Alimentation Couche-Tard Inc. 2

Sound bite for Twitter and StockTwits is: Expensive stock, Div yield very low. See my spreadsheet on Alimentation Couche-Tard Inc.

I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF). In 2004 I bought this stock as it has a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 and by the year end I bought more. I sold the stock in my trading account in 2007. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

Over the past year in insider trading there has been some $0.2M of insider buying and some $31.1M of insider selling. Net insider selling is at 0.09% of the market cap of this stock. This is rather high. The median net insider for the stocks I cover is 0.02% and 70% are below 0.08%.

There are two classes of shares, Multiple Voting Shares are ATD.A with 10 votes per share and Subordinate Voting Shares are ATD.B with1 vote per share. , Alain Bouchard, the chairman owns almost 40% of the outstanding ATD.A shares. There is a lot of insider ownership especially amount the Directors of this company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.04, 15.94 and 19.44. The 10 year P/E Ratios are similar at 12.26, 15.95 and 19.64. The current P/E Ratio is 23.28 based on a stock price of $59.63 and EPS estimate for 2016 of $2.56. The EPS estimate is some 62% CDN$ (or 35% in US$) higher than the EPS for 2015. This stock price testing suggests that this stock is relatively expensive.

I get a Graham Price of $20.93. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81. The current P/GP Ratio is 2.85 based on a stock price of $59.63. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 2.88. The current P/B Ratio is 7.84 based on BVPS of $7.60 and a stock price of $59.63. The current P/B Ratio is some 172% higher than the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 0.60%. The current dividend yield is 0.37% based on dividends of $0.22 and a stock price of $59.63. The current dividend yield is some 39% higher. You do not get any better result using the historical average and the historical median dividend yields of 0.77% and 0.65%. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. The 12 month stock price is $48.90 in US$ where the current US$ price is $45.30. This implies a total return of 8.32% with 7.955 from capital gains and 0.37% from dividends. This is a very low return for a Buy recommendation.

In an article for Motley Fool, Demetris Afxentiou says this stock is a counter recession stock. Some analysts are raising their target price for this stock according to a recent Dakota Financial News article. The Blogger on Dividend Growth Investing also thinks that the dividend yield is too low. However, he has higher standards than me..

This is the second of two parts. The first part was posted on Monday, September 14, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard Inc.

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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