I own this stock of Calian Group Ltd (TSX-CGY, OTC-CLNFF). This is an interesting company with a dividend. This stock came up on a Globe Investor site. The Globe Investor Number Cruncher is an investment column about screening for stocks and funds. They did one on companies with little to no debt. I also noted that the Financial Blogger has this stock on his Top Ten Canadian Dividend Stocks list.
When I was updating my spreadsheet, I noticed that the stock price went up a lot this year. I have done well in this stock. I have had this stock for almost 10 years and my total return to the end of last year was 20.86% per year with 16.98% per year from capital gains and 3.88% per year from dividends. The current dividend yield is 1.73%, but I am getting on my original investment a yield of 6.19%. One problem is that they have not raised the dividend since 2013.
The dividend yields are low with dividend growth non-existent. The current dividend yield is low (below 2%) at 1.73%. The 5 year and historical median dividend yields are moderate (2% to 4% range) at 3.65% and 4.28%. The 10 year dividend yield is good (5% and 6% ranges) at 5.31%. They have not raised the dividend since 2013. They have paid dividends for 17 years and have raised them in 10 of these years.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 is 50% with 5 year coverage at 52%. The DPR for CFPS for 2020 is 29% with 5 year coverage at 34%. The DPR for FCF for 2020 is 116% with 5 year coverage at 73%. Not all sites agree on FCF.
Debt Ratios are good. There is no current long term debt. The Liquidity Ratio for 2020 is 1.85. The Debt Ratio for 2020 is 2.53. The Leverage and Debt/Equity Ratios for 2020 are 1.65 and 0.65
The Total Return per year is shown below for years of 5 to 27 to the end of 2020. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 0.00% | 36.91% | 32.57% | 4.34% |
| 2010 | 10 | 3.55% | 17.33% | 13.60% | 3.73% |
| 2005 | 15 | 8.71% | 17.32% | 12.81% | 4.51% |
| 2000 | 20 | 11.73% | 20.50% | 15.46% | 5.04% |
| 1995 | 25 | 12.78% | 10.46% | 2.32% | |
| 1993 | 27 | 10.57% | 8.74% | 1.82% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.66, 13.02 and 14.38. The corresponding 10 year ratios are 11.06, 12.56 and 14.12. The corresponding historical ratios are 9.54, 11.29 and 12.69. The current P/E Ratio is 31.21 based on a stock price of $64.60 and EPS estimate for 2021 of $2.07. This stock price testing suggests that the stock price is relatively expensive.
It is interesting that when I have done the high, median, and low for years ending in December, the P/E Ratios were consistently higher than above when the year used ended in September each year. The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.29, 14.36 and 16.27 (with a December year-end). The corresponding 10 year ratios are 11.34, 13.82 and 15.30 (with a December year-end). The corresponding historical ratios are 10.03, 11.57 and 17.06 (with a December year-end). The financial year for this company ends in September each year.
Even when I look at 2022 when the EPS is expected to rise, rather than fall as it is expected to do in 2021, the P/E Ratio is still relatively high at 23.66 based on a stock price of $64.60 and EPS Estimate for 2022 of $2.73.
I get a Graham Price of $30.92. The 10 year low, median, and high median Price/Graham Price Ratios are 0.98, 1.07 and 1.18. The current P/GP Ratio is 2.09 based on a stock price of $64.60. 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 2.20. The current P/B Ratio is 3.15 based on a Book Value of $200M, Book Value per Share of $20.53 and a stock price of $64.60. The current ratio is 43% above the 10 year median 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 10.76. The current P/CF Ratio is negative so no testing can be done. I can look at the Cash Flow less Working Capital. Here the 10 year median P/CF Ratio is 8.53. The current P/CF Ratio is 16.52 based on last 12 months of Cash Flow less WC of $38M, Cash Flow per Share less WC of $3.91 and a stock price of $64.60. The current ratio is 94% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. I talk about this subject of cash flow less working capital here.
I get an historical median dividend yield of 4.28%. The current dividend yield is 1.73% based on a dividend of $1.12 and a stock price of $64.60. The current dividend is 62% below the historical median dividend. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.31%. The current dividend yield is 1.73% based on a dividend of $1.12 and a stock price of $64.60. The current dividend is 67% below the historical median dividend. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 0.66. The current P/S Ratio is 1.34 based on a stock price of $64.60, Revenue estimate for 2021 of $471M, and Revenue per Share of $48.26. The current P/S Ratio is 104% 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 probably relatively expensive. The dividend yield tests say this and is confirmed by the P/S Ratio test. However, dividend yield is probably not a good test because dividends have not been raised since 2013. However, all the test says the same thing, that the stock price is relatively expensive.
Is it a good company at a reasonable price? I plan to stay invested in this stock because I still believe in it. I still hope it will turn back into a dividend growth stock, but shareholders are currently being rewarded as the capital gains have been good. It is probably expensive at the moment, but the whole stock market is high presently.
When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (4). The consensus would be a Strong Buy. The 12 month stock price consensus is $74.29. This implies a total return of 16.73% with 15% from capital gains and 1.73% from dividends. This is a lot lower in capital gains that occurred over the past 2 years.
Analysts like this stock on Stock Chase but site gives it 3 stars out of 5. Adam Othman Motley Fool says to buy for capital growth, not dividends. The Executive Summary on Simply Wall Street gives the stock 4 stars out of 5 and list two risks. A writer on Simply Wall Street says that the stock price is growing faster than EPS. Kevin Ford, CEO of the company is interviewed on C-Suite.
Calian Group Ltd is a Canadian company offering professional services. Calian Group Ltd operates through four segments namely Advanced Technologies, Health, Learning, and Information Technology. It generates maximum revenue from the Health segment. Its web site is here Calian Group Ltd.
The last stock I wrote about was about was Rogers Sugar Inc (TSX-RSI, OTC-RSGUF) ... learn more. The next stock I will write about will be Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more on Wednesday, January 13, 2021 around 5 pm. Tomorrow on my other blog I will write about Questions for ESG Investors.... learn more on Tuesday, January 12, 2021 around 5 pm.
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