Monthly Dividend Stock In Focus: Paramount Resources – Sure Dividend

Printed on April tenth, 2025 by Felix Martinez

Paramount Sources (PRMRF) has two interesting funding traits:

#1: It’s providing an above common dividend yield of 3.8%, which is greater than twice the dividend yield of the S&P 500.
#2: It pays dividends month-to-month as an alternative of quarterly.

You’ll be able to obtain our full Excel spreadsheet of all month-to-month dividend shares (together with metrics that matter, like dividend yield and payout ratio) by clicking on the hyperlink under:

The mixture of an above-average dividend yield and a month-to-month dividend renders Paramount Sources interesting to particular person traders.

However there’s extra to the corporate than simply these components. Hold studying this text to study extra about Paramount Sources.

Enterprise Overview

Paramount Sources explores for and produces oil and pure fuel from typical and unconventional fields within the Western Canadian Sedimentary Basin.

The corporate holds pursuits within the Karr and Wapiti Montney properties, which cowl an space of 185,000 internet acres south of Grande Prairie, Alberta. It was based in 1976 and is predicated in Calgary, Canada.

Paramount Sources has a median manufacturing charge of about 100,000 barrels per day and whole proved reserves of 415 million barrels of oil equal, with oil and fuel at a 49/51 ratio.

Supply: Investor Presentation

It is usually vital to notice that 46% of the corporate is owned by insiders. It is a remarkably excessive proportion of possession, which leads to the alignment of pursuits between insiders and the opposite particular person shareholders.

As an oil and fuel producer, Paramount Sources is very cyclical as a result of dramatic swings in oil and fuel costs. The corporate has reported losses in 5 of the final ten years and resumed its dividend funds solely in the summertime of 2021, after 22 years with out a dividend cost.

Then again, Paramount Sources has some benefits over well-known oil and fuel producers. Most oil and fuel producers have been struggling to replenish their reserves as a result of pure decline of their producing wells.

Paramount Sources reported robust 2024 outcomes, with a file manufacturing of 98,490 Boe/d and $815 million in money from operations. The corporate bought its Karr, Wapiti, and Zama property to Ovintiv for $3.3 billion and issued a $15.00 per share particular distribution. It additionally repurchased 5.7 million shares for $177 million and centered capital spending on Duvernay developments, drilling 58 wells and advancing the Alhambra Plant.

At year-end, Paramount held $188 million in internet debt and $564 million in funding securities. Since 2021, it has returned $2.97 billion to shareholders and maintains robust liquidity with $830 million in money and investments, plus a $500 million undrawn credit score facility. Fox Drilling continues working six rigs, supporting inner and third-party tasks.

Excluding bought property, reserves totaled 242.5 MMBoe (50% liquids) with an NPV10 of $2.46 billion. For 2025, Paramount plans $760–$790 million in capital spending, concentrating on 37,500–42,500 Boe/d common manufacturing. Volumes rebounded in This fall because the Alhambra Plant got here on-line.

Progress Prospects

The corporate has ample room for manufacturing progress due to accelerating its growth efforts in its producing areas.

Supply: Investor Presentation

Paramount Sources has a confirmed file of figuring out key useful resource areas with a low decline charge and greater than 15 years of manufacturing.

Then again, as an oil and fuel producer, Paramount Sources is very delicate to grease and fuel value cycles. That is clearly mirrored within the firm’s efficiency file, which has posted materials losses in 5 of the final ten years.

The worth of oil has slumped considerably from its peak in 2022. Because of this, the corporate is more likely to submit a lot decrease earnings per share this 12 months.

Given Paramount Sources’ promising manufacturing progress prospects and the extremely cyclical nature of the oil and fuel business, we anticipate Paramount Sources’ earnings per share to develop by about 1.0% per 12 months on common over the following 5 years, from an estimate of $0.89 this 12 months to $1.73 in 2027.

Dividend & Valuation Evaluation

Paramount Sources is at present providing an above-average dividend yield of three.8% , which is greater than double the 1.5% yield of the S&P 500. The inventory is thus an fascinating candidate for income-oriented traders, however they need to remember that the dividend is way from protected as a result of dramatic cycles of oil and fuel costs. Paramount Sources has an honest payout ratio of 55%.

Nevertheless, it’s essential to notice that Paramount Sources reinstated its dividend solely in mid-2021, after 22 years with out a dividend cost.

The corporate failed to supply a dividend within the previous years, because it incurred materials losses in lots of these years. Due to this fact, the corporate’s dividend is way from protected.

Relating to valuation, Paramount Sources is at present buying and selling for 8 occasions its anticipated earnings per share of $0.89 this 12 months.

Given the corporate’s excessive cyclicality, we assume a good price-to-earnings ratio of 12.5, which is a typical mid-cycle valuation degree for oil and fuel producers.

Contemplating the 1.0% annual progress of earnings per share, the three.8% present dividend yield, and a 6% annualized tailwind of valuation degree, Paramount Sources might supply a ~10% common annual whole return over the following 5 years.

The anticipated return indicators that the inventory can be engaging in the long run, as we’ve got handed the height of the oil and fuel business’s cycle. Due to this fact, traders ought to look forward to a decrease entry level.

Remaining Ideas

Due to the above-average oil and fuel costs, Paramount Sources has thrived since early 2022. The inventory presents an above-average dividend yield of three.8% and a payout ratio of 55%, which is more likely to entice some income-oriented traders.

Nevertheless, the corporate has proved extremely weak to grease and fuel value cycles. As the value of oil has peaked and should have a cloth draw back, the inventory is dangerous proper now.

Furthermore, Paramount Sources has a below-average buying and selling quantity. Because of this it could be troublesome to ascertain or promote a big place on this inventory.

Further Studying

Don’t miss the sources under for extra month-to-month dividend inventory investing analysis.

And see the sources under for extra compelling funding concepts for dividend progress shares and/or high-yield funding securities.