HNZ Group Inc.

On my other blog I am today writing about possible cheap dividend stocks for October 2014 continue...

I do not own this stock of HNZ Group Inc. (TSX-HNZ.A, OTC- CDHPF). HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica.

This company started out as an income trust in 2005. The last dividend increase was for 5% in 2008. Dividends have not changed since then. The company has given no indication what its intentions are except to say that dividends are paid at the discretion of the Board of Directors.

Dividends are still paid monthly and the dividend yield is quite good at 6% currently. The 5 year median dividend yield is 5.42%. Analysts do not seem to think that dividends will change anytime soon. The 5 year median Dividend Payout Ratios for EPS is 52% and for CFPS is 23%. The corresponding DPR for 2013 was 73% for EPS and 23% for CFPS. For 2014 DPR for EPS is expected to be around 90%.

Shareholders have done well with this with total returns over the past 5 and 10 years at 19.17% and 13.81% per year. The portion of this return attributable to dividends is at 8.37% and 7.54% per year. The portion of this return attributable to capital gains is at 10.80% and 6.27% per year. However, the stock price hit a peak in 2012 and has been treading down since then. Currently the stock price is 48% off its peak.

The 5 year low, median and high median P/E Ratios are 4.67, 6.30 and 7.94. These are very low value considering the fact that the company has had no negative profit years. The lowest P/E Ratio for 2013 was 13.23, but this was because of low EPS. The current P/E Ratio is 14.93. This would suggest that the stock price is relatively expensive.

If you use the 12 month CFPS, the current P/CF Ratio would be 4.23 against the 9 year median P/CF Ratio of 3.92. The current one is just 8% higher and this would suggest that the stock price is reasonable.

However, if you look at P/S Ratio, the 9 year median P/S Ratio is 0.84 against a P/S Ratio using the 12 month Revenue per Share value of $18.70 and corresponding P/S Ratio of 0.98. This current P/S Ratio is some 17% higher than the 9 year median value and suggests a rather high stock price, but one still within a reasonable range.

Revenue, Earnings and Cash Flow all hit a peak in 2011 and have been declining since then. Obviously this needs to turn around if the company is to be a good investment. There has been growth in Revenue, Earnings and Cash Flow over the past 5 and 9 years, but just not lately. Analysts do not expect growth in Revenue or Earnings in 2014. I cannot see that any analyst has speculated on Cash Flow values for 2014.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a hold so the consensus recommendation is a Hold. The 12 month consensus stock price is $18.40 and that is close to the current price of $18.37.

Sound bit for Twitter and StockTwits is: Not currently a dividend growth stock. I will still follow this stock for a while to see where it goes to. However, it is not currently a dividend growth stock and so I would not be interested in buying currently. See my spreadsheet at sis.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.

HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Its web site is here HNZ Group.

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.