Dorel Industries

I am reviewing this stock today (TSX-DII.B) as it has just been reviewed Investment Reporter. The Investment Reporter has liked this stock for sometime. I had this stock between May 1999 and July 2006. I sold it because it was going nowhere and it did not pay a dividend. My gain on this stock was -1.2%. I do not think a dividend would help much. But, this stock certainly has the cash flow to support a dividend.

All my following figures are for the year ending at the last annual statement of December 2007. First, what I find good about this stock. The Book Value growth for the last 5 and 10 years was 10% and 16%. The Liquidity is 1.63 a little down from the 5 year average of 1.78. Any figure over 1.50 is a good figure. The Asset/Liability Ratio is 2.30 a little higher than the 5 year average of 2.14. Here, again, any figure over 1.50 is good. The total accrual figure is negative and the Accrual Ratio at -2.32% is not bad. The Return on Equity (ROE) is good at 9.3% for 2007 and 12.7% for the 5 year average.

In the acceptable, but not great category is the Revenue Growth with the last 5 year and 10 year figures at 3.5% and 13%. The Cash Flow growth for the last 5 year and 10 year periods are 3% and 10.8%. In both these cases, the 10 year figures are very good, but the 5 year periods are barely acceptable. The Closing Price, including current dividends for the 5 year and 10 year periods are -3% and 5.7%. This stock seems not to be going anywhere still, however, by the Graham Price, it is very undervalued.

Tomorrow, I will review the latest quarterly report and what other analysts are saying about this stock.

Dorel Industries Inc. is a world class juvenile products and bicycle company. Dorel’s branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel has facilities in seventeen countries, and sales worldwide. Its web site is www.dorel.com. See my spreadsheet at www.spbrunner.com/stocks/dii.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.