Friday, July 8, 2011

Progressive Waste Solutions Ltd

I own this stock (TSX-BIN, NYSE-BIN). I first bought this stock in November 2007 and then I bought more in December 2010. To date I have made a return of 1.61% per year. The dividend portion of this total return would be 3.43% per year. The stocks are worth less than what I paid for them.

This company has grown and has acquired other companies. When I first bought it, it was an income Trust. It changed to a corporation effective June 2009 and reduced its dividend from $1.82 to $0.50. This is quite typical for companies that changed to corporations. The 5 year median yield is 6.6%. The yield has come down a lot to 2.1%. They have a history of growing their dividends, so hopefully they will do so again.

The payout ratios used to be quite high on this company. For example, the Payout from Earnings median rate over the past 5 year is 224%. The Payout Ratio for Earnings is expected to be a healthy 45% in 2011. The Payout Ratio from Cash Flow is expected to be also healthy at 17% in 2011.

When looking at growth figures, the 5 years figures are not good, but the 8 year figures are. This company has only been around since 2002, so the earliest figures I have are from 2002 or 8 year ago. For example, the 5 and 8 year figures for revenue growth are -4% and 9.5% per year respectively. Cash Flow growth is the same with the 5 and 8 years figures at 0% and 10% per year, respectively.

Book Value figures are similar with 5 and 8 year growth at -3% and 5% per year, respectively. The book value not growing or decreasing in value is not surprising as this used to be an income trust type stock. Income Trust companies seldom grow their Book Value because they paid too much of their earnings and cash flow in distributions. The best growth is in Earnings per Share (EPS) at 28% and 11% per year, respectively.

The Liquidity Ratio has always been low and is currently at 0.96. Lower than 1.00 means that current assets cannot cover current liabilities. The Asset/Liability Ratio has always been healthy and is currently at 1.94. For this ratio 1.50 or above is good. Both the Leverage Ratio and the Debt/Equity Ratio are fine. They are currently at 2.06 and 1.06

I was interested in this stock because it was into waste management. I think that such companies should have a good future. This is the sort of work that is not going to go away. The other reason is that this particular company was on TD’s Action Buy List (it still is). At the moment, I am retaining my shares, but I must admit their performance hasn’t been what I had hoped. Of course, the forced change form Income Trust structure to corporation structure has adversely affected a lot of companies.

They are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Five companies control almost 53% of this company. Its web site is here Progressive Waste. See my spreadsheet at bin.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.

1 comment:

  1. I owned this stock for a couple years, but it never seemed to have a positive move. Finally sold it all as it started it's most recent drop.
    Appreciate all the work you put in and share;