Keyera Corp. 2

Sound bite for Twitter and StockTwits is: Good utility stock, but expensive. See my spreadsheet on Keyera Corp.

I do not own this stock of Keyera Corp. (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now writes for the Globe and Mail.

There is not a lot of insider ownership. The current CEO owns shares worth some $19.8M but this is just 0.3% of the outstanding shares. The Chairman owns shares worth some $31.1M and this is just 0.5% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 21.99, 25.94 and 29.96. The 10 year corresponding ratios are lower at 16.63, 20.96 and 25.29. The current P/E Ratio is 25.97 based on a stock price of $38.95 and 2015 EPS estimate of $1.24. This test suggests that the current stock price is still reasonable, but in the top of the reasonableness range. It is above the relative median. However a P/E of $25.97 is rather high, I think, for a utility stock.

I get a Graham Price of $16.75. The 10 year low, median and high median Price/Graham Price Ratios are 1.41, 1.75 and 2.06. The current P/GP Ratio is 2.32 based on a stock price of $38.95. This stock price test suggests that this stock is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.33. The current P/B Ratio is 4.89 a value that is 101% higher than the 10 year median P/B Ratio. This current P/B Ratio is based on a stock price of $38.95 and BVPS of $8.32. This stock price test suggests that this stock is relatively expensive.

Since this company is now a corporation rather than an income fund, I will only look at the 5 year Dividend Yield. The 5 year median Dividend Yield is 4.62%. The current Dividend Yield of 3.54% is based on dividends of $1.38 and a stock price of $38.95. The current dividend yield is some 25% lower than the 5 year median Dividend Yield. This stock price test suggests that this stock is relatively expensive.

When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price if $49.33. This implies a total return of 30.19% with 3.54% from dividends and 26.65% from capital gains.

Thomas Dobrow on Dakota Financial News talks about recent analysts ratings for this stock. On BOE Report is a press release about Keyera's third quarterly results. Joseph Solitro of the Motley Fool did a write up on this stock.

This is the second of two parts. The first part was posted on Monday, November 23, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Keyera provides essential services and products to oil and gas producers in western Canada, and markets related natural gas liquids (NGLs) throughout North America. Its web site is here Keyera Corp.

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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