Monday, August 15, 2016

Newfoundland Capital Corp

Sound bite for Twitter and StockTwits is: Stock is cheap. There is not much in analysts' coverage. It is not a dividend growth stock but dividends have risen over time. Dividends have been inconsistent. See my spreadsheet on Newfoundland Capital Corp.

I do not own this stock of Newfoundland Capital Corp. (TSX-NCC.A, OTC-none). I started to follow this stock as it was suggested as a decent dividend paying stock for investment purposes in the latter part of 2009. It is not on any dividend lists that I follow so I took a look at it.

This is not a dividend growth stock. Their dividends are inconsistent. They have increased, decreased and suspended dividends at various times. Currently they have not changed the dividend since 2012 but announced a big increase for 2016 of some 33%. When they have increased the dividends the increases have been quite high.

The dividend has been paid semi-annually with a first dividend at $0.09 and a second dividend of $0.06. The problem with this is most site that you look at assume dividends are the same and so show a rise in dividends at the beginning of the year and decrease in dividends at the end. Since they now say they will be paying $0.10 semi-annually, this problem should now go away.

You can make money on this stock. The total return to the end of 2015 was at 11.51% and 8.79% per year over the past 5 and 10 years with 9.78% and 7.18% from capital gains and 1.74% and 1.62% per year from dividends. This stock's price is down by just over 16% this year, so the 5 and 10 year total return to dated is 4.69% and 6.49% per year with 2.91% and 4.72% per year from capital gains and 1.78% and 1.77% per year from dividends.

When looking at growth on this stock I would want to look at Revenue, Net Income and Cash Flow rather than per share values. This is because the outstanding shares have been declining over the past 5 and 10 years by 3.3% and 2.4% per year. For example, the Revenue has grown by 7% and 7.1% per year over the past 5 and 10 years. The Revenue per Share has grown at 10.7% and 9.7% per year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.19, 12.69 and 14.81. The 10 year corresponding values are a bit higher at 11.56, 14.25 and 16.54. The historical values are even higher at 15.01, 15.91 and 21.30. The current P/E Ratio is 11.50 based on a stock price of $9.20 and 2016 EPS estimate of $0.80. I wonder if there is too low as the second quarterly report shows an increase in EPS of 22% and $0.80 EPS is just lower than last year. In any event this stock price testing suggests that the stock price is relatively cheap.

If we use the EPS for the past 12 months to the end of the second quarter, the P/E Ratio is very good at just 9.29. This is low against the historical ratios and P/E Ratios below 10.00 suggests a cheap stock.

I get a Graham Price of $10.22. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 1.24 and 1.41. The current P/GP Ratio is 0.90 based on a stock price $9.20. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 2.03. The current P/B Ratio is 1.59 a value some 22% lower. The current P/B Ratio is based on BVPS of $5.80 and a stock price of $9.20. This stock price testing suggests that the stock price is relatively cheap.

The historical median dividend yield is 1.52%. The current dividend yield is 2.17% based on Dividends of $.20 and a stock price of $9.20. Note this includes the most recently dividend increase. This stock price testing suggests that the stock price is relatively cheap.

There does not seem to be any analyst currently following this stock.

There is a recent press release from this company on News Wire about the recent dividend increase. In January 2015 Michael Cloherty wrote an article in the G&M about twenty wealth-creating stocks you may be overlooking. This stock was number 6. This was a number cruncher article, so any stocks found in such a search need to be vetted.

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 that report here.

The last stock I wrote about was about was Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more . The next stock I will write about will EnerCare Inc. (TSX-ECI, OTC-CSUWF)... learn more on Wednesday, August 17, 2016 around 5 pm. Tomorrow on my other blog I will write about Job Creation... learn more on Tuesday, August 16, 2016 around 5 pm.

Newfoundland Capital Corporation Limited also owns and operates Newcap Radio. Newcap Radio is one of Canada's leading radio broadcasters with 79 licenses across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. Its web site is here Newfoundland Capital 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.

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