Wednesday, August 27, 2014

Evertz Technologies 2

On my other blog I am today writing about dividend stocks and safety continue...

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 looked like something I might want to try out. This stock also came up in a stock screen filter that was looking for reliable dividend payers. That is companies that have reliable profits big enough to comfortably cover their dividend payments. It has high dividends and is probably riskier than average.

When I look at insider trading, I find $0.5M of insider selling and no insider buying. Insider selling is only 0.04% of the stock's market cap and therefore a very small amount. Outstanding shares were increased by 681,200 shares for stock options in the financial year ending April 2014. This is almost 1% of the outstanding shares of the company. It is a little high. About the same thing happened for the financial year ending in April 2013.

There is insider ownership with the CEO owning shares worth around $394M and the chairman owning shares worth around $394M. Insiders own around 70% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.92, 17.70 and 20.48. The 10 year corresponding P/E Ratios are similar. The current P/E Ratio is 17.84 based on a stock price of $17.30 and 2015 earnings estimates of $0.97. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $9.90. The 10 year low, median and high median Price/Graham Price Ratios are 1.35, 1.67 and 1.99. The current P/GP Ratio is 1.75. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 3.58 and the current P/B Ratio is 3.86 a value some 4% higher. This stock price test suggests that the stock price is relatively reasonable.

I get a 5 year median dividend yield of 3.21% and the current dividend yield at 3.70 is some 15% higher. This is a good sign. This stock price test suggests that the stock price is relatively reasonable. (The current one would have to be 20% higher or more for the stock to be cheap.)

The historical average dividend yield is 2.89% and the historical median dividend yield is 2.29% and both these are signaling that the stock price is cheap as they are more than 20% lower than the current dividend yield. (However, do not forget that for this stock there is only 6 years of data to deal with.)

When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 month consensus stock price is $19.50. This implies a total return of 16.42% with 3.70% from dividends and 12.72% from capital gains.

There is an interesting article from Alpha Now about the use of Evertz technologies in the world cup broadcasts. The Street site said that Evertz Technologies is in the top 25 Dividend stocks in an April 2013 item by Jim Cramer.

Sound bit for Twitter and StockTwits is: stock price is reasonable to cheap. Although I have not invested much in this company, I am pleased with this investment. I will probably invest more in this company, but since I am living off my dividends, I generally do not have much money for new investments. See my spreadsheet at et.htm.

This is the second of two parts. The first part was posted on Tuesday, August 26, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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. 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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