I do not own this stock of Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF). I am doing a report on this stock because it was on the Top 100 Canadian Dividend Stocks by Maple Money . It also was on the Top 100 Dividend Stocks Money Sense for 2021 gets a solid C Rating from Money Sense. This is a new stock for me to follow.
When I was updating my spreadsheet, I noticed that the dividends were flat from 1996 to 2014. In 2015, after the dividend was flat for some 18 years, the dividend was double and then there has been increases since. The dividends have increase by some 14.87% per year over the past 5 years. So. dividends over the past 30 years have gone up 6 times and have gone done 2 times. The decreases happened a long time again in 1995 and 1996.
The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 2.5%. The 5, 10 and historical dividend yields are low (less than 2%) at 1.68%, 1.42% and 1.43%. The dividends have grown moderately (8% to 14% ranges) at 14.87% per year over the past 5 years. Dividends have also grown moderately at 14.87% per year over the past 10 years.
The Dividend Payout Ratios (DPR) are probably fine. The DPR for EPS for 2020 is 70% with 5 year coverage at 52%. This is expected to moderate to 57% in 2021. The DPR for Cash Flow per Share for 2020 is 33% with 5 year coverage at 21%. The DPR for Free Cash Flow in 2020 is negative with 5 year coverage at 64%. The FCF is expected to be negative in 2021 also.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2020 is good at 0.21. They increased their debt by 55% in 2021, but the ratio is still good at 0.33. The Liquidity Ratio for 2020 is low at 1.32, but if you had in cash flow after dividends it is good at 1.61. The Debt Ratio is good at 2.00. The Leverage and Debt/Equity Ratios are good and low at 2.00 and 1.00.
The Total Return per year is shown below for years of 5 to 30 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 | 14.87% | 5.47% | 3.50% | 1.97% |
| 2010 | 10 | 14.87% | 11.32% | 9.50% | 1.83% |
| 2005 | 15 | 9.68% | 5.50% | 4.21% | 1.28% |
| 2000 | 20 | 7.18% | 8.15% | 6.57% | 1.58% |
| 1995 | 25 | 4.46% | 8.02% | 6.30% | 1.72% |
| 1990 | 30 | 1.75% | 4.76% | 3.23% | 1.53% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 22.43, 28.04 and 33.65. The corresponding 10 year ratios are 18.86, 22.48 and 26.74. The corresponding historical ratios are 16.6, 19.72 and 24.60. The current P/E Ratio is 23.21 based on a stock price of $29.24 and EPS estimate for 2021 of $1.26. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $21.80. The 10 year low, median, and high median Price/Graham Price Ratios are 1.14, 1.35 and 1.58. The current P/GP Ratio is 1.34 based on a stock price of $29.24. The current ratio is between the low and median ratios of the 10 year median 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 1.74. The current P/B Ratio is 1.75 based on a stock price of $29.24, Book Value of $2,067M and Book Value per Share of $16.76. The current ratio is 0.07% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 9.83. The current P/CF Ratio is 10.44 based on a stock price of $29.24, Cash Flow per Share estimate for 2021 of $2.80 and Cash Flow of $345M. The current ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 1.43%. The current dividend yield is 2.46% based on Dividends of $0.72 and a stock price of $29.24. The current dividend yield is 72% above the historical median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.42%. The current dividend yield is 2.46% based on Dividends of $0.72 and a stock price of $29.24. The current dividend yield is 73% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 0.85. The current P/S Ratio is 0.79 based on Revenue estimate for 2021 of $4,583M, Revenue per Share of 37.15 and a stock price of $29.24. The current ratio is 7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is reasonable to expensive. The P/S Ratio test is saying the stock price is reasonable and below the median. The dividend tests are showing the stock as expensive. The 10 year dividend yield test is telling because they started to raise dividends 10 years ago. Why this test is important is because dividends can be thought of as showing the true financials of a company. Dividends have to paid in cash, so the company has to have the cash to cover the dividends. However, it is only the dividend tests that are showing the stock price as expensive, so, there is the possibility the stock price is reasonable..
Is it a good company at a reasonable price? The price from most of the testing is showing the stock price as reasonable. Analysts expect the stock price to rise a lot in the next 12 months. The range is from $36 to $45 with $41.50 as the median. This company has been around for a very long time and I have some 30 years of data. It is just in the last 10 years has it become a dividend growth company. EPS has gone up (25% and 17% per year over the past 5 and 10 years), but Revenue has not (and is up by 5%% and down by 1% per year over the past 5 and 10 years). I would personally not be quick to purchase this stock.
When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $41.50. This implies a total return of 78.59% with 76.13% from capital gains and 2.46% from dividends.
A couple of analysts like this stock on Stock Chase but one is worried about the new debt the company has taken on. Christopher Liew Motley Fool thinks this stock should appeal to income investors. Joey Frenette Motley Fool thinks this company is cheap and has compelling catalysts. The company announced on Newswire that they were purchasing 4 pig farms in Saskatchewan. A recent Simply Wall Street Report on Yahoo Finance talks about who owns this company.
Maple Leaf Foods Inc is a consumer packaged meats company, originally from Canada. The company produces prepared meats and meals, fresh pork, and poultry and turkey products. The firm also has agribusiness operations. These operations supply livestock to the meat products business operations. The company's main markets are Canada, the United States, Japan, and China. Its web site is here Maple Leaf Foods Inc.
The last stock I wrote about was about was Neighbourly Pharmacy Inc (TSX-NBLY, OTC-none) ... learn more. The next stock I will write about will be KP Tissue Inc (TSX-KPT, OTC-KPTSF) ... learn more on Friday, December 31, 2021 around 5 pm. Tomorrow on my other blog I will write about Best Charities.... learn more on Thursday, December 30, 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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