Alaris Royalty Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Dividends are good as is the debt ratios. Coverage of dividends is getting thin so no wonder they did not increase them in 2017. I am thinking buying this with money in my TFSA. 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 only went public in 2008 therefore I have only 9 years of data on it. Dividends were started in 2009, so there is only 7 years of data on dividends.

So far dividends have been good (above 4%) and dividend increases low (1% to 7%) to moderate (8% to 15%). The current dividend is 7.28% with a historical median of 6.12% and a 5 year median of 5.30%. The dividend growth over the past 5 and 7 years is at 9.3% and 7.3% per year. However, dividend increases 2015 have been below 9% and the last dividend increase that occurred in 2016 was for 3.8%. So far this year here has been no dividend increase. Dividends are paid monthly.

The Dividend Payout Ratio for 2016 is a bit high at 89.5%. The 5 year median is too high at 102%. Analysts do not expect any change in dividends this year or next, but they do expect that there might be a peak in the DPR for 2017 and then for it to drop. The DPR for CFPS is better at 67.5% with a 5 year median at79%. This ratio is also expected to be higher in 2017.

Shares have increased by 13.3% and 42.5% per year over the past 5 and 10 years. There is nothing wrong with increasing shares, but it does mean that you have to be careful on where you look for growth. In this case you want to look at per share values. It can make a big difference. For example, Revenue growth over the past 5 and 10 years is 35.9% and 27.3% per year. However, Revenue per Share Growth, which is the real growth in revenue, comes in at 20% and a negative 10.7% per year over the past 5 and 9 years.

This stock has very good debt ratios. They are very high in 2016. In 2016 the Liquidity Ratio was 6.92 with a 5 year median of 3.73. The Debt Ratio in 2016 was 5.94 with a 5 year median of 7.09. Leverage and Debt/Equity Ratios are in 2016 1.20 and 0.20 with 5 year median of 1.16 and 0.16.

Return on Equity is a bit low. The ROE for 2016 was 10.2% but the 5 year median is 8.5%. The ROE on Comprehensive Income is unfortunately lower at 4.9% in 2016 with a 5 year median of 6.4%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.18, 19.21 and 23.23. The 9 year corresponding ratios are 11.71, 13.84 and 17.17. The current P/E Ratio is 14.73 based on a stock price of $22.24 and 2017 EPS estimate of $1.51. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $24.66. The 9 year low, median and high median Price/Graham Price Ratios are 0.69, 0.90 and 1.15. The current P/GP Ratio is 0.90 based on a stock price of $22.24. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.29. The current P/B Ratio is 1.24 based on a stock price of $22.24 and BV of $650.2M and BVPS of $17.89. The current P/B Ratio is some 4% lower than the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.

The historical median dividend yield is 6.12%. The current dividend is 7.28% based on dividends of $1.62 and a stock price of $22.24. The current dividend is some 19% above the historical yield. If it was 20% above the stock would be cheap. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (or Revenue) Ratio is 10.81. The current P/S Ratio is 8.62 a value some 20% lower. The current P/S Ratio is based on a stock price of $22.24, 2017 revenue 2017 estimate of $94 and 2017 revenue per share estimate of $2.58. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, they are Strong Buy, Buy and Hold. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price is $24.06. This implies a total return of 15.475 with 8.18% from capital gains and 7.28% from dividends.

Kay Ng of Motley Fool likes this stock. Chris MacDonald on Bay Street says insiders are bullish on this company. There are more insiders buying than selling with Net Insider Buying at 0.02% over the past year. Sally Masters on Stock News Time talks about some buying and selling by insiders. See what analysts are saying at Stock Chase. They like to stock but are cautious.

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.

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 Monday, July 24, 2017 around 5 pm.

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.

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