Wednesday, September 7, 2016

Alimentation Couche-Tard Inc.

Sound bite for Twitter and StockTwits is: Currently expensive. This has had a good run up, but I think it is a bit pricy at the moment. It is a good company though. See my spreadsheet on Alimentation Couche-Tard Inc. .

I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

They started to pay a dividend in 2006. The dividends are very low with good growth. The current dividend is 0.56%. The historical median dividend yield is 0.60%. The historical high is 1.31%. Mind here historical means 10 years of dividends. The growth in dividends over the past 5 and 9 years was 32.5% and 23.5% per year. I generally do not buy stocks with dividends less than 1% because it takes so long to get to a really good dividend yield on your original stock purchase.

The dividends are very affordable with the 2016 Dividend Payout Ratio for EPS at 9.2% and the CFPS at 6.1%. The last dividend increase was this year for 14.8%. However, they often increase the dividend more than once a year. Last year total dividend increase was 40%. (Note that the financial year for this company ends around the end of April each year.)

This stock reports in US$. Growth is good for Revenue, Earnings and Cash Flow. There is little change in outstanding shares. Revenue grew at 12.5% and 12.9% per year over the past 5 and 10 years. EPS grew at 26.3% and 21% per year over the past 5 and 10 years. Cash Value grew at 22.8% and 18.8% per year over the past 5 and 10 years. All this growth is in US$.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.48, 15.96 and 19.85. The 10 year corresponding values are 12.26, 15.9 and 19.64. The historical values are 12.50, 17.40 and 20.80. They are remarkable similar. The current P/E Ratio is 22.54 based on a stock price of $68.26 and 2017 EPS estimate of $3.03 CDN$ ($2.33 US$). This suggests that the stock price is relatively expensive.

I get a Graham Price of $28.77. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81. The current P/GP Ratio is 2.37 based on a stock price of $68.26. This suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 2.88. The current P/B Ratio is 5.62 based on BVPS of $12.14 and a stock price of $68.26. The current P/B Ratio is some 95% higher than the 10 year median ratio. This suggests that the stock price is relatively expensive.

The historical median dividend yield is 0.60%. The current dividend at 0.45% is based on dividends of $0.37 and a stock price of $68.26. The current dividend is some 24% lower than the historical median. This suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy, Buy and Underperform. The vast majority of the recommendations are a Buy. The 12 months stock price is $78.38 CDN$ ($60.30 US$). This implies a total return of $15.29% with 14.83% from capital gains and 0.45% from dividends.

Will Ashworth of Motley Fool talks about this company buying CST Brands Inc. They have also bought 53 Cracker Barrel locations. Unfortunately, Canadian companies buying American companies have not always worked to our benefit. Jared Coughlin on Community Financial News talks about Desjardins' increasing their target price. See what analysts are saying 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 that report here and here.

The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more . The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Friday, September 9, 2016 around 10 am. Tomorrow on my other blog I will write about Something to Buy September 2016... learn more on September 8, 2016 around 5 pm.

Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard Inc. .

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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