Is it a good company at a reasonable price? The stock price is cheap. They have begun to raise their dividends again, but dividends are still 17% below their height in 2019. During the past 34 years they have 22 years of dividend increases and 2 years of dividend declines. Starting to increase the dividend again is a good sign. This would be a risky investment.
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. It has had some problems recently, but a lot of companies are with this long drawn out recover. As with all small cap stocks there is low trading volume.
When I was updating my spreadsheet, I noticed that the Revenue was higher in the June 2022 than in June 2021 Revenue went from $28.9 to $32.7. However, EPS went from $0.66 to $0.38. this is because Cost of Sales Ratio went from 0.74 to 0.77.
If you had invested in this company in December 2011, $1,003.02 you would have bought 146 shares at $6.87 per share. In December 2021, after 10 years you would have received $465.74 in dividends. The stock would be worth $1,226.40. Your total return would have been $1,692.14.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $6.87 | $1,003.02 | 146 | 10 | $465.74 | $1,226.40 | $1,692.14 |
The dividend yields are moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 3.58%. The 5, 10 and historical dividend yields are also moderate at 3.85%, 3.85% and 2.63%. Dividends were flat and then cut in 2020 by 44%. The last dividend raise was in 2022 and dividends were raised 50%. The dividends are still 17% below what they were before the cut in 2020. I have 34 years of data and dividends were raised 22 times and cut 2 times.
The Dividend Payout Ratios (DPR) are currently good. The DPR for EPS for 2021 is 14% with 5 year coverage at 37%. The DPR for Adjusted Earnings per Share (AEPS) for 2021 is 13% with 5 year coverage at 49%. The DPR for Cash Flow per Share (CFPS) is 11% with 5 year coverage at 26%. The Free Cash Flow (FCF) for 2021 is negative, so the DPR for 2021 cannot be calculated. The 5 year coverage is 9%.
Debt Ratios are fine. Because this is a Financial Services company, I am looking at the Debt/Assets Coverage Ratio. For 2021 this is 0.75 and that is fine. Generally, for Financial Services, you do not calculate the Liquidity Ratio, but I get a very high one of 16.49. The Debt Ratio is 1.25 and this is fine for a Financial Services company. The Leverage and Debt/Equity Ratio for 2021 are 5.20 and 4.16. This is higher than usual, but Financial Services companies often have high ratios.
The Total Return per year is shown below for years of 5 to 29 to the end of 2021. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2016 | 5 | -11.09% | 2.14% | -1.35% | 3.49% |
| 2011 | 10 | -3.97% | 6.36% | 2.03% | 4.33% |
| 2006 | 15 | 0.00% | 4.23% | 0.54% | 3.69% |
| 2001 | 20 | 0.00% | 8.50% | 2.53% | 5.97% |
| 1996 | 25 | 0.00% | 9.77% | 3.87% | 5.90% |
| 1992 | 29 | 6.53% | 11.79% | 5.46% | 6.33% |
I was looking at the total return for the last 5 and 10 years to different years. So, in this chart, the total return of the end of December 2021 for the previous 5 years (i.e., from 2016) was 2.14% and the total return to the end of December 2021 for the previous 10 years (i.e., From 2011) was 6.36%. Returns have varied a lot depending on the starting date.
| To Date | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 |
|---|---|---|---|---|---|
| 5 Yr. Total Ret | 10.03% | 7.18% | 5.21% | -2.92% | 2.14% |
| 10 Yr. Total Ret | 5.01% | 9.11% | 11.53% | 3.47% | 6.36% |
| To Date | 12/31/2012 | 12/31/2013 | 12/31/2014 | 1/1/2016 | 12/31/2016 |
| 5 Yr. Total Ret | 1.02% | 10.71% | 16.94% | 8.95% | 9.89% |
| 10 Yr. Total Ret | 10.74% | 7.06% | 3.54% | 6.54% | 5.02% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.05, 12.34 and 13.19. The corresponding 10 year ratios are 9.01, 10.63 and 11.95. The corresponding historical ratios are 8.56, 10.42 and 11.75. The current ratio is 7.56 based on a stock price of $8.39 and EPS for the last 12 months of $1.11. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median P/AEPS Ratios are 10.00, 10.65 and 11.31. The corresponding 10 year ratios are 8.34, 9.59 and 10.86. The current ratio is 6.77 based on AEPS for the last 12 months of $1.24 and a stock price of $8.39. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $17.15. The 10-year low, median, and high median Price/Graham Price Ratios are 0.64, 0.73 and 0.77. The current P/GP Ratio is 0.49 based on a stock price of $8.39. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 1.02. The current P/B Ratio is 0.71 based on a Book Value of $100.8M, Book Value per Share of $11.78 and a stock price of $8.39. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 0.89. The current P/CF Ratio is 2.01 based on Cash Flow for the last 12 months of $35.7M, Cash Flow per Share of $4.17 and a stock price of $8.39. The current ratio is 127% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, a problem with this testing is that the Cash Flow was often negative.
I have Cash Flow excluding Working Capital. I get a 10-year median Price/Cash Flow per Share Ratio of 6.26. The current P/CF Ratio is 5.10 based on Cash Flow excluding WC for the last 12 months of $14.1M, Cash Flow per Share of $1.64 and a stock price of $8.39. The current ratio is 18.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 2.63%. The current dividend yield is 3.58% based on dividends of $0.30 and a stock price of $8.39. The current dividend yield is 36% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 median dividend yield of 3.85%. The current dividend yield is 3.58% based on dividends of $0.30 and a stock price of $8.39. The current dividend yield is 7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 2.27. The current P/S Ratio is 1.07 based on Revenue for the last 12 months of $37.3M, Revenue per Share of $7.86 and a stock price of $8.39. The current ratio is 53% below the 10 year median ratio.
Results of stock price testing is that the stock price is probably cheap. The P/S Ratio test shows this. The problem with the dividend yield tests is that the dividend has been declining by 11% per year over the past 5 years and 4% per year over the past 10 years. Dividends were cut in 2020. Most of the other test, except for the Cash Flow tests are showing the stock price as cheap.
When I look at analysts’ recommendations, I find one rating of a Buy (1). The consensus would be a Buy. The 12 month consensus stock price is $11.47 ($8.80 US$). This implies a total return of 40.30% with 36.72% from capital gains and 3.58% from dividends based on a current stock price of $8.39.
Analysts on Stock Chase have lost interest in this stock. The last comments were dated 2014. The company put out a Press Release on their fourth quarter of 2021 results.. The company put out aPress Release on their second quarter of 2022 results.
Simply Wall Street Yahoo Finance says that sentiment around the company has been positive lately. Simply Wall Street has a report on this stock on Yahoo Finance about their dividend. Simply Wall Street has 3 warnings on this stock of debt is not well covered by operating cash flow, dividend of 3.57% is not well covered by earnings and does not have a meaningful market cap (CA$72M).
Accord Financial Corp is a provider of asset-based financial services to businesses. Its asset-based financial services include asset-based lending, including factoring, lease financing, working capital financing, credit protection and receivables management, and supply chain financing for importers. The company's geographical segments include Canada and the United States. 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 14, 2022 around 5 pm. Tomorrow on my other blog I will write about Sam Ro Substack .... learn more on Tuesday, September 13, 2022 around 5 pm.
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