DH Corp

Sound bite for Twitter and StockTwits is: Being bought out. On most tests the current stock price is relatively expensive. This would suggest that the buyout price is a good price for shareholders. I cannot do a dividend yield stock price test because of the recent decrease in dividends. See my spreadsheet on DH Corp.

I own this stock of DH Corp (TSX-DH, OTC-DHIFF). In March 2009, I started to review this stock as I have recently been reading about it and I am considering buying it. This is an income Trust stock and it has been recommended a number of times by the Investment Reporter. Dividend yield was good and they had a history of dividend increases.

The first thing to mention is that DH Corp has agreed to be acquired by Vista Equity Partners at $25.50. Apparently shareholders will get to vote on this in May. I am currently thinking of selling my shares. Waiting until the end will not get me much more money and if the deal does not go through then the share price will drop.

This company as an income trust was a dividend growth company. However, since changing to a corporation they first decreased their dividend and then made one increase of 3.2% in 2012. Dividends have been flat since then until 2017 when dividends were again decreased. Dividends were decreased by 63% in 2017.

Dividend yield is currently low with a current yield of 1.9%. However, the yield was higher, with a 5 year median of 4.7% until the recent dividend decrease. Since the company is going to be bought out there is no much future for any change in dividends.

The 5 year low, median and high median Price/Earnings per Share Ratios are 20.68, 24.66 and 28.65. The corresponding 10 year ratios are 9.80, 11.74 and 13.69. The historical ratios are 10.06, 11.74 and 13.99. It would appear that the recent offer occurs with the expansion of the P/E Ratios. The current P/E Ratio is 28.99. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $19.76. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 1.01 and 1.15. The current P/GP Ratio is 1.28 based on a stock price of $25.22. Here again it would appear that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.64. The current P/B Ratio is 2.18 based on BVPS of $19.95 and a stock price of $25.22. The current P/B Ratio is some 33% above the 10 years median P/B Ratio. The current stock price testing would suggest again that the stock price is relatively expensive.

I get a 10 year median P/S Ratio of 2.08. The current P/S Ratio is 1.58. This ratio is based on Revenue of $1709M, Revenue per Share of $15.99 and a stock price of $25.22. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. Besides 3 other recommendations, all the rest are Hold recommendations. The consensus recommendations would be Hold recommendations. The 12 month consensus stock price is $25.50. This implies a total return of $3.01% with 1.90% from dividends and 1.11% from capital gains based on a current price of $25.22.

See what analysts are saying on Stock Chase. Mostly that is best to sell and move on. From the Canadian Press there is an article in the G&M about the buyout of this stock. According to Charlotte Bryant on Chaffey Breeze a number of analysts have recently raised the stock price target above $25.50 which is Vista Equity Partners' offer.

DH Corp is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here DH Corp.

The last stock I wrote about was about was Sun Life Financial Inc. (TSX-SLF, NYSE-SLF)... learn more . The next stock I will write about will be Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more on Monday, April 3, 2017 around 5 pm.

Also, on my book blog I have put a review of the book The Return of History by Jennifer Welsh learn more...

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.