I do not currently own this stock (TSX-CCL.B). They on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). This is why I have done a spreadsheet on them. This is a company with two classes of shares and the original family owns 94% of the votes.
When looking at dividends, they have increased them by 9 and 7% per year over the last 5 and 10 years. This is a good record. I am generally more concerned about the payout ratios from cash flow. Although these ratios have been increasing lately, the ratio is still only about 13%, which is a low one and therefore of no concern. The average payout ratio from CF for the past 5 years is just 10%.
However, as with a lot of industrial stock, the yield is low. The 5 year average is just 1.8%. The current one is a bit better at just over 2%. Considering we are in a recession, the stock has done well in Total Returns. Looking at prices at the year end, the 5 and 10 year Total Returns are both over 10% per year. If I look at average prices, the Total Return for the last 5 and 10 years is just over 7% per year. If you try to do your buying in the fall and selling in April or May, you tend to do a bit better than average. However, why I look at average prices, is that you really, generally, cannot hope to get a better than average price. Once in a while, you might be lucky and get a good sell or buy price on shares, but generally, the best we can do is to get an average price.
When looking at sales, earnings and cash flow, this stock has had its ups and downs and growth figures are not good. Hopefully these figures will improve with the economy. Analysts of this stock certainly expect that both earnings and cash flow will improve this and then do better again in 2011. I must point out that there are not many analysts following this stock, as the company is controlled by the Lang family and not the shareholders. This can limit the interest in a stock.
When Looking at Liquidity Ratios and Asset/Liability Ratios, I find both good. These ratios at the end of 2009 were 1.50 and 1.84 respectively. The same ratios at the end of the 2nd quarter were 1.32 and 1.84. The lower liquidity ratio was due to a portion of the long term debt becoming due. The 5 year averages for these ratios was 1.49 and 1.79 respectively. The Liquidity ratios look at current assets and current liabilities and the Asset/Liability Ratios look at total assets and total liabilities. In both cases, assets can cover liabilities.
The last thing to look at is the Return on Equity. This is looking at net income compared with the company’s book value. The ROE for the 2nd quarter of 2010 is good at 10.9%. The 5 year average is 11.1%. The ROE for 2008 and 2009 were lower at around 6%, but we were or are in a recession. (You only know when you come out of a recession after the fact, and I do not believe any official has yet declared this recession over.)
I am currently not interested in buying this stock, but I like to look at ones on the dividend lists that I follow. That is because the stocks on these lists are often the ones I want to look at first when I do want to buy more shares. Tomorrow I will look at what the analysts say about this stock.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.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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