Wednesday, August 11, 2010

Ag Growth International

I am continuing covering some of the stocks I follow, up do not own. This stock (TSX-AFN) is on one of the dividend lists that I follow of Dividend Achievers . This company started to pay dividends in 2004, and since then the dividends have grown some 21% per year. This is very good, considering that the yield on this stock is 5.6%, the 5 year average yield is 8.3%, and this stock is considered to be of average risk.

This stock used to be a Unit Trust and successfully converted to a corporation in June of 2009. It was made a public company in 2004 and I cannot find any financial statements prior to 2004. This means that I have only 5 years of data on this stock. The only data I can find prior to 2004 was for the company’s revenue.

The only growth figure that I find a little low is that for Book Value and it has grown at the rate of 7.8% over the last 5 years. The thing to keep in mind is that Unit Trust companies tended not to grow their book values. The main reason for this was that they paid out a lot of their cash flow. This company has reduced their payout of cash flow to just 50% for the year ending in 2009.

On this stock both the earnings and cash flow figures for 2010 and 2011 has been reduced since I looked at this stock after the 2009 annual report was issued. The payout ratio for cash value is expected to be increased in 2010 to almost 60%. The dividends have not yet been increased this year. Dividends are paid out monthly and they have declared the dividends for the months up to and including October 2010, with no increase.

The stock price is holding up quite well for this stock currently. The 5 year total return on this stock is 33% with 10% of this in dividend payments. The other very good thing about this stock is the Liquidity Ratio and the Asset/Liability Ratio. Both these ratios, at 5.34 and 1.80 respectively, are above what I like to see of 1.50, so this is great. The Return on Equity is also quite good, with a 5 year average to 2009 of 17.5% and a current one for the 1st quarter of 14.5%.

Sales and earnings for the 1st quarter are down from those of 2009. However, a lot of companies are currently having a hard time in these uncertain times. I will continue to track this stock as I feel that this is a good dividend paying stock. Tomorrow, I will look at what the analysts are saying about it.

Ag Growth is a leading North American manufacturer of portable grain handling equipment, consisting of augers, belt conveyors, grain drying, fencing, post hole augers, and other ancillary grain handling accessories. This company has 1,400 dealers and distributors in Canada and the United States. Its web site is here Ag Growth. See my spreadsheet at afn.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.

No comments:

Post a Comment