I do not own this stock of Pulse Seismic Inc (TSX-PSD, OTC-PLSDF). I wanted to invest some extra money in a dividend paying small cap. I went to the Globe and Mail site of G&M and from Globe Investor section I selected the Stock Filter. I asked for companies that were priced between $1 and $5.50 and had a yield between 4% and 20%. Pulse Seismic Inc. was one of the companies that were returned. This is not a stock I chose to invest in but I found it of interest so I am following it.
When I was updating my spreadsheet, I noticed most of the insiders that I tracked increased their shares in this company. This included the CEO, CFO, an officer, and a director. The Chairman did not. However, the Chairman has over 8M shares worth some 17M.
The dividend was suspended in 2015.
The Dividend Payout Ratios (DPR) in the last year of dividends needed improvement re EPS. The last year of dividends, they had an earnings loss. In the last 10 years, they had 6 years of earnings loss and only 4 years of positive earnings. The DPR for EPS the past 5 years to 2015 was 176%. The DPR in 2015 for CFPS was a lot better at 18% with 5 year coverage at 10%. The DPR for Free Cash Flow for 2015 was also fine at 25%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.54. It is lower currently at 0.27 because of the increase in the stock price. The Liquidity Ratio for 2020 is good at 3.58, however, the Liquidity Ratio for the first quarter is much lower at 0.83. For the first quarter, if you add in Cash Flow after dividends it is good at 5.31. The Debt Ratio for 2020 is good at 1.80. The Leverage and Debt/Equity Ratios for 2020 are fine at 2.25 and 1.25.
The Total Return per year is shown below for years of 5 to 22 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. Under the Dividend Growth column is average dividend growth. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | -20.00% | -13.25% | -15.44% | 2.18% |
| 2010 | 10 | -15.57% | -1.97% | -5.77% | 3.80% |
| 2005 | 15 | 6.05% | -1.57% | -5.79% | 4.23% |
| 2000 | 20 | 9.22% | 8.62% | 1.24% | 7.37% |
| 1998 | 22 | 12.12% | 3.77% | 8.35% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and are therefore unusable. The corresponding 10 year ratios are also all negative and unusable. The corresponding historical ratios are 2.24, 4.17 and 5.50. These are very low ratios. Anything below the ratio of 10 is low. The current P/E Ratio is 6.79 based on a stock price of $1.90 and EPS estimate for 2021 of $0.28. This current ratio is above the historical high and therefore shows the stock price is relatively expensive by the P/E Ratio test. However, a P/E Ratio of 6.79 is a low ratio which would point to the stock price as being relatively cheap.
I get a Graham Price of $1.72. The 10 year low, median, and high median Price/Graham Price Ratios are 1.08, 1.27 and 1.57. The current P/GP Ratio is 1.10 based on a stock price of $1.90. The current ratio is between the low and median 10 year ratio. 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 3.40. The current P/B Ratio is 4.03 based on a stock price of $1.90, Book Value of $25M and a Book Value per Share of $0.47. The current P/B Ratio is 19% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem with the book value is that is has been declining by 10.47% per year over the past 5 years.
I get a 10 year median Price/Cash Flow per Share Ratio of 7.33. The current P/CF Ratio is 9.67 based on Cash Flow for the past 12 months of $10.6M, Cash Flow per Share of $0.20 and a stock price of $1.90. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. Cash Flow per Share has been declining by 25% per year over the past 5 years.
I cannot do any dividend yield testing because the dividends have been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 5.76. The current P/S Ratio is 2.70 based on Revenue estimate for 2021 of 38M, Revenue per Share of $0.70 and a stock price of $1.90. The current ratio is 53% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The P/S Ratio testing is showing this. The P/E Ratio is nominally a very low ratio showing the stock is cheap. Problem with the P/B Ratio test and the P/CF Ratio test is the decline in earnings and cash flow over the past 5 years.
Is it a good company at a reasonable price? The stock price would seem to be a reasonable one, if not a cheap one. The P/S Ratio testing is showing this. However, the company has not shown that it can make a profit. I know that Analysts expect the company to make a profit this year, but they have been expecting the company to be profitable since 2017 and it has yet to happen. However, in the first quarter of 2021 they did make a small profit which is much less than $0.01 per share. So, they basically broke even.
When I look at analysts’ recommendations, I find a Buy (1) recommendation. The consensus would therefore be a Buy. The 12 month stock price consensus is $2.40. This implies a total return of 26.32%, all from capital gains.
Analysts on Stock Chase lost interest in this stock in 2018. Ambrose O'Callaghan on Motley Fool commented on this stock in 2017. Executive Summary on Simply Wall Street gives this stock 2 stars out of 5 and list 2 risks. A writer on Simply Wall Street thinks that the company should have no debt. Travis Johnson, a blogger on Stock Gum Shoe reviews this stock.
Pulse Seismic Inc is a Canadian company which acts as a provider of seismic data to the energy sector in western Canada. The company is engaged in the acquisition, marketing, and licensing of 2D and 3D seismic data to the energy sector. Its web site is here Pulse Seismic Inc.
The last stock I wrote about was about was Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more. The next stock I will write about will be TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more on Friday, July 23, 2021 around 5 pm. Tomorrow on my other blog I will write about Director Diversity.... learn more on Thursday, July 22, 2021 around 5 pm.
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