ARC Resources Ltd.
ARC Resources Ltd. Fundamental Analysis
ARC Resources Ltd. (ARX.TO) shows moderate financial fundamentals with a PE ratio of 12.91, profit margin of 20.99%, and ROE of 15.52%. The company generates $6.1B in annual revenue with weak year-over-year growth of -9.83%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ARX.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakARX.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentARX.TO trades at attractive valuation levels.
Growth Score
WeakARX.TO faces weak or negative growth trends.
Financial Health Score
ModerateARX.TO shows balanced financial health with some risks.
Profitability Score
ExcellentARX.TO achieves industry-leading margins.
Key Financial Metrics
Is ARX.TO Expensive or Cheap?
P/E Ratio
ARX.TO trades at 12.91 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ARX.TO's PEG of -1.70 indicates potential undervaluation.
Price to Book
The market values ARC Resources Ltd. at 1.99 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.56 times EBITDA. This is generally considered low.
How Well Does ARX.TO Make Money?
Net Profit Margin
For every $100 in sales, ARC Resources Ltd. keeps $20.99 as profit after all expenses.
Operating Margin
Core operations generate 40.37 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.52 in profit for every $100 of shareholder equity.
ROA
ARC Resources Ltd. generates $8.09 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
ARC Resources Ltd. generates strong operating cash flow of $3.11B, reflecting robust business health.
Free Cash Flow
ARC Resources Ltd. generates strong free cash flow of $1.23B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.14 in free cash annually.
FCF Yield
ARX.TO converts 7.39% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.70
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.99
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.72
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.58
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.70
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How ARX.TO Stacks Against Its Sector Peers
| Metric | ARX.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.91 | 21.23 | Better (Cheaper) |
| ROE | 15.52% | 945.00% | Weak |
| Net Margin | 20.99% | -60038.00% (disorted) | Strong |
| Debt/Equity | 0.58 | -0.49 (disorted) | Distorted |
| Current Ratio | 0.70 | 6.45 | Weak Liquidity |
| ROA | 8.09% | -11001215.00% (disorted) | Weak |
ARX.TO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews ARC Resources Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
147.84%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
2519.69%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
118.43%
Industry Style: Cyclical, Value, Commodity
High Growth