Sound bite for Twitter and StockTwits is: div growth stock, reasonable to expensive. Testing the stock price is really a mixed bag. Dividend yield is lower than what it has been, but companies changing from income trusts to corporations have lower yields. There is a lot of research to suggest that companies with high dividends yields do better over the longer term than other companies. This company has a relatively high dividend at 6.55%. See my spreadsheet at spb.htm.
I do not own this stock of Superior Plus Corp. (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009.
With earnings losses in 2010 and 2011, the company lowered its dividend by 63% in 2011. It is still paying out monthly dividends. Dividends are down by 18% and 13% per year over the past 5 and 10 years. In 2014 they increased their dividends at the end of the year by 20%. The current dividend is good at 6.55%.
The company has appears to have gone public in 1996 as an income trust. I have dividend info back to this date. The company has been inconsistent with dividend increases. Some years dividends have gone up and sometimes they have gone down. For example, dividends were increased in 1999, but decreased in 2000.
The Dividend Payout Ratios for EPS is too high currently. The DPR for EPS for 2014 was 149% and this ratio is expected to be around 124% this year and then falling below 100% in 2016.
Outstanding shares have increased over the past 5 and 10 years by 4.8% and 5.2% per year. Shares have increased due to DRIP, Share Issues and Stock Options. This means I would be interested in the per share values. Revenue is up moderately over the past 5 and 10 years. EPS has declined over the past 5 and 10 years. CFPS growth is non-existent to moderate over the past 5 and 10 years.
Revenue has grown at 12.01% and 9.9% per year over the past 5 and 10 years. Revenue per Share is up by 7% and 4.4% per year over the past 5 and 10 years. EPS is down by 11.45 and 12.2% per year over the past 5 and 10 years. CFPS is up by 5.7% and down by 1.7% per year over the past 5 and 10 years. With CFPS, if you look at 5 year running averages, CFPS is up by 0.2% and 1.4% per year over the past 5 and 10 years.
The Return on Equity is 10.3% in 2014 and has a 5 year median of 9.8%. The ROE on comprehensive income is 16% in 2014 with a 5 year median of 16%. This suggests that the earnings are better than they might first appear.
The debt ratios are not what I would like. The Liquidity and Debt Ratios are low and the Leverage and Debt/Equity Ratios are too high. The Liquidity Ratio is 1.28 and the Debt Ratio is 1.35. I prefer both of these to be 1.50 or higher. The Leverage and Debt/Equity Ratios are 3.84 and 2.84.
The 5 year low, median and high median Price/Earnings per Share Ratios are 7.18, 8.85 and 12.52. These are lower than the corresponding ratios at 9.99, 12.44 and 15.35. The current P/E Ratio is 18.97 based on a stock price or $11.00 and 2015 EPS estimate of $0.58. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $7.69. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.19 and 1.65. The current P/GP Ratio is 1.43. This stock price testing suggests that the stock price is reasonable, but above the relative median.
The 10 year Price/Book Value per Share Ratio is 2.59 and the current P/B Ratio is 2.43. The current P/B Ratio is based on a Stock Price of $11.00 and BVPS of $4.53. This stock price testing suggests that the stock price is reasonable and below the relative median. It is best to buy stocks that are below the relative median.
The 5 year median dividend yield is 7.34% and the current dividend at 6.55% is some 10.8% lower. This testing suggests that the stock price is reasonable but above the relative median.
The historical average and the historical median dividend yields are 11.40% and 10.45%, values some 43% and 47% above the current yield. This stock price testing suggests that the stock price is relatively expensive. Because this stock is no longer an income trust, it is expected that the dividend yield would go lower. So, future dividend yields are unlikely to get near past dividend yields.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $13.90. This implies a total return of 32.91% with 26.36% from capital gains and 6.55% from dividends.
This entry on The Legacy talks about this stock getting Buy ratings. The site of OCTA Finance says this stock is in a weak down trend. An article by Ryan Vanzo in the Motley Fool asks if the dividend is safe and concludes it is.
I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior's Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior's Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior's Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior Plus.
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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