I do not own this stock of Newfoundland Capital Corp. (TSX-NCC.A, OTC-none). I started to follow this stock as it was suggested as a decent dividend paying stock for investment purposes in the latter part of 2009. It is not on any dividend lists that I follow so I took a look at it.
When I was updating my spreadsheet, I noticed that this company is being bought by Stingray Digital Group Inc. This company provides business-to-business multi-platform music and in-store media solutions to businesses and individuals worldwide. It is headquartered in Montreal and it is dividend paying stock.
Dividend have varied over time. Why there is no value for dividends for 15 year period is that exactly 15 years ago dividends were cancelled. There were no dividends from 2000 to 2003 and then none in 2009. Dividends have done both up and down since being started in 1997. Currently the dividend yield is the highest it has ever been. This is mostly due to some really big increases in 2017 and 2018 of 84% and 42% respectively.
The dividends in the past have been low but current dividends are in the moderate range. The dividend yield is currently at 3.47%. However, the 5, 10 and historical dividend yields are 1.75%, 1.795 and 1.56% respectively.
The company tends to pay what dividends they can afford. So there has been big increases in the past as well. For example, there was a 150% rise in dividends in 2005. The Dividend Payout Ratio for 2017 was 35% with 5 year coverage at 23%. For 2018 the DPR is expected to be at 51% with 5 year coverage at 35%. The 5 year coverage is the one the really counts as any company can have a really good or really bad financial year.
Debt/Market Cap Ratio for 2017 is low at 0.20. The Liquidity Ratio for 2017 is 1.02 with 5 year median at 1.09. However, since this is a consumer stock there is a tendency to use cash flow to cover current liabilities. I you add in cash flow after dividends the ratio because 1.61 with 5 year median at 1.77. Leverage and Debt/Equity Ratios are also good at 1.79 and 0.79 for 2017 with 5 year median at 2.26 and 1.26. Good small companies need good debt ratios to see them through the rough times, like recessions.
The Total Return per year is show below for years of 5 to 25. 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.
|Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.34, 11.39 and 13.43. The 10 year ratios are 9.95, 12.04 and 14.12. The corresponding historical ratios are 13.33. 15.81 and 18.66. The current P/E Ratio is 14.69 based on a stock price of $14.22 and latest 12 month EPS of $0.98. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $11.41. The 10 year low, median, and high median Price/Graham Price Ratios are 0.98, 1.15 and 1.33. The current P/GP Ratio is 1.26 based on a stock price of $14.40. 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 Ratio of 2.04. The current P/B Ratio is 2.44 based on Book Value of $173M, Book Value per Share of $5.90 and a stock price of $14.40. The current P/B Ratio is 19.4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. If the current ratio was 10% higher than the 10 year median the stock would be considered to be relatively expensive.
I get an historical median dividend yield of 1.56%. The current yield is 3.47% based on dividends of $0.50 and a stock price of $14.40. The current yield is some 123% above the historical median. This stock price testing suggests that the stock price is relatively cheap. However, this is probably not a good test because of the recent big rises in dividends.
The 10 year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 2.48 based on latest 12 months revenue of $169.7M, Revenue per Share of $5.80 and a stock price of $14.40. The current P/S Ratio is some 32% above 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 that no analysts seem to be following this stock.
A Canadian Press article in the Globe and Mail says that Stingray Digital Group plans to acquire this company. Roger Taylor at the Chronicle Herald of Halifax talks about the deal with Stingray. There is not much news on this company and it is not followed in Stock Chase.
Newfoundland Capital Corp Ltd is a radio broadcasting company. As a pure-play radio company, its core business is the operation of radio channels globally via the internet and other media. Its revenue is derived from sale of advertising airtime. Its web site is here Newfoundland Capital Corp.
The last stock I wrote about was about was about Choice Properties REIT (TSX- CHP.UN, OTC- PPRQF) ... learn more. The next stock I will write about will be Stingray Digital Group Inc (TSX-RAY, OTC-NONE) ... learn more on Monday, August 13, 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.
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