Superior Plus Corp.

On my other blog I am today writing about investigating stocks, mutual funds and ETFs continue...

I do not own this stock of Superior Plus Corp. (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009. It has started out as an income trust in 1996.

As far as I can see the dividends (or distributions) hit a high in 1999, 2004 and 2008. After each high, dividends were cut. From 2008 to 2011 dividends were level. Dividends were again cut in 2012 and have been level ever since. The 5 and 10 year decline in dividends is at 18% and 12.5% per year.

Although the dividend yield has often been quite high on this stock, this is not the sort of stock I like. Yes, I understand that companies that go from income trusts to corporations have cut dividends and that is fine with me. The problem with this company is that is not the only time it has cut dividends. Current dividend is 4.09%.

The 5 and 10 year total return is at 6.73% for the last 5 years and a loss of 0.73% over the past 10 years. The portion of the total return attributable to dividends is at 6.61% and 6.14% over these periods. The portion of the total return over the past 5 year attributable to capital gains is 0.12% and the portion of the total return over the past 10 year attributable to capital loss is 6.87%.

The outstanding shares have increase by 7.4% and 6.2% per year over the past 5 and 10 years. The shares have increased due to Share Issues, Stock Options and a DRIP plan. Only revenues have increased over the past 5 and 10 years. Earnings and EPS are down. Cash Flow is growth is good over the past 10 years, but non-existent over the past 5 years.

Revenue is up by 8.6% and 11.8% per year over the past 5 and 10 years. Revenue per share is up by 1.1% and 5.3% per year over these periods. Earnings are down by 4.9% and 8% per year over the past 5 and 10 years. EPS is down by 12.3% and 13.7% per year over these periods.

Cash flow is up strongly over the past 10 years and not at all over the past 5 years. Cash Flow is down by 0.2% per year over the past 5 years and up by 29.5% per year over the past 10 years. CFPS is down by 7.1% per year over the past 5 years and up by 21.9% per year over the past 10 years.

Over the past 10 years there has been 3 years of earnings losses. Otherwise Return on Equity has been above 10% except for 2013 where it was at 9.8%. The ROE on Comprehensive Income was good for 2013 at 18.3%.

The debt ratios are adequate. The current Liquidity Ratio is 1.48. The current Debt Ratio is 1.37. The Leverage and Debt/Equity Ratios are 3.68 and 2.68.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 months consensus stock price is $15.20. This implies a total return of 7.19% with 3.12% from capital gains and 4.07% from dividends. The capital gains expected is rather low for a Buy recommendation.

The 5 year low, median and high median Price/Earnings per Share Ratios are 7.18, 9.85 and 12.52. The 10 year corresponding ones are a bit higher at 9.99, 12.44 and 15.35. The current P/E Ratio is 15.52 based on a stock price of $14.74 and 2014 EPS estimate of $0.95. This stock price test suggests that the stock is fully valued. That is the stock is relatively expensive.

I get a Graham Price of $9.62. The P/GP Ratio is 1.53 based on a stock price $14.74. The 10 year low, median and high median P/GP Ratios are 0.87, 1.19 and 1.65. This stock price test suggests that the stock price is relatively reasonable although on the higher end of the reasonableness range.

The 10 year Price/Book Value per Share Ratio is 2.59 and the current P/B Ratio at 3.41 is some 35% higher. This stock price test suggests that the stock price is relatively high.

Sound bit for Twitter and StockTwits is: Variable dividend, expensive stock. See my spreadsheet at spb.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.

Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior's Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior's Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior's Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior Plus.

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.

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