Ovintiv (TSX:OVV) - Share price, News & Analysis

OVV fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	3/6
Financial Health	2/6
Dividends	2/6

OVV Stock Overview

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

Rewards

Trading at 63.3% below our estimate of its fair value

Earnings are forecast to grow 29.94% per year

Became profitable this year

Risk Analysis

Has a high level of debt

Significant insider selling over the past 3 months

Ovintiv Competitors

Canadian Natural Resources

TSX:CNQ

CA$90.8b

MEG Energy

TSX:MEG

CA$6.2b

Crescent Point Energy

TSX:CPG

CA$5.3b

Vermilion Energy

TSX:VET

CA$4.1b

Price History & Performance

Summary of all time highs, changes and price drops for Ovintiv
Historical stock prices
Current Share Price	CA$56.85
52 Week High	CA$73.50
52 Week Low	CA$28.10
Beta	4.17
1 Month Change	-15.31%
3 Month Change	10.13%
1 Year Change	75.73%
3 Year Change	26.90%
5 Year Change	-25.64%
Change since IPO	58.19%

Shareholder Returns

	OVV	CA Oil and Gas	CA Market
7D	-8.4%	-3.7%	-3.0%
1Y	75.7%	53.7%	4.2%

Return vs Industry: OVV exceeded the Canadian Oil and Gas industry which returned 53.7% over the past year.

Return vs Market: OVV exceeded the Canadian Market which returned 4.2% over the past year.

Price Volatility

Is OVV's price volatile compared to industry and market?
OVV volatility
OVV Average Weekly Movement	8.7%
Oil and Gas Industry Average Movement	10.2%
Market Average Movement	9.6%
10% most volatile stocks in CA Market	16.4%
10% least volatile stocks in CA Market	4.2%

Stable Share Price: OVV is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: OVV's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2020	1,713	Brendan McCracken	https://www.ovintiv.com

Ovintiv Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. It operates through USA Operations, Canadian Operations, and Market Optimization segments. 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.

Ovintiv Fundamentals Summary

How do Ovintiv's earnings and revenue compare to its market cap?
OVV fundamental statistics
Market Cap	US$11.66b
Earnings (TTM)	US$866.00m
Revenue (TTM)	US$11.63b

13.1x

P/E Ratio

1.0x

P/S Ratio

Is OVV overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OVV income statement (TTM)
Revenue	US$11.63b
Cost of Revenue	US$5.95b
Gross Profit	US$5.68b
Other Expenses	US$4.81b
Earnings	US$866.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.35
Gross Margin	48.85%
Net Profit Margin	7.45%
Debt/Equity Ratio	101.9%

How did OVV perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

17%

Payout Ratio

Does OVV pay a reliable dividends?

See OVV dividend history and benchmarks

When do you need to buy OVV by to receive an upcoming dividend?
Ovintiv dividend dates
Ex Dividend Date	Jun 14 2022
Dividend Pay Date	Jun 30 2022
Days until Ex dividend	28 days
Days until Dividend pay date	44 days

Does OVV pay a reliable dividends?

See OVV dividend history and benchmarks

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: OVV (CA$56.85) is trading below our estimate of fair value (CA$154.83)

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

Price To Earnings Ratio

PE vs Industry: OVV is poor value based on its PE Ratio (13.1x) compared to the Canadian Oil and Gas industry average (7.9x).

PE vs Market: OVV is poor value based on its PE Ratio (13.1x) compared to the Canadian market (11.4x).

Price to Earnings Growth Ratio

PEG Ratio: OVV is good value based on its PEG Ratio (0.4x)

Price to Book Ratio

PB vs Industry: OVV is overvalued based on its PB Ratio (2.4x) compared to the CA Oil and Gas industry average (1.9x).

Future Growth

How is Ovintiv forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

29.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OVV's forecast earnings growth (29.9% per year) is above the savings rate (1.6%).

Earnings vs Market: OVV's earnings (29.9% per year) are forecast to grow faster than the Canadian market (7.5% per year).

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

Revenue vs Market: OVV's revenue (2.4% per year) is forecast to grow slower than the Canadian market (6.1% per year).

High Growth Revenue: OVV's revenue (2.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: OVV's Return on Equity is forecast to be high in 3 years time (37.2%)

Past Performance

How has Ovintiv performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-38.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OVV has high quality earnings.

Growing Profit Margin: OVV became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: OVV has become profitable over the past 5 years, growing earnings by -38.2% per year.

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

Earnings vs Industry: OVV has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (185%).

Return on Equity

High ROE: OVV's Return on Equity (18.5%) is considered low.

Financial Health

How is Ovintiv's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: OVV's short term assets ($2.2B) do not cover its short term liabilities ($4.0B).

Long Term Liabilities: OVV's short term assets ($2.2B) do not cover its long term liabilities ($6.2B).

Debt to Equity History and Analysis

Debt Level: OVV's net debt to equity ratio (96.2%) is considered high.

Reducing Debt: OVV's debt to equity ratio has increased from 63.3% to 101.9% over the past 5 years.

Debt Coverage: OVV's debt is well covered by operating cash flow (62.6%).

Interest Coverage: OVV's interest payments on its debt are well covered by EBIT (3.5x coverage).

Balance Sheet

Dividend

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

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.82%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: OVV's dividend (1.82%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.9%).

High Dividend: OVV's dividend (1.82%) is low compared to the top 25% of dividend payers in the Canadian market (5.01%).

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.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (17.2%), OVV's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (15.4%), OVV's dividend payments are well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Energy industry.

Management

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

2.7yrs

Average management tenure

CEO

Brendan McCracken (45 yo)

1.42yrs

Tenure

US$8,630,387

Compensation

Mr. Brendan Michael McCracken serves as President of Ovintiv Inc. since December 2020 and serves as its Chief Executive Officer and Director since August 1, 2021 and served as Executive Vice President of C...

CEO Compensation Analysis

Compensation vs Market: Brendan's total compensation ($USD8.63M) is about average for companies of similar size in the Canadian market ($USD7.24M).

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

Leadership Team

Experienced Management: OVV's management team is considered experienced (2.7 years average tenure).

Board Members

Experienced Board: OVV's board of directors are considered experienced (5.3 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: OVV insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31