TSX:PSI

Stock Analysis Report

Executive Summary

Pason Systems Inc. provides instrumentation and data management systems for drilling rigs.

Rewards

Trading at 13.5% below its fair value

Earnings are forecast to grow 1.99% per year

Earnings grew by 36.4% over the past year

Pays a reliable dividend of 5.79%

Risk Analysis

Dividend of 5.79% is not well covered by earnings

Significant insider selling over the past 3 months



Snowflake Analysis

Flawless balance sheet with proven track record and pays a dividend.

Share Price & News

How has Pason Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.3%

PSI

0.5%

CA Energy Services

0.8%

CA Market


1 Year Return

-36.8%

PSI

-27.7%

CA Energy Services

10.5%

CA Market

Return vs Industry: PSI underperformed the Canadian Energy Services industry which returned -28.8% over the past year.

Return vs Market: PSI underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

PSIIndustryMarket
7 Day-0.3%0.5%0.8%
30 Day-1.9%-2.8%2.1%
90 Day-12.2%4.3%6.4%
1 Year-33.9%-36.8%-25.4%-27.7%14.0%10.5%
3 Year-24.1%-32.5%-53.9%-57.2%16.8%6.3%
5 Year-11.1%-26.6%-50.7%-56.4%36.8%16.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Pason Systems undervalued compared to its fair value and its price relative to the market?

11.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PSI (CA$13.12) is trading below our estimate of fair value (CA$15.17)

Significantly Below Fair Value: PSI is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PSI is poor value based on its PE Ratio (17.5x) compared to the Energy Services industry average (15.6x).

PE vs Market: PSI is poor value based on its PE Ratio (17.5x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: PSI is poor value based on its PEG Ratio (8.8x)


Price to Book Ratio

PB vs Industry: PSI is overvalued based on its PB Ratio (3x) compared to the CA Energy Services industry average (0.8x).


Next Steps

Future Growth

How is Pason Systems forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

2.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PSI's forecast earnings growth (2% per year) is above the savings rate (1.4%).

Earnings vs Market: PSI's earnings (2% per year) are forecast to grow slower than the Canadian market (10.3% per year).

High Growth Earnings: PSI's earnings are forecast to grow, but not significantly.

Revenue vs Market: PSI's revenue is expected to decline over the next 3 years (-1.6% per year).

High Growth Revenue: PSI's revenue is forecast to decline over the next 3 years (-1.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if PSI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Pason Systems performed over the past 5 years?

-1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PSI has high quality earnings.

Growing Profit Margin: PSI's current net profit margins (20.8%) are higher than last year (16.3%).


Past Earnings Growth Analysis

Earnings Trend: PSI's earnings have declined by -1% per year over the past 5 years.

Accelerating Growth: PSI's earnings growth over the past year (36.4%) exceeds its 5-year average (-1% per year).

Earnings vs Industry: PSI earnings growth over the past year (36.4%) exceeded the Energy Services industry 28.3%.


Return on Equity

High ROE: PSI's Return on Equity (17.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Pason Systems's financial position?


Financial Position Analysis

Short Term Liabilities: PSI's short term assets (CA$267.8M) exceed its short term liabilities (CA$37.6M).

Long Term Liabilities: PSI's short term assets (CA$267.8M) exceed its long term liabilities (CA$37.8M).


Debt to Equity History and Analysis

Debt Level: PSI is debt free.

Reducing Debt: PSI has not had any debt for past 5 years.

Debt Coverage: PSI has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: PSI has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if PSI's debt is covered by short term assets.


Next Steps

Dividend

What is Pason Systems's current dividend yield, its reliability and sustainability?

5.81%

Current Dividend Yield


Dividend Yield vs Market

company5.8%marketbottom25%1.9%markettop25%5.4%industryaverage4.8%forecastin3Years5.8%

Current dividend yield vs market & industry

Notable Dividend: PSI's dividend (5.79%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: PSI's dividend (5.79%) is in the top 25% of dividend payers in the Canadian market (5.48%)


Stability and Growth of Payments

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

Growing Dividend: PSI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (97.1%), PSI's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Pason Systems's salary, the management and board of directors tenure and is there insider trading?

