DB:8RC

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 25.2% below its fair value

Earnings are forecast to grow 44.17% per year

Earnings grew by 11.2% over the past year

Risk Analysis

Dividend of 8.02% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with reasonable growth potential.

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: 8RC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

7.6%

8RC

3.3%

DE Oil and Gas

-0.3%

DE Market


1 Year Return

-16.4%

8RC

72.4%

DE Oil and Gas

14.9%

DE Market

Return vs Industry: 8RC underperformed the German Oil and Gas industry which returned 72.4% over the past year.

Return vs Market: 8RC underperformed the German Market which returned 14.9% over the past year.


Shareholder returns

8RCIndustryMarket
7 Day7.6%3.3%-0.3%
30 Day12.6%12.4%-0.1%
90 Day14.8%30.6%7.1%
1 Year-9.0%-16.4%78.4%72.4%18.5%14.9%
3 Year-65.8%-70.9%67.2%51.2%20.0%9.5%
5 Year-61.3%-70.1%282.5%218.5%38.0%19.3%

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

No news available

Valuation

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

25.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 8RC (€4.84) is trading below our estimate of fair value (€6.47)

Significantly Below Fair Value: 8RC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 8RC is poor value based on its PE Ratio (18.6x) compared to the Oil and Gas industry average (10.4x).

PE vs Market: 8RC is good value based on its PE Ratio (18.6x) compared to the German market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: 8RC is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 8RC is good value based on its PB Ratio (0.8x) compared to the DE Oil and Gas industry average (1.1x).


Next Steps

Future Growth

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

44.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 8RC's forecast earnings growth (44.2% per year) is above the savings rate (-0.4%).

Earnings vs Market: 8RC's earnings (44.2% per year) are forecast to grow faster than the German market (13% per year).

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

Revenue vs Market: 8RC's revenue (13.8% per year) is forecast to grow faster than the German market (4.9% per year).

High Growth Revenue: 8RC's revenue (13.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 8RC is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has ARC Resources performed over the past 5 years?

11.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 8RC has a large one-off loss of CA$48.0M impacting its September 30 2019 financial results.

Growing Profit Margin: 8RC's current net profit margins (11.7%) are higher than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: 8RC's earnings have grown by 11.5% per year over the past 5 years.

Accelerating Growth: 8RC's earnings growth over the past year (11.2%) is below its 5-year average (11.5% per year).

Earnings vs Industry: 8RC earnings growth over the past year (11.2%) exceeded the Oil and Gas industry -2.9%.


Return on Equity

High ROE: 8RC's Return on Equity (4.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ARC Resources's financial position?


Financial Position Analysis

Short Term Liabilities: 8RC's short term assets (CA$188.5M) do not cover its short term liabilities (CA$360.1M).

Long Term Liabilities: 8RC's short term assets (CA$188.5M) do not cover its long term liabilities (CA$2.0B).


Debt to Equity History and Analysis

Debt Level: 8RC's debt to equity ratio (24.1%) is considered satisfactory.

Reducing Debt: 8RC's debt to equity ratio has reduced from 28.3% to 24.1% over the past 5 years.

Debt Coverage: 8RC's debt is well covered by operating cash flow (82.7%).

Interest Coverage: 8RC's interest payments on its debt are well covered by EBIT (6.3x coverage).


Balance Sheet

Inventory Level: 8RC has a high level of physical assets or inventory.

Debt Coverage by Assets: 8RC's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

8.02%

Current Dividend Yield


Dividend Yield vs Market

company8.0%marketbottom25%1.4%markettop25%3.6%industryaverage5.9%forecastin3Years8.0%

Current dividend yield vs market & industry

Notable Dividend: 8RC's dividend (8.02%) is higher than the bottom 25% of dividend payers in the German market (1.37%).

High Dividend: 8RC's dividend (8.02%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: 8RC's dividend payments have been volatile in the past 10 years.

Growing Dividend: 8RC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (149%), 8RC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 8RC's dividends in 3 years are not forecast to be well covered by earnings (105.6% payout ratio).


Next Steps

Management

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

5.9yrs

Average management tenure


CEO

Myron Stadnyk (56yo)

6.9yrs

Tenure

CA$4,661,418

Compensation

Mr. Myron M. Stadnyk, B.Sc., P.Eng., has been an Independent Director of PrairieSky Royalty Ltd. since June 18, 2018. Mr. Stadnyk has been the Chief Executive Officer and President of ARC Resources Ltd. si ...


CEO Compensation Analysis

Compensation vs Market: Myron's total compensation ($USD3.53M) is above average for companies of similar size in the German market ($USD1.50M).

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


Management Age and Tenure

5.9yrs

Average Tenure

Experienced Management: 8RC's management team is seasoned and experienced (5.9 years average tenure).


