I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF) but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so it was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
When I was updating my spreadsheet, I noticed the company has been doing extremely well. I see a lot of green ink. The dividend growth is quite good, but dividend yields are very low.
Dividend yields have been very low mostly on this stock. The current yield is 0.64%, with 5, 10 and historical median yields at 0.48%, 0.60% and 0.60%. The high dividend yield is around 1.3%, but it has not been over 1% anytime during the past 5 years.
The Dividend Payout Ratio is extremely low, with the 2017 ratio at 9.51% and the 5 year coverage at 9.74%. The DPR for CFPS is also very low with the 2017 ratio at 6.68% and 5 year coverage at 6.45%.
The Liquidity Ratio is low at just 1.07 for 2017 with 5 year median at just 1.08. If you add in cash flow after dividends it becomes 1.55 for 2017 with 5 year median at 1.72. The Debt Ratio is good at 1.52 and a 5 year median at 1.61. A good ratio here is 1.50 and above. The Leverage and Debt/Equity Ratios at 3.06 and 2.02 as a little high.
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.
Shareholders have made a very good return; however, the dividend portion is very low.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 29.20% | 32.90% | 32.09% | 0.81% |
| 10 | 23.58% | 27.51% | 26.82% | 0.69% |
| 11-15 | 23.08% | 26.04% | 25.46% | 0.58% |
| 20 | 27.59% | 27.12% | 0.47% | |
| 22 | 29.53% | 29.05% | 0.48% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.93, 20.44 and 23.86. The corresponding 10 year ratios are 12.26, 15.89 and 18.59. The corresponding historical ratios are 13.09, 17.40 and 20.80. It would appear part of the recent price rise is a rising P/E Ratio. The current P/E Ratio is 14.16 based on a stock price of $62.48 and 2019 EPS estimate of $4.41 CDN$ ($3.38 US$). This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $41.33. The 10 year low, median, and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.74. The current P/GP Ratio is 1.51 based on a stock price of $62.48. 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 3.06. The current P/B Ratio is 3.35 based on Book Value of $9,708M, Book Value per Share of $17.21 and a stock price of $62.48. The current P/B Ratio is some 18.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. If it was 20% above the 10 year median the stock would be relatively expensive.
I get an historical median dividend yield of 0.60%. The current dividend yield is 0.64% a value some 6.7% higher. The current yield is based on dividends of $0.40 and a stock price of $62.48. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.30. The current P/S Ratio is 0.51 based on 2019 Revenue estimate of $69,425M CDN$ ($53,179M US$) and a stock price of $62.48 CDN$. The current ratio is some 67% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts’ recommendations I find Strong Buy (1) and Buy (12). The consensus would be a Buy. The 12 month stock price consensus is $76.63 CDN$ ($58.70 US$). This implies a total return of 23.29 with 22.65% from capital gains and 0.64% from dividends based on a stock price of $62.48 CDN$ ($47.95 US$).
Joey Frenette of Motley Fool likes this stock but thinks that the company would be wise to up dividend to 2%. Clifford Jones on Baseball Daily digest talks about recent analysts’ recommendations for this stock. Arjun Bhatia on Simply Wall Street talks about valuing a company based on P/E Ratios. See what analysts are saying about this stock on Stock Chase. Most analysts like it, but there are other opinions.
Alimentation Couche-Tard Inc operates convenience stores. The Company generates revenue from sale of tobacco products, grocery items, beverages, fresh food offerings, including quick service restaurants among others. Its web site is here Alimentation Couche-Tard Inc.
The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF) ... learn more. The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF) ... learn more on Wednesday, September 5, 2018 around 5 pm. Today on my other blog I will write about Dividend Stocks September 2018.... learn more on Tuesday, September 4, 2018 around 5 pm.
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