Wednesday, May 31, 2017

Husky Energy Inc.

Sound bite for Twitter and StockTwits is: Cheap energy company. On the best types of tests this stock looks cheap. This company may be a good one to buy if you are looking at energy companies. See my spreadsheet on Husky Energy Inc.

I do not own this stock of Husky Energy Inc. (TSX-HSE, OTC-HUSKF) but I used to. I sold this stock to buy Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). I gave up hoping for an oil and gas recovery. I never had much in oil and gas in any event. I had Husky from 2008 and had a total loss of 4.53% per year. I had a capital loss of 8.34% per year with dividends of 3.81% per year. My capital loss was 82.5% and my total loss was 60.9%.

After the company cut the dividends in 2008, they were flat until 2016 when they were cut again and then totally eliminated in 2017. The dividends I received cut my losses and this can be the value of dividends. A number of analysts feel that dividends will be restored in 2017. This company is into oil and gas so I do not think you could ever count on steady dividends.

Dividend will probably continue to go up and down or be suspended depending on how the company is doing. The company has also given out stock dividends in lieu of cash dividends.

The debt ratios are mostly fine. However, I should mention that the company does depend on cash flow for the Liquidity Ratio. For example in 2015 the Liquidity Ratio was just 0.76. With cash flow after dividends it became 1.43. In 2016 the Liquidity Ratio was 1.35. With cash flows after dividends it was 1.88. The 5 year median Liquidity Ratio is 1.18. With cash flow after dividends the 5 year median becomes 1.88.

The book value has also floated up and down. The book value per share is down by 1.8% and up by 3.95% over the past 5 and 10 years. The company has had Return on Equity above 10%, 4 times in the past 10 years and once over the past 5 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.78, 16.54 and 18.22. The 10 year values are 12.34, 14.53 and 16.18. The historical values are 9.65, 11.94 and 14.16. The current P/E Ratio is 27.37 based on a stock price of $16.15 and 2017 EPS estimate of $0.59. This stock price testing suggests that the stock price is relatively expensive. However, the P/E Ratio test is not always a good test.

I get a Graham Price of $14.85. The 10 year low, median and high median Price/Graham Price Ratios are 0.85, 10.5 and 1.30. The current P/GP Ratio is 1.09 based on a stock price of $16.15. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Book Value per Share Ratio is 1.48. The current P/B Ratio is 0.97 based on a stock price of $16.15 and BVPS of $16.62. The current P/B Ratio is some 34.5% lower than the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. Also on an absolute basis a P/B Ratio of below 1.00 is saying the stock is selling below its theoretical breakup price and is therefore cheap.

The P/S Ratio is 1.30. The current P/S Ratio is 0.89 based on 2017 revenue estimate of $18,148M, revenue per share of $18.05 and a stock price of $16.15. The current P/S Ratio is some 31% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus would be a Buy with a 12 month stock price consensus of $18.50. This implies a total return of 14.55%.

Claudia Cattaneo writes in the Financial Post about Husky doing the next big project in Newfoundland. Renee Jackson on The Cerbat Gem talks about recent ratings for this company. For example Scotiabank raised their 12 month stock from $17.00 to $19.00 recently. Muvija.M and Swetha Gopinath from Reuters report on BNN that this company beat the estimates for the first quarter. See what analysts are saying about this stock on Stock Chase. The analysts have mixed views, like the analysts' recommendations.

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 Energy Inc.

The last stock I wrote about was about was MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF)... learn more. The next stock I will write about will be Goeasy Ltd (TSX-GSY, OTC-EHMEF)... learn more on Friday, June 2, 2017 around 5 pm.. Tomorrow on my other blog I will write about Dividend Investing... learn more on Thursday, June 1, 2017 around 5 pm.

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. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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