ARC RESOURCES LTD (ARX.CA) Stock Fundamental Analysis
TSX:ARX - Toronto Stock Exchange - CA00208D4084 - Common Stock - Currency: CAD
We assign a fundamental rating of 7 out of 10 to ARX. ARX was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. While ARX has a great profitability rating, there are some minor concerns on its financial health. ARX has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! With these ratings, ARX could be worth investigating further for value and growth investing!.
1. Profitability
1.1 Basic Checks
In the past year ARX was profitable.
In the past year ARX had a positive cash flow from operations.
Of the past 5 years ARX 4 years were profitable.
In the past 5 years ARX always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.30%, ARX belongs to the top of the industry, outperforming 91.90% of the companies in the same industry.
With an excellent Return On Equity value of 16.59%, ARX belongs to the best of the industry, outperforming 90.95% of the companies in the same industry.
ARX has a better Return On Invested Capital (9.94%) than 90.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARX is significantly above the industry average of 7.31%.
The last Return On Invested Capital (9.94%) for ARX is well below the 3 year average (16.99%), which needs to be investigated, but indicates that ARX had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.3% | ||
| ROE | 16.59% | ||
| ROIC | 9.94% |
ROA(3y)13.76%
ROA(5y)7.43%
ROE(3y)23.41%
ROE(5y)12.78%
ROIC(3y)16.99%
ROIC(5y)13.58%
1.3 Margins
Looking at the Profit Margin, with a value of 24.63%, ARX belongs to the top of the industry, outperforming 86.19% of the companies in the same industry.
In the last couple of years the Profit Margin of ARX has grown nicely.
ARX's Operating Margin of 27.21% is fine compared to the rest of the industry. ARX outperforms 78.10% of its industry peers.
In the last couple of years the Operating Margin of ARX has grown nicely.
ARX has a better Gross Margin (69.05%) than 87.14% of its industry peers.
ARX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.21% | ||
| PM (TTM) | 24.63% | ||
| GM | 69.05% |
OM growth 3Y-15.37%
OM growth 5Y23.89%
PM growth 3Y12.7%
PM growth 5YN/A
GM growth 3Y-2.53%
GM growth 5Y-0.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ARX is creating value.
The number of shares outstanding for ARX has been reduced compared to 1 year ago.
Compared to 5 years ago, ARX has more shares outstanding
Compared to 1 year ago, ARX has a worse debt to assets ratio.
2.2 Solvency
ARX has an Altman-Z score of 2.99. This is not the best score and indicates that ARX is in the grey zone with still only limited risk for bankruptcy at the moment.
ARX's Altman-Z score of 2.99 is fine compared to the rest of the industry. ARX outperforms 78.10% of its industry peers.
ARX has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as ARX would need 2.18 years to pay back of all of its debts.
ARX's Debt to FCF ratio of 2.18 is amongst the best of the industry. ARX outperforms 83.81% of its industry peers.
A Debt/Equity ratio of 0.19 indicates that ARX is not too dependend on debt financing.
The Debt to Equity ratio of ARX (0.19) is better than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.99 |
ROIC/WACC1.33
WACC7.48%
2.3 Liquidity
ARX has a Current Ratio of 0.60. This is a bad value and indicates that ARX is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.60, ARX is doing worse than 73.81% of the companies in the same industry.
ARX has a Quick Ratio of 0.60. This is a bad value and indicates that ARX is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.59, ARX is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
The current and quick ratio evaluation for ARX is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
ARX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.50%, which is quite good.
ARX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.78% yearly.
ARX shows a small growth in Revenue. In the last year, the Revenue has grown by 3.05%.
Measured over the past years, ARX shows a very strong growth in Revenue. The Revenue has been growing by 33.07% on average per year.
EPS 1Y (TTM)13.5%
EPS 3Y14.78%
EPS 5YN/A
EPS Q2Q%122.58%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y-0.06%
Revenue growth 5Y33.07%
Sales Q2Q%24.75%
3.2 Future
Based on estimates for the next years, ARX will show a very strong growth in Earnings Per Share. The EPS will grow by 24.35% on average per year.
Based on estimates for the next years, ARX will show a quite strong growth in Revenue. The Revenue will grow by 9.81% on average per year.
EPS Next Y73.12%
EPS Next 2Y29.99%
EPS Next 3Y28.36%
EPS Next 5Y24.35%
Revenue Next Year12.94%
Revenue Next 2Y5.89%
Revenue Next 3Y3.17%
Revenue Next 5Y9.81%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.65, ARX is valued correctly.
64.76% of the companies in the same industry are more expensive than ARX, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ARX to the average of the S&P500 Index (27.21), we can say ARX is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.99, the valuation of ARX can be described as very reasonable.
63.33% of the companies in the same industry are more expensive than ARX, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ARX to the average of the S&P500 Index (21.70), we can say ARX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.65 | ||
| Fwd PE | 8.99 |
4.2 Price Multiples
75.24% of the companies in the same industry are more expensive than ARX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ARX is valued a bit cheaper than the industry average as 62.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.9 | ||
| EV/EBITDA | 6.62 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ARX has an outstanding profitability rating, which may justify a higher PE ratio.
