Cardinal Energy (CJ) AI Stock Analysis

• Market Cap: C$972.94M
• Dividend Yield: 11.82%
• Average Volume (3M): 674.57K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 0.81
• Revenue Growth: 2.04%
• EPS Growth: -48.47%
• Country: CA
• Employees: 174
• Sector: Energy
• Sector Strength: 72
• Industry: Fossil Fuels
• EPS (TTM): 0.65
• Shares Outstanding: 159,760,910
• 10 Day Avg. Volume: 822,939
• 30 Day Avg. Volume: 674,572
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.96
• Price to Cash Flow (P/CF): 2.90
• P/FCF Ratio: 4.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$7.50
• Price Target Upside: 23.15% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Cardinal Energy's strong financial performance, characterized by high profitability and a robust balance sheet, is a major strength, contributing significantly to the company's overall score. However, the bearish technical indicators and declining revenue growth are areas of concern. The attractive valuation, including a low P/E ratio and high dividend yield, provides a counterbalance, making the stock appealing to income-focused investors. Overall, while the company is fundamentally strong, market sentiment remains cautious.

Cardinal Energy Business Overview & Revenue Model

Company Description

Cardinal Energy Ltd. (CJ) is a Canadian-based oil and gas company primarily engaged in the exploration, development, and production of crude oil and natural gas in Western Canada. The company focuses on the acquisition and development of low-decline oil properties, aiming to provide sustainable returns to its stakeholders. Cardinal Energy operates in the energy sector, offering a range of products including light, medium, and heavy crude oil, as well as natural gas.

How the Company Makes Money

Cardinal Energy generates revenue through the extraction and sale of crude oil and natural gas. The company's revenue streams are primarily driven by the market prices of these commodities, which can fluctuate based on global demand and supply dynamics. Cardinal Energy sells its oil and gas production to a variety of buyers, including refineries and other energy companies, often through direct sales contracts or spot market transactions. The company may also engage in hedging activities to manage price risk and stabilize cash flows. Additionally, strategic partnerships and acquisitions of low-decline oil properties help enhance its production capabilities and contribute to its revenue growth.

Cardinal Energy Financial Statement Overview

Summary

Cardinal Energy demonstrates a solid financial foundation with strong profitability and efficient operations. While revenue has declined, the company maintains high margins and a stable balance sheet. Cash flows are robust, supporting operational needs and potential investments. The company is positioned well within the fossil fuels industry, though the revenue decline may pose a challenge if not addressed.

Income Statement

Cardinal Energy has shown a consistent improvement in its financial performance. The TTM gross profit margin stands at approximately 43.5%, indicating solid profitability. The net profit margin of 19.6% highlights strong bottom-line performance. However, the revenue growth rate is negative at around -29.1%, which suggests a decline in sales compared to previous years. The EBIT and EBITDA margins at 29.1% and 48.8% respectively show operational efficiency.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.08, reflecting conservative leverage. The return on equity is strong at 11.2%, showcasing effective utilization of shareholders' equity. The equity ratio is robust at 73.5%, indicating financial stability and a strong asset base primarily funded by equity.

Cash Flow

Cardinal Energy's cash flow position is strong, with an operating cash flow to net income ratio of 2.56, indicating efficient cash generation relative to net income. The free cash flow growth rate is modest at 3.5%, showing slight improvement in cash generation. The free cash flow to net income ratio is 1.26, suggesting healthy cash flow relative to earnings.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
525.89M	481.12M	741.84M	448.75M	226.46M	391.60M
	Gross Profit
228.96M	265.00M	489.37M	290.17M	126.13M	233.76M
	EBIT
153.05M	138.25M	249.77M	102.82M	-17.91M	41.49M
	EBITDA
256.59M	253.64M	410.56M	385.95M	-171.31M	89.42M
	Net Income Common Stockholders
102.92M	103.60M	302.69M	284.42M	-363.16M	-34.34M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
15.38M	4.09M	-4.49M	-2.63M	-3.91M	-5.43M
	Total Assets
1.21B	1.19B	1.16B	1.08B	749.13M	1.15B
	Total Debt
259.59M	50.10M	35.77M	157.59M	239.13M	222.90M
	Net Debt
262.28M	50.10M	40.26M	160.22M	243.05M	228.33M
	Total Liabilities
413.71M	267.16M	229.64M	356.60M	376.29M	411.93M
	Stockholders Equity
792.62M	920.69M	925.37M	719.23M	372.85M	737.90M
Cash Flow		Free Cash Flow
130.20M	125.83M	216.61M	68.72M	12.02M	54.07M
	Operating Cash Flow
263.77M	230.26M	337.26M	125.12M	43.52M	119.98M
	Investing Cash Flow
-162.89M	-114.64M	-116.18M	-46.57M	-50.75M	-48.83M
	Financing Cash Flow
-100.88M	-115.63M	-221.08M	-78.55M	7.22M	-71.15M

