I do not own this stock of Accord Financial Corp (TSX-ACD, OTC-ACCFF). Fred Poulin from StockTwits recommended this stock saying it was a small cap that pay dividends. Also, the stock has a solid background and would be a good filler stock.
When I was updating my spreadsheet, I noticed that this stock has not done very well over the past 5 years. Last year (2017) was the first year they have not raised the dividends since 2002. Outstanding share have been growing by 0.21% per year over past 5 years and declining 1.28% per year over the past 10 years. With declining shares (for 10 year period), you need to look at things like Revenue and not Revenue per Share.
Revenue for the past 5 and 10 years has grown at 3.94% and 1.03% per year. Revenue per Share has grown at 3.72% and 2.34% per year. With declining shares, EPS can look better than they really are. EPS has declined by 1.08% over the past 5 years and grown by 0.87% over the past 10 years. Net Income has declined by 0.52% and 0.12% over the past 5 and 10 years.
Dividend yields are moderate (2 and 3%) to good (4% and over). The current dividend yield is 3.60%. The 5, 10 and historical median dividend yields are 3.90%, 4.00% and 2.59%. Dividend growth over the past 25 years has been low and it is been going down over the past 15 years. See chart below.
The Dividend Payout Ratio for 2017 for EPS is 50% with 5 year coverage at 41%. The DPR for CFPS for 2017 is 34% with 5 year coverage at 17%. So they can afford their dividends
The Long Term Debt/Market Cap Ratio is 1.81 which is high, but this debt can be covered by what they have in cash and near cash with a ratio of 0.60. The Liquidity Ratio is 8.45 but this is not very important on financial stocks. The Debt Ratio is 1.47 which is a little low as I like this at 1.50 and above. The 5 year median Debt Ratio is 1.79.
Leverage and Debt/Equity Ratios are a little high at 3.28 and 2.24 respectively. The 5 year median values are better at 2.26 and 1.26 respectively.
The Total Return per year is show below for years of 5 to 25. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
The 10 year grow is low, but a lot of financials had problems coming out of the 2008 bear market and following recession.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 3.04% | 10.03% | 5.62% | 4.41% |
| 10 | 5.05% | 5.01% | 1.41% | 3.60% |
| 15 | 6.50% | 10.56% | 4.08% | 6.48% |
| 20 | 2.98% | 9.18% | 4.06% | 5.11% |
| 25 | 2.38% | 12.48% | 6.74% | 5.74% |
| 30 | 12.69% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.46, 11.20 and 12.34. The 10 year corresponding ratios are 8.77, 10.65 and 11.95. The corresponding historical ratios are 8.56, 10.42 and 11.75. The current P/E Ratio is 10.42 based on a stock price of $10.00 and 12 month earnings to the end of the second quarter of $0.96. This stock price is relatively reasonable and below the median.
I get a Graham Price of $14.46. The 10 year low, median, and high median Price/Graham Price are 0.64, 0.73 and 0.83. The current P/GP Ratio is 0.69 based on a stock price of $10.00. This stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.25. The current P/B Ratio is 1.03 based on Book Value of $80.4M, Book Value per Share of $9.68 and a stock price of $10.00. The current ratio is some 17% below the 10 year median. This stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 2.59%. The current dividend yield is 3.60% based on dividends of $0.36 and a stock price of $10.00. The current dividend yield is some 39% above the historical median. This stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 2.35. The current P/S Ratio is 2.12 based on 12 month revenue to the end of the second quarter of 2018 of $39M, Revenue per Share of $4.78 and a stock price of $10.00. The current ratio is some 9.8% below the 10 year median. This stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations I find that no analysts are following this company.
The company announced via Canada Newswire that they have secured revolving credit of $292M. The company announced via Canada Newswire their fourth quarterly results for 2017. Interview of Accord’s CEO on Small Cap Power starts around 8.36 minute mark. Austin Wood on Simply Wall Street talks about ownership of this company. According to INK, the chairman owns 24%.
Accord Financial Corp provides asset-based financial services to businesses such as asset-based lending, including factoring, working capital financing, credit protection and receivables management, and supply chain financing for importers. Its web site is here Accord Financial Corp.
The last stock I wrote about was about was Just Energy Group Inc. (TSX-JE, NYSE-JE) ... learn more. The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU) ... learn more on Wednesday, September 19, 2018 around 5 pm. Tomorrow on my other blog I will write about Efficient Markets Hypothesis.... learn more on Tuesday, September 18, 2018 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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