Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The company has not been doing well lately as far as stock price goes. It is currently cheap. There is insider buying and the last dividend increase was 16.7%. This shows that manager has a positive future view. See my spreadsheet on Leon's Furniture Ltd.
I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.
When I was updating my spreadsheet, I noticed that it seemed that dividend increases were a lot lower lately, but this is because there were no increases from 2013 to 2016 inclusive. The most recent increase was late in 2018 and it was for 16.7%. Until recently, this stock has done well for shareholders. A total return of more than 8% is a good total return for a consumer stock.
The dividend yields have been moderate in the 2% to 4% ranges. The current yield is 3.81%, with 5, 10 and historical yields at 2.54%, 2.65% and 2.01% respectively. The dividend growth has been mostly moderate but there are some years of no dividend increases. The 5 and 10 year growth are low because of lack of increases from 2013 to 2016 inclusive.
The Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 37% with 5 year coverage of 39%. Just before the stopping of dividend increases in 2012. The DPR for EPS was the highest it has ever been at 85%. The DPR for CFPS for 2018 was 44% with 5 year coverage at 41%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.04 a very low value and it has been falling over the last few years, but has always been quite good. The Liquidity Ratio has varied a lot. The current ratio for 2018 is 1.09 and has a 5 year median of 1.15 and this is low. If you added in cash flow after dividends, it because for 2018, 1.32 with 5 year median of 1.34. These are also low.
The Debt Ratio has always been good and for 2018 it is 1.99 with 5 year median at 1.69. Leverage (A/BK) Debt/Equity Ratios are fine at 2.01 and 1.01 with 5 year ratios at 2.08 and 1.08, respectively.
The Total Return per year is shown below for years of 5 to 28 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 | 4.56% | 4.51% | 1.39% | 3.12% |
| 2008 | 10 | 5.97% | 9.31% | 5.26% | 4.05% |
| 2003 | 15 | 9.68% | 9.00% | 5.23% | 3.78% |
| 1998 | 20 | 10.53% | 10.67% | 6.41% | 4.26% |
| 1993 | 25 | 10.92% | 10.39% | 6.57% | 3.81% |
| 1988 | 28 | 10.07% | 12.08% | 7.92% | 4.16% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.41, 14.74 ad 16.76. The corresponding 10 year ratios are 13.43, 14.95 and 17.01. The corresponding historical ratios are 12.37, 14.65 and 16.76. The current ratio is 10.96 based on a stock price of $14.69 and 2019 EPS estimate of $1.34. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $18.23. The 10 year low, median, and high median Price/Graham Price Ratios are 0.98, 1.16 and 1.32. The current P/GP Ratio is 0.81 based on a stock price of $14.69. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.88. The current P/B Ratio is 1.35 based on Book Value of $354M, Book Value per Share of $11.02 and a stock price of $14.69. The current ratio is 29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 2.01%. The current dividend yield is 3.81% based on a stock price of $14.69 and dividends of $0.56. The current yield is 90% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.60. The current P/S Ratio is 0.50 based on a stock price of $14.69, 2019 Revenue estimate of $2,268M and Revenue per Share of $29.27. The current ratio is 16% below 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 mostly cheap except for the P/S Ratio which is reasonable and below the median. This stock is selling at a relatively low price.
When I look at analysts’ recommendations, I find Buy (1) and Hold (2) recommendations. The consensus would be a Hold. The 12 month stock price is $18.00. This implies a total return of 26.34% with 22.53% from capital gains and 3.81% from dividends based on a current stock price of $14.69.
See what analysts are saying about this company on Stock Chase. A couple talk about the amount of Real Estate they own. Ambrose O'Callaghan on Motley Fool likes this stock. A writer on Simply Wall Street talks about ownership. Darrin Black on What’s on Thorold talks about a slight increase in shorted shares of this company. The company talks on Newswire Canada about teaming up with Shopify.
Leon's Furniture Ltd is one of Canada's largest retailers that sells furniture, major appliances, and home electronics. The company primarily operates across the Canadian provinces of Ontario, Quebec, and Alberta. Its operations are divided between corporate and franchise stores, where the majority of revenue is derived from corporate store sales. Its web site is here Leon's Furniture Ltd.
The last stock I wrote about was about was Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more. The next stock I will write about will be Barrick Gold Corp (TSX-ABX, NYSE-ABX) ... learn more on Monday, April 15, 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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