I own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I had this stock from 2012 to 2014 and lost money on it. I bought this stock a second time in June 2020 because it was so cheap.
When I was updating my spreadsheet, I noticed that analysts are still interested in this stock. This is a good thing. It means that they expect that the company will recover
When this stock had a dividend, it ranged from low (below 2%) to high (6% and over). When it started a dividend in 1995 to 2013, the dividend was in the 1% to 2% ranges and I would suspect that when it recovers and restarts a dividend, it will be in these ranges. The historical median dividend yield is low at 1.90%. The 5 and 10 year median dividend yields are higher with the 5 year median high at 7.27% and the 10 year median dividend yield at good (5% to 6% ranges) at 5.68%.
For most of their history, this company paid out some 30% or less of their DPR on dividends. They just got into trouble when they had earning losses from 2015. The DPR for CFPS were mostly under 40%. If and when they start to pay out dividends, I am sure that they will have good payout ratios.
Debt Ratios are mostly fine. The Long Term Debt/Market Cap is very high currently because of the drop in the stock price. The ratio for 2020 is 9.40. The current one is lower at 6.48. When this is above 1.00, it means the company is worth less than the debt according to the stock market. The Liquidity Ratio is good at 1.61. The Debt Ratio is also good at 1.81. The Leverage and Debt/Equity Ratios are fine at 2.24 and 1.24.
The Total Return per year is shown below for years of 5 to 29 to the end of 2020. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | -24.21% | -22.27% | -34.20% | 11.93% |
| 2010 | 10 | -10.34% | -14.59% | -24.45% | 9.86% |
| 2005 | 15 | -2.30% | -11.39% | -19.48% | 8.09% |
| 2000 | 20 | 1.69% | -1.62% | -10.95% | 9.32% |
| 1995 | 25 | 8.22% | 13.20% | -0.98% | 14.18% |
| 1991 | 29 | 25.36% | 6.03% | 19.33% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and unusable. The corresponding 10 year ratios are 4.33, 3.78 and 3.21. The corresponding historical ratios are 8.53, 12.27 and 16.43. The current P/E Ratio is negative as is the next two P/E Ratios for years 2022 and 2023. This testing cannot be done.
I calculate or guess a Graham Price of $1.35. The 10 year low, median, and high median Price/Graham Price Ratios are 0.54, 0.78 and 0.97. The current P/GP Ratio is 1.23 based on a stock price of $1.66. The current ratio is above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 0.70. The current P/B Ratio is 0.21 based on a book Value of $1,308M, Book Value per Share of $8.08 and a stock price of $1.66. The current ratio is 71% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. However, a problem is that the Book Value per Share has been declining over the past 5 years at 9% per year.
I get a 10 year median Price/Cash Flow per Share Ratio of 5.15. The current P/CF Ratio is 2.48 based on Cash Flow per Share estimate for 2021 of $0.67, Cash Flow of $108.4M, and a stock price of $1.66. The current ratio is 52% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I can do not dividend tests because this company has suspended its dividend.
The 10 year median Price/Sales (Revenue) Ratio is 1.05. The current P/S Ratio is 0.28 based on Revenue estimate for 2021 of $943M, Revenue per Share of $5.83 and a stock price of $1.66. The current ratio is 73% 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 probably cheap. Most of the testing is showing this, and especially important, the P/S Ratio testing is showing this.
Is it a good company at a reasonable price? I think the company is fine. I own it, but I understand the risks. It services the oil and gas industries so it is high risk. I expect it to come back and be fine, but there are never any guarantees in life.
When I look at analysts’ recommendations, I find Strong Buy (1) and Hold (8). The consensus would be a Hold. The 12 month consensus stock price is $1.76. This implies a total return of 6.02%, all capital gains.
The last two entries on Stock Chase say this stock is their top pick for May 2021. Chris MacDonald on Motley Fool says the CEO of this company blames slow rollout of vaccines and government programs that have made it difficult to hire people and that is why they missed earnings for the past quarter. The executive summary on Simply Wall Street gives this stock 3 stars out of 5 and one risk. A writer on Simply Wall Street talks about who owns this company. .
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. 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 09, 2021 around 5 pm. Tomorrow on my other blog I will write about Sturdy Canadian Dividend Stocks.... learn more on Tuesday, June 8, 2021 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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