I just bought some of this stock of Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE). I was following Newfoundland Capital Corp and Stingray Bought them out. Also, I read the blub on CEO, Eric Boyko. The site says he is an entrepreneur with nearly two decades of experience with start-ups, Mr. Boyko has extensive expertise in early stage business innovations.
When I was updating my spreadsheet, I noticed that they only went public in 2015. So, there is not much data on this company. It is still of interest. This is another Quebec start up paying dividends. Why is Quebec so much better with Start Ups than Ontario. I never understood this.
They have paid dividends since they listed on the TSX. Dividend yields are low to moderate. The current dividend is 2.49% with a 3 year median of 1.73%. Current dividend growth is at 26.5% per year. But growth has slowed down with the last dividend increase this year at 10%.
The last year was not a good one for earnings. The Dividend Payout Ratio for 2017 was 500%. However, the 4 year coverage was 82%. Analysts do not think that they will cover the dividend in 2018 and think the DPR will be 104%. If the current rate holds they expect the 2020 dividend to be covered by 62%. (Note that this stock has a financial year ending at the end of March each year.
I do not like the Liquidity Ratio. No matter how I look at Liquidity, there is not good coverage of current liabilities with current assets. This ratio barely breaks 1.00 after we add in Cash Flow after dividends. The other debt ratios are fine, but in tough times, it is Liquidity that counts.
The Long Term Debt/Market Cap is a low 0.07. The Debt Ratio is 2.14. Leverage and Debt/Equity Ratios are low at 1.88 and 0.88 respectively.
The Total Return per year is show below for 2 years. 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 3 year low, median, and high median Price/Earnings per Share Ratios are 31.76, 37.21 and 42.67. the current P/E Ratio is 42.14 based on a stock price of $8.85 and 2019 EPS estimate of $0.21. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $3.28. The 3 year low, median, and high median Price/Graham Price Ratios are 2.26, 2.64 and 3.03. The current P/GP Ratio is 2.70 based on a stock price of $8.85. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 3 year median Price/Book Value per Share Ratio of 4.00. The current P/B Ratio is 3.88 based on a Book Value of $128.5M, Book Value per Share of $2.28 and a stock price of $8.85. The current P/B Ratio is some 3% below the 3 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.98%. Note that in this case it covers 3 years and the company just declared another dividend hike. The current dividend yield is 2.71% based on a stock price of $8.85 and dividends of $0.24. The current dividend is some 37% above the historical. This stock price testing suggests that the stock price is relative cheap.
The 3 year median Price/Sales (Revenue) Ratio is 3.98. The current P/S Ratio is 2.40 based on 2019 Revenue estimate of $208M, Revenue per Share of $3.69 and a stock price $8.85. This stock price testing suggests that the stock price is relative cheap.
When I look at analysts’ recommendations I find Buy (5) and Hold (1). The consensus recommendation is a Buy. The 12 month stock price consensus is $11.58. This implies a total return of 33.33% with 30.85% from capital gains and 2.49% from dividends.
In a Canadian Press Article on the National Post we learn that this company has made another bid for a US company called Music Choice. Liliana Gabriel on Simply Wall street says that this company has a very low Return on Capital Employed (ROCE) of $3.94. Will Ashworth of Motley Fool likes this small company. It is surprising there are entries on Stock Chase for this stock since it is so new. The two analysts look on it favourably.
Stingray Digital Group Inc. provides business-to-business multi-platform music and in-store media solutions to businesses and individuals worldwide. Its web site is here Stingray Digital Group Inc.
The last stock I wrote about was about was Newfoundland Capital Corp. (TSX-NCC.A, OTC-none) ... learn more. The next stock I will write about will be BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY) ... learn more on Wednesday, August 15, 2018 around 5 pm. Tomorrow on my other blog I will write about Robin Speziale.... learn more on Tuesday, August 14, 2018 around 5 pm.
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