ATCO Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is probably reasonable. The dividend yield tests say it is cheap. I worry about the debt level and that they value their Property, Plant and Equipment way above the market cap. Dividends are covered well by EPS and Cash Flow. See my spreadsheet on ATCO Ltd.

I do not own this stock of ATCO Ltd (TSX-ACO.X, OTC-ACLLF). I started to look at this stock in 2009 because it was a dividend paying stock that was on everyone’s list. At that time this stock was on the Dividend Achievers list, the Dividend Aristocrats list and also was on Mike Higgs’ list. ATCO (TSX-ACO-X) owns 88% Canadian Utilities (TSX-CU), so you would not buy both these stocks.

When I was updating my spreadsheet, I noticed they have a market value of $5,707M but the company values their Property, Plant and Equipment at $17,857M. This is a big discrepancy. I know that this discrepancy has been happening for some time. Their Long Term Debt/Market Ratio is very high at 1.62. It is a problem when it is above 1.00. It has been above 1.00 since 2009 that I know of. It is obvious that the market does not value the companies Property, Plant and Equipment assets at the level the company does.

Also, there is a lack of growth in EPS. When you look at growth for the past 5 years it is showing as 4.19%. The company has been buying back stock at the rate of 3.19% per year over the past 5 years. So, the increase in EPS is just 1.00 over the past 5 years. Also, if you compare the average EPS for the 5 years ending in 2014 to the average EPS for the 5 years ending in 2019, the EPS is down by 3% per year. There was a gain on Sale of Operations of $174 or equal to 17% of the EPS or 2019. The only good news about the EPS is that the company 5 year coverage of Dividends by EPS is at 49%.

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.32%. The 5, 10 and historical dividend yields are also moderate, but lower at 2.73%, 2.20% and 2.14%. The dividend growth for the last 5 years is moderate (8% to 14% ranges) at 13.5% per year. See chart below.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 36% with 5 year coverage at 49%. The DPR for CFPS is 9% with 5 year coverage at 8%. The DPR for 2019 for Free Cash Flow is problematic as the three sites I looked at had different value for FCF. I looked at Morningstar, Market Screener and Wall Street Journal. Using the value from MS, I get a DPR for FCF for 2019 at 55% with 5 year coverage at 604%

Debt Ratios are fine, but the company does have a lot of debt. The Long Term Debt/Market Cap Ratio for 2019 is 1.62. This is high and I talked about this above. The Liquidity Ratio for 2019 is very good at 2.24, but this does fluctuate a lot and has a 5 year median of 1.67. The Debt Ratio is good at 1.57. The Leverage and Debt/Equity Ratios are fine at 2.76 and 1.76.

The Total Return per year is shown below for years of 5 to 31 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	13.49%	3.56%	0.87%	2.69%
2009	10	12.47%	10.82%	7.99%	2.84%
2004	15	10.75%	11.28%	8.51%	2.78%
1999	20	11.02%	12.16%	9.26%	2.90%
1994	25	13.55%	13.84%	10.61%	3.22%
1989	30	12.29%	13.08%	10.26%	2.83%
1988	31	11.87%	14.25%	11.09%	3.16%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.29, 14.12 and 16.69. The corresponding 10 year ratios are 11.30, 13.01 and 14.45. The corresponding historical ratios are 9.54, 10.74 and 12.37. The current P/E Ratio is 14.20 based on a stock price of $40.04 and EPS estimate for 2020 of $$2.82. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $47.27. The 10 year low, median, and high median Price/Graham Price Ratios are 0.78, 0.91 and 1.07. The current P/GP Ratio is 0.85 based on a stock price of $40.04. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.48. The current P/B Ratio is 1.14 based on a Book Value of $4,039M, Book Value per Share of $35.22 and a stock price of $40.04. The current ratio is 23% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.04. The current P/CF Ratio is 2.71 based on a stock price of $40.04, Cash Flow per Share estimate for 2020 of $14.80 and Cash Flow of $1,697M. The current ratio is 11% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 2.14%. The current dividend yield is 4.35% based on a stock price of $40.04 and dividends per share of $1.74. The current dividend yield is 103% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 2.20%. The current dividend yield is 4.35% based on a stock price of $40.04 and dividends per share of $1.74. The current dividend yield is 98% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.12. The current P/S Ratio is 1.14 based on Revenue estimate for 2020 of $4,039M, Revenue per Share of $35.22 and a stock price of $40.04. The current ratio is 1% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and about the median.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio testing just says it is reasonable, even though the dividend yield tests say it is cheap. I suspect it is in the reasonable category, but I could be wrong. I like the P/S Ratio test because revenue drives, in the end, earnings and cash flow.

Is it a good company at a reasonable price? The stock price is at a reasonable price. They have done well for the shareholders overtime and they have been paying and increasing their dividends for a long time. I worry about their debt level.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3), Hold (3) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $46.56. This implies a total return of $20.63 with 16.28% from capital gains and 4.35% from dividends.

Analysts on Stock Chase think this company is a good buy and their top pick. Aditya Raghunath on Motley Fool says this dividend aristocrat has raised their dividends every year since 1993. A writer on Simply Wall Street thinks this stock is cheap as it has a P/E 8.78 compared to peer average of 17.58. (However, part of the EPS is from a Sale and current P/E is 14.20.) A writer on Simply Wall Street says this is an attractive dividend stock that increases its dividends and can cover the dividend with their earnings and cash flow. The Blogger Dividend Growth Investing and Retirement took a look at this stock and other Canadian Utility stocks.

Atco Ltd is a Canadian holding company that offers gas, electric, and infrastructure solutions. The largest subsidiary of the company is Canadian utilities, which operates natural gas, electricity, and logistical services. Atco's primary segments include electricity, pipelines and liquid, Neltume Ports and Structures and logistics. The firm mainly operates in Canada and Australia, along with some operations in the United States, the United Kingdom, and Mexico. Its web site is here ATCO Ltd.

The last stock I wrote about was about was Exchange Income Corp (TSX-EIF, OTC-EIFZF) ... learn more. The next stock I will write about will be Capital Power Corp (TSX-CPX, OTC- CPRHF) ... learn more on Wednesday, September 2, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks September 2020.... learn more on Tuesday, September 1, 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.