Cardinal Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CJ, the sentiment is Negative. The current price of 6.09 is below the 20-day moving average (MA) of 6.29, below the 50-day MA of 6.40, and below the 200-day MA of 6.29, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 46.09 is Neutral, neither overbought nor oversold. The STOCH value of 32.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CJ.

Cardinal Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WCP	74 Outperform	C$4.88B	6.08	14.51%	9.28%	3.34%	-6.99%
CJ	72 Outperform	C$972.94M	9.40	11.14%	11.82%	2.04%	-48.47%
TOU	70 Outperform	C$24.32B	18.22	8.55%	2.04%	-8.29%	-30.52%
ARX	70 Outperform	$15.13B	13.57	14.67%	2.87%	-9.83%	-27.76%
BTE	68 Neutral	C$2.27B	9.95	5.99%	3.26%	22.71%	―
VET	62 Neutral	$1.73B	―	-1.59%	4.81%	-1.72%	79.87%
Sector *	57 Neutral	$8.36B	5.47	-5.51%	7.41%	0.15%	-68.69%

Cardinal Energy Corporate Events

Cardinal Energy Announces Ambitious 2025 Budget with Focus on Thermal Projects

Cardinal Energy Ltd. has announced its 2025 budget, highlighting plans to generate $217 million in adjusted funds flow at US$70 WTI. The company aims to achieve an average production of 21,300 to 21,700 boe/d, with a significant increase expected as the Reford project contributes in the fourth quarter. The budget includes a $71 million conventional capital budget and a $120 million thermal oil budget, with a focus on completing the Reford SAGD project and de-risking another thermal project at Kelfield. Cardinal plans to maintain its dividend at $0.06 per share per month and forecasts substantial free cash flow to support its financial commitments. The Reford project is progressing on schedule, with first steam expected in the third quarter of 2025 and full production by the first quarter of 2026.

Cardinal Energy Declares January Dividend

Cardinal Energy Ltd. announced a monthly dividend of $0.06 per common share, payable on February 18, 2025, to shareholders recorded by January 31, 2025. The cash dividend is recognized as an ‘eligible dividend’ for Canadian tax purposes, reflecting Cardinal’s commitment to providing returns to its shareholders while advancing its operational projects.

Cardinal Energy Completes $60 Million Offering

Cardinal Energy Ltd. has successfully closed a $60 million bought deal offering, issuing senior subordinated unsecured debentures and common share purchase warrants. The proceeds will be used to reduce outstanding debt and fund future projects, including the Reford thermal project. The debentures and warrants are now trading on the Toronto Stock Exchange.

Cardinal Energy Announces $50M Bought Deal Offering

Cardinal Energy Ltd. has announced a $50 million bought deal offering involving senior subordinated unsecured debentures and common share purchase warrants. The proceeds will be used to repay debt, complete the Reford thermal project, and support future projects and corporate purposes. The offering is set to close around January 3, 2025, with the debentures bearing an annual interest rate of 7.75%.

Cardinal Energy Expands Credit Facilities

Cardinal Energy Ltd. has successfully increased its credit facilities to $275 million, gaining additional financial support for its capital program. The enhanced liquidity will aid in advancing the company’s steam-assisted gravity drainage project in Reford, reflecting Cardinal’s strategic growth initiatives.

Cardinal Energy Declares Dividend and New Project

Cardinal Energy Ltd. has announced a monthly dividend of $0.06 per common share to be paid in January 2025, highlighting its commitment to shareholders. The company also stands out in the Western Canadian oil sector with its low decline asset base and a new thermal SAGD oil development project, which promises long-term sustainability.

Cardinal Energy’s Strong Q3 Financial Results

Cardinal Energy reported strong financial performance for the third quarter of 2024, with adjusted funds flow of $65.7 million supporting its active drilling and development programs. Despite planned and unplanned facility turnarounds, the company anticipates increasing production in the fourth quarter.