I own this stock of Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). I saw this on company on the Canadian Dividend All-Star List. It has just recently started to pay dividends. It has only been around since 2012 and has good dividends. It has just recently started to pay dividends and dividends are good but are taxed as interest. So, this stock should go into a TFSA, RRSP or RRIF account.
When I was updating my spreadsheet, I noticed that shares are increasing rapidly with outstanding shares up by 11.5% and 21.9% per year over the past 5 and 8 years. It is therefore the per share values that count. For example Revenue is up by 19.7% and 27.3% per year over the past 5 and 8 years, but Revenue per Share is only up by 7.3% and 6.5% per year over the past 5 and 10 years
The yield is good but growth is low. The current yield is 6.83%, with 5 and 8 year median yields at 7.22% and 7.16%. The dividend growth is low with 5 year growth at 4.1% per year. They just started paying dividends in 2013. However, they have paid special dividends each year since. The special dividends are not high, but sort of equivalent to one monthly dividend payment.
They are paying out 99% of the EPS if you include the special dividends paid. For 2019 they have not raised their dividends, but it is expected that they will still pay a special dividend in 2019. However, if you look at dividends paid in cash compared to net income, the percentage of payout is 86.7% with 5 year coverage at 88.3%.
The Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.32. The Liquidity Ratio is really high at 108.41 for 2018 as they have few current liabilities, but this ratio tends to be ignored for Financials such as this company. The Debt Ratio is good at 2.24. The Leverage and Debt/Equity Ratios are also good at 1.81 and 0.81.
The Total Return per year is shown below for years of 5 to 9 to the end of 2018. 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.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 4.14% | 11.11% | 3.04% | 8.07% |
| 2009 | 8 | 7.52% | 2.70% | 4.82% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.95, 12.71 and 13.43. The 8 year corresponding Ratios are 11.78, 12.71and 13.43. The current P/E Ratio is 13.44 based on a stock price of $13.17 and 2019 EPS estimate of $0.98. This stock price testing suggests that the stock price is relatively expensive, but it is just in the expensive range.
I get a Graham Price of $15.28. The 8 year low, median, and high median Price/Graham Price Ratios are 0.73, 0.80 and 0.85. The current P/GP Ratio is 0.86 based on a stock price of $13.17. This stock price testing suggests that the stock price is relatively expensive, but it is just in the expensive range.
I get an 8 year median Price/Book Value per Share Ratio of 1.11. The current P/B Ratio is 1.24 based on Book Value of $387M, Book Value per Share of $10.59 and a stock price of $13.17. The current ratio is 11.9% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively reasonable, but above the median.
I get an historical median dividend yield of 7.16%. The current dividend yield is 6.83% based on dividends of $0.90 and a stock price of $13.17. The current yield is 4.6% below the historical yield. This stock price testing suggests that the stock price is relatively reasonable, but above the median.
The 8 year median Price/Sales (Revenue) Ratio is 7.89. The current ratio is 7.40 based on 2019 Revenue estimate of $65.1M, Revenue per share of $1.78 and a stock price of $13.17. The current ratio is some 6.2% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively reasonable, and below the median.
Results of stock price testing is mostly that it is above the median and some just into the expensive range. The one analyst following this stock gives a recommendation of Hold. It may be a bit pricey at this time.
When I look at analysts’ recommendations, I find one analyst following this stock and that analyst gives a Hold recommendation. The 12 month stock price given is $13.00. This implies a total return of 5.54% with a capital loss of 1.29% and dividend gains of 6.83%. This is based on a current stock price of $13.17.
This stock is not on Stock Chase. Brian Paradza of Motley Fool thinks this is a great stock as long as the real estate market remains stable and growing. Kevin Zeng on Simply Wall Street says the payout ratio is too high. However, not all companies are the same when looking at Dividend Payout Ratios. Edwin Gilmore on Bharatapress says Fundamental Research reaffirmed a “hold” rating on this stock. There is a press release on Market Watch about this company closing a recent public offering.
Atrium Mortgage Investment Corp is a non-banking finance company providing residential and commercial mortgages that lends funds in major urban centres in Canada where the stability and liquidity of real estate are high. Its web site is here Atrium Mortgage Investment Corp.
The last stock I wrote about was about was Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more. The next stock I will write about will be Emera Inc. (TSX-EMA, OTC-EMRA) ... learn more on Monday, February 25, 2019 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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Interesting company Thanks for sharing your analysis. Since they are a REIT, I'd be curious what their FFO is and what their payout ratio is calculating FFO. Interesting that they pay a special dividend as well each year. My assumption is that they would not pay the special dividend if earnings took a dip one year and payout was 100%.
ReplyDeleteThanks for the write-up.
Bert