Coterra Energy Inc. (NYSE: CTRA)

Sector: Energy Industry: Oil & Gas E&P CIK: 0000858470
Market Cap 12.89 Bn
P/B 6.31
P/E 88.77
P/S 13.79
ROIC (Qtr) 8.99
Div Yield % 0.80
Rev 1y % (Qtr) 33.70
Total Debt (Qtr) 3.92 Bn
Debt/Equity (Qtr) 0.27
Add ratio to table...

About

Investment thesis

Bull case

  • Strong operating cash flow of 3.68B provides robust 0.94x coverage of total debt 3.92B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 24.01B provides 6.12x coverage of total debt 3.92B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 3.68B provides exceptional 19.88x coverage of interest expenses 185M, showing strong debt service capability.
  • Operating cash flow of 3.68B provides strong 60.28x coverage of stock compensation 61M, indicating sustainable incentive practices.
  • Strong operating cash flow of 3.68B provides 10.72x coverage of SG&A expenses 343M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 3.68B barely covers its investment activities of (5.47B), with a coverage ratio of -0.67, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (5.47B) provide weak support for R&D spending of 27M, which is -202.52x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 3.68B provides thin coverage of dividend payments of (669M) with a -5.50 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 103M provide limited coverage of acquisition spending of (3.24B), which is -0.03x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 1.01B relative to inventory of 61M (16.59 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer comparison

Companies in the Oil & Gas E&P
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 COP Conocophillips 136.62 Bn 17.10 2.22 23.44 Bn
2 CNQ Canadian Natural Resources Ltd 85.21 Bn 17.67 3.04 12.51 Bn
3 EOG Eog Resources Inc 66.33 Bn -60.48 8.67 8.13 Bn
4 FANG Diamondback Energy, Inc. 49.64 Bn -2,818.83 314.47 16.24 Bn
5 OXY Occidental Petroleum Corp /De/ 37.18 Bn 15.36 2.56 22.88 Bn
6 WDS Woodside Energy Group Ltd 34.64 Bn 11.73 2.51 -
7 TPL Texas Pacific Land Corp 29.74 Bn 126.16 78.66 0.02 Bn
8 DVN Devon Energy Corp/De 18.80 Bn 3.24 1.91 8.55 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.58 1.02
EV to Cash from Ops. EV/CFO 28.29 18.21
EV to Debt EV to Debt 3.55 54.57
EV to EBIT EV/EBIT 41.03 29.98
EV to EBITDA EV/EBITDA 20.44 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF -197.07 39.33
EV to Market Cap EV to Market Cap 1.08 1.57
EV to Revenue EV/Rev 14.92 11.47
Price to Book Value [P/B] P/B 6.31 2.97
Price to Earnings [P/E] P/E 88.77 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.46 26.80
Dividend Payout Ratio % Div Payout % (Qtr) 40.10 31.86
Dividend per Basic Share Div per Share (Qtr) 0.87 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 45.81 1.05
Interest Coverage Int. cover (Qtr) 12.06 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -23.43 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -87.85 52.06
Dividend Growth (1y) % Div 1y % (Qtr) 4.82 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 36.26 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 27.45 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 30.77 75.94
EBT Growth (1y) % EBT 1y % (Qtr) 27.40 17.44
EPS Growth (1y) % EPS 1y % (Qtr) 30.72 3.07
FCF Growth (1y) % FCF 1y % (Qtr) 28.91 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 26.38 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.29 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.11 0.07
Cash Ratio Cash Ratio (Qtr) 0.07 1.32
Current Ratio Curr Ratio (Qtr) 1.03 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 0.34
Interest Cover Ratio Int Coverage (Qtr) 12.06 -4.97
Times Interest Earned Times Interest Earned (Qtr) 12.06 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 62.40 16.19
EBIT Margin % EBIT Margin % (Qtr) 31.51 -16.83
EBT Margin % EBT Margin % (Qtr) 28.89 -24.06
Gross Margin % Gross Margin % (Qtr) 67.30 58.92
Net Profit Margin % Net Margin % (Qtr) 23.20 -28.75