Husky Energy Inc.

On my other blog I am today writing about possible cheap dividend stocks for June 2015 continue...

Sound bite for Twitter and StockTwits is: Good dividend on resource stock. No one currently seems worried about the dividend and it is at 4.9% currently. See my spreadsheet at hse.htm.

I own this stock of Husky Energy Inc. (TSX-HSE, OTC-HUSKF). When I sold some of my SNC-Lavalin in 2008, I was looking for something to buy. With this purchase, I only used a third of the money I got from my SNC sale, but got enough dividends on this to replace the dividends I will lose from my SNC sale.

This is a resource stock that pays a good dividend, but dividends payouts fluctuate. Dividends seemed to have started in 2001. Over the past 10 years dividends are up by 10.6% per year. Over the past 5 years dividends are down by 3% per year. The current dividend yield is 4.91%. The 5 year median dividend yield is 4.37% and the historical median dividend yield is 4%.

I have had this stock for approximately 6.8 years. I have collected $6.23 per share in dividends. This represents 19.1% of my original stock cost. For the stock I bought in 2008 my dividend yield on my original cost is 2.5%. For the stock I bought in 2010 my dividend yield on my original cost is 4.8%.

Shareholders who bought this stock 5, 10, 15, 20 and 25 years ago and paid a median price would be earning an 4.4%, 4.9%, 17.5%, 8.3% and 16.3% dividend yield on their original cost of their stock. This shows that it really pays to buy stock at a relatively low price.

On the shares that I own, I have made a total return of 0.31% per year with 3.71% per year from dividends and a capital loss of 3.40% per year. This stocks total return over the past 5 and 10 years is 3.02% and 3.88% per year with dividends at 4.67% and 5.67% per year and capital loss at 1.64% and 1.79% per year.

The Dividend Payout Ratios for 2015 are 100% for EPS and 22% for CFPS. The 5 year median DPRs for EPS is at 65% and 23%. Analysts do not think that the company can cover dividends with EPS until 2017.

The outstanding shares have increased by 3% and 1.5% per year over the past 5 and 10 years. Over these periods this stock's revenue and cash flow growth is moderate to good. Growth in earnings is non-existent. As a shareholder I would be more interested in the per share value growth because of the increase in shares outstanding.

Revenue is up by 9.8% and 11.1% per year over the past 5 and 10 years. Revenue per Share is up by 6.7% and 9.4% per year over the past 5 and 10 years. Analysts expect a 20% drop in revenues for 2015. For the 12 months ending in the first quarter of 2015 compared to the 12 months ending in December 2014, Revenues are down by 7%.

Cash flow is up by 16.8% and 9.1% per year over the past 5 and 10 years. CFPS is up by 13.5% and 7.8% per year over the past 5 and 10 years. Analysts seem to expect an increase in cash flow for 2015. However, for the 12 months ending in the first quarter of 2015 compared to the 12 months ending in December 2014, Cash Flows are down by 12.7%.

EPS is down by 6.4% and up by 0.2% per year over the past 5 and 10 years. Analysts seem to expect a big drop in EPS for 2015 of around 58%. For the 12 months ending in the first quarter of 2015 compared to the 12 months ending in December 2014, EPS are down by 40.8%.

The Return on Equity has been below 10% 4 times in the past 10 years and 3 times in the past 5 years. The ROE for 2014 was just 6.1% and the 5 year median is 9.1%. The ROE on comprehensive income for 2014 is 7% and its 5 year median is 10.2%. The ROE on comprehensive income has been below 10% twice in the past 5 years.

Debt ratios are fine on this stock. The Liquidity Ratio is low at 0.77, but if you add in cash flow after dividends it is a better 1.53. This means that the company depends on cash flow to pay current liabilities. The Debt Ratios have always been strong, with the 2014 Debt Ratio at 2.13 and its 5 year median at 2.19. The Leverage and Debt/Equity Ratios are also good at 1.89 and 0.89.

This is the first of two parts. The second part will be posted on Tuesday, June 02, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky.

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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