Is it a good company at a reasonable price? This is a risky stock to buy as it is oil and gas development company. You should not invest in this stock with money you cannot afford to lose. The analysts that follow this stock current expect this stock is do well in the future, however, this stock is not well followed. The current price could be reasonable.
I do not own this stock of Obsidian Energy Ltd (TSX-OBE, NYSE-OBE). I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and the stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006. The company changed its name from Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE) to Obsidian Energy Ltd (TSX-OBE, NYSE-OBE) in 2017.
When I was updating my spreadsheet, I noticed that the stock price has been rising since 2021 and there is a capital gain for the last 5 years. For people holding this stock for 10 to 25 years, they have a capital loss. Also, most of the management and directors that I follow have increased their shares held over the past year.
If you had invested in this company in December 2013, for $1,055.53 you would have bought 17 shares at $62.09 per share. In December 2023, after 10 years you would have received $86.87 in dividends. The stock would be worth $152.83. Your total return would have been $239.10. This would be a total loss of 16.67% per year with 17.57% from capital loss and 0.90% from dividends
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $62.09 | $1,055.53 | 17 | 10 | $86.87 | $152.83 | $239.70 |
If you had invested in this company in December 2018, for $1,055.53 you would have bought 281 shares at $3.57 per share. In December 2023, after 5 years you would have received $0 in dividends. The stock would be worth $2,526.19. Your total return would have been $2,526.19. This would be a total return of 20.29% per year with 20.29% from capital gain and 0.00% from dividends
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $3.57 | $1,003.17 | 281 | 5 | $0.00 | $2,526.19 | $2,526.19 |
This company stopped paying dividends in 2015, so there is no dividend information nor any Dividend Payout Ratios (DPR) information.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.31 and currently at 0.35. The Liquidity Ratio for 2023 is very low at 0.41 and 0.45 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.94 and currently at 2.19. The Debt Ratio for 2023 is good at 3.71 and 3.46currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.37 and 0.37 and currently at 1.41 and 0.41.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.31 | 0.35 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 0.41 | 0.45 |
| Liq. + CF | 1.94 | 2.19 |
| Debt Ratio | 3.71 | 3.46 |
| Leverage | 1.37 | 1.41 |
| D/E Ratio | 0.37 | 0.41 |
The Total Return per year is shown below for years of 5 to 28 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.00% | 20.29% | 20.29% | 0.00% |
| 2013 | 10 | 0.00% | -16.67% | -17.57% | 0.90% |
| 2008 | 15 | 0.00% | -7.63% | -14.54% | 6.91% |
| 2003 | 20 | 0.00% | -2.50% | -14.76% | 12.26% |
| 1998 | 25 | 0.00% | 44.41% | -7.88% | 52.29% |
| 1995 | 28 | 0.00% | 8.85% | -10.75% | 19.59% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 0.17, 0.58, and 1.00. The corresponding 10 year ratios are negative and therefore useless. The corresponding historical ratios are 4.09, 7.24 and 8.63. The current P/E Ratio is 4.85 based on a stock price of $10.29 and EPS estimate for 2024 of $3.38. My any measure, a P/E Ratio is 4.85 is very low. This stock price testing suggests that the stock price is relatively cheap.
I also have Cash Flow from Operations (CFFO) data. The 5-year low, median, and high median Price/ Cash Flow from Operations Ratios are 0.60, 1.93 and 2.75. The corresponding 10 year ratios are 1.22, 2.44 and 3.72. The current P/CFFO is 1.79 based on a stock price of $10.29 and CFFO estimate for 2024 of $5.75. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Flow from Operations (FFO) data. The 5-year low, median, and high median Price/ Flow from Operations Ratios are 0.31, 1.24 and 2.20. The corresponding 10 year ratios are 1.44, 2.88, 4.30. The current P/FFO is 2.52 based on a stock price of $10.29 and FFO for the last 12 months of $4.09. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $44.18. The 10-year low, median, and high median Price/Graham Price Ratios are 0.11, 0.24 and 0.36. The current P/GP Ratio is 0.23 based on a stock price of $10.29. This ratio is between the low and median ratios of the 10 year median ratios. 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 Ratio of 0.35. The current P/B Ratio is 0.49 based on a Book Value of $1,646M, Book Value per Share of $21.21 and a stock price of $10.29. The current ratio is 38% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, a P/B Ratio of 0.49 is a very low ratio.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.12. The current P/CF Ratio is 1.78 based on a stock price of $10.29, Cash Flow per Share estimate for 2024 of $5.77 and a stock price of $10.29. The current ratio is 16% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Since dividends have been suspended, I cannot do any dividend yield testing.
The 10-year median Price/Sales (Revenue) Ratio is 0.76. The current P/S Ratio is 0.97 based on a stock price of $10.29, Revenue estimate for 2024 of $849M and Revenue per Share of 10.94. The current ratio is 28% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Analysts expect the Revenue to increase by 31% in 2025 to $1,084M. Then the P/S Ratio would be 0.74 based on a stock price of $10.29 and Revenue per Share of $13.97. This P/S Ratio is 3% below the 10 year median ratio. In this case, stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price could be reasonable. There are no dividends, so this testing cannot be done. The P/S Ratio for 2024 says the stock price is expensive, but for 2025 this testing says the stock price is reasonable. A number of other tests are saying that the stock price is reasonable.
When I look at analysts’ recommendations, I find Buy (2) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $15.00, with a high of $17.00 and low of $13.00. The consensus price of $15.00 implies a total return of 45.77% all from capital gains and based on a current stock price of $10.29.
There are only entries on Stock Chase from 2022 and 2021 and they are both Do No Buy. Stock Chase gives this stock 1 star out of 5. Christopher Liew on Motley Fool was positive on this stock in 2022. There are no more recent entries on Motley Fool for this company. Zacks via Yahoo Finance reviews the Canadian oil industry, including this company. The company put out a Press Release about their fourth quarter of 2023. The company put out a Press Release on their results for the first quarter of 2023.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has one warning of Profit margins (13.7%) are lower than last year. I see nowhere Simply Wall Street gives any stars to this stock.
Obsidian Energy Ltd. is a conventional oil and natural gas producer and development company. Obsidian Energy Ltd, formerly known as Penn West Petroleum Ltd, is based in Calgary, Canada. Its web site is here Obsidian Energy Ltd.
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