TSX:PD

Stock Analysis Report

Precision Drilling

Executive Summary

Precision Drilling Corporation, an oilfield services company, provides oil and natural gas drilling and related services and products.


Snowflake Analysis

Fair value with questionable track record.


Similar Companies

Share Price & News

How has Precision Drilling's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PD's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.4%

PD

3.9%

CA Energy Services

2.1%

CA Market


1 Year Return

-87.5%

PD

-72.6%

CA Energy Services

-21.2%

CA Market

Return vs Industry: PD underperformed the Canadian Energy Services industry which returned -72.9% over the past year.

Return vs Market: PD underperformed the Canadian Market which returned -22.9% over the past year.


Shareholder returns

PDIndustryMarket
7 Day3.4%3.9%2.1%
30 Day-39.5%-46.8%-13.8%
90 Day-78.6%-60.0%-21.9%
1 Year-87.5%-87.5%-71.1%-72.6%-18.6%-21.2%
3 Year-92.9%-92.9%-80.0%-82.0%-11.0%-19.3%
5 Year-94.8%-94.9%-82.5%-84.9%1.6%-13.6%

Price Volatility Vs. Market

How volatile is Precision Drilling's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Precision Drilling undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PD (CA$0.5) is trading below our estimate of fair value (CA$4.29)

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


Price To Earnings Ratio

PE vs Industry: PD is poor value based on its PE Ratio (22x) compared to the Energy Services industry average (8.6x).

PE vs Market: PD is poor value based on its PE Ratio (22x) compared to the Canadian market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: PD's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: PD is good value based on its PB Ratio (0.1x) compared to the CA Energy Services industry average (0.3x).


Next Steps

Future Growth

How is Precision Drilling forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-56.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PD's earnings are forecast to decline over the next 3 years (-56.8% per year).

Earnings vs Market: PD's earnings are forecast to decline over the next 3 years (-56.8% per year).

High Growth Earnings: PD's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PD's revenue is expected to decline over the next 3 years (-14.8% per year).

High Growth Revenue: PD's revenue is forecast to decline over the next 3 years (-14.8% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PD is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Precision Drilling performed over the past 5 years?

1.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PD has a large one-off gain of CA$56.9M impacting its December 31 2019 financial results.

Growing Profit Margin: PD became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: PD has become profitable over the past 5 years, growing earnings by 1.9% per year.

Accelerating Growth: PD has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: PD has become profitable in the last year, making it difficult to compare its past year earnings growth to the Energy Services industry (4.1%).


Return on Equity

High ROE: PD's Return on Equity (0.4%) is considered low.


Next Steps

Financial Health

How is Precision Drilling's financial position?


Financial Position Analysis

Short Term Liabilities: PD's short term assets (CA$417.8M) exceed its short term liabilities (CA$216.1M).

Long Term Liabilities: PD's short term assets (CA$417.8M) do not cover its long term liabilities (CA$1.5B).


Debt to Equity History and Analysis

Debt Level: PD's debt to equity ratio (93.4%) is considered high.

Reducing Debt: PD's debt to equity ratio has increased from 75.9% to 93.4% over the past 5 years.

Debt Coverage: PD's debt is well covered by operating cash flow (20.2%).

Interest Coverage: PD's interest payments on its debt are not well covered by EBIT (0.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Precision Drilling's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate PD's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PD's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PD's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PD's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: PD is not paying a notable dividend for the Canadian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PD's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

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

3.9yrs

Average management tenure


CEO

Kevin Neveu (58yo)

