VERMILION ENERGY INC (VET.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:VET - CA9237251058 - Common Stock
12.72 CAD
+0.25 (+2%)
VET gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 206 industry peers in the Oil, Gas & Consumable Fuels industry. While VET is still in line with the averages on profitability rating, there are concerns on its financial health. VET has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- VET had negative earnings in the past year.
- In the past year VET had a positive cash flow from operations.
- In multiple years VET reported negative net income over the last 5 years.
- In the past 5 years VET always reported a positive cash flow from operatings.
1.2 Ratios
- With a Return On Assets value of -3.93%, VET perfoms like the industry average, outperforming 49.07% of the companies in the same industry.
- VET has a Return On Equity (-8.65%) which is comparable to the rest of the industry.
- VET's Return On Invested Capital of 3.20% is in line compared to the rest of the industry. VET outperforms 57.48% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for VET is above the industry average of 6.62%.
- The last Return On Invested Capital (3.20%) for VET is well below the 3 year average (9.77%), which needs to be investigated, but indicates that VET had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.93% | ||
| ROE | -8.65% | ||
| ROIC | 3.2% |
ROA(3y)4.74%
ROA(5y)-0.65%
ROE(3y)9.7%
ROE(5y)-15.85%
ROIC(3y)9.77%
ROIC(5y)N/A
1.3 Margins
- VET's Operating Margin of 12.83% is in line compared to the rest of the industry. VET outperforms 59.81% of its industry peers.
- VET's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 67.54%, VET belongs to the best of the industry, outperforming 81.78% of the companies in the same industry.
- In the last couple of years the Gross Margin of VET has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.83% | ||
| PM (TTM) | N/A | ||
| GM | 67.54% |
OM growth 3Y-29.16%
OM growth 5Y2.82%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.52%
GM growth 5Y0.95%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so VET is still creating some value.
- Compared to 1 year ago, VET has less shares outstanding
- The number of shares outstanding for VET has been reduced compared to 5 years ago.
- VET has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.43, we must say that VET is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 0.43, VET perfoms like the industry average, outperforming 41.12% of the companies in the same industry.
- VET has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of VET (0.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.43 |
ROIC/WACC0.4
WACC8.08%
2.3 Liquidity
- VET has a Current Ratio of 0.81. This is a bad value and indicates that VET is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.81, VET perfoms like the industry average, outperforming 57.94% of the companies in the same industry.
- A Quick Ratio of 0.71 indicates that VET may have some problems paying its short term obligations.
- VET has a Quick ratio (0.71) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 70.33% over the past year.
- Looking at the last year, VET shows a decrease in Revenue. The Revenue has decreased by -2.34% in the last year.
- Measured over the past years, VET shows a small growth in Revenue. The Revenue has been growing by 1.65% on average per year.
EPS 1Y (TTM)70.33%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-93.94%
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y-2.42%
Revenue growth 5Y1.65%
Sales Q2Q%-5.34%
3.2 Future
- VET is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 70.83% yearly.
- Based on estimates for the next years, VET will show a decrease in Revenue. The Revenue will decrease by -0.29% on average per year.
EPS Next Y-275.38%
EPS Next 2Y100.78%
EPS Next 3Y70.83%
EPS Next 5YN/A
Revenue Next Year-3.04%
Revenue Next 2Y-2.44%
Revenue Next 3Y-1.84%
Revenue Next 5Y-0.29%
3.3 Evolution
- 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
- The Price/Earnings Ratio is negative for VET. In the last year negative earnings were reported.
- With a Price/Forward Earnings ratio of 20.87, VET is valued on the expensive side.
- The rest of the industry has a similar Price/Forward Earnings ratio as VET.
- VET is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 20.87 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, VET is valued cheaper than 91.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 3.43 |
4.3 Compensation for Growth
- A more expensive valuation may be justified as VET's earnings are expected to grow with 70.83% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y100.78%
EPS Next 3Y70.83%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.17%, VET is a good candidate for dividend investing.
- VET's Dividend Yield is a higher than the industry average which is at 3.29.
- VET's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.17% |
5.2 History
- The dividend of VET decreases each year by -28.87%.
- VET has paid a dividend for at least 10 years, which is a reliable track record.
- VET has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-28.87%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- VET has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-32.97%
EPS Next 2Y100.78%
EPS Next 3Y70.83%
VERMILION ENERGY INC / VET.CA FAQ
What is the fundamental rating for VET stock?
ChartMill assigns a fundamental rating of 3 / 10 to VET.CA.
Can you provide the valuation status for VERMILION ENERGY INC?
ChartMill assigns a valuation rating of 2 / 10 to VERMILION ENERGY INC (VET.CA). This can be considered as Overvalued.
How profitable is VERMILION ENERGY INC (VET.CA) stock?
VERMILION ENERGY INC (VET.CA) has a profitability rating of 5 / 10.
What is the earnings growth outlook for VERMILION ENERGY INC?
The Earnings per Share (EPS) of VERMILION ENERGY INC (VET.CA) is expected to decline by -275.38% in the next year.