ARC RESOURCES LTD (ARX.CA) Stock Fundamental Analysis
TSX:ARX - Toronto Stock Exchange - CA00208D4084 - Common Stock - Currency: CAD
Taking everything into account, ARX scores 7 out of 10 in our fundamental rating. ARX was compared to 211 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.
ARX had a positive operating cash flow in the past year.
ARX had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ARX had a positive operating cash flow.
1.2 Ratios
ARX's Return On Assets of 10.30% is amongst the best of the industry. ARX outperforms 91.94% of its industry peers.
ARX has a Return On Equity of 16.59%. This is amongst the best in the industry. ARX outperforms 91.00% of its industry peers.
The Return On Invested Capital of ARX (9.94%) is better than 90.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARX is significantly above the industry average of 7.23%.
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 86.26% of the companies in the same industry.
In the last couple of years the Profit Margin of ARX has grown nicely.
Looking at the Operating Margin, with a value of 27.21%, ARX is in the better half of the industry, outperforming 78.67% of the companies in the same industry.
ARX's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 69.05%, ARX belongs to the best of the industry, outperforming 86.73% of the companies in the same industry.
In the last couple of years the Gross Margin of ARX has remained more or less at the same level.
| 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.
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
An Altman-Z score of 2.99 indicates that ARX is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of ARX (2.99) is better than 81.04% 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.
With an excellent Debt to FCF ratio value of 2.18, ARX belongs to the best of the industry, outperforming 85.78% of the companies in the same industry.
ARX has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
ARX has a better Debt to Equity ratio (0.19) than 64.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.99 |
ROIC/WACC1.12
WACC8.88%
2.3 Liquidity
A Current Ratio of 0.60 indicates that ARX may have some problems paying its short term obligations.
ARX's Current ratio of 0.60 is on the low side compared to the rest of the industry. ARX is outperformed by 73.46% of its industry peers.
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.
ARX has a worse Quick ratio (0.59) than 66.35% of its industry peers.
ARX does not score too well on the current and quick ratio evaluation. However, as it has 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
The Earnings Per Share has grown by an nice 13.50% over the past year.
The Earnings Per Share has been growing by 14.78% on average over the past years. This is quite good.
Looking at the last year, ARX shows a small growth in Revenue. The Revenue has grown by 3.05% in the last 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)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 small growth in Revenue. The Revenue will grow by 7.74% 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 5Y7.74%
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
ARX is valuated correctly with a Price/Earnings ratio of 12.63.
63.51% of the companies in the same industry are more expensive than ARX, based on the Price/Earnings ratio.
ARX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.25.
A Price/Forward Earnings ratio of 8.98 indicates a reasonable valuation of ARX.
ARX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ARX is cheaper than 62.56% of the companies 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 22.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 8.98 |
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 72.99% of the companies listed in the same industry.
63.51% of the companies in the same industry are more expensive than ARX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.87 | ||
| EV/EBITDA | 6.61 |
4.3 Compensation for Growth
ARX'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 ARX 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 2.61%.
ARX's Dividend Yield is comparable with the industry average which is at 6.45.
Compared to an average S&P500 Dividend Yield of 2.38, ARX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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
30.98% 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.
DP30.98%
EPS Next 2Y29.99%
EPS Next 3Y28.36%
TSX:ARX (5/30/2025, 7:00:00 PM)
28.67
-0.47 (-1.61%)
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 Cap16.80B
Analysts82.61
Price Target33.39 (16.46%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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)-0.67%
PT rev (3m)-1.11%
EPS NQ rev (1m)-27.4%
EPS NQ rev (3m)-19.14%
EPS NY rev (1m)0%
EPS NY rev (3m)6.14%
Revenue NQ rev (1m)-2.49%
Revenue NQ rev (3m)-12.09%
Revenue NY rev (1m)2.83%
Revenue NY rev (3m)4.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 8.98 | ||
| P/S | 3.08 | ||
| P/FCF | 17.87 | ||
| P/OCF | 6.16 | ||
| P/B | 2.07 | ||
| P/tB | 2.14 | ||
| EV/EBITDA | 6.61 |
EPS(TTM)2.27
EY7.92%
EPS(NY)3.19
Fwd EY11.14%
FCF(TTM)1.6
FCFY5.59%
OCF(TTM)4.65
OCFY16.22%
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
WACC8.88%
ROIC/WACC1.12
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 5Y7.74%
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%