Exchange Income Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price seems reasonable and below the median. There is insider buying and this old income trust company is getting their DPR for EPS under control. Shareholders have done well in the past. They are issuing a lot of new shares. See my spreadsheet on Exchange Income Corp .

I do not own this stock of Exchange Income Corp (TSX-EIF, OTC-EIFZF). One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind. This article is available here.

When I was updating my spreadsheet, I noticed that there was a lot of activity in Share capital. Changes were for the following items with a total increase of 3,387,231 shares. This is unusual as most companies have at most one or two items going into share outstanding changes.

• Issued upon conversion of convertible debentures 780,112
• Issued under dividend reinvestment plan 212,625
• Shares cancelled under NCIB (58,600)
• Issued under employee share purchase plan 49,265
• Issued under deferred share plan 18,220
• Issued under First Nations community partnership agreements 9,039
• Issued to L.V. Control Mfg. Ltd. vendors on closing 134,000
• Issued to Advanced Window. Inc. vendors on closing 103,000
• Prospectus offering, October 2019 2,139,000.

There is also insider buying by CEO, Chairman and one director. The Net Insider Buying is a 0.20% and this is high as you would expect insider buying at 0.01%. A lot of the buying occurred in March under $26.00.

The dividend yields are high with dividend growth low. The current dividend yield is high (7% or higher) at 7.13%. The 5 year median dividend yield is good (5% and 6% ranges) at 6.16%. The 10 year and historical median dividend yields are high at 7.10% and 7.42%. The dividend growth has mostly been low (under 8%) with the dividend growth for the past 5 years at 5.67% per year and the last increase done in 2019 was for 4.11%

The Dividend Payout Ratios (DPR) could be improved for EPS. The DPR for 2019 is 89% with 5 year coverage at 96%. This is high. Also, the DPR for 2020 is expected to be 285% with 5 year coverage at 109% and DPR for 2021 is expected to be better at 59% with 5 year coverage at 107%. The company used to be an income trust and only in 2016 was DPR for EPS first below 100%. It has stayed in the 90% range since then.

The DPR for CFPS for 2019 is 29% with 5 year coverage at 35%. These DPRs are good. The DPR for 2019 for Free Cash Flow is 58% with 5 year coverage at 62%. These are a bit high. The FCF I am using comes from the company, but none of the sites I looked at (Morningstar, Market Screen) agree on what the FCF is. This is often the problem with FCF.

Debt Ratios are fine, but some could improve. The Long Term Debt/Market Cap Ratio for 2019 is 0.46. It increases to 0.74 in 2020 because debt has gone up 11% and the Stock Price has gone down 31%. The Liquidity Ratio is very good at 2.10. The Debt Ratio is fine at 1.47, but I prefer it to be 1.50 or higher. The Leverage and Debt/Equity Ratios are a little high at 3.11 and 2.11 as I prefer them to be below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 16 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	5.67%	20.91%	14.01%	6.90%
2009	10	3.59%	21.96%	13.22%	8.74%
2004	15	9.88%	21.39%	11.40%	9.99%
2003	16		35.65%	16.95%	18.70%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.60, 15.07 and 18.41. The corresponding 10 year ratios are 13.01, 15.80 and 19.77. The corresponding historical ratios are 11.82, 15.12 and 18.33. The current P/E Ratio is 39.98 based on a stock price of $31.98 and EPS of $0.80. This stock price testing suggests that the stock price is relatively expensive.

However, analysts expect EPS to drop a lot this year by 68%, but then recover in 2021. The P/E Ratio for 2021 is 12.44 based on a stock price of $31.98 and EPS of $2.57. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $18.74. The 10 year low, median, and high median Price/Graham Price Ratios are 0.89, 1.15 and 1.39. The current P/GP Ratio is 1.71 based on a stock price of $31.98. This stock price testing suggests that the stock price is relatively expensive.

However, the Graham Price is also affected by the very low EPS for 2020. In 2021, the Graham Price is $33.54. The P/GP Ratio for 2021 is 0.93. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 1.64 based a Book Value of $679M, Book Value per Share of $19.46 and a stock price of $31.98. The current ratio is 6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.53. The current P/CF Ratio is 8.48 based on 2020 Cash Flow per Share estimate of $3.77. The current ratio is 34% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

However, analysts expect the cash flow to drop in 2020 and then go back up in 2021. The P/CF Ratio for 2021 is expected to be 4.77 based on 2021 Cash Flow per Share of $6.71 and a stock price of $31.98. The 2021 ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 7.42%. The current dividend yield is 7.13% based on dividends of $2.28 and a stock price of $31.98. The current dividend yield is 4% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 7.10%. The current dividend yield is 7.13% based on dividends of $2.28 and a stock price of $31.98. The current dividend yield is .04% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.97. The current P/S Ratio is 0.93 based on 2020 Revenue estimate of $1,197M, Revenue per Share of $34.28 and a stock price of $31.98. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

However, the Revenue for 2021 is expected to fall 11% in 2020 and then recover in 2021. The P/S Ratio for 2021 is expected to be 0.78. The P/S Ratio is expected to be 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable and below the median. There are problems with the testing of this stock as noted above. Analysts expect earnings and revenue and cash flow to drop for 2020 and then be better in 2021. This is hard to know at this point as we really have to wait and see what the fall brings in terms of C-19 and any vaccine or cure. No one know what will happen. But also note that the P/B Ratio testing which does not rely on estimates is also showing that the stock price is reasonable and below the median.

Is it a good company at a reasonable price? The price certainly seems reasonable at the present time. It is a dividend growth company, which is what I like. This old income trust is getting their DPR for EPS under control. They have done well for shareholders in the past. I think this is a good company.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4), Hold (2). The consensus would be a Buy. The 12 month stock price is $38.39. This implies a total return of 27.17% with 20.04% from capital gains and 7.13% from dividends.

