Wells Fargo Reports Better-than-Expected Q1 Earnings



Wells Fargo (WFC) reported better-than-expected quarterly earnings, though CEO Charlie Scharf said the bank is bracing for a slower economy this year amid worries President Donald Trump’s tariffs could weigh on growth.

The lender reported earnings per share (EPS) of $1.39 for the quarter, up from $1.20 per share a year ago and above consensus estimates from Visible Alpha. Revenue trailed estimates at $20.15 billion, versus $20.86 billion a year ago.

Net interest income (NII), a key measure of lending profitability, fell to $11.50 billion from $12.23 billion in the first quarter of 2024—below the $11.82 billion analysts anticipated. Wells Fargo blamed the year-over-year decline on lower interest rates, “partially offset by lower deposit pricing and higher deposit balances.”

CEO Scharf said the bank expects “continued volatility and uncertainty,” and is “prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes.”

“We support the administration’s willingness to look at barriers to fair trade for the United States, though there are certainly risks associated with such significant actions,” Scharf said. “Timely resolution which benefits the U.S. would be good for businesses, consumers, and the markets.”

Wells Fargo shares dropped about 2% in early trading Friday and have lost about 12% of their value since the start of the year.

UPDATE—April 11, 2025: This article has been updated since it was first published to reflect more recent share price values.



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Falling Wholesale Prices Could Mean Cheaper Eggs Soon



Key Takeaways

  • The Producer Price Index fell more than economists expected in March, following a report showing a surprising decline in consumer inflation.
  • Part of the drop can be attributed to a 36% drop in egg prices, while an 11% drop in fuel prices also had an impact.
  • However, a 7% rise in steel mill products showed that President Donald Trump’s recently enacted tariff on aluminum and steel imports may be having an impact.

Grocery shoppers may soon see some relief on egg prices.

Wholesale chicken egg prices fell 36.2% year-over-year in March, part of a surprising decline in the wholesale-focused Producer Price Index (PPI). The drop comes after a bird flu outbreak helped increase egg prices, creating an ongoing burden for consumers.

While not directly related, wholesale pricing trends can feed into consumer pricing levels, indicating that some relief for egg prices could be on the way.

Lower Gasoline Costs Help Push Wholesale Prices Lower

Overall, wholesale prices fell 0.4% in March compared with the prior month, coming in below economists surveyed by The Wall Street Journal and Dow Jones Newswires’ projections of a 0.2% monthly increase in the PPI. Compared with a year ago, wholesale prices, as measured by PPI, were up 2.7%, also declining from February levels

While egg prices dropped significantly, the downward trend in the March PPI report was primarily tied to an 11.1% drop in gasoline prices, which accounted for nearly two-thirds of March’s decline in goods prices, the Bureau of Labor Statistics said. 

The report follows Thursday’s Consumer Price Index (CPI) data, which showed that consumers also encountered lighter inflation in March. While this is positive news for consumers, economists warn that it may be short-lived, as President Donald Trump’s tariff policies are expected to push prices higher in coming months.

Steel Mill Prices Rise Following Trump Tariffs on Metals

Some indications were that tariff impacts were already being seen at the wholesale level. After Trump implemented a 25% tariff on aluminum and steel imports, the PPI showed in March that prices for steel mill products jumped more than 7%. 

“Tariffs had some impact on the March PPI beneath the surface and we expect to see more passthrough in the months ahead,” said Nationwide Financial Markets Economist Oren Klachkin.



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Here’s What Big Bank CEOs Are Saying About Tariffs and the Economy



Key Takeaways

  • Executives from across the banking industry gave their thoughts on tariffs and the current uncertainty and volatility dominating the stock market.
  • JPMorgan Chase CEO Jamie Dimon said he expects many companies to adjust or pull their full-year outlooks considering the uncertainty.
  • BlackRock CEO Larry Fink said the tariffs “went beyond anything I could have imagined.”

Executives from across the banking industry spoke on Friday about the uncertainty surrounding the Trump administration’s tariffs, the stock market, and the possibility of a recession.

JPMorgan Chase (JPM) CEO Jamie Dimon said he expects more companies to suspend their full-year guidance amid the uncertainty, something Delta Air Lines (DAL) and CarMax (KMX) did this week.

