Ovintiv Inc (OVV, Financial), an independent oil and gas producer, has seen a significant surge in its stock price over the past three months. The company's stock price has risen by 34.32%, from a significantly undervalued position three months ago to a fairly valued position today, according to the GF Value. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. This article will delve into the factors contributing to this impressive performance and provide an in-depth analysis of the company's profitability, growth, and market position.
Company Overview
Ovintiv Inc operates in the oil and gas industry, with key assets in the Permian, Eagle Ford, Montney, and Duvernay areas. The company reported net proven reserves of 1,348 million barrels of oil equivalent at the end of 2019. In 2020, net production averaged 543 thousand barrels of oil equivalent per day, with a ratio of 53% oil and natural gas liquids and 47% natural gas. With a market cap of $13.21 billion and a current stock price of $48.41, Ovintiv has demonstrated robust performance in recent times.
Profitability Analysis
Ovintiv's profitability is impressive, with a Profitability Rank of 7/10, indicating a high level of profitability. The company's Operating Margin stands at 31.74%, better than 76.63% of companies in the industry. Furthermore, Ovintiv's ROE and ROA are 44.86% and 21.17% respectively, both outperforming the majority of industry peers. The company's ROIC of 24.20% also surpasses 90.09% of companies in the industry. Over the past decade, Ovintiv has achieved profitability for seven years, better than 68.23% of companies.
Growth Prospects
Ovintiv's growth prospects are moderate, with a Growth Rank of 5/10. The company's 3-year and 5-year revenue growth rates per share are 23.30% and 11.50% respectively, outperforming a significant portion of industry peers. However, the company's future total revenue growth rate estimate stands at -3.54%. Despite this, Ovintiv's 3-year EPS without NRI growth rate is an impressive 150.10%, better than 95.55% of companies.
Major Shareholders
The top three holders of Ovintiv's stock are Dodge & Cox, holding 10.72% of shares, HOTCHKIS & WILEY, holding 2.25% of shares, and Smead Value Fund (Trades, Portfolio), holding 1.73% of shares.
Competitive Landscape
Ovintiv faces competition from several companies in the oil and gas industry. Its main competitors include APA Corp with a market cap of $12.99 billion, Chesapeake Energy Corp with a market cap of $11.28 billion, and Texas Pacific Land Corp with a market cap of $14.4 billion.
Conclusion
In conclusion, Ovintiv Inc's stock has seen a significant surge over the past three months, driven by its strong profitability and growth prospects. Despite facing stiff competition in the industry, the company's impressive performance metrics and market position make it a potential candidate for future growth and profitability.
