Ensign Energy Services

This day marks 6 years since I started blogging online about stocks. I started May 21, 2008.

I own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I bought this stock in June 2012. Stock is a good one and was rather cheap in June of 2012. I had been following this stock for some time.

Since this company started to pay dividends in 1995, they have raised their dividends each year. The 5 and 10 year dividend growth is at 5.76% and 14.11% per year. Dividend increases slow down around 2008. The latest increase was in 2014 and it was for 6.8%.

The dividend yield is currently at a moderate rate and the increases are moderate. The dividend yield used to be low with the increases being quite good. A lot of companies have had problems with the 2008 recession and this company is no different.

The 5 year median Dividend Payout Ratios for EPS is at 42% and for Cash Flow is at 15%. The DPR for EPS used to be lower (around 17 to 18%). The DPR for 2013 was at 52% for EPS and 15% for CF. The 2013 financial year was not a good one for earnings. The DPRs for EPS is expected to be lower in the future.

My total return on this stock is at 15.49% per year with 11.94% from capital gains and 3.55% from dividends. The 5 and 10 year total return on this stock is at 4.15% and 5% per year. The portion of this return attributable to capital gains is at 1.48% and 2.55% per year over the last 5 and 10 years. The portion of this return attributable to dividends is at 2.68% and 2.45% per year over the last 5 and 10 years.

The outstanding shares have not changed over the past 5 and 10 years. Shares have increased due to stock options and decreased due to Buy Backs. Growth in Revenue, Earnings and Cash Flow is a lot better over the past 10 years and not very good over the past 5 years.

Revenues have grown at the rate of 2.5% and 9.9% per year over the past 5 and 10 years using the 5 year running averages. EPS is down by 6.5% per year and up by 7.9% per year over the past 5 and 10 years using the 5 year running averages. Cash Flow is up by 3.6% and 12.8% per year over the past 5 and 10 years using the 5 year running averages. As you can see growth is better in Revenue and Cash Flow than the Earnings.

Looking at the first quarter of 2014, Revenue is up, Earnings are down and Cash Flow is level. The good thing is that there was a good improvement in comprehensive income.

Since 2008, the Return on Equity was been under 10% several times. It has been less than 10% 3 times in the last 5 years. The ROE for 2013 was just 6.6%. However, the comprehensive income, although not great was higher at 8.7%.

The Liquidity Ratio for 2013 is low at 0.98. The Liquidity Ratio is often low and if it is below 1.00, it means that current assets cannot cover current liabilities. They depend on cash flow to do this. If you add cash flow less dividends to this ratio, it because much better at 1.47. The Debt Ratio has always been good and the current one is at 2.35. The 5 year median Debt Ratio is 2.53. The Leverage and Debt/Equity Ratios are good at 1.74 and 0.74.

There is a number of ways of making money from our resources. One is to buy companies that service the resource industry. The company is also a dividend growth company, just the sort I like. See my spreadsheet at esi.htm.

This is the first of two parts. The second part will be posted on Thursday, May 22, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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