PFB Corp

Sound bite for Twitter and StockTwits is: Price seems reasonable. In testing of the stock price I had mixed results. However, there were questions or problems with most of the tests. Price is probably relatively reasonable. The company has good debt ratios to see it through some tough times. See my spreadsheet on PFB Corp.

I do not own this stock of PFB Corp. (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.

This company started to pay dividends in 1997, almost 20 years ago. It has only raised the dividend 3 times. In 2001 the increase was 50%, in 2005 it was 60% and in 2016 the increase was 16.7%. Dividend growth to the end of 2015 for the past 5 and 10 years is 0%. If you look at dividends to date you get a 5 year increase of 3.13% per year. This is higher than the rate of inflation. I would prefer stocks that raised the dividend each year.

The current dividend yield is moderate at 3.21%. The 5 year median dividend yield is 4.08%. The 10 year median dividend yield is 3.94% and the historical dividend yield is 2.90%. So yield has fluctuated, but has remained within the moderate zone. However the 5 year rate is getting into the good zone.

Over the 5 year period to the end of 2015 the EPS has covered the dividend at 91%. The coverage by CFPS is at 49.8%. The coverage has varied each year because EPS and CFPS are rather volatile. This is an industrial stock so that should be expected.

If you had held this stock for 5, 10 or 15 years, you could be earning 4.6%, 2.6% and 8.18% yield on your original stock price, if you paid a median price. Yes, the 10 years yield is correct at 2.6% because the stock price was quite high exactly 10 years ago. If you had held this stock for 5, 10 or 15 years the dividends would have covered 37.9%, 32.7% and 140.6% of the cost of your stock if you paid a median price.

This company had a very good year in 2015. They are not expected to do as well in 2016 and in 2015, but they are still expected to do well. Because outstanding shares have not really changed over the past 5 and 10 years, you can look at things like Revenue or Revenue per Share. However, since earnings and cash flow are volatile, it is best to look at the 5 year running averages.

The best growth is in Revenue per Share. Revenue per Share has grown by 8.3% and 2.1% per year over the past 5 and 10 years. Revenue per Share using the 5 year running average has growth over the past 5 and 10 years of 4.8% and 3.2% per year.

For EPS, EPS is up by 22.1% and down by 1.9% per year over the past 5 and 10 years. As stated the best way to judge growth is the 5 year running average. EPS using the 5 year running average shows growth of 0.6% and a decline of 1.3% per year over the past 5 and 10 years. This is really low growth. A lot of companies are having trouble coming out of the 2008 recession.

The bright spot in earnings is that the growth using 5 year running averages for comprehensive income over the past 5 years is at 5.4%. Net Income growth over the past 5 years using 5 year running averages is just 1.3%. This could point to the company doing better than it might first appear in earnings growth. It is a good sign when comprehensive income is higher than net income. (There is no 10 year 5 year running average for comprehensive income as statements have only included comprehensive income since 2006.)

CFPS looks decent for the past 5 and 10 years with growth of 16.4% and 3.6% per year over the past 5 and 10 years. However, using 5 year running averages growth is a lot lower with a decline in CFPS of 1.9% and an increase of 0.5% per year over the past 5 and 10 years. This again is really low growth.

The debt ratios are really good for this company. The Liquidity Ratio for 2015 is 2.45 with a 5 year median value of 2.45. The Debt Ratio is 2.61 with a 5 year median value also of 2.61. The Leverage and Debt/Equity Ratios for 2015 is at 1.62 and 0.62 respectively with 5 year median values of 1.45 and 0.45 respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.23, 12.51 and 14.79. The 10 year values are 11.16, 14.04 and 17.23. The historical values are 8.20, 10.36 and 14.79. The current P/E Ratio is 12.82 based on a stock price of $8.72 and 2016 EPS estimate of $0.68. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $10.72. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.93 and 1.07. The current P/GP Ratio is 0.81 based on a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share Ratio is 0.93. The current ratio is 1.16 which is some 24.5% higher than the 10 year ratio. The current ratio is based on BVPS of $7.51 and a stock price of $8.72. This testing suggests that the stock price is relatively expensive. The current ratio is also much lower than what is considered to be a good ratio of 1.50. The problem with this test is that the P/B Ratios are very low ratio as a good ratio is considered to be 1.50.

The historical dividend yield is 2.90%. The dividend yield at 3.21% is some 10.7% higher. The current dividend yield is based on dividends of $0.28 and a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable and below the median. Problem with this test is that can we consider this stock to be a dividend growth stock?

The 10 year P/S Ratio is 0.51. The current P/S Ratio is 0.57 based on Revenue estimate for 2016 of $101.9M and Revenue per Share of $15.2M and a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable but above the median. A problem with this testing is that the P/S Ratios are very low as a good P/S Ratio is around 1.00.

There are two analysts following this stock. Both analysts rate this stock as a Buy. The consensus would also be a Buy. The 12 month stock price is $12.68. This implies a total return of 48.62% with 45.41% from capital gain and 3.215 from dividends based on a current stock price of $8.72.

PFB Corp put out a News Wire about their third quarterly results. Sales and net income are lower. Analysis of this stock is showing on Stock News Week. Piotroski F-Score of 6 is mediocre. There is some more analysis on Wall Street Confidential. CCI is rather high at 90.48. There is also some analysis of this stock's dividend on Guru Focus.

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 IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more . The next stock I will write about will Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more on Monday, November 28, 2016 around 5 pm.

PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB 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.