“You’re going to hear 1,000 companies report, and they’re going to tell you what their guidance is. My guess [is] a lot will remove it,” Dimon said. “They’re going to tell you what they think it might do to their customers, their base, their earnings, their costs, their tariffs. It’s different for every company, but I assume you see that.”

Tariffs ‘Went Beyond Anything I Could Have Imagined,’ BlackRock’s Fink Says

BlackRock (BLK) CEO Larry Fink said in Friday’s earnings call that last week’s tariff announcement “went beyond anything I could have imagined in my 49 years in finance,” according to a transcript from AlphaSense.

Fink also said that despite uncertainty around tariffs dominating the headlines, other “macro forces” like artificial intelligence, rising demand for energy and infrastructure, and the potential for de-regulation under the Trump administration are “just as strong today” as they were earlier this year.

Wells Fargo CEO Scharf Sees ‘Risks’ With Tariffs

“We support the administration’s willingness to look at barriers to fair trade for the United States, though there are certainly risks associated with such significant actions,” Wells Fargo (WFC) CEO Charlie Scharf said in Friday’s earnings release. Scharf added that the bank expects “continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes.”

Bank of New York Mellon (BK) CEO Robin Vince noted that the firm is “prepared for a wide range of macroeconomic and market scenarios as the outlook for the operating environment is becoming more uncertain.”



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Newmont, Texas Instruments, Intel, and More



KEY TAKEAWAYS

  • The major U.S. equities indexes edged higher at midday Friday after wavering between losses and gains earlier in the session, as investors digested a slew of bank earnings and China hiked tariffs on U.S. goods.
  • Shares of Newmont other gold miners surged as the precious metal hit new highs.
  • JPMorgan Chase shares also climbed after the bank reported better-than-expected quarterly results.

The major U.S. equities indexes edged higher at midday Friday after wavering between losses and gains earlier in the session, as investors digested a slew of bank earnings and China hiked tariffs on U.S. goods.

Shares of Newmont (NEM), which led gains on the S&P 500, and other gold miners surged as the precious metal hit new highs.

JPMorgan Chase (JPM) shares also climbed after the bank kicked off the new earnings season with  better-than-expected quarterly results. Morgan Stanley (MS) shares also rose after the company reported record stock-trading revenue. 

Wells Fargo (WFC), in contrast, saw its shares slide as the bank’s quarterly net interest income decline offset better-than-estimated earnings.

Shares of Texas Instruments (TXN) and Intel (INTC), which manufacture chips in the U.S., tumbled after China indicated chips manufactured outside America would be exempt from China’s steep tariffs on U.S. goods. Shares of Nvidia (NVDA), which outsources manufacturing to TSMC (TSM) in Taiwan, gained along with shares of TSMC.

The yield on the 10-year Treasury note rose. The U.S. dollar lost ground against the euro, yen and pound. Prices for major cryptocurrencies gained. (Read Investopedia’s live coverage of today’s market action here.)



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Mortgage Rates Hold On to Dramatic 3-Day Surge



Loan Type New Purchase Rates Daily Change
30-Year Fixed 7.06% No Change
FHA 30-Year Fixed 7.04% No Change
VA 30-Year Fixed 6.71% No Change
20-Year Fixed 6.99% -0.01
15-Year Fixed 6.20% -0.02
FHA 15-Year Fixed 6.32% No Change
10-Year Fixed 6.53% No Change
7/6 ARM 7.34% +0.01
5/6 ARM 7.21% -0.04
Jumbo 30-Year Fixed 7.05% +0.04
Jumbo 15-Year Fixed 6.89% -0.01
Jumbo 7/6 ARM 7.59% -0.04
Jumbo 5/6 ARM 7.61% -0.01
Provided via the Zillow Mortgage API

The Weekly Freddie Mac Average

Every Thursday, Freddie Mac, a government-sponsored buyer of mortgage loans, publishes a weekly average of 30-year mortgage rates. This week’s reading inched down 2 basis points to 6.62%, as it largely captured the drop in rates seen late last week. Last September, the average sank as far as 6.08%. But back in October 2023, Freddie Mac’s average saw a historic rise, surging to a 23-year peak of 7.79%.

