I do not own this stock of Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF). I got this stock suggestion from Peter Keyser who I met in an Investment Club.
I noticed that EPS and Cash Flow are growing strongly, but Revenue has not except for 2017 where it grew by 11% and is expected to grow by 10.6% this year. EPS has grown by some 23% and 22% per year over the past 5 and 10 years and cash flow has grown by 11% and 14% per year. However, Revenue has grown by 2.7% and 1.6% per year over the past 5 and 10 years. For strong earnings and cash flow growth in the future, Revenue will need to grow strongly also.
Dividends have grown well over the past 4 year. In US$ they are up by 15% per year and in CDN$ they are up by 20% per year. However, analysts do not expect further growth in dividends over the next couple of years including 2018. The dividend yield is moderate with a current dividend yield at 3.80% and the 4 year median at 3.28%. Dividends are paid in US$.
The Dividend Payout Ratio for 2017 is 52% with 5 year coverage also at 52%. The DPR for CFPS is 29% for 2018 was 5 year coverage at 24%. So it appears that they can afford their dividends. With a young growing company you probably want low dividends as the company will need money to grow. These figures are in US$.
The Long Term Debt/Market Cap ratio is good at 54%. The Liquidity and Debt Ratios are good with the ones for 2017 at 1.94 and 1.55 respectively. The 5 year median ratios are 2.32 and 1.80 respectively. The Leverage and Debt/Equity Ratios are rather typical at 2.89 and 1.86.
The Total Return per year is show below for years of 5 to 24 in CDN$ and 5 to 23 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below. The first is in CDN$ and the second in US$.
Long term returns have been very low in both CDN$ and US$. Recent total returns have been good.
In CDN$
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 19.86% | 26.62% | 21.85% | 4.77% |
| 10 | 23.74% | 21.48% | 2.25% | |
| 15 | 9.38% | 8.31% | 1.07% | |
| 20 | -1.16% | -1.78% | 0.62% | |
| 24 | 4.41% | 3.81% | 0.59% |
In US$
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 15.02% | 20.48% | 16.28% | 4.20% |
| 10 | 20.88% | 18.74% | 2.14% | |
| 15 | 11.79% | 9.93% | 1.86% | |
| 20 | -0.51% | -1.24% | 0.73% | |
| 23 | 4.17% | 3.38% | 0.79% |
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.92, 15.79 and 18.66. The corresponding 10 year ratios are 7.78, 13.71 and 17.14. The historical ratios are 9.29, 15.48 and 21.48. The current P/E Ratio is 14.96 based on a current price of $19.20 and 2018 EPS estimate of $1.28 ($0.99 US$). This stock price testing suggests that the stock price is relatively reasonable and around the median. This testing is in CDN$.
I get a Graham Price of $12.83. The 10 year low, median and high median Price/Graham Price Ratios are 0.74, 1.23 and 1.58. The current P/GP Ratio is 1.50 based on a stock price of $19.20. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10 year median Price/Book Value per Share of 2.76. The current P/B Ratio is 3.44 based on Book Value of $252M, Book Value per Share of $4.29 and a stock price of $14.74. The current ratio is some 24% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
I get an historical median dividend yield of 3.28%. This is based on dividends of $0.56 and a stock price of $14.74. This current yield is some 16% above the median. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$. You will get a similar result in CDN$. This is not a good test because there is only 4 years of data.
The 10 year median Price/Sales (Revenue) Ratio is 0.70. The current P/S Ratio is 0.87 based on 2018 Revenue estimate of $993M, Revenue per Share of $16.89 and a stock price of $14.74. The current P/S ratio is some 25% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
When I look at analysts’ recommendations I find Buy (5) and Hold (1) recommendations. The consensus recommendation is a Buy. The 12 month stock price is $25.50 CDN$ ($19.67 US$). This implies a total return of 36.57% with 32.79% from capital gains and 3.78% from dividends.
The company announced on Global News Wire that they have a new $600 Million Credit Facility. Craig Ardmore on Colby Post says that the company has a Value Composite score of 26 which means it is not under or overvalued. Vernon Smith on Simply Wall Street says it is too early to tell if this stock will be a good dividend paying stock. Brad Macintosh on Motley Fool says that the stock’s outlook is bumpy growth but stable income. See what analysts are saying about this stock on Stock Chase. They think is it’s a long term buy although current price may be high.
Intertape Polymer Group Inc. is a part of the packaging industry. It manufactures and sells paper and film based pressure sensitive and water activated tapes and other packaging systems for industrial and retail use. Its web site is here Intertape Polymer Group Inc.
The last stock I wrote about was about was Waste Connections Inc. (TSX-WCN, NYSE-WCN)... learn more. The next stock I will write about will be Alcanna Inc. (TSX-CLIQ, OTC-LQSIF)... learn more on Friday, June 15, 2018 around 5 pm. Tomorrow on my other blog I will write about Canadian Banks.... learn more on Thursday, June 14, 2018 around 5 pm.
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Very good detailed analysis. Thanks, Sue O'Reilly
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