Paramount Resources (POU) AI Stock Analysis

• Market Cap: $2.29B
• Dividend Yield: 27.79%
• Average Volume (3M): 877.30K
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.92
• Revenue Growth: 3.08%
• EPS Growth: -30.22%
• Country: CA
• Employees: 566
• Sector: Energy
• Sector Strength: 44
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 2.30
• Shares Outstanding: 143,464,920
• 10 Day Avg. Volume: 847,466
• 30 Day Avg. Volume: 877,305
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.30
• Price to Cash Flow (P/CF): 3.40
• P/FCF Ratio: 99.20
• 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$22.82
• Price Target Upside: 43.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Paramount Resources shows a strong overall position, driven primarily by strategic corporate actions that have enhanced shareholder value and financial strength. Despite some operational and cash flow challenges, the company's attractive valuation and strong dividend yield provide solid investment potential. Technical indicators are mixed, suggesting caution but not significant risk.

Positive Factors

Asset Potential

Paramount is a unique E&P business with a number of non-producing/hard-to-value assets that have generally been ignored by investors, which could present untapped potential.

Financial Stability

The company sits on a net cash position, which provides financial stability and flexibility.

Negative Factors

Dividend Impact

With the company recently paying the special dividend of $15, the Target Price is being lowered to $25.

Profitability

Profitability is measured by comparing the change in PDP reserve value to the amount of capital employed, showing that for every dollar spent, management added $0.57 in value.

Paramount Resources Business Overview & Revenue Model

Company Description

Paramount Resources Ltd., an independent energy company, explores for, develops, produces, and markets natural gas, crude oil, and natural gas liquids in Canada. The company's principal properties are the Montney and Duvernay developments located in Alberta and British Columbia. It also invests in public and private corporations. Paramount Resources Ltd. was founded in 1976 and is based in Calgary, Canada.

How the Company Makes Money

Paramount Resources makes money through the exploration, extraction, and sale of crude oil and natural gas. Its primary revenue streams include the sale of produced hydrocarbons to various markets, including domestic and international buyers. The company utilizes advanced technology and efficient production techniques to optimize resource extraction and reduce operational costs. Additionally, Paramount Resources engages in strategic partnerships and joint ventures to enhance its exploration capabilities and expand its market reach. Fluctuations in commodity prices, production volumes, and operational efficiencies are significant factors that influence the company's earnings. The company may also generate income from the sale of assets or through financial instruments related to its energy production activities.

Paramount Resources Financial Statement Overview

Summary

Paramount Resources demonstrates stable financial performance with strong equity and controlled leverage. Despite profitability, operational challenges are evident in revenue and net income volatility, alongside cash flow inefficiencies, indicating areas for improvement.

Income Statement

Paramount Resources shows a mixed income statement performance. The gross profit margin has been robust, supported by relatively stable gross profits over the years. However, the net profit margin has seen fluctuations, reflecting variability in net income. The revenue growth rate is inconsistent, indicating potential volatility in sales. EBIT and EBITDA margins are healthy, although the absence of EBIT in the latest year suggests operational challenges.

Balance Sheet

The company's balance sheet is strong, with a low debt-to-equity ratio indicating limited leverage risk. Return on Equity (ROE) remains solid, demonstrating effective use of shareholder capital despite some variability across years. The equity ratio is consistently healthy, emphasizing substantial equity backing relative to assets.

Cash Flow

Cash flow statements reveal a decline in free cash flow growth, raising concerns about cash generation efficiency. Operating cash flow remains strong compared to net income, indicating good cash conversion from operations. However, the free cash flow to net income ratio is negative in the latest year, signaling potential cash flow issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.08B	1.80B	2.52B	1.38B	626.04M
	Gross Profit
991.80M	960.90M	1.46B	841.00M	239.51M
	EBIT
0.00	867.90M	989.30M	206.20M	-95.51M
	EBITDA
819.90M	1.05B	1.20B	841.90M	338.47M
	Net Income Common Stockholders
335.90M	470.20M	680.60M	236.90M	-22.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.40M	48.90M	2.50M	1.70M	4.59M
	Total Assets
4.76B	4.39B	4.34B	3.89B	3.50B
	Total Debt
201.90M	29.20M	177.40M	398.90M	835.21M
	Net Debt
199.50M	-19.70M	174.90M	397.20M	830.62M
	Total Liabilities
1.06B	889.50M	959.20M	1.28B	1.46B
	Stockholders Equity
3.70B	3.50B	3.38B	2.61B	2.04B
Cash Flow		Free Cash Flow
-41.20M	126.90M	248.80M	202.10M	-140.34M
	Operating Cash Flow
815.30M	938.20M	1.05B	482.10M	80.91M
	Investing Cash Flow
-762.40M	-376.70M	-654.00M	-51.70M	-250.02M
	Financing Cash Flow
-99.40M	-514.90M	-393.20M	-433.30M	168.37M

Paramount Resources Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:POU, the sentiment is Negative. The current price of 15.94 is below the 20-day moving average (MA) of 17.26, below the 50-day MA of 16.79, and above the 200-day MA of 15.36, indicating a neutral trend. The MACD of 0.58 indicates Negative momentum. The RSI at 70.15 is Negative, neither overbought nor oversold. The STOCH value of 87.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:POU.

Paramount Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
POU	73 Outperform	$2.29B	6.93	9.38%	27.79%	3.08%	-30.22%
TOU	71 Outperform	C$22.26B	16.80	8.55%	2.56%	-8.29%	-30.52%
Sector *	57 Neutral	$7.56B	4.34	-4.83%	6.50%	-0.19%	-64.60%

Paramount Resources Corporate Events

Paramount Resources Declares April Dividend

Paramount Resources Ltd. has announced a cash dividend of $0.05 per common share, payable on April 30, 2025, to shareholders of record as of April 15, 2025. This dividend is designated as an ‘eligible dividend’ for Canadian income tax purposes. The announcement reflects Paramount’s ongoing commitment to delivering shareholder value, although the company notes potential risks that could affect future dividend declarations, including changes in market conditions and financial requirements.

Paramount Resources Reports Strong 2024 Financial Results and Strategic Asset Sale

Paramount Resources Ltd. announced its 2024 annual financial results, highlighting the sale of its Karr, Wapiti, and Zama properties to Ovintiv Inc. for approximately $3.3 billion. This transaction allowed Paramount to distribute a special cash dividend to shareholders and repurchase shares. The company reported record annual sales volumes and significant cash flow from operations, indicating strong financial performance and strategic repositioning within the industry.

Paramount Resources Announces Major Asset Sale and Special Distribution

Paramount Resources Ltd. has successfully closed a significant asset sale to Ovintiv Inc., receiving approximately $3.3 billion in proceeds. Following this transaction, the company declared a special cash distribution of $15.00 per common share, signaling a strong return to shareholders. Additionally, Paramount has secured an amended $500 million credit facility, updated its operational and development plans for 2025, and revised its monthly dividend to $0.05 per share. These strategic decisions are likely to strengthen the company’s financial positioning and enhance shareholder value.

Paramount Resources Announces Shareholder Approval for Capital Return

Paramount Resources Ltd. announced that its shareholders have approved a special resolution for a reduction in the stated capital of its class A common shares. This move allows the company to proceed with a special cash distribution of $15.00 per share, contingent on the completion of an asset sale to Ovintiv Inc. The distribution will include a $12.00 return of capital and a $3.00 special dividend, designated as an eligible dividend for Canadian tax purposes. The transaction has received approval under the Investment Canada Act, and the company plans to finalize it soon, after which the Board of Directors will declare the special distribution.