Is it a good company at a reasonable price? I rather like this small cap company. I think that the analysts that suggest to wait for a further pull back on price are probably right, but you can never really know. The stock price is testing from reasonable, but above the median to expensive.
I do not own this stock of Element Fleet Management Corp (TSX-EFN, OTC-ELEEF). I was looking for stocks to follow and I found this stock in 100 best Dividend Stocks Money Sense for 2018. It was also on Raymond James' top 19 Canadian stocks for 2019 list.
When I was updating my spreadsheet, I noticed that this company has of January 1, 2024 changed their reporting currency from CDN$ to US$.
If you had invested in this company in December 2013, for $1,008.00 you would have bought 72 shares at $14.00 per share. In December 2023, after 10 years you would have received $489.22 in dividends. The stock would be worth $1,552.32. Your total return would have been $2,041.54. This would be a total return of 8.14% per year with 4.41% from capital gain and 3.73% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.00 | $1,008.00 | 72 | 11 | $489.22 | $1,552.32 | $2,041.54 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.83%. The 5 and 7 year median dividend yields are also low at 1.94% and 1.98%. The dividend growth is moderate (8% to 14% ranges) at 9.9% per year over the past 5 years. This stock has only been on the TSX for 10 years and dividends have been paid for the past 7 years.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 43% with 5 year coverage at 41%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 37% with 5 year coverage at 28%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 31% with 5 year coverage at 8%. The DPR for 2023 for Free Cash Flow (FCF) is non-calculable for 2023 with 5 year coverage good at 6%. No site agrees on FCF and they are great differences.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 43.24% | 40.52% |
| AEPS | 37.21% | 28.20% |
| CFPS | 30.50% | 8.38% |
| FCF | -30.95% | 6.02% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is too high at 1.43 and currently at 1.08. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2023 which is also too high at 1.17 and currently at 1.04 because this is a more important one for a Financial. The Liquidity Ratio for 2023 is low at 0.46 and 0.45 currently, but this is not important for financials. The Debt Ratio for 2023 is low at 1.31 and 1.28 currently, but this is fine for a financial. The Leverage and Debt/Equity Ratios for 2023 are good at 4.22 and 3.22 and currently at 4.56 and 3.56. These are also fine for financials.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.43 | 1.08 |
| Lg Term R+A | 1.17 | 1.04 |
| Intang/GW | 0.25 | 0.20 |
| Liquidity | 0.46 | 0.45 |
| Liq. + CF | 0.00 | 0.40 |
| Debt Ratio | 1.31 | 1.28 |
| Leverage | 4.22 | 4.56 |
| D/E Ratio | 3.22 | 3.56 |
The Total Return per year is shown below for years of 5 to 12 to the end of 2023 in CDN$. 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 | 9.86% | 27.98% | 25.56% | 2.42% |
| 2013 | 10 | 25.12% | 8.14% | 4.41% | 3.73% |
| 2011 | 12 | 18.71% | 13.34% | 5.37% |
The Total Return per year is shown below for years of 5 to 12 to the end of 2023 in US$. 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 | 10.54% | 28.68% | 26.15% | 2.53% |
| 2013 | 10 | 25.39% | 8.04% | 4.32% | 3.72% |
| 2011 | 12 | 15.33% | 10.77% | 4.56% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 15.40, 17.88 and 20.79. The corresponding 10 year ratios are 15.56, 18.38 and 22.72. The corresponding historical ratios are 13.13, 17.68 and 20.03. The current P/E Ratio is 20.94 based on stock price of $28.39 and EPS estimate for 2024 of $1.36. The current 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 10.28, 14.27 and 17.18. The corresponding 10 year ratios are 10.16, 13.90 and 17.22. The current P/AEPS Ratio is 17.86 based on a stock price of $28.39 and AEPS estimate for 2024 of $1.59. This ratio is above the high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $17.06. The 10-year low, median, and high median Price/Graham Price Ratios are 0.65, 0.83 and 1.07. The current ratio is 1.49 based on a stock price of $28.39. 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 1.12. The current ratio is 2.80 based on a Book Value of $3,948.4M, Book Value per Share of $10.15 and a stock price of $28.39. The current ratio is 149% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2024 of $9.86. This implies a ratio of 2.88 based on a stock price of $28.39 and a Book Value of $3,835.3M. This ratio is 156% above the current ratio of 1.12. 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 3.13. The current ratio is negative, so I cannot do any testing.
I get an historical median dividend yield of 1.98%. The current dividend yield is 1.83% based on Dividends of $0.52 and a stock price of $28.39. The current dividend yield is 7.5% below the historical median dividend yield. 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 1.98%. The current dividend yield is 1.83% based on Dividends of $0.52 and a stock price of $28.39. The current dividend yield is 7.5% below the 10 year 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 5.06. The current P/S Ratio is 7.19 based on Revenue estimate for 2024 of $1,536M, Revenue per Share of $3.95 and a stock price of $28.39. The current ratio is 42% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price might be reasonable, but at the high end and maybe expensive. The stock has pulled back from its high of $30.18 December 9, but perhaps it needs to pull back a bit more for it to be a buy. Other tests say the stock price is reasonable and above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (3), Hold (1) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $32.44 with a high of $39.00 and low of $26.50. The consensus price of $32.44 implies a total return of 16.10% with 14.27% from capital gains and 1.83% from dividends.
Analysts on Stock Chase like this company and there are lots of entries for this stock. Most say Buy, but a couple think that the price is too high and it is best to wait for a pullback in price. Stock Chase gives this stock 5 stars out of 5. Jitendra Parashar on Motley Fool in August said the price surged after a good second quarter. Amy Legate-Wolfe on Motley Fool says this is a growth stock that is climbing higher. The company put out a Press Release about their fourth quarter of 2023. The company put out a Press Release on their third quarter results.
Simply Wall Street via Yahoo Finance talk about who owns this company. Simply Wall Street via Yahoo Finance talk about ROE and debt. Simply Wall Street gives this stock 2 and one half stars out of 5. Simply Wall Street gives 3 warns on this stock of debt is not well covered by operating cash flow; shareholders have been diluted in the past year; and dividend of 1.8% is not well covered by free cash flows.
Element Fleet Management Corp is a fleet management company, providing services and financings for commercial vehicle and equipment fleets. The company operates in the U.S., Canada, Mexico, Australia, and New Zealand. Its web site is here Element Fleet Management Corp.
The last stock I wrote about was about was Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more. The next stock I will write about will be Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF) ... learn more on Wednesday, December 18, 2024 around 5 pm. Tomorrow on my other blog I will write about Knowable Magazine.... learn more on Tuesday, December 17, 2024 around 5 pm.
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