I am reviewing this stock (TSX-ACO.X) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This company is on the dividend lists of Dividend Achievers and Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
Most of the growth figures are good. What is not very good is the growth in revenues. Revenues have not grown over the last 5 years; they are down just over 3% per year. Over the last 10 years, they have grown about 5% per year. These are not great figures. However, the dividend is decent at 2% and it has grown about 8% per year over the last 5 years and 10% per over the last 10 years.
They payout a low percentage of their cash flow in dividends, but they have raised their dividends this year by just over 6%. Not all stocks that usually raise their dividends each year have raised theirs this year. This shows the management has faith that they can pay for an increased dividend.
Turning to the liquidity ratios, I find this ratio has always been very good as it usually is at or higher than 2.00. This means that the current assets and easily cover current liabilities. The average for the last 5 years is 2.63. However, the Asset/Liability ratios are not as high as I would like them. It is over 1.00, but I like to see them around 1.50. This ratio at the end of 2008 was 1.26. It has since retreated closer to its 10 year average by coming down to 1.22.
This is the sort of stock I like. I do not mind stocks that are largely owned by a family or person, as long as they treat their shareholders well. This company pays a decent dividend, which runs around 2%. However, I cannot buy everything. Although, in the future I might buy this if some other utility stock I own needs to be replaced.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has a 52% stake in Canadian Utilities Ltd. The company utilizes a dual share structure and it is effectively controlled by R.D. Southern. Ronald D. Southern owns 83%. The Southern family of Alberta made its wealth by doing a fine job of managing the company and its subsidiaries. Its web site is www.atco.com. See my spreadsheet at www.spbrunner.com/stocks/aco.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.
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