TSX:CEU

Stock Analysis Report

CES Energy Solutions

Executive Summary

CES Energy Solutions Corp., together with its subsidiaries, provides consumable chemical solutions throughout the life-cycle of the oilfield.

Rewards

Trading at 32.8% below its fair value

Earnings are forecast to grow 25.17% per year

Pays a reliable dividend of 2.9%

Risk Analysis

Interest payments are not well covered by earnings



Snowflake Analysis

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

How has CES Energy Solutions's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CEU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.7%

CEU

0.1%

CA Energy Services

0.1%

CA Market


1 Year Return

-37.5%

CEU

-23.3%

CA Energy Services

12.1%

CA Market

Return vs Industry: CEU underperformed the Canadian Energy Services industry which returned -23.3% over the past year.

Return vs Market: CEU underperformed the Canadian Market which returned 12.1% over the past year.


Shareholder returns

CEUIndustryMarket
7 Day6.7%0.1%0.1%
30 Day13.7%1.8%0.2%
90 Day0.5%-13.3%0.7%
1 Year-35.8%-37.5%-20.9%-23.3%15.9%12.1%
3 Year-70.9%-72.0%-52.4%-55.8%16.0%5.4%
5 Year-66.0%-69.6%-59.9%-64.7%33.5%13.8%

Price Volatility Vs. Market

How volatile is CES Energy Solutions's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CES Energy Solutions undervalued compared to its fair value and its price relative to the market?

32.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CEU (CA$2.07) is trading below our estimate of fair value (CA$3.08)

Significantly Below Fair Value: CEU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CEU is poor value based on its PE Ratio (16.4x) compared to the Energy Services industry average (15.6x).

PE vs Market: CEU is poor value based on its PE Ratio (16.4x) compared to the Canadian market (15.2x).


Price to Earnings Growth Ratio

PEG Ratio: CEU is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: CEU is overvalued based on its PB Ratio (0.8x) compared to the CA Energy Services industry average (0.8x).


Next Steps

Future Growth

How is CES Energy Solutions forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

25.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CEU's forecast earnings growth (25.2% per year) is above the savings rate (1.4%).

Earnings vs Market: CEU's earnings (25.2% per year) are forecast to grow faster than the Canadian market (10% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CEU's revenue (0.1% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: CEU's revenue (0.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CEU's Return on Equity is forecast to be low in 3 years time (5.8%).


Next Steps

Past Performance

How has CES Energy Solutions performed over the past 5 years?

13.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CEU has high quality earnings.

Growing Profit Margin: CEU's current net profit margins (2.6%) are lower than last year (2.9%).


Past Earnings Growth Analysis

Earnings Trend: CEU's earnings have grown by 13.1% per year over the past 5 years.

Accelerating Growth: CEU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CEU had negative earnings growth (-3.7%) over the past year, making it difficult to compare to the Energy Services industry average (28.3%).


Return on Equity

High ROE: CEU's Return on Equity (4.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CES Energy Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: CEU's short term assets (CA$515.5M) exceed its short term liabilities (CA$152.3M).

Long Term Liabilities: CEU's short term assets (CA$515.5M) exceed its long term liabilities (CA$398.8M).


Debt to Equity History and Analysis

Debt Level: CEU's debt to equity ratio (53.9%) is considered high.

Reducing Debt: CEU's debt to equity ratio has reduced from 62.7% to 53.9% over the past 5 years.

Debt Coverage: CEU's debt is well covered by operating cash flow (43.8%).

Interest Coverage: CEU's interest payments on its debt are not well covered by EBIT (2.5x coverage).


Balance Sheet

Inventory Level: CEU has a high level of physical assets or inventory.

Debt Coverage by Assets: CEU's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

What is CES Energy Solutions's current dividend yield, its reliability and sustainability?

2.90%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.0%markettop25%5.7%industryaverage4.9%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: CEU's dividend (2.9%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: CEU's dividend (2.9%) is low compared to the top 25% of dividend payers in the Canadian market (5.65%).


Stability and Growth of Payments

Stable Dividend: CEU's dividends per share have been stable in the past 10 years.

Growing Dividend: CEU's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.5%), CEU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CEU's dividends in 3 years are forecast to be well covered by earnings (36.7% payout ratio).


Next Steps

Management

What is the CEO of CES Energy Solutions's salary, the management and board of directors tenure and is there insider trading?

5.9yrs

Average management tenure


CEO

Tom Simons (49yo)

13.8yrs

Tenure

CA$2,959,475

Compensation

Mr. Thomas J. Simons, also known as Tom, has been the Chief Executive Officer and President at Canadian Energy Services Inc. since March 2006 and CES Energy Solutions Corp. (formerly known as Canadian Ener ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD2.24M) is above average for companies of similar size in the Canadian market ($USD1.07M).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.9yrs

Average Tenure

Experienced Management: CEU's management team is seasoned and experienced (5.9 years average tenure).


Board Age and Tenure

9.3yrs

Average Tenure

61yo

Average Age

Experienced Board: CEU's board of directors are considered experienced (9.3 years average tenure).


