Is it a good company at a reasonable price? This is a resource stock and is therefore risky. It would also by cyclical. If you are buying for dividends, they be unstable. A positive is insider buying. Personally, I tend not be buy resource stocks, or buy them for a short hold. I never consider them a long term hold. If you like resource stocks currently, this is selling cheap.
I do not own this stock of Veren Inc (TSX-VRN, NYSE-VRN). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.
When I was updating my spreadsheet, I noticed Crescent Point Energy Corp (TSX-CPG, NYSE-CPG) has changed its name and symbols to Veren Inc (TSX-VRN, NYSE-VRN) effective May 15. See news item on Newswire.
When I was updating my spreadsheet, I noticed that all the officers I follow, including CEO and CFO have increased their shares in the company and 2 of the 3 directors I follow have increased their shares in the company. These increases are over the past year.
If you had invested in this company in December 2013, for $1,031.25 you would have bought 25 shares at $41.25 per share. In December 2023, after 10 years you would have received $177.11 in dividends. The stock would be worth $229.75. Your total return would have been $406.86. This would be a total loss of 11.38% per year with 13.94% from capital loss and 2.57% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $41.25 | $1,031.25 | 25 | 10 | $177.11 | $229.75 | $406.86 |
Compared above with the last 5 years. If you had invested in this company in December 2018, for $1,001.28 you would have bought 242 shares at $4.14 per share. In December 2023, after 5 years you would have received $192.27 in dividends. The stock would be worth $2,223.98. Your total return would have been $2,416.25. This would be a total return of 19.52% per year with 17.29% from capital loss and 2.23% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $4.14 | $1,001.88 | 242 | 5 | $192.27 | $2,223.98 | $2,416.25 |
The current dividend yield is good with dividend growth low to negative. The current dividend yield is good (5% to 6% ranges) at 6.63%. The 5 year median dividend yield is low (below 1%) at 0.84%. The 10 year median dividend yield is moderate (2% to 4% ranges) at 2.95%. The historical median dividend yield is good at 6.96%.
The dividend growth over the past 5 years is low (below 8% per year) at 1.1% per year. However, this holds a lot of variations. Dividends were cut in 2019 by 89% and then another 75% in 2020. Dividends were rammed up in 2022 and the difference in dividends between 2021 and 2022 was an increase of 2833%. Dividends were increased in 2023 another 73%. The last dividend increase was for 15% and it was in 2024. Also, this company used to be an income trust which can have higher dividends than corporations. The company kept dividends flat for a number of years after the change to a corporation before decreasing dividends.
The Dividend Payout Ratios (DPR) are currently good. The DPR for 2023 for Earnings per Share (EPS) is good at 45% with 5 year coverage high at 72%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 27% with 5 year coverage at 11%. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is good at 9% with 5 year coverage at 5%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 12% with 5 year coverage at 5%. The DPR for 2023 for Free Cash Flow (FCF) is good at 22% with 5 year coverage at 14%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 44.90% | 72.23% |
| AEPS | 27.47% | 11.32% |
| AFFO | 8.91% | 5.05% |
| CFPS | 12.86% | 5.25% |
| FCF | 21.73% | 13.82% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.66 and currently at 0.59. The Liquidity Ratio for 2023 is too low at 0.76 and 1.29 currently. If you added in Cash Flow after dividends, the ratios are fine at 2.15 and currently at 2.92. The Debt Ratio for 2023 is good at 2.16 and 2.23 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.53 and 0.86 and currently at 1.82 and 0.82.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.66 | 0.59 |
| Intang/GW | 0.05 | 0.05 |
| Liquidity | 0.76 | 1.29 |
| Liq. + CF | 2.15 | 2.92 |
| Liq. CF. DB | 2.97 | 4.19 |
| Debt Ratio | 2.16 | 2.23 |
| Leverage | 1.86 | 1.82 |
| D/E Ratio | 0.86 | 0.82 |
The Total Return per year is shown below for years of 5 to 22 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 | 1.09% | 19.52% | 17.29% | 2.33% |
| 2013 | 10 | -17.99% | -11.38% | -13.94% | 2.57% |
| 2008 | 15 | -11.99% | 3.06% | -6.22% | 9.28% |
| 2003 | 20 | -2.87% | 16.11% | -1.81% | 17.92% |
