Is it a good company at a reasonable price? This is a cyclical stock. It has done well in the last 5 and 10 years for shareholders, but the stock was only up by 4% in 2024 and 4.5% this year, so it is slowing down. Analysts are all over the map on their recommendations and cover all categories. It is a very cyclical stock, but it is off its recent high. I tend not to like resource stocks because of their cyclical nature. The testing is basically showing that the stock price is relatively expensive, but none of the testing is normal.
I do not own this stock of Teck Resources Ltd (TSX-TECK.B, NYSE-TECK). In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at.
When I was updating my spreadsheet, I noticed this stock has not raised the dividends lately, but in 2024 they gave a special dividend equal to their annual dividend.
If you had invested in this company in December 2014, for $1,000.44 you would have bought 63 shares at $15.88 per share. In December 2024, after 10 years you would have received $327.60 in dividends. The stock would be worth $3,671.64. Your total return would have been $3,999.24. This would be a total return of 15.61% per year with 13.89% from capital gain and 1.73% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $15.88 | $1,000.44 | 63 | 10 | $327.60 | $3,671.64 | $3,999.24 |
The current dividend yield is low with dividend growth good, but increases are seldom done. The current dividend is low (below 2%) at 0.82%. The 5, 10 and historical dividend yields are also low at 0.90%, 0.82% and 1.17%. The dividend growth is currently good (above 15% per year) at 20.11% per year over the past year. However, this is due to one increase of 150% in 2022. That was the last dividend increase.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is fine at 64% with 5 year coverage at 22%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 16% with 5 year coverage at 11%. This is the important DRP test. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 5% with 5 year coverage at 7%. The DPR for 2024 for Free Cash Flow (FCF) is negative. Note that for 2024 the FCF varies from $155M to a negative 2,790M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 64.10% | 22.30% |
| AEPS | 15.72% | 10.74% |
| CFPS | 5.17% | 6.92% |
| FCF | -18.42% | -42.11% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.14 and currently at 0.13. The Liquidity Ratio for 2024 is good at 2.88 and 1.48 currently. If you added in Cash Flow after dividends, the ratios are good at 3.46 and currently at 1.84. The Debt Ratio for 2024 is good at 2.36 and 2.44 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.80 and 0.76 and currently at 1.76 and 0.72.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.14 | 0.13 |
| Intang/GW | 0.02 | 0.04 |
| Liquidity | 2.88 | 1.48 |
| Liq. + CF | 3.46 | 1.84 |
| Debt Ratio | 2.36 | 2.44 |
| Leverage | 1.80 | 1.76 |
| D/E Ratio | 0.76 | 0.72 |
The Total Return per year is shown below for years of 5 to 31 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 | 20.11% | 29.49% | 27.39% | 2.10% |
| 2014 | 10 | -5.71% | 15.61% | 13.89% | 1.73% |
| 2009 | 15 | 0.00% | 4.37% | 3.11% | 1.26% |
| 2004 | 20 | 6.20% | 8.02% | 5.92% | 2.11% |
| 1999 | 25 | 6.65% | 11.73% | 9.01% | 2.72% |
| 1994 | 30 | 5.51% | 6.80% | 5.34% | 1.46% |
| 1993 | 31 | 5.33% | 6.84% | 5.39% | 1.45% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.43, 7.34 and 9.26. The corresponding 10 year ratios are 4.43, 6.11 and 7.63. The corresponding historical ratios are 6.45, 11.02 and 14.12. The current P/E Ratio is 27.42 based on a stock price of $60.88 and EPS estimate for $2.22. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. Ratios are rather low because of some negative ratios and also because there is a high variance in the ratios. Of the positive ratios for the 5 year period and end median result of 7:34, there is a high ratio of 78.87 and a low one of 5.62. These ratios are basically all over the place.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.88, 10.82 and 12.65. The corresponding 10 year ratios are 5.40, 9.44 and 11.93. The corresponding historical ratios are 7.77, 10.97 and 17.09. The current P/E Ratio is 30.90 based on a stock price of $60.88 and AEPS estimate for $1.97. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. Note that analyst expect the AEPS to drop some 38% this year. Maybe reasonable. The AEPS dropped 43% in 2023 and 38% in 2024.
I get a Graham Price of $46.20. The 10-year low, median, and high median Price/Graham Price Ratios are 0.32, 0.49 and 0.74. The current ratio is 1.32 based on a stock price of $60.88. This 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 10-year median Price/Book Value per Share Ratio of 0.74. The current ratio is 1.26 based on a Stock Price of $60.88, Book Value of $24,380M, and Book Value per Share of $48.15. The current ratio is 71% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The P/B Ratio in the past have been very low. A normal ratio is considered to be around 1.20.
I also have Book Value per Share estimate for 2025 of $50.16. This implies a ratio of 1.21 based on a Stock Price of $60.88 and Book Value of $25,398M. This ratio is 64% above the 10 year 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 3.74. The current ratio is 15.55 based on Cash Flow per Share estimate for 2025 of $3.92, Cash Flow of $1,982M and a Stock Price of $60.88. The current ratio is 316% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The Cash Flow per Share is expected to drop some 29% this year after drops of 49% and 30% in 2023 and 2024.
I get an historical median dividend yield of 1.17%. The current dividend yield is 0.82% based on dividends of $0.50 and a stock price of $60.88. The current ratio is 30% 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 0.82%. The current dividend yield is 0.82% based on dividends of $0.50 and a stock price of $60.88. The current ratio is at 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.25. The current P/S Ratio is 3.07 based on Revenue estimate for 2025 of $10,043M, Revenue per Share of $19.83 and a stock price of $60.88. The current ratio is 146% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive with problems. The only test that shows that the stock price is reasonable is the 10 year median dividend yield test. Dividends are so low that you would not buy this stock for the dividends. I never buy stock with dividends less than 1%. All the other tests are saying that the stock price is expensive. There are also problems with most of the testing from really low P/E Ratio to estimates being a sharp departure from last year’s values.
When I look at analysts’ recommendations, I find Strong Buy (7), Buy (4), Hold (6), Underperform (2) and Sell (1). The consensus is a Buy. The 12 month stock price is $60.29 with a high of $74.00 and low of $45.00. The consensus stock price of $60.29 implies a total loss of 0.15% with a capital loss of 0.97% and dividends of 0.82% based on a current stock price of $60.88.
Analysts have various opinions on Stock Chase for this stock. Reason not be a buy is that stock is very cyclical. Amy Legate-Wolfe on Motley Fool thinks this is a buy because of its merger with Anglo American. Jitendra Parashar on Motley Fool thinks this stock is cheap at $46.46. The company put out a press release about their fourth quarter of 2024. The company put out a press release via Global Newswire about their second quarterly results for 2025.
Gabriel Friedman on Financial Post thinks Anglo and Teck could still work together if deal falls apart, quoting Angleo CEO says. Simply Wall Street via Yahoo Finance looks at this stock after the Glencore Asset Sale. They think the fair value of this stock is $68.55. Simply Wall Street has one warning out on this stock of Large one-off items impacting financial results.
Teck is a base metals miner with copper and zinc operations in Canada, the United States, Chile, and Peru. Its web site is here Teck Resources Ltd.
The last stock I wrote about was about was Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more. The next stock I will write about will be North West Company (TSX-NWC, OTC-NWTUF) ... learn more on Wednesday, October 8, 2025 around 5 pm. Tomorrow on my other blog I will write about Toronto Money Show.... learn more on Tuesday, October 7, 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.
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