Wednesday, August 23, 2017

Jean Coutu Group Inc

Sound bite for Twitter and StockTwits is: Dividend growth consumer. The stock price testing varies, but it would seem that the price is reasonable. See my spreadsheet on Jean Coutu Group Inc.

I do not own this stock of Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF). I bought this stock first in 2000 for my RRSP account. In 2004, I bought some of this stock for my trading account. In 2007, I sold this stock in my RRSP account because I wanted money to invest in Saputo which I liked better at that time.

When updating the spreadsheet I noticed the very good current debt ratios. The Liquidity Ratio for 2017 is 2.46 and it has a 5 year median of 2.23. However, it has gone up and down a lot in the past with a low of 0.94 in 2012. It has been above 1.50 over the past 5 years. The Debt Ratio in 2017 is 4.85 with a 5 year median of 4.94. This too has gone up and down a lot in the past. Note that the current financial year end is of around March 1 each year.

The other thing I noticed with the Net Insider Selling as a percentage of the Market Cap. In this case it might as well as be called Net Insider Buying. NIB for 2017 is 0.01%. For the previous two years it was a 0.04%. There is obvious confidence in the company by insiders. Buy over the past year was by CFO and other officers.

The dividends are currently moderate but have been low in the past. The current dividend is 2.39% with a 5 and 10 year median of 1.94% and 2.11%. However, the historical median is just 0.76%. The historical median is so low because prior to 2006 the dividend yield was generally below 1%.

The current dividend increases are moderate. The 5 and 10 year dividend increases are 12.2% and 13.1% per year. The last increase occurred in this calendar year and was for 8.3%. I consider moderate increases at between 8% and 15%.

Over the past 5 and 10 years shareholders have done quite well. The total return over the past 5 and 10 years is at 11.69% and 9.34%. The total return from dividends is 3.25% and 2.43%. The portion of the total return from capital gains is at 8.43% and 6.91%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.02, 17.95 and 18.70. The corresponding 10 year values are 10.21, 11.66 and 13.10. The historical ones are 14.29, 18.51 and 22.40. The current P/E Ratio is 22.69 based on a stock price of $21.78 and 2018 EPS estimate of $0.96. (Note that this company has a financial year end of March 1 each year.) This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $12.04. The 10 year low, median and high median Price/Graham Price Ratios are 1.30, 1.52 and 1.74. The current P/GP Ratio is 1.81 based on a stock price of $21.78. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 3.69. The current P/B Ratio is 3.24 based on Book Value of $1,233M, BVPS of $$6.72 and a stock price of $21.78. The current ratio is 12.2% lower than the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The historical median dividend yield is 0.76%. The current dividend yield is 2.39% based on dividends of $0.52 and a stock price of $21.78. The 10 year dividend yield is 2.11%. The current dividend yield is some 214% higher than the historical median and some 13% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median or relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.16. The current P/S Ratio is 1.35 based on 2018 Revenue estimate of $2.954, Revenue per Share of $15.08 and a stock price of $21.78. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

When I look at analysts' recommendations, I find Buy, Hold and Underperform. Most are a Hold and the consensus recommendation is a Hold. The 12 month stock price is 20.78. This implies a total loss of 2.20% with a capital loss of $4.59% and dividend income of 2.39%.

Chris MacDonald of Motley Fool asks if a PJC and Metro merger is on the horizon. Sarah Dixon on Clayton News Review says the shareholder yield for this stock is 3.08. Richard Conner on Financial News Daily says there are 0 buy rating, 3 Sell ratings and 3 Hold ratings on this stock today. See what analysts are saying about this stock on Stock Chase . There is a divergence of opinion on this company.

When reviewing the Financial News Daily article on analysts ratings, note Reduce and Underperform are both a number 4 rating. Every site you look at will give a different number for each rating. I tend to use 4-Traders. See my blog for information on Analyst Ratings.

The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Corporation operates a network of 413 franchised stores located in the provinces of Québec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté. Furthermore, the Jean Coutu Group owns Pro Doc Ltd ("Pro Doc"), a Québec-based subsidiary and manufacturer of generic drugs. Its web site is here Jean Coutu Group Inc.

The last stock I wrote about was about was Evertz Technologies (TSX-ET, OTC-EVTZF)... learn more. The next stock I will write about will be Superior Plus Corp. (TSX-SPB, OTC-SUUIF)... learn more on Friday, August 25, 2017 around 9 am. Tomorrow on my other blog I will write about Stable Economies... learn more on Thursday, August 23, 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. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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