I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). Goodfellow looks like a good small cap stock. It was being pushed by Investor Reporter. The report I got was from 2010.
When I was updating my spreadsheet, I noticed there is a bit of insider buying under $5.35. It is a good sign that the company restarted dividends in 2019. The company admits that there are challenging conditions in North America and overseas. This long slow recovery has been hard on a lot of companies. It has very good debt ratios with no long term debt. However, you have to worry about the effect of the Covid 19 flu on their future business and their dividends.
The dividend yields are mostly moderate with both dividend growth and dividend decreases. The current dividend is good (5% and 6% ranges) at 5.71%. This is not surprising as a lot of companies have higher than usual dividend yields. The 5, 10 and historical dividend yields are 2.87%, 3.42% and 3.50% which is in the moderate range (2% to 4% ranges). As far as I know they started to pay dividends in 1991. Dividends have gone up and down over the years. See chart below.
The Dividend Payout Ratios are fine. The DPR for EPS for 2019 is 57%. I cannot calculate 5 year coverage because the total 5 year EPS is negative. The DPR for CFPS is 18% with 5 year coverage at 26%. The DPR for Free Cash Flow is 7% with 5 year coverage at 31%. Dividend Coverage Ratio is 14.41 with 5 year ratio at 3.24.
Debt Ratios are mostly good. They have gotten rid of their long term debt, but do have a current bank indebtedness at 0.76 in 2019, rising to 1.04 currently. This has to do with the bear market sell off. Their Liquidity Ratio for 2019 is very good at 2.22 with a 5 year median at 2.04. The Debt Ratio is also very good at 2.69 for 2019 with 5 year median ratio at 2.45. The Leverage and Debt/Equity Ratios for 2019 are also very good at 1.59 and 0.59 respectively. The 5 year median ratios are 1.62 and 0.62.
The Total Return per year is shown below for years of 5 to 28 to the end of 2019. 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. |
|---|---|---|---|---|---|
| 2014 | 5 | -7.79% | -10.09% | -11.99% | 1.90% |
| 2009 | 10 | -14.97% | -4.14% | -7.40% | 3.26% |
| 2004 | 15 | -3.48% | -0.35% | -5.28% | 4.93% |
| 1999 | 20 | 1.80% | 6.80% | -0.38% | 7.18% |
| 1994 | 25 | 4.29% | 11.67% | 2.98% | 8.70% |
| 1991 | 28 | 7.01% | 10.63% | 3.10% | 7.53% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.26, $10.02 and 10.78. The corresponding 10 year ratios are 12.20, 12.98 and 13.76. The corresponding 10 year ratios are 7.08, 7.08 and 9.50. The current P/E Ratio is 10.00 based on a stock price of $3.50 and last 12 month EPS of $0.35. This stock price testing suggests that the stock price is relatively cheap. The trouble with P/E Ratios on this stock is the EPS are volatile.
I get a Graham Price of $10.21. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.59 and 0.65. The current P/GP Ratio is 0.34 based on a stock price of $3.50. 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 0.66. The current P/B Ratio is 0.26 based on a Book Value of $113.4M, Book Value per share of $13.24 and a stock price of $3.50. The current ratio is 60% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.50%. The current dividend yield is 5.71% based on dividends of $0.20 and a stock price of $3.50. The current dividend yield is 63% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 3.42%. The current dividend yield is 5.71% based on dividends of $0.20 and a stock price of $3.50. The current dividend yield is 67% higher than the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.16. The current P/S Ratio is 0.07 based on last 12 months Revenue of $449.6M, Revenue per Share of $52.51 and a stock price of $3.50. The current ratio is 58% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. All the tests are showing the same thing. The P/S Ratio test confirms what the dividend yield tests are showing which is the stock is relatively cheap. A possible problem with the dividend yield test is dividends have been volatile. There are no problems with the P/B Ratio test or the P/GP Ratio test.
Is it a good company at a reasonable price? The problem is that this company was doing quite well when I first bought it in 2010. The economy has gone through a long slow recovery since 2010 and it has been hard on a lot of companies.
When I look at analysts’ recommendations, I find none. I looked at Market Beat and their community ratings for this stock and it is scored 2.7 out of 5. In community voting 53% feel it will outperform the market and 47% feel it will underperform the market.
There are no entries for this stock on Stock Chase. It is a small cap and not of much interest. Benjamin Sinclair on Motley Fool talks about this stock and does not suggest it is a buy. I had to go back to 2014 to find an entry. A writer on Simply Wall Street is not excited by this stock. A writer on Simply Wall Street does not like the debt level and declining EPS. A writer on Simply Wall Street says the CEO of this company is being paid higher than at similar companies. He also says the earnings are growing, but I do not see that.
Goodfellow Inc is engaged in remanufacturers and distributors of lumber products and hardwood flooring products. It is engaged in the wholesale distribution of wood products, and remanufacturing, distribution, and brokerage of lumber. Its web site is here Goodfellow Inc.
The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Wednesday, April 1, 2020 around 5 pm. Tomorrow on my other blog I will write about Docebo Inc.... learn more on Tuesday, March 31, 2020 around 5 pm.
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