Cross Timbers Royalty Trust (CRT) Fund Overview

Cross Timbers Royalty Trust (CRT) Energy Operations & Outlook

Cross Timbers Royalty Trust, established in 1991, is an express trust holding net profit interests in producing and nonproducing royalty and overriding royalty interest properties across Texas, Oklahoma, and New Mexico. The company's financial performance is directly linked to the fluctuating prices and production volumes of oil and gas.

What Is the Investment Thesis for CRT?

Cross Timbers Royalty Trust offers investors exposure to the oil and gas sector through its royalty and working interests. With a market capitalization of $0.06 billion and a P/E ratio of 21.71, the trust's profitability is evident in its high profit margin of 71.4% and gross margin of 96.3%. The dividend yield of 4.95% provides an income stream for investors. However, the trust's beta of -0.01 indicates a low correlation with the broader market, suggesting limited diversification benefits. The trust's performance is highly dependent on oil and gas prices and production volumes, making it susceptible to commodity price volatility. Upcoming production reports will be crucial in assessing the trust's near-term financial health. Investors should monitor energy market trends and regulatory changes affecting the oil and gas industry to evaluate the trust's long-term prospects.

Based on FMP financials and quantitative analysis

CRT Key Highlights

Market Cap: $0.06B indicates the total value of the trust's outstanding units, reflecting investor sentiment and market valuation.

• P/E Ratio: 21.71 suggests the price investors are willing to pay for each dollar of earnings, providing insight into valuation relative to earnings.
• Profit Margin: 71.4% showcases the trust's ability to generate profit from its revenue, highlighting operational efficiency.
• Gross Margin: 96.3% demonstrates the high percentage of revenue remaining after deducting the cost of goods sold, indicating strong pricing power.
• Dividend Yield: 4.95% offers a return to investors in the form of dividend payments, making it an attractive income-generating asset.

Who Are CRT's Competitors?

CRT is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are CRT's Key Strengths?

High profit margin of 71.4%.

• Gross margin of 96.3% indicates strong pricing power.
• Dividend yield of 4.95% provides income to investors.

What Are CRT's Weaknesses?

Dependence on oil and gas prices and production volumes.

• Limited diversification benefits due to low beta of -0.01.
• Small market capitalization of $0.06B.

What Could Drive CRT Stock Higher?

Release of quarterly production and financial results, providing insights into the trust's performance.

• Fluctuations in oil and gas prices, impacting the trust's revenue and profitability.
• Changes in production volumes from the underlying properties, affecting the trust's income.

What Are the Key Risks for CRT?

Weak fundamentals — a Piotroski F-Score of 3/9 flags soft profitability, leverage or efficiency.

• Rich valuation — a P/E of 21.71 runs well above the Energy sector’s ~15.80x, leaving little room for a miss.
• Decline in oil and gas prices, reducing the trust's revenue and distributions.
• Decrease in production volumes from the underlying properties, impacting the trust's income.
• Regulatory changes affecting the oil and gas industry, increasing compliance costs.
• Commodity price volatility, creating uncertainty in the trust's financial performance.

What Are the Growth Opportunities for CRT?

• Expansion of Royalty Interests: Cross Timbers Royalty Trust can pursue growth by acquiring additional royalty and overriding royalty interests in producing and nonproducing properties. The market for royalty interests is competitive, but strategic acquisitions in areas with proven reserves can enhance the trust's long-term revenue stream. The timeline for such acquisitions can vary depending on the availability of suitable properties and the negotiation process, but successful acquisitions can lead to increased distributions to unitholders within a year. The market size for royalty interests is substantial, with billions of dollars in transactions occurring annually, providing ample opportunities for the trust to expand its portfolio.
• Optimization of Existing Assets: The trust can focus on optimizing the production and revenue from its existing properties through collaboration with the operators. This includes implementing advanced extraction techniques, improving operational efficiency, and reducing costs. The timeline for such improvements can range from several months to a year, depending on the specific measures implemented. The potential impact on revenue can be significant, with even small improvements in production rates leading to increased distributions to unitholders. The market size for oil and gas production optimization is substantial, with companies investing billions of dollars annually in technologies and strategies to enhance production efficiency.
• Diversification into New Geographies: Cross Timbers Royalty Trust can explore opportunities to diversify its royalty interests into new geographic regions with proven oil and gas reserves. This can reduce the trust's reliance on its existing properties in Texas, Oklahoma, and New Mexico and mitigate the risk of production declines in those areas. The timeline for such diversification can be several years, as it requires extensive research, due diligence, and negotiation. The potential benefits include increased revenue stability and long-term growth. The market size for oil and gas exploration and production is global, with opportunities in various regions around the world.
• Strategic Partnerships: Cross Timbers Royalty Trust can form strategic partnerships with other companies in the oil and gas sector to leverage their expertise and resources. This can include partnerships with exploration and production companies, midstream operators, or financial institutions. The timeline for establishing such partnerships can vary depending on the specific objectives and the complexity of the agreements. The potential benefits include access to new technologies, increased capital, and enhanced operational efficiency. The market for strategic partnerships in the oil and gas sector is dynamic, with companies constantly seeking opportunities to collaborate and create value.
• Hedging Strategies: Cross Timbers Royalty Trust can implement hedging strategies to mitigate the risk of commodity price volatility. This involves using financial instruments, such as futures contracts and options, to lock in a certain price for its oil and gas production. The timeline for implementing hedging strategies is ongoing, as the trust needs to continuously monitor market conditions and adjust its hedging positions accordingly. The potential benefits include increased revenue stability and reduced exposure to price fluctuations. The market for hedging instruments is liquid and well-developed, providing companies with a range of options to manage their commodity price risk.

