Tuesday, August 18, 2015


Sound bite for Twitter and StockTwits is: Dividend growth small cap. See my spreadsheet at tcs.htm.

I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

Dividend is currently low, but it used to be higher. The current dividend yield is 1.11%, the 5 year median dividend yield is 2.05% and when I bought this stock in 2011 it was 3.11%. Dividend growth is moderate at 12.5% and 12.3% per year over the past 5 and 7 years. Dividends just started in 2008.

Their last dividend increase was in 2015 and the increase was for 11.1%. The Dividend Payout Ratio is good with the 5 year median for EPS 66.7% and for CFPS at 26.5%. The DPR for 2014 was similar with DPR for EPS at 69.2% and for CFPS at 27.7%. These are expected to be much lower in 2015.

The total return over the past 5 and 10 years is at 41.51% and 20.21% per year. The portion of this total return attributable to dividends is 2.44% and 1.36% per year. The portion of this total return attributable to capital gains is 39.07% and 18.85% per year.

Since I bought this stock in 2011, my total return is 46.39% per year with 43.67% per year from capital gains and 2.72% per year from dividends. For me dividends have covered 16.8% of the cost of my stock and I am earnings 5.2% on my initial investment.

The outstanding shares have not changed much with them being up by 0.2% and down by 1.2% per year over the past 5 and 10 years. Shares in the past have grown due to Stock Options, but the Stock Option plan has been cancelled. Shares have decreased due to Buy Backs. Growth in Revenue, Earnings and Cash Flow are all good.

Revenue is up by 9.3% and 9.2% per year over the past 5 and 10 years. Revenue per Share is up by 9.1% and 10.5% per year over the past 5 and 10 years. Analysts expect Revenue growth of around 13% for 2016. The financial year ends at the end April of each year, so the financial year I am reporting on ended April 30, 2015.

There were mostly earning losses until 2007. The total growth in EPS over the past 10 years is 1400%. I cannot do a compound rate because 10 years ago there was an earning loss. EPS is down by 5.2% over the past 5 years. However, the earnings on this company fluctuate and if you look at 5 year running averages over the past 5 year the increase is 21.4% per year. Analysts expect good growth in EPS for 2016 at 100%.

The Cash Flow has grown at 26.4% and 13.5% per year over the past 5 and 10 years. The CFPS has grown at 26.2% and 14.95 per year over the past 5 and 10 years.

Return on Equity has not been great. The ROE has only been above 10% once in the past 5 years and three times in the past 10 years. The ROE for 2015 (April) is 6.5% and the 5 year median is just 6.8%. The ROE on comprehensive income is a little higher at 6.9% for 2015 with a 5 year median at 6.9% also.

The Debt Ratios are good. The Liquidity Ratio is 1.59. The Debt Ratio is 1.97 and the Leverage and Debt/Equity Ratios are 2.03 and 1.03, respectively.

This is the first of two parts. The second part will be posted on Wednesday, August 19, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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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