TSX:CJ

Stock Analysis Report

Cardinal Energy

Executive Summary

Cardinal Energy Ltd. engages in the acquisition, exploration, and production of petroleum and natural gas in the provinces of Alberta and Saskatchewan, Canada.

Rewards

PE ratio (5x) is below the Canadian market (15.8x)

Became profitable this year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer and fair value.

Share Price & News

How has Cardinal Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CJ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.8%

CJ

-0.02%

CA Oil and Gas

1.4%

CA Market


1 Year Return

21.5%

CJ

4.4%

CA Oil and Gas

10.1%

CA Market

Return vs Industry: CJ exceeded the Canadian Oil and Gas industry which returned 5.3% over the past year.

Return vs Market: CJ exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

CJIndustryMarket
7 Day-1.8%-0.02%1.4%
30 Day9.5%1.3%2.6%
90 Day23.7%10.1%6.5%
1 Year29.4%21.5%9.0%4.4%13.7%10.1%
3 Year-62.1%-69.9%-6.6%-16.3%17.8%7.1%
5 Year-70.5%-79.2%-6.3%-21.3%36.3%16.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Cardinal Energy undervalued compared to its fair value and its price relative to the market?

4.9x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CJ (CA$2.82) is trading above our estimate of fair value (CA$2.73)

Significantly Below Fair Value: CJ is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CJ is good value based on its PE Ratio (5x) compared to the Oil and Gas industry average (11.8x).

PE vs Market: CJ is good value based on its PE Ratio (5x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: CJ is good value based on its PB Ratio (0.4x) compared to the CA Oil and Gas industry average (0.8x).


Next Steps

Future Growth

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

0.4%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if CJ's forecast earnings growth is above the savings rate (1.4%).

Earnings vs Market: Insufficient data to determine if CJ's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CJ's revenue (0.4% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: CJ's revenue (0.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CJ is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Cardinal Energy performed over the past 5 years?

5.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CJ has high quality earnings.

Growing Profit Margin: CJ became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CJ has become profitable over the past 5 years, growing earnings by 5.6% per year.

Accelerating Growth: CJ has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CJ has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (16.5%).


Return on Equity

High ROE: CJ's Return on Equity (8.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cardinal Energy's financial position?


Financial Position Analysis

Short Term Liabilities: CJ's short term assets (CA$51.3M) do not cover its short term liabilities (CA$68.1M).

Long Term Liabilities: CJ's short term assets (CA$51.3M) do not cover its long term liabilities (CA$359.8M).


Debt to Equity History and Analysis

Debt Level: CJ's debt to equity ratio (31.2%) is considered satisfactory.

Reducing Debt: CJ's debt to equity ratio has increased from 8.5% to 31.2% over the past 5 years.

Debt Coverage: CJ's debt is well covered by operating cash flow (40.3%).

Interest Coverage: CJ's interest payments on its debt are well covered by EBIT (9.9x coverage).


Balance Sheet

Inventory Level: CJ has a high level of physical assets or inventory.

Debt Coverage by Assets: CJ's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Cardinal Energy's current dividend yield, its reliability and sustainability?

6.50%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Cardinal Energy before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company6.5%marketbottom25%1.9%markettop25%5.4%industryaverage4.6%forecastin3Years6.5%

Current dividend yield vs market & industry

Notable Dividend: CJ's dividend (6.38%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: CJ's dividend (6.38%) is in the top 25% of dividend payers in the Canadian market (5.48%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CJ has been paying a dividend for less than 10 years.

Growing Dividend: CJ has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.7%), CJ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CJ's dividends in 3 years are forecast to be well covered by earnings (43% payout ratio).


Next Steps

Management

What is the CEO of Cardinal Energy's salary, the management and board of directors tenure and is there insider trading?

