Is it a good company at a reasonable price? I notice that there are various opinions on this stock. The positive points are that shareholders have done well with this stock. Look at the Total Returns over the past 33 years in an item below. Insiders are buying. I think a negative is the lack of their ability to raise dividends. The stock price does seem to be reasonable at this time.
I do not own this stock of Boralex Inc (TSX-BLX, OTC-BRLXF). This stock is on the Money Sense Dividend list (2022, 2023) and the Maple Money Dividend List (2020).
When I was updating my spreadsheet, I noticed that the Dividend Payout Ratios have been very high. As this company has been earning money for the last few years, the DPRs are coming down and probably will end up being a lot more reasonable. They are expected to be in the 50% ranges next year and in the following years.
I noticed that the CEO and CFO has increased their shares in the company over the past year. The Chairman has not, but several officers and directors have. This is a positive sign.
If you had invested in this company in December 2013, for $1,006.26 you would have bought 93 shares at $10.82 per share. In December 2023, after 10 years you would have received $569.25 in dividends. The stock would be worth $3,132.24. Your total return would have been $3,701.49. This would be a total return of 15.57% per year with 12.02% from capital gain and 3.55% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $10.82 | $1,006.26 | 93 | 10 | $569.25 | $3,132.24 | $3,701.49 |
If you had invested in this company in December 1992, for $1,001.90 you would have bought 233 shares at $4.30 per share. In December 2023, after 30 years you would have received $1,341.15 in dividends. The stock would be worth $7,847.44. Your total return would have been $9,188.59. This would be a total return of 8.10% per year with 7.10% from capital gain and 1.00% from dividends. Note that in a lot of these years there were not dividends. Dividends were paid consistently since 2014.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $4.30 | $1,001.90 | 233 | 30 | $1,341.15 | $7,847.44 | $9,188.59 |
The current dividend yield is moderate with dividend growth suspended. The current dividend yield is moderate (2% - 4%) at 2.02%. The 5 year median yield is low (below 2%) at 1.92%. The 10 year median dividend yield is moderate at 2.96%. The historical median dividend yield is 0% because of there were a couple of dividends between 1996 and 2013, but regular dividends did not start until 2014. So, if you are looking for historical median dividend yields since 2014, it is the same as for the 10 year median dividend, that is 2.96%. The last dividend increase was in 2019 and it was for 4.6%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is fine at 87% with 5 year coverage much too high at 246%, but the DPR for AFFO is a better measure. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is good at 38% with 5 year coverage at 45%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 16% with 5 year coverage at 115%. The DPR for 2023 for Free Cash Flow (FCF) is good at 23% with 5 year coverage at 36%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 86.84% | 246.27% |
| AFFO | 37.71% | 44.83% |
| CFPS | 15.63% | 14.97% |
| FCF | 23.14% | 36.14% |
Debt Ratios show that the debt level is high. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.87 and currently at 0.87, but I prefer this ratio to be 0.50 or lower. The Liquidity Ratio for 2023 is too low at 1.08 and 0.99 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.77 and currently at 1.46. The Debt Ratio for 2023 is fine at 1.44 and 1.46 currently, but I prefer this ratio to be 1.50 or above. The Leverage and Debt/Equity Ratios for 2023 are too high at 3.92 and 2.71 and currently at 3.95 and 2.71.
