Wednesday, July 23, 2014

Canam Group Inc.

On my other blog I am today giving answers, as best as I can, to other questions that should probably be asked of a dividend stock portfolio continue...

I do not own this stock of Canam Group Inc. (TSX-CAM, OTC- CNMGA). I started following this stock in September 2009 as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate.

I bought this at the end part of 2011 because I thought that the market had gone overboard in punishing the stock because of a dividend cut and the company was having a tough time. I thought I could make a few thousand dollars for my RRIF account and that is what I did. However, looking back at this it appears I sold far too soon.

This stock is not the normal dividend growth stock I generally like investing in. This stock has dividends, but they only pay them when they can afford to and this means that stopped dividends on occasion. They have paid dividends in 6 of the last 10 years. They have just resumed dividend payments in 2014 after stopping them mid-way through 2011.

I made a return of 105% when I held this stock for a short period. If I waited another year I would have made over 200%. Investors over the past 5 and 10 years have had a total return of 14.77% and 11.22% per year. The portion of this return attributable to capital gain is 13.85% and 9.85% per year. The portion of this return attributable to dividends is 0.92% and 1.37% per year.

Revenue, Earnings, and Cash Flow has just start to increase over the past 2 years. Analysts expect that this will continue over the next few years.

The company's debt ratios are good with the Liquidity Ratio at 2.03 and the 5 year median at 2.14 and the Debt Ratio at 1.98 and the 5 year ratio at 1.98. This suggests that the company has survivability. The Leverage and Debt/Equity Ratios are a little high at 2.03 and 1.03.

The analysts' recommendations on this stock are Strong Buy and Buy with the consensus recommendation a Buy. The 12 month stock price consensus is $17.80. This implies a total return of 31.67% with 1.17% from dividends and 30.50% from capital gains.

Sound bit for Twitter and StockTwits is: could make money on this stock. Recessions seem to hit this company hard. It was just recovering form 2000, when it got hit with 2008. Also, when they have problems, they cut dividends and then the stock price gets slammed. The stock price recovers well when they restart dividends. Is there money to be made in the ups and downs of this company? This could be fun. See my spreadsheet at cam.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, India, Romania and Hong Kong. Its web site is here Canam.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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