Board Age and Tenure

6.5yrs

Average Tenure

65yo

Average Age

Experienced Board: 8RC's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

Insider Buying: 8RC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$13,03218 Nov 19
Kristen Bibby
EntityIndividual
Shares3,000
Max PriceCA$4.34
BuyCA$13,84113 Nov 19
Kristen Bibby
EntityIndividual
Shares3,000
Max PriceCA$4.61
BuyCA$22,30425 Sep 19
Kristen Bibby
EntityIndividual
Shares5,000
Max PriceCA$4.46
BuyCA$45,99124 Sep 19
Kristen Bibby
EntityIndividual
Shares10,000
Max PriceCA$4.62
BuyCA$33918 Sep 19
P. Van Dafoe
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares78
Max PriceCA$4.34
SellCA$159,24206 Sep 19
John Dielwart
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40,000
Max PriceCA$3.98
BuyCA$76,47525 Aug 19
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceCA$3.83
BuyCA$43,93416 Aug 19
Christopher Baldwin
EntityIndividual
Shares11,000
Max PriceCA$3.99
BuyCA$10,01916 Aug 19
Myron Stadnyk
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares2,500
Max PriceCA$4.01
BuyCA$23,51915 Aug 19
P. Van Dafoe
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares6,000
Max PriceCA$3.92
BuyCA$40,17414 Aug 19
P. Van Dafoe
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares10,000
Max PriceCA$4.02
BuyCA$46,15902 Aug 19
TSR Investments
EntityCompany
Shares9,800
Max PriceCA$4.71
BuyCA$30,83217 Jun 19
Lisa Olsen
EntityIndividual
Role
Head of Human Resources
Vice President of Human Resources
Shares6,960
Max PriceCA$4.43
BuyCA$21,90414 Jun 19
Ryan Berrett
EntityIndividual
Role
Head of Marketing
Vice President of Marketing
Shares5,000
Max PriceCA$4.38
BuyCA$43,94114 Jun 19
P. Van Dafoe
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares10,000
Max PriceCA$4.39
BuyCA$28,62413 Jun 19
Kristen Bibby
EntityIndividual
Shares6,335
Max PriceCA$4.52
BuyCA$87,80113 Jun 19
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceCA$4.39
BuyCA$241,83403 Jun 19
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50,000
Max PriceCA$4.85
BuyCA$52,72006 May 19
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceCA$5.27
BuyCA$16,29603 May 19
Lisa Olsen
EntityIndividual
Role
Head of Human Resources
Vice President of Human Resources
Shares3,040
Max PriceCA$5.39
BuyCA$24,94011 Jan 19
William Sembo
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,700
Max PriceCA$5.31
BuyCA$31,61101 Jan 19
Sean Ross Calder
EntityIndividual
Shares6,150
Max PriceCA$5.15
BuyCA$16,67021 Dec 18
Ryan Berrett
EntityIndividual
Role
Head of Marketing
Vice President of Marketing
Shares3,145
Max PriceCA$5.30
BuyCA$26,82521 Dec 18
Kristen Bibby
EntityIndividual
Shares5,000
Max PriceCA$5.37
BuyCA$260,96319 Dec 18
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50,000
Max PriceCA$5.23
BuyCA$29,10114 Dec 18
Harold Kvisle
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares5,000
Max PriceCA$5.82
BuyCA$28,09513 Dec 18
Terry Anderson
EntityIndividual
Role
Chief Operating Officer
COO & Senior VP
Shares5,000
Max PriceCA$5.62
BuyCA$516,01012 Dec 18
Myron Stadnyk
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares90,000
Max PriceCA$5.74
BuyCA$141,23812 Dec 18
Frederick Dyment
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,000
Max PriceCA$5.81

Ownership Breakdown

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


Management Team

  • Grant Zawalsky (59yo)

    Corporate Secretary

    • Tenure: 5.9yrs
  • Myron Stadnyk (56yo)

    CEO, President & Director

    • Tenure: 6.9yrs
    • Compensation: CA$4.66m
  • P. Van Dafoe

    CFO & Senior VP

    • Tenure: 5.8yrs
    • Compensation: CA$2.08m
  • Terry Anderson

    COO & Senior VP

    • Tenure: 6yrs
    • Compensation: CA$2.63m
  • Lisa Olsen

    Vice President of Human Resources

    • Tenure: 3.9yrs
  • Ryan Berrett

    Vice President of Marketing

    • Tenure: 2.9yrs

Board Members

  • Kathleen O'Neill (65yo)

    Independent Director

    • Tenure: 10.5yrs
    • Compensation: CA$245.00k
  • Fred Dyment (70yo)

    Independent Director

    • Tenure: 16.7yrs
    • Compensation: CA$225.07k
  • Hal Kvisle (66yo)

    Independent Chairman of the Board

    • Tenure: 3.9yrs
    • Compensation: CA$415.03k
  • Nancy Smith (56yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: CA$233.95k
  • John Dielwart (66yo)

    Independent Director

    • Tenure: 23.6yrs
    • Compensation: CA$235.02k
  • Bill Sembo (65yo)

    Independent Director

    • Tenure: 6.1yrs
    • Compensation: CA$220.00k
  • Herb Pinder (72yo)

    Independent Director

    • Tenure: 13.9yrs
    • Compensation: CA$235.02k
  • Myron Stadnyk (56yo)

    CEO, President & Director

    • Tenure: 6.9yrs
    • Compensation: CA$4.66m
  • David Collyer (63yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: CA$229.93k
  • Farhad Ahrabi

    Independent Director

    • Tenure: 0.08yrs

Company Information

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


Key Information

  • Name: ARC Resources Ltd.
  • Ticker: 8RC
  • Exchange: DB
  • Founded: 1996
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$2.265b
  • Listing Market Cap: CA$1.545b
  • Shares outstanding: 353.42m
  • 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 Analysis2019/12/08 21:16
End of Day Share Price2019/12/06 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.