Is it a good company at a reasonable price? This is a resource stock so it is cyclical and risky. It is interesting that there is not much in the way of reviews on this stock, but when I look at analyst’s recommendations, there are 24 entries. The 12 month stock price consensus high stock price gives a capital gain of 83% to a low stock price of 4% capital gains. There is quite a range. The stock price is probably cheap.
I do not own this stock of Ovintiv Inc (TSX-OVV, NYSE-OVV). I have owned this stock before as Alberta Energy Co. This company split into two companies in the later part of 2009 - Encana Corporation and Cenovus Energy Inc. On January 27, 2020, this company has changed its name from Encana Corp (TSX-ECA, OTC-ECA) to Ovintiv Inc (TSX-OVV, OTC-OVV).
When I was updating my spreadsheet, I noticed even though the company has a AEPS ($5.83) higher than last year’s estimate ($5.01), the new estimates for 2025 are lower by 9% ($4.85 compared to $4.43) and for 2026 lower by 46% ($9.96 compared to $5.38).
If you had invested in this company in December 2014, for $1,051.05 you would have bought 13 shares at $80.85 per share. In December 2024, after 10 years you would have received $140.96 in dividends. The stock would be worth $756.99. Your total return would have been $897.95. This would be a total loss of 1.89% per year with 3.25% from capital gain and 1.34% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $80.85 | $1,051.05 | 13 | 11 | $140.96 | $756.99 | $897.95 |
The current dividend yield is moderate with current dividend growth restarted and good. The current dividend is moderate (2% to 4% range) at 3.34%. The 5 year and Historical median dividend yield is moderate at 2.59% and 2.14%. The 10 year median dividend yield is low (below 2%) at 1.82%. The dividends were cut in 2016 by 79%. Increases restarted in 2019. Dividends are still some 15% below the 2015 dividends. The dividend increases over the past 5 years is at 26.18%, but increases were inconsistent in that there were no increases in some years and increases were wildly different being around 103% in 2022 and 4% in 2024.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 28% with 5 year coverage high at 52%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 21% with 5 year coverage at 32%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 9% with 5 year coverage at 7%. The DPR for 2024 for Free Cash Flow (FCF) is good at 19% with 5 year coverage at 16%. FCF did not vary that much in 2024, being from 1,670M to 1,739M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 28.50% | 51.53% |
| AEPS | 20.58% | 33.61% |
| CFPS | 9.21% | 6.58% |
| FCF | 18.92% | 16.47% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.46 and currently at 0.48. The Liquidity Ratio for 2024 is far too low at 0.51 and 0.43 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.78 and currently at 1.60. The Debt Ratio for 2024 is good at 2.16 and 2.11 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.86 and 0.86 and currently at 1.90 and 0.90.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.46 | 0.48 |
| Intang/GW | 0.24 | 0.28 |
| Liquidity | 0.51 | 0.43 |
| Liq. + CF | 1.78 | 1.60 |
| Debt Ratio | 2.16 | 2.11 |
| Leverage | 1.86 | 1.90 |
| D/E Ratio | 0.86 | 0.90 |
The Total Return per year is shown below for years of 5 to 32 to the end of 2024 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 28.79% | 16.52% | 13.88% | 2.64% |
| 2013 | 10 | 0.61% | -1.89% | -3.23% | 1.34% |
| 2008 | 15 | -5.75% | -5.37% | -6.91% | 1.55% |
| 2003 | 20 | 5.25% | 0.71% | -2.05% | 2.76% |
| 1998 | 25 | 6.59% | 5.27% | 1.58% | 3.69% |
| 1993 | 30 | 5.46% | 9.18% | 4.48% | 4.70% |
| 1992 | 32 | 5.55% | 8.97% | 4.50% | 4.47% |
The Total Return per year is shown below for years of 5 to 23 to the end of 2024 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 26.18% | 14.22% | 11.55% | 2.67% |
| 2013 | 10 | -1.53% | -3.94% | -5.24% | 1.29% |
| 2008 | 15 | -7.25% | -4.41% | -8.83% | 1.58% |
| 2003 | 20 | -0.03% | 2.85% | -3.12% | 3.09% |
| 2001 | 23 | 5.23% | 5.53% | 0.66% | 4.57% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 2.96, 5.23 and 5.23. The corresponding 10 year ratios are 3.51, 5.25 and 6.99. The corresponding historical ratios are 4.81, 8.69 and 12.38. The current ratio is 12.22 based on a stock price of $36.56 and EPS estimate for 2025 of $2.99. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. These P/E Ratios are low as generally a ratio below 10.00 is considered low. This testing is in US$.