| Type | Ratio '22 | Ratio Curr |
|---|---|---|
| Lg Term R | 0.87 | 0.87 |
| Intang/GW | 0.35 | 0.37 |
| Liquidity | 1.08 | 0.99 |
| Liq. + CF | 1.77 | 1.46 |
| Debt Ratio | 1.44 | 1.46 |
| Leverage | 3.92 | 3.95 |
| D/E Ratio | 2.71 | 2.71 |
The Total Return per year is shown below for years of 5 to 33 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 | 0.90% | 17.92% | 14.87% | 3.05% |
| 2013 | 10 | 2.68% | 15.57% | 12.02% | 3.55% |
| 2008 | 15 | 0.00% | 12.53% | 10.48% | 2.05% |
| 2003 | 20 | 0.00% | 12.69% | 11.06% | 1.62% |
| 1998 | 25 | 0.00% | 9.69% | 8.58% | 1.11% |
| 1993 | 30 | 4.15% | 8.10% | 7.10% | 1.00% |
| 1990 | 33 | 17.81% | 15.38% | 2.43% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 33.87, 55.46 and 86.67. The corresponding 10 year ratios are negative, 2.61 and 5.68. The corresponding historical ratios are 7.71, 11.51 and 15.32. The current ratio is 29.35. It depends on what comparison you make whether the ratio is showing the stock as expensive or cheap.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 14.71, 20.59 and 31.40. The corresponding 10 year ratios are 16.63, 21.45, 27.88. The current ratio P/AFFO Ratio is 19.48 based on AFFO estimate for 2024 of $1.68 and a stock price of $32.73. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $24.95. The 10-year low, median, and high median Price/Graham Price Ratios are 1.13, 1.56 and 1.81. The current P/GP Ratio is 1.31 based on a stock price of $32.73. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.36. The current P/B Ratio is 1.99 based on a stock price of $32.73, Book Value of $1,692M, and Book Value per Share of $16.46. This ratio is 16% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2024 of $16.66. This implies a ratio of 1.96 based on a stock price of $32.76 and Book Value of $1,712M. This ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.40. The current ratio is 8.85 based on Cash Flow per Share estimate for 2024 of $3.70, Cash Flow of $380M and a stock price of $32.76. This ratio is 5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 2.96%. The current dividend yield is 2.02% based on dividends of $0.66 and a stock price of $32.73. The current ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that the dividends are flat. This test works best if dividends are increasing. However, it is not a good sign when dividends are flat.
The 10-year median Price/Sales (Revenue) Ratio is 3.58. The current ratio is 3.85 based on Revenue estimate for 2024 of $874M, Revenue per Share of $8.50 and a stock price of $32.73. The current ratio is 7.5% 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 still reasonable. The P/S Ratio test says that the stock price is reasonable but above the median. The dividend yield test says that the stock price is expensive, but this is not a good test. The P/AFFO Ratio, P/GP Ratio, P/B Ratio tests all say that the stock price is reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $41.36 with a high of $47.00 and low of $36.00. The consensus stock price of $41.36 implies a total return of 28.38% with capital gains of 26.37% and dividend at 2.02% based on a current stock price of $32.73.
There are two analysts’ recommendations on Stock Chase for 2024. One is a Top Pick and the other is Do Not Buy. The Do Not Buy Stock comment is that this company is into clean energy, but he does not think clean energy is a good investment. Chase gives this stock 3 stars out of 5. Amy Legate-Wolfe on Motley Fool thinks this stock current represents a great opportunity. Christopher Liew on Motley Fool says this stock pays a decent dividend, but continues to underperform. The company put out a press release via Newswire about their fourth quarter results for 2023. The company put out a press release via Nation Talk about their second quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock and puts out a positive report on the company. Simply Wall Street has one warning of interest payments are not well covered by earnings. Simply Wall Street has 3 and one half stars out of 5 on this company
Boralex is a power producer whose core business is dedicated to the development and operation of renewable energy power stations in Canada, France, the United States, and the United Kingdom. Boralex owns power generation assets across four technologies: wind, solar, hydroelectric, and thermal. Substantially all of its operating assets are subject to indexed fixed-price energy sales contracts. Its web site is here Boralex Inc.
The last stock I wrote about was about was Capital Power Corp (TSX-CPX, OTC-CPRHF) ... learn more. The next stock I will write about will be High Liner Foods (TSX-HLF, OTC-HLNFF) ... learn more on Monday, September 2, 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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