Wednesday, February 20, 2013

Husky Energy Inc

I own this stock of Husky Energy Inc. (TSX-HSE, OTC- HUSKF). This is one of very few adventures into the oil and gas stocks I have taken. I bought this in July 2008 and at that time the stock was doing very well. However, this is not the case at present. My total return on this stock is 1.7% per year, with 4.02% per year from dividends and 2.24% per year in capital losses. br >
Dividends are going in the wrong direction with dividend decreases at 10.4% per year. However, over the past 10 years dividends are up by 12.8% per year. The dividends on oil and gas stocks tend to fluctuate rather than go in any one direction. However, people who hold this stock for 10 plus years seem to do well in dividend yield against original purchase price.

For this stock the total return over the past 5 years is negative with a decline of 4.08% per year. The capital loss is 7.58% per year and dividends account for a return of 3.5% per year. The 10 year total return is very good at 24.53% per year, with 13.57% from capital gains and 10.96% from dividends.

Shares have increased by 2.96% and 1.63% per year over the past 5 and 10 years. Increases are mainly due to stocks issued as dividends (for some dividends you can accept stock in place of the dividend) and by stock options for insiders. Revenue is up by 8% and 13.5% per year over the past 5 and 10 years. Revenue per share is up by 4.8% and 11.3% per year.

The earnings per share is down over the past 5 years by 11.5% and up over the past 10 years at 8.16%. The cash flow per share is down by 6.9% over the past 5 years and up by 5.8% per year over the past 10 years. Book Value per share is grown at 7% per year and 12.09% per year over the past 5 and 10 years.

As you can see the 10 year growth figures are much better than the 5 year growth figures. I have also looked at 5 year running growth and for revenue, earnings and book values. These 5 year running growth figures are significantly better over the past 5 years. This is because things like earnings tend to fluctuate and looking at 5 year running figures shows if the company is doing better over time. The answer to this question is, of course, yes.

The Return on Equity has been good with the ROE for 2012 at 10.7% and the 5 year median ROE also at 10.7%. The ROE on comprehensive income is close to the above ROE, coming in at 10.4% for 2012 and with a 5 year median of 10.4%.

Over the last 5 year the Liquidity Ratio has picked up significantly and the current ratio is a good 1.62. The company has good cash flows and this ups this ratio to 2.80. The Debt Ratio is also very good at 2.20. The Leverage and Debt/Equity Ratios are also very good at 1.86 and 0.85.

Our Alberta oil companies are having a hard time as our oil is being sold under world prices because we simply do not have enough oil pipes to deliver the oil we produce to market. It is hard to say when this will be fixed, but such anomalies do not last forever as people will find a way to get our underpriced oil commodity to market at market prices.

This stock certainly has not performed as well as I had hoped it would. However, I do not have much invested in this stock as I do not do much investing in the oil and gas industry. I certainly do not see any other oil and gas company that would be a good replacement for this stock. I still think it will do well over the longer term.

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 or StockTwits.

1 comment:

  1. I just sold all interest in husky after I learned they hired a new controller last year that has no oil & gas experience. In fact, she came from the retail drug business in small town BC. What is wrong with the management of Husky??