AGF Management Ltd

Sound bite for Twitter and StockTwits is: Can they recover? All my stock price testing suggests that the stock is currently cheap. However, it gets you know where to buy a company cheap that goes belly up or never gets out of its rut. This stock used to be a dividend growth stock. If they can get their act together, perhaps it will be that again. See my spreadsheet on AGF Management Ltd.

I do not own this stock of AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF), but I used to. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve anytime soon. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed.

I broke even on capital gains and earned 2.08% per year that was all dividends. This company has yet to recover and has been destroying shareholder value for the past 10 years.

They finally realized in 2015 that they could not afford the dividends and cut them some 70%. For the 5 years to 2015 they paid out about 148% of the earnings in dividends. This is way too much. The Dividend Payout Ratio for the financial year ending November 2016, the DPR was 60%. It is expected to fall to 57% this year. They were even paying out more than their cash flow. In 2016 the DPR for CFPS was down to a just reasonable 40%.

When I look at the spreadsheet, all I see is red for declining Assets under Management (AUM) declining Revenue, declining Earnings, declining cash flow and declining book value.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.69, 16.32 and 18.96. The corresponding 10 year values are 11.14, 14.23 and 18.09. The corresponding historical values are 10.45, 15.49 and 18.96. The current P/E Ratio is 10.77 based on a stock price of $6.03 and 2017 EPS estimate of $.56. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $12.03. The 10 year Price/Graham Price Ratios are 0.71, 0.89 and 1.05. The current P/GP Ratio is 0.50 based on a stock price of $6.03. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.08. The current P/B Ratio is 0.53 based on BVPS of $11.48 and a stock price of $6.03. The current P/B Ratio is some 51% lower than the 10 year ratio. The stock is basically selling below the BVPS. This stock price testing suggests that the stock price is relatively cheap.

I get an historical dividend yield of 2.87%. The current dividend yield is 5.31% based on dividends of $0.32 and a stock price of $6.03. The current dividend yield is some 85% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are a Hold and the consensus would be a Hold. The 12 month stock price consensus is $6.06. This implies a total return of 5.80% with 5.31% from dividends and 0.50% from capital gains.

Jonathan Ratner of Financial Post says that Canaccord Genuity downgraded this stock to a sell. Sean Craig on Financial Post says AGF Investments Inc. is launching an asset management platform and seven new ETFs. This fund manager is taking steps to diversity its business. See what analysts are saying about this company on Stock Chase. They do not like it much.

AGF Management Limited is an integrated, global wealth management company, whose principal subsidiaries provide investment management for mutual funds, institutions and corporations, as well as high-net-worth clients; and trust products and services. They sell their products in Canada. Its web site is here AGF Management Ltd.

The last stock I wrote about was about was Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more . The next stock I will write about will be Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)... learn more on Tuesday, February 8, 2017around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2017... learn more on Tuesday, February 7, 2017 around 5 pm.

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.