Analysts on Stock Chase have very wide opinions of this stock from great company to Do Not Buy. Adam Othman on Motley Fool says dividend is a mouthwatering 7.13%. A writer on Simply Wall Street thinks the company’s debt is a risk to the business. A writer on Simply Wall Street thinks the dividend is not sustainable. The Blogger Dividend Earner reviewed this stock in 2019. The dividend site of Sure Dividend also reviewed this stock in 2019.

Exchange Income Corp is a diversified acquisition-oriented corporation focused on opportunities in two sectors, aerospace, aviation services and equipment, and manufacturing. The business plan of the corporation is to invest in profitable, well-established companies with strong cash flows operating in niche markets. Its web site is here Exchange Income Corp .

The last stock I wrote about was about was Genworth MI Canada Inc (TSX-MIC, OTC- GMICF) ... learn more. The next stock I will write about will be ATCO Ltd (TSX-ACO.X, OTC-ACLLF) ... learn more on Monday, August 31, 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.

Genworth MI Canada Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price is reasonable and maybe cheap. They have great cash flow and have given out special dividends. However, revenue and earnings growth are not very good. See my spreadsheet on Genworth MI Canada Inc.

I do not own this stock of Genworth MI Canada Inc (TSX-MIC, OTC- GMICF). I was looking for another financial services stock to cover after I stopped covering Onex. This stock is from the TSX Aristocrat Index.

When I was updating my spreadsheet, I noticed that they had great cash flow. They have a number of times given out special dividends. However, EPS have not increased by much. If you look at the 5 and 10 year growth you see growth of 4.38% and 4.07%. However, over the same period shares have declined by 1.53% and 3.01%. So really, EPS has only grown over the past 5 and 10 years by2.85% (4.38%-1.53%) and 1.06% (4.07%-3.01%). Most of the time the yield is moderate, but it has been in the good range at different times in the past.

The dividends have increased every year since inception of the stock about 10 years ago. The dividend increases for the past 10 years is moderate (below 8%) at 7.53% per year. Note that this stock has also given out a number of special dividends over the years.

The dividend yields are moderate with dividend growth low. The current dividend yield is good (5% and 6% ranges) at 6%. The 5, 10 and historical are also in the moderate range (2% to 4% ranges) at 4.72%, 4.53% and 4.53%. Note that this stock was issued in 2009.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2019 is 127% with 5 year coverage at 54%. It is so high because of two special dividends given in 2019. Without the special dividends, the DPR for 2019 would have been 42%. The DPR for CFPS for 2019 is 104% with 5 year coverage at 48%. Note that without the two special dividends in 2019 the DPR for CFPS would be 34%.

Debt Ratios are all good. Since this is a financial, I am looking how Debt/Asset Coverage for 2019 it is 0.42 which is a good ratio. Since this is a financial, Liquidity Ratio is not important, but I calculate it to be 4.40 for 2019. This is very high and good. The Debt Ratio is also high and good at 2.31 for 2019. The Leverage and Debt/Equity Ratios for 2019 are low and good at 1.76 and 0.76.

The Total Return per year is shown below for years of 5 to 10 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	7.53%	14.54%	8.97%	5.57%
2009	10	8.93%	12.55%	7.74%	4.81%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.01, 7.79 and 9.27. The corresponding 10 year ratios are 6.08, 7.76 and 9.33. The corresponding historical ratios are 9.27, 7.73 and 11.62. The current P/E Ratio is 8.31 based on a stock price of $36.00 and 2020 EPS estimate of $4.33. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $64.04. The 10 year low, median, and high median Price/Graham Price Ratios are 0.44, 0.56 and 0.67. The current P/GP Ratio is 0.56 based on a stock price of $36.00. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Book Value per Share Ratio of 0.91. The current P/B Ratio is 0.86 based on a book value of $3,632, Book Value per Share of $42.09 and a stock price of $36.00. The current P/B Ratio is 6% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 8.78. The current P/CF Ratio is 5.23 based on last 12 month Cash Flow of $594M. Cash Flow per Share of $6.88 and a stock price of $36.00. The current ratio is 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 4.53%. The current dividend yield is 6.00% based on dividends of $2.16 and a stock price of $36.00. The current yield is 32% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 4.55%. The current dividend yield is 6.00% based on dividends of $2.16 and a stock price of $36.00. The current yield is 32% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 5.00. The current P/S Ratio is 4.28 based on 2020 Revenue estimate of $526M, Revenue per Share of $8.41 and a stock price of $36.00. The current ratio is 14.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is reasonable. It could be cheap. The P/S Ratio says that the stock price is reasonable and below the median. The dividend yield tests say the stock price is relatively cheap. Except for the P/E Ratio test, which is a good one, this testing is say that the stock price is either reasonable below the median or cheap. Even the P/E Ratio test shows the stock price as relatively reasonable. All the tests are good.

Is it a good company at a reasonable price? This seems like a good financial to invest in. It is a dividend growth company. I do have some concerns about the lack of growth in earnings and revenue.

When I look at analysts’ recommendations, I find Buy (2) and Hold (3). The consensus would be a Buy. The 12 month stock price of $38.20. This implies a total return of 7.60% with 1.84% from capital gains and 5.76% from dividends.

Analyst on Stock Chase like this company. Stock Chase gives it 3 stars out of 5. Ambrose O'Callaghan on Motley Fool thinks this is a good dividend stock for your TFSA. A writer on Simply Wall Street says dividends are affordable, stable and growing. This report is from 2019 and this site has not more recent reports on this stock. Ben Hobson on Stockopedia says this stock dividend has the yield, growth and safety, which are the three main pillars for dividend investing . This is a new item of Brookfield Business Partners buying a stake in Genworth. The Blogger Dividend Earner has recently blogged about this stock.

Genworth MI Canada Inc is a private residential mortgage insurer, providing mortgage default insurance to mortgage originators and lenders. The company generates income from insurance premiums and investments. Its web site is here Genworth MI Canada Inc.

The last stock I wrote about was about was Alimentation Couche-Tard Inc (TSX-ATD.B, OTC-ANCUF) ... learn more. The next stock I will write about will be Exchange Income Corp (TSX-EIF, OTC-EIFZF) ... learn more on Friday, August 28, 2020 around 5 pm. Tomorrow on my other blog I will write about Gordon Pape.... learn more on Thursday, August 27, 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.

