FirstService Corp

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSRV), but I used to. I bought FirstService Corp in 2002. By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends.

Interestingly this company started to pay dividends in 2013. Dividends are payable in US$ so dividends will vary with the currency exchange rate. The dividend yield is quite low with the current yield at 0.77% US$. Also there is no sign that the company will increase the dividends. Analysts also do not expect any increase in dividends over the next few years.

The shareholders have done quite well with this stock. The 5 and 10 year total return to date is 24.63% and 9.74% per year. The portion of this total return from capital gains is 23.92% and 9.47% per year. The portion of this total return from dividends is 0.70% and 0.27% per year.

Outstanding shares have grown at 4.1% and 2% per year over the past 5 and 10 years. Revenue is up moderately to good over the past 5 and 10 years. However, Revenue per Share growth is marginal to moderate over these periods. The company puts out an adjusted EPS figure as well as EPS. The Adjusted EPS shows good growth, but since 2013 was a negative EPS year, there is no growth in EPS.

Cash Flow is negative over the past 5 years and good over the past 10 years. Of course, the Cash Flow per share growth figures is worse because of the growth in outstanding Shares.

Revenue is up by 6.6% and 14.4% per year over the past 5 and 10 years. Revenue per Share is up by 2.4% and 12.2% per year over these periods. Adjusted EPS is up by 9.4% and 15.7% per year over the past 5 and 10 years. Cash Flow is down by 1% and up by 10.5% per year over the past 5 and 10 years. CFPS is down by 4.9% and up by 8.4% per year over these periods. All the above is in US$.

There is no Return on Equity for this stock for 2013 as earnings are negative. However, the comprehensive income is lower than the net income.

As far as debt ratios go, the Liquidity Ratio is low as is the Debt Ratios. They are 1.08 and 1.21. I would rather see then at 1.50 or higher. Leverage and Debt/Equity Ratios are rather high at 5.08 and 4.08. When debt ratios are not good, a company can be vulnerable in bad times.

Because of negative EPS, I cannot get 5 year median Price/Earnings per Share values. However, the historical low, median and high median P/E Ratios look viable and these are 11.14, 15.72 and 20.82. The current P/E Ratio is 64.80 based on a stock price of $60.57 and 2014 EPS estimates of $0.81. This stock price test suggests that the stock price is high or expensive.

The 10 year median Price/Book Value per Share Ratio is 5.38. The current P/B Ratio at 8.07 is some 50% higher. This is based on a BVPS of $7.51 and a stock price of $60.57. This stock price test suggests that the stock price is high or expensive.

The 10 year median Price/Cash Flow per Share Ratio is 9.95 and the current P/CF Ratio is 12.62 based on a CFPS estimate for 2014 of $4.80 and a stock price of $60.57. The current P/CF Ratio is some 27% higher than the 10 year median P/CF Ratio. This stock price test suggests that the stock price is high or expensive.

Sound bit for Twitter and StockTwits is: Stock price is currently expensive. See my spreadsheet at fsv.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.

This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Its web site is here FirstService Corp.

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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