Arc Resources Ltd (ARX.TO) Buy, Sell or Hold

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Arc Resources Ltd (ARX.TO)

29.84

-0.30 (1.00%)

as of Jun 19, 2026, 8:00:01 pm Market Open.

537 watching

BUY

He likes it. It's bottoming. Energy should rise next year and so should this.

BUY

He thinks there is still good upside to come. The sector has put all the good companies in the same camp as the poor performers and dragged all down to the same reduced valuations. Arc is yielding 9.1% and trades at a 25% discount to their reserve valuation. Out to 2021 their spending drops to create a 10% free cash flow yield after paying the dividend. He still sees this as an opportunity.

RISKY

He used to own this. It is mostly a BC natural gas producer. Natural gas prices have been depressed and a lack of northern BC pipeline access has been shown in the stock price. He likes the management team, but the fundamentals are still a concern. Lately natural gas prices have been improving, but he wants to hold it long term. Maybe its a better short term trade. When LNG gets going on the west coast it will benefit.

BUY

He bought it in the last couple of months. The western Canadian energy space has been decimated and no one wants to own you if you are not in the index. They had a bit of a headwind from nat gas pricing in western Canada. ARX-T is trading where it was in the last '90s. The dividend is sustainable at this level. If you can close your eyes, over time you will be rewarded handsomely. It is close to 10% so you get paid to wait. Great assets and a great management team with a proven ability to develop those assets over a period of time. It is the most hated sector in Canada and can be bought at 30 year lows.

COMMENT

MFC vs. Arc Arc is riskier while MFC is steadier. MFC is at an excellent price now, close to book value and offers a 12% ROE. Best in this sector with great Asian growth potential. They have a long way to sort out problems with long-term care in the U.S. Arc is good if you want more torque in your portfolio.

DON'T BUY

Has a yield of 10.9% yield which seems to be sustainable. Earnings revisions have been revised down.

COMMENT

Market Outlook TOU-T is planning to spin off some of their infrastructure into a royalty like offering, while retaining 80% of the value. Prior to this the stock was trading at all time lows and the market was giving zero value to the infrastructure they held. The company was trading at 3 times cash flow. The assets they are effectively selling are being valued at 9 times cash flow within the offering. This should remind people how undervalued this space is and there are self-adjusting opportunities that will "fix the funk" we see today. ARX-T has a similar 20% of its company in similar infrastructure. Once we get past the upcoming Federal election things should move forward. What a party says on the campaign trail and what happens in reality can be two very different things. The Liberals appear to support the TMX pipeline project in reality and it will ultimately get built, he says. 11% of our GDP in Canada comes from the energy sector.

BUY

Good energy dividend payers? For a five year time period, there are a few 9% dividend payers which are safe, he thinks. He would suggest ARX-T (11% yield), WCP-T, and TOG-T (each yielding around 9%). He thinks the dividends are safe to $50 WTI. These stocks are just so undervalued and have enormous upside if investment comes back.

TOP PICK

It was the gold standard in the market with a rockstar balance sheet and high yield down to $50 WTI. Over 60% of their revenue comes from liquids. The first time he has owned it as it has always been too expensive as it traded at premium mulitples -- a bargain today. Yield 10.95% (Analysts’ price target is $10.00)

BUY ON WEAKNESS

They have a strong balance sheet. It is trading at half of its book value. Take advantage of tax loss selling season.

SELL

Afflicted by the same thing afflicting all the other nat gas producers. They're at the end of the pipe. Selling at a deep discount. Not making money, but continuing to spend. Dividend is at risk. Producers are going to be in the penalty box until the LNG plant gets built off the west coast. Could fall further.

BUY ON WEAKNESS

The debt is 21%, but down from last December. He would recommend buying it on weakness. They have the gas for LNG approved projects in Canada. We could see takeovers in the next two to three years.

PAST TOP PICK

(A Top Pick Oct 05/18, Down 50%) Natural gas and liquids cash flows have been challenged. He loves the management team here. He was stopped out in the fall. Now, the company is incredibly cheap and natural gas prices are improving. He would buy this again.

TOP PICK

At this point in time, this is simply the highest free cash flow company in the space.

BUY

It has been trending down. They are one of the better managed companies. They had good results last quarter, but no one seems to care. He highly recommends it at these levels. If the energy market turns at all, they will do quite well. 9.6% yield. (Analysts’ price target is $11.00)

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Arc Resources Ltd (ARX.TO)