Friday, August 3, 2012

Canyon Services Group

I own not own this stock (TSX-FRC). I get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19th and I was impressed with it so I did a spreadsheet. You can sign up for this newsletter at their site.

This stock only went public in 2006. They have had a few years of negative earnings, but lately they have been going great guns. They started to pay dividends in 2011 and then rammed them up in 2012 doing two increases. Current dividend yield is very good at 5.83%.

The Dividend Payout Ratio for earnings is expected to be 33.5% this year and 34% next year. This is a good payout ratio. I do not have any figures for DPR for cash flow, but the company does seem to have a good cash flow.

I only have total returns for the last 5 years and this is at 19.47%, with 19.28% from capital gain and just 0.20% from dividends. They just started to pay dividends, so in the future dividends should be a higher percentage of the total returns.

Since going public they have had a number of public offerings of shares. Shares have increased at the rate of 22% and 23% per year over the past 5 and 7 years. Revenues have increased at 51% and 55% per year over the past 5 and 6 years. Revenue per share has grown at 23% and 25% per year over the past 5 and 6 years.

Earnings per share have grown at 73% and 24% per year over the past 5 and 6 years. Cash flow per share has grown at the rate of 34% and 23% per year over the past 5 and 6 years. The only growth rate that is not great is Book Value and BV per share has grown at 3.4% and 13.5% per year over the past 5 and 6 years.

Return on Equity has only been very good over the past couple of years. They really have only started to earn a profit over the past couple of years. Although the 5 year median ROE is negative, the ROE for 2011 was 30% and for 2010 was 24.4%. ROE based on comprehensive income is the same as that based on net income.

Current Liquidity Ratio is great at 1.81. This ratio has fluctuated a bit in the past, but it has basically been fine. The current Debt Ratio is also great at 4.37 and this has always been great. The current Leverage and Debt/Equity Ratios are also very good 1.30 and 0.30 and these also have always been quite good.

Do not mistake this for a stable dividend paying stock, but it has great potential. It is rather a high risk, but if you can stand the risk, you could probably do very well by it if it keeps growing. I very much like fast growing dividend growth stock and this stock has great potential. Tomorrow I will look at what other analysts say about it and what my spreadsheet says about its current price.

Canyon Services Group Inc. is a fast-growing company providing hydraulic fracturing and other well-stimulation services, including coiled tubing, acidizing, cementing, nitrogen and CO2, to oil and natural gas producers developing a variety of play types across Western Canada. Its web site is here Canyon Services. See my spreadsheet at frc.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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