Exco Technologies Ltd.

Sound bite for Twitter and StockTwits is: Good stock, good price. This small tech stock is doing well and is earning money for its shareholders. It has good growth in dividends. See my spreadsheet on Exco Technologies Ltd.

I do not own this stock of Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.

Dividends are low to moderate. The dividend growth is moderate to high. The current dividend yield is 1.89% and the 5 year median dividend yield is 2.80%. Dividend growth is at 24.3% and 16.5% per year over the past 5 and 10 years. Dividends just started 12 years ago. The reason that the 5 year growth is better than the 10 years growth is that dividends did not grow at first.

The Dividend Payout Ratios are good. The DPR for EPS for 2015 is 24% and the 5 year DPR for EPS is 26.7%. The DPR for CFPS for 2015 is 16.5% and the 5 year median is 18.2%.

The company had some difficulty in the 2008 to 2010 time frame with lower Revenue, Earnings and Cash Flow. However things picked up and the growth over the past 5 and 10 years to date is good. For example, Revenue has grown by 24.7% and 8.8% per year over the past 5 and 10 years. Revenue per Share has grown at 23.8% and 8.6% per year over the past 5 and 10 years.

The company has a strong balance sheet. The Liquidity Ratio for 2015 was 2.27, the Debt Ratio for 2015 was 3.50 and the Leverage and Debt/Equity Ratios for 2015 was 1.40 and 0.40. These are all very good ratios.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 8.50, 10.40 and 12.31. The corresponding 10 year ratios are close at 8.39, 10.21 and 12.04. The current P/E Ratio is 10.32 based on a stock price of $12.69 and 2016 EPS estimate of $1.23. This stock price testing suggests that the stock price is reasonable and around the median.

I get a Graham Price of $13.00. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 096 and 1.24. The current P/GP Ratio is 0.98. This stock price testing suggests that the stock price is reasonable and around the median. On an absolute basis an P/GP Ratio lower than 1.00 suggests a stock is selling at a good price.

Looking at the dividend yield the picture is basically the same. The historical median dividend is 1.95% which is some 3% higher than the current dividend yield of 1.89%. You want a current dividend yield that is higher than the median. In this case it is not much higher. So again this stock price testing suggests that the stock price is reasonable and around the median.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. The consensus would be a Buy. The 12 month stock price is $19.10. This implies a total return of 51.69% with 1.89% from dividends and 49.80% from capital gains. (See my blog for information on Analyst Ratings .)

Nick Waddell in the CanTech Letter gave a good report on this stock. In this News Release Exco Technologies Ltd talks about its first quarterly results for 2016. There are some analysts' comments at Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

Exco is a global designer, developer and manufacturer of dies, moulds, equipment, components and assemblies to the die-cast, extrusion and automotive industries. The Die Casting and Extrusion Technology groups operations are based in Canada, U.S., Mexico and Colombia and primarily serve automotive and industrial markets throughout the world. The Automotive Solutions Group has facilities are located in Canada, U.S., Mexico and Morocco and supply the North American, European and Asian markets. Its web site is here Exco Technologies Ltd.

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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