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.


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

-2.0%

CEU

-13.8%

CA Energy Services

-4.8%

CA Market


1 Year Return

-38.3%

CEU

-43.5%

CA Energy Services

0.1%

CA Market

Return vs Industry: CEU exceeded the Canadian Energy Services industry which returned -43.5% over the past year.

Return vs Market: CEU underperformed the Canadian Market which returned 0.1% over the past year.


Shareholder returns

CEUIndustryMarket
7 Day-2.0%-13.8%-4.8%
30 Day-7.1%-12.7%-3.2%
90 Day4.3%-11.5%-1.0%
1 Year-36.5%-38.3%-41.7%-43.5%3.3%0.1%
3 Year-72.1%-73.3%-58.9%-61.9%12.9%2.7%
5 Year-65.2%-68.7%-61.9%-66.4%29.2%10.3%

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?

27.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CEU (CA$1.95) is trading below our estimate of fair value (CA$2.69)

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 (15.4x) compared to the Energy Services industry average (12.6x).

PE vs Market: CEU is poor value based on its PE Ratio (15.4x) compared to the Canadian market (15.2x).


Price to Earnings Growth Ratio

PEG Ratio: CEU is good value based on its PEG Ratio (0.5x)


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 (0.6x).


Next Steps

Future Growth

How is CES Energy Solutions forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

33.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CEU's forecast earnings growth (33.6% per year) is above the savings rate (1.4%).

Earnings vs Market: CEU's earnings (33.6% per year) are forecast to grow faster than the Canadian market (9.8% per year).

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

Revenue vs Market: CEU's revenue (0.9% per year) is forecast to grow slower than the Canadian market (4.7% per year).

High Growth Revenue: CEU's revenue (0.9% 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 (6.8%).


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 (25.9%).


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?

3.08%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.0%markettop25%5.8%industryaverage5.9%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: CEU's dividend (3.08%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: CEU's dividend (3.08%) is low compared to the top 25% of dividend payers in the Canadian market (5.81%).


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 (38.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

Tom Simons (49yo)

13.9yrs

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 ($USD2.22M) is above average for companies of similar size in the Canadian market ($USD1.04M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Simons
President13.9yrsCA$2.96m0.94% CA$4.8m
Anthony Aulicino
Chief Financial Officer1.3yrsCA$1.25m0.034% CA$174.2k
Kenneth Zinger
COO & President of Canadian Drilling Fluids14.1yrsCA$2.37m0.55% CA$2.8m
Jason Waugh
President of Canadian Production Chemicals1.5yrsCA$2.36mno data
Vernon Disney
President of US Production Chemicals1.5yrsCA$2.38m0.90% CA$4.6m
Kenneth Zandee
Vice President of Sales & Marketing13.9yrsCA$413.17k0.022% CA$111.6k
James Pasieka
Corporate Secretary6.1yrsno data0.016% CA$79.3k
Richard Baxter
President of AES Drilling Fluids6.1yrsno data0.085% CA$430.4k

6.1yrs

Average Tenure

Experienced Management: CEU's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Simons
President13.9yrsCA$2.96m0.94% CA$4.8m
Spencer Armour
Independent Director1.2yrsCA$103.09k0.015% CA$76.9k
John Hooks
Independent Director14.2yrsCA$167.00k0.52% CA$2.6m
Kyle Kitagawa
Independent Chairman of the Board0yrsCA$265.00k0.61% CA$3.1m
Rodney Carpenter
Independent Director14.2yrsCA$164.00k2.24% CA$11.3m
Stella Cosby
Independent Director2.4yrsCA$157.50k0.031% CA$155.4k
Philip Scherman
Independent Director4.8yrsCA$164.00k0.051% CA$259.9k

9.5yrs

Average Tenure

61yo

Average Age

Experienced Board: CEU's board of directors are considered experienced (9.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$506.796m
  • Shares outstanding: 263.96m
  • 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 of completion and stimulation, at the wellhead and pump-jack, and through to the pipeline and midstream market. Its solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides, and other specialty products. The company also designs and implements drilling fluid systems and completion solutions for oil and gas producers; and designs and manufactures production and specialty chemicals for use in the oil and natural gas production markets, the stimulation and fracturing markets, and the pipeline and midstream markets. In addition, it provides environmental consulting, water management services, and drilling fluids waste disposal services primarily to oil and gas producers; and trucks and trailers to transport products in the oil and gas industry. It serves oil and natural gas industry, including multinational producers, intermediate oil and natural gas operators, independent juniors, and joint ventures, as well as pipeline and mid-stream markets in western Canada and the United States. The company was formerly known as Canadian Energy Services & Technology Corp. and changed its name to CES Energy Solutions Corp. in June 2017. CES Energy Solutions Corp. was incorporated in 1986 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 00:43
End of Day Share Price2020/02/26 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.