I do not own this stock of CCL Industries Inc (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.
When I was updating my spreadsheet, I noticed that the company had a 2018 EPS estimate of $2.87, but the EPS for 2018 came in at $2.61. The estimates for 2019 and 2020 have been lowered. The old ones were $3.25 and $3.52 and the new ones are $2.77 and $3.14. This company has done well for their shareholders especially lately.
Dividend yields are low (below 1%) or barely moderate (2% to 4% ranges). The current dividend is 1.24%. The 5, 10 and historical yields are 0.89%, 1.20% and 2.09%. The current yields are better than when I looked at this stock last year with current yield under 1% at 0.91%.
The dividend growth is good. The dividend growth used to be moderate (8% to 14% ranges), but lately has been in the good range (15% and above). The growth for the last 5 years, per year, is 24.8%. The last increase was this year and was for 30.8%.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 was 20% with 5 year coverage at 19%. The DPR for EPS for 2018 was 9% with 5 year coverage also at 9%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 was good at 0.27. The Liquidity Ratio for 2018 is fine at 1.58 with a 5 year median at 1.42. The Debt Ratio is good at 1.61 with a 5 year median also at 1.61. The Leverage and Debt/Equity Ratios for 2018 is 2.63 and 1.63. The 5 year median ratios are 2.20 and 1.20.
The Total Return per year is shown below for years of 5 to 31 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 24.77% | 27.32% | 25.87% | 1.45% |
| 2008 | 10 | 16.59% | 27.56% | 25.91% | 1.65% |
| 2003 | 15 | 14.09% | 20.31% | 18.94% | 1.37% |
| 1998 | 20 | 11.79% | 15.24% | 14.15% | 1.10% |
| 1993 | 25 | 9.32% | 14.86% | 13.58% | 1.28% |
| 1988 | 30 | 8.27% | 12.19% | 11.06% | 1.13% |
| 1987 | 31 | 13.47% | 12.04% | 1.43% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.77, 22.16 and 25.86. The corresponding 10 year ratios are 14.31, 19.62 and 23.79. The corresponding historical ratios are 11.69, 14.34 and 19.64. The current P/E Ratio is 19.78 based on a stock price of $54.78 and 2019 EPS estimate of $2.77. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $31.05. The 10 year low, median, and high median Price/Graham Price Ratios are 1.05, 1.46 and 1.88. The current P/GP Ratio is 1.76 based on a stock price of $54.78. 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 2.56. The current P/B Ratio is 3.54 based on Book Value of $2,749M, Book Value per Share of $12.41 and a stock price of $54.78. The current ratio is 38% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.09%. The current yield is 1.24% based on dividends of $0.68 and a stock price of $54.78. The current dividend yield is 41% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.20%. The current yield is 1.24% based on dividends of $0.68 and a stock price of $54.78. The current dividend yield is 4% below 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 1.28. The current P/S Ratio is 1.79 based on 2019 Revenue estimate of $5,444M, Revenue per Share of $30.63 and a stock price of $54.78. The current ratio is 40% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. Most of my testing is show the stock price as relatively above the median or expensive. The P/S Ratio, the historical dividend yield, and the P/B Ratio tests all show this. At least the dividend yield is over 1% at 1.24%.
Is it a good company at a reasonable price? This stock has certainly done well for shareholder, especially lately. A few analysts think that it is slowing down. Judging by the second quarterly results, this seems so. For the 12 months ending at the end of the second quarter compared to 2018, Revenue is up just 4% and EPS 1.2%. The 5 year growth in Revenue was 22% per year and the 5 year growth in EPS is 34% per year to the end of 2018. So, the analysts seem to be right. It is not as overpriced as it was last year, but price is still high.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price is $68.69. This implies a total return of $26.63% with 1.24% from dividends and 23.39% from capital gains.
See what analysts are saying on Stock Chase. They like the company but some have concerns. Chen Liu on Motley Fool likes this company for its worldwide dominance and strong financials. A writer on Simply Wall Street thinks this stock is a smart choice for dividend investors. A writer on Simply Wall Street thinks the ROCE for this company is good . Staff at Market Exclusive talks about CIBC lowering its target price on this stock.
CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments which include The CCL segment, which generates the majority of revenue, sells pressure sensitive and extruded film materials used for labels on consumer packaging, healthcare, automotive, and consumer durable products. Its web site is here CCL Industries Inc.
The last stock I wrote about was about was Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM) ... learn more. The next stock I will write about will be Encana Corp (TSX-ECA, NYSE-ECA) ... learn more on Monday, November 4, 2019 around 5 pm.
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