I do not own this stock of Kirkland Lake Gold (TSX-KL, NYSE-KL). This stock was recommended to me by Sue O'Reilly to me in 2019 and I wish I had bought it when she talked about it. Sue O'Reilly runs the Meetup Group of StockTwits.
When I was updating my spreadsheet, I noticed Revenue, EPS, Stock Price and Cash Flow over the past 5 years is still moving forward sharply. For example, Revenue is up 75% per year over the past 5 years while Revenue per Share is ups by 38% per year over the past 5 year. EPS is up by 91% per year over the past 5 years.
The dividend yields are low with dividend growth high. The current dividend yield is low (less than 2%) at 1.84%. The 3 year median dividend yield is also low at 0.35%. Over the past 3 years, dividends have grown by 203% per year.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 is 4.7% with 3 year coverage at 8%. The DPR for CFPS for 2020 is 11% with 3 year coverage at 5%. The DPR for Free Cash Flow for 2020 is 16% with 3 year coverage at 9.5%.
Debt Ratios are good. The company has no long term debt. The Liquidity Ratio for 2020 is good at 1.95. The Debt Ratio is very good at 3.55. The Leverage and Debt/Equity Ratios are good at 1.39 and 0.39
The Total Return per year is shown below for years of 5 to 19 to the end of 2020 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 202.54% | 80.15% | 79.28% | 0.87% |
| 2010 | 10 | 13.13% | 12.94% | 0.19% | |
| 2005 | 15 | 11.39% | 11.26% | 0.12% | |
| 2001 | 19 | 10.38% | 10.28% | 0.10% |
The Total Return per year is shown below for years of 5 to 11 to the end of 2020 in US$. 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 | 201.05% | 82.64% | 81.77% | 0.87% |
| 2010 | 10 | 12.63% | 12.44% | 0.19% | |
| 2009 | 11 | 9.09% | 8.93% | 0.16% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.20, 14.63 and 20.23. The corresponding 10 year ratios are 9.27, 14.75 and 21.65. The corresponding historical ratios are all negative and so cannot be used. The EPS were all negative until 2010 and then occasionally negative after that. The current P/E ratio is 13.23 based on a stock price of $49.60 and EPS estimate for 2021 of $3.75. The current ratio is between the low and median 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $44.37. The 10 year low, median, and high median Price/Graham Price Ratios are 0.68, 1.19 and 1.72. The current P/GP Ratio is 1.12 based on a stock price of $49.60. The current ratio is between the low and median 10 year ratios. 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 1.67. The current P/B Ratio is 2.13 based on a stock price of $49.60, Book Value of $6,231M and a Book Value per Share of $23.33. The current ratio is 27% 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 6.81. The current P/CF Ratio is 8.00 based on Cash Flow per Share estimate for 2021 of $6.20, Cash Flow of $1,656M and a stock price of $49.60. 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.
I get 3 year median dividend yield of 0.35%. The current dividend yield is 1.84% based on dividends of $0.91 and a stock price of $49.60. The current dividend yield is 425% above the 3 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 2.73. The current P/S Ratio is 4.31 based on Revenue estimate for 2021 of $3,073M, Revenue per Share of $11.51 and a stock price of $49.60. The current ratio is 58% 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 reasonable to expensive. The testing shows the stock price as cheap and expensive and positions in between. Analysts seem to expect Revenue and EPS to slow down a lot in the near future. It is because of revenue showdown that the P/S Ratio test shows the stock as expensive. The P/S Ratio is one of my favourite tests.
Is it a good company at a reasonable price? It is hard to say if the stock price is reasonable or not. If the Revenue and EPS are going to slow as analysts think, perhaps the price is expensive. This is a gold company, so it is high risk. Having good debt ratios is certainly a positive.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (4), Hold (2) and Underperform (1). The consensus would be a Buy. The 12 month stock price of $67.80. This implies a total return of 38.53% with 36.69% from capital gains and 1.84% from dividends.
Analysts on Stock Chase certainly like this stock. Chris MacDonald on Motley Fool likes this stock as a long term hedge and especially Kirkland Lake because of its balance sheet. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and lists one risk. The risk is unstable dividends, but they are wrong. Dividends switched from paying in CDN$ to US$, but they are stable. A writer on Simply Wall Street thinks the dividends can grow because of increasing EPS.
Kirkland Lake Gold Ltd is a Canada-based gold mining, development, and exploration company with a diversified portfolio of exploration projects. The production profile of the company includes the Macassa mine complex located in northeastern Ontario and the Fosterville gold mine located in the State of Victoria, Australia. Also, the company owns the Holt mine and the Detour mine. Its web site is here Kirkland Lake Gold.
The last stock I wrote about was about was Ag Growth International (TSX-AFN, OTC-AGGZF) ... learn more. The next stock I will write about will be Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF) ... learn more on Monday, May17, 2021 around 5 pm.
Also, on my book blog I have put a review of the book The Written World by Martin Puchner learn more...
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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment