I do not own this stock of CI Financial Corp (TSX-CIX, OTC-CIFAF). I started to follow this stock originally because it was a Mutual Fund company. People in the past talked about it being easier to make money from buying a Mutual Fund company than buying Mutual Funds.
When I was updating my spreadsheet, I noticed that more analysts are looking at this stock. This is a positive development. Insiders are also buying a lot with NIB at 0.14% (where normal might be 0.01% to 0.02%). Outstanding shares have been declining with shares down by 3% and 1.8% per year over the past 5 and 10 years. This means the growth will show up in things like Revenue and Net Income, rather than Revenue per Share and EPS.
When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable. They changed back to a corporation in 2009 and dividends were decreased in 2010. They have increased their dividends since 2011 until 2018 when they changed the payout period from monthly to quarterly and decreased the dividends again. So, they have a very mixed record for paying dividends. See the chart below.
The dividend yields have varied but mostly they were in the moderate range. The current dividend yield is 3.38%, with 5, 10 and historical yields at 4.77%, 4.14% and 3.48%.
The Dividend Payout Ratios are fine. DPR for EPS for 2018 is 47% with 64% 5 year coverage. The DPR for CFPS for 2018 is 42% with 5 year coverage at 52%. Before dividends were cut in 2018 DPR for EPS was 94%.
Debt Ratios are fine, but has a vulnerability that cash flow is needed to get good coverage of current liabilities. The Long Term Debt/Market Cap Ratio is 0.38. The Liquidity Ratio for 2018 is 1.03 with 5 year median at 0.98. If you add in cash flow after dividends, the ratio becomes 1.44 with 5 year coverage at 1.62. The Debt Ratio for 2018 is 1.50 with 5 year median at 2.02. The Leverage and Debt/Equity Ratios for 2018 are 3.00 and 2.00 with 5 year median at 1.89 and 0.89.
The Total Return per year is shown below for years of 5 to 24 to the end of 2018. 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.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.72, 14.74 and 16.72. The corresponding 10 year Ratios are 14.66, 16.51 and 19.08. The corresponding historical ratios are 15.72, 17.83 and 20.05. The current P/E Ratio is 8.98 based on a stock price of $21.28 and 2019 EPS estimate of $2.37. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $18.32. The 10 year low, median, and high median Price/Graham Price Ratios are 1.48, 1.67 and 1.94. The current P/GP Ratio is 1.16 based on a stock price of $21.28. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 3.92. The current P/B Ratio is 3.38 based on Book Value of $1,340M, Book Value per Share of $5.88 and a stock price of $21.28. The current ratio is some 14% below the 10 median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 3.48%. The current dividend yield is 3.38% based on dividends of $0.72 and a stock price of $21.28. The current dividend yield is 2.8% below the historical median 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 4.13. The current/S Ratio is 2.40 based on 2019 Revenue estimate of $2085M, Revenue per Share of $8.87 and a stock price of $21.28. the current ratio is 42% 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 cheap to reasonable. The testing is mostly coming up with a cheap stock price, although an important of P/B Ratio is saying it is only reasonable. We can ignore the dividend yield test because of the ups and downs in the dividends for shareholders.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1), Hold (3) and Underperform (2). The consensus would be a Hold. The 12 month stock price consensus is $22.19. This implies a total return of 7.66% with 4.28% from capital gains and 3.38% from dividends.
See what analysts are saying at Stock Chase. Mostly they like the company. Christopher Liew on Motley Fool likes this company as a dividend stock, but does not talk about the dividend risk as dividends have gone down as well as up in the past. A writer on Simply Wall Street talks about the problems with the company’s dividends.. Ploutos Investing on Seeking Alpha is not pleased with this stock. The company provided an overview of the first quarterly 2019 results on Newswire.
CI Financial Corp is a diversified provider of wealth management products and services, primarily in the Canadian market. The company operates primarily through CI Investments, which offers a broad selection of investment funds, and Assante Wealth Management, which provides financial advice through a network of advisors. Other subsidiaries include Sentry Investments, Stonegate Private Counsel, Grant Samuel Funds Management (Australia), First Asset Investment Management and BBS Securities. Its web site is here CI Financial Corp.
The last stock I wrote about was about was Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN) ... learn more. The next stock I will write about will be Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) ... learn more on Wednesday, June 26, 2019 around 5 pm. Tomorrow on my other blog I will write about Selling in a Bear Market.... learn more on Tuesday, June 25, 2019 around 5 pm.
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