Thursday, September 26, 2013

Canyon Services Group

I do not own this stock Canyon Services Group (TSX-FRC, OTC-CYSVF). I get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19th and I was impressed with it so I did a spreadsheet. You can sign up for this newsletter at their site.

They started off with a low dividend in 2011 of less than 1% and only semi-annually. They increased it by 150% in 2012and also increased payments to quarterly. They then did another increase in 2012 of 140%. Since then the dividend has not changed. The current dividend yield is 5.14%.

The Dividend Payout Ratios for 2012 was fine at 58% for EPS and 43% for CFPS. However, analysts expect both Earnings and Cash Flow to drop this year. This is borne out by the second quarterly report. They had a positive cash flow for the second quarter, but there was an earnings loss. This is probably why the dividend has remained flat in 2013.

So far investors have had a great run with 5 year total return at 39.77% with 1.55% from dividends and 38.66% from capital gains. The 6 year total return is not a good with the return at 15.87% with 1.04% from dividends and 14.83% from capital gains.

The outstanding shares have increased by 22.8% per year over the past 5 years and 20.37% per year over the past 8 years. The shares have increased mostly because of new share issues, but there is some increase from stock options.

Revenues have increased by 49% and 44% per year over the past 5 and 7 years. Revenue per Share has increased by 21% and 20% per year over the past 5 and 7 years. Earnings per Share have been volatile as there are some years with negative earnings. EPS is up by 44% per year over the past 6 years, but a lower 11% per year over the past 7 years.

Cash Flow has been similarly volatile with Cash Flow per Share up by 34% per year over the past 5 years and a lower 9.5% per year over the past 7 years. The financial year 5 years ago was not a good year. This company was started in 2004 and went public in 2006 on the TSX.

The Return on Equity was not very good until 2010. The ROE for 2012 was 16.1%. For this company the net income and the comprehensive income is the same.

The Liquidity Ratio has had some volatility, but it has been good since 2009 and the current Liquidity Ratio is 1.91. The current Debt Ratio is very high at 6.41, although this ratio has had some volatility also. The Leverage and Debt/Equity Ratios have always been quite good and they are currently quite low at 1.00 and 0.16 respectively.

There is not a lot of history to go on for this firm and it is into hydraulic fracturing, so it is rather risky. However, if you can take the risk, you might be able to make decent money here. Another good point is the lack of debt. See my spreadsheet at frc.htm.

This is the first of two parts. Second part will be posted on Friday, September 27, 2013 and will be here.

Canyon Services Group Inc. is a fast-growing company providing hydraulic fracturing and other well-stimulation services, including coiled tubing, acidizing, cementing, nitrogen and CO², to oil and natural gas producers developing a variety of play types across Western Canada. Its web site is here Canyon Services Group.

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.

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