I do not own this stock of Wild Brain Ltd (TSX-WILD, OTC-WLDBF). In the CanTech Letter of May 2014 Byron Capital says investors should accumulate DHX Media aggressively. I also have a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014. They have a year-end date of June of each year, so I am covering June 2020 in this report.
When I was updating my spreadsheet, I noticed that this company has had a name change from DHX Media Ltd (TSX-DHX, OTC-DHXMF) to Wild Brain Ltd (TSX-WILD, OTC- WLDBF) after I last reviewed the stock last year. The dividends were not well covered in the past. They have had earning losses since 2017 and analysts do not see any positive earnings until 2023.
The dividends have been suspended (in 2019). Dividends used to be low (under 2%) to moderate (2% to 4%). The low dividend yield is 0% and the high is 2.93%. The 5, and 7 median dividend yields are low at 0.80 and 0.89. The average increase in dividends over the past 7 years was 9.8%
The Dividend Payout Ratios (DPR) shows dividends were not well covered in the past. Because of earning losses, I cannot calculate the DPR for the last year of dividends in 2018. The 5 year coverage at that point was 99%. They were paying out more than they could afford. The DPR for 2018 for CFPS was 27% with 5 year coverage at 52%. The sites do not agree on Free Cash Flow, but none suggest that the dividends were affordable.
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2020 is too high at 2.26. It should be lower than 1.00 and some analysts like it at 0.50 or lower. It is better in 2021 because of a higher stock price, but long term debt also went up. The Liquidity Ratio at 1.86 is good. The Debt Ratio at 1.42 is a bit low and I prefer it to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 are 14.09 and 9.89. I prefer these to be below 3.00 and 2.00.
The Total Return per year is shown below for years of 5 to 15 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% | -31.84% | -32.59% | 0.75% |
| 2009 | 10 | 0.00% | 7.22% | 4.10% | 3.12% |
| 2004 | 15 | -2.18% | -3.56% | 1.39% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative. The corresponding 10 year ratios are 19.03, 26.68 and 33.68. The corresponding historical ratios are 12.40, 18.20 and 24.00. The current P/E Ratio is negative because analysts expect a $0.04 EPS loss this year. Next year the EPS is also a loss at $0.06. The P/E Ratio for 2023 is 34.20 as the EPS is expected to be $0.05and the current stock price is $1.71. This stock price testing suggests that the stock price is relatively expensive.
I am guessing a Graham Price of $0.72 is probably fair. The 10 year low, median, and high median Price/Graham Price Ratios are 1.42, 2.37 and 3.19. The current P/GP Ratio is 2.37 based on a stock price of $1.71. 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 2.31. The current P/B Ratio is 3.71 based on a Book Value of $79M, Book Value per Share of $0.46 and a stock price of $1.71. The current ratio is 60% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Cash Flow per Share Ratio of 4.43. The current 4.89 based on Cash Flow per Share estimate for 2021 of $0.35, Cash Flow of $59.8M and a stock price of $1.71. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I cannot do any dividend yield tests because this stock has suspended it dividend.
The 10 year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 0.68 based on Revenue estimate for 2021 of $443M, Revenue per Share of $2.53 and a stock price of $1.71. The current ratio is 64% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive cheap.
Results of stock price testing is that the stock price is probably cheap. The stock price testing is all over the place and this is mainly because this company is having a hard time and it is showing up in their financials. For example, the Book Value is rapidly falling and that is why this test shows the stock price as expensive.
Is it a good company at a reasonable price? The stock price is probably reasonable, but this would be a risky stock to buy as it is not expected to do anything much in the near term.
When I look at analysts’ recommendations, I find Hold (6) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $1.71. This would imply a total return of 0%. There can only be return from capital gains as the dividends are suspended.
There are no recently entries on Stock Chase but all the old ones are negative. Ambrose O'Callaghan on Motley Fool thinks the new deal with Apple TV is positive for this company. The executive overview on Simply Wall Street gives this stock 2 starts out of 5 and says it will be unprofitable in the near term. . The company’s first quarterly results for 2021 are on WFTM News. An article on The Chronicle Herald talks about how a change in YouTube’s advertising policy affect revenues at WildBrain.
WildBrain Ltd is a children's content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget, and Degrassi franchise. The company owns the independent library of children's content. It licenses its content to broadcasters and streaming services worldwide and generates royalties through its consumer products program. Its web site is here Wild Brain Ltd.
The last stock I wrote about was about was Northland Power Inc (TSX-NPI, OTC-NPIFF) ... learn more. The next stock I will write about will be First Capital REIT (TSX-FCR, OTC-FCRGF) ... learn more on Friday, November 4, 2020 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2020.... learn more on Thursday, December 03, 2020 around 5 pm.
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