Is it a good company at a reasonable price? This is a small cap company attached to the energy sector. It is a good sign that the company has restarted dividends and then increased them this year. This shows that the management has a positive attitude towards the future. However, Revenue and Earnings in the chart below does not seem to be doing well this year to the second quarter or expected to do well this year. This is a small cap and so you should not invest any money that you cannot afford to lose. The stock price might be reasonable.
I do not own this stock of Trican Well Service Ltd (TSX-TCW, OTC-TOLWF). I was following Canyon Services Group Inc. and Trican Well Services Ltd. had a plan of arrangement with Canyon Shareholders. I used to get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this Canyon Services Group Inc on July 19, 2012 and I was impressed with it so I did a spreadsheet.
When I was updating my spreadsheet, I noticed that this company has restarted dividends. This is always a good sign. The stock has been volatile in connection with stock prices. Look at the chart under total return below. You would have to be careful of the timing when buying this stock.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the second quarter in 2024 and expected growth over this year. You can see that Revenue growth is slowing between the 10 year growth and 5 year growth. Also, it does not seem to be doing well in same areas to the end of the second quarter and what is expected to the end of this year.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 8.00% | 1.55% | 1.90% | <-12 mths |
| 5 | EPS Growth | 175.34% | 22.45% | -38.18% | <-12 mths |
| 5 | Net Income Growth | 152.01% | 20.31% | 1.26% | <-12 mths |
| 5 | Cash Flow Growth | 146.14% | 19.74% | -29.80% | <-12 mths |
| 5 | Dividend Growth | 0.00% | 0.00% | 12.50% | <-12 mths |
| 5 | Stock Price Growth | 249.15% | 28.41% | 12.38% | <-12 mths |
| 10 | Revenue Growth | 224.45% | 12.49% | -1.26% | <-this year |
| 10 | EPS Growth | 1435.71% | 31.41% | -7.27% | <-this year |
| 10 | Net Income Growth | 2865.92% | 40.35% | -10.83% | <-this year |
| 10 | Cash Flow Growth | 382.91% | 17.05% | -31.61% | <-this year |
| 10 | Dividend Growth | -54.67% | -7.61% | 12.50% | <-this year |
| 10 | Stock Price Growth | -41.73% | -5.26% | 12.38% | <-this year |
The current dividend yield is moderate with dividend restarting. The current dividend is moderate (2% to 4% ranges) at 3.84%. When this company last paid dividends, the 5 and 10 year median dividend yield was 3.99%. The company restarted their dividends 2023 and raised them 12.5% in 2024. Dividends had been cancelled in 2014.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 29% with 5 year coverage at 0%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 17% with 5 year coverage at 0%. The DPR for 2023 for Free Cash Flow (FCF) is good at 20% with 5 year coverage at 12%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 29.09% | 0.00% |
| CFPS | 16.53% | 6.65% |
| FCF | 20.30% | 11.79% |
< Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.00 and currently at 0.00. The company has no long term debt. The Liquidity Ratio for 2023 is good at 2.06 and 2.60 currently. The Debt Ratio for 2023 is good at 3.67 and 4.48 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.37 and 0.37 and currently at 1.29 and 0.29.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.00 | 0.00 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 2.06 | 2.60 |
| Liq. + CF | 3.23 | 4.03 |
| Debt Ratio | 3.67 | 4.48 |
| Leverage | 1.37 | 1.29 |
| D/E Ratio | 0.37 | 0.29 |
The Total Return per year is shown below for years of 5 to 17 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% | 29.39% | 28.41% | 0.98% |
| 2013 | 10 | -6.09 | -3.98% | -5.26% | 1.28% |
| 2008 | 15 | 3.18% | 28.11% | 15.56% | 12.55% |
| 2006 | 17 | 7.08% | 4.68% | 2.06% | 2.62% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.33, 7.43 and 9.53. The corresponding 10 year ratios are 2.42, 3.12 and 3.82. The corresponding historical ratios are 1.04, 3.12 and 3.82. The current P/E Ratio is 9.08 based on a stock price of $4.63 and EPS estimate for 2024 of $0.51. This ratio is high according to the 10 year ratios (and historical ratios). This stock price testing suggests that the stock price is relatively expensive.
If you compare the current P/E Ratio to the 5 year ratios, this ratio is between the median and high ratios. In this case stock price testing suggests that the stock price is relatively reasonable but above the median
I get a Graham Price of $5.29. The 10-year low, median, and high median Price/Graham Price Ratios are 0.56, 0.84 and 1.17. The current P/GP Ratio is 0.88 based on a stock price of $4.63. The current ratio is between the median and high ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.28. The current P/B Ratio is 1.90 based on a Book Value of $509.7M, Book Value per Share of $2.44 and a stock price of $4.63. The current ratio is 49% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2024 of $2.52. This implies a ratio of 1.84 based on a stock price of $4.63 and with a Book Value of $527M. This ratio is 44% 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/Cash Flow per Share Ratio of 8.34. The current ratio is 6.38 based on Cash Flow per Share estimate for 2024 of $0.81, Cash Flow of $170M and a stock price of 4.63. The current ratio is 24% 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 0.58%. This is because there are so many years of no dividends. The current dividend is 3.89% based on a stock price of $4.63 and Dividends of $0.18. The current dividend is 570% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. But with so many years of 0%, you have to wonder how good this test is.
I get a 10 median dividend yield of 0.0%. I cannot do any testing with this.
I get a 5 median dividend yield of 4.33% based on when dividends were paid from 2011 to 2016. The current dividend is 3.89% based on a stock price of $4.63 and Dividends of $0.18. The current dividend is 10% below this 5 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. Since these dividends were paid 8 plus years ago, you got to wonder how good this test is also.
The 10-year median Price/Sales (Revenue) Ratio is 1.04. The current P/S Ratio is 1.01 based on Revenue estimate for 2024 of $960.4M, Revenue per Share of $4.59 and a stock price of $4.63. The current ratio is 2.6% below the 10 year median ratio. This 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 still be reasonable, but it is not cheap. The P/S Ratio is saying that the stock price is cheap and this is a good test. I doubt the dividend yield tests are of any value. The P/CF Ratio test and the P/GP Ratio test both say the stock price is reasonable but above the median. The P/B Ratio test is showing the stock price as expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (3). The current consensus would be a Buy. The 12 month stock price consensus is $5.91 with a high of $6.75 and low of 5.00. The 12 months stock price consensus of $5.91 implies a total return of 31.53% with a capital gain of 27.65% and dividends of 3.89% based on a current stock price of $4.63.
For 2024 analysts on Stock Chase had a Hold and Partial Buy. They both like the fact that it is debt free and has a good balance sheet. Stock Chase gives this stock 3 stars out of 5. Christopher Liew on Motley Fool feels this company has solid growth prospects. Christopher Liew on Motley Fool also wrote about this stock in September 2023. The company put out a press release via Newsfile about their year-end results for 2023. The company put out a press release via Newsfile about their second quarter results.
Simply Wall Street via Yahoo Finance reviews this stock and its ROCE (Return on Capital Employed). They have two warnings on this stock of earnings are forecast to decline by an average of 3.1% per year for the next 3 years; and unstable dividend track record.
Trican Well Service Ltd is an equipment services company. It provides products, equipment, services, and technology for use in the drilling, completion, stimulation, and reworking of oil and gas wells primarily through its continuing pressure pumping operations in Canada. The company offers services related to coiled tubing, pipeline service, cementing, fracturing and reservoir solutions. Its web site is here Trican Well Service Ltd.
The last stock I wrote about was about was Telus Corp (TSX-T, NYSE-TU) ... learn more. The next stock I will write about will be Wajax Corp (TSX-WJX, OTC-WJXFF) ... learn more on Wednesday, September 18, 2024 around 5 pm. Tomorrow on my other blog I will write about 15 Ways to Lose Money in the Markets.... learn more on Tuesday, September 17, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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