Progressive Waste Solutions Ltd.

On my other blog I am today writing about a recent paper on Financial Planning and Investing Behavior continue...

Sound bite for Twitter and StockTwits is: Dividend growth Industrial stock. This stock is producing solid results. I bought it for diversification. See my spreadsheet at bin.htm.

I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 because TD Securities had a very favorable report on this stock and had it on it action buy lists. I had money because I had recently sold RIM. At that time it was an income fund. In 2010, I needed to buy something for Pension Account. I have this already and it was on TD Action Buy List.

When this company changed from an income trust to a corporation in 2008, it decreased its dividends and the final dividends decrease in 2010 was a 72.5% decrease. In 2011 it started to increase the dividend again. Since then dividends are up 64%, but they are still some 65% lower than dividends paid in 2008. The last dividend increase was in 2014 and the increase was for 6.7%.

The problem a lot of income trusts had with dividends was that they were paying out more than their EPS. Some of the ones that cut their dividends have been able to start increasing them again. This is one such company. The Dividend Payout Ratio for 2014 was 47.8% for EPS and 14.7% for CFPS.

Currently the dividend yield is low with the current yield at 1.84%. The 5 year median dividend yield is at 2.23% is a moderate dividend. The dividend growth has been at 5.1% per year since increases have restarted. So the dividend growth is moderate. The Dividend Payout Ratio for EPS is moderate with the 5 year median at 52.5%.

My total return has been 8.53% per year with 5.97% per year from capital gains and 2.56% per year from dividends. The 5 and 10 year total return is 9.67% and 5.58% per year with 7.58% and 2.18% per year from capital gains and 2.09% and 3.40% from dividends.

The outstanding shares have increased by 6.4% and 15.5% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and have decreased due to Buy Backs. I will report growth in US$ as more than 60% of this companies business Revenue is from US and the company reports in US$. Revenue growth is moderate to good as is EPS. Cash Flow growth is good.

Revenue is up by 14.8% and 28.8% per year over the past 5 and 10 years. Revenue per Share is up by 7.9% and 11.5% per year over the past 5 and 10 years. Analysts do not expect any growth in Revenues for 2015 and modest growth in 2016. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows revenues to down modestly (less than 1%).

EPS has grown at 16% and 7.5% per year over the past 5 and 10 years. Analysts expect good growth in EPS this year and next year. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows EPS to down by 6.4%.

Cash Flow is up by 15% and 25.4% per year over the past 5 and 10 years. CFPS is up by 8.2% and 8.6% per year over the past 5 and 10 years. Analysts expect cash flow to decline this year and next and then start going up again in 2017. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows Cash Flow is down by 38%.

The Return on Equity has been rather low for this company until last year. Last year the ROE was 9.1% and this year it was over 10% at 10.3%. A problem is that the ROE on comprehensive income is much lower in 2014 than the ROE on Net Income at just 6.9%. This could suggest that the earnings may not be of good quality.

The debt ratios are fine. The Liquidity Ratio is low at 0.89 in 2014. However when you add in Cash Flow less dividends then it is 2.08. The Debt Ratio is the best at 1.57 in 2014. The Leverage and Debt/Equity Ratios are a little high but fine at 2.75 and 1.75 in 2014.

This is the first of two parts. The second part will be posted on Thursday, May 28, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Progressive Waste Solutions Ltd. are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Its web site is here Progressive Waste.

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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