Mesa Royalty Trust Common Stock (MTR)

FairStock Score: 78/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am a value investor first, and Mesa Royalty Trust is not a normal operating company. It owns overriding royalty interests in the Hugoton field and the San Juan Basin, so it collects cash from production without drilling or managing wells. That structure can be wonderful when volumes and commodity prices cooperate: in fiscal Q2 2026, revenue was $155,031 and net income was $130,591, an 84.24% margin. But a royalty trust also has a finite life, and the data show revenue growth of -29.80% and profit growth of -33.31%, so the trend is not a friend. The moat is thin. Location and the royalty structure may protect cash flow, but there is no pricing power, no operational control, and reserves deplete. Financially, the debt-to-equity figure is not available; Altman Z of 44.70 suggests safety per FairStock, while Piotroski 5/9 is only average. At the 2026-10-13 close of $2.15, the P/E is 10.75 and P/B is 1.27. The Graham Number is $2.76, giving a 22.10% margin of safety. A 6.96% dividend yield and 0.42 beta are appealing. However, EV/EBITDA of 30.52 is expensive for a declining trust. The stock looks modestly cheap on earnings and book value, but the business is shrinking and hard to underwrite without more history. I would demand a larger discount for depletion and commodity risk.

In plain English: Mesa Royalty Trust earns money from oil and gas royalties in Kansas, New Mexico, and Colorado. The latest quarter showed a very high profit margin, but sales and profits have been falling. At $2.15, the price looks a bit below one simple value estimate, though the business is hard to judge because its energy properties are depleting.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer