ENERFLEX LTD., $13.66 - Toronto symbol EFX

ENERFLEX LTD., $13.66 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 77.9 million; Market cap: $1.1 billion; Dividend yield: 2.1%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration equipment and power generators.

The company has a strong position in three expanding markets: U.S. and Canadian shale gas production; Australian natural gas from coal beds; and conventional Middle Eastern natural gas, most of which gets converted to liquefied natural gas (LNG) for shipping worldwide.

In the quarter ended March 31, 2013, Enerflex’s revenue fell slightly, to $353.3 million from $355.7 million a year ago. Lower revenue in Canada and the northern U.S. offset increases from producers in the southern U.S., Latin America and overseas. Earnings per share rose 5.3%, to $0.20 from $0.19, due to improved profit margins.

The company holds cash of $151.6 million, or $1.95 a share. Its $110.8 million of long-term debt is just 10.1% of its $1.1-billion market cap.

The stock trades at 13.1 times Enerflex’s forecast 2013 earnings of $1.04 a share. The company raised its quarterly dividend by 16.7% with the January 2013 payment, to $0.07 from $0.06. The shares yield 2.1%.

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