Insider Trading

Insider Buying: CEU insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$10,12510 Oct 19
Thomas Simons
EntityIndividual
Role
Chief Executive Officer
President
Shares5,000
Max PriceCA$2.03
BuyCA$7,06028 Aug 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares4,000
Max PriceCA$1.78
BuyCA$4,02023 Aug 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.01
BuyCA$7,55919 Aug 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares4,000
Max PriceCA$1.96
BuyCA$3,68015 Aug 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$1.84
BuyCA$4,46005 Jul 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.23
BuyCA$4,40026 Jun 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.20
BuyCA$9,11320 Jun 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares4,000
Max PriceCA$2.29
BuyCA$13,05820 Jun 19
Kenneth Zinger
EntityIndividual
Role
Chief Operating Officer
COO & President of Canadian Drilling Fluids
Shares5,727
Max PriceCA$2.28
BuyCA$6,07519 Jun 19
Kenneth Zinger
EntityIndividual
Role
Chief Operating Officer
COO & President of Canadian Drilling Fluids
Shares2,700
Max PriceCA$2.25
BuyCA$4,38005 Jun 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.19
BuyCA$13,35023 May 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares6,000
Max PriceCA$2.23
BuyCA$23,79916 May 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares10,000
Max PriceCA$2.45
BuyCA$2,99008 Apr 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares1,000
Max PriceCA$2.99
BuyCA$25,70504 Apr 19
Thomas Simons
EntityIndividual
Role
Chief Executive Officer
President
Shares8,900
Max PriceCA$2.89
SellCA$45,65603 Apr 19
Burton Ahrens
EntityIndividual
Shares16,000
Max PriceCA$2.85
BuyCA$5,58401 Apr 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.81
BuyCA$2,82528 Mar 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares1,000
Max PriceCA$2.83
SellCA$83,24325 Mar 19
Jason Waugh
EntityIndividual
Role
Senior Key Executive
President of Canadian Production Chemicals
Shares29,200
Max PriceCA$2.85
BuyCA$5,78015 Mar 19
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.89
BuyCA$28,90015 Mar 19
Kenneth Zinger
EntityIndividual
Role
Chief Operating Officer
COO & President of Canadian Drilling Fluids
Shares10,000
Max PriceCA$2.89
SellCA$26,47511 Jan 19
Burton Ahrens
EntityIndividual
Shares7,500
Max PriceCA$3.53
BuyCA$5,96028 Dec 18
Anthony Aulicino
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,000
Max PriceCA$2.98
SellCA$261,85425 Dec 18
John Hooks
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares80,000
Max PriceCA$3.28

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Pasieka (65yo)

    Corporate Secretary

    • Tenure: 5.9yrs
  • Tom Simons (49yo)

    President

    • Tenure: 13.8yrs
    • Compensation: CA$2.96m
  • Ken Zinger

    COO & President of Canadian Drilling Fluids

    • Tenure: 13.9yrs
    • Compensation: CA$2.37m
  • Ken Zandee

    Vice President of Sales & Marketing

    • Tenure: 13.8yrs
    • Compensation: CA$413.17k
  • Jason Waugh

    President of Canadian Production Chemicals

    • Tenure: 1.3yrs
    • Compensation: CA$2.36m
  • Richard Baxter

    President of AES Drilling Fluids

    • Tenure: 5.9yrs
  • Vern Disney

    President of US Production Chemicals

    • Tenure: 1.3yrs
    • Compensation: CA$2.38m
  • Tony Aulicino

    Chief Financial Officer

    • Tenure: 1.2yrs
    • Compensation: CA$1.25m

Board Members

  • Spencer Armour (64yo)

    Independent Director

    • Tenure: 1yrs
    • Compensation: CA$103.09k
  • John Hooks (61yo)

    Independent Director

    • Tenure: 14yrs
    • Compensation: CA$167.00k
  • Kyle Kitagawa (58yo)

    Independent Chairman of the Board

    • Tenure: 0yrs
    • Compensation: CA$265.00k
  • Tom Simons (49yo)

    President

    • Tenure: 13.8yrs
    • Compensation: CA$2.96m
  • Rod Carpenter (65yo)

    Independent Director

    • Tenure: 14yrs
    • Compensation: CA$164.00k
  • Stella Cosby (61yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$157.50k
  • Phil Scherman (68yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: CA$164.00k

Company Information

CES Energy Solutions Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CES Energy Solutions Corp.
  • Ticker: CEU
  • Exchange: TSX
  • Founded: 1986
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: CA$548.946m
  • Shares outstanding: 265.19m
  • Website: https://www.cesenergysolutions.com

Number of Employees


Location

  • CES Energy Solutions Corp.
  • 332-6th Avenue
  • Suite 1400
  • Calgary
  • Alberta
  • T2P 0B2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CEUTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 2006
CESD.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMar 2006
7C4DB (Deutsche Boerse AG)YesCommon SharesDEEURMar 2006

Biography

CES Energy Solutions Corp., together with its subsidiaries, provides consumable chemical solutions throughout the life-cycle of the oilfield. The company provides solutions at the drill-bit, at the point o ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 00:30
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.