Canadian Oil Sands

n my other blog I am today writing about the presentation at the World Money Show in Toronto by Jeff Weniger.

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

Dividends are good, but they have fluctuated over time. I have dividend information going back to 1996 and the median dividend is 5.2%. The 5 year median dividend is 6.2% and the current dividend is 7.9%. The dividends have declined by 17.9% per year over the past 5 years, but they are up by 13.4% per year over the past 10 years.

The 5 year median Dividend Payout Ratios are 81% for EPS and 50% for CFPS. The corresponding values for 2013 are 81% for EPS and 50% for CFPS.

If a shareholder bought this stock exactly 5, 10 or 15 years ago, they would be making a return of 5.4%, 13.3% or 32.7% on their original purchase price. So it is not that you cannot make good dividends from this stock, but you might have to put up with dividend fluctuation.

Shareholders have done well over the past 10 years, but not over the past 5 years. The total return over the past 5 years is a loss of 4.17% per year with 5.83% from dividends and a capital loss of 10% per year. Over the past 10 years, shareholders have a total return of 12.48% per year with 2.71% from capital gains and 9.77% from dividends.

Outstanding shares have not grown over the past 5 years, but have grown at the rate of 1% per year over the past 10 years. Shares have increased due to Stock Options, DRIP and Share Issues. Revenue, cash flow and earnings are down over the past 5 years, but up over the past 10 years.

Revenue is down by 1.5% and up by 16.3% per year over the past 5 and 10 years. Revenue per Share is down by 1.6% and up by 15.05% per year over the past 5 and 10 years. EPS is down by 11.5% and up by 8.26% per year over the past 5 and 10 years. CFPS is down by 8% and up by 16.1% per year over the past 5 and 10 years.

The Return on Equity has been over 10% each year in the last 10 years. The 5 year median ROE is 21.7% and the ROE for 2013 is at 17.6%. The 5 year median ROE on comprehensive income is at 21.2% and the ROE on comprehensive income for 2013 is 18.9%. So the ROE on comprehensive income suggests that the EPS is of good quality.

The debt ratios tend to fluctuate but 5 year median ratios are good. The Liquidity Ratio for 2013 is at 1.19 and this ratio has a 5 year median of 1.80. The 2013 Debt Ratio is 1.87 and the 5 year median ratio is 1.95. The Leverage and Debt/Equity Ratios for 2013 are at 2.15 and 1.15 with 5 year median ratios at 1.77 and 0.77.

Sound bit for Twitter and StockTwits is: Dividends are good. This stock does grow their dividends over the longer term, but they can fluctuate over the shorter term. See my spreadsheet at cos.htm.

This is the first of two parts. The second part will be posted on Wednesday, October 5, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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.

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.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.