MacDonald, Dettwiler & Associates

On my other blog I am today writing about space...continue...

I do not own this stock MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also and it is a Tech stock with dividends.

Dividends are a recent addition to this stock as they were started only in 2011. They are also only paying them semi-annually rather than the normal timing of quarterly. They started off with their dividends around 2%. There was a 30% increase in dividends in 2012, but no increase in 2013. The current dividend yield is just 1.6%. Mainly we have lower dividends as this stock in currently on a tear upwards.

The dividend Payout Ratios are good with the ratio for earnings being some 25% in 2011 and 48% in 2012. The DPR for cash flow was also quite good at 24% for 2011 and 29% or 2012.

Total Return over the past 5 and 10 years has been at 6.92% and 10.01% with 6.03% and 9.54% from capital gains and 0.88% and 0.46% from dividends. (There were only dividends during the last 2 years of these periods.)

The outstanding shares have declined over the past 5 and 10 years with the decline being at 4.8% and 1.5% per year over these periods. The shares have increased due to stock options, employee purchase plan and share issues. The shares have decreased due to buy backs.

No matter how you look at the statistics on revenues, the last 5 years have had no growth. Revenue is down by 6% per year over the past 5 years and up by only 4.4% per year over the past 10 years. The Revenue per share, if you look at the 5 year running averages is only up by 1.8% per year over the past 5 years and by 7.8% per year over the past 10 years. However, analysts expect good growth over the next few years. The latest financial shows that year over year revenues are up by 60% to the end of June 2013.

Earnings have had better growth with the 5 and 10 year growth, using 5 year running averages, up by 7% and 14.6% per year, respectively. Analysts are also expecting growth in earnings for the next few years, but looking at the latest report of June 2013, year over year earnings are down by 1.5%.

The cash flow per share has also grown well and the 5 and 10 year growth, using 5 year running averages is up by 9.9% and 16.6% per year. The analysts expect good growth here too and looking at the latest report of June 2013, year over year cash flow is up by 39%.

The Return on Equity has generally been quite good with the ROE at the end of last year at 32.4% with a 5 year median value of 20.3%. The comprehensive income has varied from net income. Comprehensive income was higher in 2011. It was then lower in 2012. If you look the year ending in June 2013, it is again higher (by some 27%).

They have recently been going into debt to buy assets so debt ratios were not great for the financial year ending in 2012. However, they have been improving with the current Liquidity Ratio at 0.92 up from 0.75. However, if you take off the current portion of long term debt and add in cash flow after dividends, the ratio can get to 1.24. Not great, but not that bad.

The Debt Ratio has improved since the end of last year, with the current ratio at 1.31, up from 1.13. The Leverage and Debt/Equity Ratios were rather high at the end of last year coming in at 8.70 and 7.70. They have now improved to 4.24 and 3.24, respectively. Still a little higher than I would like.

I have always had a soft spot for tech companies. This just might be a candidate for a stock to replace Shoppers that I sold from my TFSA. Tomorrow I will look at what my stock price tests tell me and also what others are saying about this stock. See my spreadsheet at mda.htm.

This is the first of two parts. Second part will be posted on Tuesday, August 20th, 2013 and will be here.

MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald, Dettwiler and Associates.

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.