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ARC RESOURCES LTD (ARX.CA) Stock Fundamental Analysis

TSX:ARX - Toronto Stock Exchange - CA00208D4084 - Common Stock - Currency: CAD

26.61  -0.15 (-0.56%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to ARX. ARX was compared to 221 industry peers in the Oil, Gas & Consumable Fuels industry. ARX scores excellent on profitability, but there are some minor concerns on its financial health. ARX scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make ARX suitable for value investing!


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

ARX had positive earnings in the past year.
ARX had a positive operating cash flow in the past year.
Of the past 5 years ARX 4 years were profitable.
In the past 5 years ARX always reported a positive cash flow from operatings.
ARX.CA Yearly Net Income VS EBIT VS OCF VS FCFARX.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B 2B 3B 4B

1.2 Ratios

With an excellent Return On Assets value of 8.58%, ARX belongs to the best of the industry, outperforming 87.44% of the companies in the same industry.
ARX has a better Return On Equity (14.14%) than 82.61% of its industry peers.
ARX has a Return On Invested Capital of 7.79%. This is in the better half of the industry: ARX outperforms 78.74% 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 7.73%.
The last Return On Invested Capital (7.79%) 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 RankSector 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%
ARX.CA Yearly ROA, ROE, ROICARX.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 -10 20 30

1.3 Margins

ARX's Profit Margin of 21.96% is fine compared to the rest of the industry. ARX outperforms 79.23% of its industry peers.
ARX's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 24.00%, ARX is doing good in the industry, outperforming 72.95% 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 68.59%, ARX belongs to the best of the industry, outperforming 85.02% of the companies in the same industry.
ARX's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
ARX.CA Yearly Profit, Operating, Gross MarginsARX.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 -40 60

5

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 less shares outstanding than it did 1 year ago.
The number of shares outstanding for ARX has been increased compared to 5 years ago.
The debt/assets ratio for ARX is higher compared to a year ago.
ARX.CA Yearly Shares OutstandingARX.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M
ARX.CA Yearly Total Debt VS Total AssetsARX.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

2.2 Solvency

An Altman-Z score of 2.73 indicates that ARX is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.73, ARX is doing good in the industry, outperforming 76.33% of the companies in the same industry.
ARX has a debt to FCF ratio of 4.63. This is a neutral value as ARX would need 4.63 years to pay back of all of its debts.
ARX has a Debt to FCF ratio of 4.63. This is in the better half of the industry: ARX outperforms 77.78% 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.
ARX has a Debt to Equity ratio of 0.29. This is comparable to the rest of the industry: ARX outperforms 52.17% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.29
Debt/FCF 4.63
Altman-Z 2.73
ROIC/WACC1.07
WACC7.31%
ARX.CA Yearly LT Debt VS Equity VS FCFARX.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B 4B 6B

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.
ARX's Current ratio of 1.14 is in line compared to the rest of the industry. ARX outperforms 55.07% of its industry peers.
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.
ARX's Quick ratio of 1.12 is fine compared to the rest of the industry. ARX outperforms 61.84% of its industry peers.
Industry RankSector Rank
Current Ratio 1.14
Quick Ratio 1.12
ARX.CA Yearly Current Assets VS Current LiabilitesARX.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

5

3. Growth

3.1 Past

ARX shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.33%.
The Earnings Per Share has been growing by 15.06% on average over the past years. This is quite good.
The Revenue has decreased by -9.67% in the past year.
The Revenue has been growing by 33.07% on average over the past years. This is a very strong growth!
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

Based on estimates for the next years, ARX will show a very strong growth in Earnings Per Share. The EPS will grow by 31.15% on average per year.
Based on estimates for the next years, ARX will show a small growth in Revenue. The Revenue will grow by 6.80% on average per year.
EPS Next Y57.32%
EPS Next 2Y33.35%
EPS Next 3Y39.69%
EPS Next 5Y31.15%
Revenue Next Year15.6%
Revenue Next 2Y4.93%
Revenue Next 3Y4.54%
Revenue Next 5Y6.8%

