Thursday, November 17, 2016

Alimentation Couche-Tard Inc. Redone

Sound bite for Twitter and StockTwits is: Still rather expensive. I was looking again at this stock for my investment club. The stock has gone down some from September. When I looked then it was $68.26 and now it is some 7% lower at $63.38. 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 20.36 based on a stock price of $63.38 and 2017 EPS estimate of $3.11 CDN$ ($2.31 US$). This suggests that the stock price is relatively expensive.

I get a Graham Price of $29.69. 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 2.13 based on a stock price of $63.38. 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 5.03 based on BVPS of $12.14 and a stock price of $63.38. The current P/B Ratio is some 75% 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 0.49% is based on dividends of $0.31 and a stock price of $63.38. The current dividend is some 18.5% lower than the historical median. This suggests that the stock price is relatively reasonable but below the median. This is a change from September when the current dividend was at 0.45% and was some 24% below the historical median and therefore relatively expensive

When I look at analysts' recommendations I find Strong Buy, Buy and Underperform. The vast majority of the recommendations are a Buy. This has not changed from September. When I looked in September the 12 months stock price is $78.38 CDN$ ($60.30 US$). This implied a total return of $15.29% with 14.83% from capital gains and 0.45% from dividends. The 12 month stock price is now $81.48 ($60.47 US$) and this implies a total return in CDN$ of 29.05% with 28.56% from capital gains and 0.49% from dividends. The higher gain is caused by the lower stock price and the higher currency exchange rate.

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.

The last stock I wrote about was about was Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more . The next stock I will write about will be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more on Friday, November 18, 2016 around 5 pm

Today on my other blog I will write about Money Show 2016 - Tom Sosnoff... learn more .

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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