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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (79129)

2/7/2026 3:59:04 PM

From: E_K_S

Respond to of 79138

RE: Ovintiv Inc (OVV)

This is the old Encana, I acquired my shares in 3/2020 w/ an avg cost of $8/share, Since then they have expanded their operation w/ acquisitions.

I look at FCF yield and this one is at/near DVN's. I had been peeling off shares at/above $45 but w/ the review below, maybe I need to stop selling and just hold what I have.

1. The Genesis: From Encana to Ovintiv

In January 2020, Encana officially completed its "redomestication," moving its corporate headquarters from Calgary, Alberta, to Denver, Colorado, and rebranding as Ovintiv.

The Reason: The move was largely strategic—designed to tap into deeper U.S. capital markets and shed the "Canadian discount" that some analysts felt plagued the stock.
The Structure: It was a 1-for-5 reverse stock split during the transition. While the name changed, the leadership (led by Brendan McCracken today) and the core asset base remained a mix of high-quality U.S. and Canadian plays.

2. Operating Areas & Portfolio Shift

They still operate in the "neighborhoods" that made Encana famous, but they have aggressively "high-graded" the portfolio. They focus on three core "pillars":

Permian Basin (Midland): This is their crown jewel for oil growth.
The Montney (Canada): A massive, liquids-rich gas play in Alberta/BC where they are a dominant player.
Anadarko Basin (STACK/SCOOP): While still a core area, they recently announced plans to divest their Anadarko assets (expected by late 2026) to pivot more resources toward the Montney and Permian.

3. Major New Acquisitions (2025/2026)Ovintiv has been very active in M&A to shore up their inventory:

NuVista Energy Acquisition (Feb 2026): Ovintiv just closed a $2.7 billion (C$3.8 billion) acquisition of NuVista. This added 140,000 net acres in the core of the Alberta Montney, essentially "doubling down" on their best Canadian assets.
EnCap/Midland Basin (2023): They previously spent ~$4.275 billion to pick up core Midland Basin assets, which significantly extended their drilling inventory in the Permian.

4. Financial Health (Current Estimates)

As of early 2026, the company is focused on a "capital-efficient" model.

Metric	Estimated Value (2026 Forward)
FCF Yield	~10-12% (Highly dependent on strip prices; management targets a 10% uplift from the NuVista deal).
Forward EPS	$4.65 – $5.15 (Consensus estimates vary by analyst, but recent production beats have pushed this higher).
Earnings CAGR	~30-33% (Projected over the next 3 years as they integrate NuVista and optimize Permian drilling).
Dividend	Currently $0.30/quarter ($1.20 annualized), yielding roughly 2.7%.

Summary "Peer" Check

Compared to other large-cap E&Ps, Ovintiv trades at a relatively low P/E (historically around 5x-8x, though currently seeing expansion toward 11x-12x on forward estimates). They are using their free cash flow to aggressively buy back shares and pay down debt—targeting a net debt floor of $4 billion by the end of 2026.
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OVV is one of the better CAGR in my basket of Oil/NG companies. Based on my Buys in 3/2020 if I sold today and added the div income the CAGR is 37% ! Thats a five year holding period too and to get that CAGR is very good.