I have followed this stock (TSX-PFB) for sometime. It is a stock that the Investment Reporter has recommended. The Investment Reporter is an MPL Communications investment letter. See Advise for Investors site and click on publications tab. Personally, I think that this company puts out some of the best in investor newsletters. This is a rather small company with a cap of around $38M. Insiders own just under 80% of the company.
As far as dividends go, this company has been rather inconsistent. They seldom give dividend increases, but when they do, they are big. In 2001, they raised the dividend 50% and in 2005, they raised the dividend 60%. They have in the past also given out special dividends when they can. However, they also have not raised their dividend nor given out special dividends since 2005. They sell insulation products for residential and commercial buildings in North America and it is no wonder they are having a hard time, especially considering the real estate market in the US.
If you have been invested in this company for the last 10 years, you would have made a very decent return on your money. Your Total Return would have been around 14% per year, with the dividends portion being around 8% per year. The Total Return over the past 5 years is in negative territory, with only 3% belong to dividends.
The growth figures for this company are rather inconsistent. The best was for the last 5 years in earnings, which increased about 11% per year. However, the earnings over the past 10 years have only increased about 2.5% per year. Both the growth in Revenues and Book Value are rather mediocre. The growth in Revenue per shares has only increased just over 5% over the past 5 and 10 years. The growth in Book Value has increased over the past 5 and 10 years at the rate of 7.8% and 4% per year respectively.
The very good think about this company is low debt and good Liquidity and Asset/Liability Ratios. The Liquidity Ratio is currently at 2.60 and it has a 5 year average of 2.16. The Asset/Liability Ratio is currently at 3.41 and it has a 5 year average of 3.37. The Leverage Ratios (Asset/Book Value) is currently at 1.41 and it has a 5 year average of 1.43. There is one think I notice about companies with lots of insider owners and that is good debt ratios. This gives a company the ability to weather the bad times.
The Return on Equity at the end of the financial year of December 2009 was 8.3% with a 5 year average of 9.4%. However, using the last 12 months earnings, the current ROE is just 5.2%.
Tomorrow I will talk about what my spreadsheet says about this company and what analysts say. However, few analysts cover this stock.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB. See my spreadsheet at pfb.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.
Not good when dividends have been inconsistent, although this one has provided investors with a nice return as you say.
ReplyDeleteStill not tempted though, I much prefer big blue-chips, sticking with companies that are battled-tested over time. On that note, I'm starting my DRIP with FTS next month. I'm going to write a post about that.