MEG Energy Corp. Fundamental Analysis (TSX: MEG.TO)
MEG Energy Corp. Fundamental Analysis (TSX: MEG.TO)
MEG Energy Corp. (TSX: MEG.TO) shows weak financial fundamentals with a PE ratio of 18.06, profit margin of 13.76%, and ROE of 9.39%. The company generates $3.2B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze MEG.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakMEG.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentMEG.TO trades at attractive valuation levels.
Growth Score
ModerateMEG.TO shows steady but slowing expansion.
Financial Health Score
ExcellentMEG.TO maintains a strong and stable balance sheet.
Profitability Score
WeakMEG.TO struggles to sustain strong margins.
Key Financial Metrics
Is MEG.TO Expensive or Cheap?
P/E Ratio
MEG.TO trades at 18.06 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MEG.TO's PEG of 1.24 indicates fair valuation.
Price to Book
The market values MEG Energy Corp. at 1.66 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.72 times EBITDA. This is generally considered low.
How Well Does MEG.TO Make Money?
Net Profit Margin
For every $100 in sales, MEG Energy Corp. keeps $13.76 as profit after all expenses.
Operating Margin
Core operations generate 22.80 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.39 in profit for every $100 of shareholder equity.
ROA
MEG Energy Corp. generates $6.26 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
MEG Energy Corp. produces operating cash flow of $763.13M, showing steady but balanced cash generation.
Free Cash Flow
MEG Energy Corp. produces free cash flow of $278.32M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.09 in free cash annually.
FCF Yield
MEG.TO converts 3.55% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.06
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.66
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.47
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.22
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.73
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How MEG.TO Stacks Against Its Sector Peers
| Metric | MEG.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.06 | 22.19 | Better (Cheaper) |
| ROE | 9.39% | 1142.00% | Weak |
| Net Margin | 13.76% | 1205.00% | Weak |
| Debt/Equity | 0.22 | 2.82 | Strong (Low Leverage) |
| Current Ratio | 1.73 | 3.03 | Neutral |
| ROA | 6.26% | 477.00% | Weak |
MEG.TO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews MEG Energy Corp.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Value, Commodity
EPS CAGR
N/A
Industry Style: Cyclical, Value, Commodity
FCF CAGR
N/A
Industry Style: Cyclical, Value, Commodity