CCL Industries Inc. 2

I do not own this stock CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock which I had also heard of this stock before. This is also a dividend paying stock and was and is on is on the Dividend Aristocrats list.

When I look at the insider trading reporting, I find no insider buying and $31.4M of insider selling of which $9M was done by the CEO. The insider selling seems to be all options selling. Commonly insiders consider options part of their salaries and tend to sell off options when they can do so. Most of the selling happened in the early part of 2013. There has been not action in last month. Insiders have options and also Rights Restricted Share Units and Rights Deferred Share Units.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.69, 13.22, and 15.03. The current P/E Ratio is 24.23 based on a stock price of 24.93 based on a stock price of $84.02 and 2013 EPS estimate of $3.37. The stock test suggests that the stock price is high.

Analysts have been pointing out that we should look at the 2014 P/E Ratio because the stock is rising due to the recent purchase of Avery Dennison. If we do that I get a P/E of 15.50 based on a current stock price of $84.02 and 2014 EPS estimate of $5.42. Unfortunate or maybe fortunate for current shareholders, the stock price has been rising steeply lately and this P/E Ratio is also rather high.

The 10 year Price/Book Value per Share is 1.39 and the current one is 2.93. The current P/B Ratio is some 110% above the 10 year median and this stock price test suggests that the stock price is high.

I get a current Graham Price of $46.64. The 10 year low, median and high median Price/Graham Price Ratios are 0.74, 0.85 and 0.96. The current P/GP Ratio is 1.80. I get a Graham Price of $59.15 for 2014 and a P/GP Ratio of 1.42. On a relative basis the stock price is certainly quite high.

The 5 year median dividend yield is 2.2% and the current dividend yield is just 1.20% a value some 53% lower. This test also suggests that the stock price is rather high. We are in a bull market currently and people get over exuberant in these times. Also, this stock is having quite a bull run and perhaps people are getting too exuberant about this stock. It would seem that no matter how you slice and dice it, the stock is probably above what you should be paying for it.

There is not many analysts following this stock, but they all give a recommendation of Buy. The 12 month consensus stock price is $92.30. This implies a 12 month total return of 10.87, with 9.85% from capital gains and 1.02% from dividends.

There is a short article by Motley Fools. In mid-November, the author thought that the price of $78.50 was perhaps too bullish. The site Zolmax talks about BMO rising their 12 month stock price to $90 from $80 while Scotiabank lowered theirs from $91 to $88. A blogger called Dividend Gangster did a good review of this stock in October of 2012.

I think that this is a good company. However, I do feel that it is overpriced. See my spreadsheet at ccl.htm.

This is the second of two parts. The first part was posted on Monday, November 25, 2013 and is available here.

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 Industries.

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.