Mexco Energy Corp (NYSE: MXC)

Sector: Energy Industry: Oil & Gas E&P CIK: 0000066418
Market Cap 20.54 Mn
P/B 1.07
P/E 16.43
P/S 2.97
ROIC (Qtr) 3.42
Div Yield % 0.00
Rev 1y % (Qtr) -26.83
Total Debt (Qtr) 88,705.00
Debt/Equity (Qtr) 0.00
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About

Mexco Energy Corporation, a Colorado-based company with the stock symbol MXC on the OTC Markets, operates in the oil and gas industry. The company's history dates back to 1972, when it was founded as Miller Oil Company, before changing its name to Mexco Energy Corporation in 1980. Mexco Energy is a small-cap company, with a market capitalization of around $29 million as of March 31, 2024. Mexco Energy's main business activities involve the acquisition, exploration, development, and production of crude oil and natural gas properties in the United...

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Investment thesis

Bull case

  • Strong operating cash flow of 4.26M provides robust 48.02x coverage of total debt 88705, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.27M provide 41.57x coverage of short-term debt 54550, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 20.56M provides 231.74x coverage of total debt 88705, indicating robust asset backing and low credit risk.
  • Operating cash flow of 4.26M provides strong 23.14x coverage of stock compensation 184061, indicating sustainable incentive practices.
  • Operating cash flow of 4.26M provides exceptional 978.03x coverage of interest expenses 4355, showing strong debt service capability.

Bear case

  • Operating cash flow of 4.26M barely covers its investment activities of (2.70M), with a coverage ratio of -1.58, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 4.26M provides thin coverage of dividend payments of (204600) with a -20.82 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 1.74M show weak coverage of depreciation charges of 2.69M, with a 0.65 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 2.69M relative to operating cash flow of 4.26M, which is 0.63x suggests significant maintenance capital requirements affecting free cash flow.
  • Tax assets of 0 provide limited offset against tax liabilities of 336841, which is 0x, indicating potential future cash flow pressure from tax obligations.

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 0.87 1.02
EV to Cash from Ops. EV/CFO 4.20 18.21
EV to Debt EV to Debt 201.78 54.57
EV to EBIT EV/EBIT 10.28 29.98
EV to EBITDA EV/EBITDA 4.26 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF 8.40 39.33
EV to Market Cap EV to Market Cap 0.87 1.57
EV to Revenue EV/Rev 2.59 11.47
Price to Book Value [P/B] P/B 1.07 2.97
Price to Earnings [P/E] P/E 16.43 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 6.11 26.80
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 31.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.05
Interest Coverage Int. cover (Qtr) 399.68 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 55.15 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 149.19 52.06
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -7.00 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.61 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 20.00 75.94
EBT Growth (1y) % EBT 1y % (Qtr) 20.29 17.44
EPS Growth (1y) % EPS 1y % (Qtr) -6.15 3.07
FCF Growth (1y) % FCF 1y % (Qtr) 385.03 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.55 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.34 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.07
Cash Ratio Cash Ratio (Qtr) 8.02 1.32
Current Ratio Curr Ratio (Qtr) 12.34 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.34
Interest Cover Ratio Int Coverage (Qtr) 399.68 -4.97
Times Interest Earned Times Interest Earned (Qtr) 399.68 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 64.10 16.19
EBIT Margin % EBIT Margin % (Qtr) 25.14 -16.83
EBT Margin % EBT Margin % (Qtr) 25.08 -24.06
Gross Margin % Gross Margin % (Qtr) 80.20 58.92
Net Profit Margin % Net Margin % (Qtr) 18.10 -28.75