Monday, December 30, 2013

Stella-Jones Inc.

On my other blog I am today writing about Dividend Stocks that may be cheap...continue...

I have just finished covering my list of stock for 2013 as Stella-Jones is the last stock on my list. I will cover this stock today and on Tuesday. On Thursday, January 2, 2014, I will start back with covering the banks and other stocks with financial years ending prior to December 2013.

I do not own this stock of Stella-Jones Inc. (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.

This is a dividend growth company. The configuration is low dividend and high growth in dividends. The 5 and 10 year growth of dividends is at 21% and 25.5% per year. Because the current yield is so low, it will take a number of years at this growth rate to get a very good yield on a current purchase of this stock.

At 21%, in 10 years' time the yield will only be 5% on your original purchase price. However, in 15 years' time, the dividend yield on your original purchase price will be almost 13%. This is the reason you buy dividend growth stocks. It is so you can growth your dividends income over time.

The yield on this stock is not always so low. The 5 year median dividend yield is better at 1.31%. The stock market is on a bit of a tear at present and this stock is currently doing very well. If you like this stock, you might want to wait until the price gets more reasonable.

Outstanding shares have increased by 6.8% and 6.6% per year over the past 5 and 10 years. Shares have increased due to stock issues and stock options.

Revenues are up by 21.6% and 22.2% per year over the past 5 and 10 years. Revenue per share is up by 13.8% and 14.6% per year over the past 5 and 10 years. On my spreadsheet I denote good growth in green, mediocre growth in blue and low and negative growth in red. Looking at this spreadsheet, all I see is green.

Earnings per Share is up by 17% and 27% per year over the past 5 and 10 years. Cash Flow per Share is up by 10.6% and 21.5% per year over the past 5 and 10 years.

The Return on Equity has been above 10% since 1998. The ROE for the 2012 financial year was 15.6% and it is expected to be slightly higher in 2013 at 17.6%. The ROE on comprehensive income is sometimes higher and sometimes lower than the ROE on Net Income. For the 2012 financial year it was close at 14.4%.

This stock has good debt ratios. The current Liquidity Ratio is 8.67. The current Debt Ratio is 2.26. The current Leverage Debt/Equity Ratios are 1.80 and 0.80. The Leverage Debt/Equity Ratios can vary and the 10 year median ratios are 2.03 and 1.03.

This is a Dividend growth stock with good growth. See my spreadsheet at sj.htm.

This is the first of two parts. Second part will be posted on Tuesday, December 31, 2013 and will be available here.

Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones.

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.

No comments:

Post a Comment