Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0793
    0.0000 (-0.00%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2638
    +0.0016 (+0.13%)
     
  • USD/JPY

    151.2370
    -0.1350 (-0.09%)
     
  • Bitcoin USD

    69,978.66
    -1,210.88 (-1.70%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

Why We Think Ensign Energy Services Inc. (TSE:ESI) Could Be Worth Looking At

I've been keeping an eye on Ensign Energy Services Inc. (TSE:ESI) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe ESI has a lot to offer. Basically, it is a well-regarded dividend payer with an optimistic growth outlook, not yet priced into the stock. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on Ensign Energy Services here.

Very undervalued with reasonable growth potential and pays a dividend

Investors in search for stocks with room to flourish should look no further than ESI, with its expected earinngs growth of 22%, made up of high-quality, operational cash from its core business, which is expected to increase by 53% next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. ESI's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if ESI's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, ESI's share price is trading below the group's average. This bolsters the proposition that ESI's price is currently discounted.

TSX:ESI Past and Future Earnings, September 23rd 2019
TSX:ESI Past and Future Earnings, September 23rd 2019

Income investors would also be happy to know that ESI is one of the highest dividend payers in the market, with current dividend yield standing at 14%. ESI has also been regularly increasing its dividend payments to shareholders over the past decade.

TSX:ESI Historical Dividend Yield, September 23rd 2019
TSX:ESI Historical Dividend Yield, September 23rd 2019

Next Steps:

For Ensign Energy Services, there are three essential factors you should further examine:

  1. Historical Performance: What has ESI's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ESI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

Advertisement