Is it a good company at a reasonable price? I do not like the debt ratios. Very low Liquidity Ratios can cause problems in economic downturns if the company needs cash but cannot raise cash. The company hit a high in 2015 and has recovered Revenue and Cash Flow but not EPS. It is a risk and not my favourite tech at this time.
I do not own this stock of Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also. It is a Tech stock with dividends.
When I was updating my spreadsheet, I noticed EPS estimate for 2021 was a loss of $0.63, instead the company made a profit of $0.63. In the two prior years, a good profit was made because of income from discontinued operations.
The Long Term Debt/Market Cap Ratio for 2021 went down to 0.96, which is still high. The current one is back up past 1.00 at 1.34. This means that the Long Term Debt is higher than the Market Cap the company. Also, Goodwill Intangible/Market Cap Ratio is over 1.00 at 1.12 in 2021 and is now 1.09. The Liquidity Ratio is quite low at 0.85. This means that the current assets cannot cover the current liabilities. Even adding in Cash Flow after Dividends, it is on 1.30 and that is still low as I prefer it to be 1.50 or higher. The Debt Ratio has improved from 1.26 of last year to 1.48 for this year. I prefer this to be 1.50 or higher also.
The other thing I noticed is insider buying. I follow CEO, CFO, one officer, Chairman and one Director. I based the following of the officer and director on A to Z Alphabet and continue to follow that officer or director until they leave and then pick the next one based on A to Z alphabet. All the ones I am following on this stock bought shares within the last year. For example, the CEO increased his number of shares by 35% over the past year.
If you had invested in this company in December 2011, $1,035.98 you would have bought 22 shares at $47.09 per share. In December 2021, after 20 years you would have received $219.42 in dividends. The stock would be worth $822.36. Your total return would have been $1,041.78.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $47.09 | $1,035.98 | 22 | 10 | $219.42 | $822.36 | $1,041.78 |
The dividend yields are very low with dividend growth non-existent. The dividend yields are very low, almost non-existent at 0.15%. Low yields are under 2%. The company decreased the dividends by 97% in 2019. So, any dividends this company is giving out is nominal. Analyst do not see any dividend increases in the next 3 years. In fact, analysts are saying that dividends might be decreased even further.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 6%. The 5 year coverage cannot be calculated because of an earning loss in 2018. The DPR for Cash Flow per Share is 0.69% with 5 year coverage at 9%. The DPR for Free Cash Flow for 2021 is 6%. The 5 year coverage cannot be calculated because of negative FCFs.
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2021 is 0.96. This is the first time in 4 years that is it under 1.00. The current one is 1.36 because of an increase in Long Term Debt. The Liquidity Ratio for 2021 is 0.85. If you add in Cash Flow after dividends, it is still low at 1.30. I prefer this to be at least 1.50. The Debt Ratio is acceptable at 1.48. The Leverage and Debt/Equity Ratios are 3.08 and 2.08. I prefer these to be at below 3.00 and 2.00, respective. These ratios are better than last year.
The Total Return per year is shown below for years of 5 to 21 to the end of 2021 in CDN$. 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 | -49.07% | -9.97% | -10.99% | 1.02% |
| 2011 | 10 | -33.34% | 0.06% | -2.28% | 2.35% |
| 2006 | 15 | 0.74% | -0.90% | 1.64% | |
| 2001 | 20 | 2.90% | 1.50% | 1.40% | |
| 2000 | 21 | 4.43% | 2.50% | 1.93% |
The Total Return per year is shown below for years of 5 to 19 to the end of 2021 in US$. 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 | -48.48% | -9.09% | -10.11% | 1.03% |
| 2011 | 10 | -34.78% | -2.30% | -4.39% | 2.09% |
| 2006 | 15 | 0.60% | -1.09% | 1.68% | |
| 2002 | 19 | 5.73% | 3.91% | 1.82% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.27, 5.46 and 8.66. The corresponding 10 year ratios are 17.97, 21.71 and 25.39. The corresponding historical ratios are 18.00, 21.71 and 25.39. The current P/E Ratio is 58.53 based on a stock price of $34.78. This is above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. A ratio of 58.53 is a very high one and it is high because the EPS for 2022 is expected to be low at $0.59 CDN$ ($0.47 US$). This testing is in CDN$.