| 2001 | 22 | 37.53% | 4.39% | 33.14% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 0.74, 1.19 and 1.64. The corresponding 10 year ratios are negative and unusable. The corresponding historical ratios are 2.88, 6.20 and 9.52. The current P/E Ratio is 19.50 based on a stock price of $7.45 and EPS estimate for 2024 of $0.38. The ratio is way above the 5 year ratios, which are very low due to earnings losses. However, a ratio is 19.50 is on the high side.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 04.26, 6.11 and 7.96. The corresponding 10 year ratios are 6.86, 12.39 and 14.98. The current P/AEPS Ratio is 4.84 based on a stock price of $7.45 and AEPS estimate for 2024 of $1.54. The current ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios 1.18, 2.17 and 2.71. The corresponding 10 year ratios are 1.86, 2.54 and 3.55. The current P/AFFO Ratio is 2.06 based on a stock price of $7.45 and AFFO estimate for 2024 of $3.62. The current 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 $17.87. The 10-year low, median, and high median Price/Graham Price Ratios are 0.37, 0.64 and 0.82. The current P/GP Ratio is 0.42 based on a stock price of $7.45. The current 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 0.79. The current P/B Ratio is 0.81 based on a Book Value of $6,868M, Book Value per Share of $11.08 and a stock price of $7.45. 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.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.68. The current P/CF Ratio is 1.99 based on a stock price of $7.45, Cash Flow per Share estimate for 2024 of $3.74 and a Cash Flow of $2,315M. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 6.96%. The current dividend yield is 6.17% based on dividends of $0.46 and a stock price of $7.45. The current yield is 11% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. Since this company used to be an income trust with high dividend yields, this would not be a good test.
I get a 10 year median dividend yield of 2.95%. The current dividend yield is 6.17% based on dividends of $0.46 and a stock price of $7.45. The current yield is 109% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.37. The current P/S Ratio is 1.09 based on a stock price of $7.45, Revenue estimate for 2024 of $4,224 and Revenue per Share of $6.81. The current ratio is 20.2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is suggests that the stock price is relatively cheap. The 10 year dividend yield is saying that the stock price is cheap. This is confirmed by the P/S Ratio test. The rest of the testing says that the stock price is cheap or reasonable.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (5), and Hold (1). The consensus would be a Strong Buy. The 12 months stock price consensus is $11.82 with a high of $14.00 and low of $10.00. The consensus stock price of $11.82 implies a total return of 64.83 with 58.66% from capital gains and 6.17% from dividends based on a current stock price of $7.45.
There are lots of analyst comments on Stock Chase for this stock. Most are positive. However, one analyst said that there were better names elsewhere. Stock Chase gives this stock 4 stars out of 5. Jitendra Parashar on Motley Fool says Canadian Stocks are decline with this stock tanking. Rajiv Nanjapla on Motley Fool in December 2023 felt this stock could give you superior long term returns. The company put out a press release via Newswire about their fourth quarter results for 2023. The company put out a Press Release about their third quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. They have 4 warnings out on this stock of earnings are forecast to decline by an average of 2.4% per year for the next 3 years; shareholders have been diluted in the past year; has a high level of debt; and unstable dividend track record.
Veren Inc is an oil producer company. It is engaged in acquiring, developing, and holding interests in petroleum assets operations across western Canada. Its web site is here Veren Inc.
The last stock I wrote about was about was Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more. The next stock I will write about will be Finning International Inc (TSX-FTT, OTC-FINGF) ... learn more on Friday, November 8, 2024 around 5 pm. Tomorrow on my other blog I will write about Something to Buy November 2024.... learn more on Thursday, November 7, 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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