I do not own this stock of Exco Technologies Ltd (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.
When I was updating my spreadsheet, I noticed that long term total return is rather mixed with the total return for the past 10 years being exceptional. The stock is already up 9% this year. The financial year ends in September each year, so the last financial year ended September 30, 2018.
They have only had dividends for the past 15 years. Dividend yield is in the low to moderate ranges and it has varied over time. The current dividend is 3.64% with 5, 10 and 15 year median yields at 1.95%, 3.06% and 1.97%. Dividend growth has been in the good range (15% and over) until recently. The most recent increase was late in 2018 (for the 2019 year) and was only at 5.9%.
I believe that they can afford their dividends. The Dividend Payout Ratio for 2018 was 33% with 5 year coverage at 28%. The DPR for CFPS for 2018 was 22% with 5 year coverage at 19%.
I find the Debt Ratios very good. The Long Term Debt/Market Cap Ratio for 2018 is 0.05. The Liquidity Ratio, one of the most important ones, was 2.51 in 2018 with 5 year median at 2.26. The Debt Ratio for 2018 was 3.80 with 5 year coverage at 3.32. The Leverage and Debt/Equity Ratios for 2018 were 1.36 and 0.36.
The Total Return per year is shown below for years of 5 to 26 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 | 14.20% | 4.52% | 1.46% | 3.07% |
| 2008 | 10 | 17.37% | 28.97% | 23.10% | 5.87% |
| 2003 | 15 | 13.52% | 4.25% | 2.48% | 1.76% |
| 1998 | 20 | 8.34% | 6.63% | 1.71% | |
| 1993 | 25 | 6.37% | 5.14% | 1.23% | |
| 1992 | 26 | 8.79% | 7.43% | 1.35% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.40, 13.17 and 15.68. The corresponding 10 year ratios are 8.50, 10.03 and 12.31. The corresponding historical ratios are 9.40, 13.35 and 15.77. The current P/E Ratio is 9.24 based on a stock price of $9.89 and 2019 EPS estimate of 1.07. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $14.00. The 10 year low, median, and high median Price/Graham Price Ratios are 0.63, 0.75 and 0.63. The current P/GP Ratio is 0.71 based on a stock price of $9.89. 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 1.28. The current P/B Ratio is 1.21 based on Book Value of $337M, Book Value per Share of $8.14 and a stock price of $9.89. The current ratio is 5% lower than the 10 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 1.97%. The current dividend yield is 3.64% based on dividends of $0.36 and a stock price of $9.89. The current yield is some 84% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.80. The current P/S Ratio is 0.80. The current P/S Ratio is 0.78 based on 2019 Revenue estimate of $527, Revenue per Share of $12.72 and a stock price of $9.89. The current ratio is some 3% lower than the 10 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 that the stock price is relatively cheap to relatively reasonable and below the median. I did not do testing of the dividend yield against the 5 and 10 year dividends, because they have not been fooling around with the dividends. They started off flat and they have been increasing since 2007. However, the Dividend Payout Ratio has been increasing, but has fluctuated in the past and the dividend yield has fluctuated a lot. Also, the P/S Ratio cannot be ignored.
When I look at analysts’ recommendations, I find Buy (1) and Hold (4). The consensus would be a Hold. This is a small company so there are few analysts following it. The 12 month stock price consensus is $10.90. This implies a total return of $13.85 with 10.21% from capital gains and 3.64% from dividends.
See what analysts are saying on Stock Chase. There is nothing recent but remarks from 2017 note it is not currently doing well. Kris Knutson on Motley Fool thinks this is a small cap that should be on your radar. Kyle Sanford on Simply Wall Street says why he thinks this stock is undervalued.
Exco Technologies Ltd is a designer, developer, and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries. Its web site is here Exco Technologies Ltd.
The last stock I wrote about was about was AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more on Friday, February 8, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy February 2019.... learn more on February 07, 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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