The INVRS Blog

VALUATION MODEL FOR CNQ The Model We'll start by looking at CNQ's value relative to the group and then we'll look at it's dividend yield relative to its five year average.  Group Valuation Metrics We're looking at four valuation metrics  and then ranking them from best to worst.  The ranks are summed and a final rank is calculated. Security Price to Book Rank Price to Sales Rank PE Ratio Rank EV/EBITDA Rank Sum Final Rank CNQ 0.0132 3 1.9171 5 17.86 3 5.92 4 15 2 CVE .009 4 .5659 10 na (negative) 1 23.14 2 17 4 HSE  .0054 9 .6423 9 7.12 8 4.68 6 32 10 ECA .0076 6 1.06 7 5.09 10 3.93 8 31 9 ALA .0089 5 .739 8 na (negative) 1 na (negative) 1 15 2 TOU .0052 10 2.7331 1 10.099 6 6.50 3 20 5 VET .0142 2 2.6826 2 12.5324 4 5.87 5 13 1 PXT .0196 1 2.4163 3 6.8331 9 2.45 10 23 6 VII .0063 8 1.2609 6 7.57 7 3.24 9 30 8 ARX .007      7 2.0627  4    11..87  5 4.50    7  23 6   CNQ doesn't look like good

INCOME ANALYSIS FOR CNQ The Model There are a multitude of ways to look at dividends.  This report is going to combine two elements: the sum of the current yield and the five year average growth rate (total return) and the dividend coverage. The Total Return The graph below shows the sum of the current yield and the five year average growth rate. CNQ is really high, almost 24%.  This is a combination of a 3.95% dividend yield and a 5 year growth rate of 19.95%.  Note, the 3 year growth rate was 13.97%. Dividend Coverage We want to see that the TTM dividend is less than 75% of the company's free cash flow with this metric. CNQ is 37%.  Summary CNQ has an impressive total return and good coverage. Disclaimer The point of this report is to demonstrate what INVRS can do.  This is not a comprehensive analysis and we cannot be held responsible for any investment decisions you make.  We may publish this report after three business days. Thank you for your interest i

Quality of Earnings results for a Group of 11 oil and gas companies trading on the TSX. Impressive results (7/8) for CNQ and HSE.  Next analysis will look at income potential for the group.

If you work with your own investment models you likely use excel to build them, but excel isn’t ideal for many reasons and it costs you in other ways.   First, you need good data and it isn’t just lying around in an easy to import format.   You’re either keying it in yourself or paying money for excel downloads.   When you need data from numerous sources – price information, data from different statements and across multiple years - you must merge it from multiple sheets.   It's a n inefficient process which can lead to data corruption. After all this data is collected and merged, models built and tested, the net result is one statistic for one company.   A stand-alone number without context has limited use.   To be meaningful, you need to compare it to similar companies.       This is just a sample of the challenges.  You need software that overcomes these problems and is designed for investment model creation. Surprise!  This software exists,