I also have Adjusted Earnings per Share (AEPS) Ratios. The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.13, 7.09 and 9.05. The corresponding 10 year ratios are 5.92, 8.34 and 10.56. The corresponding historical ratios are 7.29, 12.24, and 16.65. The current ratio is 8.25 based on a stock price of $36.56 and AEPS estimate for 2025 of $4.43. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. These P/E Ratios are low as generally a ratio below 10.00 is considered low. This testing is in US$.
I get a Graham Price of $89.12. The 10-year low, median, and high median Price/Graham Price Ratios are 0.46, 0.71 and 0.97. The current ratio is 0.57 based on a stock price of $51.14. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 1.25. The current ratio is 0.91 based on a Book Value of $10,377M, Book Value per Share of $40.38 and a stock price of $35.56. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I also have Book Value per Share estimate for 2025 of $44.68. This implies a Book Value of $11,483M and a ratio of 0.82 with a stock price of $35.56. This ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.81. The current ratio is 2.57 based on Cash Flow per Share estimate for 2025 of $14.21, Cash Flow of $3,652M and a stock price of $35.56. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
I get an historical median dividend yield of 2.14%. The current dividend yield is 3.28% based on Dividends of $1.20 and a stock price of $35.56. The current dividend yield is 53% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median dividend yield of 1.82%. The current dividend yield is 3.28% based on Dividends of $1.20 and a stock price of $35.56. The current dividend yield is 80% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
The 10-year median Price/Sales (Revenue) Ratio is 1.21. The current P/S Ratio is 1.09 based on Revenue estimate for 2025 of $8.500M, Revenue per Share of $33.42 and a stock price of $35.56. The current ratio is 10% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
Results of stock price testing is that the stock price is probably reasonable, but could be cheap. The dividend yield tests say that the stock price is relatively cheap. The P/S Ratio tests says that the stock price is relatively reasonable. So, I went with reasonable, but could be cheap. Most of the testing is saying that the stock price is either cheap or reasonable. I did the majority of the testing in US$ because the reporting is in US$, the estimates are in US$ and dividends are paid in US$.
When I look at analysts’ recommendations, I find Strong Buy (13), Buy (6) and Hold (5). The consensus is a Strong Buy. The 12 months stock price consensus is $72.66 ($51.82 US$) with a high of $93.00 ($67.00 US$) and low of $53.28 ($38.00 US$). The consensus stock price of $72.66 implies a total return of $45.37% with 3.29% from dividends and $42.08% from Capital Gains based on a current stock price of $51.14. This is in CDN$.
There is only one entry on Stock Chase for 2025 and it is a weak buy. Maybe because this company is more indebted than its peers. There are no entries for this company on Motley Fool for 2025. Aditya Raghunath on Motley Fool talks about the Bull case for Ovintiv in 2024. The company put out a Press Release about their fourth quarter of 2024. The company put out a Press Release for their second quarter of 2025 results.
Simply Wall Street via Yahoo Finance suggests that this stock maybe undervalued. Simply Wall Street has 4 warnings on this stock of has a high level of debt; dividend of 3.31% is not well covered by free cash flows; profit margins (6.6%) are lower than last year (18.8%); and large one-off items impacting financial results.
Ovintiv Inc is a North American oil and natural gas exploration and production company that is focused on developing its multi-basin portfolio of high-quality assets located in the United States and Canada. Its web site is here Ovintiv Inc.
The last stock I wrote about was about was CCL Industries Inc (TSX-CCL.B, OTC-CCDBF) ... learn more. The next stock I will write about will be Dollarama Inc (TSX-DOL, OTC-DLMAF) ... learn more on Friday, October 24, 2025 around 5 pm. Tomorrow on my other blog I will write about Equity Clock Blogger.... learn more on Thursday, October 23, 2025 around 5 pm.
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