Alimentation Couche-Tard Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price is probably relatively expensive. The Dividend Yield is very low as is the Dividend Payout Ratios. They also have good Debt Ratios. See my spreadsheet on Alimentation Couche-Tard Inc.

I do not own this stock of Alimentation Couche-Tard Inc (TSX-ATD.B, OTC-ANCUF) but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. The only problem I had with it then was it had no dividend. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so it was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

When I was updating my spreadsheet, I noticed on this spreadsheet, all is green ink. This company has done very well. It is not much of a dividend stock because the yield is generally below 1%. However, if you are building a portfolio, this could be a good stock to have. The financial year end of at the end of April each year.

The dividend yields are low with dividend growth good. The current yield is low (under 2%) at 0.68%. The 5, 10 and historical yields are also low all at 0.60%. This dividend growth on this stock has always been good (14% and higher). See chart below. However, if you are looking at yield on your original cost, this stock does well over a long term. Yield on original cost after 10, 15 and 20 years for 2020 is 7.75%, and 61.79%, and 283.54%.

The Dividend Payout Ratios (DPR) are very good The DPR for EPS for 2020 is very low at just 10% with 5 year coverage at 10%. The DPR for CFPS for 2020 is 6% with 5 year coverage also at 6%. The DPR for Free Cash Flow for 2020 is 9% with 5 year coverage also at 9%.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2020 is 0.24 and is good. The Liquidity Ratio for 2020 is 1.72 and higher than it has been in the past as the 5 year median is just 1.07. The Debt Ratio is good at 1.64 with a 5 year median of 1.68. The Leverage and Debt/Equity Ratios for 2020 are fine at 2.62 ad 1.59.

The Total Return per year is shown below for years of 5 to 24 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	26.19%	11.88%	11.26%	0.62%
2009	10	27.76%	29.10%	28.17%	0.93%
2004	15	14.91%	19.86%	19.28%	0.59%
1999	20		26.30%	25.65%	0.65%
1995	24		28.20%	27.58%	0.62%

The Total Return per year is shown below for years of 5 to 18 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	21.36%	9.09%	8.52%	0.94%
2009	10	24.11%	26.60%	25.66%	0.58%
2004	15	13.44%	13.73%	13.27%	0.46%
2001	18		15.34%	14.92%	0.42%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.93, 15.85 and 18.45. The corresponding 10 year ratios are 12.26, 15.89 and 18.94. The corresponding historical ratios are 12.50, 16.17 and 20.10. The current P/E Ratio is 20.13 based on a stock price of $45.20 and 2021 EPS estimate of $2.24. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms. Also, the P/E Ratios have been fairly consistent over time.

I get a Graham Price of $24.45. The 10 year low, median, and high median Price/Graham Price Ratios are 1.14, 1.48 and 1.76. The current P/GP Ratio is 1.85 based on a stock price of $45.20. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.

I get a 10 year median Price/Book Value per Share Ratio of 3.26. The current P/B Ratio is 3.82 based on a stock price of $45.20, Book Value of $13,293M, and Book Value per Share of $11.83. The current ratio is 17% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and but above median. This is in CDN$ terms.

I get a 10 year median Price/Cash Flow per Share Ratio of 9.01. The current P/CF Ratio is 12.68 based on Cash Flow per Share estimate for 2021 of $3.30 ($2.70 US$), Cash Flow per Share of $3,967M and a stock price of $45.20. The current ratio is 41% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.

I get an historical median dividend yield of 0.60. The current dividend yield is 0.62 based on dividends of $0.28 and a stock price of $45.20. The current dividend yield is 3% above the current dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$ terms.

I get a 10 year median dividend yield of 0.60. The current dividend yield is 0.62 based on dividends of $0.28 and a stock price of $45.20. The current dividend yield is 3% above the current dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$ terms.

The 10 year median Price/Sales (Revenue) Ratio is 0.50. The current P/S Ratio is 0.75 based on 2021 Revenue Estimate of $51,163M, Revenue per Share of $45.98 and a Stock Price of $34.45. The current ratio is 49% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$ terms. You will get similar results in CDN$ terms.

Results of stock price testing is that the stock price is relatively expensive. There is a disconnect between the testing for dividend yield and P/S Ratio. They have still increased their dividend this year by 12%, however, sales have fallen both in 2020 and are expected again to fall in 2021. With their latest dividend increase of 12%, the company obviously thinks that they will do fine in the end. They also have a very low dividend cost. I will go with the P/E Ratio and put the stock price as relatively expensive. There is nothing wrong with the rest of the tests. In CDN$ the P/B Ratio test shows that the stock price as reasonable but above the median. However, in US$ terms, the P/B Ratio is showing the stock price as relatively expensive. There is not usually much difference between testing in US$ or CDN$ terms.

Is it a good company at a reasonable price? I think that this company has done very well. It is a dividend growth stock, but the dividend is below 1%, so it is a better stock for people building a portfolio. It would seem that at the present time, the stock price is relatively expensive.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (8). The consensus would be a Buy. The 12 month stock price consensus is $48.48 ($36.71 US$). This implies a total return of 7.87% based on a current stock price of $45.20. You have to wonder about the strong buy rating and only 7.87% total return over the next year.

There is not much coverage for this stock on Stock Chase but the last one says it is a partial sell because of E-Car adoption and changes coming with that. Demetris Afxentiou on Motley Fool thinks this stock is a great defensive stock. A Writer on Simply Wall Street says inferior analyst earnings forecast is not affecting P/E Ratio. A writer on Simply Wall Street says the intrinsic value for this stock is $63.59 CDN$. The Blogger Dividend Earner recently reviewed this stock.

Alimentation Couche-Tard Inc operates a network of convenience stores across North America, Ireland, Scandinavia, Poland, the Baltics, and Russia. The company primarily generates income through the sale of tobacco products, groceries, beverages, fresh food, quick service restaurants, car wash services, other retail products and services, road transportation fuel, stationary energy, marine fuel, and chemicals. In addition, the company operates more stores under the Circle K banner in other countries such as China, Egypt, and Malaysia. Its web site is here Alimentation Couche-Tard Inc.

