I do not own this stock of Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.
When I look at insider trading I find $12.3m of insider selling and $2.4M of insider buying, with net insider selling of $9.9M of net insider selling. Net insider selling is just 0.6% of the company's market cap. There is insider ownership with the CEO owns shares worth around $45.8M, the CFO owns shares worth around $8.2M and the Chairman owning shares worth around $23.2M.
When looking at the stock price today, this price is down. Stock price today is $27.84 and I used this as the basis for my report. Also note that because the stock price is down, the dividend yield is higher than I reported on yesterday.
The problem with looking at Price/Earnings Ratios for the last 5 years is that earnings have fluctuated and gone negative over this period. The P/E Ratios for the last 10 years is more viable, with the low, median and high median P/E Ratios at 14.90, 17.98 and 21.06. The current P/E Ratio is 22.82 based on a stock price of $27.84 and 2014 EPS estimate of $1.22. By this stock price test the stock price is relatively high.
I get a Graham Price of $22.94. The current P/GP Ratio is 1.21 based on a stock price of $27.84. The low, median and high median P/GP Ratios are 1.56, 1.79 and 2.02. By this stock price test the stock price is reasonable. However, the GP price has fluctuated greatly also due to the fluctuation on EPS.
The 10 year median Price/Book Value per Share Ratio is 1.86 and the current P/B Ratio is 1.45 based on a BVPS of $19.17 and a stock price of $27.84. The current P/B Ratio is some 22% below the 10 year median P/B Ratio. This stock price test suggests that the stock price is cheap.
The 5 year median Dividend yield is 6.96% and the current Dividend Yield at 9.91% is some 43% lower. Also, if you look at the historical median Dividend Yield at 8.57%, you have a value some 16% lower in the current Dividend Yield. This testing suggests that the stock price is cheap to reasonable.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus would be a Buy recommendation. The 12 month consensus stock price is $46.50. This would imply a total return of 76.94% with 9.91% from dividends and $67.03% from capital gains.
The Motley Fool has an interesting article on why you should not buy a stock just for the dividend. Dividends, no matter how good cannot make up for capital losses. This company is talked about on BNN. The siteTicker Report talks about a recent TD Securities drop in their target price from $48.00 to $46.00.
Sound bit for Twitter and StockTwits is: Price is cheap to reasonable. I think it is a buy because the price of oil is down considerably and oil stocks are probably depressed. However, I think that the 12 month consensus stock price is rather high. I do not see this happening within a year. You could buy this as a bargain, but I think you would have to be patient to see good results in the future. See my spreadsheet at cpg.htm.
This is the second of two parts. The first part was posted on Wednesday, December 3, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.
Crescent Point Energy Corp. is a Canada-based oil and gas exploration, development and production company. The Company is a conventional oil and gas producer with assets focused in properties consisting of assets light and medium oil and natural gas reserves in Western Canada and the United States. Its web site is here Crescent Point 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.
See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
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