5.8yrs

Average management tenure


CEO

Marcel Kessler (52yo)

8.2yrs

Tenure

CA$2,311,365

Compensation

Mr. Marcel Kessler has been the Chief Executive Officer and President of Pason Systems Inc., since November 07, 2011. Mr. Kessler has been a Partner of McKinsey & Company since 2001. Mr. Kessler served as  ...


CEO Compensation Analysis

Compensation vs Market: Marcel's total compensation ($USD1.77M) is about average for companies of similar size in the Canadian market ($USD1.63M).

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


Management Age and Tenure

5.8yrs

Average Tenure

Experienced Management: PSI's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

6.2yrs

Average Tenure

64yo

Average Age

Experienced Board: PSI's board of directors are considered experienced (6.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyCA$62,77431 Dec 19
Timur Kuru
EntityIndividual
Shares4,780
Max PriceCA$13.14
BuyCA$65,50031 Dec 19
Jon Faber
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares5,000
Max PriceCA$13.10
SellCA$6,425,95005 Dec 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares500,000
Max PriceCA$12.85
BuyCA$35,10521 Nov 19
Marcel Kessler
EntityIndividual
Role
Chief Executive Officer
President
Shares2,785
Max PriceCA$12.61
SellCA$2,428,89614 Nov 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares180,200
Max PriceCA$13.51
SellCA$4,435,31913 Nov 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares319,800
Max PriceCA$13.96
BuyCA$66,00025 Sep 19
Jon Faber
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares4,000
Max PriceCA$16.50
BuyCA$119,67725 Sep 19
Marcel Kessler
EntityIndividual
Role
Chief Executive Officer
President
Shares7,200
Max PriceCA$16.64
BuyCA$5,02524 Sep 19
Marcel Kessler
EntityIndividual
Role
Chief Executive Officer
President
Shares300
Max PriceCA$16.75
BuyCA$21,87911 Sep 19
Lars Olesen
EntityIndividual
Shares1,300
Max PriceCA$16.83
BuyCA$3,12428 Aug 19
Kevin Boston
EntityIndividual
Shares200
Max PriceCA$15.62
BuyCA$8,21123 Aug 19
Kevin Boston
EntityIndividual
Shares500
Max PriceCA$16.50
BuyCA$15,91023 Aug 19
Lars Olesen
EntityIndividual
Shares1,000
Max PriceCA$15.91
BuyCA$8,16916 Aug 19
Kevin Boston
EntityIndividual
Shares500
Max PriceCA$16.34
BuyCA$8,34715 Aug 19
Kevin Boston
EntityIndividual
Shares500
Max PriceCA$16.69
SellCA$3,717,85528 Jun 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares200,000
Max PriceCA$18.75
BuyCA$18,79025 Jun 19
Lars Olesen
EntityIndividual
Shares1,000
Max PriceCA$18.79
SellCA$3,771,94620 Jun 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares200,000
Max PriceCA$18.98
BuyCA$9,52518 Jun 19
Lars Olesen
EntityIndividual
Shares500
Max PriceCA$19.05
BuyCA$9,36317 Jun 19
Kevin Boston
EntityIndividual
Shares500
Max PriceCA$18.73
SellCA$1,872,92013 Jun 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares100,000
Max PriceCA$18.73
BuyCA$9,81909 May 19
Kevin Boston
EntityIndividual
Shares500
Max PriceCA$19.64
BuyCA$10,15807 May 19
Kevin Boston
EntityIndividual
Shares501
Max PriceCA$20.27
SellCA$1,691,83301 Apr 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares86,400
Max PriceCA$19.58
SellCA$1,749,80028 Mar 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares88,600
Max PriceCA$20.14
SellCA$3,085,92827 Mar 19
James Hill
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares150,100
Max PriceCA$20.72
BuyCA$66,33006 Mar 19
Jon Faber
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares3,300
Max PriceCA$20.10
BuyCA$9,97506 Mar 19
Russell Smith
EntityIndividual
Shares500
Max PriceCA$19.95
BuyCA$46,88206 Mar 19
Marcel Kessler
EntityIndividual
Role
Chief Executive Officer
President
Shares2,350
Max PriceCA$19.95

