WSP Global Inc.

Sound bite for Twitter and StockTwits is: Dividend paying Industrial. The stock price would seem to be reasonable. See my spreadsheet on WSP Global Inc.

I own this stock of WSP Global Inc. (TSX-WSP, OTC-WSPOF). In Sept 2011 I rationalized my portfolio. I sold stocks that did not make it into my core and bought stocks that could of the same type. In this case selling Stantec and buying Genivar. In October 2011 I wanted to sell Enerflex because it is not a company I bought but a distribution from Toromont. I bought more Genivar, now called WSP Global.

I have had this stock for 5.5 years. I have made a total return of 19.59% per year with 14.69% from capital gains and 4.90% from dividends. Dividends paid so far have paid for 10.95 of the cost of my stock. On the stock I bought in 2011, I am making a dividend yield of 6.07%.

This stock is currently not a dividend growth stock. It used to be an income trust as Genivar Income Fund (TSX-GNV.UN). Income trust companies can pay out higher dividends than corporations can. So the change of an income trust to a corporation has not been good for dividends. What this company did was to keep the dividends flat. Analysts do not see any dividend increases any time soon. They did increase dividends prior to the government changes for income trust companies.

The Dividend Payout Ratios for EPS has improved greatly. They hit a high of 153% in 2014. The DPR for EPS for 2016 was 76%. The DPR for CFPS has been coming down also and was at 35% in 2016. These ratios are expected to be the same or a bit better in 2017.

Shares have been increasing rapidly. The growth in shares is at 25% per year over the past 5 and 10 years. Each year shares have been increased because of their DRIP plan. However, they have also issued shares because of acquisitions. In this case it is the per share values that you have to look at to determine the company's actual growth. There is a difference. For example Revenue has grown by 56% and 44% per year over the past 5 and 10 years. Revenue per Share has grown at 24% and 15% per year over the past 5 and 10 years.

Revenue has been growing quite nicely, but the EPS has been quite volatile. Because this is an industrial stock you would expect volatility in earnings. Analysts expect that the company will have better earnings in 2017. The 10 year earnings growth is 13%, but earnings over the past 5 years is level.

The debt ratios are fine on this company. However, the Return on Equity has been under 10% since 2012. This has been a very long slow recovery for many companies.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.51, 20.60 and 24.55. The 10 year corresponding values are 14.51, 17.46 and 22.34. The current P/E Ratio is 20.40 based on a current stock price of $49.77 and 2017 EPS estimate of $2.44. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $39.35. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 1.09 and 1.32. The current P/GP Ratio is 1.26 based on a stock price of $49.77. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year Price/Book Value per Share Ratio of 1.53. The current P/B Ratio is 1.76 based on a BVPS of $28.21 and a stock price of $47.99. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Since this company used to be an income trust it is best to us the 5 year median dividend yield to do the dividend yield test. The 5 year median dividend yield is 4.31%. The current dividend yield is 3.01% based on dividends of $1.50 and a stock price of $47.99. The current dividend yield is 30% above the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median P/S Ratio of 1.09. The current P/S Ratio is 0.97 based on 2017 Revenue estimates of $5211M and Revenue per Share of $51.41. The current P/S Ratio is some 11% below the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations, I fine Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy. The consensus recommendation is a Buy. The 12 month stock price is $51.55. This implies a total return of 6.59% with 3.01% from dividends and 3.58% from capital gains based on a current stock price of $49.77.

Renata Jones on Sports Perspectives talks about this company getting an average rating of Buy by 9 brokerages. Ashwin Virk on Simply Wall Street feels that this company is priced at a good values because its PEG Ratio is 1. The PEG ratio is price/earnings to growth ratio. A PEG of 1 means a company is fairly valued. A lower PEG means the company is undervalued and a higher PEG means the company is overvalued. See what analysts are saying about this stock on Stock Chase. They generally like this company.

WSP Global Inc. is an engineering services firm providing private and public-sector clients with a complete range of professional consulting services throughout all project phases, including planning, design, construction and maintenance. WSP now has global coverage. Its web site is here WSP Global Inc.

The last stock I wrote about was about was Power Financial Corp. (TSX-PWF, OTC-POFNF)... learn more. The next stock I will write about will be Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more on Monday, May 1, 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. I am on Instagram with #walktoronto.