Tuesday, September 8, 2015

Evertz Technologies

On my other blog I am today writing about possible cheap dividend stocks for September 2015 continue...

Sound bite for Twitter and StockTwits is: Dividend Growth Small Cap Tech. This stock has not been doing well lately, but I am into this stock for the longer term, so I will be holding on to my shares. There have been a number of studies to say that companies with high yields do better for shareholders in the longer term. See my spreadsheet at et.htm.

I own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). I came across an article in G&M about ET and it seemed a good dividend paying company. It has high dividends and is probably riskier than average. The company also has a large amount of insider ownership.

The first thing I noticed is that this company has done very good over the past 10 years, but has distinctly lower growth over the past 5 years. The last recession hit this company quite hard, but this is not unusual. The other thing is that the debt ratios are very good so they can weather recessions well. This stock has a financial year at the end of April each year.

This company is a dividend growth small cap tech company. The current dividend is good, with a good record of dividend increases and generally good payout ratios. The dividend yield has also been increasing as has the payout ratios. The current dividend is 4.54% based on a stock price of $15.87. The dividends have increased by 16.3% and 19.1% per year over the past 5 and 7 years.

The dividend yield has also been increasing as has the payout ratios. The dividends started out with a median of less than 1% in 2008 and have increased to the current 4.54%. The current Dividend Payout Ratios for EPS is 78.2% and for CFPS is $64% for the financial year of April 2015. The 5 year median DPR for EPS is 66% and for CFPS is 54.1%. These ratios started out for EPS at 17.1% and for CFPS 15.2%.

This stock is down this year by almost 10%. I have done fairly well but the total return for the past 5 and 10 years is low. I bought this stock in October 2011 and my total return is 9.48% with 2.52% from capital gains and 6.96% from dividends. The 5 and 10 year total return is at 3.50% and 5.76% per year. The portion of this total return from dividends is at 5.31% and 4.03%. The portion the 5 year total return attributable to a capital loss is 1.81% and to a 10 year capital gain is 1.73%.

There has not been much change in outstanding shares with shares down by 0.6% per year over the past 5 and shares up by 1.4% over the past 10 years. Revenue growth is moderate to good. EPS growth is low to good. Cash Flow growth is non-existent to good.

Revenue is up by 4.95 and 14% per year over the past 5 and 10 years. Revenue per Share is up by 5.5% and 12.4% per year over the past 5 and 10 years. Analysts expect moderate to good growth in revenue over the next couple of years.

EPS is up by 1% and 45.8% per year over the past 5 and 10 years. Because EPS can be volatile it is a good idea to look at the 5 year running averages. EPS is down by 1.5% and up by 4.3% per year over the past 5 and 9 years using 5 year running averages. Earnings have been rather flat since 2008. Analysts expect good EPS growth over the next couple of years.

Cash Flow per Share is flat over the past 5 years and up by 35.4% per year over the past 10 years. Analysts expect good growth in CFPS over the next couple of years.

Return on Equity has always been good with the ROE for April 2015 at 18.5% with a 5 year median at 18.9%. The ROE on comprehensive income is similar at 18.6% for April 2015 with a 5 year median at 19.6%.

As I have said earlier the debt ratios are very good. This provides a company with the ability to survive the bad times. The Liquidity Ratio is 5.62 and the Debt Ratio is 6.15. These ratios are considered good when they are at 1.50 and above. The Leverage and Debt/Equity Ratios are also very good at 1.19 and 0.19.

This is the first of two parts. The second part will be posted on Wednesday, September 9, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz.

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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