HSE Husky Energy Dividend Stock Analysis
- 11 Comment
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 $80 and that Husky shares are going to go back to a better price in the upcoming year.
Another interesting point for the future is Husky’s desire to move towards alternative energy (ethanol and wind energy). They are investing massively in these 2 fields as they see stricter regulation coming slowing for the oil industry.
Final Thoughts on HSE
I must admit it: HSE is a gamble. It’s a gamble as I am doing the same thing with RIM and with VNP in my portfolio. I don’t mind risking since I’m young (29) and this money is being invested in my retirement investment account. Over time, I am confident that HSE will be a good pick even though its financials are a bit shaky at the moment. What do you think?
disclaimer: I hold position in HSE, RIM, VNP and CVX
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11 Comments on this post
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Michel said:
I think it is a great pick, and you get the dividend while you wait. I combined HSE with SU and I’m off to the races!
February 23rd, 2011 at 5:16 am -
Mike said:
SU is a great pick as well
I was kind of lucky to buy HSE just before the recent oil jump. I am pretty sure it will be a good year for them considering the oil price continuously going up…
February 23rd, 2011 at 8:39 am -
The Passive Income Earner said:
I agree that HSE stock has a potential upswing but I found its dividend payment erratic. It’s not as much a dividend play as CVX butlike Michael said, getting paid dividends while you wait isn’t bad.
A friend did that with Bombardier (BBD.B) at the 5$ mark.
February 23rd, 2011 at 10:09 am -
SustainableReality said:
My concern with HSE actually has nothing to do with its financials or its dividend. It’s the corporate culture. I’ve had friends that worked there, and found it to be a pretty oppressive dictatorial style, and I believe that’s why they’ve lagged the Canadian energy industry as a whole (have a look: http://tinyurl.com/6zcfumt).
Now, last year, they did name a new CEO. He’s from outside the industry… so maybe that will shake things up??
But yes, in my opinion it is a bit of a gamble. Not a bad one, but a gamble nonetheless.
February 23rd, 2011 at 10:50 am -
Mike said:
I love gambling
we don’t have any Husky station in Quebec, so I am not really aware of their management style…
February 23rd, 2011 at 5:07 pm -
David said:
Your analysis misses the most important characteristic of this as a holding….the public float of HSE is tiny (about 30%) with the remainder held by Li Ka-Shing.
He dictates all corporate governance issues including dividend policy, which is primarily tailored to suit his own needs.
That’s the fact, Jack. Good luck.
February 24th, 2011 at 3:55 pm -
My Own Advisor said:
There are MUCH bigger gambles to take, but yes, the dividend payment is not very consistent.
Heck, as long as HSE pays you, hold it man!
I’d like to own XOM in my RRSP, I just have no cash right now.
February 24th, 2011 at 7:13 pm -
NeilM said:
i have friends who also work at Husky and from what they tell me, it really can be a very controlling atmosphere to work – tru story to get a new mouse for his computer my friend had to wait on the approval from the VP – holy micro manage..
i love your blog and have learned a great deal from it, thanks and keep the excellent work.
Neil
dividendnoob.blogspot.comMay 9th, 2011 at 1:56 pm
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