| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 21.69 | 332 |
| Intrinsic value (DCF) | 2.11 | -58 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 0.68 | -87 |
Granite Ridge Resources, Inc. (NYSE: GRNT) is a Dallas-based energy company specializing in oil and gas exploration and production (E&P). The company manages private funds with strategic interests in key U.S. shale plays, including the Midland and Delaware Basins (Permian), Bakken, Eagle Ford, DJ Basin, and Haynesville. Granite Ridge operates as a non-operator, partnering with established E&P firms to acquire working interests in high-quality assets. With a market cap of ~$726 million, GRNT provides investors exposure to diversified oil and gas production while mitigating single-basin risks. The company’s asset-light model focuses on capital efficiency and cash flow generation, supported by a dividend yield of ~3.1% (based on a $0.44 annualized dividend). As a pure-play U.S. onshore E&P, Granite Ridge is positioned to benefit from sustained energy demand and commodity price volatility, though its performance remains tied to oil and gas market cycles.
Granite Ridge offers a differentiated investment proposition in the E&P sector, combining non-operated asset diversification with a disciplined capital allocation strategy. The company’s low beta (0.2) suggests relative resilience to broader market swings, but its fundamentals are heavily leveraged to oil and gas prices. Positive operating cash flow ($275.7M in the latest period) and manageable debt ($205M) support its dividend, though net income margins are thin (~4.9%). Risks include commodity price exposure, reliance on operator partners, and potential capex volatility. The stock may appeal to income-focused energy investors, but growth prospects depend on accretive acquisitions and drilling efficiency in its core basins.
Granite Ridge’s competitive edge lies in its non-operated model, which reduces overhead costs and operational risks while providing scale across multiple basins. Unlike many E&Ps that concentrate capital in a single play, GRNT’s diversification mitigates region-specific disruptions (e.g., Permian takeaway constraints). However, the model also limits control over drilling schedules and cost optimization. The company’s private fund structure allows access to high-quality assets typically reserved for institutional investors, but this niche approach faces competition from larger non-operated peers like Northern Oil and Gas (NOG). GRNT’s lean operations (zero reported capex in the period) suggest a focus on cash flow over growth, contrasting with operators like Diamondback Energy (FANG) that prioritize volume expansion. Its small size may limit economies of scale in leasing and completions, though partnerships with established operators partly offset this. The dividend policy provides a yield advantage over growth-focused E&Ps but may constrain reinvestment flexibility during downturns.