Wednesday, December 21, 2016

FirstService Corp

Sound bite for Twitter and StockTwits is: Relatively Expensive. See my spreadsheet on FirstService Corp.

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSV), but I used to. I bought FirstService Corp in 2002 as it a good solid company that knows how to make money. At that time I was still buying companies to earn capital gains. I bought more of this company in 2007 from my profit from RIM. FSV was a non-dividend paying stock, but it had issued preferred shares to shareholders. I sold my shares in 2010 when cleaning up by portfolio. I sold this company because it was such a small amount of my portfolio.

This company started to pay a dividend in 2013. It is really too soon to tell how the dividends will go. Dividends were flat for the first 3 years and then they raised the dividend by 10% in 2016. The Dividend Payout Ratios for EPS for 2015 is a bit high at 67.8% (I would prefer it to be 60% or lower). The Dividend Payout Ratios for CFPS for 2015 is fine at 26.2%.

The dividend yield is low. The current dividend is 0.95% based on a stock price of $61.91 and dividends of $0.59. The median dividend is 1.51%.

Outstanding shares have increased by 3.5% and 1.8% over the past 5 and 10 years. When looking at growth, especially over the past 5 years, I would look at per share growth. Revenue does not seem to be going anywhere. The Revenue growth over the past 5 and 10 years is at 4.7% and 8.9% per year. The Revenue per Share growth is 1.2% and 6.9% per year over the past 5 and 10 years.

Revenue was down in 2015 by over 8%. However, analysts expect better in 2016 with growth of over 15%. If you compare the 12 months to the end of the third quarter and to the end of 2015, it is up by 12.2%. So perhaps the analysts are right that 2016 will be a better year for Revenue.

Earnings are a rather mixed bag. The 5 year growth is great at 60.3%. However, over the past 5 year there were two years of earnings losses and EPS is still not above where it was 6 years ago.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.03, 15.38 and 18.72. The corresponding 10 year values are 16.46, 19.29 and 22.13. The historical values are 12.03, 18.21 and 22.14. The current P/E Ratio is 29.75, based on a stock price of $61.91 and 2016 EPS estimate of $2.08 ($1.56 US$). The P/E Ratio for 2017 is 25.79 based on a stock price of $61.91 and EPS estimate for 2017 of $2.40 ($1.80US$). This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $17.35 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.98, 2.60 and 3.11. The current P/GP Ratio is 3.57 based on a stock price of $61.91 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 years Price/Book Value per Share Ratio of 7.71. The current P/B Ratio is 9.63 based on a stock price of $61.91 CDN$ and BVPS of $6.43 CDN$. The current P/B Ratio is some 25% higher than the 10 year value. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 0.95% based on dividends of $0.59 CDN$ and a stock price of $61.91 CDN$. The median dividend yield is 1.51% and this is some 37% higher than the current dividend yield. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy and Hold Recommendations. There is the same number of both and the consensus would be a Buy. The 12 month stock price is $64.96 CDN$. This implies a total return of $5.87% with 4.93% from capital gains and 0.95% from dividends based on a current price of $61.91.

Harold C. McSweeney on Daily Quint says that Raymond James Financial Inc. upgraded shares of FirstService Corp from a market perform rating to an outperform rating. In a report on Wall Street Confidential the staff says that the 14-day RSI is presently at 72.28. The RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. James Telfser on Stock Chase says that they recently split and it now also does property management. He thinks that they are in a great business.

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 The Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)... learn more . The next stock I will write about will be Colliers International Group Inc. (TSX-CIGI, NASDAQ-CIGI)... learn more on Friday, December 23, 2016 around 5 pm. Tomorrow on my other blog I will write about Portfolio Size... learn more on Thursday, December 22, 2016 around 5 pm.

FirstService Corporation is a North American leader in the property services sector, serving its customers through two industry-leading service platforms: FirstService Residential, North America's largest manager of residential communities; and FirstService Brands, one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations. Its web site is here FirstService 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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