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.
ARX.CA Yearly Revenue VS EstimatesARX.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B 8B
ARX.CA Yearly EPS VS EstimatesARX.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0 2 4 6

7

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 14.01, ARX is valued correctly.
The rest of the industry has a similar Price/Earnings ratio as ARX.
When comparing the Price/Earnings ratio of ARX to the average of the S&P500 Index (30.19), we can say ARX is valued rather cheaply.
A Price/Forward Earnings ratio of 8.88 indicates a reasonable valuation of ARX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARX indicates a somewhat cheap valuation: ARX is cheaper than 61.84% 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 23.58.
Industry RankSector Rank
PE 14.01
Fwd PE 8.88
ARX.CA Price Earnings VS Forward Price EarningsARX.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ARX is valued a bit cheaper than the industry average as 71.98% of the companies are valued more expensively.
ARX's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 30.46
EV/EBITDA 7
ARX.CA Per share dataARX.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8 10

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.
ARX has an outstanding profitability rating, which may justify a higher PE ratio.
ARX's earnings are expected to grow with 39.69% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.24
PEG (5Y)N/A
EPS Next 2Y33.35%
EPS Next 3Y39.69%

6

5. Dividend

5.1 Amount

ARX has a Yearly Dividend Yield of 2.84%.
Compared to an average industry Dividend Yield of 6.30, ARX pays a bit more dividend than its industry peers.
ARX's Dividend Yield is a higher than the S&P500 average which is at 2.30.
Industry RankSector Rank
Dividend Yield 2.84%

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.
ARX has decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.59%
Div Incr Years2
Div Non Decr Years2
ARX.CA Yearly Dividends per shareARX.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

5.3 Sustainability

ARX pays out 36.09% of its income as dividend. This is a sustainable payout ratio.
ARX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.09%
EPS Next 2Y33.35%
EPS Next 3Y39.69%
ARX.CA Yearly Income VS Free CF VS DividendARX.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 500M -500M 1B 1.5B 2B
ARX.CA Dividend Payout.ARX.CA Dividend Payout, showing the Payout Ratio.ARX.CA Dividend Payout.PayoutRetained Earnings

ARC RESOURCES LTD

TSX:ARX (2/14/2025, 7:00:00 PM)

26.61

-0.15 (-0.56%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)02-06 2025-02-06/amc
Earnings (Next)05-07 2025-05-07/amc
Inst Owners38.46%
Inst Owner ChangeN/A
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap15.71B
Analysts83.81
Price Target33.5 (25.89%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 2.84%
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)2.67%
PT rev (3m)7.56%
EPS NQ rev (1m)10.92%
EPS NQ rev (3m)-9.59%
EPS NY rev (1m)3.33%
EPS NY rev (3m)1.02%
Revenue NQ rev (1m)6.95%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)2.21%
Revenue NY rev (3m)3.06%
Valuation
Industry RankSector Rank
PE 14.01
Fwd PE 8.88
P/S 3.07
P/FCF 30.46
P/OCF 6.69
P/B 1.98
P/tB 2.04
EV/EBITDA 7
EPS(TTM)1.9
EY7.14%
EPS(NY)3
Fwd EY11.26%
FCF(TTM)0.87
FCFY3.28%
OCF(TTM)3.98
OCFY14.95%
SpS8.67
BVpS13.47
TBVpS13.05
PEG (NY)0.24
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector 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 2.73
F-Score5
WACC7.31%
ROIC/WACC1.07
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 Y57.32%
EPS Next 2Y33.35%
EPS Next 3Y39.69%
EPS Next 5Y31.15%
Revenue 1Y (TTM)-9.67%
Revenue growth 3Y-0.06%
Revenue growth 5Y33.07%
Sales Q2Q%-10.48%
Revenue Next Year15.6%
Revenue Next 2Y4.93%
Revenue Next 3Y4.54%
Revenue Next 5Y6.8%
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%