Evertz Technologies

I own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). I got the idea to investigate this stock from a G&M article. It is a small cap tech company with a very good dividend (4.6%) and strong balance sheet (Liquidity Ratio of 8.92).

This company was founded in 1966, but it only went public in 2006. They started to pay dividends in 2008. I bought this stock in October 2011for my trading account. I have made a total return of 14.23% per year with 4.79% from dividends and with 9.44% from capital gains.

Dividends are good, as I have said, with the current dividend is quite good at 4.6%. However, the 5 year median dividend yield is lower at 2.27%. The growth in dividends over the past 5 year is 23.73% per year. The most recent dividend increase was in 2013 with an increase at 14.3%. The Dividend Payout Ratios are quite good with the 5 year median DPR for earnings at 39% and for cash flow at 30%.

However, total return has not been so great especially for the last 5 years. The 5 year total return is a loss of 1.51% per year, with a capital loss of 3.81% and with dividends at 2.3%. The 7 year total return is better with the return at 7.47% per year and capital gain at 5.17% per year and dividends at 2.3%.

The outstanding shares have marginally increased over the past 5 and 8 years at 0.37% and 1.61% per year, respectively. Outstanding shares have increased due to stock options and decreased due to Buy Backs. In most cases, the growth in 5 year running averages is higher than for exactly 5 or 10 years of growth. This mostly occurs because exactly 5 or 10 years ago were great financial years.

The 5 and 7year growth in Revenue per Share using 5 year running averages is at 13% and 20% per year. The 5 and 10 year growth is 2.6% and 21% per year. The 7 year growth is at 10.5% per year. EPS is down over the past 5 year at 5.5% per year, but up over the past 5 year using the 5 year running averages at 13.4%. The 10 year growth in EPS runs at 90% per year because 10 years ago, profits were tiny. EPS has fluctuated over the years.

There is no growth in Cash Flow over the past 5, with Cash Flow per Share down by 2% per year. The 8 year growth in CFPS runs at 48.2% per year. The 5 year running average 5 year growth in CFPS is 8.3% per year. Cash Flow has fluctuated quite a bit over the years.

The Return on Equity is good with the ROE for the financial year ending in April 2013 at 16% and the 5 year median higher at 20.2%. The ROE on comprehensive income also comes in at 16% for the April 2013 financial year. The 5 year median ROE on comprehensive income is close at 19.2%.

The Balance Sheet is very strong and has been since 2007. The current Liquidity Ratio is 8.92, and the 5 year median ratio is also 8.92. The Debt Ratio is 8.37 and this ratio has a 5 year median also of 8.37. The Leverage and Debt/Equity Ratios are very low at 1.17 and 0.14, respectively. The company has little debt.

One problem with this stock is finding financial statements. The company does not have them on their site. The company issues press releases with financial data (but these too are not on the company's site). I found the financial statements for 2013 on the Morningstar site.

The article I read said it was looking for stocks with dividends, a strong dose of safety and a dash of growth potential. This stock does have a strong balance sheet with dividends increasing faster than the stock price. I expect to do well by this stock in the longer term, but you have to keep an eye on such stocks. See my spreadsheet at et.htm.

This is the first of two parts. Second part will be posted on July 26, 2013 and will be here.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz.

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.