Matador Resources Co (NYSE: MTDR)

Sector: Energy Industry: Oil & Gas E&P CIK: 0001520006
Market Cap 5.44 Bn
P/B 3.22
P/E 27.55
P/S 6.16
ROIC (Qtr) 11.58
Div Yield % 0.79
Rev 1y % (Qtr) 4.36
Total Debt (Qtr) 3.22 Bn
Debt/Equity (Qtr) 0.58
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About

Investment thesis

Bull case

  • Strong operating cash flow of 2.53B provides robust 0.78x coverage of total debt 3.22B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 2.53B provides exceptional 24.77x coverage of minority interest expenses 101.97M, showing strong core operations.
  • Operating cash flow of 2.53B provides strong 129.30x coverage of stock compensation 19.53M, indicating sustainable incentive practices.
  • Operating cash flow of 2.53B provides exceptional 11.83x coverage of interest expenses 213.44M, showing strong debt service capability.
  • Strong tangible asset base of 11.65B provides 3.62x coverage of total debt 3.22B, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 2.53B barely covers its investment activities of (1.96B), with a coverage ratio of -1.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.53B provides thin coverage of dividend payments of (148.09M) with a -17.05 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 538.41M relative to inventory of 43.55M (12.36 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 435.29M provides weak coverage of capital expenditures of 2.09B, with a 0.21 ratio suggesting additional external financing needs for growth initiatives.
  • High financing cash flow of (545.13M) relative to working capital of (340.35M), which is 1.60x suggests concerning dependence on external funding for operational needs.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

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 0.57 1.02
EV to Cash from Ops. EV/CFO 12.51 18.21
EV to Debt EV to Debt 2.07 54.57
EV to EBIT EV/EBIT 27.78 29.98
EV to EBITDA EV/EBITDA 11.39 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF -6.80 39.33
EV to Market Cap EV to Market Cap 1.22 1.57
EV to Revenue EV/Rev 7.54 11.47
Price to Book Value [P/B] P/B 3.22 2.97
Price to Earnings [P/E] P/E 27.55 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.28 26.80
Dividend Payout Ratio % Div Payout % (Qtr) 19.00 31.86
Dividend per Basic Share Div per Share (Qtr) 1.19 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 33.95 1.05
Interest Coverage Int. cover (Qtr) 5.88 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -7.44 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 25.14 52.06
Dividend Growth (1y) % Div 1y % (Qtr) 48.50 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -9.31 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.93 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.71 75.94
EBT Growth (1y) % EBT 1y % (Qtr) -14.09 17.44
EPS Growth (1y) % EPS 1y % (Qtr) -17.31 3.07
FCF Growth (1y) % FCF 1y % (Qtr) 26.22 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.75 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.33 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.07
Cash Ratio Cash Ratio (Qtr) 0.08 1.32
Current Ratio Curr Ratio (Qtr) 0.73 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.58 0.34
Interest Cover Ratio Int Coverage (Qtr) 5.88 -4.97
Times Interest Earned Times Interest Earned (Qtr) 5.88 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 63.90 16.19
EBIT Margin % EBIT Margin % (Qtr) 32.88 -16.83
EBT Margin % EBT Margin % (Qtr) 27.29 -24.06
Gross Margin % Gross Margin % (Qtr) 70.10 58.92
Net Profit Margin % Net Margin % (Qtr) 20.50 -28.75