13.25s

Tenure

CA$6,641,230

Compensation

Mr. Kevin A. Neveu B.Sc, P.Eng, has been the Chief Executive Officer and President of Precision Drilling Corporation, the Administrator of Precision Drilling Trust since January, 2007. Mr. Neveu served as  ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD4.72M) is above average for companies of similar size in the Canadian market ($USD158.50K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Kevin Neveu
President13.25yrsCA$6.64m0.45% CA$565.4k
Carey Ford
Senior VP & CFO4yrsCA$2.42m0.077% CA$97.5k
Shuja Goraya
Chief Technology Officer1.75yrsCA$2.01m0.027% CA$34.1k
Veronica Foley
Senior VP3.92yrsCA$1.84m0.044% CA$54.9k
Gene Stahl
Chief Marketing Officer0.75yrCA$2.33m0.061% CA$77.3k
John Goertzen
Executive Vice-President and Chief Operating Officerno datano datano data
Darren Ruhr
Chief Administrative Officer1.75yrsCA$1.96m0.036% CA$45.4k
Dustin Honing
Manager of Investor Relationsno datano datano data
Roland Marks
Senior Vice President of International Drilling Operationsno datano data0.022% CA$28.3k
Grant Hunter
Senior Vice President of North American Drilling Operation13.25yrsCA$1.39m0.0052% CA$6.6k

3.9yrs

Average Tenure

58yo

Average Age

Experienced Management: PD's management team is considered experienced (3.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kevin Neveu
President13.25yrsCA$6.64m0.45% CA$565.4k
Steven Krablin
Independent Chairman of the Board2.92yrsCA$391.38k0.0091% CA$11.5k
William Donovan
Independent Director11.33yrsCA$278.61k0.043% CA$53.9k
David Williams
Independent Director1.58yrsCA$258.71k0.0091% CA$11.5k
Kevin Meyers
Independent Director8.58yrsCA$286.57k0.018% CA$22.8k
Michael Culbert
Independent Director2.33yrsCA$258.71k0.042% CA$52.9k
Allen Hagerman
Independent Director13.33yrsCA$278.61k0.027% CA$34.2k
Brian Gibson
Independent Director8.92yrsCA$258.71k0.089% CA$112.7k
Susan MacKenzie
Independent Director2.58yrsCA$264.68k0.024% CA$29.7k

8.6yrs

Average Tenure

63yo

Average Age

Experienced Board: PD's board of directors are considered experienced (8.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: PD insiders have bought more shares than they have sold 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

Precision Drilling Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Precision Drilling Corporation
  • Ticker: PD
  • Exchange: TSX
  • Founded: 1951
  • Industry: Oil and Gas Drilling
  • Sector: Energy
  • Market Cap: CA$126.146m
  • Shares outstanding: 274.23m
  • Website: https://www.precisiondrilling.com

Number of Employees


Location

  • Precision Drilling Corporation
  • 525–8th Avenue SW
  • Suite 800
  • Calgary
  • Alberta
  • T2P 1G1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PDTSX (The Toronto Stock Exchange)YesCommon SharesCACADSep 1988
PDSNYSE (New York Stock Exchange)YesCommon SharesUSUSDSep 1988
PREDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1988

Biography

Precision Drilling Corporation, an oilfield services company, provides oil and natural gas drilling and related services and products. The company operates in two segments, Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the oil and natural gas industry. This segment provides land drilling, directional drilling, and turnkey drilling services; and procures and distributes oilfield supplies, as well as manufactures and refurbishes drilling and service rig equipment. As of December 31, 2019, this segment operated 226 land drilling rigs, including 109 in Canada; 104 in the United States; 6 in Kuwai; 4 in Saudi Arabia; 2 in the Kurdistan region of Iraq; and 1 in the country of Georgia. The Completion and Production Services segment provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; wellsite accommodations; and oilfield surface equipment rentals, as well as pressure control services to oil and natural gas exploration and production companies. As of December 31, 2019, this segment operated 123 well completion and workover service rigs, including 114 in Canada; 9 in the United States; approximately 1,700 oilfield rental items, including surface storage, small-flow wastewater treatment, and power generation and solids control equipment; and 132 wellsite accommodation units in Canada. It also had 42 drilling camps in Canada. Precision Drilling Corporation was incorporated in 1951 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 Analysis2020/04/08 07:12
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.