I own this stock of Evertz Technologies Ltd (TSX-ET, OTC-EVTZF). I got the idea to investigate this stock from a G&M Article. It looked like something I might want to try out. This stock came up in a stock screen filter article that was looking for reliable dividend payers. That is companies that have reliable profits big enough to comfortably cover their dividend payments. The financial year end April 30 each year. The year end financial that I looked at was for April 30, 2021.
When I was updating my spreadsheet, I noticed I did better on this stock than for last year. To the end of July last year my Total Return was 1.76%, with a capital loss of 4.63% and 7.39% from dividends. The total return to July of 2021 is 4.33% with a capital loss of 2.11% and 6.44% from dividends. There is lots of insider ownership. Although INK has not been recently updated, the report shows both the CEO and Chairman owning some 31% each of this company.
The dividend yields are good with dividend growth non-existent. The current dividend yield is good (5% to 6% ranges) at 5.29%. The 5, 10 and historical dividend yields were moderate (2% to 4% ranges) at 4.40%, 4.10% and 4.00%. The dividends were cut in the 2021 Financial year because of uncertainty about the pandemic. Later, in the same financial year, the dividends were restored to their original amount of $0.72. So, the 5 year growth in dividends to date is really 0.00%.
The Dividend Payout Ratios (DPR) need to be improved. The DPR for EPS for 2021 is 98% with 5 year coverage at 133%. Analysts expect this to go lower in the near future. The DPR for CFPS for 2021 is 65% with 5 year coverage at 89%. This is far to high. Any DPR for CFPS should be at 40% or lower. The DPR for Free Cash Flow for 2021 is 45% with 5 year coverage at 103%.
Debt Ratios are good and it is wise for small caps to have good debt ratios. There is Long Term Debt but the Long Term Debt/Market Cap Ratio for 2021 is 0.00 because this debt is so low. The Liquidity Ratio for 2021 is 2.61. The Debt Ratio for 2021 is 2.88. The Leverage and Debt/Equity Ratios for 2021 are 1.53 and 0.53.
The Total Return per year is shown below for years of 5 to 14 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 | -5.59% | 1.47% | -5.45% | 6.93% |
| 2010 | 10 | 4.14% | 3.63% | -2.70% | 6.33% |
| 2007 | 14 | 7.94% | 5.24% | -0.20% | 5.44% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.10, 17.77 and 21.33. The corresponding 10 year ratios are 14.86, 17.74 and 21.20. The corresponding historical ratios are 14.51, 17.72 and 20.36. The current P/E Ratio is 16.40 based on a stock price of $13.61 and EPS estimate for 2022 of $0.83. 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 $8.46. The 10 year low, median, and high median Price/Graham Price Ratios are 1.41, 1.67 and 1.93. The current P/GP Ratio is 1.61 based on a stock price of $13.61. 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 3.54. The current P/B Ratio is 3.55 based on a stock price of $13.61, Book Value of $293M and Book Value per Share of $3.84. The current ratio is 0.15% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and at median.
I get a 10 year median Price/Cash Flow per Share Ratio of 13.87. The current P/CF Ratio is 15.83 based on a stock price of $13.61, Cash Flow per Share estimate for 2022 of $0.86, and Cash Flow of $65.6M. This ratio is 14% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above median.
I notice that analysts expect the CFPS for 2022 to drop by 35% from 2021. However, the 2023 CFPS is at a more expected level of $1.27. The P/CF Ratio for 2023 is 10.72 based on the CFPS estimate of $1.27, Cash Flow of $96.9 and a stock price of $13.61. This P/CF Ratio is 23% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.00%. The current dividend yield is 5.29% based on a dividend of $0.72 and a stock price of $13.61. The current dividend yield is 32% below 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 4.10%. The current dividend yield is 5.29% based on a dividend of $0.72 and a stock price of $13.61. The current dividend yield is 29% below 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 3.30. The current P/S Ratio is 2.52 based on Revenue estimate for 2022 of $412M, Revenue per Share of $5.40 and a stock price of $13.61. The current ratio is 24% 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 relatively cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio testing. Other tests are coming up with a reasonable price which is above and below the median.
Is it a good company at a reasonable price? The current stock price would seem to be reasonable. I plan to keep the shares I have but not buy any more at the present time. It maybe on the cheap side, but it has not performed for me as well as I expected. I was in a trading range since late 2008 to March 2020 and has not yet really recovered from March 2020.
When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (2) recommendations. The consensus would be a Strong Buy. The 12 month stock price consensus is $16.83. This implies a total return of $28.95%, with 23.66% from capital gains and 5.29% from dividends.
The most recent analyst comment is that it is time to sell some of this stock because it is near his expected high on Stock Chase. Christopher Liew on Motley Fool thinks now is the time to buy this stock with its juicy dividend. The executive summary on Simply Wall Street gives this stock 3 stars out of 5 and lists two risks. A writer on Simply Wall Street says the problem with this company is that it is not growing its capital. I tend to agree. A writer on Simply Wall Street says the company’s increasing dividends and decreasing earnings is a problem. I agree.
Evertz Technologies Ltd is a Canadian provider of telecommunications equipment and technology solutions to the television broadcast and new-media industries. Evertz equipment is used in the production, post-production, and transmission of television content. More than half of the firm's revenue is generated in the United States and Canada. Its web site is here Evertz Technologies.
The last stock I wrote about was about was Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF) ... learn more. The next stock I will write about will be Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more on Wednesday, August 11, 2021 around 5 pm. Tomorrow on my other blog I will write about Canadian Retail Stocks.... learn more on Tuesday, August 10, 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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