Vermilion Energy Inc. (NYSE: VET)

Sector: Energy Industry: Oil & Gas E&P CIK: 0001293135
Market Cap 1.54 Bn
P/B 0.79
P/E -9.09
P/S 1.13
ROIC (Qtr) 0.67
Div Yield % 2.71
Rev 1y % (Qtr) 13.68
Total Debt (Qtr) 953.04 Mn
Debt/Equity (Qtr) 0.49
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About

Investment thesis

Bull case

  • Strong operating cash flow of 741.23M provides robust 0.78x coverage of total debt 953.04M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 741.23M provides strong 49.53x coverage of stock compensation 14.97M, indicating sustainable incentive practices.
  • Strong tangible asset base of 4.31B provides 4.53x coverage of total debt 953.04M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 741.23M provides 9.73x coverage of SG&A expenses 76.15M, showing efficient operational cost management.
  • Operating cash flow of 741.23M provides solid 2.09x coverage of current liabilities 354.66M, showing strong operational health.

Bear case

  • Operating cash flow of 741.23M barely covers its investment activities of (930.69M), with a coverage ratio of -0.80, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 741.23M provides thin coverage of dividend payments of (55.96M) with a -13.24 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 33.37M provide limited coverage of acquisition spending of (441.19M), which is -0.08x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 136.28M relative to inventory of 32.82M (4.15 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of (57.67M) show weak coverage of depreciation charges of 560.86M, with a -0.10 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Oil & Gas E&P
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 COP Conocophillips 136.62 Bn 17.10 2.22 23.44 Bn
2 CNQ Canadian Natural Resources Ltd 85.21 Bn 17.67 3.04 12.51 Bn
3 EOG Eog Resources Inc 66.33 Bn -60.48 8.67 8.13 Bn
4 FANG Diamondback Energy, Inc. 49.64 Bn -2,818.83 314.47 16.24 Bn
5 OXY Occidental Petroleum Corp /De/ 37.18 Bn 15.36 2.56 22.88 Bn
6 WDS Woodside Energy Group Ltd 34.64 Bn 11.73 2.51 -
7 TPL Texas Pacific Land Corp 29.74 Bn 126.16 78.66 0.02 Bn
8 DVN Devon Energy Corp/De 18.80 Bn 3.24 1.91 8.55 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.52 1.02
EV to Cash from Ops. EV/CFO 3.02 18.21
EV to Debt EV to Debt 2.35 54.57
EV to EBIT EV/EBIT -38.77 29.98
EV to EBITDA EV/EBITDA 3.03 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF 8.14 39.33
EV to Market Cap EV to Market Cap 1.45 1.57
EV to Revenue EV/Rev 1.63 11.47
Price to Book Value [P/B] P/B 0.79 2.97
Price to Earnings [P/E] P/E -9.09 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -2.20 26.80
Dividend Payout Ratio % Div Payout % (Qtr) -24.70 31.86
Dividend per Basic Share Div per Share (Qtr) 0.27 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 10.95 1.05
Interest Coverage Int. cover (Qtr) -0.62 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -12.26 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -76.23 52.06
Dividend Growth (1y) % Div 1y % (Qtr) -38.07 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 88.25 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8,283.46 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 89.73 75.94
EBT Growth (1y) % EBT 1y % (Qtr) 75.74 17.44
EPS Growth (1y) % EPS 1y % (Qtr) 70.71 3.07
FCF Growth (1y) % FCF 1y % (Qtr) -30.02 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.10 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.23 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.07
Cash Ratio Cash Ratio (Qtr) 0.09 1.32
Current Ratio Curr Ratio (Qtr) 0.81 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.49 0.34
Interest Cover Ratio Int Coverage (Qtr) -0.62 -4.97
Times Interest Earned Times Interest Earned (Qtr) -0.62 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 36.70 16.19
EBIT Margin % EBIT Margin % (Qtr) -5.81 -16.83
EBT Margin % EBT Margin % (Qtr) -11.03 -24.06
Gross Margin % Gross Margin % (Qtr) 61.00 58.92
Net Profit Margin % Net Margin % (Qtr) -12.40 -28.75