I do own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). I got the idea to investigate this stock from a G&M Article. It looked like something I might want to try out. This stock came up in a stock screen filter article that was looking for reliable dividend payers. That is companies that have reliable profits big enough to comfortably cover their dividend payments. This was in 2011.
When I was updating my spreadsheet, I noticed that this stock is down almost 30% this year. It at first recovered from March 2020 decline, but has decline again since then. This company has the end of their financial year as April 30.
The dividend yields are moderate with dividend growth currently stopped. The current dividend yield is moderate (2% to 4% range) at 2.87%. The 5, 10 and historical dividend yields are higher, but still in the moderate range at 4.40%, 4.10% and 4.00%. The dividends stopped growing in 2017 and went flat. This year, the dividends were cut by 50%.
The Dividend Payout Ratios (DPR) are too high but are expected to fall. The DPR for 2020 is 180% with 5 year coverage at 125%. The DPR for CFPS for 2020 is 120% with 5 year coverage at 84%. The DPR for Free Cash Flow for 2020 is 125% with 5 year coverage at 107%.
The DPRs are expected to fall for the next financial year of 2021 and continue to fall in 2022. For example, the DPR for EPS for 2021 is expected to be 60% in 2021 and 40% in 2022. Also, the reason for the very high DPRs for 2020 is because of a special dividend paid in 2020 of $0.90 a share. Without this special payment the DPRs would have been lower. For example, the DPR for EPS would have be 80% rather than 180%.
Debt Ratios are all very good. The company paid off their long term debt in 2020 so the Long Term Debt/Market Cap Ratio is currently 0.00. The Liquidity Ratio for 2020 is 2.85. The Debt Ratio for 2020 is 3.03. Leverage and Debt/Equity Ratios for 2020 are 1.49 and 0.49.
The Total Return per year is shown below for years of 5 to 13 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 | 1.15% | 6.57% | 0.29% | 6.28% |
| 2009 | 10 | 8.45% | 8.90% | 2.84% | 6.06% |
| 2006 | 13 | 11.26% | 6.87% | 2.12% | 4.75% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.54, 16.68 and 19.45. The corresponding 10 year ratios are 14.51, 17.19 and 20.26. The corresponding historical ratios are 14.47, 17.70 and 20.21. The current P/E Ratio is 20.93 based on a stock price of $12.56 and 2021 EPS estimate of $0.60. This stock price testing suggests that the stock price is relatively expensive.
A problem is that analysts expect the EPS for 2021 to drop 53% in 2021 and then go back up in 2022. The EPS expected in 2022 is $0.91 and here the P/E Ratio would be 13.80. This would suggest that the stock price is relatively cheap.
I get a Graham Price of $12.56. The 10 year low, median, and high median Price/Graham Price Ratios are 1.37, 1.66 and 1.93. The current P/GP Ratio is 1.74 based on a stock price of $12.56. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 3.54. The current P/B Ratio is 3.25 based on a stock price of $12.56, Book Value of $295M and a Book Value per Share of $3.86. The current ratio is 8% 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 14.69. The current P/CF Ratio is 18.47 based on a stock price of $12.56, Cash Flow per Share estimate for 2021 of $0.68 and Cash Flow of $52M. The current ratio is 26% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
A problem is that analysts expect the Cash Flow per Share to drop by 52% in 2021, but go back up in 2021 to $0.87 with a Cash Flow of $66.5M. This will give a P/CF Ratio of 14.44 and this is 2% below the 10 year median of 14.69. This would suggest that the stock price is relatively reasonable.
I get an historical median dividend yield of 4.00%. The current dividend yield is 2.87% based on dividends of $0.36 and a stock price of $12.56. The current yield is 28% below he historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 4.10%. The current dividend yield is 2.87% based on dividends of $0.36 and a stock price of $12.56. The current yield is 30% below he historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 3.41. The current P/S Ratio is 2.47 based on a stock price of $12.56, Revenue estimate for 2021 of $388M, and Revenue per Share of $5.08. The current ratio is 27% 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 reasonable. The P/S Ratio testing says the stock price is relatively cheap. The P/B Ratio says that the stock is relatively reasonable and below the median. The problem with the dividend yield tests is that the dividends were recently cut by 50%. There is nothing wrong with the P/S Ratio test or the P/B Ratio test. The problems with the P/E test and P/CF tests are noted above.
Is it a good company at a reasonable price? I think that the stock price for this company is reasonable, if not getting into the cheap range. It seems to be having some problems at present but I still believe in this stock and will continue to own it. I am not planning additional buys at this time.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $14.50. This implies a total return of 18.31% with 15.45% from capital gains and 2.87% from dividends.
The last three analysts on Stock Chase give it a Hold rating, but like the stock. Motley Fool Staff on Motley Fool name this stock in their top 10 tech stocks for Millennials. A writer on Simply Wall Street says the P/E Ratio is high considering the weak earnings lately of this company. A writer on Simply Wall Street talks about analysts downgrades. The April 2020 Annual report is highlighted on Newsfile Corp.
Evertz Technologies Ltd is a Canadian provider of telecommunications equipment and technology solutions to the television broadcast and new-media industries. Its web site is here Evertz Technologies .
The last stock I wrote about was about was Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF) ... learn more. The next stock I will write about will be Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more on Friday, August 14, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth Stock.... learn more on Thursday, August 13, 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