Freddie Mac’s average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average that blends five previous days of rates. In contrast, our Investopedia 30-year average is a daily reading, offering a more precise and timely indicator of rate movement. In addition, the criteria for included loans (e.g., amount of down payment, credit score, inclusion of discount points) varies between Freddie Mac’s methodology and our own.

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

Important

The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate you ultimately secure will be based on factors like your credit score, income, and more, so it can vary from the averages you see here.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:

  • The level and direction of the bond market, especially 10-year Treasury yields
  • The Federal Reserve’s current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
  • Competition between mortgage lenders and across loan types

Because any number of these can cause fluctuations simultaneously, it’s generally difficult to attribute the change to any one factor.

Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic’s economic pressures. This bond-buying policy is a major influencer of mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net zero in March 2022.

Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it doesn’t directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.

But given the historic speed and magnitude of the Fed’s 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.

The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023. But in September, the central bank announced a first rate cut of 0.50 percentage points, and then followed that with quarter-point reductions in November and December.

For its second meeting of 2025, however, the Fed opted to hold rates steady—and it’s possible the central bank may not make another rate cut for months. At their March 19 meeting, the Fed released its quarterly rate forecast, which showed that, at that time, the central bankers’ median expectation for the rest of the year was just two quarter-point rate cuts. With a total of eight rate-setting meetings scheduled per year, that means we could see multiple rate-hold announcements in 2025.

How We Track Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.



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Refinance Rates Ease Down from 3-Month High



After surging a third of a percentage point over three days to notch their priciest level since January, 30-year refi rates moved slightly lower Thursday. Giving up 2 basis points, the flagship refi average slid to a 7.24% average.

This year’s high water mark is 7.30%, registered in January. But in early March, the 30-year refinance average fell as low as 6.71%. In any case, today’s rates are more than a full percentage point above last September’s two-year low of 6.01%.

Many other refi loan types also declined Thursday. The 15-year and 20-year refi averages subtracted 4 and 3 basis points, respectively, though the jumbo 30-year refi average added 2 points.

National Averages of Lenders’ Best Rates – Refinance
Loan Type Refinance Rates Daily Change
30-Year Fixed 7.24% -0.02
FHA 30-Year Fixed 6.62% No Change
VA 30-Year Fixed 6.80% -0.01
20-Year Fixed 7.15% -0.03
15-Year Fixed 6.11% -0.04
FHA 15-Year Fixed 6.07% No Change
10-Year Fixed 6.44% -0.10
7/6 ARM 7.31% -0.01
5/6 ARM 6.73% -0.38
Jumbo 30-Year Fixed 7.19% +0.02
Jumbo 15-Year Fixed 6.71% +0.07
Jumbo 7/6 ARM 8.15% +1.00
Jumbo 5/6 ARM 7.42% -0.23
Provided via the Zillow Mortgage API
Occasionally some rate averages show a much larger than usual change from one day to the next. This can be due to some loan types being less popular among mortgage shoppers, such as the 10-year fixed rate, resulting in the average being based on a small sample size of rate quotes.

Important

The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate you ultimately secure will be based on factors like your credit score, income, and more, so it can vary from the averages you see here.

Since rates vary widely across lenders, it’s always wise to shop around for your best mortgage refinance option and compare rates regularly, no matter the type of home loan you seek.

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:

  • The level and direction of the bond market, especially 10-year Treasury yields
  • The Federal Reserve’s current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
  • Competition between mortgage lenders and across loan types

Because any number of these can cause fluctuations at the same time, it’s generally difficult to attribute any single change to any one factor.

Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic’s economic pressures. This bond-buying policy is a major influencer of mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net zero in March 2022.

Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it doesn’t directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.

But given the historic speed and magnitude of the Fed’s 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.

The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023. But in September, the central bank announced a first rate cut of 0.50 percentage points, and then followed that with quarter-point reductions in November and December.

