Canadian Oil Sands

I do not own this stock of Canadian Oil Sands (TSX-COS). I started to follow it in 2010 because when anyone talks about investing in the Canadian Oil Sands sector, this is the stock that seems to be mentioned first. As with any other investment in oil companies, if the dividend is good, then it will vary according to the price of oil.

Currently the yield on this stock is very good at 6.8%. Because the stock dividend varies, there is no 5 year growth in dividends. I have a 10 year growth in dividends at 8.42% per year. The thing is that over time you can get a lot in dividends. Look at the total return over the past 5 and 10 years. The dividend portion of the total return attributable to dividends is 6.47% and 8.07% per year over these periods.

The total return over the past 5 was a loss of .07% per year, which is not good. However, the total return over the past 10 years was 19.75% per year. There was a capital loss of 6.54% per year over the past 5 years and a capital gain of 11.68% per year over the past 10 years.

The outstanding shares have grown at the rate of 0.57% and 5.49% per year over the past 5 and 10 years. In 2003, the outstanding shares doubled because of new shares issued. Other than that most of the increases are small and are mostly for stock options issued.

Revenue has grown over the past 5 and 10 years at the rate of 9.2% and 20% per year. The Revenue per Share has grown at the rate 8.6% and 13.8% per year over the past 5 and 10 years. (The difference is, of course, due to changes in outstanding shares.)

Earnings per Share have grown at the rate of 5.8% and 14.8% per year over the past 5 and 10 years. EPS is expected to be lower for 2012 than it was for 2011, but EPS does tend to fluctuate for this stock. However, EPS is always positive. Cash Flow per Share has grown at the rate of 10.5% and 17.2% per year over the past 5 and 10 years. Book Value per Share has grown at the rate of 0.7% and 11.9% per year over the past 5 and 10 years. Growth is a bit inconsistent, but generally good.

Return on Equity for the financial year ending December 2011 was very good at 27.2%. The 5 year median ROE is also very good at 22.4%. The ROE based on the comprehensive income is not far off the ROE on net income and was 24.1% for the financial year ending in December 2011. The 5 year median ROE on comprehensive income is closer at 22.2%.

The current Liquidity Ratio is 1.93, which is very good. The 5 year median Ratio is also very good at 2.05. Also this stock does have a strong cash flow. The current Debt Ratio is also very good at 1.81. The 5 year ratio is good at 2.29. The current Leverage Debt/Equity Ratios are also fine at 2.23 and 1.23.

This is different from other dividend stocks I follow in that the dividend fluctuates. However, you can earn great dividends over time if you can stand the risk.

Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74% interest in the Syncrude Project. Syncrude is an experienced oil sands operator, producing a high-quality crude oil for the past 30 years. With large, bitumen-rich leases located in the sweet spot of the Athabasca oil sands deposit and a fully integrated upgrading facility that produces 100% light, sweet crude oil, the quality of their Syncrude asset is very good. Its web site is here CDN Oil Sands. See my spreadsheet at cos.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 or StockTwits.