I own this stock (TSX-ATD.B). I first bought this stock in 2004 and then bought some more in 2006 and 2007. I have made a return 12% per year on this stock. This is a fast growing stock, so the part of my return attributable to dividends is just .6%, with 11.4% attributable to capital gain.
This is a stock with two classes, Class A multiple voting shares, and Class B subordinate Voting Shares. Class A shares have 10 votes each and Class B have 1 vote each. Since there are some 54M Class A shares, they outvote for Class B shares totally 130M. This is a method used to keep control of a company when money is raised on the stock market and more than 50% of the company is sold via the stock market.
When I look at Insider Trading, I find that there is $19.6M of insider selling. Most of this is by officers of the company, with a minimal amount by Directors. There is also a minimal amount insider buying. Although it sounds like a lot of money, this insider selling is way less than 1% of the market cap of this company. With few exceptions, officers of this company have more stock options than stocks.
I get a 5 year low median Price/Earnings Ratio of 9.48 and a 5 year median high P/E Ratio of 14.52. So, the current P/E ratio of 13.56 is towards the high side. I get a Graham Price of $21.96 and this is some 32% lower than the stock price of $28.90. The median difference between the Graham Price and Stock price is 55%, so this shows a relatively good stock price.
I get a 10 year median Price/Book Value Ratio of 2.71. The current P/B Ratio at 2.87 is some 6% higher. What you want to show a good current stock price is a current P/B Ratio lower than the 10 year median. Lastly, the current dividend yield is .87%. The 5 year median dividend yield is .75%. By this measure, the stock price is good.
The results of all this is rather mixed, but the price is probably reasonable. There will be no problems with this company maintaining their dividends. The 5 year median Dividend Payout Ratios for EPS is 9% and for cash flow is 5%. You will earn little in dividends from this stock as a total percentage of your total return.
However, most dividend paying stock, over the long term tend to increases at the dividend increase rate, which over the past 5 years for this company is 11.2% to April 2011. However, if you include the last increase, the 5 year growth in dividends is 17.8%. The other point to make is that this is a retail company and as such there will be volatility in its price movements.
When I look for analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The Buy recommendations come with a 12 month stock price of $34.28 which is almost 19% higher than today’s price. One analyst expects that this stock will, in the near future, move back to a higher P/E Ratio (as it had in the past).
As I said yesterday, all the growth in all items (like revenue, earnings etc.) has grown over the past 5 years, but the stock price has not. The result of this is the P/E ratio has been treading lower. If it moves up to past level, these would mean a nice move up in stock price. As for me, I intend to hold on to the shares I have.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac’s and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Couche-Tard . See my spreadsheet at atd.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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