Ovintiv Inc (OVV)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 5,453,000 | 3,177,000 | 4,786,000 | 6,367,000 | 6,974,000 |
| Total stockholders’ equity | US$ in thousands | 10,370,000 | 7,689,000 | 5,074,000 | 3,837,000 | 9,930,000 |
| Debt-to-capital ratio | 0.34 | 0.29 | 0.49 | 0.62 | 0.41 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,453,000K ÷ ($5,453,000K + $10,370,000K)
= 0.34
The debt-to-capital ratio of Ovintiv Inc has fluctuated over the past five years, ranging from 0.32 to 0.65. A lower debt-to-capital ratio indicates a lower level of financial leverage and a higher proportion of equity in the company's capital structure. In 2022 and 2023, the ratio decreased to 0.32 and 0.36, respectively, suggesting a more conservative approach to financing and a decrease in the reliance on debt.
Conversely, in 2020, the ratio spiked to 0.65, indicating a higher level of debt relative to the total capital employed. This elevated ratio may have been due to significant debt issued or a decline in equity relative to debt during that period.
Overall, the trend in the debt-to-capital ratio for Ovintiv Inc shows variability but appears to have improved in recent years, potentially reflecting a more stable and balanced capital structure. Investors and analysts may consider the company's ability to manage its debt levels and maintain a healthy balance between debt and equity when evaluating its financial performance.
Peer comparison
Dec 31, 2023