The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF) ... learn more. The next stock I will write about will be Genworth MI Canada Inc (TSX-MIC, OTC- GMICF) ... learn more on Wednesday, August 26, 2020 around 5 pm. Tomorrow on my other blog I will write about Enbridge Inc.... learn more on Tuesday, August 25, 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.

Chemtrade Logistics Income Fund

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. The stock price is relatively cheap. However, this would be a risky buy. Both the Dividend Payout Ratios and Debt Ratio need improvement. They are expecting to have negative earnings for the next two years as has happened over the past two years. A positive thing is insider buying at 0.27% of market cap. Anything over 0.1 is good. See my spreadsheet on Chemtrade Logistics Income Fund.

I do not own this stock of Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.

When I was updating my spreadsheet, I noticed that the growth in Revenue per Share is so much lower than the growth in Revenue. The 5 and 10 year Revenue growth is 5% and 11%. The 5 and 10 year Revenue per Share growth is negative at 1.2% and 0.7%. This because of the growth in shares. As a shareholder, the figure you want to look at the Revenue per Share.

The dividend yields are high with dividend growth non-existent. The dividend yield is high (7% and above) at 9.87%. The 5, 10 and historical dividend yields are also high at 7.12%, 7.36% and 8.19%. The dividends were cut in 2007 and they have remained flat until this year, 2020, when the dividends were cut again.

The Dividend Payout Ratios (DPR) need improving. I cannot calculate the DPR for EPS because of earning losses. The DPR for CFPS for 2019 is fine at 38% with 5 year coverage at 41%. They still give out Distributional Income, for which the 2019 DPR is 135% with 5 year running average at 98%. The DPR for AFFO for 2019 is 67% with 5 year running average at 60%. The DPR for Free Cash Flow for 2019 is 247.33% with 5 year coverage at 106%.

This company started out as an income fund. However, the legislation of 2006 says that all income trust must pay tax from 2011. This company certainly is currently a tax paying corporation. So, the DPR for EPS counts. They do have the cash flow to cover their dividends. The lack of good coverage of dividends is probably why the dividends were decreased by 50% in 2020. A problem is that they are not expected to make a profit either this year or next.

Debt Ratios need to improve. The Long Term Debt/Market Cap for 2019 is 0.85. The current ratio is 1.43 because of an increase in debt by 8% and a decreased in stock price of 45%. The Liquidity Ratio for 2019 is 1.35. If you add in cash flow after dividends it is 1.43. The Debt Ratio for 2019 is 1.38. Both the Liquidity Ratio and Debt Ratio are low. I prefer them to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are a bit too high at 3.66 and 2.66. I prefer them to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 18 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	0.00%	-4.41%	-11.83%	7.42%
2009	10	0.00%	10.91%	0.02%	10.89%
2004	15	-0.63%	3.99%	-3.99%	7.97%
2001	18	5.03%	13.26%	-0.35%	13.61%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative. The corresponding 10 year ratios are 8.05, 10.01 and 11.85. The corresponding historical ratios are 11.18, 12.11 and 13.28. The current P/E Ratio is negative as is the P/E Ratio for 2021. This test cannot be done.

My best guess for a Graham Price is $16.24. The problem is the negative EPS and EPS is part of the Graham Price calculation. The 10 year low, median, and high median Price/Graham Price Ratios are 0.98, 1.11 and 1.27. The current P/GP Ratio is 0.37 based on a stock price of $6.08. This stock price testing suggests that the stock price is relatively cheap. Possible problem is in the Graham Price calculation.

I get a 10 year median Price/Book Value per Share Ratio of 1.57. The current P/B Ratio is 0.79 based on a Book Value of $709M, Book Value per Share of $7.66 and a stock price of $6.08. The current ratio is 49% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.06. The current P/CF Ratio is 4.25 based on 2020 Cash Flow per Share estimate of $1.43, Cash Flow of $132M and a stock price of $6.08. The current ratio is 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 8.19%. The current dividend yield is 9.87% based on a stock price of $6.08 and dividends of $0.60. The current dividend is 20% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 years median dividend yield of 7.38%. The current dividend yield is 9.87% based on a stock price of $6.08 and dividends of $0.60. The current dividend is 34% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.87. The current P/S Ratio is 0.59 based on a stock price of $6.08, 2020 Revenue estimate of $1,447M and Revenue per Share of $15.63. The current ratio is 55% below the 10 year median 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 relatively cheap. Both the dividend yield tests say that the stock price is relatively cheap and this is confirmed by the P/S Ratio test. There is nothing wrong with the P/B Ratio test and the P/CF Ratio tests. These also say that the stock price is relatively cheap.

Is it a good company at a reasonable price? The stock price seems to be cheap. However, I would think that this is a rather risky investment. I think that both the Dividend Payout Ratios and Debt Ratios could be improved. They have no positive EPS over the last two years and analysts do not think that they will over the next two years. There is insider buying.

When I look at analysts’ recommendations, I find Buy (1) and Hold (5). The consensus would be a Hold. The 12 month stock price is $7.18. This implies a total return of 27.96% with 18.09% from capital gain and 9.87% from dividends.

Analyst on Stock Chase think this stock is too risky. Adam Othman on Motley Fool says high yield could add good income for your TFSA. Mat Litalien, on Motley Fool says to approach this high yield stock with caution. Writers on Simply Wall Street seem to have lost interest in this stock as all their reports are from 2018 and before. This company on Globe Newswire announces the recent sale of debentures. The company talks about their second quarterly results for 2020 on Globe Newswire.

Chemtrade Logistics Income Fund provides industrial chemicals and services to customers in North America and around the world. The company organized into four main operating segments: Sulphur Products and Performance Chemicals (SPPC), Water Solutions and Specialty Chemicals (WSSC), Electrochemicals, and Corporate. Its web site is here Chemtrade Logistics Income Fund.

The last stock I wrote about was about was Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more. The next stock I will write about will be Alimentation Couche-Tard Inc (TSX-ATD.B, OTC-ANCUF) ... learn more on Monday, August 24, 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.

