Tuesday, May 19, 2009

Ensign Energy Services 2

I am continuing my review this stock (TSX-ESI) today from last Friday. This stock is on the Dividend Achievers list at www.dividendachievers.com, and the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). As usual, I am first checking on Insider Buying and Selling. What I have found is a very small amount of insider buying spread over the past year. This does not seem to materially change the holdings of insiders.

The next thing I looked into was the yield. The current yield of 2.2% is above the average 5 year yield on the closing price (1.6%) and the average High/Low stock price (1.4%). This is positive buying signal. It is perhaps better than the P/E ratio, as the current P/E ratio really depends on what the earnings for this year come in at, and there is a wide spread in what analyst feel the earnings will be for this year. However, the current P/E at about 13 is not bad.

The other good ratio to look at is the Price/Book Value ratio. This ratio at 1.5 is considerably below the 10 year average of 2.8. This is also a good indicator to use, as it also does not depend on what the earnings estimates are for this stock in 2009. The last thing I am looking at as far as buy/sell signals go is the Graham Price. It shows that the stock price is a good one. Depending on what you think the earnings will be; the stock price is at or below the Graham Price.

In looking what the analysts’ recommendations are, I see that there are a few Strong Buys and Buys, but most of the recommendations are a Hold. The consensus recommendation is a Hold. (See my site for information on analyst ratings.) This company is dependent on the oil and gas industry and it is felt there will be less activity and therefore less call for the services to these industries over the next while.

As far as I can see, this is a great little company, and I can see why it is on the dividend achievers’ type lists as they have a habit of increasing their dividends on a regular basis over the last 5 and 10 years.

With headquarters in Calgary, Alberta, Ensign is an industry leader in the delivery of oilfield services worldwide to the oil and gas industry. They operate in North and South American, Middle East, South East Asia, Africa, Australia and New Zealand. Its web site is www.ensignenergy.com. See my spreadsheet at www.spbrunner.com/stocks/esi.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.

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