Calian Technologies Ltd.

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.

They started paying dividends in 2003 and had a good record of increasing the dividends until 2014. The yield on this stock is good as is the dividend increases. The current yield is 6.35% and the 5 year median dividend yield is 5.13%. The dividends have increased by 11.8% and 17.7% per year over the past 5 and 10 years.

The 5 year median Dividend Payout Ratios were at 58% for EPS and 51% for CFPS. The corresponding ones for 2014 were at 78% for EPS and 55% for CFPS. The DPR for EPS is getting high and it seems to me to be a prudent move to not increase the dividends at the present time.

The financial year ending in September 2014 was not a good year for this company. Revenues, Earnings and Cash Flow all declined. In fact 2013 was also not a good year for this company as in that year also Revenues, Earnings and Cash Flow all declined. There is only one analyst following this stock and he expects 2015 to be a better year. However, you have to wonder if the company feels that way as they did not increase dividends.

They have done some buy backs of shares. Shares have increased due to Stock Options and an Employee Share Purchase Plan and decreased due to the buy backs. Shares have declined by 1% per year over the past 5 and 10 years. This makes the per share value look better than they really are.

For example, the net income has decline by 24% and increased by way less than 1% over the past 5 and 10 years. If you look at 5 year running averages, net income is down by 3.7% and up by 14.6% per year over the past 5 and 10 years. If you look at EPS, this is down by 7.4% and up by 1.7% per year over the past 5 and 10 years. The EPS is up by 6.1% and 16.2% per year over the past 5 and 10 years looking at the 5 year running averages.

The Return on Equity has not been less than 10% any year over the past 10 years. Also, the ROE on comprehensive income has not been less than 10% any year over the past 8 years. ROE is a rather new value and the company has only been giving out comprehensive income over the past 8 years.

For the financial year ending in September 2014 the ROE is 15.2% and the ROE on comprehensive income is 15.5%. The ROE on comprehensive income tends to suggest that the earnings are of good quality.

This company has very good debt ratios. The Liquidity Ratio is especially good and this help companies survive the bad times. The Liquidity Ratio for 2014 is 2.66. The Debt Ratio is 3.22. For both this ratios I like to see them at 1.50 or above. So this company has good ratios. The Leverage and Debt/Equity Ratios are also good at 1.45 and 0.45.

Sound bite for Twitter and StockTwits is: Dividend Growth small Tech company. I was looking at this for my TFSA but since it is some 20% of this account, I was going to look at a few other stocks before I make up my mind. See my spreadsheet at cty.htm.

This is the first of two parts. The second part will be posted on Wednesday, January 7, 2015 and will be 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.

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