TSX:ARX

Stock Analysis Report

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Executive Summary

ARC Resources Ltd. explores, develops, and produces crude oil, natural gas, and natural gas liquids in Canada. More Details


Snowflake Analysis

Exceptional growth potential and fair value.

Share Price & News

How has ARC Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARX is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: ARX's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

3.1%

ARX

6.1%

CA Oil and Gas

1.0%

CA Market


1 Year Return

77.1%

ARX

20.8%

CA Oil and Gas

29.0%

CA Market

Return vs Industry: ARX exceeded the Canadian Oil and Gas industry which returned 1.5% over the past year.

Return vs Market: ARX exceeded the Canadian Market which returned 16.2% over the past year.


Shareholder returns

ARXIndustryMarket
7 Day3.1%6.1%1.0%
30 Day11.9%11.5%2.1%
90 Day33.3%17.0%7.0%
1 Year84.1%77.1%28.2%20.8%33.8%29.0%
3 Year-27.2%-39.0%1.0%-11.5%25.2%13.4%
5 Year-48.3%-59.4%3.5%-14.9%57.6%33.8%

Long-Term Price Volatility Vs. Market

How volatile is ARC Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ARC Resources undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARX (CA$7.72) is trading below our estimate of fair value (CA$48.55)

Significantly Below Fair Value: ARX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ARX is unprofitable, so we can't compare its PE Ratio to the CA Oil and Gas industry average.

PE vs Market: ARX is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ARX's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ARX is good value based on its PB Ratio (1x) compared to the CA Oil and Gas industry average (1.5x).


Next Steps

Future Growth

How is ARC Resources forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

42.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARX is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.5%).

Earnings vs Market: ARX is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ARX's is expected to become profitable in the next 3 years.

Revenue vs Market: ARX's revenue (23% per year) is forecast to grow faster than the Canadian market (7.7% per year).

High Growth Revenue: ARX's revenue (23% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARX's Return on Equity is forecast to be high in 3 years time (22.5%)


Next Steps

Past Performance

How has ARC Resources performed over the past 5 years?

-28.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARX is currently unprofitable.

Growing Profit Margin: ARX is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ARX is unprofitable, and losses have increased over the past 5 years at a rate of 28.6% per year.

Accelerating Growth: Unable to compare ARX's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ARX is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-43.6%).


Return on Equity

High ROE: ARX has a negative Return on Equity (-19.61%), as it is currently unprofitable.


Next Steps

Financial Health

How is ARC Resources's financial position?


Financial Position Analysis

Short Term Liabilities: ARX's short term assets (CA$162.3M) do not cover its short term liabilities (CA$367.7M).

Long Term Liabilities: ARX's short term assets (CA$162.3M) do not cover its long term liabilities (CA$1.8B).


Debt to Equity History and Analysis

Debt Level: ARX's debt to equity ratio (25.2%) is considered satisfactory.

Reducing Debt: ARX's debt to equity ratio has reduced from 32.8% to 25.2% over the past 5 years.

Debt Coverage: ARX's debt is well covered by operating cash flow (93.4%).

Interest Coverage: ARX is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is ARC Resources's current dividend yield, its reliability and sustainability?

3.11%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARX's dividend (3.11%) is higher than the bottom 25% of dividend payers in the Canadian market (1.57%).

High Dividend: ARX's dividend (3.11%) is low compared to the top 25% of dividend payers in the Canadian market (4.94%).


Stability and Growth of Payments

Stable Dividend: ARX's dividend payments have been volatile in the past 10 years.

Growing Dividend: ARX's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: ARX is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: ARX's dividends in 3 years are forecast to be thoroughly covered by earnings (12.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.7yrs

Average management tenure


CEO

Terry Anderson (49 yo)

1.08yrs

Tenure

CA$2,801,060

Compensation

Mr. Terry Michael Anderson, P. Eng., has been the Chief Executive Officer and President at ARC Resources Ltd. since February 20, 2020 and serves as its Director since May 7, 2020. Mr. Anderson served as th...


CEO Compensation Analysis

Compensation vs Market: Terry's total compensation ($USD2.21M) is about average for companies of similar size in the Canadian market ($USD2.22M).

Compensation vs Earnings: Terry's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Terry Anderson
President1.08yrsCA$2.80mno data
Kristen Bibby
Senior VP & CFO1.08yrsCA$1.20m0.036%
CA$ 996.8k
Larissa Conrad
Vice President of Development & Planning7.08yrsCA$1.21m0.029%
CA$ 802.4k
Armin Jahangiri
Vice President of Operationsno datano data0.018%
CA$ 497.7k
Ryan Berrett
Vice President of Marketing4.17yrsno data0.017%
CA$ 470.8k
Lisa Olsen
Vice President of Human Resources5.17yrsno data0.025%
CA$ 701.5k
Grant Zawalsky
Corporate Secretary7.17yrsno datano data

4.7yrs

Average Tenure

49yo

Average Age

Experienced Management: ARX's management team is considered experienced (4.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Terry Anderson
President1.08yrsCA$2.80mno data
Kathleen O'Neill
Independent Director11.75yrsCA$245.00k0%
CA$ 0
Harold Kvisle
Independent Chairman of the Board5.17yrsCA$415.02k0%
CA$ 0
Nancy Smith
Independent Director5.08yrsCA$235.02k0%
CA$ 0
John Dielwart
Independent Director24.83yrsCA$235.02k0%
CA$ 0
William Sembo
Independent Director7.33yrsCA$220.00k0%
CA$ 0
Herbert Pinder
Independent Director15.17yrsCA$235.02k0%
CA$ 0
Michael McAllister
Independent Director0.33yrno datano data
David Collyer
Independent Director4.33yrsCA$235.00k0%
CA$ 0
Farhad Ahrabi
Independent Director1.33yrsCA$32.88kno data

5.1yrs

Average Tenure

65yo

Average Age

Experienced Board: ARX's board of directors are considered experienced (5.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ARC Resources Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ARC Resources Ltd.
  • Ticker: ARX
  • Exchange: TSX
  • Founded: 1996
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$2.796b
  • Shares outstanding: 354.37m
  • Website: https://www.arcresources.com

Number of Employees


Location

  • ARC Resources Ltd.
  • 308 - 4th Avenue South West
  • Suite 1200
  • Calgary
  • Alberta
  • T2P 0H7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARXTSX (The Toronto Stock Exchange)YesCommon SharesCACADJul 1996
AETU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 1996
8RCDB (Deutsche Boerse AG)YesCommon SharesDEEURJul 1996

Biography

ARC Resources Ltd. explores, develops, and produces crude oil, natural gas, and natural gas liquids in Canada. The company holds interests in the Montney properties located in northeast British Columbia an...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/08 23:03
End of Day Share Price2021/03/08 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.