ARC RESOURCES LTD (ARX.CA) Stock Fundamental Analysis
TSX:ARX - Toronto Stock Exchange - CA00208D4084 - Common Stock - Currency: CAD
Overall ARX gets a fundamental rating of 7 out of 10. We evaluated ARX against 221 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on ARX. This makes ARX very considerable for value 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.
ARX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARX's Return On Assets of 8.58% is amongst the best of the industry. ARX outperforms 91.40% of its industry peers.
ARX has a Return On Equity of 14.14%. This is amongst the best in the industry. ARX outperforms 86.88% of its industry peers.
ARX's Return On Invested Capital of 7.79% is amongst the best of the industry. ARX outperforms 81.00% of its industry peers.
ARX had an Average Return On Invested Capital over the past 3 years of 16.99%. This is significantly above the industry average of 7.70%.
The 3 year average ROIC (16.99%) for ARX is well above the current ROIC(7.79%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 14.14% | ||
| ROIC | 7.79% |
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
ARX's Profit Margin of 21.96% is amongst the best of the industry. ARX outperforms 81.90% of its industry peers.
ARX's Profit Margin has improved in the last couple of years.
ARX's Operating Margin of 24.00% is fine compared to the rest of the industry. ARX outperforms 76.02% of its industry peers.
In the last couple of years the Operating Margin of ARX has grown nicely.
ARX has a Gross Margin of 68.59%. This is amongst the best in the industry. ARX outperforms 85.97% of its industry peers.
ARX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24% | ||
| PM (TTM) | 21.96% | ||
| GM | 68.59% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ARX is creating value.
Compared to 1 year ago, ARX has less shares outstanding
ARX has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARX has a worse debt to assets ratio.
2.2 Solvency
ARX has an Altman-Z score of 2.63. 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.
Looking at the Altman-Z score, with a value of 2.63, ARX belongs to the top of the industry, outperforming 80.54% of the companies in the same industry.
The Debt to FCF ratio of ARX is 4.63, which is a neutral value as it means it would take ARX, 4.63 years of fcf income to pay off all of its debts.
ARX has a better Debt to FCF ratio (4.63) than 79.19% of its industry peers.
ARX has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.29, ARX is in line with its industry, outperforming 57.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 4.63 | ||
| Altman-Z | 2.63 |
ROIC/WACC1.05
WACC7.4%
2.3 Liquidity
ARX has a Current Ratio of 1.14. This is a normal value and indicates that ARX is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.14, ARX is doing good in the industry, outperforming 63.80% of the companies in the same industry.
ARX has a Quick Ratio of 1.12. This is a normal value and indicates that ARX is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ARX (1.12) is better than 69.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The earnings per share for ARX have decreased strongly by -27.33% in the last year.
Measured over the past years, ARX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.06% on average per year.
The Revenue has decreased by -9.67% in the past year.
ARX shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 33.07% yearly.
EPS 1Y (TTM)-27.33%
EPS 3Y15.06%
EPS 5YN/A
EPS Q2Q%-23.35%
Revenue 1Y (TTM)-9.67%
Revenue growth 3Y-0.06%
Revenue growth 5Y33.07%
Sales Q2Q%-10.48%
3.2 Future
The Earnings Per Share is expected to grow by 31.15% on average over the next years. This is a very strong growth
Based on estimates for the next years, ARX will show a small growth in Revenue. The Revenue will grow by 6.91% on average per year.
EPS Next Y61.92%
EPS Next 2Y31.55%
EPS Next 3Y26.36%
EPS Next 5Y31.15%
Revenue Next Year8.5%
Revenue Next 2Y5.94%
Revenue Next 3Y3.47%
Revenue Next 5Y6.91%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 13.25, the valuation of ARX can be described as correct.
Based on the Price/Earnings ratio, ARX is valued a bit cheaper than the industry average as 65.16% of the companies are valued more expensively.
ARX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.35.
With a Price/Forward Earnings ratio of 8.16, the valuation of ARX can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARX indicates a somewhat cheap valuation: ARX is cheaper than 64.71% 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 22.10.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.25 | ||
| Fwd PE | 8.16 |
4.2 Price Multiples
74.66% of the companies in the same industry are more expensive than ARX, based on the Enterprise Value to EBITDA ratio.
