Wednesday, November 29, 2017

Crescent Point Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Resource Stock. It would seem that the current stock price is rather cheap. However, since it is a resource stock there is lots of risk in this stock. See my spreadsheet on Crescent Point Energy Corp.

I do not own this stock of Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG). 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.

This is a dividend paying stock. However, it is a resource stock and because of this the earnings are volatile. Dividends go up and down and sometimes remain the same. Over the past 5 and 10 years dividends are down by 27% and 13% per year. If you bought this stock 5, 10 or 15 years ago at a median price your current yield would be 0.87%, 1.96% or 5.16%.

If you bought this sock 5, 10 or 15 years ago at a median price the dividends would have covered your stock cost by 20.91%, 121.38% or 457.70%. The stock price coverage by yield is good. It would seem that you can collect a lot in dividends over the longer term. However, there will be volatility in dividends.

We should talk about their debt ratios. The Long Term Debt/Market Cap ratio rose from 0.34 in 2016 to 0.84 at present. This has to do with the drop in share price and I think there nothing to worry about at this time. The Liquidity Ratios are very low. The one for 2016 is 0.48 and currently at 0.72. The 5 year median is 0.48. When it is below 1.00 it means that the current assets cannot cover the current liabilities.

If you add in cash flow after dividends, the Liquidity Ratio becomes 1.92 and 2.62 for these time periods. This means that the company relies on cash flow to cover current liabilities. This is fine if the company is assured of enough cash flows. There seems to be no problems with cash flows.

The Debt Ratios are good at 2.46 for 2016 with a 5 year median of 2.61. The Leverage and Debt/Equity Ratios are also fine at 1.69 and 0.69 for 2016 with 5 year medians of 1.56 and 0.56 respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 18.12, 14.97 and 11.81. The corresponding 10 year values are 11.60, 11.54 and 11.48. The historical ones are 10.79, 14.70 and 14.28. (Note the problem with the P/E high median P/E Ratios and this is because of negative earnings years.) Since the next three years have no positive earnings, you cannot do any P/E Ratio testing on stock price.

I cannot do testing using the Graham Price because of so many years of negative earnings. I cannot do any testing using the dividend yield because of dividend decreases.

The 10 year median Price/Book Value per Share Ratio is 1.68. The current P/B Ratio is 0.53. This is based on Book Value of $9,248M, BVPS of $17.07 and a stock price of $9.13. The current P/B Ratio is some 68% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. When the P/B Ratio is below 1.00 the stock is selling below the company's theoretical break up price. This also suggests that the stock price is cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.20. The current P/S Ratio is 1.54 based on 2017 Revenue of $3219M, Revenue per Share of $5.94 and a stock price of $9.13. The current ratio is some 63% lower than 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 (2), Buy (11) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $13.97. This implies a total return of 56.96% with 53.01% from capital gains and 3.94% from Dividends.

Brian Zinchuk on Pipeline News talks about this company acquiring more land in Saskatchewan. Andrew Walker on Motley Fool thinks that this stock is worth buying at a price below $10.00. Wall Street News Staff at Wall Street News suggests that the Relative Strength Index show that the stock is neither overbought nor oversold. (However, it does look like this report is computer generated.) Thomas Auclair on Simply Wall Street looks at this company's debt load. See what analysts are saying about this stock on Stock Chase. Analysts have various views.

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. It is involved in acquiring, developing and holding interests in petroleum and natural gas properties and assets through a general partnership and wholly owned subsidiaries. Its web site is here Crescent Point Energy Corp.

The last stock I wrote about was about was Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more. The next stock I will write about will be Finning International Inc. (TSX-FTT, OTC-FINGF)... learn more on Friday, December 1, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth Stocks Part 3... learn more on Thursday, November 30, 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.

No comments:

Post a Comment