For its second meeting of 2025, however, the Fed opted to hold rates steady—and it’s possible the central bank may not make another rate cut for months. At their March 19 meeting, the Fed released its quarterly rate forecast, which showed that, at that time, the central bankers’ median expectation for the rest of the year was just two quarter-point rate cuts. With a total of eight rate-setting meetings scheduled per year, that means we could see multiple rate-hold announcements in 2025.

How We Track Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.



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3 Ways Tariffs Could Affect The Housing Market



Key Takeaways

  • Tariffs stand to affect the already expensive housing market in different ways.
  • Raw materials such as lumber, stone and copper could cost more, making new homes more expensive.
  • Renovators could also face higher prices as tariffs will likely increase the costs of appliances, fixtures, cabinetry, and glass. 
  • Economic uncertainty also has an impact on borrowing costs as fluctuating mortgage rates create issues for lenders.

Tariffs are adding new price pressures to a housing market that was already pricing out many buyers.

President Donald Trump’s changing tariff policies have rattled markets and are being felt across the economy. The housing market is no exception: Tariffs could have a variety of effects on buyers, sellers, builders, and mortgage brokers.

Housing market participants are bracing for increased costs as housing affordability remains under pressure due to limited supply and elevated mortgage rates. Import taxes on materials like wood, plastics, glass, and metals will raise housing construction and renovation costs. Meanwhile, economic uncertainty is driving interest rates even higher, making it harder for lenders to close deals.

Home Builders Face Higher Material Costs

Raw materials will likely become more expensive under Trump’s tariffs, especially if the tariffs he has proposed are implemented.

The White House has been particularly interested in lumber as it studies which imports come into the U.S. The U.S. relies on lumber imports to meet about 30% of its domestic demand, the National Association of Home Builders (NAHB) said.

Lumber is currently exempt from tariffs, but that could change, according to a new report from the Commerce Department. Canada is one of the major suppliers of lumber to the U.S., with about 80% of U.S. softwood lumber imports being sourced from the country. The report indicated that import taxes on lumber from the U.S.’s northern neighbor could more than double this year.

And lumber isn’t the only material under threat. Tariffs on Mexican products could also raise the prices of stone tiles. Meanwhile, granite and marble costs could rise due to tariffs in Europe. Trump has also floated industry-specific tariffs on copper and already implemented steel and aluminum tariffs.

Home Renovators Will Also Feel the Pinch of Tariffs

Home renovators are also likely to feel the pinch from tariffs. While less reliant on lumber than home builders, renovators are also facing costs for fixtures, appliances and plumbing.

Tariffs on China could be particularly problematic for home renovators, who import several key housing materials from the nation, including glass and cabinetry, said Eli Moyal, founder and COO of renovation project tracking service Chapter. 

“A lot of the materials that we use in projects, either the finished materials or the rough materials, are directly or indirectly from China. So that’s going to affect a significant part of the market,” he said.

Clients could see project price increases of between 10% and 15% from the tariffs, Moyal said, though not all of the increased costs are being passed on to consumers.

“Not everything is being put to the client, to the end of the funnel. The manufacturer takes some, the distributor takes some, the builder takes some, and then the client will see some increase in cost,” Moyal said. 

Mortgage Rates Have Already Fluctuated

For mortgage brokers, tariff challenges come in the form of fluctuating mortgage rates.

Treasury yields have soared this week as investors price in tariff policies. The yield on the 10-year Treasury, which heavily influences mortgage interest rates, rose as high as 4.59% on Friday before retreating slightly. 

Mortgage rates generally follow the path of the 10-year Treasury yield and jumped to more than 7% late in the week, up from around 6.7% a week earlier.

Phil Crescenzo Jr., vice president of Nation One Mortgage Corporation’s southeast division, said the uncertainty in borrowing is making it difficult for home buyers to finalize costs.

“If we’re trying to lock an interest rate within the last four business days, they could move by half a percent, three-quarters of a percent, for the same cost in a four-day span. That’s pretty significant,” Crescenzo said.



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Trump Exempts Smartphones, Computers, Chips From Tariffs



Smartphones, computers, and semiconductors have been exempted from President Donald Trump’s “reciprocal” tariffs, according to updated guidance from the U.S. Customs and Border Protection.

