I own this stock of Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF). I bought this stock as my main purchase for the TFSA in 2013 and 2014. I picked Hammond initially in 2013 as my main buy because it has good growth and reasonable dividend. Also, I think that it important to try out newer smaller companies for investment purposes. Companies on the TSX are always changing and it is good to get into new industries and new companies. The problem of this, of course, is you do not always know what industries and companies will be long lasting.
I am finally making some money on this stock. It when down after I bought and I think this is the first time it is above my purchase price.
Hammond Power Solutions became a public company in 2001 and in 2009 they started to pay dividends. They at first were increasing their dividends but this stopped in 2014 when the Dividend Payout Ratio was 109%. They have not increased the dividends since. The dividend growth for the past 5 and 8 years is 5.92% and 11.56% as shown in the table below.
The DPR for 2017 is 46% with 5 year coverage at 60%. The DPR for CFPS for 2017 was $13% with 5 year coverage at 15%. So they can afford their dividends.
The Total Return is show below for years of 5, 10, 15 and 16. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below. The total return for the 5 and 10 year period is low to non-existent. They are having a hard time recovering from the last recession as is a lot of other companies.
|Years||Div Gth||Tot Ret||Cap Gain||Div|
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.62, 16.79 and 20.96. The corresponding 10 year median ratios are 11.30, 14.07 and 16.85. The corresponding historical ratios are 7.35, 9.29 and 11.22. The current P/E Ratio is 19.16 based on a stock price $9.77 and last 12 month EPS of $0.51. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $10.87. The 10 year low, median and high median Price/Graham Price Ratios are 0.60, 0.79 and 1.01. The current P/GP Ratio is 0.90. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share of 1.04. The current P/B Ratio is 0.95 based on a Book Value of $119M, Book Value per Share of $10.30 and a stock price of $9.77. The current P/B Ratio is some 9% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The P/B Ratio is only 0.95. Any time this ratio is below 1.00 it means that the stock is selling below the theoretical breakup value of this stock. Generally a stock with such a low ratio is considered cheap. At any time this ratio is 1.50 and low, a stock is considered cheap. The 10 year ratio of 1.04 is also a very low ratio.
I get an historical median dividend yield of 2.29%. The current dividend yield is 2.46% based on dividends of $0.24 and a stock price of $9.77. The current dividend yield is some 7.3% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.43. The current P/S Ratio is 0.37 based on 12 month Revenue of $302.5M, Revenue per Share of $26.11 and a stock price of $9.77. The current P/S Ratio is some 12.4% below the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.
There are no analysts’ recommendations for this stock.
The company has reported on their first quarter of 2018 on Globe News Wire. Staff Contributor on Derby News Journal says Hammond has a weak upward trend. Seth Doty on Simply Wall Street thinks this stock is undervalued according to it P/E Ratio. See what analysts are saying about this stock on Stock Chase. It is not well followed and last entry was in 2009.
Hammond Power Solutions Inc. is a Canada-based manufacturer of dry-type magnetics. It is engaged in the design and manufacture of custom electrical engineered magnetics. Its web site is here Hammond Power Solutions Inc.
The last stock I wrote about was about was Canadian Utilities Ltd (TSX-CU, OTC-CDUAF)... learn more. The next stock I will write about will be Mullen Group Ltd (TSX-MTL, OTC-MLLGF)... learn more on Wednesday, May 16, 2018 around 5 pm. Tomorrow on my other blog I will write about Mutual Funds.... learn more on Tuesday, May 15, 2018 around 5 pm.
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