I do not own this stock of Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech like it in 2012. It is a Tech stock with dividends.
When I was updating my spreadsheet, I noticed that the Long Term Debt/Market Cap Ratio is very high at 3.11 for 2019 and currently at 3.24. The Intangible Assets/Market Cap Ratio for 2019 is 3.10 and currently at 3.25. When these ratios are over 1.00 it means that Long Term Debt and Intangible Assets are both higher than the current market cap of the stock. This is not a good situation.
Some debt ratios are improving from last year, but they are still awful. The Debt Ratio this year is 1.17 which is still too low but better than last year’s 1.15. The Leverage and Debt/Equity Ratios are very high at 6.68 and 5.78 but improved from last year’s 7.78 and 6.78.
The dividend yields are low with dividend growth non-existent. Dividends have been paid in US$ since 2019. The dividend yield is mostly always been low (under 2%) for this stock. The current dividend yield is 0.25%. This very low dividend yield is caused by a 96% decrease in dividends in 2019. Still the 5, 10 and historical dividend yields are low at 1.89%, 1.87% and 1.87%. Dividends started in 2012. There was only one dividend increase and it was in 2016.
The Dividend Payout Ratios (DPR) are currently good. The DPR for EPS for 2019 was 2.21%. The 5 year coverage cannot be calculated because of the huge EPS loss in 2018. The DPR for CFPS for 2019 is 0.53% with 5 year coverage at 15%. The DPR for Free Cash Flow for 2019 was 67% with 5 year coverage at 995%.
Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 219 is 3.11 and is currently at 3.24. This means that the Long Term Debt is much higher than the market cap for this stock. This is because of the sharp drop in share price beginning in 2018. The Liquidity Ratio for 2019 is 1.27 and if you add in cash flow after dividends, it is 1.58. This is a good ratio. The Debt Ratio is quite low at 1.17 for 2019 and it has a 5 year median of 1.43. I prefer this to be at least at 1.50. The Leverage and Debt/Equity Ratios are much too high in 2019 at 6.78 and 5.78 respectively.
The Total Return per year is shown below for years of 5 to 19 to the end of 2019 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | -47.48% | -24.36% | -26.51% | 2.14% |
| 2009 | 10 | -36.87% | -3.81% | -7.12% | 3.30% |
| 2004 | 15 | 0.86% | -1.84% | 2.70% | |
| 2000 | 19 | 1.75% | -0.47% | 2.21% |
The Total Return per year is shown below for years of 5 to 17 to the end of 2019 in US$. 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 | -48.65% | -26.18% | -28.13% | 1.95% |
| 2009 | 10 | -39.23% | -5.93% | -9.09% | 3.16% |
| 2004 | 15 | 0.83% | -2.02% | 2.85% | |
| 2002 | 17 | 3.36% | 0.56% | 2.80% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.16, 20.92 and 24.68. The corresponding 10 year ratios are 17.97, 21.71 and 25.39. The corresponding historical ratios are 18.00, 21.71 and 25.39. The current P/E Ratio is negative, so this test cannot be done. The next positive P/E Ratio is for 2022 and is 13.31 based on EPS estimate for 2022 of $1.68 ($1.22 US$) and stock price of $22.38. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.
My best estimate for a Graham Price is $23.90. The 10 year low, median, and high median Price/Graham Price Ratios are 1.44, 1.86 and 2.19. The current P/GP Ratio is 0.94 based on a stock price of $22.38. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 3.34. The current P/B Ratio is 1.51 based on Book Value of $656M, Book Value per Share of $10.95 and a stock price of $16.53. The current ratio is 55% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$ and you will get similar results in CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 15.56. The current P/CF Ratio is 5.90 based on 2020 Cash Flow per Share of $2.80, Cash Flow of $168M and a stock price of $16.53. The current ratio is 62% below the 10 year median ratio. This is in US$ and you will get similar results in CDN$.
I get an historical median dividend yield of 1.87%. The current dividend yield is 0.25% based on Dividends of $0.06 CDN$ ($0.04 US$) and a stock price of $22.38. The current dividend yield is 87% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$. Since dividend have only been paid for 7 years, a maximum median dividend yield would yield the same result.
The 10 year median Price/Sales (Revenue) Ratio is the 1.47. The current P/S Ratio is 0.58 based on 2020 Revenue estimate of $2,308M, Revenue per Share of $38.53 and a stock price of $22.38. The current ratio is 61% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.
Results of stock price testing is that the stock price is probably relatively cheap. The best test of P/S Ratio points to that conclusion as does the P/GP Ratio, the P/B Ratio, and the P/CF Ratio tests. The dividend yield test is not much good because the dividends have been cut. Since there is no positive EPS expected this year and next, the P/E Ratio test is not much good.
Is it a good company at a reasonable price? You have to wonder about the future for this company. It is selling cheap but highly speculative. It would appear that management does not expect the near future to be good because it has cut is dividend. Insiders were buying last year, but this year they are doing nothing. Analysts does not expect positive earnings this year and next. So, it would appear that recovery will be not be soon.
When I look at analysts’ recommendations, I find Buy (3) and Hold (6). The consensus would be a Hold. The 12 month stock price is $15.50 US$ or $21.37 CDN$. This implies a total loss of 4.27% with a capital loss of 4.51% and dividends of 0.25%.
Analyst on Stock Chase talks about the mistakes this company has made. Vishesh Raisinghani on Motley Fool says it is time to take a look at this stock. A writer on Simply Wall Street thinks this company has a great future, is undervalued, but will have negative growth in the near future. There is a long announcement on Financial Post about this company’s first quarter of 2020. Denise Gardner on News Heater asks if is a good time to buy this stock. Jason Mann on CanTech says stay away from this firm.
Maxar Technologies Inc is an integrated space and geospatial intelligence company with a full range of space technology solutions for commercial and government customers including satellites, Earth imagery, geospatial data, and analytics. Its web site is here Maxar Technologies Ltd.
The last stock I wrote about was about was Ensign Energy Services (TSX-ESI, OTC-ESVIF) ... learn more. The next stock I will write about will be Husky Energy Inc (TSX-HSE, OTC-HUSKF) ... learn more on Monday, June 08, 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.
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