Is it a good company at a reasonable price? The price is probably reasonable. This stock has very low ratios. However, the ratios seemed to always be low for this stock. The other thing to note is that the dividends are now higher than they have ever been. Generally, it is considered that management feels good above the future when they raise dividends. Last dividend increase was 33%.
I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). Goodfellow looks like a good small cap stock. It was being pushed by Investor Reporter. The report is no longer on Advice for Investors site.
When I was updating my spreadsheet, I noticed that I certainly bought this stock at the wrong time. I have now had this stock for some 11 years and have made 3.19% per year which includes a capital gain of 1.01% and dividends of 2.18%.
The other thing that I noticed is Revenue went up some 36% and EPS went up 175% in 2021. The cost of the revenue, relatively went down. That is Total Expenses/Revenue Ratio for 2020 was 0.96 and for 2021 is 0.76.
If you had invested in this company in December 2011, $1,002.96 you would have bought 126 shares at $7.96 per share. In December 2021, after 10 years you would have received $378 in dividends. The stock would be worth $1,266.30. Your total return would have been $1,644.30.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.96 | $1,002.96 | 126 | 10 | $378.00 | $1,266.30 | $1,644.30 |
The dividend yields are good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 6.36%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 3.38%, 3.42% and 3.64%.
The dividend growth has recently been low at 4.14% per year over the past 5 years. However, a lot is buried under the value. They decreased the dividends and then did not pay any dividends in 2016 and 2016. The last dividend increase was in 2021 and it was for 33%. This was after two big increases in 2020 and 2021. Dividends has varied a lot over time. In the past 30 years they have increased dividends 18 times and decreased them 10 times.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 was 14% with 5 year coverage at 18%. The DPR for Cash Flow per Share for 2021 was 9% with 5 year coverage also at 9%. The company also provides Funds from Operations (FFO) values. The DPR for FFO for 2021 is 9% with 5 year coverage at 7%. The DPR for Free Cash Flow (FCF) for 2021 is 5% with 5 year coverage at 4%.
Debt Ratios are good. The company has no long term debt. The Liquidity Ratio at 2.90 is high and good. The Debt Ratio at 3.10 is also high and good. The Leverage and Debt/Equity Ratios are low and good at 1.48 and 0.48, respectively.
The Total Return per year is shown below for years of 5 to 30 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 4.14% | 6.31% | 2.39% | 3.91% |
| 2011 | 10 | 14.87% | 6.38% | 2.36% | 4.02% |
| 2006 | 15 | 0.00% | -1.11% | -3.98% | 2.87% |
| 2001 | 20 | 7.18% | 11.78% | 4.09% | 7.69% |
| 1996 | 25 | 8.98% | 11.51% | 4.62% | 6.89% |
| 1991 | 30 | 10.50% | 11.39% | 5.24% | 6.15% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 5.22, 4.17 and 3.76. The corresponding 10 year ratios are 9.81, 10.65 and 11.49. The corresponding historical ratios are 7.08, 8.11 and 9.50. The current P/E Ratio is 2.85 based on a stock price of $12.58 and EPS of last 12 months of $4.42. The current P/E Ratio is below the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $43.24. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.58 and 0.63. The current P/GP Ratio is 0.29 based on a stock price of $12.58. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. Also, the P/GP Ratios are very low. A good ratio is 1.00 to 1.20, but these are a lot lower than what is a good ratio.
I get a 10 year median Price/Book Value per Share Ratio of 0.63. The current P/B Ratio is 0.67 based on a Book Value of $161M, Book Value per Share of $18.80 and a stock price of $12.58. The current ratio is 6.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 3.07. The current P/CF Ratio is 3.24 based on Cash Flow for last 12 months of $33.3M, Cash Flow per Share of $21.88 and a stock price of $12.58. The current ratio is 5.6% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. The 10 year median ratio is low because of past negative ratios.
I get an historical median dividend yield of 3.64%. The current dividend yield is 6.36% based on Dividends of $0.80 and a stock price of $12.58. The current dividend yield is 75% above 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 3.42%. The current dividend yield is 6.36% based on Dividends of $0.80 and a stock price of $12.58. The current dividend yield is 86% above 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 0.14. The current P/S Ratio is 0.17 based on Revenue for past 12 months of $516M, Revenue per Share of $71.93 and a stock price of $12.58. The current ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. Although the P/S Ratio is very low. When looking at small caps, a good ratio is one below 1.00, but these are a lot lower.
Results of stock price testing is that the stock price might be reasonable. The dividend yield tests say cheap, but the P/S Ratio tests say expensive. The other tests are mainly that the stock price is reasonable, but above the median. The exception is the P/GP Ratio test. The other thing to note is that the ratios are very low.
When I look at analysts’ recommendations, I find a Strong Buy recommendation on WSJ. On Alpha Spread, it says that the DCF Valuation is $30.71 CDN$, so it is undervalued by some 59%. There seems to be no analysts really following this stock at the present time.
There are no comments on Stock Chase for this stock. It is not well followed. The last mention of Goodfellow Inc on Motley Fool was in 2014 and Benjamin Sinclair said it was struggling. A report from Simply Wall Street on Yahoo Finance says the fair value of this company is $12.23 CDN$. The company talks about their fourth quarterly results on Newswire. Simply Wall Street has an interesting report on this company on Yahoo Finance. Simply Wall Street lists two risks of unstable dividend track record; and does not have a meaningful market cap (CA$111M). In this case they are right about the unstable dividend track record.
Goodfellow Inc is engaged in remanufacturers and distributors of lumber products and hardwood flooring products. It is engaged in the domestic and export sales of wholesale distribution of wood products, and remanufacturing, distribution, and brokerage of lumber. Its web site is here Goodfellow Inc.
The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Friday, April 8, 2022 around 5 pm. Tomorrow on my other blog I will write about Something to Buy April 2022.... learn more on Thursday, April 7, 2022 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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