- After Husky shares had fallen from a high of around $52 in 2008 and the company's cut their dividend, they haven't bounced back as much as I expected given the rebound in oil prices. I now don't see a lot of downside for the shares as they price of oil feels firm now that the economy is out of the hole it was in.
- The stock has also underperformed many other oil and gas stocks and the valuation seems reasonable at just $4 above it's multi-year low
- I think Husky will be quick to raise their dividend back up once their earnings catch up to the price of oil. Husky is now paying $1.20/share in dividends, while their EPS in strong-oil years past has been in the $4-$5.50 range. I think we have some high-oil price years ahead of us...
- The current yield of 4% offers some in pocket return with little risk of downside to the share price as the great recession moves further into history
Husky now makes up 7.4% of our non-registered portfolio.
3 comments:
I see that you own 24 different stocks. Don't you feel it's hard to follow all those stocks? I have 11 in portfolio and I don't feel like it would be a good idea to add more...
Btw, I also own Husky Energy, just like you said, I think oil will eventually bounce in the next coming years.
Thank you and happy new year!
I enjoy reading your blog. I noticed that HSE is now slightly lower than your purchase price. I'm just wondering - does HSE have better value/potential than another Oil/Gas company? I don't know a great deal about the sector but am interested in having some Oil/Gas representation in a long-term portfolio. I was also looking at companies such as TransCanada.
Thanks
Anon, Thanks.
After looking at a few other firms I do believe that Husky presents pretty good value here. I would not compare it to TRP as TRP is more of a utility company versus and oil and gas firm. Husky will be more volatile than TRP. TRP is a good company and is in a very similar space to IPL.UN, which I own. Husky sports a nice yield for an O&G firm and they have a solid history of rewarding investors. They also hold some very stable assets and are considered one of the more conservative plays in the sector.
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