Ownership Breakdown

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


Management Team

  • Ben Thomas

    Director of Support Services - United States Business Unit

    • Compensation: CA$145.00k
  • Marcel Kessler (52yo)

    President

    • Tenure: 8.2yrs
    • Compensation: CA$2.31m
  • Jon Faber

    Chief Financial Officer

    • Tenure: 5.8yrs
    • Compensation: CA$1.19m
  • Natalie Fenez

    General Counsel

    • Tenure: 1yrs
  • Reid Wuntke

    Vice President of New Ventures


    Board Members

    • T. Collins (72yo)

      Independent Director

      • Tenure: 7.4yrs
      • Compensation: CA$139.27k
    • Judi Hess (60yo)

      Independent Director

      • Tenure: 4.9yrs
      • Compensation: CA$123.43k
    • Jim Howe (69yo)

      Lead Director

      • Compensation: CA$121.94k
    • Jim Hill (68yo)

      Chairman of the Board

      • Compensation: CA$26.89k
    • Marcel Kessler (52yo)

      President

      • Tenure: 8.2yrs
      • Compensation: CA$2.31m
    • Laura Schwinn (54yo)

      Independent Non-Executive Director

      • Tenure: 0.4yrs

    Company Information

    Pason Systems Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Pason Systems Inc.
    • Ticker: PSI
    • Exchange: TSX
    • Founded: 1978
    • Industry: Oil and Gas Equipment and Services
    • Sector: Energy
    • Market Cap: CA$1.106b
    • Shares outstanding: 84.58m
    • Website: https://www.pason.com

    Number of Employees


    Location

    • Pason Systems Inc.
    • 6130 Third Street SE
    • Calgary
    • Alberta
    • T2H 1K4
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PSITSX (The Toronto Stock Exchange)YesCommon SharesCACADNov 1996
    3PSDB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1996
    PSYT.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDNov 1996

    Biography

    Pason Systems Inc. provides instrumentation and data management systems for drilling rigs. The company offers Electronic AutoDriller, which maximizes the rate of penetration by monitoring multiple drilling parameters; Electronic Choke Actuator that provides a means of remotely controlling the choke valve; and Electronic Drilling Recorder. It also provides Enhanced Pit Volume Totalizer, a well control system; Gas Analyzer to detect the changes in relative volumes of hydrocarbon gases; Hazardous Gas Alarm System, which detects the presence of combustible gases and provides visible and audible alerts; Pit Volume Totalizer, a control system; Rig Communications that provides remote data communications for drillers; Rig Display, a touch screen computer to access services and applications on and around the rig floor; and SideKick, a rig floor computer that allows for data entry and displays information around the rig. In addition, the company offers abbl Directional Express that allows operations engineers to manage deliverables on multiple wells; DataHub, a Web application that collects, stores, and displays drilling data, reports, and real-time information for remote access; Directional System, an application that enables directional drillers to monitor and manage multiple wells; and Drilling Guidance System that offers real-time guidance. Further, it provides Pason Live, a Web-based data viewer, which provides visualization tools that display real-time drilling data; Tour Sheet Analytics, which delivers insight into the data; WellView Field Solution, a corporate well file that begins at the request to drill and follows through to the well completion; and VERDAZO visual analytics software, as well as training and maintenance services. The company has operations in Canada, the United States, and internationally. The company was founded in 1978 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 Analysis2020/01/21 23:47
    End of Day Share Price2020/01/21 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.