# Headwater Exploration Inc. (HWX.TO) fundamentals

Data as of 2026-09-08. TSX, Canada. Sector: Energy / Oil, Gas & Consumable Fuels. Price C$14.22, market value C$3.4 billion.

## Valuation
- **P/E (trailing): 18.2×** (5-yr avg 11.4×, 3-yr avg 10.1×). Headwater Exploration Inc. trades at 18.2× trailing earnings, well above its own five-year average of 11.4×: investors are paying up relative to the company's past. The Energy median in the September 2026 study was 16.8×. Forward P/E is 21.5×, higher than trailing, so analysts expect earnings to fall.
- **Price / sales: 5.1×**. Each dollar of revenue is priced at 5.1×.
- **Price / book: 4.2×**. The shares trade at 4.2× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 8.9×**. Enterprise value is 8.9× operating earnings before depreciation, the multiple that ignores how the company is financed.
- **Free-cash-flow yield: 3.0%** (5-yr avg 3.3%). Free cash flow equals 3.0% of the market value, in line with its five-year average of 3.3%.
- **Earnings yield: 5.5%**. The inverse of the P/E: 5.5% of the price is earned each year.

## Profitability
- **Gross margin: 53.8%**. Headwater Exploration Inc. keeps 53.8% of revenue after the direct cost of what it sells.
- **Operating margin: 39.1%**. 39.1% of revenue is left after running the business, an exceptional level.
- **Net margin: 29.8%**. 29.8% of each dollar of sales reaches the bottom line.
- **Return on equity: 20.5%**. 20.5% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 31.2%**. Return on all capital, debt included, is 31.2%: comfortably above what that capital costs.
- **Return on assets: 18.7%**. Each dollar of assets produces 18.7% of profit.

## Growth
- **Revenue growth (1 yr): -17.0%** (3-yr 3.9%/yr, 5-yr 122.2%/yr). Revenue fell 17.0% over the last year, against 122.2% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -20.0%** (3-yr -2.9%/yr, 5-yr 69.2%/yr). Earnings per share fell 20.0%, roughly in step with revenue.
- **Free-cash-flow growth (3 yr): 47.4%/yr**. Free cash flow has compounded at 47.4% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 0.02**. Debt is 0.02 times equity: a conservative balance sheet.
- **Net debt / EBITDA: net cash**. Headwater Exploration Inc. holds more cash than debt.
- **Current ratio: 1.23** (quick 1.23). Current assets cover the next year's liabilities 1.23 times.
- **Altman Z-score: 10.50**. A Z-score of 10.50 places the company in the safe zone for bankruptcy risk.
- **Piotroski F-score: 4/9**. 4 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 3.38%** (C$0.45 per share, trailing). Headwater Exploration Inc. yields 3.38%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 67%** (102% of free cash flow). 67% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 4**. 4 straight years of increases.

## Analyst view
- **Analyst consensus: buy** (9 analysts). 9 analysts cover Headwater Exploration Inc.; the consensus is buy, with an average price target of C$15.69 (+10% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 119.2%** (YTD 54.6%, 3-mo 11.1%). The shares are up 119.2% over twelve months including dividends.
- **From 52-week high: -3.3%** (111.0% above the low). Trading within 5% of its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 58**. An RSI of 58 is neutral.
- **Beta (1 yr): 0.32** (volatility 34%). Beta of 0.32 against the S&P/TSX Composite: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=HWX.TO · Page: https://foliofundamentals.com/stocks/hwx.to

Not investment advice.