I do not own this stock of Superior Plus Corp (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009.
When I was updating my spreadsheet, I noticed the decline in dividends. However, this used to be an income trust. It was expected that old income trusts would cut dividends and this one did by around 63%. Since then there was one major increase in 2014 of 20% and then dividends have been flat ever since. Analysts do not expect any increase over the next few years.
The current dividend yield is good at 5.49%. It is typical for companies with high dividends to have low dividend growth. Dividends for this company used to be much higher. They were over 18% at one point (went it was an income trust). The historical median is still very high at 9.79%. The 10 year median and 5 year median dividend yields are lower with the 10 and 5 year median dividend yields being 7.03% and 5.91%
They had an earnings loss in 2017 so the Dividend Payout Ratio cannot be calculated. However, the 5 year coverage is at 120%, which is too high. Analysts expect the DPR for 2018 to be around 124%. This is probably why analysts are not suggesting any dividend increases in the near term. The DPR for CFPS is fine with the one for 2017 at 40.5% and 5 year coverage at 36%. The 5 year coverage is what really counts.
The Long Term Debt/Market Cap Ratio is fine at 0.60. The Liquidity Ratio is low at 1.34, but more acceptable if you added in cash flow after dividends for a ratio of 1.53. The current Debt Ratio is fine at 1.50. Leverage and Debt/Equity Ratios are fine at 3.01 and 2.01 with 5 year medians at 3.87 and 2.87. I would prefer the last two ratios to be lower.
The Total Return per year is show below for years of 5 to 21. 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.
Except for the 15 year period, the total return for shareholders have been quite good. 15 years ago, was 2002 and both the Price/Graham Price and Price/Book Value Ratios were pointing to an expensive stock price. Other testing ratios were not. This is as far as I can see.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 3.71% | 9.17% | 3.00% | 6.17% |
| 10 | -7.50% | 9.55% | 0.14% | 9.41% |
| 15 | -6.55% | 6.10% | -3.31% | 9.41% |
| 20 | -2.10% | 11.93% | -0.55% | 12.48% |
| 21 | -1.55% | 11.04% | -0.68% | 11.73% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 25.63, 29.15 and 32.68. The corresponding 10 year ratios are 9.40, 12.38 and 15.35. The corresponding historical ratios are 13.93, 19.59 and 19.78. The current P/E Ratio is 22.62 based on a stock price of $13.12 and a 2018 EPS estimate of $0.58. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $9.19. The 10 year low, median, and high median Price/Graham Price Ratios are 1.21, 1.58 and 1.90. The current P/GP Ratio is 1.43. 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 Ratio of 2.40. The current P/B Ratio is 2.34 based on a stock price of $13.12, Book Value of $800M and Book Value per Share of $5.60. The current ratio is some 2.6% below the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 5 year median dividend yield of 5.91%. The current dividend yield is 5.49% a value some 7.2% lower. The current yield is based on dividends of $0.72 and a stock price of $13.12. This stock price testing suggests that the stock price is relatively reasonable and below the median. Because this stock used to be an income trust, it would not be a good test to use the Historical Dividend Yield. On the other hand, we should pay more attention to the other tests rather than this one.
The 10 year median Price/Sales (Revenue) Ratio is 0.42. The current P/S Ratio is 0.63 based on 2018 Revenue estimate of $2,960M, Revenue per Share of $20.73 and a stock price of $13.12. The current ratio is some 52% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Because this stock used to be an income trust, it would not be a good test to use the Historical Dividend Yield test so I used the 5 year median dividend yield. Because it used to be an income trust, we should be paying more attention to the other tests rather than the dividend yield test. Both the P/S Ratio and P/B Ratios would be good tests, but they are saying the opposite thing.
On an absolute basis the P/E Ratio is high at 22.62 for this sort of stock. I find the Graham Price a bit high for this stock of stock also. My guess would be that the price is reasonable to expensive, with the price more to the expensive end.
When I look at analysts’ recommendations I find Strong Buy (1), Buy (6) and Hold (4). The consensus recommendations would be a buy. The 12 month stock price is $14.66. This implies a total return of 17.23% with 11.745 of capital gains and 5.49% from dividends based on a current stock price of $14.66.
Brandy Kinsey on Simply Wall Street thinks that this stock could help diversity your portfolio. Ploutos Investing on Seeking Alpha thinks that the purchase of NGL Propane was a good move for this company. Will Ashworth on Motley Fool gave this stock as one to achieve a 5% yield. . See what analysts are saying about this stock on Stock Chase. They think it is a good dividend payer.
Superior Plus Corp provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels. Its segments include Energy Distribution, and Specialty Chemicals. Its web site is here Superior Plus Corp.
The last stock I wrote about was about was Evertz Technologies (TSX-ET, OTC-EVTZF) ... learn more. The next stock I will write about will be Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF) ... learn more on Friday, August 24, 2018 around 5 pm. Tomorrow on my other blog I will write about Best Canadian Banks Ranked.... learn more on Thursday, August 23, 2018 around 5 pm.
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