The independent oil and natural gas company said it filed a registration statement with the SEC relating to the public offering of $1.1 billion of senior subordinated notes due 2020.
"Denbury intends to use the net proceeds from the offering to fund all or substantially all of the costs of its repurchase of all $996.3 million aggregate outstanding principal amount of its 81/4% senior subordinated notes due 2020, for which a tender offer and consent solicitation was announced earlier today," the company said.
TheStreet Ratings team rates DENBURY RESOURCES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate DENBURY RESOURCES INC (DNR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.7%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for DENBURY RESOURCES INC is rather high; currently it is at 60.02%. Regardless of DNR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DNR's net profit margin of 15.10% compares favorably to the industry average.
- DENBURY RESOURCES INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DENBURY RESOURCES INC reported lower earnings of $1.11 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $1.11).
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 21.5% when compared to the same quarter one year ago, dropping from $114.66 million to $89.99 million.
- DNR's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that DNR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.52 is low and demonstrates weak liquidity.
- You can view the full analysis from the report here: DNR Ratings Report