Wednesday, February 22, 2012

Husky Energy Inc

I own this stock (TSX-HSE). I bought Husky in 2008 and some more in 2010. I have lost 8.8% per year on this stock. Dividends on this stock equaled a return of 3.4% per year. I have lost some 12.1% per year in Capital gains.

This is a company in the oil and gas production business and as such the dividends fluctuate. Over the past 10 years, dividends are up 14% per year. However, over the past 5 years, dividends are down by 0.1%. Dividends have been decreasing since 2007. The last decrease occurred in 2010, when dividends were decreased by 40%.

The 5 year median Dividend Payout Ratios are 68% for earnings and 40% for cash flow. The 10 year median DPR ratios are 60% for earnings and 31% for cash flow The DPR for the end of 2011 were 52% for earnings and 23% for cash flow. These ratios are expected to be 66% for earnings and 27% for cash for 2012. From this it would not appear that the dividend will rise soon. DPR ratios for cash flow is better than that for EPS.

If you had held this stock over the past 5 years, you would have probably lost 4% per year. The dividend income would be around 4.8% per year. If you had held this stock over the past 10 years, you would have done much better. The total return over the past 10 years is 22% per year, with dividends contributing 10% per year of this total return.

The best growth for this company is in revenue. Revenue per share has grown at the rate of 11.4% and 12.5% per year over the past 5 and 10 years. The Book Value has grown at the rate of 10% and 13% per year. Both Earnings and Cash Flow tend to fluctuate, and in both the 10 year growth is much better than the 5 year growth. EPS has declined over the past 5 years by 6% per year, but has grown by 12% per year over the past 10 years. For Cash Flow, it has not grown over the past 5 years, but has grown by 8% over the past 10 years.

All the debt ratios are fine. The current Liquidity Ratio is 1.61. This is better than the 5 year median of 1.33. The Asset/Liability Ratio is very good at 2.21 and it is close to the 5 year median of 1.19. The current Leverage and current Debt/Equity Ratios are good at 1.85 and 0.84. These are very close to the 5 year median ratios.

The Return on Equity at 12.7% with a 5 year ROE also of 12.5% are both good, but not as high as it has been in the past. The ROE based on Comprehensive Income is close at 13% with a 5 year median value also of 13%.

I had, of course, wanted better results than what I got. You always want stocks to go up. However, I have very little invested in Oil and Gas production. I have around 3% of my portfolio in Oil and Gas and just less than 1% in Oil and Gas productions. I know that oil and gas are a big part of our Canadian market. However, it is not an area I feel that comfortable in investing in. However, I do like to keep an eye on this area, so I have this stock and follow a couple of other stocks.

I plan to continue to hold this stock for the time being.

This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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.

No comments:

Post a Comment