Encana (NYSE: ECA) shares currently have a dividend yield of 4.50%. Encana Corporation and its subsidiaries engage in the exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the United States. The average volume for Encana has been 4,332,100 shares per day over the past 30 days. Encana has a market cap of $13.1 billion and is part of the energy industry. Shares are down 10.5% year to date as of the close of trading on Friday. TheStreet Ratings rates Encana as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow. Highlights from the ratings report include:
- ECA's very impressive revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues leaped by 171.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 149.3% when compared to the same quarter one year prior, rising from -$1,482.00 million to $730.00 million.
- ENCANA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ENCANA CORP swung to a loss, reporting -$3.79 versus $0.15 in the prior year.
- ECA has underperformed the S&P 500 Index, declining 20.62% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The debt-to-equity ratio of 1.45 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ECA's quick ratio is somewhat strong at 1.41, demonstrating the ability to handle short-term liquidity needs.
- You can view the full Encana Ratings Report.
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