I do not own this stock of Goeasy Ltd (TSX-GSY, OTC-EHMEF). In April of 2016 Investment Reporter said to seek stocks with growing dividends from The Investment Reporter Key stock buys. This is one stock that was named. However, I would still rather invest in companies that are not in the business of charging very high interest rates.
To me they are giving out a high proportion of options. This is not a tech company, it is a consumer company. The increase in outstanding shares due to options is at a median of 1.58% over the past 4 years. The median increase in outstanding shares due to stock options for all the stocks I follow is 0.17% and 70% are at 0.37% or lower.
The company started to pay dividends in 2004. The dividends yields are moderate as is the dividend growth. The current dividend yield is 2.20% with 5, 10 and historical median dividend yields at 2.17%, 2.56% and 2.25%. Dividend increases have been very uneven. They have been high when given, but there were no increases between 2010 and 2014 inclusive. The last increase was for 25% and it occurred this year. See chart below for increases per year over past 5, 10 and 12 year periods.
The Dividend Payout Ratio for 2017 was 26% with 5 yea coverage at 25%. So the company can afford their dividends. The DPR for CFPS is very low at 5% for 2017 and 5 year coverage also at 5%.
The Total Return per year is show below for years of 5 to 22. 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 company seems to be doing well lately, but long term investors have made little. Total returns and dividend growth is very uneven.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 13.06% | 35.56% | 32.72% | 2.83% |
| 10 | 9.43% | 8.04% | 6.52% | 1.52% |
| 12-15 | 11.51% | 17.74% | 15.34% | 2.39% |
| 20 | 5.30% | 4.30% | 1.00% | |
| 22 | 3.59% | 2.93% | 0.66% |
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.85, 11.56 and 14.51. The corresponding 10 year P/E Ratios are 9.14, 11.77 and 14.78. The corresponding historical P/E Ratios are 9.64, 14.46 and 18.27. The current P/E Ratio is 11.57 based on a current stock price of $40.95 and 2018 EPS estimate of $3.54. This stock price testing suggests that the stock price is relatively reasonable and around the median.
I get a Graham Price of $35.91. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.85 and 1.07. The current P/GP Ratio is 1.14 based on a stock price of $40.95. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share of 1.37. The current P/B Ratio is 2.53 based on a Book Value of $220M, Book Value per Share of $16.19 and a stock price of $40.95. The current P/B Ratio is some 85% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
The stock failed this test is for a couple of reasons. First the book value per share is not growing as fast as the stock price. Also, outstanding shares have been increasing by 2.5% and 2.7% per year over the past 5 and 10 years. This results in the P/B Ratio going up a lot over the past 10 years. Book value is import as it reflects the Shareholders’ Equity in a business. You can find a discussion on this subject on Investopedia.
I get an historical median dividend yield of 2.25%. The current dividend yield is 2.20% based on dividends of $0.90 and a stock price of $40.95. The current yield is some 2% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and around the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.81. The current P/S Ratio is 1.15 based on 2018 Revenue estimate of $483M, Revenue per Share of $35.53 and a stock price of $40.95. The current ratio is some 42% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts’ recommendations I find Strong Buy (1), Buy (4) and Hold (1). The consensus recommendation would be a Buy. The 12 month stock price consensus is $46.83. This implies a total return of 14.36% with 2.20% from dividends and 16.36% from capital gains.
Because of past complaints about this company, I looked to see if there was any improvement. There actually seem to be fewer complaints online than in past years. BBB registered complaints are shown here. There are good and bad reviews of working for this company on Indeed. There is a web site Easy Financial, Pissed Consumer devoted to consumer complaints.
Ambrose O'Callaghan on Bay Street talks about the great first quarter for this company. Ambrose O'Callaghan on Motley Fool talks about this stock as a growth stock. Ivanka Thompson on Bangalore Weekly talks about recent analyst’s recommendations and changes. See what analysts are saying about this stock on Stock Chase. Analysts mostly like this company.
Goeasy Ltd is a provider of goods and alternative financial services which are engaged in merchandise leasing of household furnishings and home electronic products to consumers and offering unsecured installment loans to consumers. Its web site is here Goeasy Ltd.
The last stock I wrote about was about was Husky Energy Inc. (TSX-HSE, OTC-HUSKF)... learn more. The next stock I will write about will be Lassonde Industries (TSX-LAS.A, OTC-LSDAF)... learn more on Wednesday, June 6, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks June 2018.... learn more on Tuesday, June 5, 2018 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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