Unlocking the Potential of Teck Resources Stock

Teck Resources shares fell by -3.6% during the day's afternoon session, and are now trading at a price of $49.17. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

Teck Resources Has Attractive P/B and P/E Ratios:

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 25.4 and an average price to book (P/B) ratio of 3.23. In contrast, Teck Resources has a trailing 12 month P/E ratio of 22.0 and a P/B ratio of 0.97.

When we divide Teck Resources's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -3.92. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.

Generally Positive Cash Flows but a Declining EPS Growth Trend:

2018 2019 2020 2021 2022 2023
Revenue (M) $12,564 $11,934 $8,948 $12,766 $17,316 $15,011
Gross Margins 37% 28% 15% 41% 49% 34%
Net Margins 25% -5% -11% 23% 19% 15%
Net Income (M) $3,145 -$588 -$944 $2,915 $3,298 $2,308
Earnings Per Share $5.34 -$1.08 -$1.62 $5.31 $6.19 $4.59
EPS Growth n/a -120.22% -50.0% 427.78% 16.57% -25.85%
Free Cash Flow (M) $4,438 $3,484 $1,563 $4,738 $7,983 $4,084
Total Debt (M) $5,181 $4,133 $6,140 $7,161 $6,551 $6,019
Net Debt / EBITDA 0.55 2.12 9.48 0.89 0.54 0.84
Current Ratio 2.11 1.62 1.23 1.62 1.41 1.1
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.