Astral Media Inc

I am reviewing this stock (TSX-ACM.A) today as I just read a review on this stock suggesting it is a good long term buy for dividends and increasing value.

If you look at the growth figures for this stock, they are very good. The growth in stock price for the last 5 year period is rather low, but we are still in a recession. Also low is the growth in revenue per share, and for the 10 year period this is only 3%. There has been periods of time when this company was selling shares and the average increase in number of shares over the last 10 is almost 8% per year. However, the increase in revenue per shares for the last 5 years has been much better at 12% per year.

When looking at the liquidity ratios, they are lower than 1.50, where I would like to see them. However, in the last 5 years they have been, at least, over l. 00. A ratio of 1.00 is ok, but leaves little margin of current assets over current liabilities. I find the A/L Ratio high and it has an average over the last 5 and 10 years of at least 2.50. Anything for this ratio at 1.50 and above is good.

The one really sour note on this stock is the Accrual Ratio that was extraordinarily high at 33% for the year ending August 2008. Using the last 12 months of figures, this ratio has been negative and this is a good sign. Problem was that they spent a lot in the 12 months to August 2008 on investments. The difference between the net income and the cash flow from operations was negative, so they really had no room for this spending.

At the moment, I have no intentions of buying this stock. However, the review was good and I thought I would do a spreadsheet on it. It is the sort of stock I like, a growing stock with dividends. One thing I do not like is that the yield is very low, and it is generally below 1%. The payout ratio from cash flow is low at 14%.

Astral Media is a leading Canadian media company, reaching people through a combination of highly targeted media properties in television, radio, outdoor advertising, and interactive media. Its web site is www.astralmedia.com. See my spreadsheet at www.spbrunner.com/stocks/acm.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.