Ensign Energy Services 2

I do not own this stock (TSX-ESI). This company is a bit different from the other ones I have been reviewing, as they provide services to the oil and gas industry, rather than being in the oil and gas industry. They are also different from the oil and gas companies I have been lately blogging on as they have increased their dividends each year.

When I look at insider trading, I find a minimal amount of insider selling and a minimal amount of insider buy with a net insider selling of $.4M. What I see is that people have a lot of stock options. Insiders also own a lot of shares of this company. Some 35 institutions own around 35% of this company. In the past 3 months they have increased their ownership by around 7%.

I get a 10 year low median Price/Earnings Ratio of 10.96 and a 10 year high median P/E Ratio of 16.67. The corresponding 5 year low and high median P/E Ratio are 8.59 and 14.79. On a relative basis, the current P/E Ratios of 10.91 is low to reasonable. On an absolute basis, a P/E Ratio of 10.91 is low.

I get a current Graham Price of $18.05 and the current stock price of $15.16 is around 16% lower. The 10 year median low difference between the Graham Price and stock price is the stock price being 12.5% lower. On this basis the stock price is low. It is also a good thing that the stock price is below the Graham Price.

I get a 10 year median Price/Book Value Ratio of 2.41 and a current P/B Ratio of 1.46. The current P/B Ratio is just 60% of the 10 year median and this difference points to a very good current stock price.

The last thing to look at is the dividend yield, which is current at 2.51%. The 5 year median dividend yield is 1.87% and this also points to a very good current stock price. Even the 10 year median high dividend yield is lower at 1.8%.

When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and one Sell recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)

One analyst with buy recommendations says that this stock is a good buy for long-term capital gains and raising dividends. He expects that the dividend will be raised again this year. He says that Ensign is well financed and its net-debt-to-cash-flow ratio is a safe 0.1. Another analyst believes the stock is undervalued and expects EPS to benefit as Ensign puts more of its rigs to work and increases the prices it charges.

One article says that this company might benefit from EnCana’s acquisition of Duvemay in Western Canada. There is also an article of Ensign’s acquisition of the land drilling division of Rowan Companies.

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 Ensign. See my spreadsheet at 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 stocks followed and investment notes. Follow me on twitter.