December 14, 2018

Bonavista Energy Corp (BNP)

 

 

Bonavista Energy Corporation (BNP) is a proven oil and gas company that has been in business since 1997.  Through intelligent acquisitions, and organic growth, the company is now one of the most well-known dividend players on the Toronto Stock Exchange and has a massive market capitalization of almost $3.9 billion.  Bonavista is currently producing roughly 75,000 boe/per day and has an estimated 312 boes.  The company’s holdings are focussed within Western Canada.

 

Bonavista Energy (BNP) has clearly defined six key principles that they have adhered to since their founding and they credit them with their continuing success.  They are:

 

  • Build and retain entrepreneurial and knowledgeable staff to apply disciplined technical, operational, and financial expertise
  • Create operational strength and dominance in geographically focused regions
  • Develop low cost, low-risk economic opportunities with appropriate commodity balance
  • Enforce capital efficiency and strict cost controls through acute attention to detail
  • Preserve financial strength and flexibility to take advantage of new opportunities
  • Pursue complementary acquisitions to add long reserve life, low-decline assets

 

Bonavista began in 1997 as a junior oil and natural gas company.  Within three years they had cleared many of the initial start-up obstacles, and were already producing close to 15,000 boe/per day.  Their early annual growth of 40-80% speaks to the value of their management team.  From 2000-2003 the company expanded at a more deliberate place, but still seen 20-40% growth each of the three years, while steadily expanding their asset base and the efficiency of current operations.  In 2003 Bonavista (BNP) converted into an energy trust in order to provide the maximum value to shareholders and reap the tax benefits.  Over the next few years the company focused on extracting maximum value from our high quality asset base, and in turn, generating sustainable distributions for shareholders.  In 2007 the company seen the proverbial writing on the wall as the government determined that the tax advantages enjoyed by energy trusts were not sustainable, and would be fully-taxed beginning in 2011.  In response the company began shifting to a corporate structure.  Since 2008 Bonavista (BNP) has been focussed on acquiring new properties, with long production lives through their capital expenditure budget, while at the same time returning generous amounts of earnings to shareholders.  The company had a 2011 capital expenditure budget of roughly $360 million (with most of that going to light oil property development).

 

Bonavista recently closed at $26.77 per share.  This is close to the middle of their 52-week trading range, with a high of $32 and a low of $19.88.  At this price, the stock has a Price-to-Earnings ratio of 23.53, and it’s annual dividend of $1.44 gives the company a dividend yield of 5.4%.  While I wouldn’t say the company is “cheap” at this price, it has certainly proved itself to be a quality company that has solid management behind it.  For investors looking for an income-producing stock that also some decent growth potential, Bonavista (BNP) should definitely be looked at.

 

Bonavista Energy (BNP) Technical Analysis:

BNP trend analysis

 BNP is trading on a down trend, Get your Free BNP Trend Analysis Report

 

Bonavista Energy (BNP) Stock Graph:

TSE BNP

Bonavista Energy (BNP) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
BNPBonavista Energy Corp28.075.13125.160.2110023-13.7389-8.333331