Dividend Stock Wednesday: Husky Energy (HSE-T)

Written by The Dividend Guy on May 7, 2008

This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

Husky Energy

Due to a recent post by The MoneyGardener on the strong performance of Husky Energy and the recent 21% increase in the company’s dividend, I ran the company through my dividend stock analysis machine. I was interested to see how the company’s EPS and revenue trend stacked up against its dividend performance. Also, given that I just paid $70 to fill up my truck at a Husky station, I have been thinking about a way to get some of my money back! Here is the results of that analysis.

7 Points

The Company: Husky Energy (HSE-T)

HUSKY ENERGY INC. is an integrated energy and energy-related company. 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 and petroleum coke, and the upgrading and refining of crude oil and marketing of refined petroleum products.

Dividend Aristocrat (25+ yrs dividend growth)
 No
Dividend Achiever (10+ yrs dividend growth)
 No

THE FUNDAMENTALS

Revenue

HSE - RevenueClick to Enlarge

Revenue Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with Less Than 2 Down Years 0.5
Choppy with Greater Than 2 Down Years 0.0
My Revenue Score 0.0 out of 1.0

Earnings Per Share

HSE - EPSClick to Enlarge

Earnings Per Share Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with Less Than 2 Down Years 0.5
Choppy with Greater Than 2 Down Years 0.0
My EPS Score 0.0 out of 1.0

TOTAL FUNDAMENTALS SCORE: 0.0 out of 2.0

THE RATIOS

Return on Equity

HSE - ROEClick to Enlarge

Return on Equity Scoring

Criteria Scoring
Above 15% for Last 5 Years 1.0
At Least One Year Below 15% in Last 5 Years 0.0
My ROE Score 0.0 out of 1.0

Other Ratios

Ratio Criteria Value Score (Pass=1 / Fail = 0)
Debt to Equity Less Than 0.50 0.24 1.0
Payout Ratio Less Than 60% 35% 1.0
Credit Rating BBB+ BBB+ 1.0
Total Ratio Score
-
-
3.0 out of 3.0

TOTAL RATIOS SCORE: 3.0 out of 4.0

DIVIDEND DATA
Annual Dividends

HSE - DPSClick to Enlarge

Dividend Scoring

Criteria Scoring
25+ Years of Dividend Growth 1.0
10+ Years of Dividend Growth 1.0
Less Than 10 Years of Dividend Growth 0.0
My Dividend Growth Score 0.0 out of 2.0

TOTAL DIVIDEND GROWTH SCORE: 0.0 out of 2.0

STOCK VALUATION

Valuation Metric Criteria Value Score (Pass=1 / Fail = 0)
Dividend Yield Cur Yld Greater Than 10 Yr Avg Yld 5.4% 0.0
Div Yld Compared to SPY Div Yld Cur Yld Greater Than SPY Yld 3.8% 1.0
P/E Ratio Cur P/E Less Than 10 Yr Avg P/E 21.1 1.0
Relative P/E Relative P/E Less Than 1.0 0.74 1.0
Price to Sales Less Than 1.5 1.29 0.0
Total Ratio Valuation Score
-
-
3.0 out of 5.0

Canadian Shareowner’s Association Stock Selection Guide Software Buy Price

Buy Zone
 Maybe Zone
 Sell Zone
 Current Price Rating Scoring (Buy=1.0, Other=0.0)
$35.92 to $62.47
$62.47 to $89.02
$89.02 to $115.56
$44.90
Buy
 1.0

TOTAL STOCK VALUATION SCORE: 4.0 out of 6.0

SUMMARY

Points Earned:

7 out of 14 - half points are rounded down to be conservative

The stock is rated LOW with 7 points earned through my analysis of the stock. Although this stock has seen some very strong EPS and revenue growth, it has been choppy. Companies with choppy performance such as this can see pretty crazy swings in stock price which can be difficult to hold. Yes, the company has had very strong dividend growth in the past couple of years, my data from the CSA shows a rather sketchy dividend past. I am comfortable waiting on this one until we have more consistent dividend performance. In addition, oil and gas prices are high right now and some caution must be taken when buying energy stocks. I have not idea what it going to happen in the future, but it pays to be prudent when it comes to investing.

Rating Points Required
High 11+ points
Medium 8-10 points
Low < 8 points

Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

The Dividend Guy does not own shares in HSE


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7 Comments so far

  1. moneygardener May 7, 2008 6:02 am

    Thanks for the link. For a dividend growth investor, consistency is an issue for commodity plays like this. Aside from Exxon and maybe a few others you would be hard pressed to find consistnency in dividend and earnings growth. I chose to ignore Husky’s long term choppiness and buy it for the resource exposure and current emphasis on dividend growth and growing production. Yes, oil is high now, but I switched the exposure out from my Petro Canada holdilng so it really doesn’t matter where oil is to make that trade. That being said, it’s difficult to not really take a hard look at adding energy exposure to a portfolio, even at these levels because these stocks have low correlation with the usual dividend growth firms in finance, consumer, etc. Most energy companies are not pricing in the current price/barrel of oil anyway; and if it is a long term hold being bullish on oil prices makes them a pretty solid investment.

  2. Investment » Dividend Stock Wednesday: Husky Energy (HSE-T) May 7, 2008 7:24 am

    […] GottaBeMobile - Tablet PC & UMPC News & Video Reviews, and Tablet PC / UMPC Forums wrote an interesting post today on Dividend Stock Wednesday: Husky Energy (HSE-T)Here’s a quick excerptDividend Stock Wednesday: Husky Energy (HSE-T) Written by The Dividend Guy on May 7, 2008 Be the First to Comment » This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis. Due to a recent post by The MoneyGardener on the strong performance of Husky Energy and the recent 21% increase in the company’s dividend, I ran the company through my divide […]

  3. Buy » Dividend Stock Wednesday: Husky Energy (HSE-T) May 7, 2008 7:25 am

    […] Owners of Pets wrote an interesting post today on Dividend Stock Wednesday: Husky Energy (HSE-T)Here’s a quick excerptDividend Stock Wednesday: Husky Energy (HSE-T) Written by The Dividend Guy on May 7, 2008 Be the First to Comment » This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis. Due to a recent post by The MoneyGardener on the strong performance of Husky Energy and the recent 21% increase in the company’s dividend, I ran the company through my divide […]

  4. Dividend Growth Investor May 7, 2008 7:34 pm

    Pretty choppy past. I wonder if commodity prices were to fall, whether or not companies like Husky would start freezing or cutting their dividends?

  5. moneygardener May 7, 2008 8:25 pm

    They likely would if we saw a significant reduction in price/barrel, and they ran into production issues at the same time. I can’t seem them cutting due to low commodity prices alone though, as they base much of their planing on lower oil than today.

  6. what is crude oil used for May 10, 2008 9:44 pm

    […] It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks dischttp://www.thedividendguyblog.com/dividend-stock-wednesday-husky-energy-hse-t/Crude Cruises ForbesGoldman unleashes a note predicting oil at 200 in two years and, Wall Street […]

  7. The Banana Roundup : Week 19 : Personal Finance May 11, 2008 8:10 pm

    […] blogger I enjoy reading in addition to Dividends4Life is The Dividend Guy.  Read his post, Dividend Stock Wednesday: Husky Energy and you can see why I enjoy reading because of the wealth of information you can learn about […]

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