MEG ENERGY CORP (MEG.CA) Stock Fundamental Analysis
TSX:MEG - Toronto Stock Exchange - CA5527041084 - Common Stock - Currency: CAD
We assign a fundamental rating of 7 out of 10 to MEG. MEG was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. MEG has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. MEG may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make MEG a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
MEG had positive earnings in the past year.
In the past year MEG had a positive cash flow from operations.
MEG had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MEG had a positive operating cash flow.
1.2 Ratios
MEG has a Return On Assets of 9.19%. This is amongst the best in the industry. MEG outperforms 90.00% of its industry peers.
The Return On Equity of MEG (13.51%) is better than 82.86% of its industry peers.
MEG's Return On Invested Capital of 11.88% is amongst the best of the industry. MEG outperforms 93.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MEG is significantly above the industry average of 7.31%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 13.51% | ||
| ROIC | 11.88% |
ROA(3y)9.53%
ROA(5y)5.48%
ROE(3y)14.76%
ROE(5y)8.31%
ROIC(3y)13.52%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 12.53%, MEG is in the better half of the industry, outperforming 74.76% of the companies in the same industry.
In the last couple of years the Profit Margin of MEG has grown nicely.
MEG's Operating Margin of 19.85% is fine compared to the rest of the industry. MEG outperforms 71.43% of its industry peers.
In the last couple of years the Operating Margin of MEG has grown nicely.
MEG has a Gross Margin (38.77%) which is comparable to the rest of the industry.
MEG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.85% | ||
| PM (TTM) | 12.53% | ||
| GM | 38.77% |
OM growth 3Y-6.62%
OM growth 5Y13.34%
PM growth 3Y14.56%
PM growth 5YN/A
GM growth 3Y-3.24%
GM growth 5Y-0.34%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MEG is creating value.
The number of shares outstanding for MEG has been reduced compared to 1 year ago.
Compared to 5 years ago, MEG has less shares outstanding
The debt/assets ratio for MEG has been reduced compared to a year ago.
2.2 Solvency
MEG has an Altman-Z score of 3.08. This indicates that MEG is financially healthy and has little risk of bankruptcy at the moment.
MEG has a better Altman-Z score (3.08) than 78.57% of its industry peers.
The Debt to FCF ratio of MEG is 1.51, which is an excellent value as it means it would take MEG, only 1.51 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.51, MEG belongs to the best of the industry, outperforming 87.14% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that MEG is not too dependend on debt financing.
MEG has a Debt to Equity ratio of 0.24. This is in the better half of the industry: MEG outperforms 61.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.51 | ||
| Altman-Z | 3.08 |
ROIC/WACC1.58
WACC7.5%
2.3 Liquidity
A Current Ratio of 1.69 indicates that MEG should not have too much problems paying its short term obligations.
MEG has a Current ratio of 1.69. This is in the better half of the industry: MEG outperforms 80.00% of its industry peers.
MEG has a Quick Ratio of 1.12. This is a normal value and indicates that MEG is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of MEG (1.12) is better than 68.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
MEG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.59%, which is quite good.
MEG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.92% yearly.
MEG shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.66%.
Measured over the past years, MEG shows a small growth in Revenue. The Revenue has been growing by 5.55% on average per year.
EPS 1Y (TTM)13.59%
EPS 3Y25.99%
EPS 5Y13.92%
EPS Q2Q%127.78%
Revenue 1Y (TTM)-10.66%
Revenue growth 3Y6.02%
Revenue growth 5Y5.55%
Sales Q2Q%-14.81%
3.2 Future
MEG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 26.02% yearly.
The Revenue is expected to grow by 5.04% on average over the next years.
EPS Next Y31.12%
EPS Next 2Y23.11%
EPS Next 3Y19.59%
EPS Next 5Y26.02%
Revenue Next Year-17.62%
Revenue Next 2Y-6.95%
Revenue Next 3Y-4.38%
Revenue Next 5Y5.04%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.00 indicates a reasonable valuation of MEG.
Based on the Price/Earnings ratio, MEG is valued a bit cheaper than 68.10% of the companies in the same industry.
MEG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.15.
The Price/Forward Earnings ratio is 9.03, which indicates a very decent valuation of MEG.
Based on the Price/Forward Earnings ratio, MEG is valued a bit cheaper than the industry average as 62.38% of the companies are valued more expensively.
MEG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11 | ||
| Fwd PE | 9.03 |
4.2 Price Multiples
MEG's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MEG is cheaper than 82.86% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MEG is valued a bit cheaper than 78.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.04 | ||
| EV/EBITDA | 4.93 |
4.3 Compensation for Growth
MEG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of MEG may justify a higher PE ratio.
A more expensive valuation may be justified as MEG's earnings are expected to grow with 19.59% in the coming years.
PEG (NY)0.35
PEG (5Y)0.79
EPS Next 2Y23.11%
EPS Next 3Y19.59%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.55%, MEG has a reasonable but not impressive dividend return.
MEG's Dividend Yield is comparable with the industry average which is at 6.19.
