TSX:SES

Stock Analysis Report

Secure Energy Services

Executive Summary

Secure Energy Services Inc., an energy services company, provides specialized solutions to upstream oil and natural gas companies operating primarily in the Western Canadian Sedimentary Basin and North Dakota.

Rewards

Trading at 51.1% below its fair value

Earnings are forecast to grow 69.63% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 5.53% is not well covered by earnings or forecast to be in the next 3 years



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.7%

SES

2.3%

CA Energy Services

0.3%

CA Market


1 Year Return

-43.8%

SES

-33.4%

CA Energy Services

5.5%

CA Market

Return vs Industry: SES underperformed the Canadian Energy Services industry which returned -32.8% over the past year.

Return vs Market: SES underperformed the Canadian Market which returned 5.8% over the past year.


Shareholder returns

SESIndustryMarket
7 Day1.7%2.3%0.3%
30 Day-1.2%-3.0%0.5%
90 Day15.4%4.1%3.5%
1 Year-41.2%-43.8%-31.2%-33.4%8.8%5.5%
3 Year-51.6%-56.6%-55.0%-58.3%14.8%4.5%
5 Year-64.4%-69.6%-56.7%-61.8%34.1%14.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Secure Energy Services 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: SES (CA$4.88) is trading below our estimate of fair value (CA$9.98)

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


Price To Earnings Ratio

PE vs Industry: SES is poor value based on its PE Ratio (60.6x) compared to the Energy Services industry average (14.8x).

PE vs Market: SES is poor value based on its PE Ratio (60.6x) compared to the Canadian market (15.9x).


Price to Earnings Growth Ratio

PEG Ratio: SES is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: SES is overvalued based on its PB Ratio (1x) compared to the CA Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Secure Energy Services forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

69.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SES's forecast earnings growth (69.6% per year) is above the savings rate (1.4%).

Earnings vs Market: SES's earnings (69.6% per year) are forecast to grow faster than the Canadian market (10.4% per year).

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

Revenue vs Market: SES's revenue (2.1% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: SES's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SES's Return on Equity is forecast to be low in 3 years time (0.3%).


Next Steps

Past Performance

How has Secure Energy Services performed over the past 5 years?

20.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SES has high quality earnings.

Growing Profit Margin: SES became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SES has become profitable over the past 5 years, growing earnings by 20.3% per year.

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

Earnings vs Industry: SES has become profitable in the last year, making it difficult to compare its past year earnings growth to the Energy Services industry (26.1%).


Return on Equity

High ROE: SES's Return on Equity (1.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Secure Energy Services's financial position?


Financial Position Analysis

Short Term Liabilities: SES's short term assets (CA$281.9M) exceed its short term liabilities (CA$173.8M).

Long Term Liabilities: SES's short term assets (CA$281.9M) do not cover its long term liabilities (CA$633.0M).


Debt to Equity History and Analysis

Debt Level: SES's debt to equity ratio (54%) is considered high.

Reducing Debt: SES's debt to equity ratio has increased from 43.4% to 54% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: SES's debt is not covered by short term assets (assets are 0.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SES is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: SES is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Secure Energy Services's current dividend yield, its reliability and sustainability?

5.53%

Current Dividend Yield


Dividend Yield vs Market

company5.5%marketbottom25%1.9%markettop25%5.3%industryaverage5.0%forecastin3Years5.5%

Current dividend yield vs market & industry

Notable Dividend: SES's dividend (5.53%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: SES's dividend (5.53%) is in the top 25% of dividend payers in the Canadian market (5.32%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SES has been paying a dividend for less than 10 years.

Growing Dividend: SES's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (335.3%), SES's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SES's dividends in 3 years are not forecast to be well covered by earnings (337.4% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Rene Amirault (58yo)

12.9yrs

Tenure

CA$2,552,840

Compensation

Mr. Rene E. Amirault, CGA, has been the President and Chief Executive Officer at Secure Energy Services Inc. (formerly Secure Energy Services Ltd.) since March 2007. Mr. Amirault served as the Chief Execut ...


