I do not own this stock of AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF). I wanted to review all the income trust stocks touted in the 2009 Money Show. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This stock converted to a corporation in 2009.
What I noticed on the spreadsheet was that revenue is declining and the company has earning losses. The other thing was that the Debt/Market Cap Ratio was above 1.00 at 1.29. This is mainly due to the drop in the stock’s price.
The dividend yield has varied a lot over the 12 years that they have paid dividends. The company used to be an income trust and this probably accounts for that. The current, 5, 10 and historical median dividend yields are all moderate at 3.89%, 2.17%, 2.48% and 2.84% respectively. The dividends have not grown since 2012.
From 2014 to 2016 they could afford their dividends. They had an earnings loss last year (2017) and the 5 year coverage of dividends for 2017 was at 612%. The Dividend Payout Ratio for CFPS in 2017 was good 17% with 5 year coverage at 16%.
As mentioned above the Long Term Debt/Market Cap Ratio is too high currently at 1.29. This means that the long term debt is higher than the company’s market cap and this is never good. The ratio for 2017 is 0.93. The Liquidity Ratio is high and good for 2017 at 2.08. The Debt Ratio at 1.45 with 5 year median at 1.43 is a little low as I would prefer it to be 1.50 or higher. Leverage and Debt/Equity Ratios are a bit high at 3.24 and 2.24.
The Total Return per year is show below for years of 5 to 13. 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.
From the chart below you can see that long term shareholders have done well with Total Return. However, I prefer my stocks to be dividend growers.
|Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median and high median Price/Earnings per Share Ratios are 16.81, 23.75 and 30.69. The corresponding 10 year ratios are 9.87, 15.37 and 20.90. The corresponding historical ratios are 6.35, 8.41 and 11.11. From this you can see the stock raise has more to do with increasing the P part of this ratios and not the E part. Historical ratios are low, but the 5 year ones seem high to me. The current P/E Ratio is negative so this is unusable for test purposes. The one for 2019 is 27.09, but it is hard to trust estimates so far ahead. This would not be a good stock price test for this stock.
I get a Graham Price of 13.79. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 1.51 and 1.87. The current P/GP Ratio is 1.12 based on a stock price of $15.44. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share of 1.72. The current P/B Ratio is 1.04 based on a Book Value of $359M, Book Value per Share of $14.83 and a stock price of $15.44. The current P/B Ratio is some 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 2.84%. The current dividend yield is 3.89% based on dividends of $0.60 and a stock price of 15.44. The current yield is 36% above the historical median. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.46. the current P/S Ratio is 0.21 based on Revenue estimate for 2018 of $1,773M, Revenue per Share of $73.15 and a stock price of $15.44. The current ratio is some 54% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
When I look at analysts’ recommendations I find Buy (4), Hold (4) and Underperform (1). The consensus recommendation would be a Hold. The 12 month stock price is $19.17. This implies a total return of 28.04% with 24.16% from capital gains and 3.89% from dividends.
Daisy Mock Simply Wall Street talks about the company’s interest charges. Jason Phillips on Motley Fool says this is one of five agricultural companies that should outperform. See what analysts are saying about this stock on Stock Chase. They say stock is having a hard time currently but will recover.
AGT Food and Ingredients Inc, through its subsidiaries, is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) of pulses specialty crops for export domestic markets. Its web site is here AGT Food and Ingredients Inc.
The last stock I wrote about was about was Saputo Inc. (TSX-SAP, OTC-SAPIF)... learn more. The next stock I will write about will be Intact Financial Corp (TSX-IFC, OTC-IFCZF)... learn more on Monday, July 2, 2018 or Tuesday, July 3, 2018 around 5 pm.
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