Metro Inc

I own this stock of Metro Inc. (TSX-MRU, OTC-MTRAF). I first bought this stock in 2001 for the RRSP account and later bought it in 2004 for my Trading account. I sold the stock in my RRSP account, as the stock had grown a lot and there is no capital gain in for RRSP accounts.

I have made a return of 18.36% on the stock I bought in 2004. Only 1.95% is attributable to dividends and 16.41% is attributable to capital gains. I investigated and bought this stock because it was on Mike Higgs list of dividend growth stocks. They on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices).

The dividend is low on this stock. It was a 5 year median dividend yield of 1.6%. The current dividend yield is just 1.32%. On my stock which I have had for 9 years, I am earning a dividend yield of 4.9% on my original purchase price.

The dividend growth is good with the 5 and 10 year growth at 12.6% and 14.5% per year. The last dividend increase for this stock in the 2012 financial year was for 11.7%. The Dividend Payout Ratios are low. The 5 year DPR for earnings is at 19% and the DPR for cash flow is at 12%.

To the end of 2012 the 5 and 10 year total return has been 20.86% and 15.09%. The portion of this total return attributable to dividends is 1.69% and 1.57%. The dividends make up 12% and 11% of the total return over these periods. The portion of the return attributable to capital gain is 19.17% and 13.56%.

The outstanding shares have decreased over the past 5 and 10 years at 3.2% and 0.2%. The shares have increase for stock options and shares issued and have been reduced through share buy backs.

The revenue has grown by 2.4% and 8.8% per year over the past 5 and 10 years. The Revenue per Share has grown at the rate of 5.9% and 9.1% per year over these periods. Earnings per Share have grown at the rate of 15.4% and 13.1% per year over the past 5 and 10 years.

Cash Flow per Share has grown at 9.8% and 11.1% per year over the past 5 and 10 years. The Book Value per Share has grown at the rate of 9.2% and 15% per year over the past 5 and 10 years. Growth rates are good except for revenue and here the 5 year growth rate is low.

The Return on Equity is good with the one for the financial year ending in September 2012 at 19.2% and the 5 year median ROE at 15.7%. The ROE on comprehensive income at 17.3% is has a 2% difference from the ROE on net income. However, the 5 year median ROE is closer at 15.6%.

The Liquidity Ratio is low at just 1.04. Generally cash flow after dividends makes up for this, but even with cash flow after dividends included the Liquidity Ratio is low at 1.43. (You would like to see this at 1.50.) The Debt Ratio is very good at 1.98. Leverage and Debt/Equity Ratios are fine at 2.02 and 1.02.

It has been a good investment and I plan to hold on to the shares I have at present. It has had a good run recently and I would not be surprise if there is a pause in growth. The high accrual ratio of 5.8% is a negative. Revenue growth for last 5 year has been low.

Metro just sold off half their investment in Alimentation Couche-Tard Inc. (TSX-ATD) mru.htm.

Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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.