CEO Compensation Analysis

Compensation vs Market: Rene's total compensation ($USD1.93M) is above average for companies of similar size in the Canadian market ($USD963.71K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Rene Amirault
Chairman12.9yrsCA$2.55m2.08% CA$16.0m
Chad Magus
Chief Financial Officer2.4yrsCA$1.20m0.044% CA$337.8k
Corey Higham
Executive Vice President of Corporate Development0.8yrsCA$1.31m0.097% CA$744.9k
Allen Gransch
Chief Operating Officer of Midstream0.8yrsCA$1.40m0.24% CA$1.8m
David Engel
Executive Vice President of Operations0.8yrsCA$1.88m0.11% CA$830.9k
George Wadsworth
Executive Vice President of Drilling & Production Services7.2yrsCA$1.12m0.38% CA$2.9m
Brian K. McGurk
Executive Vice President of Corporate Services0.8yrsCA$1.06m0.078% CA$602.0k
David Mattinson
Executive Vice President of Environmental Solutions6.8yrsCA$1.06m0.25% CA$1.9m
Mike Mikuska
Executive Vice President of Commercial & Transportation2.4yrsno data0.024% CA$180.6k

2.4yrs

Average Tenure

50yo

Average Age

Experienced Management: SES's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Rene Amirault
Chairman12.9yrsCA$2.55m2.08% CA$16.0m
Bradley Munro
Independent Director10.8yrsCA$244.50k0.030% CA$229.3k
Kevin Nugent
Independent Director12.4yrsCA$247.50k0.047% CA$359.9k
Murray Cobbe
Lead Independent Director10.2yrsCA$255.50k0.25% CA$1.9m
David Johnson
Independent Director12.7yrsCA$244.50k0.27% CA$2.1m
Richard Wise
Independent Director1yrsno data0.017% CA$126.8k
Daniel Steinke
Director4.8yrsCA$1.64m0.41% CA$3.1m
Deanna Zumwalt
Independent Director0.8yrsno datano data
Shaun Paterson
Independent Director6.8yrsCA$229.50k0.0029% CA$22.0k
Michele Harradence
Independent Director1.5yrsCA$92.00k0.0091% CA$69.7k

8.5yrs

Average Tenure

58yo

Average Age

Experienced Board: SES's board of directors are considered experienced (8.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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

Secure Energy Services Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Secure Energy Services Inc.
  • Ticker: SES
  • Exchange: TSX
  • Founded:
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: CA$768.311m
  • Shares outstanding: 157.44m
  • Website: https://www.secure-energy.com

Number of Employees


Location

  • Secure Energy Services Inc.
  • Bow Valley Square 2
  • Suite 3600
  • Calgary
  • Alberta
  • T2P 2V7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SESTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 2010
SEPDB (Deutsche Boerse AG)YesCommon SharesDEEURMar 2010
SECY.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMar 2010

Biography

Secure Energy Services Inc., an energy services company, provides specialized solutions to upstream oil and natural gas companies operating primarily in the Western Canadian Sedimentary Basin and North Dakota. The company’s Midstream Infrastructure division provides services, such as clean oil terminalling, rail transloading, pipeline transportation, marketing and custom treating of crude oil, produced and waste water disposal, oilfield waste processing, and purchase/resale of oil services through its full service terminals, full service rail facilities, crude oil pipelines, crude oil terminalling facilities, water disposal facilities, and landfills. Its Environmental Solutions division offers pipeline integrity projects; demolition, decommissioning, reclamation, and remediation of former well sites, facilities, and commercial and industrial properties; environmental construction projects; onsite integrated fluid solutions for water management, recycling, pumping, and storage; naturally occurring radioactive material management; waste container services; and emergency response services. The Company’s Technical Solutions division provides product solutions for drilling, completion, and production operations for oil and gas producers; and design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas. This division also offers equipment and chemical solutions for chemicals and enhanced oil recovery line. Secure Energy Services Inc. 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 Analysis2020/02/18 00:35
End of Day Share Price2020/02/14 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.