Sound bite for Twitter and StockTwits is: Price reasonable to expensive. This looks like an interesting company and could provide nice diversification in a portfolio. Dividends are high and moderate increases and good debt ratios. I just started to follow this company. See my spreadsheet on Alaris Royalty Corp.
I do not own this stock of Alaris Royalty Corp (TSX-AD, OTC-ALARF). This is a stock that Dividends In Hand Blogger has bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest.
This company was started at the end of 2007. It went public in December 2008. It started to pay dividends in 2009. So dividends have been paid for 7 years. Dividends are high with moderate dividend growth. The growth in dividends is at 10.8% and 7.8% per year over the past 5 and 6 years. The current dividend is 5.47% based on dividends of $1.62 and a stock price of $29.60. Dividends are paid monthly.
When you have the combination of high dividends and moderate dividend growth you tend to get good coverage of your original stock cost and good dividend yields on your original cost. If you had bought this stock 5 years ago and paid a median price, your dividends would have covered 48% of the cost of your stock and be paying a yield of 10.9% on your original cost.
If you bought this stock today at around $28.49 and say conservatively the company’s increases were at 8% per year, then in 5 year time your dividend yield on your original cost would be 8.4%, in 10 years 12.3% and in 15 years 18%.
They are paying out a high portion of their earnings with a Dividend Payout Ratio of 92.6% for earnings. The 5 year median DPR is 91.9%. The Dividend Payout Ratio for CFPS is at 85%. The 5 year median DPR for EPS is at 101%. EPS has been quite volatile. For example EPS in 2010 to 2013 was at $0.73, $1.97, $0.84 and $1.97. The 5 year running growth over the past 4 years is at 6%.
The outstanding shares have increased by 17% and 49% per year over the past 5 and 8 years. The company started out with few shares. This means that I as an investor would be very interested in per shares values to gauge growth. Shares have increased due to Share Issues, Warrants exercised and Stock Options. The 8 year growth using per share values are therefore not good. For example, the Revenue over the past 5 and 8 years is at 36.1% and 27.1% per year. Revenue per Share is at 16.1% and a negative 14.6% over the same time period.
Shareholders have done quite well over the past 5 and 9 years. The total growth is at 16.21 and 18.75% over these periods. The portion of this total return attributed to dividends is at 6.59% and 6.42% per year over these periods. The portion of this total return attributed to capital gains is at 9.62% and 12.34% per year over these periods.
The debt ratios are very good. The Liquidity Ratio for 2015 is 3.73with 5 year median of 3.67%. The Debt Ratio for 2015 is 7.09 with a 5 year median of 9.43%. The Leverage and Debt/Equity Ratios for 2015 are 1.16 and 0.16. The 5 year median values are 1.12 and 0.12
The Return on Equity is lower than I generally like as I prefer it to be at 10% or higher. The ROE for 2015 was 8.5% and the 5 year median value is also 8.5%. The Comprehensive Income and Net Income vary around each other quite a bit. For example in 2015 the Comprehensive Income ROE was 43% above the ROE on the Net Income. However, over the past 5 years the difference nets to just a negative 0.5%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.18, 19.21 and 23.23. The corresponding 8 year values are lower at 12.38, 15.66 and 18.94. The current P/E Ratio is 25.96 based on a stock price of $29.60 and 2016 EPS estimate of $1.88. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $27.66. The 8 year low, median and high median Price/Graham Price Ratios are 0.76, 0.96 and 1.17. The current P/GP Ratio is 1.07 based on a stock price of $29.60. This stock price testing suggests that the stock price is reasonable but above the median.
I get an 8 year median Price/Book Value per Share Ratio of 1.23. The current P/B Ratio is 1.64 a value 33.39% higher. The current P/B Ratio is based on BVPS of 18.09 and a stock price of $29.60. This stock price testing suggests that the stock price is relatively expensive. However, a P/B Ratio of 1.64 is not a high P/B Ratio.
I get a historical median dividend yield of 5.62%. (Note that the term historical for this company is 8 years.) The current dividend yield is 5.47% based on dividends of $1.62 and a stock price of 29.60. The current dividend yield is some 3% higher than the historical dividend yield. This stock price testing suggests that the stock price is reasonable but above the median. However 3% above the median is not much above the median.
When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The vast majority is Buy recommendations and the consensus is a Buy recommendation. The 12 month stock price is $33.85. This implies a total return of 20.00% with 5.47% from dividends and 14.53% from capital gains.
I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.
The last stock I wrote about was about was Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more . The next stock I will write about will be Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more on Wednesday, July 22, 2016 around 5 pm. Tomorrow on my other blog I will write about Money-Weighted Reporting.... learn more on Thursday, July 21, 2016 around 5 pm.
Alaris Royalty Corp. forms partnerships with and invests in private companies where owners want to maintain control of their business. Typically, this financial services provider participates in the form of preferred limited partnership interests, preferred interest in limited liability corporations in North America, or long-term license and royalty arrangements. Its web site is here Alaris Royalty Corp.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits
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