I do not own this stock of Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF). I got this stock suggestion from Peter Keyser who I met in an Investment Club. The company reports in US$ and distributes its dividend in US$.
When I was updating my spreadsheet, I noticed that long term investors have not done well, but anyone investing in the last 10 years has. See chart below. This is because the stock really took off in the 2000 bull market and then crashed. This would not be the fault of management because investors got too excited about investing in the stock and pushed in up to heights it should not have gone to. A more serious thing is that Long Term Debt has been climbing. It went up 54% in 2017 and 84% in 2018 and then another 14% in the first quarter of this year.
Dividend yield is moderate. The current dividend yield is 4.02% with 5, and historical at 3.56 and 3.42%. They at first grow their dividends, but that has slowed and then stopped in 2018. What I have heard is that the company will spend their money on acquisitions in the near future and not on dividends.
The Dividend Payout Ratios are fine The DPR for EPS for 2018 is 71% with 5 year coverage at 60%. The DPR for CFPS for 2018 is 28% with 5 year coverage at 27%.
Debt Ratios are fine, but the Debt Ratio is getting low and the Leverage and Debt/Equity Ratios are getting a little high for what I like. The Long Term Debt/Market Cap ratio is 0.32. The Liquidity Ratio is 2.06 with 5 year median of 2.17. The Debt Ratio is 1.35 with 5 year median of 1.72. The Leverage and Debt/Equity Ratios for 2018 are 4.02 and 2.98 with 5 year medians of 2.55 and 1.55.
The Total Return per year is shown below for years of 5 to 25 to the end of 2018 in CDN$. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 17.55% | 8.20% | 3.82% | 4.38% |
| 2008 | 10 | 36.81% | 31.55% | 5.25% | |
| 2003 | 15 | 1.54% | 0.17% | 1.37% | |
| 1998 | 20 | -3.20% | -4.09% | 0.89% | |
| 1993 | 25 | 4.06% | 2.67% | 1.39% |
The Total Return per year is shown below for years of 5 to 25 to the end of 2018 in US$. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 11.84% | 2.89% | -1.07% | 3.97% |
| 2008 | 10 | 35.51% | 30.02% | 5.49% | |
| 2003 | 15 | 1.27% | -0.16% | 1.43% | |
| 1998 | 20 | -2.47% | -3.53% | 1.06% | |
| 1993 | 25 | 3.62% | 2.51% | 1.11% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.16, 17.82 and 22.48. The corresponding 10 year ratios are 9.73, 15.14 and 20.14. The corresponding historical ratios are 7.56, 14.43 and 18.19. The current P/E Ratio is 16.63 based on 2019 EPS estimate of $0.86 and a stock price of $14.30. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is all in US$.
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.79, 17.31 and 20.88. The corresponding 10 year ratios are 9.73, 15.14 and 20.14. The corresponding historical ratios are 10.32, 15.70 and 21.07. The current P/E Ratio is 16.55 based on 2019 EPS estimate of $1.15 and a stock price of $19.05. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is all in CDN$.
I get a Graham Price of $12.49. The 10 year low, median, and high median Price/Graham Price Ratios are 0.96, 1.36 and 1.77. The current P/GP Ratio is 1.53 based on a stock price of $19.05. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is all in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 3.07. The current P/B Ratio is 3.16 based on a stock price of $19.05, Book Value of $353M and Book Value per Share of $6.02. The current ratio is 3% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is all in CDN$.
I get an historical median dividend yield of 3.42%. The current dividend yield is 3.93% based on dividends of 0.75 and a stock price of $19.05. The current dividend yield is 15.05% above the historical yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is all in CDN$.
The 10 year median Price/Sales (Revenue) Ratio is 0.87. The current P/S Ratio is 0.70 based on 2019 Revenue estimate of $1,193M, Revenue per Share of $20.33 and a stock price of $14.30. The current ratio is some 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is all in US$.
Results of stock price testing is that the stock price is probably reasonable. The difference in P/E Ratios in US$ and CDN$ is to do with currency exchange and the fact that this stock is trade a lot more on the TSX than OTC in the US. The testing is showing the stock price to be reasonable and either above or below the median. The good tests of P/S Ratio, P/B Ratio and dividend yield is all showing the stock price to be reasonable and below the median.
When I look at analysts’ recommendations, I find Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price is 16.99 US$ or 22.74 CDN$. This implies a total return of 23.31% with 19.38% from capital gains and 3.93% from dividends.
See what analysts are saying at Stock Chase. Some analysts are impressed. Jason Phillips on Motley Fool likes this stock. (Do not forget for Motley Fool reports, if you do not get the full report use your browser’s arrows to go out and come back into the report and you should get the whole report.) A writer on Simply Wall Streetthinks the company has a good ROE. Devon Fonder on Rockland Register talks about this stock. Jill Kern on Sundance Herald compares this company to IT Tech Packaging Inc (NYSE-ITP).
Intertape Polymer Group Inc manufactures and sells a variety of packaging products. The firm's primary product categories include tapes, films, and woven coated fabrics. Its web site is here Intertape Polymer Group Inc.
The last stock I wrote about was about was Waste Connections Inc. (TSX-WCN, NYSE-WCN) ... learn more. The next stock I will write about will be Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN) ... learn more on Friday, June 21, 2019 around 5 pm. Tomorrow on my other blog I will write about Why I am Not Buying Bonds.... learn more on Thursday, June 20, 2019 around 5 pm.
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