ARC RESOURCES LTD (ARX.CA) Stock Fundamental Analysis
TSX:ARX - Toronto Stock Exchange - CA00208D4084 - Common Stock - Currency: CAD
ARX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 214 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 a correct valuation and a medium growth rate.
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.
The reported net income has been mixed in the past 5 years: ARX reported negative net income in multiple years.
ARX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.77%, ARX belongs to the best of the industry, outperforming 89.55% of the companies in the same industry.
The Return On Equity of ARX (16.30%) is better than 86.07% of its industry peers.
The Return On Invested Capital of ARX (7.65%) is better than 78.11% of its industry peers.
ARX had an Average Return On Invested Capital over the past 3 years of 19.71%. This is significantly above the industry average of 7.73%.
The last Return On Invested Capital (7.65%) for ARX is well below the 3 year average (19.71%), which needs to be investigated, but indicates that ARX had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.77% | ||
| ROE | 16.3% | ||
| ROIC | 7.65% |
ROA(3y)13.2%
ROA(5y)5.62%
ROE(3y)23.12%
ROE(5y)9.79%
ROIC(3y)19.71%
ROIC(5y)12.31%
1.3 Margins
ARX has a better Profit Margin (24.92%) than 85.07% of its industry peers.
In the last couple of years the Profit Margin of ARX has grown nicely.
ARX has a better Operating Margin (23.47%) than 72.14% of its industry peers.
In the last couple of years the Operating Margin of ARX has grown nicely.
ARX has a Gross Margin of 67.54%. This is in the better half of the industry: ARX outperforms 78.11% of its industry peers.
ARX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.47% | ||
| PM (TTM) | 24.92% | ||
| GM | 67.54% |
OM growth 3Y79.97%
OM growth 5Y13.03%
PM growth 3YN/A
PM growth 5Y12.96%
GM growth 3Y-2.48%
GM growth 5Y0.45%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ARX is creating value.
ARX has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
ARX has an Altman-Z score of 2.57. 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.
With a decent Altman-Z score value of 2.57, ARX is doing good in the industry, outperforming 72.64% of the companies in the same industry.
ARX has a debt to FCF ratio of 6.57. This is a slightly negative value and a sign of low solvency as ARX would need 6.57 years to pay back of all of its debts.
The Debt to FCF ratio of ARX (6.57) is better than 69.15% of its industry peers.
A Debt/Equity ratio of 0.31 indicates that ARX is not too dependend on debt financing.
ARX's Debt to Equity ratio of 0.31 is in line compared to the rest of the industry. ARX outperforms 50.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 6.57 | ||
| Altman-Z | 2.57 |
ROIC/WACC1.05
WACC7.28%
2.3 Liquidity
ARX has a Current Ratio of 0.93. This is a bad value and indicates that ARX is not financially healthy enough and could expect problems in meeting its short term obligations.
ARX's Current ratio of 0.93 is in line compared to the rest of the industry. ARX outperforms 52.24% of its industry peers.
A Quick Ratio of 0.92 indicates that ARX may have some problems paying its short term obligations.
ARX has a Quick ratio of 0.92. This is comparable to the rest of the industry: ARX outperforms 55.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
The earnings per share for ARX have decreased strongly by -29.05% in the last year.
ARX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.84% yearly.
Looking at the last year, ARX shows a very negative growth in Revenue. The Revenue has decreased by -21.62% in the last year.
ARX shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 32.34% yearly.
EPS 1Y (TTM)-29.05%
EPS 3Y70.35%
EPS 5Y33.84%
EPS Q2Q%41.03%
Revenue 1Y (TTM)-21.62%
Revenue growth 3Y70.91%
Revenue growth 5Y32.34%
Sales Q2Q%-15.55%
3.2 Future
ARX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.52% yearly.
ARX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.35% yearly.
EPS Next Y-30.9%
EPS Next 2Y6.92%
EPS Next 3Y8.92%
EPS Next 5Y21.52%
Revenue Next Year50.28%
Revenue Next 2Y31.8%
Revenue Next 3Y18.27%
Revenue Next 5Y14.35%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.92, the valuation of ARX can be described as reasonable.
Based on the Price/Earnings ratio, ARX is valued a bit cheaper than 61.69% of the companies in the same industry.
ARX is valuated cheaply when we compare the Price/Earnings ratio to 28.35, which is the current average of the S&P500 Index.
ARX is valuated reasonably with a Price/Forward Earnings ratio of 8.36.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARX indicates a somewhat cheap valuation: ARX is cheaper than 61.19% of the companies listed in the same industry.
ARX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 95.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 8.36 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARX indicates a somewhat cheap valuation: ARX is cheaper than 70.65% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARX is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.44 | ||
| EV/EBITDA | 6.84 |
4.3 Compensation for Growth
The excellent profitability rating of ARX may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.35
EPS Next 2Y6.92%
EPS Next 3Y8.92%
5. Dividend
5.1 Amount
ARX has a Yearly Dividend Yield of 3.01%. 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 6.59.
Compared to an average S&P500 Dividend Yield of 2.28, ARX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
5.2 History
The dividend of ARX has a limited annual growth rate of 1.37%.
