Is it a good company at a reasonable price? I have never been keen on stocks with low and negative book values. The dividend yield is so low you really are not getting much. The last annual increase was just over 2%. I would rather wait a bit to see what this stock does in the future before I would be positive about it. The current stock price could be reasonable, but it is close to the recent high.
I do not own this stock of BRP Inc (TSX-DOO, OTC-DOOO). Robin Speziale, author of Market Masters and Capital Compounders had mentioned this stock in Capital Compounders, Table 3 (page 93 in my copy) as a possible next Capital Compounder.
When I was updating my spreadsheet, I noticed a number of reasons for an earnings loss in 2025, compared to 2024. The revenue went down but the percentage of expenses compared to revenue went up. Foreign Exchange loss on long-term debt went up a lot. There was also a bigger loss from discontinued operations in 2025 compared to 2024. Also, this stock has an annual reporting date of January 31 each year and I am looking at the financials for January 31, 2025.
The dividend increases were quite good until this year. The 5 year dividend increase for the last 5 years was 16%. If this continued, what sort of dividends would you get in the future? This chart is an attempt to show this. If dividends continue to increase by 9.87% as they have in the past 5 years, what you would get in dividends in 5, 10 and 15 years is shown in the Dividends Paid (Div Pd) column. The next column shows what your yield on the current stock price of $223.68 would be. The last column shows the percentage of your stock’s price would be covered by dividends in 5, 10 and 15 years.
| Div Pd | Div Yield | Years | At IRR | Div Cov |
|---|---|---|---|---|
| $1.81 | 2.05% | 5 | 16.00% | 6.72% |
| $3.79 | 4.31% | 10 | 16.00% | 18.79% |
| $7.96 | 9.05% | 15 | 16.00% | 44.12% |
However, the dividend increase for this year is a lot lower at 2.38%. If this continues the above chart would be different and look like the following one.
| Div Pd | Div Yield | Years | At IRR | Div Cov |
|---|---|---|---|---|
| $0.97 | 1.10% | 5 | 2.38% | 5.13% |
| $1.09 | 1.24% | 10 | 2.38% | 9.79% |
| $1.22 | 1.39% | 15 | 2.38% | 15.04% |
If you had invested in this company in December 2014, for $1,013.88 you would have bought 51 shares at $19.88 per share. In December 2024, after 10 years you would have received $195.33 in dividends. The stock would be worth $3,733.71. Your total return would have been $3,929.04. This would be a total return of 12.50% per year with 11.70% from capital gain and 0.79% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $19.88 | $1,013.88 | 51 | 10 | $195.33 | $3,733.71 | $3,929.04 |
The current dividend yield is low with dividend growth good, but seems to be slowing down. The current dividend yield is low (below 2%) at 0.98%. Dividends have only been paid for 7 years, so the 5 and 7 year median dividend yields are also low at 0.69%. The dividend growth is good (15% per year or higher) at 16% per year over the past 5 years. The last dividend increase was in 2025 and it was for 2.38%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is non-calculable due to an earnings loss with 5 year coverage good at 9%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 18% with 5 year coverage at 7%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 7% with 5 year coverage at 3%. The DPR for 2024 for Free Cash Flow (FCF) is good at 9% with 5 year coverage at 9%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 9.22% |
| AEPS | 17.95% | 7.40% |
| CFPS | 7.43% | 3.39% |
| FCF | 9.10% | 8.72% |
Some Debt Ratios are good, but debt is too high. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.54 and currently at 0.45. The Liquidity Ratio for 2024 is low at 1.31 and 1.34 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.57 and currently at 1.64. The Debt Ratio for 2024 is good at 1.68 and 1.68 currently. The Leverage and Debt/Equity Ratios for 2024 are far too high at 25.50 and 24.50 and currently at 12.74 and 11.74. This is because book value was negative in the past and is currently very low.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.54 | 0.45 |
| Intang/GW | 0.11 | 0.10 |
| Liquidity | 1.31 | 1.34 |
| Liq. + CF | 1.57 | 1.64 |
| Liq. CF WC | 1.61 | 1.64 |
| Debt Ratio | 1.04 | 1.09 |
| Leverage | 25.50 | 12.74 |
| D/E Ratio | 24.50 | 11.74 |
The Total Return per year is shown below for years of 5 to 11 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 16.00% | 5.21% | 4.35% | 0.82% |
| 2014 | 10 | 14.78% | 12.50% | 11.70% | 0.85% |
