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Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Sitio Royalties had a gross margin of 78.53% for the quarter that ended in Mar. 2022 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Sitio Royalties Gross Margin % Related Terms
Sitio Royalties Gross Margin % Historical Data
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The historical data trend for Sitio Royalties's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
STR.WS vs AMPY, CEI, EP: Gross Margin % Comparison
For the Oil & Gas E&P subindustry, Sitio Royalties's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Sitio Royalties Gross Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Sitio Royalties's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Sitio Royalties's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Sitio Royalties (STR.WS) has a Gross Margin % of 78.53% as of Mar. 2022. Gross margin is the ratio of total gross profit to net sales. View historical data on Sitio Royalties and its competitors. This is 19% above median its historical median of 65.92. Over the past decade, Sitio Royalties' Gross Margin % has ranged from 42.43 to 77.26.
Is Sitio Royalties' Gross Margin % too high?
Sitio Royalties' current Gross Margin % of 78.53% is 19% above median its 10-year median of 65.92. Over the past 10 years, this metric has ranged from a low of 42.43 to a high of 77.26. The Oil & Gas industry median Gross Margin % is 26.91. Sitio Royalties' value of 78.53% is 191.8% above this industry median. Overall, Sitio Royalties has a GF Score™ of 12/100, reflecting its overall financial health beyond just this single metric.
How does Sitio Royalties' Gross Margin % compare to AMPY and CEI?
Sitio Royalties' Gross Margin % of 78.53% can be compared against companies in the Oil & Gas industry. The industry median Gross Margin % is 26.91. Sitio Royalties' value of 78.53% is 191.8% above this benchmark. Historically, Sitio Royalties' own Gross Margin % has ranged from 42.43 to 77.26 over the past decade. While the company's 10-year median is 65.92 vs. the industry median of 26.91, Sitio Royalties has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for an Oil & Gas company?
The median Gross Margin % among Oil & Gas companies is 26.91, based on 875 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Sitio Royalties's current Gross Margin % of 78.53% is 191.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Sitio Royalties and its competitors. For the Oil & Gas industry, the median Gross Margin % is 26.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Sitio Royalties's current Gross Margin % is 78.53%, which is 19% above median its own 10-year median of 65.92. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Sitio Royalties stock overvalued right now?
Sitio Royalties (STR.WS) has a current Gross Margin % of 78.53%. The current Gross Margin % is 78.53%, which is 19% above median its 10-year median of 65.92 and 191.8% above the Oil & Gas industry median of 26.91. Sitio Royalties' overall GF Score™ is 12/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Sitio Royalties (STR.WS), the current Gross Margin % is 78.53% as of Mar. 2022. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Sitio Royalties Corp is a pure-play mineral and royalty company. The group is focused on large-scale consolidation of high-quality oil & gas mineral and royalty interests across premium basins. Sitio invests in mineral and royalty interests in the Permian and other productive U.S. oil basins.
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