Thursday, July 5, 2012

HNZ Group Inc

On my comment blog is all about how often I am “Updating Stock Info”. See comments blog.

This company called Canadian Helicopters Group (TSX-CHL.A, CHL.B) is in the process of changing its name to HNZ Group Inc. (TSX-HNZ.A, HNZ.B) this month, July 2012. The reason for the two levels of stock is the A shares are common shares and B are variable voting shares. The B variable voting shares are for non-Canadians. I do not own this stock.

This company started out as an income trust (TSX-CHL.UN) and then changed to a corporation on December 31, 2010. The company started off with a good dividend in the 10% to 11% range. The actual dividend has only gone up 1% per year since dividends began. The stock price has risen, so the current dividend, while still good at 3.77% is a lot lower than the starting one.

The median Dividend Payout Ratio was basically good from the start with the DRP for earnings around 61% and for cash flow around 47%. The current 5 year median DPR for earnings is 52% and for cash flow is 42%. The DPR for 2011 is even lower at 29% and 19%, respectively.

A growing company needs to have a low DPR so that it has money to invest in growth. However, I personally would not be interested in this stock until they have a solid record of dividend increases.

Total return over the past 5 and 7 years is 32.56% and 19.81% per year. The dividend portion of this return is 9.14% and 6.45% per year, respectively. The capital gain portion of this return is 23.43% and 13.36% per year, respectively. Dividend income makes up 28% and 33% of the total return over the past 5 and 7 years.

Growth for this company is generally good. Revenue growth is 14% and 10% per year over the past 5 and 9 years. Revenue per share is lower at 9.4% and 7.6% per year, respectively. Earnings per Share are up 21.5% per year over the past 5 years. Cash flow is up 15.2% and 37.4% per year over the past 5 and 6 years. Book Value is up 9.8% and 8.9% per year over the past 5 and 6 years.

The debt ratios are good on this stock. The current Liquidity Ratio is 1.60 and the current Debt Ratio is 2.75. The current Leverage and Debt/Equity Ratios are 1.58 and 0.58. (See my site for further information on Debt Ratios.)

The Return on Equity has generally been quite good for this stock. The ROE for the financial year ending in 2011 is 24% and the 5 year median is 17.5%. ROE based on comprehensive income for the end of 2011 is 24% and the 5 year median is 16.3%. The similar ROEs based on comprehensive income confirm the good ROEs based on net income.

This looks to me like a good stock for investment. However, I would like to see increasing dividends before I would consider investing in this stock. Tomorrow, I will talk about what analysts say about this stock and what my tests say about the current stock price.

HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Its web site is here HNZ Group. See my spreadsheet at chl.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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