POWR Stock of the Week Under $10: Berry Corp (BRY)

: BRY | Berry Petroleum Corporation News, Ratings, and Charts

BRY – Public companies get a lot of attention these days, and sometimes they focus more on making dramatic headlines than benefiting their shareholders. As an investor it’s your job to invest in companies that meet your requirements for how they treat shareholders. Berry Corp (BRY) is one of those great companies that has a focus that is all about shareholder returns without any of the drama.

You may have seen the recent headlines around Chevron’s (CVX) purchase of Hess (HES) or Exxon’s (XOM) big merger with Pioneer (PXD). Splashy headlines, and lots of CNBC interviews, but those deals will likely take years to integrate and the CVX/HES deal in particular may take a lot longer to be profitable. 

I prefer less “splash” and more immediate return, which is why I like the strategy of oil company Berry Corp (BRY) with what it calls its “enhanced shareholder return” model. 

Berry is an oil and gas exploration company that has been in business since 1909, with a bit of a twist. It also has a well servicing division which brings in a stable approximately $25M annually to the company.

Servicing and decommissioning wells in California in particular, where Berry does a large part of its business, is very lucrative given the state’s extensive environmental laws. 

Those same laws have prevented the extensions of pipelines into California from non-western states, which in essence gives Berry (and other oil producers in the region) a quasi monopoly when it comes to selling oil in California, Nevada, and Arizona, what Berry calls a “structurally advantaged market”. 

BRY’s enhanced shareholder return model, is a combination of a fixed dividend, a variable dividend (the just released earnings put the current dividend at over 6%, with a long term target of 8-9% announced by the company), share buybacks, debt reduction, and bolt-on acquisitions which are quickly accretive to earnings (as opposed to headline grabbing acquisitions that may or may not pan out).

Berry takes on less risk in its acquisitions by focusing on conventional, or simpler, wells that have shallow reservoirs and proven reserves. Their California base of operations provides for local refining, with the oil products mainly used in the Los Angeles area with Berry’s wells located just north in Kern county. 

The stock trades at just 2.4x earnings and 8.5x projected earnings, and has a price to book value of just 0.76. For reference Exxon trades at 2.3 times book value. 

Given those numbers, it’s no surprise that the highest component rating for Berry in our POWR Ratings is in the Value component where it outscores over 97% of the companies in our database with an A rating. 

Berry is on a steady path which values a consistent and attentive focus on rewarding shareholders without the need to make headlines. For an under $10 stock, this well managed company may have a better strategic plan than many of its much larger competitors.

What To Do Next?

If you like the stock shared above…then you will love this new special report sharing 3 low priced companies with tremendous upside potential.

3 Stocks to DOUBLE This Year >

BRY shares . Year-to-date, BRY has gained 6.37%, versus a 13.89% rise in the benchmark S&P 500 index during the same period.

About the Author: Jay Soloff

Jay is a former professional market maker who cut his teeth trading on the floor of the CBOE. With more than 20 years of experience trading and investing, his focus is on making professional strategies accessible to everyone, which is exactly what does in his highly profitable POWR Income and POWR Stocks Under $10 investment advisory services. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BRYGet RatingGet RatingGet Rating
CVXGet RatingGet RatingGet Rating
HESGet RatingGet RatingGet Rating
XOMGet RatingGet RatingGet Rating
PXDGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

These 5 Economic Reports Hold the Key for Stocks

Thanks to signs of easing inflation in May we have enjoyed a rally for stocks with the S&P 500 (SPY) making new all time highs. What happens next for stocks very much is tied to the results for these 5 upcoming economic reports. Steve Reitmeister previews these announcements with keys to what stocks do next. Read it all in the full article below...

NVIDIA (NVDA) Earnings Are Out: Here's What to Do

NVIDIA’s (NVDA) much-anticipated first-quarter earnings report comfortably surpassed analyst expectations, driven by massive demand for its AI chips. The chipmaker also announced a 10-to-1 stock split. Following an impressive financial performance, how should investors approach this stock? Read on to know more...

3 Gold Stocks With May Upside Potential

Gold’s prospects appear promising owing to rising disposable incomes, its appeal as a safe-haven asset, and the expected interest rate cuts later this year. Amid this backdrop, investors could consider buying quality gold stocks Eldorado Gold (EGO), Alamos Gold (AGI), and Centerra Gold (CGAU), given their strong upside potential. Read on...

3 Tech Stocks for Bullish Investors This Week

The technology industry is growing rapidly owing to the rapid adoption of emerging technologies and increased enterprise spending on digitization. Amid this backdrop, it could be wise to invest in quality tech stocks Ericsson (ERIC), Pure Storage (PSTG), and Proto Labs (PRLB) this week for substantial gains. Continue reading...

Stock Investors: Fade This Rally

Nice rally...but is it really built to last? That is what we have to ask ourselves as the S&P 500 (SPY) nears the all time highs. 44 year investment veteran Steve Reitmeister shares his updated market outlook which includes why there is likely not much more upside in the days in the head. Gladly, there are still ways to carve out profits from the market if you look in the right places. Just read on below for the full story...

Read More Stories

More Berry Petroleum Corporation (BRY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BRY News