| 2013 | 11 | 14.78% | 9.04% | 8.40% | 7.87% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.06, 10.60 and 12.87. The corresponding 10 year ratios are 8.66, 12.17 and 15.13. The corresponding historical ratios are 9.21, 13.49 and 18.16. The current ratio is 16.28 based on a stock price of $87.97 and EPS estimate for 2026 of $5.40. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (Data). The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 7.09, 10.26 and 12.66. The corresponding 10 year ratios are 8.81, 12.07 and 17.02. The corresponding historical ratios are 9.30, 13.32 and 17.18. The current ratio is 19.86 based on a stock price of $87.97 and AEPS estimate for 2026 of $4.43. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $25.96. The 10-year low, median, and high median Price/Graham Price Ratios are 11.86, 29.39 and 39.59. The current ratio is 3.39 based on a stock price of $87.97. 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 negative 8.86. We cannot do any testing here with a negative P/B Value. The current ratio is 13.02 based on a Book Value of $493.6M, Book Value per Share of 6.76 and a stock price of $87.97. A normal value would be around 1.50. The P/B Ratio is very high because the company used to have a negative book value and currently it is positive but really low.
I get a 10-year median Price/Cash Flow per Share Ratio of 7.72. The current ratio is 8.18 based on a Cash Flow per Share estimate for 2026 of $10.75, Cash Flow of $785M and a stock price of $87.97. The current ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 0.69%. The current dividend yield is 0.98% based on dividends of $0.86 and a stock price of $87.97. The current yield is 42% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. Note dividends have only been given for 7 years, so the 7 year and historical median dividend yield is the same.
The 10-year median Price/Sales (Revenue) Ratio is 0.76. The current P/S Ratio is 0.78 based on revenue estimate for 2026 of $8,217M, Revenue per Share of $112.51 and a stock price of $87.97. The current ratio is 2% 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 dividend yield test says it is cheap. The P/S Ratio test does not confirm this and says it is reasonable but above the median. Most of the rest of the testing is saying it is reasonable, but above the median or expensive. This is why I do not think this stock is cheap. I could, of course, be wrong on this.
When I look at analysts’ recommendations, I find Strong Buy (5), Buy (4) and Hold (8). The consensus is a Buy. The 12 month stock price is $100.53 with a high of $114.00 and low of $90.00. The consensus stock price of $100.53 implies a total return of 15.26% with 14.28% from capital gains and 0.98% from dividends based on a current stock price of $87.97.
Analysts on Stock Chase have no entries for 2025. In 2024 analysts have different reactions with some thinking this stock is a buy and other that it is not. Amy Legate-Wolfe on Motley Fool thinks this stock has been given a bad rap and you should buy. Jitendra Parashar on Motley Fool thinks this stock will be good for the long-term. The company put out a press release via newswire about their fourth quarter results ending January 2025. The company put out a press release via newswire about their second quarter of 2026 results ending in July 2025.
Simply Wall Street via Yahoo Financial reviews this stock and talks about the recent surge in the stock price and their recent equity offering. Simply Wall Street has 3 warnings out on this stock of interest payments are not well covered by earnings; large one-off items impacting financial results; and profit margins (2.6%) are lower than last year (5.4%).
BRP designs, develops, manufactures, distributes, and markets snowmobiles, all-terrain vehicles, and personal watercraft under the Ski-Doo, Sea-Doo, Can-Am, and Lynx brand names. It also builds engines under the Rotax brand (after shuttering the Evinrude outboard engine business in 2020) and offers clothing, parts, and accessories that cater to its core consumers. Its web site is here BRP Inc.
The last stock I wrote about was about was K-Bro Linen Inc (TSX-KBL, OTC-KBRLF) ... learn more. The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more on Friday, October 3, 2025 around 5 pm. Tomorrow on my other blog I will write about Something to Buy October 2025.... learn more on Thursday, October 2, 2025 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Also, on my book blog I have put a review of the book Dominion by Tom Holland learn more...
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