According to reports, Trump had hinted at exemptions on Air Force One on Friday night, telling reporters that “there could be a couple of exceptions for obvious reasons, but I would say 10% is a floor” for tariffs.

The White House did not immediately respond to an Investopedia request for comment.

Apple and Other Device Makers Stand to Benefit From Exemptions

The news would benefit Apple (AAPL), which manufactures many of its iPhones and other electronics in China, as well as other device makers.

Trump’s executive actions call for 145% tariffs on imported goods from China, which has engaged in an escalating tit-for-tat with the U.S. Apple, whose shares are yet to fully recover from the hit taken since President Trump’s tariff announcement on April 2, did not immediately return a request for comment.



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Monthly Dividend Stock In Focus: Pine Cliff Energy


Updated on April 10th, 2025 by Felix Martinez

Pine Cliff Energy (PIFYF) has a rather unique, appealing investment characteristic: it pays dividends monthly instead of quarterly. There are only 76 such stocks today, a list of which you can find below.

Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter like dividend yield and payout ratio) by clicking on the link below:

 

Pine Cliff Energy’s combination of a high dividend yield and a monthly dividend makes it appealing to individual investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about Pine Cliff Energy.

Business Overview

Pine Cliff Energy acquires, explores, develops, and produces oil, natural gas, and natural gas liquids in the Western Canadian Sedimentary Basin.

The company primarily holds interests in oil and gas properties in the Southern Alberta, Southern Saskatchewan, and Edson areas, as well as in the Viking and Ghost Pine areas of Central Alberta. It was formed in 2004 and is headquartered in Calgary, Canada.

Pine Cliff Energy produces oil and gas at a ratio of 21/79, so it should be considered primarily a natural gas producer. As a gas producer, Pine Cliff Energy is highly cyclical due to the dramatic swings in the price of natural gas. Notably, the company has reported losses in seven of the last ten years and initiated a dividend only in 2022.

On the other hand, Pine Cliff Energy claims to have some advantages over well-known oil and gas producers.

First, the company claims that it has a decent balance sheet (more on this later), which is paramount in the oil and gas industry, which is characterized by fierce downturns every few years.

Source: Investor Presentation

In addition, Pine Cliff Energy’s management team owns 14% of the company; hence, it is aligned with the shareholders. This is an essential characteristic that investors should not undermine.

Moreover, Pine Cliff Energy has the lowest natural production decline rate among all Canadian public producers. This reduces the capital expenses required to sustain a given level of production.

Like almost all oil and gas producers, Pine Cliff Energy incurred losses in 2020 due to the collapse of oil and gas prices caused by the coronavirus crisis.

However, thanks to the massive distribution of vaccines worldwide, global demand for oil and gas recovered in 2021, and thus, the company became profitable in that year.

Even better for Pine Cliff Energy, the Ukrainian crisis triggered a rally in oil and gas prices to 13-year highs in 2022. As a result, the company posted 10-year high earnings per share of $0.22 in that year. It also initiated a dividend in June 2022, after more than a decade without one.

However, the price of natural gas has slumped since early last year due to abnormally warm winter weather for two consecutive years. This has resulted in exceptionally high gas inventories in North America.

Pine Cliff Energy ended 2024 with a stronger Q4 performance due to higher AECO natural gas prices. Adjusted funds flow reached $8.6 million for the quarter and $38 million for the year, though both were down from 2023. Annual production averaged 23,248 Boe/d, up 13% year-over-year. The company spent $8.9 million in capital, earned $10.5 million from asset sales, and paid $25.6 million in dividends—all while keeping its payout ratio below 100%, supported by a successful hedging program.

Despite not drilling in 2024, Pine Cliff grew its reserves. A 2023 acquisition boosted low-decline production and drilling inventory, helping 2P reserves rise 5.6%. Technical revisions and land swaps added new two-mile drilling locations and early potential in the Basal Quartz oil play. Pine Cliff now holds 18.4 net two-mile locations and controls key gas infrastructure to support future growth.

The company plans to resume drilling in late 2025, depending on commodity prices. It announced a 25-year natural gas supply deal for a new Alberta data center, diversifying markets without added transport or hedge costs. Hedging and pipeline strategies remain key to protecting cash flow and supporting shareholder returns.

