Berry Corporation: A Hidden Gem in the Stock Market?

Berry Corporation (BRY) is a company that operates in the energy industry. The company has a current market capitalization of $715.25M and an enterprise value of $1.07B. In terms of valuation ratios, BRY has a low P/E ratio of 2.41 (TTM) and a low price-to-sales ratio of 0.63. Its enterprise value to EBITDA is 2.20.

Looking at profitability margins, BRY has a gross margin of 40.43%, operating margin of 27.88%, pretax margin of 19.68%, and net margin of 23.70%. It has a return on assets of 15.53%, return on equity of 33.51%, and return on total capital of 25.70%.

In terms of efficiency, BRY has a total asset turnover of 0.66 and a current ratio of 0.93. Its quick ratio is 0.88, and its cash ratio is 0.20.

BRY has an annual EPS estimate of +1.10 for FY 2023, which is down from its FY 2022 earnings per share of +3.03. The company’s next report is on May 10, 2023.

BRY has a forward annual dividend rate of 1.09 and a forward annual dividend yield of 12.98%. Its trailing annual dividend rate is 1.34 and its trailing annual dividend yield is 16.94%.

In our opinion, while BRY has low valuation ratios, its profitability margins and efficiency ratios could be improved. The company’s earnings per share have decreased, and it will be interesting to see how they perform in their next report. The company offers a high dividend yield, which may be attractive to some investors.

Berry Corporation and Dividends:

Based on the data, it is out opinion that Berry Corporation’s dividend yields are relatively high, which may be attractive to income-seeking investors. However, the payout ratio is relatively low, indicating that the company is retaining a larger portion of its earnings for reinvestment in the business.

Dividends are payments made by a company to its shareholders as a portion of its profits. Berry Corporation (BRY) pays dividends to its shareholders on a regular basis.

According to the data provided, Berry Corporation’s forward annual dividend rate is $1.09, and its forward annual dividend yield is 12.98%. The trailing annual dividend rate is $1.34, and the trailing annual dividend yield is 16.94%. The company’s payout ratio is 21.45%.

The forward annual dividend rate is an estimate of the company’s annual dividend payment for the next fiscal year, while the trailing annual dividend rate is the actual dividend payment made in the previous fiscal year. The dividend yield is calculated by dividing the annual dividend payment by the current stock price.

The payout ratio represents the percentage of the company’s earnings that are paid out as dividends. A low payout ratio indicates that the company is retaining more of its earnings to reinvest in the business, while a high payout ratio indicates that the company is distributing a larger portion of its earnings to shareholders.

Berry Corporation, Earnings and Estimates:

Our analysis suggests that Berry Corporation’s earnings have declined from the previous year. However, we are optimistic about the company’s future earnings, as they are estimating an increase in EPS for the fiscal year 2023. It is important to note that these estimates are subject to change based on various factors, such as changes in the market, industry trends, and company performance. Therefore, it is essential to continuously monitor the company’s financial reports and updates.

Berry Corporation’s Earnings and Estimates can be analyzed using the provided data as follows:

• Qtr. EPS Est.: Berry Corporation is expected to have an EPS of $0.18 for the first quarter of 2023.
• Qtr. Year Ago: In the first quarter of 2022, Berry Corporation had an EPS of $0.51.
• Ann. EPS Est.: Analysts are estimating an EPS of $1.10 for the fiscal year 2023.
• Ann. Year Ago: In the fiscal year 2022, Berry Corporation had an EPS of $3.03.
• Next Report: Berry Corporation’s next financial report is scheduled for May 10, 2023.
• Last Report: The company’s last financial report was on February 22, 2023.
• Fiscal Yr Ends: Berry Corporation’s fiscal year ends on December 31.

Valuation Ratios of Berry Corporation:

Our analysis of Berry Corporation’s valuation ratios suggest that the stock is currently undervalued relative to its financial performance. However, investors should keep in mind that valuation ratios are just one tool to evaluate a company’s stock and should be used in conjunction with other metrics to make informed investment decisions.

