Monday, November 10, 2014

CCL Industries Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Money Saver Magazine with Burns and Johnston.

I do not own this stock of CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard of before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.

As far as dividends go, this stock has had a moderate dividend and has increased it moderately. The 5 year median dividend yield is 2.2% and the 10 year median dividend is 2%. The 5 and 10 year dividend growth is at 9% and 9.1% per year. Recently however, the stock price has moved up sharply and the 2014 dividend yield is only 0.9%. The current dividend yield is 1%. These are both low dividend yields.

With a 2% to 2.2% dividend and 9% dividend growth you would probably have a dividend yield on your original purchase price of 5%, 7.7% and 11.8% after 10, 15 and 20 years. With the current 1% yield and 9% dividend growth, you would have a dividend yield of 2.3%, 3.6% and 5.5% yield on your original purchase price in 10, 15 and 20 years.

Dividend Payout Ratios are good. The 5 year median DPR for EPS is at 28.8% and for CFPS is at 12.8%. The corresponding DPRs for 2013 are at 28.8% for EPS and 13.3% for CFPS. The company is expected to have strong earnings for 2014. The dividends were raised some 20% in 2014, but the DPRs for 2014 are expected to be 16.9% for EPS and just 9% for CFPS.

As I mentioned above, the stock price on this company has moved up sharply lately with an 84% increase in 2013 and another 54% increase so far this year. Shareholders have done very well recently with 5 and 10 year total return at 35.66% and 22.07% per year. The capital gains portion of this total return is at 34.03% and 20.58% per year. The dividends portion of this total return is at 1.63% and 1.49% per year.

Outstanding shares have not increased much over the past 5 and 10 years with increases of 1.1% and 0.6% per year. Shares have increased due to Stock Options and Share Issues and have decreased due to Buy Backs. There are also two classes of shares. Class B shares are on the TSX and are non-voting. Class A shares are voting shares and mostly owned by the Lang family (i.e. like 95%).

Growth in Revenues, Earnings and Cash Flow has been moderate to good over the past 5 and 10 years. If you look at just Revenue, it has grown at 9.7% and 2.2% per year over the past 5 and 10 years. However, in 2005 they sold a division of the company, and if you strip out this division, growth over the past 5 and 8 years are at 9.7% and 8.4% per year. The Revenue per Share has grown at 8.5% and 1.6% per year over the past 5 and 10 years.

The EPS is up by 15.4% and 6.4% per year over the past 5 and 10 years. The 5 year earnings are up sharply because exactly 5 years ago the EPS was at a low. If you use the 5 year running averages over the past 5 years, EPS are down by 4.7% per year.

The Cash Flow is up by 5% and 5.3% per year over the past 5 and 10 years. The Cash Flow per Share is up by 3.9% and 4.6% per year over the past 5 and 10 years.

The Return on Equity has been below 10% 3 times in the last 10 years and 2 times in the last 5 years. The ROE for 2013 is 10.2% and the 5 year median ROE is also at 10.2%. The ROE on comprehensive income is strong for 2013 with a value of 14.7%. However, the 5 year median ROE is low at just 7.2%. It would seem that 2013 is a strong earnings year.

The debt ratios are fine with the Liquidity Ratio a bit low sometimes and the Leverage and Debt/Equity Ratios a bit high sometimes. The Liquidity Ratio is for 2013 is 1.41. If you add in cash flow after dividends his ratio is 1.97. The Debt Ratios have always been good with the 2013 ratio at 1.74 and the 5 year median at 1.95. The current Leverage and Debt/Equity Ratios are 2.36 and 1.36 respectively.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock. Analysts seem to feel that 2014 will be a very good year for this company. The company seems to have confidence in the future as they have raised the dividend by 20% in 2014. This is the highest dividend increase ever for this company. The stock price has also shot up. See my spreadsheet at ccl.htm.

This is the first of two parts. The second part will be posted on Tuesday, November 11, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world's largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world's largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Its web site is here CCL Industries.

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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