I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.
When I was updating my spreadsheet, I noticed I did better this year than last year. This year I have a total return of 0.58% with a 1.52% capital loss and 2.10% from dividends. Last year I was showing an 8.83% loss, with a capital loss of 10.04% and dividend of 1.21%.
The dividend yields are good with dividend growth has been restarted. The current dividend yield is good (5% and 6% ranges) at 5.76%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.87%, 3.42% and 3.55%. The company suspended their dividends in 2017. They restarted them in 2019 and increased them 2020 and 2021. The last increase was in 2021 and the increase was for 20%.
The Dividend Payout Ratios (DPR) are fine. The Dividend Payout Ratio for EPS for 2020 is 22%. The 5 year coverage is 144%. They stopped dividend payouts because of EPS losses. The DPR for CFPS for 2020 is 10% with 5 year coverage at 18%. The DPR for Free Cash Flow for 2020 is 17% with 5 year coverage at 17% also. Sites do not agree on FCF but values are close.
Debt Ratios are fine. The company has no long term debt, but they do have a current bank loan. The Bank Loan/Market Cap Ratio is 0.50. This bank loan can be paid in 2.5 years with cash flow and that is a good number. The Liquidity Ratio for 2020 is 2.06. The Debt Ratio for 2020 is 2.25. Leverage and Debt/Equity Ratios for 2020 are 1.80 and 0.80.
The Total Return per year is shown below for years of 5 to 29 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 | -5.25% | -1.51% | -4.05% | 2.55% |
| 2010 | 10 | 0.00% | -0.91% | -3.86% | 2.96% |
| 2005 | 15 | -2.67% | 1.28% | -2.66% | 3.94% |
| 2000 | 20 | 3.38% | 10.31% | 2.87% | 7.44% |
| 1995 | 25 | 9.06% | 15.10% | 5.78% | 9.32% |
| 1991 | 29 | 8.84% | 11.16% | 4.66% | 6.50% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.30, 3.76, 5.22. The corresponding 10 year ratios are 12.20, 12.98 and 13.76. The corresponding historical ratios are 7.08, 8.40 and 9.50. The current P/E Ratio is 6.47 based on a stock price of $10.42 and EPS for last 12 months of $1.61. The current ratio is below the low median 10 year ratio of 12.20. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $22.65. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.59 and 0.65. The current P/GP Ratio of 0.46 based on a stock price of $10.42. The current ratio is below the low median 10 year ratio. 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 0.64. The current P/B Ratio is 0.74 based on a Book Value of $121M, Book Value per Share of $0.61 and a stock price of $10.42. The current ratio of 0.74 is 14% above the 10 year median P/B Ratio of 0.64. This stock price testing suggests that the stock price is relatively reasonable and below the median. The problem here is that the book value is declining and this is never good.
I get a 10 year median Price/Cash Flow per Share Ratio of 4.16. The current P/CF Ratio is 7.80 based on Cash Flow for the last 12 months of $11.44M, Cash Flow per Share of $1.34 and a stock price of $10.42. The current ratio is 88% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.55%. The current dividend yield is 5.76% based on a stock price of $10.42 and dividends of $0.60. The current dividend yield is 62% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 3.42%. The current dividend yield is 5.76% based on a stock price of $10.42 and dividends of $0.60. The current dividend yield is 69% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.15. The Current P/S Ratio is 0.20 based on Revenue of the last 12 months of $454M, Revenue per Share of $53.03 and a stock price of $ 10.42. The current Ratio is 29% 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 cheap. The dividend yield testing says that and this is the only test based on the future (dividends to be paid this year). Most of the testing is using last 12 months data as there are no analyst giving estimates. The management obviously feels good about the future because they restarted the dividends in 2019 and then increased them in 2020 and 2021. The P/S Ratio testing says the stock is expensive because it is using last 12 month’s revenue. The rest of the testing is a mix of cheap, expensive, and reasonable.
Is it a good company at a reasonable price? The stock price is probably reasonable. This is a small company that is not well followed. It is a risky investment. But I own this company and I intend to continue to hold it.
When I look at analysts’ recommendations, I find only a Strong Buy (1). The consensus would be a Strong Buy. There seems to be only one analyst following this stock. There is no target stock price.
There is nothing on Stock Chase or Motley Fool for this stock. The Executive Summary on Simply Wall Street lists two risks and gives the stock 4 stars out of 5. A writer on Simply Wall Street talks about this company’s dividend. A writer on Simply Wall Street thinks the CEO of this company is paid better than the median.
Goodfellow Inc is engaged in remanufacturers and distributors of lumber products and hardwood flooring products. It is engaged in the wholesale distribution of wood products, and remanufacturing, distribution, and brokerage of lumber. Its web site is here Goodfellow Inc.
The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Wednesday, April 07, 2021 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks April 2021.... learn more on Tuesday, April 06, 2021 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.
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