ARX's earnings are expected to grow with 28.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y29.99%
EPS Next 3Y28.36%
5. Dividend
5.1 Amount
ARX has a Yearly Dividend Yield of 2.64%. Purely for dividend investing, there may be better candidates out there.
ARX's Dividend Yield is a higher than the industry average which is at 6.19.
Compared to an average S&P500 Dividend Yield of 2.42, ARX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
5.2 History
The dividend of ARX has a limited annual growth rate of 2.59%.
ARX has paid a dividend for at least 10 years, which is a reliable track record.
ARX has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.59%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
ARX pays out 30.98% of its income as dividend. This is a sustainable payout ratio.
The dividend of ARX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP30.98%
EPS Next 2Y29.99%
EPS Next 3Y28.36%
TSX:ARX (6/30/2025, 7:00:00 PM)
28.71
-0.07 (-0.24%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners39.56%
Inst Owner ChangeN/A
Ins Owners0.42%
Ins Owner ChangeN/A
Market Cap16.82B
Analysts82.86
Price Target34.75 (21.04%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Yearly Dividend0.68
Dividend Growth(5Y)2.59%
DP30.98%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.89%
Min EPS beat(2)-6.74%
Max EPS beat(2)20.52%
EPS beat(4)3
Avg EPS beat(4)27.67%
Min EPS beat(4)-6.74%
Max EPS beat(4)57.44%
EPS beat(8)5
Avg EPS beat(8)17.64%
EPS beat(12)9
Avg EPS beat(12)29.68%
EPS beat(16)10
Avg EPS beat(16)2.48%
Revenue beat(2)2
Avg Revenue beat(2)8.09%
Min Revenue beat(2)3.66%
Max Revenue beat(2)12.52%
Revenue beat(4)4
Avg Revenue beat(4)10.56%
Min Revenue beat(4)3.66%
Max Revenue beat(4)18%
Revenue beat(8)8
Avg Revenue beat(8)11.37%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)4.06%
PT rev (3m)2.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-19.02%
EPS NY rev (1m)0%
EPS NY rev (3m)1.31%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.4%
Revenue NY rev (1m)0%
Revenue NY rev (3m)4.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.65 | ||
| Fwd PE | 8.99 | ||
| P/S | 3.08 | ||
| P/FCF | 17.9 | ||
| P/OCF | 6.17 | ||
| P/B | 2.08 | ||
| P/tB | 2.14 | ||
| EV/EBITDA | 6.62 |
EPS(TTM)2.27
EY7.91%
EPS(NY)3.19
Fwd EY11.12%
FCF(TTM)1.6
FCFY5.59%
OCF(TTM)4.65
OCFY16.2%
SpS9.31
BVpS13.82
TBVpS13.4
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.3% | ||
| ROE | 16.59% | ||
| ROCE | 12.84% | ||
| ROIC | 9.94% | ||
| ROICexc | 9.95% | ||
| ROICexgc | 10.16% | ||
| OM | 27.21% | ||
| PM (TTM) | 24.63% | ||
| GM | 69.05% | ||
| FCFM | 17.23% |
ROA(3y)13.76%
ROA(5y)7.43%
ROE(3y)23.41%
ROE(5y)12.78%
ROIC(3y)16.99%
ROIC(5y)13.58%
ROICexc(3y)17.05%
ROICexc(5y)13.61%
ROICexgc(3y)17.46%
ROICexgc(5y)13.96%
ROCE(3y)21.94%
ROCE(5y)17.54%
ROICexcg growth 3Y-21.36%
ROICexcg growth 5Y39.3%
ROICexc growth 3Y-21.23%
ROICexc growth 5Y40.04%
OM growth 3Y-15.37%
OM growth 5Y23.89%
PM growth 3Y12.7%
PM growth 5YN/A
GM growth 3Y-2.53%
GM growth 5Y-0.87%
F-Score6
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 2.18 | ||
| Debt/EBITDA | 0.53 | ||
| Cap/Depr | 130.65% | ||
| Cap/Sales | 32.74% | ||
| Interest Coverage | 12.87 | ||
| Cash Conversion | 95.61% | ||
| Profit Quality | 69.96% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 2.99 |
F-Score6
WACC7.48%
ROIC/WACC1.33
Cap/Depr(3y)124.75%
Cap/Depr(5y)99.95%
Cap/Sales(3y)28.25%
Cap/Sales(5y)26.97%
Profit Quality(3y)61.71%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13.5%
EPS 3Y14.78%
EPS 5YN/A
EPS Q2Q%122.58%
EPS Next Y73.12%
EPS Next 2Y29.99%
EPS Next 3Y28.36%
EPS Next 5Y24.35%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y-0.06%
Revenue growth 5Y33.07%
Sales Q2Q%24.75%
Revenue Next Year12.94%
Revenue Next 2Y5.89%
Revenue Next 3Y3.17%
Revenue Next 5Y9.81%
EBIT growth 1Y5.58%
EBIT growth 3Y-15.42%
EBIT growth 5Y64.86%
EBIT Next Year176.6%
EBIT Next 3Y40.65%
EBIT Next 5YN/A
FCF growth 1Y-53.78%
FCF growth 3Y-18.47%
FCF growth 5YN/A
OCF growth 1Y-24.61%
OCF growth 3Y5.39%
OCF growth 5Y29.74%