I do not own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I bought this stock in June 2012. Stock is a good one and was rather cheap in June of 2012. I had been following this stock for some time. I sold this stock in December 2014 to buy Mullen instead. Details of why is in a December 2014 post. I know I would be selling Ensign at a loss, but I also could buy Mullen cheaply. See post here here.
When I was updating my spreadsheet, I noticed that long term debt has increased a lot (456%) and Long Term Debt/Market Cap is now 1.83. They have issued senior unsecured notes. In the first quarter they repaid the unsecured notes and got a secure Bank Facility. The Long Term Debt/Market Ratio is now 2.23. When this ratio is above 1.00 it means that they have a higher long term debt than the market value of the stock.
They started dividends in 1995 and they had dividend increases until 2015. Since 2015 dividends have been flat. I am sure they will remain so until they have positive earnings. Analysts are not suggesting any dividend cut or suspension in the near future.
The Dividend Payout Ratios are only positive for CFPS. They cannot cover the dividends with earnings. Since analysts do not expect positive earnings in the near future, it is uncertain when they will be covered by earnings. So far, the dividends are covered by cash flow, with DPR for 2018 at 33% with 5 year coverage at 29%.
Debt Ratios are improving and except for the Long Term Debt/Market Cap are fine currently. The Long Term Debt/Market Cap is far to high at 1.83 in 2018 and 2.26 currently. Part of the problem is the steep decline in stock price, but it is not the whole problem. The Liquidity Ratio has been really low lately and the one for 2018 was 0.77. Even with Cash Flow less dividend it was only 0.89 for 2018. However, they have improved their position in 2019 to a current ratio of 1.96.
The Debt Ratio for 2018 is fine at 1.78 and with a current ratio of 1.77. Leverage and Debt/Equity Ratios for 2018 are higher than they have been historically, but are still fine at 2.29 and 1.29 in 2018.
The Total Return per year is shown below for years of 5 to 27 to the end of 2018. 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.
I held this stock between 2012 and 2014 and lost money on it. The stock price at 5.10 is lower than my sale price of $10.33.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 1.76% | -17.48% | -22.39% | 4.91% |
| 2008 | 10 | 3.74% | -4.53% | -9.81% | 5.27% |
| 2003 | 15 | 9.84% | 0.00% | -5.08% | 5.08% |
| 1998 | 20 | 9.73% | 11.29% | 3.76% | 7.52% |
| 1993 | 25 | 15.73% | 14.20% | 6.66% | 7.54% |
| 1991 | 27 | 25.82% | 13.17% | 12.65% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are -4.94, -7.40 and -9.87. The 10 year corresponding ratios are 10.12, 14.12 and 17.95. The corresponding historical ratios are 8.86, 12.41 and 16.67. The current P/E Ratio is -7.50 based on a stock price of $5.10 and 2018 EPS estimate of a loss of $0.68. The 2019 EPS estimate is also negative, so this testing is not possible.
I get a Graham Price of $9.43. The 10 year low, median, and high median Price/Graham Price Ratios are 0.66, 0.84 and 1.08. The current P/GP Ratio is 0.54 based on a stock price of $5.10. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.15. The current P/B Ratio is 0.48 based on a Book Value of $1,677M, Book Value per Share of $10.68 and a stock price of $5.10. The current ratio is 58% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.87%. The current dividend yield is 9.41% based on dividends of $0.48 and a stock price of $5.10. The current yield is 403% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 1.22. The current P/S Ratio is 0.46 based on 2019 Revenue estimate of $1,757M, Revenue per Share of $11.19 and a stock price of $5.10. The current ratio is 62.7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is relatively cheap. The P/E Ratio testing is not possible with so many recent earning losses and especially since the next two EPS is expected to be negative also. The P/B Ratio is below 1.00, which means that the stock is selling below is theoretical breakup value. The best tests are the P/B Ratio, the dividend yield test and the P/S Ratio test for this stock.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (5), Hold (3) and Underperform (1) Recommendations. The consensus would be a Buy. The 12 month stock price is $7.20. This implies a total return of 50.59% with 41.18% from capital gains and 9.41% from dividends.
See what analysts are saying on Stock Chase. The last two entries say “Don’t Buy”. Daniel Da Costa on Motley Fool likes this company. He says they have made a commitment to reduce the debt load. A writer on Simply Wall Street looks at this company’s risk level. Dan Healing via CBC says purchase of Trinidad Drilling saw revenue jump 72% for this company. Ensign reports first quarterly report of 2019 via Yahoo Finance.
Ensign Energy Services Inc is a Canada-based oil services company. It offers services in drilling and well servicing, oil sands coring, directional drilling, underbalanced and managed pressure drilling, equipment rentals, transportation, wireline services, and production testing services. The majority of the company's revenue is derived from the United States and Canada. Ensign's customers include crude-oil, natural gas, and geothermal operators. Its web site is here Ensign Energy Services.
The last stock I wrote about was about was Hardwoods Distribution Inc (TSX-HDI, OTC-HDIUF) ... learn more. The next stock I will write about will be Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR) ... learn more on Wednesday, June 05, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks June 2019.... learn more on Tuesday, June 04, 2019 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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