Oil & Natural Gas Corpn Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (2.4x coverage).
• Dividends after 3 years are expected to be well covered by earnings (2.8x coverage).
• Oil and Natural Gas's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Oil and Natural Gas's dividend is above the markets top 25% of dividend payers in India (3.08%).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

future

Pros

Cons

• Cash flow for Oil and Natural Gas is expected to decrease over the next 2 years.
• Oil and Natural Gas's earnings are expected to grow by 3.4% yearly, however this is not considered high growth (20% yearly).
• Oil and Natural Gas's earnings growth is positive but not above the India market average.
• Oil and Natural Gas's earnings growth is positive but not above the low risk savings rate of 7.2%.
• Oil and Natural Gas's earnings are expected to decrease over the next year.
• Oil and Natural Gas's earnings are expected to increase but not above the low risk growth rate in 3 years time
• Oil and Natural Gas's net income is expected to decrease over the next 2 years.
• Oil and Natural Gas is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Performance (ROE) is not expected to exceed the current IN Oil and Gas industry average.
• A decline in Oil and Natural Gas's performance (ROE) is expected over the next 3 years.
• Oil and Natural Gas's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Oil and Natural Gas's revenue is expected to grow by 4.1% yearly, however this is not considered high growth (20% yearly).
• Oil and Natural Gas's revenue growth is positive but not above the India market average.

health

Pros

• Oil and Natural Gas is profitable, therefore cash runway is not a concern.
• Oil and Natural Gas is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (63.6%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 1x debt.
• Interest payments on debt are well covered by earnings (EBIT is 43.1x coverage).
• Oil and Natural Gas's level of debt (38.9%) compared to net worth is satisfactory (less than 40%).

Cons

• Oil and Natural Gas's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
• Oil and Natural Gas's long term commitments exceed its cash and other short term assets.
• The level of debt compared to net worth has increased over the past 5 years (28.8% vs 38.9% today).
• High level of physical assets or inventory.

management

Pros

• Shashi's remuneration is lower than average for companies of similar size in India.
• Shashi's compensation has been consistent with company performance over the past year, both up more than 20%.
• The tenure for the Oil and Natural Gas management team is about average.

Cons

• The average tenure for the Oil and Natural Gas board of directors is less than 3 years, this suggests a new board.

misc

Pros

Cons

• Oil and Natural Gas has significant price volatility in the past 3 months.

past

Pros

• Oil and Natural Gas's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
• Oil and Natural Gas has improved its use of capital last year versus 3 years ago (Return on Capital Employed).

Cons

• Oil and Natural Gas's 1-year earnings growth is negative, it can't be compared to the 5-year average.
• Oil and Natural Gas used its assets less efficiently than the IN Oil and Gas industry average last year based on Return on Assets.
• Oil and Natural Gas has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Oil and Natural Gas's 1-year earnings growth is negative, it can't be compared to the IN Oil and Gas industry average.

value

Pros

• Oil and Natural Gas's share price is below the future cash flow value, and at a moderate discount (> 20%).
• Oil and Natural Gas is good value based on assets compared to the IN Oil and Gas industry average.
• Oil and Natural Gas is good value based on earnings compared to the IN Oil and Gas industry average.
• Oil and Natural Gas is good value based on earnings compared to the India market.
• NSEI:ONGC is up 10.2% along with the Oil and Gas industry (10.5%) over the past month.
• NSEI:ONGC is up 10.2% outperforming the market in India which returned 8% over the past month.

Cons

• Oil and Natural Gas's share price is below the future cash flow value, but not at a substantial discount (< 40%).
• Oil and Natural Gas is poor value based on expected growth next year.
• ONGC underperformed the Oil and Gas industry which returned -4% over the past year.
• ONGC underperformed the Market in India which returned -14.5% over the past year.