Wednesday, May 30, 2012

Ensign Energy Services

What we did wrong in the good times. See comments blog.

I do not own this stock of Ensign Energy Services (TSX-ESI), but maybe I should. This stock is on the dividend list I follow of Dividend Aristocrats (see indices). This is a great list to go to, to find stocks to investigate for possible investments.

This stock has been paying dividends since 1995 and has increased their dividends every year since then. The dividend growth over the past 5 and 10 years is 6.9% and 14.8% per year. Dividend increases have slowed since the recent crisis, but the most recent one at the end of 2011 was for 10.5%, so it would seem that management is expecting better earnings ahead. The analysts following this stock seem to concur on this.

The Dividend Payout Ratios are low on this stock with 5 year median DPRs of 28% and 16% for earnings and cash flow respectively. However, the 10 year median DPRs are even lower at 20% and 16% for earnings and cash flow. The DPRs hit a high in 2010 and have been tracking lower since then. They were 28% and 16% for earnings and cash for 2011, right on the 5 year median values and are expected to be a bit lower in 2012.

The current dividend yield is 3.2% and this is higher than the 5 year median of 2.3%. It is also quite a bit higher than the 10 year median dividend yield of 1.55%. This is a dividend paying growth stocks which usually has a relatively low dividend yield, but a relatively high dividend growth.

The total return over the past 5 and 10 years was 0% and 11.7% per year, respectively. The dividend portion of this return was 2% and 2.4% respectively. The capital gain over the last 5 and 10 years was negative and 9.3%. Any money you got over the past 5 years was all dividends, but you lost it in capital gain. The dividend portion of the return over the past 10 years was 20%.

This company’s growth over the past 10 is good than over the past 5 years. 5 years growth is anemic or non-existent. Growth over the 5 and 10 years for revenues is 0% and 9% per year. Earnings per share are negative over the past 5 years and up only 7.5% over the past 10 years. However, they have had no year of earnings loss.

Cash Flow per shares over the past 5 and 10 years is 2% and 12% per year. Growth in Book Value per share is 9% and 14% per year and this one is good. There has not been much growth in number of shares outstanding, so there would not be much difference in earnings and revenues compared to earnings per share and revenues per share.

The Liquidity Ratio is often low and for 2011 it is only 0.98 and the current one for March 2012 is a bit lower at 0.96. However, they do have strong cash flow to compensate. The Debt Ratio is good and has always been and is current at 2.35. The current Leverage and Debt/Equity Ratios are good and they are low at 1.74 and 0.74.

The Return on Equity was low over the past two years and improved greatly for 2011. The 2011 ROE is 12.3% and the 5 year median is also 12.3%. The ROE based on comprehensive income confirms the good ROE on net income, coming in at 13.7% with a 5 year median of 13.7%.

This company seems to be recovering from the last recession. Analysts expect it to do even better next year, but a number of analysts are cautious. It looks to me to be a good stock. It is risky as far as dividend payers good, because it is a growth stock. Tomorrow, I will look at the price and more in depth what the analysts say.

Ensign Energy Services Inc. is an industry leader in the delivery of oilfield services in Canada, the United States and internationally. They are one of the world's leading land-based drilling and well servicing contractors serving crude oil, natural gas and geothermal operators. 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.

1 comment:

  1. I think it's a great company. Once I get some more $$$, I'm buying ESI.

    Thanks for the detailed two-part review Susan. Always good to read some detailed metrics from your site.