Thursday, May 6, 2010

Pareto Corp

I bought this company (TSX-PTO) in June 2009. It is a small cap dividend paying company. I do not have a lot invested in this company, as that is hard to do when the stock price is just over $1. Since I bought this stock, I have earned a return of 125%. The stock price has risen quite well. The dividend increases have been great. Dividends were first paid in 2008. They were raised 50% in 2009, and another 33% in 2010. Also, in 2010 I received a special dividend of $.04 per share.

When looking at the growth figures, the worst is for Total Return. The 5 and 9 year growth in Total Return are 5.9% and 9% per year respectively. This company has had a number of name changes and I cannot find financial or stock prices before 2001. Also, since some of the figures in 2001 and 2002 were negative, I have only 5 year growth figures for such things as earnings and cash flow. The 5 year growth figures for earnings and cash flow are 8.7% and 14.4% respectively. Book Value growth and revenue growth are also good for the stock.

The Liquidity Ratios is a little low at 1.05 for 2009 and at 1.10 for a 5 year average. The Asset/Liability Ratio is much better at 1.61 for 2009 and 2.03 for a 5 year average. And, on to the last thing I want to talk about, which is the Return on Equity. The ROE for 2009 was 23.7%, a great figure. The 5 year running average ROE is 14.4% and a good figure also.

I am pleased with my investment in this company. I will probably buy some more of this stock as I think it has a great future. However, I should stress that this is a small cap and therefore quite risky for a dividend paying stock.

Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.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 for stocks followed and investment notes. Follow me on twitter.

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