I do not own this stock of Exco Technologies Ltd (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.
When I was updating my spreadsheet, I noticed there was lots of insider buying, including buying by the CEO, CFO, Chairman, and some directors. Insider buying was at 3% (were generally insider buying would be around 0.01%).
The dividend yields are Moderate with dividend growth Moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.97% The 5, 10 and historical dividend yields are also moderate at 3.49%, 3.06% and 2.39%. The dividend growth has been Moderate (8% to 14% ranges) with growth over the past 5 years at 10.27% per year. However, the last increase was lower at 5.6% and it was done in 2020.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 was 54% with 5 year coverage at 37%. The DPR for CFPS for 2020 is 30% with 5 year coverage at 22%. The DPR for Free Cash Flow for 2020 at 67% with 5 year coverage at 35%. There is a rare agreement on the sites I looked at for FCF.
Debt Ratios are all good. The Long Term Debt/Market Cap Ratio is low and very good at just 0.01 (and rising to 0.03 for 2021). The Liquidity Ratio is good at 2.70. The Debt Ratio is good at 5.20. The Leverage and Debt/Equity Ratios are good at 1.24 and 0.24
The Total Return per year is shown below for years of 5 to 30 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 | 10.27% | -8.88% | -11.41% | 2.53% |
| 2010 | 10 | 17.08% | 13.51% | 9.43% | 4.08% |
| 2005 | 15 | 14.38% | 7.73% | 5.14% | 2.59% |
| 2000 | 20 | 12.58% | 7.95% | 5.78% | 2.17% |
| 1995 | 25 | 6.22% | 4.65% | 1.57% | |
| 1990 | 30 | 12.52% | 10.59% | 1.92% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.73, 9.75 and 12.67. The corresponding 10 year ratios are 8.62, 10.21 and 12.64. The corresponding historical year ratios are 9.40, 13.33 and 15.69. The current P/E Ratio is 10.63 based on a stock price of $9.57 and EPS estimate for 2021 of $0.90. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $13.00. The 10 year low, median, and high median Price/Graham Price Ratios are 0.65, 0.78 and 0.94. The current P/GP Ratio is 0.74 based on a stock price of $9.57. 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 1.28. The current P/B Ratio is 1.15 based pm a Book Value of $328M, Book Value per Share of $8.34 and a stock price of $9.57. The current P/B Ratio is 10.5% 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 8.87. The current P/CF Ratio is 7.91 based on a stock price of $9.57, Cash Flow per Share estimate for 2021 of $ 1.21 and Cash Flow of $47.5M. The current P/CF Ratio is 11% 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 2.39%. The current dividend yield is 3.97% based on a stock price of $9.57 and dividends of $0.38. The current dividend yield is 66% 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 3.06%. The current dividend yield is 3.97% based on a stock price of $9.57 and dividends of $0.38. The current dividend yield is 30% 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 0.72. The current P/S Ratio is 0.82 based on a stock price of $9.57, Revenue estimate for 2021 of $457M and Revenue per Share of $11.64. The current ratio is 14% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests show that the stock price is cheap, but it is not confirmed by the P/S Ratio test. The dividend increases show how the company feels about the future. Recent dividend increases are lower than in the past. Ultimately, revenue drives things like earnings and cash flow. Revenue has recently gone down. I see no problems with any of the testing and testing points to a reasonable price.
Is it a good company at a reasonable price? I think that the stock price is reasonable. This is a dividend growth stock which is what I like. They have paid dividends for 17 years and have been rising dividends for the last 14 years, although the increases have gone down, percentage wise. However, total return has been low over the years, not quite making my desired 8% total return per year.
When I look at analysts’ recommendations, I find Buy (1) and Hold (2). The consensus would be a Hold. The 12 month stock price consensus is $10.00. This implies a total return of 8.46% with 4.49% from capital gains and 3.97% from dividends.
There are no recent entries for this stock on Stock Chase and Stock Chase only gives them one star out of five. Aditya Raghunath on Motley Fool likes this stock. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and lists one risk factor. A writer on Simply Wall Street likes the steady dividend, but not the current decline in EPS. A writer on Simply Wall Street says its prosperous future profit outlook isn’t fully reflected in the current share price yet.
Exco Technologies Ltd is a designer, developer, and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries. The company reports in two business segments namely, Casting and Extrusion segment and Automotive Solutions segment. Its web site is here Exco Technologies Ltd .
The last stock I wrote about was about was Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more. The next stock I will write about will be AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. Tomorrow on my other blog I will write about Dividend Stocks February 2021.... learn more on Tuesday, February 02, 2021 around 5 pm
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