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MEG Energy stock climbs on strong ROE and profit retention

Published Nov 20, 2023 10:26AM ET
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The Canadian oil and gas company MEG Energy (OTC:MEGEF) has seen its stock price rise by 9.4% over the last quarter, bolstered by its robust Return on Equity (ROE) performance. The company's ROE, a key measure of financial efficiency, stands at 13%, indicating that it generates CA$ 0.13 in profit for every dollar of shareholder equity. This figure comes against the backdrop of a net profit of CA$ 625 million and shareholder equity totaling CA$4.6 billion.

Despite MEG Energy's ROE falling short of the industry average of 17%, the company has outperformed in terms of net profit growth, which has surged by 62% over the past five years, notably exceeding the industry's growth rate of 43%. This comparison underscores MEG Energy's effective strategies in profit retention and managerial efficiency.

In line with its strategy to fuel growth, MEG Energy does not distribute dividends, opting instead to reinvest all profits back into its operations. This approach has been pivotal to the company's impressive earnings trajectory. Nonetheless, analysts predict that the pace of MEG’s future earnings growth may decelerate. Investors seeking a deeper understanding of these projections and an assessment of the firm's intrinsic value can access further insights through detailed analyst reports.

InvestingPro Insights

Drawing from InvestingPro's real-time data, MEG Energy's market capitalization stands at a substantial 962.7M USD. The company's revenue over the last twelve months as of Q3 2023 was 597.98M USD, with a growth of 8.98%. This reflects a robust financial standing, further underscored by a gross profit of 225.16M USD during the same period. The revenue growth for Q3 2023 also showed a remarkable quarterly upswing of 28.87%.

InvestingPro Tips shed light on MEG Energy's performance and potential. The company operates with a moderate level of debt and its liquid assets exceed short-term obligations, indicating strong financial health. It's also worth noting that the company has been profitable over the last twelve months, which aligns with the article's mention of MEG's impressive earnings trajectory. Despite the volatility of the stock price, MEG Energy is trading near its 52-week high, suggesting investor confidence.

InvestingPro offers a wealth of additional insights and tips for those interested in a deeper dive into MEG Energy's performance. With the current Black Friday sale, a subscription to InvestingPro is available at a discount of up to 55%, providing access to a multitude of valuable investing tips and real-time data.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

MEG Energy stock climbs on strong ROE and profit retention

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