I do not own this stock of Husky Energy Inc. (TSX-HSE, OTC-HUSKF) but I used to. I had been tracking this stock prior to buying it. 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 to 2017 and had a total loss of 4.53% per year.
It is not much of a dividend stock as dividends have gone down as well as up. They cut the dividend 2017 but have revived dividends in 2018. They had a big loss in 2015.
This company is only paying three dividends in 2018. Dividends for this year are lower than at any time since they started to pay dividends in 2001. By the way, they also paid only 3 dividends in 2001. If you are looking for a dividend growth stock, this is probably not it. They did have a good run of increasing dividends prior to 2009.
The Dividend Payout Ratio for 2018 is expected to be around 19%. The 5 year coverage is very high because the loss in 2015 erased all profits for the past 5 years. The DPR for CFPS is expected to be around 7% for 2018 with 5 year coverage at 17%. The coverage by cash flow is fine.
The Total Return is show below for years of 5 to 27. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
This stock has done nothing for shareholders over the past 10 years, but very long term shareholders have done fine. The 10 and 15 year returns are low. I prefer to see long term returns at 8% or better.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | -17.60% | -6.53% | -9.60% | 3.07% |
| 10 | -28.45% | -5.19% | -8.60% | 3.41% |
| 15 | -3.26% | 18.05% | 5.25% | 12.79% |
| 16-20 | -2.89% | 6.32% | 0.97% | 5.35% |
| 25 | 7.09% | 2.58% | 4.51% | |
| 27 | 11.08% | 5.79% | 5.29% |
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.86, 17.15 and 20.51. The 10 year corresponding Ratios are 14.32, 16.84 and 19.36. The corresponding historical ratios are 10.27, 12.37 and 14.63. The current P/E Ratio is 15.59 based on a current stock price of $18.55 and 2018 EPS estimate of $1.19. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $21.56. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 1.01 and 1.23. The current P/GP Ratio is 0.86 based on a stock price of $18.55. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share of 1.44. The current P/B Ratio is 1.07 based on Book Value of $17,449M, Book Value per Share of $17.36 and a stock price of $18.55. The current P/B Ratio is some 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.92%. The current dividend yield is 1.62% based on dividends of $0.30 and a stock price of $18.55. The current dividend is some 59% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this is not a good test for stocks that decrease dividends. On the other hand it does point out that it is not a good dividend paying stock.
The 10 year median Price/Sales (Revenue) Ratio is 1.25. The current P/S Ratio is 1.03 based on 2018 Revenue estimate of $18,148M, Revenue per Share of $18.06 and a stock price of $18.55. The current ratio is some 18% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations I find Buy (5), Hold (12), Underperform (3) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $20.73. This implies a total return of 13.37% with 11.75% from capital gains and 1.62% from dividends.
Ricardo Landis on Simply Wall Street says that dividend hunters should stay clear of this stock. Micheal Lombardo on Yahoo Finance says that the company is trading at a fair price so now may not be the time to buy. Ambrose O'Callaghan on Motley Fool says you can make up for losses at the pump by investing in oil retailers. See what analysts are saying about this stock on Stock Chase. Some like the company and some do not.
Husky Energy Inc. is an integrated oil and gas company. Its operating business has upstream and downstream segments. The company operates in Western Canada, the United States, the Asia Pacific Region and the Atlantic Region. Its web site is here Husky Energy Inc.
The last stock I wrote about was about was Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR)... learn more. The next stock I will write about will be Goeasy Ltd (TSX-GSY, OTC-EHMEF)... learn more on Monday, June 4, 2018 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.
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