ARX has been paying a dividend for at least 10 years, so it has a reliable track record.
ARX has decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.37%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
32.38% of the earnings are spent on dividend by ARX. This is a low number and sustainable payout ratio.
The dividend of ARX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP32.38%
EPS Next 2Y6.92%
EPS Next 3Y8.92%
ARC RESOURCES LTD
TSX:ARX (2/5/2025, 7:00:00 PM)
25.035
-0.07 (-0.3%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners38.46%
Inst Owner ChangeN/A
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap14.82B
Analysts83.81
Price Target33.5 (33.81%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
Yearly Dividend0.64
Dividend Growth(5Y)1.37%
DP32.38%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)48.45%
Min EPS beat(2)39.45%
Max EPS beat(2)57.44%
EPS beat(4)3
Avg EPS beat(4)32.06%
Min EPS beat(4)-24.09%
Max EPS beat(4)57.44%
EPS beat(8)6
Avg EPS beat(8)32.72%
EPS beat(12)9
Avg EPS beat(12)24.59%
EPS beat(16)11
Avg EPS beat(16)31.5%
Revenue beat(2)2
Avg Revenue beat(2)13.03%
Min Revenue beat(2)8.07%
Max Revenue beat(2)18%
Revenue beat(4)4
Avg Revenue beat(4)13.05%
Min Revenue beat(4)5.74%
Max Revenue beat(4)20.4%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
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)2.67%
PT rev (3m)7.56%
EPS NQ rev (1m)1.59%
EPS NQ rev (3m)-36.95%
EPS NY rev (1m)-0.61%
EPS NY rev (3m)11.78%
Revenue NQ rev (1m)4.72%
Revenue NQ rev (3m)-2.31%
Revenue NY rev (1m)4.03%
Revenue NY rev (3m)2.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 8.36 | ||
| P/S | 2.93 | ||
| P/FCF | 39.44 | ||
| P/OCF | 6.18 | ||
| P/B | 1.92 | ||
| P/tB | 1.98 | ||
| EV/EBITDA | 6.84 |
EPS(TTM)2.1
EY8.39%
EPS(NY)3
Fwd EY11.96%
FCF(TTM)0.63
FCFY2.54%
OCF(TTM)4.05
OCFY16.17%
SpS8.54
BVpS13.06
TBVpS12.64
PEG (NY)N/A
PEG (5Y)0.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.77% | ||
| ROE | 16.3% | ||
| ROCE | 9.88% | ||
| ROIC | 7.65% | ||
| ROICexc | 7.65% | ||
| ROICexgc | 7.81% | ||
| OM | 23.47% | ||
| PM (TTM) | 24.92% | ||
| GM | 67.54% | ||
| FCFM | 7.43% |
ROA(3y)13.2%
ROA(5y)5.62%
ROE(3y)23.12%
ROE(5y)9.79%
ROIC(3y)19.71%
ROIC(5y)12.31%
ROICexc(3y)19.77%
ROICexc(5y)12.35%
ROICexgc(3y)20.27%
ROICexgc(5y)12.67%
ROCE(3y)25.44%
ROCE(5y)15.9%
ROICexcg growth 3Y124.54%
ROICexcg growth 5Y28.54%
ROICexc growth 3Y127.06%
ROICexc growth 5Y29.16%
OM growth 3Y79.97%
OM growth 5Y13.03%
PM growth 3YN/A
PM growth 5Y12.96%
GM growth 3Y-2.48%
GM growth 5Y0.45%
F-Score5
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 6.57 | ||
| Debt/EBITDA | 0.94 | ||
| Cap/Depr | 150.96% | ||
| Cap/Sales | 39.97% | ||
| Interest Coverage | 10.57 | ||
| Cash Conversion | 94.9% | ||
| Profit Quality | 29.82% | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z | 2.57 |
F-Score5
WACC7.28%
ROIC/WACC1.05
Cap/Depr(3y)112.8%
Cap/Depr(5y)98.38%
Cap/Sales(3y)23.17%
Cap/Sales(5y)30.99%
Profit Quality(3y)86.75%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-29.05%
EPS 3Y70.35%
EPS 5Y33.84%
EPS Q2Q%41.03%
EPS Next Y-30.9%
EPS Next 2Y6.92%
EPS Next 3Y8.92%
EPS Next 5Y21.52%
Revenue 1Y (TTM)-21.62%
Revenue growth 3Y70.91%
Revenue growth 5Y32.34%
Sales Q2Q%-15.55%
Revenue Next Year50.28%
Revenue Next 2Y31.8%
Revenue Next 3Y18.27%
Revenue Next 5Y14.35%
EBIT growth 1Y-48.01%
EBIT growth 3Y207.59%
EBIT growth 5Y49.59%
EBIT Next Year84.55%
EBIT Next 3Y33.56%
EBIT Next 5YN/A
FCF growth 1Y-82.81%
FCF growth 3Y20.19%
FCF growth 5Y24.94%
OCF growth 1Y-33.6%
OCF growth 3Y53.99%
OCF growth 5Y22.65%