PFB Corp.

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

I do not own this stock of PFB Corp. (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term if the company is successful.

This stock looked a lot more interesting in 2009. It had a couple of dividend rises in its past and a habit of special dividends. Unfortunately, since that time dividends have been flat and until 2003 no special dividends have been paid. The special dividend paid in 2013 was 4 times the normal annual dividend, so this was good.

I realize that a lot of companies have had a hard time dealing with the 2008/09 recession, but the fact remains that there is not much of dividend increases for this company. Dividends are flat over the past 5 years and are up by 4.8% per year over the past 10 years.

Shareholders have not done that well over the past 5 and 10 year and only have a positive return because of dividends. The total returns over the past 5 and 10 years are at 4.07% and 5.81% per year. The dividend portion of this return is at 8.65% and 7.09% per year. There was capital loss of 4.59% and 1.27% per year over the past 5 and 10 years.

Note that the $1.00 special dividend in 2013 made possible such high dividend rates. They made a capital gain in 2013 and this is why the EPS for 2013 was $1.02. Without the capital gain they made in 2013, EPS would be $0.13.

Outstanding share have not changed much over the past 5 and 10 years with shares increasing at 0.5% and 1.7% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs.

Growth has not been good for this company, especially over the past 5 years. Revenue is us by 1.2% and 7.4% per year over the past 5 and 10 years. Revenue per Share is up by 0.7% and 5.6% per year over these periods.

Earnings per Share have increased by 56% and 10% over the past 5 and 10 years. However, if you insider the EPS for 2013 at $.13 that is without the special gain then growth over the past 5 year is at 3.4% per year and EPS would be down by 10.4% over the past 10 years.

The picture is not very good looking at cash flows. The Cash Flow per Share is down by 3% and 4.1% per year over the past 5 and 10 years.

The only year with a Return on Equity over 10% in the past 5 years is 2013 with an ROE at 16.1%. However, without the special gain, ROE for 2013 would be only 2%.

One bright point for this stock is debt ratios and they are all good and have been good. The Liquidity Ratio for 2013 was 2.65 and it has a 5 year median value of 2.61. The Debt Ratio was 2.60 and it has a 5 year median value of 3.32. The Leverage and Debt/Equity Ratios for 2013 was at 1.63 and 0.63. The 5 year median values are 1.43 and 0.43, respectively.

Sound bit for Twitter and StockTwits is: Dividend Paying Small Cap. I think that the debt ratios are a good sign because good debt ratios can see a company through hard times. See my spreadsheet at pfb.htm.

This is the first of two parts. The second part will be posted on Tuesday, December 2, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB 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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