Logistec Corp

Sound bite for Twitter and StockTwits is: Dividend growth Industrial. On a relative basis the current stock price is expensive. This could be cured if EPS rises strongly again. The stock price has been in a $35 to $45 range since mid-2014. See my spreadsheet on Logistec Corp.

I do not own this stock of Logistec Corp (TSX- LGT.B, OTC-LTKBF). I got this stock from Dividend Growth Investing and Retirement blogger's all-star spreadsheet for March 2017. I needed a new stock to follow as I have lost a number this year with stocks merging like Veresen Inc. with Pembina or like Canadian Oil Sands being bought by Suncor, and with stocks like Canam Group Inc. (TSX: CAM) going private.

One thing to mention is that I cannot find any analysts following this stock. This is good and bad. This stock has a market cap of less than 500M. It makes it a small cap. It is not in the TSX Composite Index. Small caps have room to grow and you can make money on them, especially around the time they do get noticed and do get into the TSX Composite Index.

First shares have been declining by 1.4% and .8% per year over the past 5 and 10 years. So per share growth looks better than it actually is. For example, Revenue has grown by 8.9% and 4.7% per year over the past 5 and 10 years but Revenue per Share has grown by 10.4% and 5.6% per year over the past 5 and 10 years.

The most important one of EPS has not grown was well as it might appear. Growth in Net Income is 1.4% and 5.9% per year over the past 5 and 10 years. What you compare this to is growth in Basic EPS (not diluted) where growth is 2.8% and 6.8% per year. By the way, growth in Diluted EPS is 1.9% and 6.4% per year over the past 5 and 10 years.

The other thing to mention about earnings is that the 5 year running growth is at 14.6 and 14.9% per year over the past 5 and 10 years. What this tells you is that the in the case of the 5 year running over the past 5 years that the last 5 years had overall better growth than 6 to 10 years ago. EPS has been depressed lately. EPS fell 4.9% and 36.9% in the last 2 years. Growth seems to be up in the first two quarters of 2017 with a 12 month EPS of $1.66 to the end of the second quarter. This is some 12% higher than last year.

This is a dividend growth company. They have not raised the dividends every year, but most years, especially in later years. Since 2005 they have only not increased their dividends in only one year and that was in 2009.

Dividends have been low to moderate and growth in dividends has been moderate. The current dividend yield is just 0.95%. The 5 year, 10 year and historical median yields are 0.85%, 1.62% and 2.10%. Dividend yields have been higher in the past than now. The dividend growth over the past 5 years is at 11.8% and 8.8% per year. The most recent increase was for 9.9% and it was in 2017.

This stock has two classes. The main one on the TSX is Class B. The two classes are Class A Common Shares with 30 votes per share, convertible into Class B Subordinate Voting Shares at the holder's discretion and Class B Subordinate Voting Shares, with one vote per share, entitling their holders to receive a dividend equal to 110% of any dividend declared on each Class A Common Share.

This stock has good debt ratios. The Liquidity Ratio for 2016 is 2.51 with a 5 year median of 2.25. The Debt Ratio for 2016 is 2.33 with a 5 year median of 2.67. The Leverage and Debt/Equity Ratios for 2016 are 1.77 and 0.76 with 5 year medians of 1.73 and 0.64 respectively. Good debt ratios are important for small companies, especially if earnings can be volatile.

The Return on Equity was below 10% once in the past 5 years and twice in the past 10 years. The year of 2016 was not good for this company with an ROE of 9.4%. The 5 year median ROE is 15.4%. The Comprehensive Income is close with a 2016 ROE of 9.1% and a 5 year median of 18.5%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.86, 13.23 and 16.60. The 10 year corresponding ratios are 7.08, 8.85 and 11.62. The Historical ones are 7.49, 10.15 and 12.16. Small caps often have low P/E Ratios. The current P/E Ratio is 22.19 based on a stock price of $39.06 and latest 12 month EPS of $1.66. This stock price testing suggests that the stock price is relatively expensive. While a P/E Ratio of 22 is high for a small cap, it is rather a median one for a large cap.

I get a Graham Price of $24.75. The 10 year low, median and high median Price/Graham Price Ratios are 0.58, 0.80 and 1.02. The current P/GP Ratio is 1.58 based on a stock price of $39.06. This stock price testing suggests that the stock price is relatively expensive. A P/GP Ratio of 1.58 is high ratio for any stock.

The 10 year median Price/Book Value per Share Ratio is 1.46. The current P/B Ratio is 2.52 a value some 73% higher. The current ratio is based on Book Value of $199M, BVPS of $16.43 and a stock price of $39.06. This stock price testing suggests that the stock price is relatively expensive. On an absolute basis, a P/E Ratio of 1.46 is a good one, but one of 2.52 is a high one.

The current dividend yield is 0.93%. The historical dividend yield is 2.10% a value some 56% higher. The current Dividend Yield is based on dividends of $0.36 and a stock price of $39.06. This stock price testing suggests that the stock price is relatively expensive. I generally would not buy a stock with a dividend yield less than 1%.

The 10 year median Price/Sales (Revenue) Ratio is 0.65. The current P/S Ratio is 1.40 a value some 115% higher. The current P/S Ratio is based last 12 months Revenue of $360M, Revenue per Share of 29.68 and a stock price of $39.06. This stock price testing suggests that the stock price is relatively expensive.

There is a new release on Cision about this company acquiring a 51% of the shares of FER-PAL Construction Ltd. Patrick M. Pritchard on Seeking Alpha gives a review of this company. He also thinks that it is currently overpriced.

Logistec Corporation provides cargo handling and other services to a range of marine, industrial and municipal customers. The Company operates through two segments: marine services and environmental services.. Its web site is here Logistec Corp.

The last stock I wrote about was about was Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more. The next stock I will write about will be Trigon Metals Inc. (TSX-TM, OTC-PNTZF)... learn more on Friday, October 20, 2017 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 - Ryan Irvine... learn more on Thursday, October 17, 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.

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