2.2yrs

Average management tenure


CEO

M. Ratushny (54yo)

7.5yrs

Tenure

CA$1,419,165

Compensation

Mr. M. Scott Ratushny has been the Chief Executive Officer of Cardinal Energy Ltd, since May 11, 2015 and served as its President since November 9, 2017 until February 2019. Mr. Ratushny served as the Chie ...


CEO Compensation Analysis

Compensation vs Market: M.'s total compensation ($USD1.09M) is above average for companies of similar size in the Canadian market ($USD672.22K).

Compensation vs Earnings: M.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.2yrs

Average Tenure

50yo

Average Age

Experienced Management: CJ's management team is considered experienced (2.2 years average tenure).


Board Age and Tenure

7.5yrs

Average Tenure

54yo

Average Age

Experienced Board: CJ's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

Insider Buying: CJ insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$15,66503 Jan 20
M. Ratushny
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares6,000
Max PriceCA$2.63
BuyCA$2,00018 Nov 19
M. Ratushny
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares1,000
Max PriceCA$2.00
BuyCA$38,28015 Nov 19
John Brussa
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares19,000
Max PriceCA$2.02
BuyCA$39,00001 Nov 19
John Brussa
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceCA$1.95
BuyCA$16,73002 Aug 19
M. Ratushny
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares7,000
Max PriceCA$2.39
SellCA$26,50008 Apr 19
Dale Orton
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares8,660
Max PriceCA$3.06
BuyCA$26,50008 Apr 19
Dale Orton
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares8,660
Max PriceCA$3.06

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.3%.


Management Team

  • Shannon Gangl (56yo)

    Corporate Secretary

    • M. Ratushny (54yo)

      Chairman & CEO

      • Tenure: 7.5yrs
      • Compensation: CA$1.42m
    • Dale Orton (46yo)

      Chief Operating Officer

      • Tenure: 2.2yrs
      • Compensation: CA$750.61k
    • Rob Wollmann

      Senior Vice President of Exploration

      • Tenure: 2.2yrs
      • Compensation: CA$320.04k
    • Shawn Van Spankeren (46yo)

      Chief Financial Officer

      • Tenure: 2yrs
      • Compensation: CA$1.20m

    Board Members

    • John Brussa (62yo)

      Independent Director

      • Tenure: 7.5yrs
      • Compensation: CA$149.06k
    • M. Ratushny (54yo)

      Chairman & CEO

      • Tenure: 7.5yrs
      • Compensation: CA$1.42m
    • Dave Johnson (68yo)

      Independent Director

      • Tenure: 7.5yrs
      • Compensation: CA$149.06k
    • Greg Tisdale (49yo)

      Independent Director

      • Tenure: 6yrs
      • Compensation: CA$151.40k
    • Stephanie Sterling (51yo)

      Independent Director

      • Tenure: 2.4yrs
      • Compensation: CA$161.67k

    Company Information

    Cardinal Energy Ltd.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Cardinal Energy Ltd.
    • Ticker: CJ
    • Exchange: TSX
    • Founded: 2010
    • Industry: Oil and Gas Exploration and Production
    • Sector: Energy
    • Market Cap: CA$315.317m
    • Shares outstanding: 113.83m
    • Website: https://www.cardinalenergy.ca

    Number of Employees


    Location

    • Cardinal Energy Ltd.
    • 400-3rd Avenue SW
    • Suite 600
    • Calgary
    • Alberta
    • T2P 4H2
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CJTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 2013
    C0YDB (Deutsche Boerse AG)YesCommon SharesDEEURDec 2013
    CRLF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDDec 2013

    Biography

    Cardinal Energy Ltd. engages in the acquisition, exploration, and production of petroleum and natural gas in the provinces of Alberta and Saskatchewan, Canada. It holds interests in the Midale, Wainwright, Mitsue, Bantry, and Grande Prairie properties. The company was incorporated in 2010 and is headquartered in Calgary, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/21 00:53
    End of Day Share Price2020/01/20 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.