I do not own this stock of Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF). I got this stock suggestion from a member of an Investment Club I belong to. The company reports in US$ and distributes it dividend in US$.
When I was updating my spreadsheet, I noticed that the company gives away lots of stock options. In the past year the outstanding shares were increased by 0.61% (5 year average 0.60%). This is rather high as you would expect this to be no higher than 0.50% of outstanding shares. It appears that there is lots of insider selling (0.11% of market Cap), but really people are not taking up stock options given.
There is also a number of people with the last name of Yull. The CEO is Gregory Yull. There is an officer called Duncan Yull. A director called Melbourne Yull who has over a 1.7M shares. Apparently, Melbourne Yull started the company.
The dividend yields are moderate with dividend growth currently low. The current dividend is good (5% and 6% ranges) at 6.66% however, the yield has been mostly in the moderate range (2% to 4% ranges). The 5, 10 and historical median dividend yields are 3.71%, 3.56% and 3.56%. The recent dividend increases have been in the low range (under 8%). The most recent dividend increase was for 5.4% and this increase was for this year.
The Dividend Payout Ratios (DPR) are fine, but are getting too high. The DPR for 2019 is 82% with 5 year coverage at 63%. The DPR for CFPS is 21% with 5 year coverage at 25%. The DPR for Free Cash Flow for 2119 is 40% with 5 year coverage at 69%. Dividend Coverage Ratio for 2019 is 2.49 with 5 year ratio at 1.45.
Debt Ratios should be improved. The Long Term Debt/Market Cap Ratio is 0.64 for 2019 but is higher at 1.11 currently. Debt has increased by 18% and the stock price has fallen by 29%. It is too high, but we are also in a bear market. The Liquidity Ratio is high and good at 1.95. The Debt Ratio is lower than what I like at 1.39. I prefer this to be at 1.50. The Leverage and Debt/Equity Ratios are 3.93 and 2.89 and a little too high.
The Total Return per year is shown below for years of 5 to 26 to the end of 2019 in CDN$. 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. |
|---|---|---|---|---|---|
| 2014 | 5 | 9.98% | 1.84% | -2.24% | 4.07% |
| 2009 | 10 | 13.99% | 23.67% | 18.75% | 4.92% |
| 2004 | 15 | 4.67% | 2.85% | 1.82% | |
| 1999 | 20 | -3.34% | -4.39% | 1.05% | |
| 1994 | 25 | 2.78% | 1.62% | 1.17% | |
| 1993 | 26 | 3.71% | 2.50% | 1.21% |
The Total Return per year is shown below for years of 5 to 26 to the end of 2019 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. |
|---|---|---|---|---|---|
| 2014 | 5 | 7.53% | -0.81% | -4.51% | 3.70% |
| 2009 | 10 | 10.26% | 20.93% | 16.31% | 4.62% |
| 2004 | 15 | 4.40% | 2.57% | 1.82% | |
| 1999 | 20 | -2.77% | -3.84% | 1.08% | |
| 1994 | 25 | 3.00% | 1.95% | 1.05% | |
| 1993 | 26 | 3.57% | 2.55% | 1.03% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.69, 17.31 and 20.88. The corresponding 10 year ratios are 11.80, 16.16 and 21.27. The corresponding historical ratios are 10.68, 15.79 and 21.26. The current P/E Ratio is 12.84 based on a stock price of $12.01, EPS of $0.94 ($0.69 US$). This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get a Graham Price of $11.20. The 10 year low, median, and high median Price/Graham Price Ratios are 1.19, 1.48 and 1.86. The current P/GP Ratio is 1.07 based on a stock price of $12.01. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 3.28. The current P/B Ratio is 2.09 based on a stock price of $8.80, Book Value of $248M and a Book Value per Share of $4.20. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get similar results in CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 8.24. The current P/B Ratio is 4.66 based on a stock price of $8.80, Cash Flow per Share of $1.89 and a Cash Flow of $112M. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get similar results in CDN$.
I get an historical median dividend yield of 3.55%. The current dividend yield is 6.66% based on dividends of $0.80 ($0.59 US$), and a stock price $12.01. The current dividend 88% above the historical median dividend. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get a 10 year median dividend yield of 3.13%. The current dividend yield is 6.66% based on dividends of $0.80 ($0.59 US$), and a stock price $12.01. The current dividend 113% above the 10 year median dividend. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
The 10 year median Price/Sales (Revenue) Ratio is 0.87. The current P/S Ratio is 0.49 based on 2020 Revenue estimate of $1064M, Revenue per Share of $18.03 and a stock price of $8.80. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get similar results in CDN$.
Results of stock price testing is that the stock price is relatively cheap. The dividend yield tests are showing the stock as relatively cheap and this is confirmed by the P/S Ratio test. There is nothing wrong that I can see about any of the tests. However, I noted that all the estimate value (like Revenue, EPS, Cash Flow etc.) are lower than for 2019. However, the first quarterly values are the same as for 2019 or higher. For example, the Revenue estimate for 2020 is $1064M, a decrease of 8%, but the last 12 month Revenue is $1,160 an increase of $0.9% over Revenue for 2019.
Is it a good company at a reasonable price? The stock price is relatively cheap. They will probably do fine, but they do need to improve their Dividend Payout Ratios and their Debt Ratios. There are also reasons, like both DPR and Debt Ratios needing improvement is why it is cheap.
When I look at analysts’ recommendations, I find Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $13.87 ($10.23 US$). This implies a total return of 21.15% with 15.49% from capital gains and 6.66% from dividends. The total returns have been low for most periods. Maybe a look at a better stock in this area is wise.
Analyst on Stock Chase do not seem to be impressed with the company. Brian Pacampara on Motley Fool likes the high dividend on this stock. A writer on Simply Wall Street thinks the future looks bright for this company. A writer on Simply Wall Street looks at ownership. The Blogger Dividend Earner recently reviewed this stock.
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. The majority of revenue comes from the United States. 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 19, 2020 around 5 pm. Tomorrow on my other blog I will write about Canadian Bank Dividends.... learn more on Thursday, June 18, 2020 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.
No comments:
Post a Comment