MEG's Dividend Yield is slightly below the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
5.2 History
MEG is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
8.55% of the earnings are spent on dividend by MEG. This is a low number and sustainable payout ratio.
DP8.55%
EPS Next 2Y23.11%
EPS Next 3Y19.59%
TSX:MEG (6/30/2025, 7:00:00 PM)
25.73
+0.01 (+0.04%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners48.65%
Inst Owner ChangeN/A
Ins Owners0.51%
Ins Owner ChangeN/A
Market Cap6.56B
Analysts72.5
Price Target29.07 (12.98%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend0.1
Dividend Growth(5Y)N/A
DP8.55%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.37%
Min EPS beat(2)-34.35%
Max EPS beat(2)19.61%
EPS beat(4)1
Avg EPS beat(4)-15.57%
Min EPS beat(4)-34.35%
Max EPS beat(4)19.61%
EPS beat(8)2
Avg EPS beat(8)-13.73%
EPS beat(12)2
Avg EPS beat(12)-17.33%
EPS beat(16)5
Avg EPS beat(16)-2.54%
Revenue beat(2)1
Avg Revenue beat(2)-6.66%
Min Revenue beat(2)-16.34%
Max Revenue beat(2)3.01%
Revenue beat(4)2
Avg Revenue beat(4)-0.87%
Min Revenue beat(4)-16.34%
Max Revenue beat(4)17.85%
Revenue beat(8)5
Avg Revenue beat(8)5.75%
Revenue beat(12)8
Avg Revenue beat(12)5.62%
Revenue beat(16)11
Avg Revenue beat(16)5.94%
PT rev (1m)-1.97%
PT rev (3m)-9.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-28.57%
EPS NY rev (1m)0%
EPS NY rev (3m)2.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)11.97%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11 | ||
| Fwd PE | 9.03 | ||
| P/S | 1.33 | ||
| P/FCF | 9.04 | ||
| P/OCF | 4.97 | ||
| P/B | 1.43 | ||
| P/tB | 1.43 | ||
| EV/EBITDA | 4.93 |
EPS(TTM)2.34
EY9.09%
EPS(NY)2.85
Fwd EY11.07%
FCF(TTM)2.85
FCFY11.07%
OCF(TTM)5.17
OCFY20.11%
SpS19.4
BVpS18
TBVpS17.99
PEG (NY)0.35
PEG (5Y)0.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 13.51% | ||
| ROCE | 15.67% | ||
| ROIC | 11.88% | ||
| ROICexc | 12.04% | ||
| ROICexgc | 12.05% | ||
| OM | 19.85% | ||
| PM (TTM) | 12.53% | ||
| GM | 38.77% | ||
| FCFM | 14.68% |
ROA(3y)9.53%
ROA(5y)5.48%
ROE(3y)14.76%
ROE(5y)8.31%
ROIC(3y)13.52%
ROIC(5y)N/A
ROICexc(3y)13.9%
ROICexc(5y)N/A
ROICexgc(3y)13.91%
ROICexgc(5y)N/A
ROCE(3y)17.84%
ROCE(5y)N/A
ROICexcg growth 3Y0.59%
ROICexcg growth 5Y23.57%
ROICexc growth 3Y0.6%
ROICexc growth 5Y23.59%
OM growth 3Y-6.62%
OM growth 5Y13.34%
PM growth 3Y14.56%
PM growth 5YN/A
GM growth 3Y-3.24%
GM growth 5Y-0.34%
F-Score8
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.51 | ||
| Debt/EBITDA | 0.71 | ||
| Cap/Depr | 107.23% | ||
| Cap/Sales | 11.99% | ||
| Interest Coverage | 17.23 | ||
| Cash Conversion | 85.93% | ||
| Profit Quality | 117.1% | ||
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 3.08 |
F-Score8
WACC7.5%
ROIC/WACC1.58
Cap/Depr(3y)79.29%
Cap/Depr(5y)69.56%
Cap/Sales(3y)8.24%
Cap/Sales(5y)7.78%
Profit Quality(3y)160.67%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13.59%
EPS 3Y25.99%
EPS 5Y13.92%
EPS Q2Q%127.78%
EPS Next Y31.12%
EPS Next 2Y23.11%
EPS Next 3Y19.59%
EPS Next 5Y26.02%
Revenue 1Y (TTM)-10.66%
Revenue growth 3Y6.02%
Revenue growth 5Y5.55%
Sales Q2Q%-14.81%
Revenue Next Year-17.62%
Revenue Next 2Y-6.95%
Revenue Next 3Y-4.38%
Revenue Next 5Y5.04%
EBIT growth 1Y1.13%
EBIT growth 3Y-1.01%
EBIT growth 5Y19.63%
EBIT Next Year77.65%
EBIT Next 3Y26.7%
EBIT Next 5Y12.31%
FCF growth 1Y-48.4%
FCF growth 3Y30.18%
FCF growth 5Y12.84%
OCF growth 1Y-27.05%
OCF growth 3Y24.76%
OCF growth 5Y16.26%