Parkland Fuel Corp.

Sound bite for Twitter and StockTwits is: Not Cheap. I go for not cheap because both the dividend yield and P/B Ratios are showing the price around the relatively reasonable mark. These are the only tests that do not use estimate. With so many of the other testing showing that the stock price may be expensive, it is hard to judge the stock price differently. See my spreadsheet on Parkland Fuel Corp.

I do not own this stock of Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF). I decided to do a spreadsheet on this stock as it was a stock recommended by Roger Conrad in Money Show 2013.

This was another income trust that changed to a corporation. Near that time they decrease the dividend by some 19%. The decrease occurred in 2011 and dividends were flat for a year. In 2013 they did a modest dividend increase of 2%. Since they restarted dividend increases, the dividends have grown at 1.76% per year. The last dividend increase was in 2016 and it was for 5%. They are still paying dividends monthly.

Last year was not a good year for this company in connection with earnings. The Dividend Payout Ratio for EPS was at 238%. It is expected to be better in 2016 at around 119%. If you look at dividends paid in cash, they paid out some 69% of earnings in 2015. This is because the company has a DRIP plan. But dividends paid in dividends are not free. Increases in shares numbers will lower the earnings per share.

An off set to this low EPS is the fact that in 2015, the comprehensive income is some 39% higher than the net income. It is up some 5.8% from 2014. In 2014, the net income and comprehensive income were close. When comprehensive income is a lot high than net income it tends to show that the company did better than what is showing up in earnings. On the other hand analysts expect EPS to increase by 108% in 2016. With the first quarterly report, the EPS for the 12 month period ending in the first quarter compared to the 12 month period ending in December 2015, EPS is only up by 4.4%.

For this company the shares have increased by 12% and 9.8% per year over the past 5 and 10 years. Shares have increased due to DRIP, Stock Options and Share Issues. Shares have decreased due to Buy Backs. Because of the increase in share issues, per share values are the ones that will tell you if the company is growing. The company has to do a lot of growing to overcome these share increase.

Revenue has grown at 16.6% and 21.8% per year over the past 5 and 10 years. Revenue per Share has grown at 4% and 10.9% per year over the past 5 and 10 years. Over the past 2 years, both earnings and cash flow has declined. Analysts expect earnings to start to climb again this year. However, they do not see any increase in cash flow until 2017.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.55, 14.55 and 17.62. The corresponding 10 year ratios are 10.98, 13.70 and 16.82. The historical ratios are 11.21, 15.03 and 19.27. The current P/E Ratio is 24.21 based on a stock price of $22.76 and EPS for 2016 of $0.94. This stock price testing suggests that the stock price is expensive.

I get a Graham Price of $13.56. The 10 year low, median and high median Price/Graham Price Ratios are 1.03, 1.29 and 1.60. The current P/GP Ratio is 1.68 based on a stock price of $22.76. This stock price testing suggests that the stock price is expensive.

I get a 10 year Price/Book Value per Share Ratio of 2.94. The current P/B Ratio is 2.62 a value some 10.8% lower. The current P/B Ratio is based on a stock price of $22.76 and BVPS of $8.69. This stock price testing is suggesting that the stock price is reasonable and below the median.

The historical median dividend yield price is not a good test for this stock because it used to be an income trust company and as such had quite high yields. However, the 5 year median yield is 5.75%. The current dividend yield is 4.98% based on dividends of $1.13 and a stock price of $22.67. This stock price testing suggests that the stock price is reasonable but above the median.

The P/S and P/CF Ratios does not help the current stock price look good. The 10 year median P/S Ratio is 0.24 and the current P/S Ratio is 0.30 based on a stock price of $22.76 and 2016 Revenue estimate of $7.182 and therefore Revenue per Share of $75.83. The P/S Ratios are low, because any P/S Ratio below 1.00 is low. Analysts expect the Revenue to increase by 14.6% this year but with the first quarter of 2016, revenue is down by 1.2%. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Cash Flow per Share Ratio is 8.41. The current P/CF Ratio is 13.23 a values some 57% higher. The current P/CF Ratio is some 57% higher than the 10 year median P/CF Ratio. The current P/CF Ratio is based on a stock price of $22.76 and 2016 CFPS estimate of $1.72. 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 recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $24.86. This implies a total return of $14.21% with 4.98% from dividends and 9.23% from capital gains.

Yadullah Hussain in an article in the Financial Post talks about Bob Espey, the CEO of this company, who thinks that the company's earnings can double in 5 years. Espey says he hopes to raise the non-fuel revenues by 50% with the roll out of the On The Run branch from Imperial Oil. Joseph Solitro of Motley Fool likes this stock. Peter Harrington of Seeking Alpha thinks that this company has acquired undervalued assets and has done well by shareholders.

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.

Yesterday on my other blog I wrote about Killing Others You do not Like... learn more . Tomorrow on my other blog I will write about Dividend Growth... learn more on Thursday, June 23, 2016 around 5 pm. The next stock I will write about is AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Friday, June 24, 2016 around 5 pm.

Parkland Fuel Corporation is a marketer and distributor of fuels, managing a nationwide network of sales channels for retail, commercial, wholesale and home heating fuel customers. Its web site is here Parkland Fuel 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.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.