The P/E Ratio for 2023 is more normal. It is 15.45 based on a stock price of $34.78 and an EPS estimate for 2023 of $2.25 CDN$ ($1.78 US$). This ratio is below the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get a Graham Price of $17.02. The 10 year low, median, and high median Price/Graham Price Ratios are 1.33, 1.68 and 2.06. The current P/GP Ratio is 2.04 based on a stock price of $34.78. The current ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
The Graham Price for 2023 is 33.13. P/GP Ratio for 2023 is 105 based on a stock price of $34.78. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 2.98. The current P/B Ratio is 1.58 based on a stock price of $29.85, Book Value of $1,462M and Book Value per Share of $20.11. The current ratio is 47% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.
There is also a Book Value per Share estimate for 2022 of $19.80. This would produce a P/B Ratio of 1.37 based on a stock price of $29.85, Book Value per Share of $19.80 and Book Value of $1,440M. This ratio is 54% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 15.56. The current P/CF Ratio is 5.90 based on Cash Flow per Share estimate for 2022 of $4.60, Cash Flow of $252M and a stock price of $29.85. The current ratio is 62% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.
I get an historical median dividend yield of 1.60%. The current dividend yield is 0.15% based on dividends of $0.04 and a stock price of $29.85. The current dividend yield is 91% below the historical median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
I get a 10 year median dividend yield also of 1.60%. The current dividend yield is 0.15% based on dividends of $0.04 and a stock price of $29.85. The current dividend yield is 91% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
The 10 year median Price/Sales (Revenue) Ratio is 1.49. The current P/S Ratio is 1.09 based on Revenue estimate for 2022 of $1,813M, Revenue per Share of $24.94 and a stock price of $29.85. This ratio is 85% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.
Results of stock price testing is that the stock price is probably cheap. The Dividend Yield tests are not good because dividends were cut by 97% in 2019. The P/S Ratio test is good and it says that the stock price is cheap. The P/CF Ratio and P/B Ratio tests are good and says the stock price is cheap. If you look at the P/GP Ratio and P/E Ratio tests for 2023, they are reasonable and say the stock price is cheap. The P/GP Ratio and P/E Ratio tests for 2022 have a very low EPS for 2022, so may not be reliable.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (3) and Underperform (1). The consensus would be a Buy. The 12 months stock price of $53.42 CDN$ ($42.25 US$). This implies a total return of 53.74% with 53.60% from capital gains and 0.15% from dividends.
The last entry on Stock Chase was a Top Pick in December 2021. Stock Chase gives this company 3 stars out of 5. Christopher Liew on Motley Fool says tech stocks are down, but this one is up this year. Report was written in April 2022. Vineet Kulkarni on Motley Fool says company has a heavy debt burden, but Maxar has a recurring revenue base, which could be constructive in the long term. In a Press Release Maxar Technologies talks about their fourth quarter results. In a Press Release Maxar Technologies talks about their First Quarter of 2022 results.
Simply Wall Street has a report on Yahoo Finance about this stock. Simply Wall Street lists two risks of interest payments are not well covered by earnings and shareholders have been diluted in the past year. I must admit that I do not see the 394% increase over the past 3 years but it is up a fair bit. I am surprised that they do not mention debt as a risk. I agree that insiders are buying.
Maxar Technologies Inc is an integrated space and geospatial intelligence company with a full range of space technology solutions for commercial and government customers including satellites, Earth imagery, geospatial data, and analytics. Its operating segments include Earth Intelligence and Space Infrastructure. Its web site is here Maxar Technologies Ltd.
The last stock I wrote about was about was Ensign Energy Services (TSX-ESI, OTC-ESVIF) ... learn more. The next stock I will write about will be Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN) ... learn more on Monday, June 13, 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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