Headwater Exploration (TSE:HWX)
TSX:HWX
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Headwater Exploration
(TSX:HWX)
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Rating:78Outperform
Price Target:
C$15.50
▲(34.43% Upside)
Action:Reiterated
Date:05/02/26
The score is driven primarily by strong financial performance—especially the very low leverage and strong profitability/returns—tempered by cyclicality and choppy free-cash-flow conversion. Technicals are constructive with a clear uptrend, though momentum looks somewhat extended. Valuation is fair-to-moderate with a ~3.27% dividend, but the ~21.5 P/E limits the score.
Positive Factors
Conservative Balance Sheet
An exceptionally low debt-to-equity (~0.02) gives Headwater strong financial flexibility and low interest burden. This conservative capital structure supports funding exploration and development through commodity cycles, reduces solvency risk, and enables opportunistic M&A or shareholder actions over the medium term.
Negative Factors
Cyclicality & Revenue Cooling
Revenue and EPS softness versus 2024 and negative recent revenue growth (~-3.35%) highlight commodity and production cyclicality. Such variability can materially swing earnings and cash, complicating multi-quarter planning, capital allocation, and the predictability of returns for investors and management.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
An exceptionally low debt-to-equity (~0.02) gives Headwater strong financial flexibility and low interest burden. This conservative capital structure supports funding exploration and development through commodity cycles, reduces solvency risk, and enables opportunistic M&A or shareholder actions over the medium term.
Read all positive factors
Headwater Exploration (HWX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.16B
Dividend Yield4.58%
Average Volume (3M)679.74K
Price to Earnings (P/E)21.5
Beta (1Y)0.69
Revenue Growth-3.35%
EPS Growth-30.86%
CountryCA
Employees38
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.58
Shares Outstanding237,762,880
10 Day Avg. Volume621,858
30 Day Avg. Volume679,737
Financial Highlights & Ratios
PEG Ratio-0.73
Price to Book (P/B)2.98
Price to Sales (P/S)4.33
P/FCF Ratio19.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.50Price Target Upside17.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.03
Revenue Forecast (FY)C$730.53M
Headwater Exploration Business Overview & Revenue Model
Company Description
Headwater Exploration Inc., a junior resource company, engages in the exploration, development, and production of petroleum and natural gas in the Western Canadian Sedimentary Basin and onshore in New Brunswick. It holds interests in the McCully F...
How the Company Makes Money
Headwater Exploration makes money primarily by producing and selling crude oil, condensate, and natural gas (and related natural gas liquids, if produced) from its Canadian properties. Revenue is generated when produced volumes are sold at market-...
Headwater Exploration Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
93
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 575.37M | 514.29M | 619.80M | 425.55M | 458.38M | 190.94M |
| Gross Profit | 291.15M | 245.11M | 332.06M | 193.33M | 266.00M | 108.10M |
| EBITDA | 309.50M | 335.42M | 372.81M | 324.89M | 291.97M | 95.66M |
| Net Income | 138.77M | 153.21M | 188.03M | 156.07M | 162.11M | 45.83M |
Balance Sheet | ||||||
| Total Assets | 1.03B | 995.17M | 952.64M | 836.34M | 734.74M | 488.81M |
| Cash, Cash Equivalents and Short-Term Investments | 63.06M | 102.00M | 142.69M | 146.05M | 175.45M | 114.70M |
| Total Debt | 2.05M | 14.04M | 15.64M | 842.00K | 861.00K | 1.55M |
| Total Liabilities | 272.16M | 247.01M | 253.18M | 225.84M | 191.41M | 91.02M |
| Stockholders Equity | 757.57M | 748.15M | 699.46M | 610.50M | 543.34M | 397.79M |
Cash Flow | ||||||
| Free Cash Flow | 67.19M | 112.02M | 93.87M | 63.25M | 35.00M | -28.73M |
| Operating Cash Flow | 269.27M | 299.14M | 316.74M | 303.32M | 283.93M | 111.66M |
| Investing Cash Flow | -215.01M | -227.88M | -226.85M | -243.71M | -232.06M | -109.13M |
| Financing Cash Flow | -114.75M | -112.29M | -93.24M | -89.00M | 8.88M | 35.40M |
Headwater Exploration Technical Analysis
Positive
11.53
Price Trends
12.63
Positive
11.73
Positive
9.62
Positive
Market Momentum
0.20
Negative
63.43
Neutral
78.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HWX, the sentiment is Positive. The current price of 11.53 is below the 20-day moving average (MA) of 12.97, below the 50-day MA of 12.63, and above the 200-day MA of 9.62, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 63.43 is Neutral, neither overbought nor oversold. The STOCH value of 78.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HWX.
Headwater Exploration Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$3.16B | 21.48 | 18.54% | 4.58% | -3.35% | -30.86% | |
73 Outperform | C$2.92B | 20.28 | 8.81% | 7.05% | -7.99% | -44.67% | |
71 Outperform | C$2.60B | 104.50 | 9.34% | 8.48% | -14.73% | 123.98% | |
67 Neutral | C$1.81B | 7.50 | 3.07% | 1.59% | 11.96% | -50.40% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
61 Neutral | C$1.69B | 15.88 | 6.59% | ― | 11.26% | ― | |
60 Neutral | C$2.69B | -5.03 | -33.68% | 4.60% | -7.04% | -2448.68% |
* Energy Sector Average
TSE:HWX
Headwater Exploration
13.22
7.28
122.48%
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Headwater Exploration Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Headwater Exploration lifts output and dividend despite weaker 2025 margins
Neutral
Mar 6, 2026
Headwater Exploration reported essentially flat full-year 2025 sales at about $594 million versus 2024, as higher production offset weaker pricing, but adjusted funds flow, cash flow and net income all declined, with annual profit down 19% to $153...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.