Thursday, September 22, 2011

Genivar Inc. 2

I do own this stock (TSX-GNV) as I bought it yesterday when I sold Stantec (TSX-STN). I started to look at this stock (TSX-GNV) for possible purchase after reading a Globe and Mail article Build your own pension with top dividend stocks. I liked what I saw and so I am trying this stock out.

The Insider Trading report does not tell much as it has been restarted since this company changed to a corporation. Since the beginning of the year, there is net insider selling, but of a very small amount (about .1% of the market cap of this stock). There are 50 institutional shareholders owning some 28% of this stock. Over the past 3 months they have increased their holdings by 6%.

I get a 5 year median low Price/Earnings Ratio of 10.4 and a 5 year median high P/E Ratio of 17.9. The current one of 14.4 on a price of $24.70 is therefore a relatively reasonable one. The median P/E Ratio would be 15.9. I get a current Graham Price of $22.45. The stock price is some 9.4% higher. The median difference between the Graham Price and stock price is 1.4%. The median high difference between the Graham Price and Stock price is 24%. So the difference is higher than the median, but much lower than the high difference. With stock prices everything is relative, and this points to a relatively reasonable price.

I get a 5 year median Price/Book Value Ratio of 1.98 and a currently P/B Ratio of 1.87. The current is 95% of the 5 year median. This current ratio points to a reasonable price but not a great one. A great price is when the current P/B Ratio is just 80% of the median.

The last thing to look at is the dividend yield. The current one is 6.1% and the 5 year median is 5.2%. This yield points to a reasonable price. The 5 year median dividend yield high is 6.9%. What I look for is a reasonable price. It is great to get a really good price, but this is not usually possible.

When I look at analyst’s recommendations, I see Strong Buy, Buy and Hold. The consensus is a Buy. It is surprising how many Hold recommendations that there are. With the Buy recommendation I see a consensus 12 month stock price of $29.87.

This is an infrastructure play and will rebound when the non-residential building market rebounds. This company is exposed to the Ontario and Quebec commercial and industrial markets which some analysts feel is returning to normal. This company is also exposed to the Ontario institutional and government markets.

One analyst has a hold on this stock because it has not done well this year. The consensus revenue, earnings and cash flow consensus estimates do not show good or any growth for 2011, but show much better growth for 2012. A number of analysts feel that the company has good management. Their international exposure is only about 3% to 5% of revenue. Other analysts find that the current dividend yield particularly attractive.

This stock has a reasonable price and a very good dividend yield currently.

Genivar Inc. is an engineering services firm providing private and public-sector clients with a complete range of professional consulting services throughout all project phases, including planning, design, construction and maintenance. Its web site is here Genivar. See my spreadsheet at gnv.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. The MTO is looking to use "design-build" for their transportation projects. Large construction companies like Miller Paving, Coco Paving, Aecon, etc will benefit but engineering firms who currently inspect the project will be eliminated from the process.