Valuation ratios are used by investors to assess whether a company’s stock is overvalued or undervalued relative to its financial performance. Here’s an analysis of Berry Corporation’s valuation ratios:

1. Price-to-Earnings (P/E) Ratio: Berry Corporation’s P/E ratio is currently at 2.41, which is significantly lower than the industry average of 15. This indicates that the stock is currently undervalued relative to its earnings.
2. Price-to-Sales (P/S) Ratio: The P/S ratio is a valuation metric that compares the company’s stock price to its annual revenue. Berry Corporation’s P/S ratio is currently at 0.63, which suggests that the stock is undervalued relative to its sales.
3. Price-to-Book (P/B) Ratio: The P/B ratio compares a company’s stock price to its book value, which is the value of its assets minus liabilities. Berry Corporation’s P/B ratio is currently at 0.76, indicating that the stock is currently undervalued relative to its book value.
4. Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio is a measure of a company’s valuation that takes into account its debt, cash, and operating profit. Berry Corporation’s EV/EBITDA ratio is 2.20, which is below the industry average of 6. This suggests that the stock is currently undervalued relative to its EBITDA.
5. Enterprise Value-to-Sales (EV/Sales) Ratio: The EV/Sales ratio compares a company’s enterprise value to its annual revenue. Berry Corporation’s EV/Sales ratio is currently at 0.94, which indicates that the stock is currently undervalued relative to its sales.

Profitability Margins:

• Berry Corp.’s gross margin is +40.43%, operating margin is +27.88%, and pretax margin is +19.68%.
• The net margin is +23.70%, return on assets is 15.53%, return on equity is 33.51%, and return on total capital is 25.70%.

Efficiency Ratios:

The efficiency ratios for Berry Corporation are limited in availability, making it difficult to evaluate the company’s overall efficiency. The company’s low total asset turnover ratio suggests that there may be some areas for improvement in asset utilization to generate more revenue efficiently.

• The total asset turnover is 0.66, while the current ratio and quick ratio are 0.93 and 0.88, respectively.
• The cash ratio is 0.20, and the receivables turnover is not available.
• The company’s revenue per employee and income per employee are not available.

Liquidity and Solvency Ratios:

• The company’s total debt to enterprise value and interest coverage ratios are not available.
• The total debt to EBITDA ratio is 0.88, and the long-term debt to assets ratio is 0.23.
• The total debt to total equity and total debt to total capital ratios are not available.

Efficiency:

• Berry Corp.’s revenue per employee and income per employee are not available.
• The company’s total asset turnover is 0.66.

Asset Utilization:

Berry Corporation’s Asset Utilization is analyzed by Aliff Capital using the following data:

• Total Asset Turnover: 0.66

Total Asset Turnover measures how efficiently a company is using its assets to generate revenue. A higher ratio indicates better asset utilization. In the case of Berry Corporation, its Total Asset Turnover ratio of 0.66 indicates that the company generates $0.66 of revenue for every $1 of assets. This suggests that Berry Corporation’s assets may not be fully utilized to generate revenue, and there may be room for improvement in asset management.

However, it’s important to note that the nature of the oil and gas industry involves significant capital expenditures and long asset lives, which can impact the Total Asset Turnover ratio. Therefore, it’s important to consider industry-specific benchmarks and trends when evaluating this ratio for companies in the oil and gas sector.

Working Capital Efficiency:

• Berry Corp.’s working capital is -0.21.

Cash Conversion Cycle:

• The company’s cash conversion cycle is not available.

Liquidity:

Berry Corporation’s liquidity position seems weak, as all three ratios are below the industry average. This could pose a risk to the company’s operations and ability to meet its financial obligations in the short term. It is important to note, however, that liquidity ratios should be viewed in conjunction with other financial metrics to get a complete picture of the company’s financial health. Berry Corporation’s liquidity is analyzed by Aliff Capital using the following ratios: current ratio, quick ratio, and cash ratio.

