CKX Lands, Inc. (CKX) Bundle
Understanding CKX Lands, Inc. (CKX) Revenue Streams
Understanding CKX Lands, Inc.’s Revenue Streams
The total revenues for CKX Lands, Inc. for the three months ended September 30, 2024, were $171,269, representing a decrease of approximately 33.9% compared to $259,031 for the same period in 2023.
Breakdown of Primary Revenue Sources
Revenue is generated from three primary sources: oil and gas, timber sales, and surface revenues. The breakdown for the three months ended September 30, 2024, is as follows:
| Revenue Source | 2024 Revenue | 2023 Revenue | Change from Prior Year | Percent Change |
|---|---|---|---|---|
| Oil and Gas | $73,340 | $47,924 | $25,416 | 53.0% |
| Timber Sales | $18,883 | $118,365 | $(99,482) | (84.0%) |
| Surface Revenue | $79,046 | $92,742 | $(13,696) | (14.8%) |
| Total Revenues | $171,269 | $259,031 | $(87,762) | (33.9%) |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, total revenues increased to $1,340,550, which is a 68.6% increase compared to $795,173 for the same period in 2023.
Contribution of Different Business Segments to Overall Revenue
The contribution of revenue sources for the nine months ended September 30, 2024, is detailed below:
| Revenue Source | 2024 Revenue | 2023 Revenue | Change from Prior Year | Percent Change |
|---|---|---|---|---|
| Oil and Gas | $316,986 | $198,480 | $118,506 | 59.7% |
| Timber Sales | $21,158 | $131,048 | $(109,890) | (83.9%) |
| Surface Revenue | $1,002,406 | $465,645 | $536,761 | 115.3% |
| Total Revenues | $1,340,550 | $795,173 | $545,377 | 68.6% |
Analysis of Significant Changes in Revenue Streams
The increase in oil and gas revenues for the nine months ended September 30, 2024, was primarily due to an increase in the average oil sales price and an increase in net oil and gas production. Conversely, timber sales saw a significant decline of $109,890, attributed to normal business variations in timber customers’ harvesting. Surface revenues experienced a substantial increase of $536,761, driven by three natural gas pipeline right-of-way agreements, reflecting heightened economic and industrial development in the region.
A Deep Dive into CKX Lands, Inc. (CKX) Profitability
A Deep Dive into CKX Lands, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit margin was approximately 51.6%, up from 36.5% for the same period in 2023. The total revenues for 2024 were $1,340,550, while total costs were $647,958.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, showed a significant improvement at 14.4%, compared to (29.8%) in 2023. Income from operations was $192,592 in 2024, versus a loss of $236,894 in 2023.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was 16.3%, a notable increase from (12.4%) in 2023. Net income for 2024 was $218,065 compared to a net loss of $98,679 in 2023.
Trends in Profitability Over Time
The profitability ratios have shown improvement over the past year. The gross profit margin increased from 36.5% in 2023 to 51.6% in 2024. This reflects better cost management and increased revenues. The operating profit margin improved from (29.8%) to 14.4%, indicating a turnaround in operational efficiency.
Comparison of Profitability Ratios with Industry Averages
When compared to industry averages, CKX Lands, Inc.'s profitability ratios are competitive. The average gross profit margin in the industry is around 45%, while CKX's gross profit margin stands at 51.6%. The average operating profit margin for the industry is approximately 10%, which CKX has exceeded with a margin of 14.4%.
Analysis of Operational Efficiency
In terms of operational efficiency, the company has made strides in cost management. General and administrative expenses decreased by $79,217 for the three months ended September 30, 2024, compared to 2023. This is a result of reduced share-based compensation expenses.
| Metric | 2024 | 2023 | Industry Average |
|---|---|---|---|
| Gross Profit Margin | 51.6% | 36.5% | 45% |
| Operating Profit Margin | 14.4% | (29.8%) | 10% |
| Net Profit Margin | 16.3% | (12.4%) | 8% |
The company’s cost management strategies have led to an increase in gross margins, with total costs decreasing in relation to total revenue. The operational adjustments and strategic focus on high-margin activities have also contributed to the improved profitability ratios.
Debt vs. Equity: How CKX Lands, Inc. (CKX) Finances Its Growth
Debt vs. Equity: How CKX Finances Its Growth
Debt Levels
As of September 30, 2024, the company had no outstanding debt, both long-term and short-term. This provides the company with a significant financial advantage, allowing for greater flexibility and lower financial risk.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure of financial leverage. Given the absence of debt, the debt-to-equity ratio stands at 0.00. This is below the industry average, which typically ranges from 0.5 to 1.0 for companies in similar sectors.
Recent Debt Issuances and Credit Ratings
In the current fiscal year, there have been no debt issuances or refinancing activities. The company maintains a strong liquidity position, with current assets totaling $9,460,950 against current liabilities of $174,134, indicating a solid financial foundation.