Growth Prospects

As mentioned above, Pine Cliff Energy has the lowest natural production decline rate among all Canadian public producers.

Source: Investor Presentation

The natural decline of the producing wells is paramount in the oil and gas industry, as high decline rates result in excessive capital expenses required to sustain a given level of production. Thus, Pine Cliff Energy has a significant competitive advantage over its peers.

On the other hand, as an oil and gas producer, Pine Cliff Energy is highly sensitive to the inevitable cycles of oil and gas prices. More precisely, as the company produces 79% gas and 21% oil, it is especially sensitive to the cycles of natural gas prices.

Thanks to the rally in oil and gas prices to 13-year highs in 2022, Pine Cliff Energy posted 10-year high earnings per share in 2022. However, both prices have plunged from their highs in 2022. As a result, the company is likely to post much lower earnings per share this year.

Given the highly cyclical nature of the oil and gas industry and our expectations for slightly higher gas prices in the upcoming years, we expect Pine Cliff Energy’s earnings per share to grow by about 5.0% per year on average over the next five years, from $0.07 in 2025 to $0.08 in 2026.

Dividend & Valuation Analysis

Pine Cliff Energy is currently offering a decent dividend yield of 2.5%. It is thus not a pure play for income-oriented investors, and those investors should be aware that the dividend is far from safe due to the dramatic cycles of oil and gas prices.

Pine Cliff Energy’s forward payout ratio is 30%, which is low, particularly for the energy sector.

Overall, the balance sheet has weakened in recent quarters, and thus, the company will be vulnerable whenever the next downturn in the energy sector occurs.

Moreover, it is critical to note that Pine Cliff Energy initiated a dividend only in 2022, amid multi-year high commodity prices. It failed to offer a dividend in the preceding years, as it incurred material losses in most of those years. Therefore, it is evident that the company’s dividend is far from safe.

About valuation, Pine Cliff Energy is currently trading for 5.8 times its expected earnings per share this year. Given the company’s high cyclicality, we assume a fair price-to-earnings ratio of 10.0 for the stock.

Therefore, the current earnings multiple is much lower than our assumed fair price-to-earnings ratio. If the stock trades at its fair valuation level in five years, it will incur a 7.3% annualized tailwind in its returns.

Taking into account the 5.0% annual growth of earnings per share, the 2.5% current dividend yield, and a 7.3% annualized tailwind of valuation level, Pine Cliff Energy could offer a ~15% average annual total return over the next five years.

This is a very high expected return. The stock is highly risky right now, and hence, investors should wait for the next downturn in the energy sector before evaluating it again despite strong projected returns.

Final Thoughts

Pine Cliff Energy offers a dividend yield of just 2.5%, which is just over the S&P 500’s 1.5% dividend yield. As a result, the stock isn’t particularly enticing for income investors.

However, the company has a weakening balance sheet. In addition, it has proved highly vulnerable to the cycles of oil and gas prices.

As these prices seem to have peaked in this cycle, the stock is highly risky right now. Therefore, investors should wait for a much lower entry point.

Moreover, Pine Cliff Energy is characterized by extremely low trading volume. This means that it is hard to establish or sell a large position in this stock.

Additional Reading

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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Monthly Dividend Stock In Focus: Paramount Resources


Published on April 10th, 2025 by Felix Martinez

Paramount Resources (PRMRF) has two appealing investment characteristics:

#1: It is offering an above average dividend yield of 3.8%, which is more than twice the dividend yield of the S&P 500.
#2: It pays dividends monthly instead of quarterly.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

 

The combination of an above-average dividend yield and a monthly dividend renders Paramount Resources appealing to individual investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about Paramount Resources.

Business Overview

Paramount Resources explores for and produces oil and natural gas from conventional and unconventional fields in the Western Canadian Sedimentary Basin.

The company holds interests in the Karr and Wapiti Montney properties, which cover an area of 185,000 net acres south of Grande Prairie, Alberta. It was founded in 1976 and is based in Calgary, Canada.

Paramount Resources has an average production rate of about 100,000 barrels per day and total proved reserves of 415 million barrels of oil equivalent, with oil and gas at a 49/51 ratio.

