Encana Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Resource. All my stock price testing suggests that the stock price is relatively expensive. The stock hit a low in 2016 and is up by 253% so far from that low. The market tends to go up prior to a company's rebound. Has it already gone up too much? Analysts certainly do not seem any huge stock gain from the current price. See my spreadsheet on Encana Corp.

I do not own this stock of Encana Corp. (TSX-ECA, NYSE-ECA). I have owned this stock before as Alberta Energy Co. I do not tend to hold on to resource stocks for the long term.

The thing you notice is that they are paying dividends that they cannot cover with Earnings. I just have never considered resource stocks to be good long term dividend stocks. Yields can be low and dividends can be adjusted up and down depending on resource prices.

On this stock the dividend yields are very low at currently just 0.48%. I generally do not like to buy a stock with a yield under 1%. Also if you look at dividend growth, dividends are down by 40% and 12% per year over the past 5 and 10 years. This would not be classified as dividend growth stocks, which are the stocks that I favour.

When I look at my spreadsheet all I see is red. Revenue, Earnings, Dividends, Stock Price, Cash Flow, Book Value all are declining over the past 5 and 10 years. Analysts expect this year to be much better than recently past years. For example, analysts expect Revenue to be up some 42% in 2017. This is reasonable as the third quarter shows that the 12 month Revenue to the end of the third quarter is up by 40% over 2016.

The 5 year low, median and high median Price/Earnings per Share Ratios make no sense because the last two years have been earning losses years. The 10 year low, median and high median Price/Earnings per Share Ratios are 6.68, 9.05 and 11.43. They might be reasonable. The corresponding historical P/E Ratios are 10.18, 12.01 and 15.43. This is over a period of 25 years. The current P/E Ratio is 17.75 based on a current stock price of $16.04 CDN$ and 2017 EPS estimate of $0.90 CDN$ (or $0.90 US$). This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $13.61 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.75, 1.00 and 1.35. The current P/GP Ratio is 1.18 based on a stock price of $16.04 CDN$. This stock price testing suggests that the stock price is relative reasonable, but above the median.

I get a 10 years Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 1.76 a values some 30% higher. The current P/B ratio is based on Book Value of $8,866 CDN$, Book Value per Share of $9.11 CDN$ and a stock price of $16.04 CDN$. This stock price testing suggests that the stock price is relatively expensive. Note that Book Value has had no growth recently and it has dropped by 18% and 5% per year over the past 5 and 10 years.

The historical dividend yield is 1.45% CDN$. The current dividend yield is 0.48% based on dividends of $0.08 CND$ ($0.06 US$) and a stock price of $16.04 CDN$ ($12.60 US$). The current dividend is some 84% below the historical median yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Sales (Revenue) Ratio of 2.20. The current P/S Ratio is 2.96 based on Revenue of $5.277 CDN$ ($4,146 US$), Revenue per Share of $5.42 CDN$ ($4.26 US$) and a stock price of $16.04 CDN$ ($12.60 US$). The current P/S Ratio is some 34% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month stock price is $13.19 US or $16.79 CDN$. This implies a total return of 5.15% with 4.67% from capital gains and 0.48% from dividends based on a current stock price of $16.04 CDN$ ($12.60 US$).

Encana Corp released over Globe News Wire information about their third quarterly results. David Jagielski on Motley Fool suggests that Encana represents a stable investment in the Oil and Gas industry. Stephen Andrade on Weekly Hub talks about recent analysts ratings on this stock. See what analysts have to say about this stock on Stock Chase. They do not seem to like it much.

Encana Corporation is an energy producer that is focused on developing its multi-basin portfolio of natural gas, oil and natural gas liquids (NGLs) producing plays. The Company's operations also include the marketing of natural gas, oil and NGLs. Its web site is here Encana Corp.

The last stock I wrote about was about was CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more. The next stock I will write about will be Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more on Monday, November 13, 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.