TSX:ARX

Stock Analysis Report

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Executive Summary

ARC Resources Ltd., together with its subsidiaries, acquires, develops, and holds interest in petroleum and natural gas properties and assets in Canada.


Snowflake Analysis

Slightly overvalued with imperfect balance sheet.

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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.2%

ARX

2.2%

CA Oil and Gas

1.5%

CA Market


1 Year Return

0.7%

ARX

-21.0%

CA Oil and Gas

-4.6%

CA Market

Return vs Industry: ARX exceeded the Canadian Oil and Gas industry which returned -21% over the past year.

Return vs Market: ARX exceeded the Canadian Market which returned -4.7% over the past year.


Shareholder returns

ARXIndustryMarket
7 Day11.2%2.2%1.5%
30 Day23.8%6.7%6.1%
90 Day6.6%2.8%11.1%
1 Year8.2%0.7%-16.7%-21.0%-1.2%-4.6%
3 Year-55.3%-62.7%-23.6%-32.9%11.8%1.0%
5 Year-60.9%-69.8%-21.9%-35.3%33.6%13.3%

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?

47.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARX (CA$6.14) is trading below our estimate of fair value (CA$11.76)

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's PB Ratio (0.8x) is in line with the CA Oil and Gas industry average.


Next Steps

Future Growth

How is ARC Resources forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

122.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARX is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ARX is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ARX is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ARX's revenue (14.4% per year) is forecast to grow faster than the Canadian market (5.9% per year).

High Growth Revenue: ARX's revenue (14.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ARX's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has ARC Resources performed over the past 5 years?

-6.7%

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 6.7% 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 (-41.3%).


Return on Equity

High ROE: ARX has a negative Return on Equity (-24.11%), 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$194.6M) do not cover its short term liabilities (CA$317.4M).

Long Term Liabilities: ARX's short term assets (CA$194.6M) do not cover its long term liabilities (CA$2.0B).


Debt to Equity History and Analysis

Debt Level: ARX's debt to equity ratio (34%) is considered satisfactory.

Reducing Debt: ARX's debt to equity ratio has increased from 27.1% to 34% over the past 5 years.

Debt Coverage: ARX's debt is well covered by operating cash flow (63.2%).

Interest Coverage: Insufficient data to determine if ARX's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

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

3.91%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARX's dividend (3.91%) is higher than the bottom 25% of dividend payers in the Canadian market (1.81%).

High Dividend: ARX's dividend (3.91%) is low compared to the top 25% of dividend payers in the Canadian market (5.9%).


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 well covered by earnings (40.6% payout ratio).


Next Steps

Management

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

4.1yrs

Average management tenure


CEO

Terry Anderson (50 yo)

0.50

Tenure

CA$2,801,060

Compensation

Mr. Terry Michael Anderson, P. Eng., serves as President & Chief Executive Officer at ARC Resources Ltd. Since February 20, 2020 and serves as its Director since May 7, 2020 and served as Chief Operating O ...


CEO Compensation Analysis

Compensation vs Market: Terry's total compensation ($USD2.10M) is about average for companies of similar size in the Canadian market ($USD2.04M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Terry Anderson
President0.50yrCA$2.80m0.076%
CA$ 1.5m
Kristen Bibby
Senior VP & CFO0.50yrCA$1.20m0.028%
CA$ 555.0k
Larissa Conrad
Vice President of Development & Planning6.5yrsCA$1.21m0.023%
CA$ 465.7k
Armin Jahangiri
Vice President of Operationsno datano data0.012%
CA$ 234.9k
Ryan Berrett
Vice President of Marketing3.58yrsno data0.013%
CA$ 259.4k
Lisa Olsen
Vice President of Human Resources4.58yrsno data0.020%
CA$ 398.5k
Grant Zawalsky
Corporate Secretary6.58yrsno datano data

4.1yrs

Average Tenure

50yo

Average Age

Experienced Management: ARX's management team is considered experienced (4.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Terry Anderson
President0.50yrCA$2.80m0.076%
CA$ 1.5m
Kathleen O'Neill
Independent Director11.17yrsCA$245.00k0.0059%
CA$ 117.6k
Harold Kvisle
Independent Chairman of the Board4.58yrsCA$415.02k0.042%
CA$ 853.4k
Nancy Smith
Independent Director4.5yrsCA$235.02k0.0029%
CA$ 57.7k
John Dielwart
Independent Director24.25yrsCA$235.02k0.072%
CA$ 1.4m
William Sembo
Independent Director6.75yrsCA$220.00k0.0057%
CA$ 113.8k
Herbert Pinder
Independent Director14.58yrsCA$235.02k0.048%
CA$ 963.4k
David Collyer
Independent Director3.75yrsCA$235.00k0.0057%
CA$ 113.8k
Farhad Ahrabi
Independent Director0.75yrCA$32.88kno data

4.6yrs

Average Tenure

66yo

Average Age

Experienced Board: ARX's board of directors are considered experienced (4.6 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$2.011b
  • Shares outstanding: 353.40m
  • 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., together with its subsidiaries, acquires, develops, and holds interest in petroleum and natural gas properties and assets in Canada. The company holds interests in the Montney propertie ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/05 23:54
End of Day Share Price2020/08/05 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.