Can this TSXV Energy stock keep up its 8% dividend yield?

Qayyum Rajan is a CFA Charterholder who has previously worked at CIBC, RBC Dominion Securities and Sentry Investments before creating his own fintech ventures. He has been a financial advisor, analyst and portfolio manager who is passionate about helping people reach their financial goals. Qayyum is the owner of Wealth Awesome where he writes financial content and creates tools for over 20,000 Canadian investors.

Expertises: finance, investment, stocks
 
Can this TSXV Energy stock keep up its 8% dividend yield? 1

Hemisphere Energy Corporation (TSXV: HME)

Hemisphere Energy Corporation is a Canadian-based oil and gas exploration and production company focused on developing its 100%-owned Atlee Buffalo property in southeastern Alberta. The company specializes in enhanced oil recovery (EOR) techniques, which have led to steady production growth and strong cash flow generation.

As of its latest financial reports, Hemisphere Energy has maintained an 8.6% dividend yield, placing it among the highest-yielding stocks in the energy sector. The company has also demonstrated a commitment to returning value to shareholders through share buybacks and sustainable dividends. Despite only three years of dividend history, its distributions have been stable, supported by a low payout ratio of 33.2% and a cash payout ratio of 57.6%.

Hemisphere trades at an attractive price-to-earnings (P/E) ratio of 6.1x, which is significantly lower than the Canadian market average. Its recent financial performance highlights consistent revenue growth and improving profitability, making it a compelling option for investors seeking a high-yield energy stock.

Can this TSXV Energy stock keep up its 8% dividend yield? 2

Key Products and Operations

Oil and Gas Exploration:

  • Hemisphere Energy focuses on enhanced oil recovery (EOR) in its Atlee Buffalo asset, improving production efficiency and resource recovery.
Can this TSXV Energy stock keep up its 8% dividend yield? 3

Production and Development:

  • The company has achieved record production levels through optimization strategies and waterflood technology.

Dividend Payments:

  • Currently offering an 8.6% yield, Hemisphere is one of the top dividend stocks in the TSX small-cap sector.

Share Buyback Program:

  • Hemisphere actively repurchases shares, reinforcing its commitment to shareholder returns.

Sustainable Growth Strategy:

  • Management focuses on long-term value creation through disciplined capital allocation and operational efficiency.
Can this TSXV Energy stock keep up its 8% dividend yield? 4

Hemisphere Energy Corporation (TSXV: HME): Stock Performance Analysis

Over the past year, Hemisphere Energy has delivered strong performance, supported by favorable oil prices, disciplined cost management, and shareholder-focused initiatives. The stock has remained resilient despite market volatility, reflecting its solid fundamentals.

Key Stock Performance Drivers:

  1. Strong Dividend Track Record:
    • Hemisphere has maintained consistent dividend payments, supported by robust free cash flow.
  2. Strategic Share Buybacks:
    • The company’s ongoing buyback program has helped reduce share count and enhance per-share earnings.
  3. Operational Efficiency:
    • The use of enhanced oil recovery (EOR) techniques has led to improved production efficiency.
  4. Attractive Valuation:
    • With a P/E ratio of 6.1x, Hemisphere remains undervalued compared to industry peers.
  5. Sector Strength:
    • Rising oil prices and favorable macroeconomic conditions have supported earnings growth.
Code Name GicSector Beta 52WeekHigh 52WeekLow 50DayMA 200DayMA SharesShort SharesShortPriorMonth ShortRatio ShortPercent
HME Hemisphere Energy Corporation Energy 1.949 1.97 1.27 1.84 1.79 11,945 2,324 0.05 0.0005

Research and Peer Analysis: Hemisphere Energy Corporation (TSXV: HME)

Peer Comparison:

CodeNameGicSectorMarketCapBeta52WeekHigh52WeekLow50DayMA200DayMASharesShortShortRatioShortPercent
EUenCore Energy Corp.Energy887,807,3601.1916.914.105.015.411,888,2248.240.0239
LGNLogan Energy CorpEnergy421,884,5120.970.660.780.84635,4902.79
SEISintana Energy IncEnergy303,064,7360.8381.540.371.041.13569,6131.030
LOULucero Energy CorpEnergy290,137,1201.6690.700.380.420.5247,6060.83
GASXNgx Energy International CorpEnergy272,862,8481.3431.230.771.020.96248,0220.910.0002
RECOReconnaissance Energy Africa LtdEnergy265,567,0081.3881.870.761.051.071,042,7483.480.0094
SNMShaMaran Petroleum CorpEnergy240,997,0881.1520.130.040.080.07120.000
ALVAlvopetro EnergyEnergy195,454,7520.5916.063.534.904.9049,2313.820.0001
HMEHemisphere Energy CorporationEnergy180,431,4241.9491.971.141.841.7811,9450.050.0005
ORC-AOrca Energy Group IncEnergy176,839,6160.3166.8960.9063.5266.1312631.500

This table compares Hemisphere Energy Corporation with its industry peers, highlighting key market and financial metrics.

Valuation Metrics

Valuation MeasuresCurrent9/30/20246/30/20243/31/202412/31/20239/30/2023
Market Cap124.65M136.57M126.95M119.18M97.19M97.23M
Enterprise Value118.01M132.18M127.63M118.00M95.99M97.02M
Trailing P/E6.096.487.127.155.615.66
Forward P/E5.085.376.146.094.606.20
PEG Ratio (5yr expected)
Price/Sales1.851.942.072.031.591.67
Price/Book2.422.572.732.542.012.25
Enterprise Value/Revenue1.721.852.021.961.561.62
Enterprise Value/EBITDA3.353.584.033.983.153.20

This table showcases Hemisphere Energy Corporation’s valuation metrics, highlighting key financial trends over the past year.

TL;DR Summary

Stock Performance: Hemisphere Energy (TSXV: HME) remains a strong performer, supported by a high 8.6% dividend yield and strategic growth initiatives.

Key Growth Drivers: Enhanced oil recovery (EOR) strategies, share buybacks, and stable dividend payouts contribute to its long-term investment appeal.

Valuation and Market Position: With a P/E ratio of 6.1x, Hemisphere Energy is an undervalued energy stock offering high income potential.

Leave a Reply

Your email address will not be published. Required fields are marked *

Table of Contents