07-22-2014, 09:32 PM
Added a small opening position in Ensco plc (ESV) in my wife's portfolio yesterday. A P/E of 9 vs. 10 year average of around 11, their investment in new deepwater rigs, debt/equity of about 35% and a payout ratio in the low 40's after a couple huge increases over the last couple years augurs well. They've not been big dividend growers in the past but I think management is changing their attitude. Their fleet is fairly new. They are willing to invest in the business on spec and seem to have a plan going forward focussing on deeper water operations. At 5.6% yield and the P/E, I'm looking at it more as a value play with a dividend kicker. If they keep bumping up the dividend at a reasonable rate, it may be a longer term holding.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan