TSX:OVV

Stock Analysis Report

Executive Summary

Ovintiv Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids.


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

28.8%

OVV

12.8%

CA Oil and Gas

3.0%

CA Market


1 Year Return

-89.9%

OVV

-41.0%

CA Oil and Gas

-24.5%

CA Market

Return vs Industry: OVV underperformed the Canadian Oil and Gas industry which returned -40.4% over the past year.

Return vs Market: OVV underperformed the Canadian Market which returned -23.3% over the past year.


Shareholder returns

OVVIndustryMarket
7 Day28.8%12.8%3.0%
30 Day-61.5%-32.6%-21.2%
90 Day-84.4%-40.1%-24.4%
1 Year-89.5%-89.9%-37.9%-41.0%-22.0%-24.5%
3 Year-93.4%-93.8%-42.1%-48.8%-13.9%-21.9%
5 Year-92.7%-93.4%-44.1%-53.6%-2.0%-16.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Ovintiv 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: OVV (CA$4.5) is trading below our estimate of fair value (CA$22.7)

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


Price To Earnings Ratio

PE vs Industry: OVV is good value based on its PE Ratio (3.6x) compared to the Oil and Gas industry average (6.2x).

PE vs Market: OVV is good value based on its PE Ratio (3.6x) compared to the Canadian market (10.6x).


Price to Earnings Growth Ratio

PEG Ratio: OVV's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: OVV is good value based on its PB Ratio (0.1x) compared to the CA Oil and Gas industry average (0.4x).


Next Steps

Future Growth

How is Ovintiv forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-52.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OVV's earnings are forecast to decline over the next 3 years (-19.6% per year).

Earnings vs Market: OVV's earnings are forecast to decline over the next 3 years (-19.6% per year).

High Growth Earnings: OVV's earnings are forecast to decline over the next 3 years.

Revenue vs Market: OVV's revenue is expected to decline over the next 3 years (-9.9% per year).

High Growth Revenue: OVV's revenue is forecast to decline over the next 3 years (-9.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OVV's Return on Equity is forecast to be low in 3 years time (5%).


Next Steps

Past Performance

How has Ovintiv performed over the past 5 years?

31.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OVV has a large one-off loss of $168.0M impacting its December 31 2019 financial results.

Growing Profit Margin: OVV's current net profit margins (3.3%) are lower than last year (19.6%).


Past Earnings Growth Analysis

Earnings Trend: OVV has become profitable over the past 5 years, growing earnings by 31.2% per year.

Accelerating Growth: OVV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OVV had negative earnings growth (-78.1%) over the past year, making it difficult to compare to the Oil and Gas industry average (-2.5%).


Return on Equity

High ROE: OVV's Return on Equity (2.4%) is considered low.


Next Steps

Financial Health

How is Ovintiv's financial position?


Financial Position Analysis

Short Term Liabilities: OVV's short term assets ($1.9B) do not cover its short term liabilities ($2.4B).

Long Term Liabilities: OVV's short term assets ($1.9B) do not cover its long term liabilities ($9.1B).


Debt to Equity History and Analysis

Debt Level: OVV's debt to equity ratio (70.2%) is considered high.

Reducing Debt: OVV's debt to equity ratio has reduced from 75.8% to 70.2% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: OVV's debt is not covered by short term assets (assets are 0.3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: OVV is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: OVV is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

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

10.97%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OVV's dividend (11.79%) is higher than the bottom 25% of dividend payers in the Canadian market (2.67%).

High Dividend: OVV's dividend (11.79%) is in the top 25% of dividend payers in the Canadian market (8.63%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.9%), OVV's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OVV's dividends in 3 years are forecast to be covered by earnings (87.4% payout ratio).


Next Steps

Management

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

0.9yrs

Average management tenure


CEO

Doug Suttles (58yo)

6.83s

Tenure

US$12,570,394

Compensation

Mr. Douglas James Suttles, also known as Doug, has been the Chief Executive Officer of Ovintiv Inc. (Formerly known as Encana Corporation) since June 10, 2013 and also served as its President. Mr. Suttles  ...


CEO Compensation Analysis

Compensation vs Market: Doug's total compensation ($USD12.57M) is above average for companies of similar size in the Canadian market ($USD1.70M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Douglas Suttles
CEO & Director6.83yrsUS$12.57m0.034% $431.4k
Michael McAllister
President0.58yrUS$5.25m0.0081% $101.5k
Corey Code
Executive VP & CFO0.92yrUS$1.91m0.0070% $88.2k
Renee Zemljak
Executive Vice President of Midstream10.42yrsUS$2.69m0.0025% $31.6k
David Hill
Executive Vice President of Land & Explorationno dataUS$2.61m0.0039% $48.3k
Gregory Givens
Executive VP & COO0.58yrno datano data
Stephen Campbell
Senior Vice President of Investor Relationsno datano data0.022% $272.9k
Joanne Alexander
Executive VP5.25yrsno data0.0040% $49.6k
Simon Scott
Vice-President of Communicationsno datano datano data
Brendan McCracken
Executive Vice President of Corporate Development & External Relations0.58yrno data0.0040% $50.8k

0.9yrs

Average Tenure

52yo

Average Age

Experienced Management: OVV's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Douglas Suttles
CEO & Director6.83yrsUS$12.57m0.034% $431.4k
Peter Dea
Independent Director9.92yrsUS$235.38k0.0026% $33.1k
Fred Fowler
Independent Director10.17yrsUS$225.27k0.0077% $96.6k
Bruce Waterman
Independent Director9.92yrsUS$245.38k0.040% $507.1k
Thomas Ricks
Independent Director1.17yrsUS$218.59k0.060% $751.1k
Brian Shaw
Independent Director7.17yrsUS$225.38k0.0066% $83.1k
Clayton Woitas
Independent Chairman of the Board6.75yrsUS$400.38k0.030% $376.1k
Lee McIntire
Independent Director5.33yrsUS$225.38k0.0047% $58.7k
Suzanne Nimocks
Independent Director10.25yrsUS$240.38k0.0032% $40.3k
Howard Mayson
Independent Director5.83yrsUS$235.38k0.0093% $117.0k

7.0yrs

Average Tenure

66yo

Average Age

Experienced Board: OVV's board of directors are considered experienced (7 years average tenure).


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 36%.


Top Shareholders

Company Information

Ovintiv Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ovintiv Inc.
  • Ticker: OVV
  • Exchange: TSX
  • Founded:
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$1.255b
  • Shares outstanding: 259.82m
  • Website: https://www.ovintiv.com

Number of Employees


Location

  • Ovintiv Inc.
  • 370 17th Street
  • Suite 1700
  • Denver
  • Colorado
  • 80202
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OVVNYSE (New York Stock Exchange)YesCommon SharesUSUSDDec 1972
OVVTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1972
PCD1DB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972

Biography

Ovintiv Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. The company’s principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. Its other upstream assets comprise Eagle Ford in south Texas, Bakken in North Dakota, and Uinta in central Utah; and Duvernay in west central Alberta, Wheatland in southern Alberta, Horn River in northeast British Columbia, and Deep Panuke in offshore Nova Scotia. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. is based in Denver, Colorado. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 02:59
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
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.