Source: Investor Presentation

It is also important to note that 46% of the company is owned by insiders. This is a remarkably high percentage of ownership, which results in the alignment of interests between insiders and the other individual shareholders.

As an oil and gas producer, Paramount Resources is highly cyclical due to the dramatic swings in oil and gas prices. The company has reported losses in five of the last ten years and resumed its dividend payments only in the summer of 2021, after 22 years without a dividend payment.

On the other hand, Paramount Resources has some advantages over well-known oil and gas producers. Most oil and gas producers have been struggling to replenish their reserves due to the natural decline of their producing wells.

Paramount Resources reported strong 2024 results, with a record production of 98,490 Boe/d and $815 million in cash from operations. The company sold its Karr, Wapiti, and Zama assets to Ovintiv for $3.3 billion and issued a $15.00 per share special distribution. It also repurchased 5.7 million shares for $177 million and focused capital spending on Duvernay developments, drilling 58 wells and advancing the Alhambra Plant.

At year-end, Paramount held $188 million in net debt and $564 million in investment securities. Since 2021, it has returned $2.97 billion to shareholders and maintains strong liquidity with $830 million in cash and investments, plus a $500 million undrawn credit facility. Fox Drilling continues operating six rigs, supporting internal and third-party projects.

Excluding sold assets, reserves totaled 242.5 MMBoe (50% liquids) with an NPV10 of $2.46 billion. For 2025, Paramount plans $760–$790 million in capital spending, targeting 37,500–42,500 Boe/d average production. Volumes rebounded in Q4 as the Alhambra Plant came online.

Growth Prospects

The company has ample room for production growth thanks to accelerating its development efforts in its producing areas.

Source: Investor Presentation

Paramount Resources has a proven record of identifying key resource areas with a low decline rate and more than 15 years of production.

On the other hand, as an oil and gas producer, Paramount Resources is highly sensitive to oil and gas price cycles. This is clearly reflected in the company’s performance record, which has posted material losses in five of the last ten years.

The price of oil has slumped significantly from its peak in 2022. As a result, the company is likely to post much lower earnings per share this year.

Given Paramount Resources’ promising production growth prospects and the highly cyclical nature of the oil and gas industry, we expect Paramount Resources’ earnings per share to grow by about 1.0% per year on average over the next five years, from an estimate of $0.89 this year to $1.73 in 2027.

Dividend & Valuation Analysis

Paramount Resources is currently offering an above-average dividend yield of 3.8% , which is more than double the 1.5% yield of the S&P 500. The stock is thus an interesting candidate for income-oriented investors, but they should be aware that the dividend is far from safe due to the dramatic cycles of oil and gas prices. Paramount Resources has a decent payout ratio of 55%.

However, it is critical to note that Paramount Resources reinstated its dividend only in mid-2021, after 22 years without a dividend payment.

The company failed to offer a dividend in the preceding years, as it incurred material losses in many of those years. Therefore, the company’s dividend is far from safe.

Regarding valuation, Paramount Resources is currently trading for 8 times its expected earnings per share of $0.89 this year.

Given the company’s high cyclicality, we assume a fair price-to-earnings ratio of 12.5, which is a typical mid-cycle valuation level for oil and gas producers.

Considering the 1.0% annual growth of earnings per share, the 3.8% current dividend yield, and a 6% annualized tailwind of valuation level, Paramount Resources could offer a ~10% average annual total return over the next five years.

The expected return signals that the stock will be attractive in the long term, as we have passed the peak of the oil and gas industry’s cycle. Therefore, investors should wait for a lower entry point.

Final Thoughts

Thanks to the above-average oil and gas prices, Paramount Resources has thrived since early 2022. The stock offers an above-average dividend yield of 3.8% and a payout ratio of 55%, which is likely to entice some income-oriented investors.

However, the company has proved highly vulnerable to oil and gas price cycles. As the price of oil has peaked and may have a material downside, the stock is risky right now.

Moreover, Paramount Resources has a below-average trading volume. This means that it may be difficult to establish or sell a large position in this stock.

Additional Reading

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

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