Aecon Group Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is reasonable and below the median. Current dividend is 4.37% and this is some 67% above the 10 year median dividend yield of 2.62%. See my spreadsheet on Aecon Group Inc.

I do not own this stock of Aecon Group Inc (TSX-ARE, OTC-AEGXF). This will replace Onex Corp (TSX-ONEX, OTC-ONEXF) which I will no longer follow. I will try to find another Financial stock also.

When I was updating my spreadsheet, I noticed that there was a big difference between the Basic EPS and the Diluted EPS. For 2019 it was 6.67% and for 2018 it was 5.05%. Most of this difference is because of convertible debentures. For 2019 the difference in these EPS for Convertible Debentures was 5.28% and for 2018 it was 4.05%. For 2019 the difference in these EPS for Stock Options was 1.38% and for 2018 it was 1.00%.

Also, the shareholder who have held this stock for 10 years, have not made much money. The Total Return for the 10 year period is just 3.80% with a capital gain of 1.57%. The different ratios where not especially high in 2009 (10 years ago). The only thing I noticed is that the stock price increased some 36% in 2009. This might have suggested caution.

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.39%. The 5, 10 and historical dividend yields are lower, but still moderate at 2.91%, 2.62% and 2.24%. The Dividend growth over the past 5 years is moderate (8% to 14% ranges) at 9.86% per year. The last dividend increase was this year and it was for 10.34%.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2019 for EPS was 50% with 5 year coverage at 55%. The DPR for CFPS for 2019 was 18% with 5 year coverage also at 18%. The DPR for 2019 for Free Cash Flow is 21% with 5 year coverage at 84%.

Debt Ratios are fine, but could improve. The Long Term Debt/Market Cap Ratio for 2019 is 0.48. Because the stock price has declined some 23% year to date, the current ratio is higher at 0.60. The Liquidity Ratio for 2019 is 1.57. The Debt Ratio is low for 2019 at 1.38. I prefer to see this at 1.50 or higher. The 5 year median is better but still low at 1.44. Leverage and Debt/Equity Ratios for 2019 are high at 3.63 and 2.63. I prefer to see them under 3.00 and under 2.00.

The Total Return per year is shown below for years of 5 to 23 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. Note that the company did not pay dividends from 2003 to 2007.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	9.86%	13.98%	10.34%	3.64%
2009	10	10.84%	3.80%	1.57%	2.23%
2004	15	n/a	8.93%	6.75%	2.18%
1999	20	9.49%	10.97%	8.79%	2.19%
1996	23		8.84%	7.19%	1.65%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.26, 18.26 and 21.26. The corresponding 10 year ratios are 15.15, 18.46 and 21.81. The corresponding historical ratios are 8.39, 12.65 and 18.51. The current P/E Ratio is 29.90 based on a stock price of $14.65 and 2020 EPS estimate of $0.49. This stock price testing suggests that the stock price is relatively expensive.

This test is based on EPS for 2020 that drops some 56% from the EPS of 2019. The P/E Ratio for 2021 is 13.86 based on a stock price of $14.65 and 2021 EPS estimate of $1.02. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $12.42. The 10 year low, median, and high median Price/Graham Price Ratios are 0.84, 1.01 and 1.19. The current P/GP Ratio is 1.18 based on a stock price of $14.65. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The Graham Price formula uses EPS and it would be affected by the big expected drop in earnings in 2020. For 2021, I get a Graham price of $17.92. The P/GP Ratio for 2021 is 0.82 based on a stock price of $14.65. 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 1.22. The current P/B Ratio is 1.05 based on a Book Value of $838M, Book Value per Share of $14.00 and a stock price of $14.65. The current ratio is 15% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.59. The current P/CF Ratio is 4.53 based on last 12 months Cash Flow of $193.7M, Cash Flow per Share of $3.24 and a stock price of $14.65. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 2.24%. The current dividend yield is 4.27% based on dividends of $0.64 and a stock price of $14.65. The current yield is 95% above 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 2.62%. The current dividend yield is 4.27% based on dividends of $0.64 and a stock price of $14.65. The current yield is 67% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.30. The current P/S Ratio is 0.25 based on 2020 Revenue estimate of $3448M, Revenue per share of $57.59 and a stock price of $14.65. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. Both the dividend yield tests show this stock is cheap, but the P/S Ratio test shows the stock as reasonable and below the median. A potential problem with the P/S Ratio test is that the Revenue is expected to fall a bit in 2020 and then be better in 2021. There are no problems with the P/B Ratio test nor the P/CF Ratio test. Both these test show that the stock price is relatively reasonable and below the median.

Is it a good company at a reasonable price? I think that the stock price is reasonable at the present time. The stock is down by about 16% from 2019. This is a dividend growth company and this is the sort of company I do like. It is currently on the Aristocrats list.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (4) and Hold (1). The consensus would be a Buy. The 12 month stock price is $19.95. This implies a total return of $40.35% with 36.18% from capital gains and 4.37% from dividends.

The last few entries on Stock Chase for this company thinks that it will do well with Covid. Jitendra Parashar on Motley Fool thinks this is an opportunity buy. A writer on Simply Wall Street says their ROE of 8.5% is at the industry’s average. A writer on Simply Wall Street says this stock’s intrinsic value is $20.79. There is an article on Small Cap Power saying this company could benefit from infrastructure spending by governments in Canada. The Blogger Dividend Earner does a review of this stock. Tom Drake on Maple Money has this stock as one of the top 100 Canadian Stocks.

Aecon Group Inc is a Canada-based company that operates in two major segments: Construction and Concessions. Its web site is here Aecon Group Inc.

The last stock I wrote about was about was Badger Daylighting Ltd (TSX-BAD, OTC-BADFF) ... learn more. The next stock I will write about will be Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF) ... learn more on Friday, August 21, 2020 around 5 pm. Tomorrow on my other blog I will write about Stantec Inc.... learn more on Thursday, August 20, 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.

Badger Daylighting Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is probably reasonable. The Dividend Payout Ratios are good. There is insider buying by the CEO, CFO and Chairman. See my spreadsheet on Badger Daylighting Ltd.

