Ensign Energy Services

I own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I first bought this stock in June of 2012. I have followed this dividend paying stock for some time and I thought it was cheap last year so I bought some. How have I done? Well the stock so far for me is up some 24%. This is not bad.

The time to buy dividend paying stocks, especially ones that have good records on rising dividends is when they are cheap. Of course, what comes with the stock being cheap is the lowering of dividend increases. Stocks are cheap for a reason. This stock is an oil service stock and business is not currently good. However, buying a good stock when they are cheap really enhances your long term gains.

This stock has had very good dividend increases in the past and the 10 year growth in dividend reflects this with a growth of 15% per year. However, dividend increases have slowed and the 5 year growth is just 5.4% per year. The last dividend increase in 2012 was just 4.8%.

The Dividend Payout Ratios are still quite good with the 5 year median at 30% for earnings and 13% for cash flow. The DPR for 2012 were about the same and the ones for 2013 are expected to me higher at 40% for earnings and 16% for cash flow.

This stock hit a high in 2008, which it has not yet come back too. The 5 and 10 year total returns are at 2.56% and 10.17%. The dividend portion of these returns is at 2.4% and 2.47% per year. The capital gains are at 0.16% and 6.32% per year. You can see that the stock has really slowed down.

The outstanding shares have decreased by 0.06% per year over the past 5 years and increased by 0.22% over the past 10 years. Shares have increased due to Stock Options and decreased due to share buy backs. When you look at growth you see that it is much better over the past 10 years than over the past 5 years.

Revenue is up by 6.9% per year and 12.9% per year over the past 5 and 10 years. Revenue per Share is up by 6.9% and 12.8% per year over the past 5 and 10 years. Earnings per Share is down by 2.6% per year over the past 5 years and up by 15.2% over the past 10 years. Cash Flow per Share has done better and is up by 11% and 17% per year over the past 5 and 10 years. Book Value per Share is up by 8% and 14% over the past 5 and 10 years.

The Return on Equity is quite good at 11.7% for 2012. It was only lower than 10% in 2009 and 2010. However, the first quarter of 2013 has lower earnings and if you look at ROE for the last 12 months it is only 9.2%. There is a lot of fluctuation in ROE on comprehensive income compared to net income. For 2012 the ROE on comprehensive income is 7.8% lower and for the last 12 months it is 13% higher.

Analysts do not expect a very good year in 2013 for this company. It is expected that revenues, earnings and cash flow will all be lower. This is certainly true if you look at these values over the last 12 months compared to the values for 2012. The first quarter was not great.

The balance sheet is not that strong as far as current values goes. The Liquidity Ratio is currently at 1.11 and was 1.03 for 2012. However, it gets stronger when you consider cash flow after dividends. The Debt Ratios have, however, been very good. The current one is 2.45. The current Leverage and Debt/Equity Ratios are quite good also with current ones 1.69 and 0.69.

Even though there are current problems in getting our oil out of Alberta, this will not last forever. If pipelines are not allowed, oil will be shipped by rail. Companies are currently building lots of railway cars for oil. Markets usually find a way. See my spreadsheet at esi.htm.

This is the first of two parts. Second part will be Friday and will be here. Tomorrow I will look at the relative current stock price and what analysts say about this stock.

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 Energy.

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.