PrairieSky to buy back 6.5% of shares under new bid

CALGARY, Alberta - PrairieSky Royalty Ltd. (TSX: PSK), a royalty company with a market capitalization of $807.75 million and current share price of $31.43, has received approval from the Toronto Stock Exchange (TSX) to begin a normal course issuer bid (NCIB), signaling its intent to repurchase up to 15,355,946 of its common shares. This amount represents approximately 6.5% of the outstanding common shares as of May 21, 2025. The NCIB is set to start on June 4, 2025, and will remain active until June 3, 2026, at the latest. According to InvestingPro, the stock generally trades with low price volatility, making it an interesting consideration for stability-focused investors.

The company’s move to buy back shares is based on its belief that the market price of its common shares may not always reflect their inherent value. By repurchasing shares, PrairieSky aims to benefit all remaining shareholders by increasing their proportionate interest. The company currently offers a substantial 6.87% dividend yield and has maintained dividend payments for 17 consecutive years, as revealed by InvestingPro analysis. Additionally, the buyback is expected to provide increased market liquidity for shareholders looking to sell their shares. The stock is currently trading near its 52-week low of $30.85, potentially presenting an opportunity for value investors.

The repurchase plan permits PrairieSky to acquire shares on the open market through the TSX and/or other Canadian alternative trading systems. The daily purchase limit is set at 99,954 common shares, which is 25% of the average daily trading volume for the six months ending April 30, 2025. However, PrairieSky is allowed to make one block purchase per calendar week that exceeds this daily limit.

PrairieSky has also established an automatic share purchase plan with its broker, CIBC Capital Markets, to facilitate the repurchase of shares during times when the company might normally face trading restrictions.

The company’s history with NCIBs dates back to 2016, with a cumulative total of 20.1 million common shares purchased and cancelled at an average price of $16.74 per share up to March 31, 2025. In the previous NCIB cycle, which started on June 4, 2024, and ends on June 3, 2025, PrairieSky has already repurchased 3,415,900 common shares out of an authorized 5,000,000.

The press release also contains forward-looking statements regarding the company’s expectations for the number of shares to be repurchased over the next 12 months. These statements are based on certain assumptions, including market conditions and the company’s ability to execute the repurchase plan. InvestingPro data shows the company maintains a "FAIR" financial health score, with additional insights available to subscribers. However, the company cautions that these forward-looking statements are subject to various risks and uncertainties, and actual results may differ materially.

This news is based on a press release statement from PrairieSky Royalty Ltd.

In other recent news, PrairieSky Royalty Ltd. announced a quarterly dividend of CDN $0.26 per common share. This dividend is scheduled for payment on April 15, 2025, to shareholders on record as of March 31, 2025. The company emphasizes that this dividend is recognized as an eligible dividend for Canadian income tax purposes, reinforcing its commitment to providing value to its investors. PrairieSky’s business model, which involves generating revenue through royalty payments from oil and natural gas production on its lands, supports the sustainability of these dividend distributions. The company maintains the largest independently-owned fee simple mineral title position in Canada, which continues to generate free cash flow. PrairieSky’s strategy focuses on leveraging its diversified property portfolio to ensure regular dividend payments to its shareholders. This financial announcement aligns with the company’s ongoing efforts to return profits to investors, reflecting its stable financial health. Investors can access additional details about PrairieSky’s dividend policy through the company’s official communication channels.

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