If you want to invest in Canadian oil and gas without the volatility and risk of investing in an oil or gas company, this may be the company TSX-ESI) for you. It is also a good dividend payer. However, the 5 year growth in dividends of 18% masks the fact that the 2008 and 2009 the dividend increase were a lot lower, at around 3% and this year’s increase is not much better.
The total return on this stock for the last 5 and 10 years is in the range of 5.7% and 14% per year, respectively. The dividend portion of this total return is around 2 to 2.5%. Both the revenue and earnings for this company took a hit in 2007 and in 2009. This means the 5 year growth in both is under 2%. However, the 10 year growth figures are much better at 11% and 15% respectively.
This company is also very nicely growing the book value per share at a high clip of 18% for both the last 5 and 10 years. The cash flow growth is not bad either, but the 10 year growth of 14.5% per year is higher than the 5 year growth of between 6% and 10% per year.
The Liquidity Ratio on this stock is improving of late. It has a low 5 year average of 1.18, but for 2009 it was 1.39 and the current one from the 2nd quarter is higher at 1.40. The Asset/Liability Ratio has always been solid, with a 5 year average of 2.98 and a current ratio even higher at 3.67. When we turn out attention to the Return on Equity, I find the 5 year average at 16% to be very good. However, the ROE for 2009 was just 8.2% and for the first two quarters, it is even lower at 6.3%.
This company has a number of analysts that follow it and tomorrow, I will talk about what they are currently saying about this company. Also, if you have noticed, the TSX has been trading up and down for most of October in a very tight band. Today, the TSX made a big brake out and gained 1.8% so far today. It is beginning to look very doubtful we will have a nice correction and a buying opportunity this fall.
The Dow had a big upswing to day gaining just over 2% or far today, although it was not trading in such a tight band as the TSX was trading. The S&P 500, traded more like the Dow and it also had a run up of 1.9%, so far today.
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 here http://www.ensignenergy.com" target="_top">Ensign Energy. See my spreadsheet at http://www.spbrunner.com/stocks/esi.htm" target="_top" >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 for http://www.spbrunner.com/stocks.html" target="_top">stocks followed and http://www.spbrunner.com/investing.html" target="_top">investment notes. Follow me on http://twitter.com/spbrunner" target="_top">twitter.
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