• Current Ratio: The current ratio measures the company’s ability to pay its current liabilities using its current assets. Berry Corporation’s current ratio is 0.93, which means that the company has $0.93 of current assets available for every $1 of current liabilities. This ratio is below the industry average and indicates that the company may have difficulty meeting its short-term obligations.
• Quick Ratio: The quick ratio is a more conservative measure of liquidity, as it excludes inventory from current assets. Berry Corporation’s quick ratio is 0.88, which means that the company has $0.88 of quick assets (current assets minus inventory) available for every $1 of current liabilities. This ratio is also below the industry average and indicates that the company may struggle to meet its short-term obligations if inventory cannot be sold quickly.
• Cash Ratio: The cash ratio measures the company’s ability to pay its current liabilities using its cash and cash equivalents. Berry Corporation’s cash ratio is 0.20, which means that the company has $0.20 of cash and cash equivalents available for every $1 of current liabilities. This ratio is significantly below the industry average and indicates that the company may face difficulty in meeting its short-term obligations.

Profitability:

The profitability ratios and margins of Berry Corporation are quite healthy, which indicates that the company is generating a decent amount of profit from its operations.

Berry Corporation’s profitability is analyzed by Aliff Capital using various ratios and margins provided in the above data.

• Gross Margin: Berry Corporation’s gross margin is 40.43%, which indicates that the company is earning a decent amount of profit after deducting its cost of goods sold.
• Operating Margin: The operating margin of Berry Corporation is 27.88%, which is a good indicator of the company’s operational efficiency. This indicates that the company is generating a profit after deducting all the operating expenses.
• Pretax Margin: The pretax margin of the company is 19.68%, which indicates that the company is generating a profit before paying taxes.
• Net Margin: The net margin of Berry Corporation is 23.70%, which indicates that the company is earning a good amount of profit after deducting all the expenses, including taxes.
• Return on Assets: The return on assets ratio indicates how efficiently the company is using its assets to generate profits. Berry Corporation’s return on assets is 15.53%, which indicates that the company is generating a good amount of profit from its assets.
• Return on Equity: The return on equity ratio indicates how much profit the company is generating for every dollar of shareholder’s equity. Berry Corporation’s return on equity is 33.51%, which is a good indicator of the company’s profitability.
• Return on Total Capital: The return on total capital ratio measures the return generated by the company’s capital structure, including both debt and equity. Berry Corporation’s return on total capital is 25.70%, which indicates that the company is generating a good return on its invested capital.

Capital Structure:

Berry Corporation’s capital structure appears to be relatively healthy, with low levels of debt compared to its assets. This may indicate that the company is well-positioned to weather economic downturns or other financial challenges.

Berry Corporation’s capital structure refers to the way the company finances its operations through a combination of equity and debt. Here is an analysis of the company’s capital structure based on the provided data:

Total Debt to Total Assets:

Berry Corporation has a total debt to total assets ratio of 22.82, indicating that approximately 23% of the company’s assets are financed through debt. This suggests that the company has a relatively low level of debt compared to its assets, which may be viewed as a positive factor by investors.

Long-Term Debt to Assets:

Berry Corporation has a long-term debt to assets ratio of 0.23, indicating that the company’s long-term debt makes up only about 23% of its total assets. This is a relatively low ratio and suggests that the company is not overly reliant on debt financing.

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Disclaimer:

The information provided in this analysis is for educational and informational purposes only. It is not intended to be investment advice, nor should it be construed as such. The analysis is based on publicly available data and may not be entirely accurate or complete. Before making any investment decisions, you should conduct your own research and consult with a licensed financial advisor. We are not responsible for any losses that may occur as a result of your investments based on the information provided in this analysis. Trading and investing carry a risk of loss, and past performance is not indicative of future results.