ARX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.79 | ||
| EV/EBITDA | 6.66 |
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 26.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.21
PEG (5Y)N/A
EPS Next 2Y31.55%
EPS Next 3Y26.36%
5. Dividend
5.1 Amount
ARX has a Yearly Dividend Yield of 3.04%.
ARX's Dividend Yield is a higher than the industry average which is at 6.64.
Compared to an average S&P500 Dividend Yield of 2.33, ARX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
5.2 History
The dividend of ARX has a limited annual growth rate of 2.59%.
ARX has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of ARX decreased in the last 3 years.
Dividend Growth(5Y)2.59%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
36.09% 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.
DP36.09%
EPS Next 2Y31.55%
EPS Next 3Y26.36%
TSX:ARX (3/7/2025, 7:00:00 PM)
25.17
+0.21 (+0.84%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners39.33%
Inst Owner ChangeN/A
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap14.85B
Analysts83.81
Price Target33.77 (34.17%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
Yearly Dividend0.68
Dividend Growth(5Y)2.59%
DP36.09%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)36.83%
Min EPS beat(2)16.21%
Max EPS beat(2)57.44%
EPS beat(4)3
Avg EPS beat(4)22.25%
Min EPS beat(4)-24.09%
Max EPS beat(4)57.44%
EPS beat(8)6
Avg EPS beat(8)29.65%
EPS beat(12)9
Avg EPS beat(12)19.96%
EPS beat(16)11
Avg EPS beat(16)13.26%
Revenue beat(2)1
Avg Revenue beat(2)-1.99%
Min Revenue beat(2)-12.04%
Max Revenue beat(2)8.07%
Revenue beat(4)3
Avg Revenue beat(4)8.6%
Min Revenue beat(4)-12.04%
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)0.81%
PT rev (3m)4.65%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.92%
EPS NY rev (1m)2.93%
EPS NY rev (3m)6.35%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.95%
Revenue NY rev (1m)-6.51%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.25 | ||
| Fwd PE | 8.16 | ||
| P/S | 2.9 | ||
| P/FCF | 28.79 | ||
| P/OCF | 6.32 | ||
| P/B | 1.87 | ||
| P/tB | 1.93 | ||
| EV/EBITDA | 6.66 |
EPS(TTM)1.9
EY7.55%
EPS(NY)3.08
Fwd EY12.25%
FCF(TTM)0.87
FCFY3.47%
OCF(TTM)3.98
OCFY15.82%
SpS8.68
BVpS13.47
TBVpS13.05
PEG (NY)0.21
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 14.14% | ||
| ROCE | 10.06% | ||
| ROIC | 7.79% | ||
| ROICexc | 7.79% | ||
| ROICexgc | 7.95% | ||
| OM | 24% | ||
| PM (TTM) | 21.96% | ||
| GM | 68.59% | ||
| FCFM | 10.07% |
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-Score5
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 4.63 | ||
| Debt/EBITDA | 0.89 | ||
| Cap/Depr | 135.02% | ||
| Cap/Sales | 35.8% | ||
| Interest Coverage | 10.47 | ||
| Cash Conversion | 90.81% | ||
| Profit Quality | 45.88% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 2.63 |
F-Score5
WACC7.4%
ROIC/WACC1.05
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)-27.33%
EPS 3Y15.06%
EPS 5YN/A
EPS Q2Q%-23.35%
EPS Next Y61.92%
EPS Next 2Y31.55%
EPS Next 3Y26.36%
EPS Next 5Y31.15%
Revenue 1Y (TTM)-9.67%
Revenue growth 3Y-0.06%
Revenue growth 5Y33.07%
Sales Q2Q%-10.48%
Revenue Next Year8.5%
Revenue Next 2Y5.94%
Revenue Next 3Y3.47%
Revenue Next 5Y6.91%
EBIT growth 1Y-28.43%
EBIT growth 3Y-15.42%
EBIT growth 5Y64.86%
EBIT Next Year171.64%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-7.25%
FCF growth 3Y-18.47%
FCF growth 5YN/A
OCF growth 1Y-1.91%
OCF growth 3Y5.39%
OCF growth 5Y29.74%