I do not own this stock of Badger Daylighting Ltd (TSX-BAD, OTC-BADFF). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at why stocks might appeal to a conservative investor looking for income.

When I was updating my spreadsheet, I noticed using the 12 month data from the second quarter of 2019, the Revenue had gone up to $655.1M or up 6.5%. The estimate for 2019 was $688M an increase of 11.8%. What happened was an increase to $654.3M or an increase of 6.3%. So, the estimate showed the right direction, but was off on how much the Revenue would increase. For EPS, the 12 month data showed an EPS for $1.83 which was no change from 2018. The EPS estimate was for $1.79, a decrease of 2.2%. What happened was an EPS for 2019 of $1.67 a decrease of 8.7%. Here the estimate also shows the right direction, but was also off on how much the EPS would decrease.

The dividend yields are low with dividend growth moderate. The current dividend yield is low (under 2%) at 1.65%. The 5 and 10 year median dividend yield are also low at 1.45% and 1.66%. The historical dividend yield is moderate (2% to 4% ranges) at 4.00%. This historical yield is higher because this stock used to be an income trust. The dividends have grown at a moderate rate (8% to 14% ranges) 9.34% per year over the past 5 years. However, the last dividends increase in 2020 was low (under 8%) at 5.3%.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2019 is 34% with 5 year coverage at 31%. The DPR for CFPS for 2019 is 12% with 5 year coverage at 13%. The DPR for Free Cash Flow for 2019 cannot be calculated because the FCF is negative in 2019. The 5 year coverage is 58%. The 5 year Dividend Coverage Ratio is 1.72.

Debt Ratios are fine. The Long Term Debt/Market Cap is very low and good at just 0.05. The Liquidity Ratio is good at 1.67. The Debt Ratio is also good at 1.98. The Leverage and Debt/Equity Ratios are fine at 2.02 and 1.02

The Total Return per year is shown below for years of 5 to 22 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 9.34% 7.33% 5.85% 1.49% 2009 10 2.96% 26.19% 22.15% 4.05% 2004 15 7.83% 16.31% 12.77% 3.54% 1999 20 16.77% 13.83% 2.94% 1997 22 12.28% 10.38% 1.90%
The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.3.5, 23.06 and 27.78. The corresponding 10 year ratios are 12.41, 17.23 and 23.59. The corresponding historical ratios are 9.25, 11.39 and 14.26. The current P/E Ratio is 37.88 based on a stock price of $36.36 and 2020 EPS estimate of $0.96. This stock price testing suggests that the stock price is relatively expensive.

Part of the reason that the stock is expensive for 2020 is that analysts expect the EPS to drop some 42% in 2020. If you look at the P/E Ratio for 2021 when EPS is expected to recover, the P/E Ratio is 19.55 based on a stock price of $36.36 and 2021 EPS estimate of $1.86. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $14.54. The 10 year low, median, and high median Price/Graham Price Ratios are 1.15, 1.71 and 2.13. The current P/GP Ratio is 2.50 based on a stock price of $36.36. This stock price testing suggests that the stock price is relatively expensive.

However, the big drop in expected EPS for 2020 will also affect the Graham Price. The Graham Price for 2021 is 20.24. This would have a P/GP Ratio of 1.80 based on a stock price of $36.36. 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 3.35. The current P/B Ratio is 3.72 based on a stock price of $36.36, Book Value of $341.7M, and Book Value per Share of $9.78. The current P/B Ratio is 11% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 10.88. The current P/CF Ratio is 9.28 based on a stock price of $36.36, Cash Flow per Share estimate for 2020 of $3.92 and Cash Flow of 136.9M. The current P/CF Ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 4.00%. The current dividend yield is 1.65% based on dividends of $0.60 and a stock price of $36.36. The current dividend yield is 59% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 1.66%. The current dividend yield is 1.65% based on dividends of $0.60 and a stock price of $36.36. The current dividend yield is 0.8% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.15. The current P/S Ratio is 2.16 based on a Revenue estimate for 2020 of $589M, Revenue per Share of $16.87 and a stock price of $36.36. Analysts expect a 10% drop in Revenue which is a lot less than the drop expected in EPS. The current P/S Ratio is 0.07% above the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

Results of stock price testing is that the stock price is probably reasonable and at the median. The 10 year dividend yield test and the P/S Ratio test both show a stock price that is relatively reasonable and at the median. This stock used to be an income trust, so past dividend yields would be very high. So, I would think that the 10 year median dividend yield test is better than the historical median yield test. There is nothing wrong with the P/B Ratio or P/CF Ratio testing. There are problems with the P/E Ratio and P/GP testing as indicated above.

Is it a good company at a reasonable price? This is a dividend growth stock. It did cut dividends in the past, but that was to move from an income trust company to a corporation. I think that the stock price is reasonable. I do think that this is a worthwhile dividend growth stock to invest in.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $38.88. This implies a total return of 8.58% with 6.93% from capital gains and 1.65% from dividends.

Most analysts seem to like to this stock on Stock Chase. Ambrose O'Callaghan on Motley Fool thinks this can do better in the future. A writer on Simply Wall Street criticizes the stock for cutting dividends in the past. However, this stock used to be an income trust and this stock had to cut dividends when they became corporations. A writer on Simply Wall Street says the intrinsic value of this stock is $31.62 which is lower than the current price of the stock. The company announces its second quarterly results on Global Newswire.

Badger Daylighting is a Canada-based company that provides nondestructive hydrovac excavation services based on its core technology, the Badger Hydrovac System. The Badger Hydrovac System is an excavation unit that is used primarily for digging in areas with buried pipes and cables. Its web site is here Badger Daylighting Ltd.

The last stock I wrote about was about was Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more. The next stock I will write about will be Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more on Wednesday, August 19, 2020 around 5 pm. Tomorrow on my other blog I will write about Women’s Earning Power.... learn more on Tuesday, August 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.

Superior Plus Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. The stock price is probably relatively expensive. Main problem is analysts do not think this company will do very well in the short term. They do not seem to be able to grow their Revenue. The DPR for EPS needs to be improved. Debt Ratios could be improved. See my spreadsheet on Superior Plus Corp.

