CCL Industries Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. This stock has had a great run up in price. No matter how I looked at the price in testing, it is showing up as relatively expensive. Not only has the stock price risen, but the P/E Ratios has also gone up. See my spreadsheet on CCL Industries Inc.

I do not own this stock of CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.

One thing that I noticed when updating the spreadsheet was the increase in Long Term Debt and Goodwill and Intangible items. They have been buying companies lately and this would account for the increases. The latest Debt/Market Cap Ratio and GW and Intangible/Market Cap Ratio are at 0.24 and 0.25. These are good ratios so there is no problem.

Whenever I see fast rises in either item, I like to know the reason for the fast rises. Long Term debt is up by 52 % and 59% over the past 2 years and is up by another 64% for the first two quarters of 2017. Goodwill and Intangibles are up by 47% and 45% over the past 2 years and it up by another 61% for the first two quarters of 2017.

Dividends used to be in a moderate range of 2%, but especially lately they have been low and currently they are very low. The current dividend is below 1% at 0.79%. The 5, 10 and historical median dividend yields are 1.07%, 1.68% and 2.10%. They certainly can afford their dividend. The Dividend Payout Ratio for 2016 is 20.5% with 5 year coverage of 20.7%. The DPR for CFPS for 2016 is 9.5% with 5 year coverage of 9%.

The dividend growth has been good for this stock. The dividends are up by 23.4% and 16.6% per year over the past 5 and 10 years. If you had bought and held this stock for 5, 10 or 15 years, your current dividend yield would be 6.16%, 7.02%, or 13.11%.

This stock has been on a tear since 2011. The stock price is up some 756% since then. The stock is up some 50.15% and 24.7 % per year over the past 5 and 10 years. The portion of this total return attributable to capital gains is 48.59% and 23.68%. The portion of this total return attributable to dividends is 1.57% and 1.03%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.03, 20.65 and 27.26. The 10 year corresponding ratios are 13.31, 17.57 and 21.28. The historical ones are 9.39, 14.13 and 16.91. The current P/E Ratio is 23.31 based on a stock price of $58.50 and EPS 2017 estimate of $2.51. This stock price testing suggests that the stock price is relatively reasonable but above the median to relatively expensive.

While the stock price has been rising, so have the P/E Ratios. However, the stock price has gone up a lot faster. The stock price to the end of 2016 is up over the past 5 and 10 years by 756% and 830%. The P/E Ratio has grown by 119% and 122% over the past 5 and 10 years.

I get a Graham Price of $24.96. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 1.00 and 1.19. The current P/GP Ratio is 2.34 based on a stock price of $58.50. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.46. The current P/B Ratio is 5.30 a value some 263% higher. A P/B Ratio of 1.46 is relatively low, but one of 5.30 is relatively high. The current P/B Ratio is based on a Book Value of $1,941M, Book Value per Share of $11.03 and a stock price of $58.50. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 2.10%. The current dividend yield is 0.79% based on dividends of $0.46 and a stock price of $58.50. The current dividend yield is some 63% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 1.07%. The current dividend yield at 0.79% is some 27% lower. So no matter how you look at testing the stock price via dividend yield, the stock price is show up as relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.95. The current P/S Ratio is 2.13 based on 2017 Revenue estimate of $4,826M, Revenue per Share Ratio of 27.43 and a stock price of $58.50. The current P/S Ratio is some 124% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy (6) and Hold (3). The consensus would be a Buy. The 12 month stock price is $70.63. This implies a total return of 21.52% with 0.79% from dividends and 20.74% from capital gains based on a stock price of $58.50.

There is a Press Release on Market Wired about this company's third quarterly results today. Brent Freeman on Simply Wall Street uses expected cash flow and says the stock is slightly undervalued. See what analysts are saying about this tock on Stock Chase. There are mixed views.

A global specialty packaging pioneer, CCL is the largest label company in the world and provides innovative solutions to the Home & Personal Care, Premium Food & Beverage, Healthcare & Specialty, Automotive & Durables and Consumer markets worldwide. The Company is divided into three reporting segments: CCL Label, CCL Container and its consumer arm, Avery. Its web site is here CCL Industries Inc.

The last stock I wrote about was about was Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. The next stock I will write about will be Encana Corp. (TSX-ECA, NYSE-ECA)... learn more on Friday, November 10, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy, November 2017... learn more on Thursday, November 09, 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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