Wednesday, January 28, 2015

Rogers Sugar Inc.

On my other blog I am today writing about what I am doing with my new TFSA money in 2015 continue...

I do not own this stock of Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has recently converted to corporation. On change to a corporation, it lowered its dividend.

This is not a dividend growth company. The dividends have fluctuated many times in the past. For example, the dividends were $0.58 in 2001, a decrease of 26%; $0.42 in 2002, a decrease of 28.5%; and $0.48 in 2003, an increase of 15.7%. They were at one time an Income Trust company and when they became a corporation in 2011 they cut their dividends by around 30%.

The other thing to mentions, of course, is the dividend yield. The 5 year median dividend yield is quite good at 6.18% but the current one is even better at 7.89%. Of course as an income trust, this stock had high dividend yields. The historical average and historical median are at 10.58% and 10.09%. The stock hit lows of dividends in 2012, but dividends were still north of 5%.

The current dividend at $0.36 has been stable since 2013. They also paid a special dividend they could ill afford in 2013. The company has had high Dividend Payout Ratios, which occurred after 2011 and especially in regards to earnings. The 5 year DPR for EPS is 107.8% and for CFPS is 57.6%. The DPR in 2014 for EPS was 116% and for CFPS was 54.4%.

When a company pays out more than earnings in dividends this basically cause a decline in book value. The book value for this company has been declining. The Book Value per Share has decreased by 17% and 11% per year over the past 5 and 10 years. Book value hit a peak in 2011 and has been decreasing since then.

There has been little to no growth in revenues, but analysts expect some growth over the next couple of years. EPS have been volatile and analysts do not see much growth over the next couple of years. There has been little to no growth in CFPS, but analysts see some growth in 2015.

Revenue per Share is down by 1.9% and up by 1.6% per year over the past 5 and 10 years. Revenues per Share peaked in 2010 and 2011and have been going down since. Analysts expect little to happen in 2015, but expect growth of around 4% in 2016.

EPS is down by 7% and 2.8% per year over the past 5 and 10 years. However because of the volatility of EPS, if you look at 5 year running averages, EPS is up by 2.8% and 4% per year over the past 5 and 10 years. Analysts expect EPS to be flat in 2015 and 2016 at $0.33.

For Cash Flow per Share there has been a decline of 4.6% per year over the past 5 years and no change over the past 10 years. CFPS is also a bit volatile, but even looking at 5 year running averages there is no growth over the past 5 years and 1.4% per year growth over the past 10 years. Analysts' consensus expect some growth in 2015 but none in 2016.

The Return on Equity has been over 10% every year over the past 5 and 10 years, so this is good. The ROE for 2014 was 11.7% and has a 5 year median of 14.6%. The ROE on comprehensive income is slightly higher and is 11.8% in 2014 and has a 5 year median of 15.2%.

The Liquidity Ratio has been quite volatile, but is good in 2014 at 1.61. However, the 5 year median is just 1.34. The Debt Ratios have always been good and is at 1.79 in 2014. Leverage and Debt/Equity Ratios have been a bit high over the past while and were at 2.27 and 1.27 in 2014. These ratios have 5 year medians of 2.16 and 1.16, respectively.

Stock price has been fall after hitting a peak in 2012. Total return to date is 5.25% and 12.90% per year over the past 5 and 10 years. The dividend portion of this return is at 8.35% and 10.79% per year. The capital gain portion is a negative 3.11% and a positive 2.11% per year. This shows the value of dividends. Investors have a tendency not to lose much with dividend stock.

Sound bite for Twitter and StockTwits is: Not dividend growth, but yield is good. It has problems with lack of revenue growth and declining book value. They need to lower the DPR for EPS and this many not happen anytime soon. Some see a dividend cut in the future. See my spreadsheet at rsi.htm.

This is the first of two parts. The second part will be posted on Thursday, January 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Rogers Sugar.

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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