I do not own this stock of Superior Plus Corp (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009.

When I was updating my spreadsheet, I noticed that they cannot seem to grow their revenue. Revenue is down by 6.4% per year over the past 5 years. Revenue per Share is down even more at 12.3%. Also, they have not been able to bring their Dividend Payout Ratio for EPS under control. They have decreased dividends and kept them flat. They have been flat since 2015. But 2019 has been the only year with a decent DPR for EPS, but in 2020 the EPS is not expected to cover the dividends again. Analysts expect they will be able to cover the dividend again in 2021.

The dividend yields are good with dividend growth non-existent. The current dividend yield is good (5% and 6% ranges) at 5.86%. The 5, and 10 dividend yields are also good at 6.15% and 6.22%. The historical dividend yield is high (7% and above) at 9.22%. This stock used to be an income trust and as an income trusts had very high dividend yields. The dividends have been flat since 2015. However, analysts do not expect any cuts at this point over the next two years.

The Dividend Payout Ratios (DPR) need to be improved for the EPS. The DPR for EPS for 2019 is 88% with 5 year coverage at 138%. As an income trust they could pay out more than the EPS, but when it became a corporation, it needs to get the DPR for EPS under control. The company is not expected to make much in earnings this year. The DPR for CFPS for 2019 is 26% with 5 year coverage at 36%. These are good ratios. The DPR for Free Cash Flow for 2019 is 44% with 5 year coverage at 72%. The current DPR for FCF is good, but the 5 year coverage is too high.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2019 is 0.77. This is fine, but it would be nice if it was lower than 0.50. The Liquidity Ratio for 2019 is low at 0.99. It means that the current assets cannot cover the current liabilities. However, if you add in Cash Flow after dividends, it is 1.54. The Debt Ratio for 2019 is 1.40 and this is low. I prefer it to be 1.50 or higher. Leverage and Debt/Equity Ratios at 3.50 and 2.50 are rather high. I prefer these to be below 3.00 and below 2.00, respectively.

The Total Return per year is shown below for years of 5 to 23 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	3.37%	6.83%	0.93%	5.90%
2009	10	-7.79%	4.68%	-1.53%	6.21%
2004	15	-7.85%	-0.05%	-5.64%	5.60%
1999	20	-3.67%	12.40%	-0.25%	12.65%
1996	23	-1.42%	11.00%	-0.38%	11.37%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 4.24, 5.34 and 6.43. The corresponding 10 year ratios are 5.71, 7.59 and 9.48. The corresponding historical ratios are 12.46, 15.32 and 18.86. The current P/E Ratio is 409.67 based on a stock price of $12.29 and 2020 EPS estimate of $0.03. This stock price testing suggests that the stock price is relatively expensive.

The above makes no sense at all. There were a number of EPS losses leading to negative P/E Ratio and so very low P/E Ratios for the past 5 and 10 years. The EPS for 2020 is a drop in EPS of over 96%. The P/E Ratio for 2021 is more reasonable at 15.96, but on the high side. This testing should not be considered for this stock in determining if the stock price is reasonable or not.

I get a Graham Price of $2.03. The 10 year low, median, and high median Price/Graham Price Ratios are 1.01, 1.18 and 1.46. The current P/GP Ratio is 6.07 based on a stock price of $12.29. This stock price testing suggests that the stock price is relatively expensive.

However, the current P/GP Ratios is greatly affected the big drop in EPS for 2020. The Graham Price for 2021 is 10.26, a more reasonable value. The P/GP Ratio for 2021 is 1.20. This stock price testing suggests that the stock price is relatively reasonable but above the median. You have to wonder about this test also.

I get a 10 year median Price/Book Value per Share Ratio of 2.40. The current P/B Ratio is 2.02 based on a Book Value of $1069.8M, Book Value per Share of $6.08 and a stock price of $12.29. The current P/B Ratio is 16% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.35. The current P/CF Ratio is 6.15 based on 2020 Cash Flow per Share estimate of $2.00, Cash Flow of $352M and a stock price of $12.29. The current ratio is 16% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 9.22%. The current dividend yield is 5.86% based on dividends of $0.72 and a stock price of $12.29. The current yield is 36% 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 6.22%. The current dividend yield is 5.86% based on dividends of $0.72 and a stock price of $12.29. The current yield is 5.9% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.47. The current P/S Ratio is 0.84 based on 2020 Revenue estimate of $2,587M, Revenue per Share of $14.70 and a stock price of $12.29. The current ratio is 78% 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 expensive because the company is not expected to do well in the short term in terms of Revenue and Earnings. The stock price is probably relatively high for this company. The tests that I find no problems with are the P/S Ratio, the P/B Ratio, and the P/CF Ratio tests. The rest all have problems. The Dividend Yield problem is the lack the dividend growth and also yields used to be very high in the past as this company used to be an income trust.

Is it a good company at a reasonable price? I do not think the price is reasonable at this time. I hope this company will do better in the future, but it is hard to tell if it will.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (6), Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $13.33. This implies a total return of 14.32% with 8.46% from capital gains and 5.86% from dividends.

Several analysts on Stock Chase says this stock is their top pick. Robin Brown on Motley Fool thinks this is a top dividend stock. A writer on Simply Wall Street thinks that this stock is not a good bet because earnings are expected to decline over the near term. A writer on Simply Wall Street says the intrinsic value of the stock is $19.38 which is above the current price. The company talks about the second quarterly results on the Financial Post via Newswire.

Superior Plus is a Canadian-based company that distributes energy and specialty chemicals. The company is organized into three business segments: Canadian propane distribution, U.S. propane distribution, and specialty chemicals. Its web site is here Superior Plus Corp.

The last stock I wrote about was about was Evertz Technologies (TSX-ET, OTC-EVTZF) ... learn more. The next stock I will write about will be Badger Daylighting Ltd (TSX-BAD, OTC-BADFF) ... learn more on Monday, August 17 around 5 pm.

Also, on my book blog I have put a review of the book The Storm Before the Calm by George Friedman learn more...

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.