Is it a good company at a reasonable price? It is a small tech company so you should not invest money into it that you cannot afford to lose. I still like this company. I am holding on to the share that I have but will not buy more at the moment. The stock price is testing as being on the expensive side, but analysts still consider it a buy.
I own this stock of TECSYS Inc (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. This is a small cap dividend paying stock that I like.
When I was updating my spreadsheet, I noticed I have done very well with this stock. I have had it for 13.5 years and I have made a total return of 26.81% with 24.45% from capital gains and 2.36% from dividends. Because dividends have been increasing, I am now get a yield of 16.6% on the stock I bought in 2011.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the first quarter in 2024 and expected growth over the next year. This shows growth over the past 5 years is higher than over the past 10 years for most items. It also shows better growth is expected over the next year for EPS and Net Income. Cash Flow growth is weak.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 124.00% | 17.50% | 1.70% | <-12 mths |
| 5 | EPS Growth | 316.67% | 33.03% | 7.69% | <-12 mths |
| 5 | Net Income Growth | 349.53% | 35.07% | 522.77% | <-12 mths |
| 5 | Cash Flow Growth | 18.41% | 3.44% | ||
| 5 | Dividend Growth | 47.62% | 8.10% | 3.23% | <-12 mths |
| 5 | Stock Price Growth | 163.54% | 21.39% | -2.92% | <-12 mths |
| 10 | Revenue Growth | 267.80% | 13.91% | 8.50% | <-this year |
| 10 | EPS Growth | -18.75% | -2.05% | 292.31% | <-this year |
| 10 | Net Income Growth | 3.01% | 0.30% | 309.33% | <-this year |
| 10 | Cash Flow Growth | -36.95% | -4.51% | 0.00% | <-this year |
| 10 | Dividend Growth | 313.33% | 15.25% | 3.23% | <-this year |
| 10 | Stock Price Growth | 535.08% | 20.30% | -2.92% | <-this year |
If you had invested in this company in December 2013, for $1,000.05 you would have bought 117 shares at $5.65 per share. In December 2023, after 10 years you would have received $361.97 in dividends. The stock would be worth $5,807.37. Your total return would have been $6,169.34. This would be a total return of 20.78% per year with 19.23% from capital gain and 1.54% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.65 | $1,000.05 | 177 | 10 | $361.97 | $5,807.37 | $6,169.34 |
The current dividend yield is low with dividend growth moderate. The dividends are low (below 2%) at just 0.82%. The 5, 10 and historical median dividend yields are also low at 0.96%, 1.18% and 1.32%. The dividend growth is moderate (8% to 14% ranges) at 8.1% per year over the past 5 years. The last dividend increase was in 2024 and it was for 6.7%.
The Dividend Payout Ratios (DPR) are higher than they should be. The DPR for 2023 for Earnings per Share (EPS) is far too high at 238% with 5 year coverage at 107%. The DPR for 2023 for Cash Flow per Share (CFPS) is also too high at 45% with 5 year coverage at 45%. I prefer this ratio be 40% or less. The DPR for 2023 for Free Cash Flow (FCF) is good at 38% with 5 year coverage at 40%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 238.46% | 107.26% |
| CFPS | 45.21% | 45.21% |
| FCF | 37.78% | 39.96% |
Debt Ratios are fine, but Liquidity could be improved. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.00. There is no long term debt. The Liquidity Ratio for 2024 is fine at 1.38. If you added in Cash Flow after dividends, the ratios are fine at 1.39. However, I do prefer this ratio to be at 1.50 or better. The Debt Ratio for 2024 is good at 2.15. The Leverage and Debt/Equity Ratios for 2024 are good at 1.87 and 0.87.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.00 | 0.00 |
| Intang/GW | 0.04 | 0.04 |
| Liquidity | 1.38 | 1.38 |
| Liq. + CF | 1.39 | 1.39 |
| Debt Ratio | 2.15 | 2.15 |
| Leverage | 1.87 | 1.87 |
| D/E Ratio | 0.87 | 0.87 |
The Total Return per year is shown below for years of 5 to 25 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 8.10% | 10.81% | 9.59% | 1.24% |
| 2013 | 10 | 15.25% | 24.38% | 22.45% | 1.38% |
| 2008 | 15 | 14.63% | 22.27% | 20.34% | 1.96% |
| 2003 | 20 | 13.65% | 17.71% | 16.55% | 0.96% |
| 1998 | 25 | 9.79% | 9.21% | 0.43% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 98.10, 99.58 and 133.78. The corresponding 10 year ratios are 45.85, 76.08 and 82.36. The corresponding historical ratios are 14.32, 18.62 and 23.09. The current P/E Ratio is 76.25 based on a stock price of $38.89 and EPS estimate for 2025 of $0.51. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $7.27. The 10-year low, median, and high median Price/Graham Price Ratios are 3.04, 4.17 and 4.79. The current ratio is 5.35 based on a stock price of $38.89. This ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 4.59. The current P/B Ratio is 8.44 based on a Book Value of $68.37M, Book Value per Share of $4.61 and a stock price of $38.89. The current ratio is 84% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 48.84. The current ratio is 118.87 based on Cash Flow for the last 12 months of $4.86M, Cash Flow per Share of $0.33 and a stock price of $38.89. The current ratio is 143% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 1.32%. The current dividend yield is 0.82% based on a stock price of $38.89 and dividends of $0.32. The current ratio is 38% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.18%. The current dividend yield is 0.82% based on a stock price of $38.89 and dividends of $0.32. The current ratio is 30% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 2.61. The current P/S Ratio is 3.11 based on Revenue estimate for 2025 of $186M, Revenue per Share of $12.52 and a stock price of 38.89. The current ratio is 38.9% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably on the expensive side. The dividend yield testing is saying that the stock price is relatively expensive. The P/S Ratio testing is saying the stock price is relative reasonable, but above the median. It is close to being expensive. Most of the testing is saying that the stock price is expensive, except for the P/E Ratio and P/S Ratio tests that says it is reasonable, but above the median.
When I look at analysts’ recommendations, I find Strong Buy (1), and Buy (4). The consensus would be a Strong Buy. The 12 months stock price consensus is $45.80, with a high of $50.00 and low of $41.00. The consensus price of $45.80 implies a total return of 18.59% with 17.77% from capital gains and 0.82% from dividends based on a stock price of $38.89.
There are two entries on Stock Chase for 2024 and they are both buys. Stock Chase gives this stock 4 stars out of 5. Christopher Liew on Motley Fool is an outperforming tech stock you should buy. Chris MacDonald on Motley Fool reviews this stock in 2023 and said it was for long-term investors. The company put out a Press Release on their fourth quarter of 2024 results.
Simply Wall Street via Yahoo Finance reviews this stock and it is worried about the dividends. Dividend Payout Ratios are high. They have one warning on this stock of large one-off items impacting financial results. Simply Wall Street gives this stock 3 and one half stars out of 5.
Tecsys Inc is engaged in the development and sale of enterprise supply chain management software for distribution, warehousing, transportation logistics, point-of-use, and order management. It also provides related consulting, education, and support services. The company serves healthcare systems, services parts, third-party logistics, retail, and general wholesale distribution industries. Geographically, it derives a majority of its revenue from the United States and also has a presence in Canada, Europe, and other regions. Its web site is here TECSYS Inc .
The last stock I wrote about was about was Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more. The next stock I will write about will be Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more on Wednesday, July 24, 2024 around 5 pm. Tomorrow on my other blog I will write about Robin Speziale.... learn more on Tuesday, July 23, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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