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PetroChina Co. Ltd. ADS (PTR)

The Razor’s Edge

2-Year Price History

Recent Price
52-Week Price
$56.30 – $182.97
Market Capitalization
$152.9 Billion
Dividend Yield
Most Recent Dividend

About PetroChina Co. Ltd. ADS

PetroChina Co. Ltd. ADS is considered to operate in the Basic Materials sector. They specifically operate in the Major Integrated Oil/Gas business segment contained within the Energy industry.

The Company engaged in crude oil and natural gas exploration, development and production.

Ockham’s Rating

Rating Specific Information Withheld Premium Access Only

PTR Revenue

As a value investing shop, we are interested in seeing how PTR’s revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock’s current underlying value. Using this method, we have established a high range for Price to Sales of 2.79x and the low end of the range at 1.28x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for PTR of 1.07x is well below its normal historic Price to Sales levels. At a price of $82.58, PTR is 48% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

PTR Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. PTR is significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from PTR. For example, PTR’s Cash Earnings ratio per share has fluctuated between 4.25 and 9.52 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where PTR is with respect to prior business periods.

So with PTR’s current price (latest close of $82.58) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, PTR is 40% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn’t exist in a vacuum. So if the market doesn’t recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with PTR.

PTR Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don’t require dividend payments for company’s whose management has elected to forgo them entirely.

When reviewing dividend yields for PTR, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management’s confidence in the company. PTR’s estimated annual dividend is $3.94 resulting in a current dividend yield of 4.77%. The highest dividend yield from PTR over recent history was 11.44% while the lowest dividend yield was 1.76%. While it is quite common for a growth stock to pay no dividend at all, but for a mature company such as PTR that has a history of paying dividends it is disappointing to see their dividend yield drop so significantly. At this time, the current dividend yield is 27.73% below the median yield.

Peer Comparison


PetroChina Co. Ltd. ADS Industry Grouping

Company Ticker Market Cap (Ml) Latest
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding PTR) 3.71 2.96 » 10.08 0.54 0.84 » 4.26 15.16% 24.52%
*10 year range does not include current year values
PetroChina Co. Ltd. ADS PTR $152.9 Billion $83.53 4.19 2.34 » 16.45 1.07 0.86 » 13.95 31.10% 22.74%
Chevron Corp. CVX $151.9 Billion $74.74 4.40 3.22 » 15.37 0.59 0.90 » 3.88 17.34% 24.32%
BP PLC BP $142.4 Billion $45.33 3.95 3.19 » 12.31 0.56 1.10 » 4.80 9.73% 22.08%
Total SA TOT $111.2 Billion $49.74 3.85 3.33 » 9.76 0.62 0.80 » 4.94 13.16% 28.52%
Royal Dutch Shell PLC Class A RDSA $87.2 Billion $50.00 3.35 2.61 » 6.26 0.37 0.61 » 1.75 n/a 24.25%
ENI Spa E $86.5 Billion $43.17 3.02 2.46 » 6.71 0.56 0.80 » 5.91 20.41% 23.42%
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PetroChina Co. Ltd. ADS (PTR)
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Key Fundamentals

PTR – PetroChina Co. Ltd. ADS Fundamentals
Price (12/3/2008) $83.53
Volume (12/3/2008) 1.0 Million
10 Day Average Volume 1.0 Million
13 Week Price Range $56.30 – $121.50
52 Week Price Range $56.30 – $182.97
LTM Revenue $141.2 Billion
Shares Outstanding (12/2007) 1.8 Billion
Market Capitalization $152.9 Billion
Shares Held By Institutions 11.1 Million
Insitutional Holders 254
% Shares Held By Institutions 5.30%
Earnings Per Share (EPS) $10.27
P/E Ratio 9.90
Book Value Per Share $60.32
Gross Margin 62.10%
Quarterly Dividend 3.94
Dividend Yield 4.70%
Beta 2.07
Fiscal Year Ends December