CCL Industries Inc

I do not own this stock of CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). I had read a favorable report on this stock and they are on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). This is why I am following this company. This is a company with two classes of shares and the original family owns 94% of the votes.

The company pays a decent dividend of around 2% (the 5 year median dividend yield is 2.2%) and they increase their dividend at a decent rate. The dividends have grown at the rate of 10% and 8% over the past 5 and 10 years. The last time they increased their dividend was this year and the increase was for 11.4%.

The Dividend Payout Ratios are good with the 5 year median ratios at 30% for earnings and 13% for cash flow. This year's ratios are expected to be in line with longer term ratios at 27% for earnings and 15% for cash flow.

The outstanding shares have only changed marginally over the past few years with the shares outstanding increasing by 0.7% per year over the past 5 years and decreasing by 0.1% over the past 10 years. The outstanding shares have been going up recently due to stock options being exercised.

The total return for this stock over the last 5 and 10 years has been at 3.68% and 10.08% per year. The dividend portion of this return was at 2.02% and 2.33% per year, respectively. The capital gain over these periods was at 1.66% and 7.75% per year, respectively. The dividend portion of the return was 54.96% and 23.09% per year over the past 5 and 10 years.

There has not been much growth in revenues lately with revenues up just 0.9% per year over the past 5 years. Revenues are down by 2.3% per year over the past 10 years. Revenue per share is similar with revenue per share up 0.3% per year over the past 5 years and down 2.2% per year over the past 10 years.

The earnings per share have a tendency to fluctuate, but they always have positive earnings. EPS is up some 1.4% per year over the past 5 years and is up 13.6% per year over the past 10 years. This is an industrial company and so it having fluctuating EPS is not a surprise. The good part of this is that the EPS are positive.

The cash flow per share has the same problem as the EPS in that they fluctuate, but they are positive. The CFPS is up 3.5% and 4.7% per year over the past 5 and 10 years. The book value per share has increased by 3.9% per year over the past 5 and 10 years.

The return on equity was good at 10.3% (for the financial year ending in 2011). This has varied over the years and the 5 year median ROE is lower at 9%. Unfortunately, the ROE on comprehensive income is lower with the ROE for 2011 at just 7.2% and the 5 year median ROE also at 7.2%. The ROE on comprehensive income tends to be lower than the ROE on net income and this can call into question the quality of the earnings. (That is that the EPS may not be quite as good as they first appear to be.)

The Liquidity Ratios tend to be quite good with the ratio for 2011 at 1.66 and the current one being at 1.93. They also have strong cash flows, and the Liquidity Ratio with cash flow after dividend is at 2.24 for 2011and has a 5 year median of 2.19. The Debt Ratio is also good with the ratio for 2011 being at 2.03 and the current one at 2.12.

The current Leverage and Debt/Equity Ratios are 1.90 and 0.90. These ratios have been higher in the past as the 5 year median ratios are 2.36 and 1.36, respectively. Generally speaking, when a stock is mostly owned by insiders or a family, you tend to get good debt ratios and this stock is no different.

The reason people buy dividend growth stocks, which this stock is one of, is that because the dividends paid on your original investment grows over time. For this stock, after 10 years, you could have twice the yield on your stock purchase money today or after 20 years your dividend on your stock purchase money today could be close to 10%.

This stock has been a solid investment for dividend investing shareholders.

CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world's largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world's largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Its web site is here CCL. See my spreadsheet at ccl.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 or StockTwits.