What Threats Does CRT Face?

• Volatility in oil and gas prices.
• Regulatory changes affecting the oil and gas industry.
• Competition from other royalty trusts and energy companies.

What Are CRT's Competitive Advantages?

• Established Royalty Interests: The trust's existing royalty and working interests provide a stable base of income.
• Geographic Diversification: The trust's properties are located in multiple states, reducing its reliance on any single region.
• Express Trust Structure: The trust's structure allows for direct distribution of income to unitholders.

What Does CRT Do?

Cross Timbers Royalty Trust, founded in 1991 and based in Dallas, Texas, functions as an express trust focused on the acquisition and management of net profits interests in oil and gas properties. The trust's primary assets include a 90% net profits interest in various producing and nonproducing royalty and overriding royalty interest properties located in Texas, Oklahoma, and New Mexico. Additionally, it holds a 75% net profits working interest in four properties in Texas and three properties in Oklahoma. These interests represent the trust's stake in the revenue generated from the extraction and sale of oil and gas from these properties. The trust's income is derived from the royalties and working interests it owns, making its financial performance directly dependent on the production volumes and prevailing market prices of oil and gas. As an express trust, Cross Timbers Royalty Trust is designed to distribute its income to its unitholders after deducting operating expenses, providing investors with a direct stake in the performance of the underlying oil and gas assets. The trust does not actively engage in exploration or production activities but rather relies on the operators of the properties to manage these aspects. The trust's structure and operations are relatively straightforward, focusing on maximizing the value of its existing assets and distributing income to its unitholders.

What Products and Services Does CRT Offer?

• Holds 90% net profits interests in certain producing and nonproducing royalty and overriding royalty interest properties.
• Manages properties in Texas, Oklahoma, and New Mexico.
• Holds 75% net profits working interest in four properties in Texas.
• Holds 75% net profits working interest in three properties in Oklahoma.
• Distributes income to unitholders after deducting operating expenses.
• Relies on operators to manage exploration and production activities.

How Does CRT Make Money?

• Acquires and manages net profits interests in oil and gas properties.
• Receives royalties and working interests from the production and sale of oil and gas.
• Distributes income to unitholders after deducting operating expenses.

What Industry Does CRT Operate In?

Cross Timbers Royalty Trust operates within the oil and gas exploration and production industry, a sector characterized by cyclical trends and sensitivity to commodity prices. The industry is influenced by global supply and demand dynamics, geopolitical events, and technological advancements. The competitive landscape includes major integrated oil companies, independent exploration and production firms, and royalty trusts. Cross Timbers Royalty Trust's position is unique as an express trust, focusing on acquiring and managing royalty interests rather than direct exploration and production. The trust's performance is closely tied to the prevailing market prices of oil and gas, as well as the production volumes from its underlying properties. The industry is currently navigating a transition towards cleaner energy sources, which presents both challenges and opportunities for companies in the oil and gas sector.

Who Are CRT's Key Customers?

• Unitholders who receive distributions from the trust's income.
• Operators of the oil and gas properties who manage exploration and production.
• End consumers of oil and gas products.

Over the past six months, Cross Timbers Royalty Trust insiders filed 32 SEC Form 4 transactions — 0 sales and 32 purchases. On net that is roughly 376K shares acquired (about $3.8M) — insiders putting money in tends to read as conviction.

Quarterly Financial Performance: Cross Timbers Royalty Trust

Revenue for Cross Timbers Royalty Trust came in at $1.1M during Q2 FY2026, a 39.8% improvement versus the preceding quarter. The company recorded net income of $861K, with diluted EPS of $0.14. Quarter-over-quarter revenue has been mixed, typical for a unknown company operating in Energy. Across the four most recent quarters, CRT averaged $0.13 in diluted EPS.

Return on equity for Cross Timbers Royalty Trust stands at 145.8%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 88.4%, showing how much profit it generates from its asset base. CRT trades at a trailing price-to-earnings ratio of 21.71, above the Energy sector average of ~15.80x. Its earnings yield is 6.2%, the inverse of the P/E and a quick read on earnings relative to price.

Cross Timbers Royalty Trust's Piotroski F-Score is 3/9, a 9-point checklist of profitability, leverage and efficiency — flagging fundamental weakness worth scrutiny. Its Altman Z-Score of 27.36 places it in the safe zone, indicating low near-term bankruptcy risk.

Company Profile

Cross Timbers Royalty Trust operates in the Oil & Gas Exploration & Production industry within the Energy sector. It is headquartered in Dallas, US. The company is led by CEO Nancy G. Willis. CRT has traded publicly since 1992.

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Cross Timbers Royalty Trust Energy Stock: Key Questions Answered

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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