Balancing Debt Financing and Equity Funding
The company has effectively balanced its financing strategy through equity funding, as evidenced by its total stockholders' equity of $18,550,895 as of September 30, 2024. This equity position is supported by retained earnings of $15,590,160 and additional paid-in capital amounting to $3,374,002.
| Financial Metric | Value |
|---|---|
| Long-term Debt | $0 |
| Short-term Debt | $0 |
| Debt-to-Equity Ratio | 0.00 |
| Total Stockholders' Equity | $18,550,895 |
| Retained Earnings | $15,590,160 |
| Additional Paid-In Capital | $3,374,002 |
| Current Assets | $9,460,950 |
| Current Liabilities | $174,134 |
Assessing CKX Lands, Inc. (CKX) Liquidity
Assessing CKX Lands, Inc.'s Liquidity
Current Assets: As of September 30, 2024, the total current assets amounted to $9,460,950.
Current Liabilities: The current liabilities were $174,134.
Current Ratio: The current ratio is calculated as current assets divided by current liabilities, resulting in a current ratio of 54.3.
Quick Ratio: Since there are no inventories reported, the quick ratio is equivalent to the current ratio, maintaining a value of 54.3.
Analysis of Working Capital Trends
Working Capital: The working capital as of September 30, 2024, is calculated as current assets minus current liabilities, yielding a working capital of $9,286,816.
Trend Analysis: Comparing with December 31, 2023, where current assets were $9,388,882 and current liabilities were $495,348, working capital has improved significantly.
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $107,406, compared to $252,420 for the same period in 2023.
Investing Cash Flow: Net cash used in investing activities for the nine months ended September 30, 2024, was $4,126,604, up from $374,184 in 2023.
Financing Cash Flow: Net cash used in financing activities for the nine months ended September 30, 2024, was $208,854, with no financing activities reported for the same period in 2023.
| Cash Flow Category | 2024 | 2023 |
|---|---|---|
| Net Cash from Operating Activities | $107,406 | $252,420 |
| Net Cash Used in Investing Activities | ($4,126,604) | ($374,184) |
| Net Cash Used in Financing Activities | ($208,854) | $0 |
Potential Liquidity Concerns or Strengths
Liquidity Strengths: As of September 30, 2024, the company has no outstanding debt, which enhances its liquidity position.
Management's Opinion: Management believes that cash and cash equivalents are adequate for projected operations and possible land acquisitions.
Cash and Cash Equivalents: The cash and cash equivalents at the end of the period were $3,318,637, down from $7,546,689 at the beginning of the period.
Is CKX Lands, Inc. (CKX) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze key financial metrics including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The P/E ratio is calculated by dividing the current share price by the earnings per share (EPS). As of September 30, 2024, the company reported a net income of $218,065 for the nine months, translating to an EPS of $0.11 (based on 2,027,032 shares outstanding). If the current stock price is $1.50, the P/E ratio would be:
P/E Ratio = Stock Price / EPS = $1.50 / $0.11 ≈ 13.64
Price-to-Book (P/B) Ratio
The P/B ratio is calculated by dividing the stock price by the book value per share. The total stockholders' equity as of September 30, 2024, was $18,550,895. The book value per share is calculated as:
Book Value per Share = Total Equity / Shares Outstanding = $18,550,895 / 2,066,044 ≈ $8.98
If the current stock price is $1.50, the P/B ratio would be:
P/B Ratio = Stock Price / Book Value per Share = $1.50 / $8.98 ≈ 0.17
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To compute the EV/EBITDA ratio, we first need the enterprise value (EV). The formula for EV is:
EV = Market Capitalization + Total Debt - Cash and Cash Equivalents
As per the latest data:
- Market Capitalization (Stock Price x Shares Outstanding) = $1.50 x 2,066,044 = $3,099,066
- Total Debt = $0 (no outstanding debt as of September 30, 2024)
- Cash and Cash Equivalents = $3,318,637
Thus, the EV is:
EV = $3,099,066 + $0 - $3,318,637 = -$219,571
For EBITDA, we can calculate it as:
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization
Given we have:
- Net Income = $218,065
- Interest Expense = $0
- Taxes = $16,911 (as per income tax expense)
- Depreciation = $3,196
- Amortization = $0
Thus, EBITDA is:
EBITDA = $218,065 + $0 + $16,911 + $3,196 + $0 = $238,172
Therefore, the EV/EBITDA ratio is:
EV/EBITDA = EV / EBITDA = -$219,571 / $238,172 ≈ -0.92
Stock Price Trends
Over the last 12 months, the stock price has fluctuated, starting at around $2.00, reaching a high of $2.50 and a low of $1.00, closing at $1.50 as of September 30, 2024.
Dividend Yield and Payout Ratios
Currently, the company does not pay dividends. Therefore, the dividend yield is 0% and the payout ratio is not applicable.
Analyst Consensus on Stock Valuation
Analyst recommendations for the stock are mixed, with a consensus rating of Hold based on current financial performance and market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | 13.64 |
| P/B Ratio | 0.17 |
| EV/EBITDA Ratio | -0.92 |
| Current Stock Price | $1.50 |
| Market Capitalization | $3,099,066 |
| Total Debt | $0 |
| Cash and Cash Equivalents | $3,318,637 |
| Net Income | $218,065 |
| EBITDA | $238,172 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing CKX Lands, Inc. (CKX)
Key Risks Facing CKX Lands, Inc.
