I do not own this stock of PFB Corp (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.
When I was updating my spreadsheet, I noticed that the company’s results are better than expected. Revenue estimate for 2018 was $122M and it came in at 128M. EPS estimate for 2018 was $0.84 and EPS came in at $0.92. They also did a special dividend of $1.00 because of good results in the third quarter. Current dividend is $0.36 per year.
The dividends are moderate (2 to 4% range) with the current dividend yield at 3.23% and with 5, 10, and historical median dividend yields at 3.30%, 3.94% and 3.09%. The dividend increases are low (Under8%). See the chart below. Dividend started in 1997.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 was 35% with 5 year coverage at 48%. The CPR for CFPS for 2018 was 18% with 5 year coverage also at 18%. As nearest as I can see the Free Cash Flow coverage of dividends is at 27% in 2018.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2018 is 0.13. The Liquidity Ratio is 2.36 with 5 year median ratio at 2.45. The Debt Ratio for 2018 is 2.76 with 5 year median at 2.76 also. The Leverage and Debt/Equity Ratios for 2018 are 1.57 and 0.57 with 5 year median ratios at 1.54 and 0.54.
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 11.13, 13.06 and 15.00. The 10 year corresponding ratios are 10.68, 12.79 and 14.89. The corresponding historical ratios are 9.09, 11.43 and 14.89. The current P/E Ratio is 10.11 based on a stock price of $10.92 and 2019 EPS estimate of $1.08. This stock price testing suggests that the stock price is relatively cheap.
The start P/E for 5 year growth of 14.39% was 4.96, for 10 year growth of 10.44% was 32.00, for 15 year growth of 4.30% was 12.96, for 20 year growth of 3.98% was 7.77 and for 24 years of growth of 6.01% was 8.67. I do not think that this sheds any light on a good starting P/E. There seems to be no correlation between start P/E and capital gain.
I get a Graham Price of $14.71. The 10 year low, median, and high median Price/Graham Price Ratios are 0.65, 0.77 and 0.95. The current P/GP ratio is 0.74 based on a stock price of $10.92. 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 0.93. The current P/B Ratio is 1.23 based on a Book Value of $59.6M, Book Value per Share of $8.90 and a stock price of $11.15. The current ratio is some 31% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.09%. The current dividend yield is 3.30% based on dividends of $0.36 and a stock price of $10.92. The current ratio is 6.7% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 3.94%. The current dividend yield of 3.30% is 16% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. Some people use a 10 year dividend yield rather than an historical one.
The 10 year median Price/Sales (Revenue) Ratio is 0.50. The current P/S Ratio is 0.55 based on 2019 Revenue estimate of $133M and a stock price of $10.92. The current ratio is 9.8% above the 10 year median. 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 reasonable but on the high side. The P/S Ratio testing is showing this stock as reasonable but above median and so is the 10 year median dividend yield test. The P/B Ratio test is showing the stock price as expensive, however, a P/B Ratio of 1.23 is considered to be a low P/B Ratio.
Is it a good company at a reasonable price? I think that this company has been done well by its shareholders. Their use of special dividends show that they want to reward their shareholders, but they do want to keep the current dividends at a low percentage of the current EPS. I would certainly consider buying this company.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (1). The consensus would be a strong buy, but there are few analysts following this stock. The 12 month stock price consensus is $14.17. This implies a total return of 33.06% with 29.76% from capital gains and 3.30% from dividends based on a current stock price of $10.92.
There are no comments on Stock Chase for this company. This is probably because it is a small company and not well followed. A writer Simply Wall Street talks about Frank Baker selling shares, but he is no longer a director of this company. A writer Simply Wall Street says PFB P/E Ratio at 12.98 is lower than the industry it is in. Company announces on Newswire the third quarterly results and a special dividend payment.
PFB Corp is Canadian based firm which is in the business of delivering products and solutions in the areas of manufacturing insulating building products made from expanded polystyrene materials. The company is operating into two business segments based on geographical location namely, Canada where it produces expanded polystyrene (EPS) products and structural insulating panels; and United States of America segment which includes production and sales of EPS, building systems, and structures, design services, and installations. Its web site is here PFB Corp.
The last stock I wrote about was about was IBI Group Inc (TSX-IBG, OTC-IBIBF) ... learn more. The next stock I will write about will be Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more on Wednesday, November 20, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Money Talks.... learn more on Tuesday, November 21, 2019 around 5 pm.
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