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. I also notice that some sites are calling this stock Magasins Couche-Tard, but I do not know why.
Dividends have only been paid since 2006 and this is one reason my dividend portion is small. However, it will not get much larger and the 5 year median dividend is just .75%. Also, the dividend portion of the total return over the past 5 years is between .6% and .7%. I did as well as I did in capital gain because I bought this stock in 2004. This stock hit highs in 2006/7 that it is just now getting back to.
If you look at the total return over the past 5 years, this stock has basically just broken even. The reason is that the P/E ratio was a lot higher prior to 2008. The 5 year median P/E ratio to 2008 was over 20. The 5 year median P/E ratio to 2011 is 12. Investor’s idea on what they should be paying for each $1 of earnings changed in 2009.
The stock has very good growth in Revenues, Earnings, Cash Flow and Book Value. For example, the 5 and 10 year growth in Revenue has been 12% and 24% per year, respectively. The 5 and 10 year growth in cash flow has been 11% and 26% per year, respectively. Yes, growth has slowed down over the past 5 years, but the 5 year growth rates are still good. Also, analysts expect that growth will pick up this year.
The return on equity (ROE) has generally been quite good for this stock. For the financial year ending in April 2011, the ROE was 19%. The 5 year median ROE is 18.8%. Since companies will be going to IFRS accounting rules, it is felt that we should also look at ROE based on Comprehensive Income. For this company, that ROE was better at 21% with a 4 year median of 18.8%.
As far a debt ratios goes, this company is fine. The current Liquidity Ratio is bit low at 1.26 and with an even lower 5 year median which is 1.10. The Asset/Liability Ratios have always been quite good, with the current one at 1.94 and a 5 year median one of 1.69. The current Leverage Ratio at 2.07 is better than the 5 year median one of 2.45. The current Debt/Equity Ratio at 1.07 is also better than the 5 year median one of 1.45.
I do not have a particularly large investment in this company compared to my investment portfolio. However, I will keep the shares I have. One good thing to mention about this stock is that it has raised their dividends by 25% this year. I have stocks with difference tradeoffs between dividend increases and dividend yield. This stock has a low dividend yield (currently around .87%) , but a very good record of dividend increase.
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.
No comments:
Post a Comment