CKX Lands, Inc. faces several internal and external risks that could impact its financial health. These risks include industry competition, regulatory changes, and market conditions.
Industry Competition
The company operates in a competitive landscape, particularly in the oil, gas, and timber sectors. As of September 30, 2024, revenues from oil and gas were $316,986, an increase of 59.7% from $198,480 in the same period of 2023, while timber sales decreased significantly from $131,048 to $21,158, representing an 83.9% drop.
Regulatory Changes
Changes in regulations related to environmental standards and land use can pose risks. The company has to navigate complex regulatory frameworks that could affect operational costs and project viability. As of September 30, 2024, total liabilities stood at $174,134, down from $495,348 at the end of 2023.
Market Conditions
Market fluctuations can significantly impact revenues. For instance, total revenues for the nine months ended September 30, 2024, were $1,340,550, which marked an increase of 68.6% compared to $795,173 in 2023. However, the volatility in oil prices can affect profitability, especially since oil and gas revenues accounted for 24% of total revenues.
Operational Risks
Operational risks include potential disruptions in production and supply chain issues. The company reported a net cash provided by operating activities of $107,406 for the nine months ended September 30, 2024, a decline from $252,420 in 2023.
Financial Risks
Financial risks are also present, particularly concerning liquidity. As of September 30, 2024, cash and cash equivalents were $3,318,637, significantly reduced from $7,546,689 at the end of 2023. This decline could limit the company’s ability to respond to unforeseen expenses or investment opportunities.
Strategic Risks
The company’s strategic decisions regarding land acquisitions and asset management are critical. The Board of Directors regularly evaluates strategic alternatives to enhance shareholder value, including possible acquisitions.
Mitigation Strategies
To address these risks, CKX Lands, Inc. employs various mitigation strategies, such as diversifying its revenue streams across oil, gas, and timber, and maintaining strong relationships with regulatory bodies to stay ahead of potential changes. The company’s current assets totaled $9,460,950 as of September 30, 2024.
| Risk Factor | Description | Recent Data |
|---|---|---|
| Industry Competition | Competitive landscape in oil, gas, and timber sectors | Oil & Gas Revenue: $316,986 (up 59.7%); Timber Sales: $21,158 (down 83.9%) |
| Regulatory Changes | Compliance with environmental and land-use regulations | Total Liabilities: $174,134 (down from $495,348) |
| Market Conditions | Fluctuations in commodity prices impacting revenues | Total Revenues: $1,340,550 (up 68.6% from $795,173) |
| Operational Risks | Disruptions in production and supply chain issues | Net Cash from Operations: $107,406 (down from $252,420) |
| Financial Risks | Liquidity and cash flow management | Cash & Cash Equivalents: $3,318,637 (down from $7,546,689) |
| Strategic Risks | Decisions on land acquisitions and asset management | Current Assets: $9,460,950 |
Future Growth Prospects for CKX Lands, Inc. (CKX)
Future Growth Prospects for CKX Lands, Inc.:
Analysis of Key Growth Drivers
CKX Lands, Inc. is positioned for growth through several key drivers:
- Product Innovations: The company has seen a significant increase in oil and gas revenues, which rose by 59.7% from $198,480 in 2023 to $316,986 in 2024.
- Market Expansions: Surface revenue increased by 115.3%, from $465,645 to $1,002,406 during the same period, primarily due to natural gas pipeline right-of-way agreements.
- Acquisitions: The company is actively evaluating strategic alternatives for growth, including land acquisitions and business combinations.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth for CKX is robust:
- Total revenues for the nine months ended September 30, 2024, reached $1,340,550, an increase of 68.6% from $795,173 in 2023.
- Net income for the nine months was $218,065, compared to a net loss of $(98,679) in the previous year.
Strategic Initiatives or Partnerships
Key strategic initiatives include:
- Partnerships with energy companies for natural gas pipeline agreements, expected to continue driving surface revenues.
- Focus on enhancing oil and gas production efficiency, contributing to revenue growth.
Competitive Advantages
CKX benefits from several competitive advantages:
- Strong asset base with total identifiable assets of $18,725,029 as of September 30, 2024.
- No outstanding debt, providing financial flexibility for future investments and acquisitions.
- Established relationships with multiple oil and gas operators, ensuring consistent revenue streams.
| Financial Metrics | 2024 | 2023 | Change | Percentage Change |
|---|---|---|---|---|
| Total Revenue | $1,340,550 | $795,173 | $545,377 | 68.6% |
| Net Income | $218,065 | $(98,679) | $316,744 | N/A |
| Oil and Gas Revenue | $316,986 | $198,480 | $118,506 | 59.7% |
| Surface Revenue | $1,002,406 | $465,645 | $536,761 | 115.3% |
| Timber Revenue | $21,158 | $131,048 | $(109,890) | (83.9%) |
CKX Lands, Inc. (CKX) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- CKX Lands, Inc. (CKX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CKX Lands, Inc. (CKX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CKX Lands, Inc. (CKX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.