I own this stock of TECSYS Inc (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. This is a small cap dividend paying stock that I like. The financial year for this company ends at April 30 each year, so I have reviewing the April 30, 2021 financial year.
When I was updating my spreadsheet, I noticed there was insider selling last year. It had hard to know why. But CEO still owns shares worth some $15M and the Chairman owns shares worth $74M. This stock has great debt ratios. The Long Term Debt/Market Cap is just 0.01, Liquidity Ratio is 1.72, Debt Ratio is 2.08 and Leverage and Debt/Equity Ratios are 1.93 and 0.93, respectively.
The dividend yields are low with dividend growth good. The current dividend yield is low (less than 2%) at 0.53%. The 5, 10 and historical median dividend yields are also low at 1.28%, 1.32% and 1.49%. The current dividend growth is good with growth at 19% per year over the past 5 years. The last increase was in lower at 8.3% and it was made in the 2022 financial year.
The Dividend Payout Ratios (DPR) currently fine. The DPR for EPS for 2021 is 49% with 5 year coverage at 71%. The DPR for CFPS for 2021 is 27% with 5 year coverage at 44%. The DPR for Free Cash Flow for 2021 is 21% with 5 year coverage at 33%. Some of the DPRs got high between 2018 and 2020, but are under control and analysts expects this to continue.
Debt Ratios are all good. The Long Term Debt/Market Cap Ratio is very low and good at just 0.01. The Liquidity Ratio for 2021 is 1.72. The Debt Ratio is 2.08. The Leverage and Debt/Equity Ratios for 2021 are good at 1.93 and 0.93
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. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 19.14% | 44.15% | 42.83% | 1.32% |
| 2010 | 10 | 15.87% | 39.23% | 37.48% | 1.74% |
| 2005 | 15 | 14.78% | 24.72% | 23.73% | 0.99% |
| 2000 | 20 | 15.53% | 15.12% | 0.41% | |
| 1998 | 22 | 10.85% | 10.57% | 0.28% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 38.13, 49.72 and 61.30. The corresponding 10 year ratios are 24.03, 32.95 and 41.88. The corresponding historical ratios are 13.00, 15.21 and 17.08. The current P/E Ratio is 109.18 based on a stock price of $49.13 and EPS estimate for 2022 of $0.45. The current ratio is above the high 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I know that the EPS expected in 2022 is low at $0.45 that the EPS for 2021 which was $0.49. The EPS estimate for 2023 is higher at $0.74. However, that does not help with this test. With a stock price of $49.13, the P/E Ratio for 2023 is 66.39. This is still a very high ratio and higher than the high 10 year median ratio. This test also shows the stock price is relatively expensive.
I get a Graham Price of $6.84. The 10 year low, median, and high median Price/Graham Price Ratios are 1.97, 2.63 and 3.29. The current P/GP Ratio is 7.18 based on a stock price of $49.13. The current ratio is higher than the high 10 year median ratio. 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 4.04. The current P/B Ratio is 10.62 based on a stock price of $49.13, Book Value of $67M and a Book Value per Share of $4.63. The current ratio is 163% 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 26.63. The current P/CF Ratio is 37.29 based on a stock price of $49.13, Cash Flow for the last 12 months of $19M, and Cash Flow per Share of $1.32. The current ratio is 40% higher than 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 1.49%. The current dividend yield is 0.53% based on dividends of $0.26 and a stock price of $49.13. The current yield is 64% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.32%. The current dividend yield is 0.53% based on dividends of $0.26 and a stock price of $49.13. The current yield is 60% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 1.74. The current P/S Ratio is 5.16 based on Revenue estimate for 2022 of $138M, Revenue per Share of $9.51 and a stock price of $49.13. The current ratio is 197% 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 expensive. The dividend yield tests show this and it is confirmed by the P/S Ratio test. However, all the testing points to that fact that the stock price is relatively expensive.
Is it a good company at a reasonable price? I still like this company and would not sell just because it is expensive. I also do not think now is the time to start to lock in my profit on this stock. However, now is probably not the time to buy this company. Also, I generally do not buy dividend stock when the yield is below 1%.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4). The consensus would be a Buy. The 12 month stock price consensus is $61.00. This implies a total return of $24.69% with 0.53% from dividends and 24.16% from capital gains.
This stock is not well covered by Stock Chase analysts. Kay Ng on Motley Fool says this is a Canadian growth stock to buy now. The executive summary on Simply Wall Street list two positives about this stock and no risks. A writer on Simply Wall Street talks about recent insider selling. A writer on Simply Wall Street has a current negative view of this stock, but notes that the company’s growth rate is expected to see huge improvements. A writer on Simply Wall Street recently had a positive view of this company.
Tecsys Inc is engaged in the development and sale of enterprise supply chain management software for distribution, warehousing, transportation logistics, point-of-use, and order management. It also provides related consulting, education, and support services. The company serves healthcare systems, services parts, third-party logistics, retail, and general wholesale distribution industries. Geographically, it derives a majority of revenue from the United States and also has a presence in Canada and Other Countries. Its web site is here TECSYS Inc.
The last stock I wrote about was about was Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more. The next stock I will write about will be Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more on Monday, July 26, 2021 around 5 pm.
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