I do not own this stock of Goeasy Ltd (TSX-GSY, OTC-EHMEF). In April of 2016 Investment Reporter said to seek stocks with growing dividends from The Investment Reporter Key stock buys. This is one stock that was named. However, I would still rather invest in companies that are not in the business of charging very high interest rates.
When I was updating my spreadsheet, I noticed that the dividend was increased this year by some 37.8% and that the stock price also when up strongly by 40%. They are also giving out a lot of stock options. The Stock Options increase outstanding shares by 1.33% in the last 12 months. You would expect this to be around 0.50%.
Dividend yields are moderate but they have dipped at times to low (below 2%). The current dividend is 2.47% with 5, 10 and historical yields at 2.05%, 2.48% and 2.21%. Dividends have been growing strongly recently. However, there was a period in the past with no growth from, from 2010 to 2014 inclusive. See chart below.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 24% with 5 year coverage also at 24%. The DPR for CFPS is low at 5% with 5 year coverage at 5%.
Debt Ratios are fine. The company is classified as consumer but has financial features. The long Term Debt/Market Cap for 2018 was high at 1.26. This was due to the falling of the stock price, but the whole Canadian market fell last year. However, the current ratio is 0.89 which is fine. The Liquidity Ratio for 2018 is 2.27 with a 5 year median of 1.57.
The Debt Ratio is a bit low at 1.4 with 5 year median at 1.64. The Leverage and Debt/Equity Ratios are a bit high at 3.50 and 2.50 respectively with 5 year medians at 2.57 and 1.57 respectively.
The Total Return per year is shown below for years of 5 to 23 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.
Shareholders have done well, especially lately.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 18.89% | 17.90% | 15.64% | 2.26% |
| 2008 | 10 | 9.66% | 16.78% | 14.18% | 2.60% |
| 2003 | 15 | 12.73% | 15.40% | 12.86% | 2.55% |
| 1998 | 20 | 9.17% | 7.60% | 1.57% | |
| 1990 | 23 | 3.41% | 2.63% | 0.78% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.85, 11.97 and 14.51. The corresponding 10 year ratios are 8.80, 11.76 and 14.78. The corresponding historical ratios are 9.54, 13.22 and 16.74. The current P/E Ratio is 9.41 based on a stock price of $50.14 and 2019 EPS estimate of $5.33. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $49.97. The 10 year low, median, and high median Price/Graham Price Ratios are 0.63, 0.85 and 1.07. The current P/GP Ratio is 1.00 based on a stock price of $50.14. 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 1.37. The current P/B Ratio is 2.41 based on a stock price of $50.14, Book Value of $302M, and Book Value per Share of $20.82. The current ratio is 76% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.21%. The current dividend yield is 2.47% based on dividends of $1.24 and a stock price of $50.14. The current dividend yield is 11.9% above the historical dividend yield. 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 0.81. The current P/S Ratio is 1.20 based on 2019 Revenue of $604M, Revenue per Share of $41.71 and a stock price of $50.14. The current ratio is 49% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is probably relatively expensive. Both the P/S Ratio test and the P/B Ratio test is showing this stock as expensive and I do not think these tests can be ignored. There has been big dividend increases recently in line with the stock price, but Revenue seems not to have kept up and neither has book value. I have always felt that Revenue growth is important.
When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (5). The consensus would be a Buy. The 12 month stock price consensus is $64.00. This implies a total return of 30.12% with 27.64% from capital gains and 2.47% from dividends.
See what analysts are saying at Stock Chase. Most analysts think it has a good story. Ryan Vanzo on Motley Fool says the company has great customer service. A writer on Simply Wall Street says that the stock is undervalued. Note that the writer is using US$. Joseph Davey on Nyse News Room says the stock is giving a Buy signal. A writer on Simply Wall Street talks about insider selling. My Net Insider Selling is 0.07% of market Cap. This is high as you expect it to be no higher than 0.02%. However, the Net Insider Selling seems to be of options, not shares held. For the major insiders, shares held has gone up.
Goeasy Ltd provides financial services to own furniture, electronics, computers, and appliances. It offers merchandise leasing of household furnishings, appliances, and home electronic products to consumers under weekly or monthly leasing agreements. The company also offers unsecured installment loans to consumers. Its web site is here Goeasy Ltd.
The last stock I wrote about was about Husky Energy Inc. (TSX-HSE, OTC-HUSKF) ... learn more. The next stock I will write about will be Lassonde Industries (TSX-LAS.A, OTC-LSDAF) ... learn more on Wednesday, June 12, 2019 around 5 pm. Tomorrow on my other blog I will write about Why Retail Investors Lose.... learn more on Tuesday, June 11, 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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