Wednesday, January 7, 2015

Calian Technologies Ltd. 2

On my other blog I am today writing about possible cheap dividend stocks for January 2015 continue...

I own this stock of Calian Technologies Ltd. (TSX-CTY, OTC-CLNFF). This is an interesting company with a very nice dividend. This stock came up on a Globe Investor site. The Globe Investor Number Cruncher is an investment column about screening for stocks and funds. They did one on companies with little to no debt. I also noted that the Financial Blogger had this stock on his Top Ten Canadian Dividend Stocks list in 2011.

In the 2014 financial year, the outstanding shares were not increased by any stock options. There was not much in the way of insider trading. There was a bit of insider buy and no insider selling. Insider buying is at 0.01% of the market cap of this stock and a very small amount.

There is a bit of insider ownership with the CEO owning shares worth around $1.3M and the CFO owning shares worth around $0.3M. This is not much insider ownership.

They do not have a mission statement, but they say that they wish to be their customers' program delivery partner, by providing value added systems and services in order to assist them in achieving their business objectives. They also wish to be the most desirable Canadian company to work for, buy from and invest in.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.89, 11.05 and 11.85. The corresponding 10 year P/E Ratios are similar at 10.12, 11.17 and 11.99. This is a pretty tight range. The current P/E Ratio is 11.46 based on a stock price of $17.65 and 2015 EPS estimate of $1.54. This test suggests that the stock price is relatively reasonable.

I get a Graham price of $18.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.04 and 1.14. The current P/GP Ratio is 0.97 based on a stock price of $17.65. This test suggests that the stock price is relatively reasonable. On an absolute basis, a P/GP Ratio of less than 1.00 says a company is cheap.

The 10 year median Price/Book Value per Share Ratio is 2.22. The current P/B Ratio at 1.87 is some 16% lower. This test suggests that the stock price is relatively reasonable. For the stock price is be considered cheap the current P/B Ratio would have to be 20% lower than the 10 year median ratio.

Where this stock is showing up as cheap is using the historical high dividend yield, which at 6.20% is some 2% lower than the current dividend yield is 6.35%. This test is saying that the stock is relatively cheap. The current dividend yield is, of course, also higher than the 5 year median, the historical average and the historical median dividend yields.

When I look at analysts' recommendations, I find only one analyst following this stock and the recommendation given is a hold. The 12 month stock price is $19.00. This implies total returns of 13.99% with 7.65% from capital gains and 6.35% from dividends.

This article talks about Calian being awarded a defense contract worth more than $17M. This article talks about Calian acquiring Amtek Engineering Services Ltd. of Ottawa, Ontario. There is an interesting 2012 article on Calian in the Globe and Mail. Going forward to today, this company has been trading in $17.50 to $22.50 range since 2009.

Sound bite for Twitter and StockTwits is: Stock price is cheap to reasonable. I must say that I do like using the dividend yield test because you are not using past financial data or estimates of future financial data. Also, I think the point to investing for the long term is to buy a good company when it is cheap. This seems to be the time that analysts tend to give recommendations of a Hold. See my spreadsheet at cty.htm.

This is the second of two parts. The first part was posted on Tuesday, January 06, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Calian sells technology services to industry and government in Canada and around the world. Calian provides customers with ready access to an exceptional team of engineers, telecommunications and technology professionals, health care professionals and other highly qualified staff. Its web site is here Calian.

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.


  1. Nice analysis - but what do you think about their dependence on government contracts, and where this will go with the current bleak outlook for the Canadian economy? Is this a significant risk in your view?

  2. If I had this stock it would be a worry. It is hard to know where our economy is going to go and we could go into another recession when we are not really out of the 2008 one.

    On the other had the number of people and the percentage of the population working for govenment in Canada had just gone up over time. When this will stop is anyone's guess. But it cannot go on forever.

    I do like the people that run this company and they seem to act in smart and prudent ways.