Paramount Resources Ltd. (POU) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Suncor Energy, Inc.

Whitecap Resources, Inc.

Peyto Exploration & Development Corp.

Athabasca Oil Corp.

Baytex Energy Corp.

Crescent Point Energy Corp.

NuVista Energy Ltd.

Cenovus Energy, Inc.

Paramount Resources Ltd.

Imperial Oil Ltd.

Enerplus Corp.

Why is Paramount Resources Ltd. ?

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 55.20

Healthy long term growth as Net Sales has grown by an annual rate of 15.86% and Operating profit at 66.55%

The company has declared Negative results for the last 7 consecutive quarters

OPERATING CASH FLOW(Y) Lowest at CAD 583.1 MM
INTEREST COVERAGE RATIO(Q) Lowest at 3,776.92
INTEREST(HY) At CAD 3.8 MM has Grown at 22.58%

With ROE of 54.22%, it has a very attractive valuation with a 1.13 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -11.52%, its profits have risen by 392.5% ; the PEG ratio of the company is 0

Majority shareholders : Mutual Funds

Below par performance in long term as well as near term

Along with generating -11.52% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Paramount 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 Paramount Resources Ltd. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Paramount Resources Ltd.

-15.69%

-0.53

56.35%

S&P/TSX 60

19.1%

1.54

14.62%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

15.86%

EBIT Growth (5y)

66.55%

EBIT to Interest (avg)

55.20

Debt to EBITDA (avg)

1.14

Net Debt to Equity (avg)

-0.32

Sales to Capital Employed (avg)

0.55

Tax Ratio

21.25%

Dividend Payout Ratio

73.89%

Pledged Shares

Institutional Holding

4.06%

ROCE (avg)

14.30%

ROE (avg)

21.15%

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

1.24

EV to EBIT

11.86

EV to EBITDA

4.95

EV to Capital Employed

1.30

EV to Sales

1.88

PEG Ratio

0.01

Dividend Yield

ROCE (Latest)

10.94%

ROE (Latest)

54.22%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

Mildly Bullish

RSI

Bearish

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Bearish

Dow Theory

Mildly Bullish

OBV

Mildly 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

17What is working for the Company

DIVIDEND PAYOUT RATIO(Y)

Highest at 511.95%

NET PROFIT(HY)

Higher at CAD 1,274.11 MM

ROCE(HY)

Highest at 46.54%

CASH AND EQV(HY)

Highest at CAD 1,404.7 MM

DEBT-EQUITY RATIO (HY)

Lowest at -19.95 %

-34What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at CAD 583.1 MM

INTEREST COVERAGE RATIO(Q)

Lowest at 3,776.92

INTEREST(HY)

At CAD 3.8 MM has Grown at 22.58%

OPERATING PROFIT MARGIN(Q)

Lowest at 29.72 %

RAW MATERIAL COST(Y)

Grown by 111.92% (YoY

NET SALES(Q)

Lowest at CAD 165.2 MM

OPERATING PROFIT(Q)

Lowest at CAD 49.1 MM

PRE-TAX PROFIT(Q)

Lowest at CAD -28.5 MM

NET PROFIT(Q)

Lowest at CAD -26.02 MM

EPS(Q)

Lowest at CAD 0.03

Here's what is working for Paramount Resources Ltd.

Dividend Payout Ratio

Highest at 511.95% and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Cash and Eqv

Highest at CAD 1,404.7 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at -19.95 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

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

Net Sales

At CAD 165.2 MM has Fallen at -62.43%

over average net sales of the previous four periods of CAD 439.75 MM

MOJO Watch

Near term sales trend is extremely negative

Net Sales (CAD MM)

Interest Coverage Ratio

Lowest at 3,776.92 and Fallen

In each period in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Pre-Tax Profit

At CAD -28.5 MM has Fallen at -105.85%

over average net sales of the previous four periods of CAD 486.98 MM

MOJO Watch

Near term Pre-Tax Profit trend is very negative

Pre-Tax Profit (CAD MM)

Net Profit

At CAD -26.02 MM has Fallen at -106.78%

over average net sales of the previous four periods of CAD 383.53 MM

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (CAD MM)

Operating Cash Flow

Lowest at CAD 583.1 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (CAD MM)

Operating Profit Margin

Lowest at 29.72 % and Fallen

In each period in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Interest

At CAD 3.8 MM has Grown at 22.58%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Net Sales

Lowest at CAD 165.2 MM

in the last five periods

MOJO Watch

Near term sales trend is negative

Net Sales (CAD MM)

Operating Profit

Lowest at CAD 49.1 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CAD MM)

Pre-Tax Profit

Lowest at CAD -28.5 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (CAD MM)

Net Profit

Lowest at CAD -26.02 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (CAD MM)

EPS

Lowest at CAD 0.03

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (CAD)

Raw Material Cost

Grown by 111.92% (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