I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock.
When I was updating my spreadsheet, I noticed this company is in a cyclical business, but they have not done well over the past 10 years and then 2018 was a losing year because of higher costs. Things seem to be improving in 2019 and analysts expect a better year in 2020 and in the future. However, they do not see the dividend improving over the near term. This stock used to be an Income Trust. A lot of the previous income trust stocks have had a hard time getting their DPR for EPS under control.
The dividend yields are good with dividend growth non-existent. The current yield is good (4% and 5% ranges) at 5.01%. The 5, 10 and historical dividend yields are also good at 5.93%, 5.70% and 5.93%. Dividend were decreased in 2017 and they have been flat ever since. Analysts do not expect any increases in the near future. The company used to be a dividend growth company, but it has not been one for sometime now. It however, might again be one in the future, just not the near future.
The Dividend Payout Ratios (DPR) are expected to improve. The DPR for EPS for 2019 was 177% with 5 year coverage at 173%. They have not been able to afford the dividends in connection with EPS for some time. However, analysts expect that to change in 2020 with a DPR for EPS of 68% and then going lower again in 2021. The DPR for Cash Flow per Share for 2019 at 55% with 5 year coverage at 42%. (I prefer this to be 40% or less, especially the 5 year coverage.) The DPR for Free Cash Flow for 2019 is negative, with 5 year coverage at 322%. Analysts expect this to be better in 2020 at an DPR of 41%.
Debt Ratios need improvement. The Long Term Debt/Market Cap Ratio for 2019 is 0.11 and is low and good. The Liquidity Ratio is low at just 1.12. The Debt Ratio is low also at 1.18. I prefer these last two to be 1.50 or better. The Leverage and Debt/Equity Ratios are too high at 6.71 and 5.71. I prefer them to be below 3.00 and 2.00, respectively.
The Total Return per year is shown below for years of 5 to 21 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. (In the past there were some years of special dividends and this seems to account for the high dividend portion of the total return for 15 to 22 year dividend portion of the total return.)
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | -12.48% | -4.24% | -9.73% | 5.49% |
| 2009 | 10 | -3.23% | 2.00% | -4.61% | 6.62% |
| 2004 | 15 | 1.26% | 29.54% | 7.75% | 21.78% |
| 1999 | 20 | 7.22% | 36.48% | 12.40% | 24.08% |
| 1997 | 22 | 49.64% | 18.22% | 31.42% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 18.39, 23.42 and 28.43. The corresponding 10 year ratios are 14.14, 17.54 and 21.16. The corresponding historical ratios are 7.12, 10.03 and 11.38. The current P/E Ratio is 13.65 based on a stock price of $7.78 and EPS estimate for 2020 of $0.57. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $6.88. The 10 year low, median, and high median Price/Graham Price Ratios are 1.24, 1.54 and 1.83. The current P/GP Ratio is 1.13 based on a stock price of $7.78. 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 2.94. The current P/B Ratio is 2.11 based on a stock price of $7.78, Book Value of $196M and a Book Value per Share of $3.70. The current ratio is 28% 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 7.41. However, I cannot do a test on P/CF Ratio because the Cash Flow for 2020 is expected to be negative.
I get an historical median dividend yield of 5.93%. The current dividend yield is 5.01% based on dividends of 0.39 and a stock price of $7.78. The current dividend yield is 15% below the historical 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 5.70%. The current dividend yield is 5.01% based on dividends of 0.39 and a stock price of $7.78. The current dividend yield is 12% 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 0.37. The current P/S Ratio is 0.27 based on a stock price of $7.78, Revenue estimate for 2020 of $1520M and Revenue per Share of $28.66. The current ratio is 27% 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 cheap. The P/S Ratio test is showing this, as are the other tests I can do except for the dividend yield tests. There are lots of problems with the dividend yield test. For this stock used to be an income trust, and income trust had much higher yields than corporation because they could payout more than the EPS. Also, the company has been cutting dividends lately. However, lots of income trusts had to cut dividends after becoming corporations.
Is it a good company at a reasonable price? The stock price is relatively cheap. You would buy this company for diversification purposes. The long slow recovery from the 2008 recession and bear market and problems with Covid has hurt this company, but most analysts feel that it will start to do better in 2021. They are probably right.
When I look at analysts’ recommendations, I find Strong Buy (4) and Buy (2). The consensus would be a Strong Buy. The 12 months stock price consensus is $9.92. This implies a total return of 32.52% with 27.51% from capital gains and 5.01% from dividends.
Recent comments are positive on Stock Chase. Ambrose O'Callaghan on Motley Fool thinks this would be a great stock to buy for your TFSA this year. The Executive Summary on Simply Wall Street list 4 positives and 3 negatives and give it 4 out of 5 stars. A writer on Simply Wall Street talks about who owns shares in this company. Bird Constructions on Cision announced that wholly owned subsidiary, Stuart Olson Construction Ltd., has been selected as preferred proponent for the Nanaimo Correctional Centre Replacement Project.
Bird Construction Inc, through its subsidiaries, operates as a contractor in the construction market. It also provides pre-construction services, building information modeling and involves public-private partnership projects. The company focuses on commercial, institutional, retail, tenant, residential, industrial, mining, water, wastewater, energy, and civil sectors. Its web site is here Bird Construction Inc.
The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more on Wednesday, December 30, 2020 around 5 pm. Tomorrow on my other blog I will write about One Rule in Investing.... learn more on Tuesday, December 29, 2020 around 5 pm.
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