Sometimes, a stock shoots higher on big news, leaving investors wondering if they’ve already missed the move. That’s exactly what just happened with one of the top Canadian dividend stocks, ARC Resources (TSX: ARX). The stock popped by over 21% in a single day after the company agreed to be acquired by Shell (NYSE: SHEL) in a $22 billion deal.
With ARX stock now trading at $31.22 per share, the big question is: Is there any upside left, or has most of the opportunity already played out?
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Why ARC Resources stands out in the energy space
Among Canadian dividend stocks that have attracted long-term investors, ARC Resources has built a strong reputation as a top Montney-focused producer. Its operations are centered on unconventional natural gas, condensate, and crude oil across Alberta and northeast British Columbia.
Before this rally, the stock had been trading well below its highs, offering a solid dividend yield and a more attractive entry point. Now, after the surge, ARX trades just a couple of percentage points below its 52-week high, with a market cap of roughly $17.7 billion.
Strong production and disciplined financial performance
ARC Resources delivered impressive results in recent quarters. Its average production reached a record 408,382 barrels of oil equivalent per day in the fourth quarter of 2025, including a record 118,898 barrels per day of crude oil and condensate.
On a per-share basis, production rose 10% year-over-year (YoY), reflecting strong operational efficiency. Financially, the company generated $874 million in funds from operations and $668 million in operating cash flow.
Meanwhile, its free funds flow came in at $415 million in the fourth quarter, while net profit stood at $260 million.
Pricing strength and smart capital allocation
One of ARC’s key strengths is its ability to secure better pricing for its natural gas. Last year, it realized an average price of $3.51 per thousand cubic feet, which was $1.65 higher than the Alberta Energy Company (AECO) benchmark. This marked the 13th consecutive year that it exceeded AECO pricing by at least 20%.
The company also strengthened its asset base with a $1.6 billion acquisition of condensate-rich Montney assets in the Kakwa region, supporting future production growth.
In 2025, ARC’s reserves continued to expand, with proved developed producing reserves rising 15% YoY and total proved plus probable reserves increasing 9%. It also replaced 121% of its reserves, marking its 18th consecutive year of strong reserve replacement – a key indicator of long-term sustainability.
Operationally, ARC remained active, drilling 144 wells and completing 157 during the year. Its total capital spending of $1.9 billion stayed within guidance, reflecting a disciplined approach to growth.
What the ARC-Shell deal means for investors
Under the agreement announced on April 27, ARC shareholders will receive $32.80 per share, paid through a mix of cash and Shell shares. That represents a 27% premium to the stock’s pre-announcement price.
However, with the stock now trading close to that level, the remaining upside is relatively limited and largely depends on the deal closing as expected in the second half of 2026.
The acquisition also highlights ARC’s quality. Shell is buying a low-cost, high-quality Montney producer with strong reserves and a proven track record. Once the transaction is complete, ARC investors will effectively transition into owning a stake in Shell – a global energy giant with a more diversified business and broader cash flow base.
For existing shareholders, most of the easy gains have already been captured. For new investors, this is no longer a typical “buy the dip” opportunity, but rather an event-driven situation with returns tied to deal completion. That also means investors may want to look beyond ARX stock, as the TSX still offers several other fundamentally solid dividend stocks that could provide better value right now.
