ARC Resources Ltd. (ARX) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Topaz Energy Corp.

ARC Resources Ltd.

Cardinal Energy Ltd.

Canadian Natural Resources Ltd.

MEG Energy Corp.

Advantage Energy Ltd.

Parex Resources, Inc.

Obsidian Energy Ltd.

Tourmaline Oil Corp.

Vermilion Energy, Inc.

Crew Energy, Inc.

Why is ARC Resources Ltd. ?

High Management Efficiency with a high ROCE of 24.46%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 19.96

Healthy long term growth as Net Sales has grown by an annual rate of 35.98% and Operating profit at 45.47%

Positive results in Mar 26

OPERATING CASH FLOW(Y) Highest at CAD 3,131.3 MM
ROCE(HY) Highest at 17.41%
DIVIDEND PER SHARE(HY) Highest at CAD 8.77

With ROE of 17.15%, it has a attractive valuation with a 2.09 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -3.12%, its profits have risen by 15.9% ; the PEG ratio of the company is 0.6

Majority shareholders : FIIs

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to ARC Resources Ltd. should be less than 10%
Overall Portfolio exposure to Oil should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Oil)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is ARC Resources Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

ARC Resources Ltd.

-3.12%

15.81

36.18%

S&P/TSX 60

29.6%

2.31

12.81%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

35.98%

EBIT Growth (5y)

45.47%

EBIT to Interest (avg)

19.96

Debt to EBITDA (avg)

0.44

Net Debt to Equity (avg)

0.14

Sales to Capital Employed (avg)

0.57

Tax Ratio

22.88%

Dividend Payout Ratio

35.57%

Pledged Shares

Institutional Holding

0.07%

ROCE (avg)

24.46%

ROE (avg)

22.19%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.09

EV to EBIT

11.42

EV to EBITDA

6.03

EV to Capital Employed

1.82

EV to Sales

3.26

PEG Ratio

0.62

Dividend Yield

ROCE (Latest)

15.94%

ROE (Latest)

17.15%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

13What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 3,131.3 MM

ROCE(HY)

Highest at 17.41%

DIVIDEND PER SHARE(HY)

Highest at CAD 8.77

NET SALES(Q)

Highest at CAD 1,953.2 MM

OPERATING PROFIT(Q)

Highest at CAD 1,079.8 MM

PRE-TAX PROFIT(Q)

Highest at CAD 633 MM

NET PROFIT(Q)

Highest at CAD 485 MM

EPS(Q)

Highest at CAD 1.03

-9What is not working for the Company

INTEREST(HY)

At CAD 86.2 MM has Grown at 49.39%

RAW MATERIAL COST(Y)

Grown by 6.85% (YoY

DEBTORS TURNOVER RATIO(HY)

Lowest at 8.77 times

Here's what is working for ARC Resources Ltd.

Operating Cash Flow

Highest at CAD 3,131.3 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Dividend per share

Highest at CAD 8.77 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (CAD)

Net Sales

Highest at CAD 1,953.2 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Net Sales

At CAD 1,953.2 MM has Grown at 28.59%

over average net sales of the previous four periods of CAD 1,518.93 MM

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Operating Profit

Highest at CAD 1,079.8 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (CAD MM)

Pre-Tax Profit

Highest at CAD 633 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CAD MM)

Net Profit

Highest at CAD 485 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (CAD MM)

EPS

Highest at CAD 1.03

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CAD)

Here's what is not working for ARC Resources Ltd.

Interest

At CAD 86.2 MM has Grown at 49.39%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Debtors Turnover Ratio

Lowest at 8.77 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Raw Material Cost

Grown by 6.85% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales