I actually already bought HSE 2 weeks ago (I know I must update my dividend holdings faster!). But here’s my stock analysis on Husky Energy:
The Company Stock Description:
HUSKY ENERGY INC. is an integrated energy and energy-related company that ranks among major players in Canada. The Company’s operations include the exploration for and development of crude oil and natural gas as well as the production, purchase, transportation and marketing of crude oil, natural gas, natural gas liquids, sulphur, ethanol and petroleum coke, and the upgrading and refining of crude oil and marketing of refined petroleum products. HSE is actually the largest ethanol producer in Western Canada.
HSE Stock Graph
The Company Ratios and Financial Info:
HSE Dividend Metrics:
– Current Dividend Yield: 4.52%
– 5 year Dividend Growth : 7.78%
– 1 year Dividend Growth : 0.0%
Husky Energy Company Metrics :
– Sales Growth (5 year): 11.44%
– Earnings Growth: 6.43%
– P/E Ratio: 20.15
– Margin Growth: -17.43%
– Payout Ratio: 86.96%
– Return on Equity: 7.84
– Debt to Capital Ratio: 0.18
Husky Stock Metrics:
– Ticker: HSE (TSE: HSE)
– Price: $27.60
– Trend (technical analysis): Currently trading under the 200 day moving average.
Upcoming opportunities and dangers for Husky Energy:
I discussed this in CVX stock analysis; there are no energy companies shielded from the threat a major lawsuit. Husky is no exception. Another important factor to consider is the small refining margin combined with a wildly fluctuating price of oil. Taking into consideration a strong Canadian dollar and that you don’t find much benefit or growth in selling oil to the US! That is on the negative side. However, here’s what I really like about HSE: the growth in the price of oil combined with a stock price under the 200 day moving average. I don’t believe in market timing but I do believe that oil will remain over $80 and that Husky shares are going to go back to a better price in the upcoming year.
Another interesting point for the future is Husky’s desire to move towards alternative energy (ethanol and wind energy). They are investing massively in these 2 fields as they see stricter regulation coming slowing for the oil industry.
Final Thoughts on HSE
I must admit it: HSE is a gamble. It’s a gamble as I am doing the same thing with RIM and with VNP in my portfolio. I don’t mind risking since I’m young (29) and this money is being invested in my retirement investment account. Over time, I am confident that HSE will be a good pick even though its financials are a bit shaky at the moment. What do you think?
disclaimer: I hold position in HSE, RIM, VNP and CVX