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Oil & Gas Development Company Limited(OGDC) Company Overview: -

Sarmaaya Desk
Sarmaaya Content Team

OGDC a value share:

The Oil and Gas Development Company Limited (OGDCL), often known as "the Company," was established on October 23, 1997, under the Companies Ordinance of 1984. (now the Companies Act, 2017). The Company was formed to conduct oil and gas resource exploration and development, as well as the manufacture and distribution of oil and gas, and other associated activities that were previously carried out by Oil and Gas Development Corporation. The London Stock Exchange lists the Company's Global Depository Shares (1GDS = 10 ordinary shares of the Company).

Oil & Gas Development Co Ltd (OGDCL) is an upstream oil and gas firm that is fully integrated. Its assets are located in the Pakistani provinces of Sindh, Punjab, Balochistan, and Kyber Pakhtoon Khawa (KPK), where it explores, develops and produces oil and gas. It possesses exploration licenses and mining leases that are both operational and non-operated.

KEY INDICATORS:
Share Price per share R.s 96.61
Book value per share R.s 174.54
Earnings per share 19.28
Dividend R.s 7.438
Price to earnings ratio 5.01
Price to book value ratio 0.554
52 weeks highest price R.s 119.80
52 weeks lowest price R.s 86.25

The total market value of OGDC at the present share price is Rs. 415.51 Billion

Sales and Profits:

The table shows the sale and the gross profit that the company has made in some previous years. All values are in thousands:

  2020 2019 2018 2017 2016 2015 2014
Sales 244,856,754 261,481,188 205,335,000 171,829,364 162,866,578 210,624,908 257,014,254
Gross profit 149,078,068 167,061,563 121,479,743 95,004,186 87,889,539 131,966,911 176,072,804

Under the leadership of a forward-thinking management team, OGDCL envisions itself not just as the country's leading E&P firm, but also as a corporation known for its people, partnerships, and performance in the area. The Company maintained its oil and gas exploration, reserve additions, early development of recently found fields, and oil and gas production base strengthening initiatives to boost the country's indigenous output and produce value for its shareholders.

OGDC shares have a higher earning quality and have boosted its sales from a downfall that the share experienced in 2016. OGDC’s earnings have grown over the past 5 years overall but in the previous year, it had a negative earnings growth and was also less than the markets and industries earning growth. The historic annual earnings growth for the last 5 years has been 12.9%. Moreover, the profit margins of the company are less than the previous year too. This means that the company has not performed well in the previous financial year.

Financial Health:

Company has strong financial health:

  2020 2019 2018 2017 2016
Assets 888,973,636 766,597,190 666,477,197 627,287,973 589,565,539
Liabilities 178,409,660 148,843,362 115,920,775 114,303,636 110,932,972
Equity 710,563,976 646,214,995 550,556,422 512,987,337 478,632,567

OGDC has sufficient short-term assets which exceed both the short-term as well as the long-term liabilities. No debt has been experienced in the past 5 years. OGDC dividend payment is very volatile as the share itself but on the plus, plus the dividend paid and a dividend yield of OGDC has only increased in the previous 10 years.

PEER Analysis: -

The price to earnings ratio of OGDC is better than the market for the petroleum industry and also its peer which includes PPL and MARI. OGDC is also trading below its estimated book value. The book value is Rs. 174.54 the stock is undervalued by 55% which is significantly below book value. The growth of the share is slow and the price of the stock compared to the market is highly volatile. Growth is slow concerning the peer companies in the industry. The EPS of MARI is very high meaning that it has good earnings as compared to its share price. At the same time, the share price of MARI is too high so it is not a good buy for a middle-class investor.

From the lower figure, we can see that OGDC is the most sophisticated stock and is good as the stock price is Rs. 96.61 it has a good dividend yield and the price-to-earning ratio is also better. Price to earnings ratio of PPL is good but on the other hand, the price-to-book value ratio is greater which is not a good thing.

So we can conclude that OGDC is the best stock among its peer and is pretty valuable.

Fund holdings
Fund Holding:
Fund holdings

Around 70 mutual funds have invested in OGDC which means that fund managers trust OGDC to give higher returns and be a useful investment for their customers and investors as a whole.

Conclusion: -

The share is bound to be a good investment but the growth and return must be slow. The stock is a valuable investment in the long term for investors looking to gain profits in long term must invest in the stock.

 




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