Pason Systems Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Derek Foster.

I do not own this stock of Pason Systems Inc. (TSX-PSI, OTC-PSYTF). I read a report on this stock in the Buy and Sell Advisor in September 2013. I had not heard of this dividend growth company before so I decided to investigate it.

This stock has been around for some time but just started to pay dividends in 2003. The dividend yield is moderate to good and the dividend increases are good. The current dividend yield is 2.48% and the dividends have grown at 27.1% and 31.7% per year over the past 5 and 10 years. The other thing to mention is the dividends used to be paid just semi-annually until this year when they were switched to quarterly.

The last dividend increase was in 2014 and was for 13.3%. However, dividends are up 30.8% year over year. Last year dividends were up 18.2%, year over year. The actual dividends look paid looks different as dividends were switched from semi-annual to quarterly in 2013 and in 2013 shareholders received one semi-annual dividend and 3 quarterly dividends.

The Dividend Payout Ratios seem fine with the 5 year median at 68.2% for EPS and 26.1% for CFPS. The DPR for EPS has been high lately as the EPS has been depressed. The DPR for EPS for 2012 was 87.5% and for 2013 was at 217%. However it is expected to go lower to 43.6% in 2014. Analysts expect EPS to increase by 382% in 2014. If you compare the 12 month period ending in June 2014 to the 12 month period ending in December 2013, EPS are up 203%.

Shareholders have done well recently with the total returns over the past 5 and 10 years at 20.99% and 13.05% per year with 18.27% and 11.29% per year from capital gains and 2.72% and 1.76% per year from dividends.

Outstanding shares have not increased over the past 5 years and have increased by 1% per year over the past 10 years. Revenues are up modestly to good over the past 5 and 10 years. Because of the past two years of low EPS, EPS are down over the past 5 and 10 years. CFPS is down over the past 5 years, but up well over the past 10 years.

Revenue per Share is up by 6.5% and 14.7% per year over the past 5 and 10 years. EPS are down by 17.3% and 1.2% per year over the past 5 and 10 years. CFPS is down by 2.3% and up by 9.5% per year over the past 5 and 10 years. If you compare cash flow for the 12 months to the end of June 2014 and to the 12 months to the end of December 2013, it is up by 72%. Analysts expect CF to increase by some 88% in 2014.

Return on Equity was below 10% twice over the past 10 years and twice over the past 5 years. There was an EPS loss in 2009 and the ROE for 2013 was at just6.5%. The 5 year median ROE is 10.8%. The ROE on comprehensive income was better in 2013 at 10.1%. Its 5 year median ROE is 10.1%.

The debt ratios on this stock are very good. The Liquidity Ratio is 2.88 for 2013 and the Debt Ratio is 5.62 for 2013. Leverage and Debt/Equity Ratios for 2013 are at 1.22 and 0.22 respectively.

Sound bit for Twitter and StockTwits is: Oil Service Dividend Growth Stock. See my spreadsheet at psi.htm.

This is the first of two parts. The second part will be posted on Wednesday, October 28, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Pason is the leading global provider of specialized data management systems for drilling rigs. Their solutions, which include data acquisition, well-site reporting, remote communications, and web-based information management, enable collaboration between the rig and the office. Its web site is here Pason Systems.

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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