Is it a good company at a reasonable price? This is a very hard company to judge, although the stock price could be relatively cheap. Kruger Products L. P. (Limited Partnership) (KPLP) seems to have revenue and net income. What I do not like is that KP Tissue has no cash flow, no earnings (so far) and the dividends have been flat since they started in 2013. I am not impressed with high yields. I much rather have a low yield and dividend growth. This would not be a company I would be anxious to buy.
I do not own this stock of KP Tissue Inc (TSX-KPT, OTC-KPTSF). This was a stock suggested by a speaker at the Ellen's Investment Club. This is also a new stock for me to follow.
When I was updating my spreadsheet, I noticed KP Tissue Inc owns 14.5% of Kruger Products and that is what they were set up to do. Also, L.P. Kruger Inc owns the rest, 85.5%. Although KP Tissue Inc has not made a profit in its investment for the past 8 years, it is expected to do so in 2021. The stock is paying a dividend, but has no profit nor has it any Cash Flow.
They get money from issuing shares and from dividends from Kruger Products L.P. They pay in dividends all the money they get from Kruger Products L.P. Their investment is in units from Kruger Products L.P. The revenue given is for Kruger Products L.P. Shareholders of KP Tissue Inc has done poorly on this stock.
The dividend yields are good with dividend growth non-existent. The current dividend yield is good (5% to 6% ranges) at 6.89%. They have paid dividends for the last 7 years and they have not changed. Analysts do not expect that it will change in the near future.
The Dividend Payout Ratios (DPR) are non-calculable as they have EPS losses and no cash flow. The DPR for EPS is non- calculable because the earning losses. The DPR for CFPS is non-calculable as they have no cash flow.
Debt Ratios are probably fine because they have a lot of assets compared to the liabilities. The company has no long term debt. The Liquidity Ratio is 0.41. This means that the current assets cannot cover the current liabilities. There is no cash flow. The Debt Ratio is 16.39. There are a lot of assets to cover the liabilities.
The Total Return per year is shown below for years of 5 to 8 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.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative, so useless. The corresponding 8 year and historical P/E Ratios are also all negative and so useless. The current P/E Ratio is 348.33 based on a stock price of $10.45 and EPS estimate for 2021 of $0.03. The P/E Ratio for 2022 is 22.23 based on a stock price of $10.45 and EPS estimate for 2022 of $0.47. The P/E Ratio for 2023 is 11.48 based on a stock price of $10.45 and EPS estimate for 2023 of $0.91. The only really reasonable P/E Ratio is the one for 2023 at 11.48. However, the further out estimates are, the more unreliable they are.
I get a Graham Price of $2.30. The estimated 9 year low, median, and high median Price/Graham Price Ratios are 4.72, 5.78 and 6.79. I can only estimate these because in the past 9 years, this stock only had one year of positive earnings. The current P/GP Ratio is 4.54 based on a stock price of $10.45. This is ratio is below the low of the 9 year median ratios. This stock price testing suggests that the stock price is relatively cheap. However, any P/GP Ratio over 1.50 is probably showing that the company is expensive.
I get an 8 year median Price/Book Value per Share Ratio of 0.99. This stock price testing suggests that the stock price is relatively reasonable and below the median. The current P/B Ratio is 1.33 based on a Book Value of $77.5M, Book Value per Share of $7.87 and a stock price of $10.45. The current ratio is 34% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, stocks with a P/B Ratio of 1.50 or lower are considered cheap.
This company has no cash flow, so I cannot do any cash flow testing.
I get a 7 year and historical median dividend yield of 5.27%. The current yield is 6.89% based on Dividends of $0.72 and a stock price of $10.45. The current yield is 31% above the 7 year and 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 0.11. The current P/S Ratio is 0.07 based on Revenue for 2021 of $1,437M, Revenue per Share of $145.75 and a stock price of $10.45. The current P/S Ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. However, the Revenue that is shown is the Revenue for Kruger Products L.P. You have to wonder how valid this test is.
Results of stock price testing is that the stock price is probably relatively cheap. However, most of the stock price testing is questionable.
When I look at analysts’ recommendations, I find Buy (1) and Hold (5). The consensus would be a Hold. The 12 month stock price is $11.25. This implies a total return of 14.55% with 7.66% from capital gains and 6.89% from dividends.
There is nothing recent from analysts on Stock Chase. Joey Frenette on Motley Fool like the high dividend on this stock. Personally, I would not go for a high dividend on a stock and especially one that cannot cover the dividend. I would go for a lower dividend with growth. Adam Othman on Motley Fool also likes this stock for its high dividend. The company talks about its third quarter on Newswire. A Simply Wall Street Report on Yahoo Finance talks about the fact that analysts expect the company to start to have a profit in the near future.
KP Tissue Inc operates as a holding company. They have a Limited Partnership interest in L. P. Kruger. The firm produces, distributes, markets, and sells a range of disposable tissue products in North America. Its web site is here KP Tissue Inc.
The last stock I wrote about was about was Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF) ... learn more. The next stock I will write about will be Metro Inc (TSX-MRU, OTC-MTRAF) ... learn more on Monday, January 03, 2022 around 5 pm.
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