U.S. drilling surge spurs their sales

Article Excerpt

ENERFLEX LTD. $17.24 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 88.8 million; Market cap: $1.5 billion; Dividend yield: 2.4%) rents and sells equipment and services for natural gas production. That includes refrigeration gear, power generators and processing plants. The company’s revenue jumped 41.5% in the quarter ended September 30, 2018, to $445.8 million from $315.0 million a year earlier. Stronger gas production in the U.S. more than offset weakness in Canada. Earnings rose 49.7%, to $37.7 million, or $0.43 a share, from $25.2 million, or $0.28. Enerflex’s balance sheet is sound: its debt of $426.3 million is a reasonable 28% of its market cap, and it holds $267.1 million in cash. New orders remain very strong, especially from U.S. and international customers, who have begun to increase their gas production. On September 30, 2018, Enerflex’s order backlog was $1.07 billion—up 59.5% from $670.8 million at the end of 2017. The company’s outlook is strong, based on continued strength in the U.S. natural gas…

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