Accord Financial Corp

Sound bite for Twitter and StockTwits is: Price is cheap to reasonable. This is about as good as it usually gets. The stock has solid if unspectacular returns. See my spreadsheet on Accord Financial Corp.

I do not own this stock of Accord Financial Corp (TSX-ACD, OTC-ACCFF). Fred Poulin from StockTwits recommended this stock saying it was a small cap that pays dividends. Also the stock has a solid background and would be a good filler stock.

Let's start with dividends. The dividend is moderate (almost good) and the increases are low. The current dividend is 3.85% based on dividends of $0.36 and a stock price of $9.35. The 5 year median dividend yield is 3.98%. Dividends have grown at 4.6% and 6.9% per year over the past 5 and 10 years.

The Dividend Payout Ratio for EPS for 2015 is 33% and the 5 year median DPR for ESP is 40%. The DPR for CFPS for 2015 is 23% and the 5 year median is also 23%. They can afford their dividends. They do not raise the dividends every year, but generally every second year.

Because the outstanding shares have been decreasing I would be more interested as an investor in Revenue and Net Income growth rather than per share growth as in Revenue per Share and EPS. The shares have decreased by 1.7% and 1.8% per year over the past 5 and 10 years. When growth is low, 1.7% per year can count. For example Revenue is up by 0.11% and 1.87% per year over the past 5 and 10 years. Revenue per Share is up by 1.87% and 3.71% over the same time period.

Net Income has had low growth, but cash flow has done better. The 5 and 10 year growth in Net Income is at 1.19% and 3.50% per year over the past 5 and 10 years. Cash Flow growth is at 6.34% and 7.71% per year over the past 5 and 10 years

If you look at total return for 5 year periods to the end of 2015 for the past 19 years this company only had 3 really bad years and another 3 that were mediocre. If you look at total return for 10 year periods over the past 14 years, there were no bad periods, but there were 3 with mediocre total returns.

The Debt Ratio in 2015 was very good at 1.90 and the 5 year median ratio is also very good at 1.79. The Leverage and Debt/Equity Ratios are relatively good for a financial services company at 2.12 and 1.12 for 2015 and with 5 year median values of 2.26 and 1.26.

The Return on Equity has consistently been 10% or higher. The ROE for 2015 was 12% and the 5 year median is 12.2%. The ROE on Comprehensive Income is higher so this basically suggests that the earnings are of good quality.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.55, 10.02 and 11.48. The corresponding 10 year values are 8.77, 10.32 and 11.52. The historical values are 8.55, 10.15 and 11.52. These are highly consistent. The current P/E Ratio is 9.26 based on a stock price of $9.35 and 12 months EPS to the end of the second quarter of 2015 of $1.01. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $14.06. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.77 and 0.89. The current P/GP Ratio is 0.67 based on a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year Price/Book Value per Share Ratio is 1.29. The current P/B Ratio is some 16.8% lower at 1.08 based on BVPS of $8.69 and a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The historical median dividend yield is 2.56%. The current dividend yield at 3.85% is some 50% higher. The current dividend yield is based on dividends of $0.36 and a stock price of $9.35. This stock price testing suggests that the stock price might be cheap. It is not a relatively low as it has been in the past where there was a dividend yield of 5%.

If I was looking for a small cap financial stock, I would consider this stock. The dividend is good and it does raise the dividend regularly. It has had some problems recently, but a lot of companies are with this long drawn out recover. As with all small cap stocks there is low trading volume.

Fabrice Taylor in a G&M article says "We live in low-growth world, so when a 40-year-old company posts a 100-per-cent increase in net income, investors take notice". Unfortunately this was only for the one quarterly report in 2015. It did not carry through to the annual report where net income increased by 27%. This News Release talks about Accord launching an innovative small business lending program. See past comments on this company by analysts on Stock Chase. Not everyone likes this company.

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.

The last stock I wrote about was about was Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more . The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm.

Accord Financial Corp. is a provider of asset-based financial services to businesses, such as asset-based lending (ABL), including factoring, lease financing, working capital financing, credit protection and receivables management, and supply chain financing for importers. Its web site is here Accord Financial 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.