Is it a good company at a reasonable price? The stock price seems reasonable. This company has done very well for shareholders over the longer term. This would be a good stock to have in a portfolio if you are building a dividend portfolio. It would be different if you were living off a dividend portfolio as the dividend yield is very low. Occasionally this stock pays a dividend yield of 1% and if and when this happens again, it would be a good time to buy for a dividend portfolio you are living off of. This is because of the high rate of dividend increases.
I do not own this stock of Alimentation Couche-Tard Inc (TSX-ATD.B, OTC-ANCUF). In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. The only problem I had with it then was it had no dividend. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. By the year end I bought more as TD Bank said it was a good time to buy this stock. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so it was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
When I was updating my spreadsheet, I noticed analysts expected the revenue to increase by 21.61% to $55,651. However, revenue increased by 37.26% to $62,810. Analysts expected the EPS to decrease by 9.8% to $2.20, but instead the EPS increased by 3.3% to $2.52.
If you had invested in this company in December 2011, $1,003.83 you would have bought 190 shares at $5.28 per share. In December 2021, after 10 years you would have received $351.10 in dividends. The stock would be worth $10,070.00. Your total return would have been $10,421.10.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.28 | $1,003.83 | 190 | 10 | $351.10 | $10,070.00 | $10,421.10 |
The dividend yields are low with dividend growth good. The current dividend yield is low (below 2%) and 0.75%. The 5, 10 and historical dividend yields are also low at 0.60%, 0.67% and 0.63%. These are very low dividend yields. I do not buy stocks when the dividend yield is below 1%. I had this for awhile and bought when the dividend yield hit just over 1%. The dividend growth is good (15% or higher) at 18.7% per year over the past 5 years. The last dividend increase was in 2022 and it was for 25.7%.
The Dividend Payout Ratios (DPR) are low and very good. The DPR for EPS for 2022 is 12% with 5 year coverage at 10%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 12% with 5 year coverage at 10%. The DPR for Cash Flow per Share (CFPS) is 7% with 5 year coverage at 6%. The DPR for Free Cash Flow (FCF) for 2022 is 8% with 5 year coverage at 8%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is low and good at 0.11. The Liquidity Ratio for 2022 is too low at 1.22, but if you add in cash flow after dividends, it is 1.82. I like it to be 1.50 or higher. The Debt Ratio for 2022 is 1.73 which is good. The Leverage and Debt/Equity Ratios are fine at 2.38 and 1.38 respectively.
The Total Return per year is shown below for years of 5 to 29 to the end of 2021 in CDN$. 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 | 18.72% | 12.42% | 11.73% | 0.69% |
| 2011 | 10 | 24.03% | 26.96% | 25.93% | 1.03% |
| 2006 | 15 | 22.71% | 19.01% | 18.37% | 0.65% |
| 2001 | 20 | 15.39% | 22.21% | 21.55% | 0.67% |
| 1996 | 25 | 27.39% | 26.62% | 0.77% | |
| 1992 | 29 | 33.05% | 32.05% | 1.00% |
The Total Return per year is shown below for years of 5 to 29 to the end of 2021 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2016 | 5 | 19.87% | 13.79% | 13.09% | 0.70% |
| 2011 | 10 | 20.78% | 24.16% | 23.23% | 0.94% |
| 2006 | 15 | 21.53% | 18.33% | 17.67% | 0.66% |
| 2001 | 20 | 14.43% | 23.69% | 22.88% | 0.80% |
| 1996 | 25 | 25.31% | 24.59% | 0.72% | |
| 1992 | 29 | 32.01% | 30.99% | 1.03% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.11, 15.12 and 17.73. The corresponding 10 year ratios are 12.62, 15.89 and 18.94. The corresponding historical ratios are 12.50, 15.96 and 19.85. The current P/E Ratio is 17.61 based on a stock price. The current P/E Ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. Since the ratios over the 5, 10 and historical periods are quite consistent, this would be a good test. This testing is in CDN$.
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.33, 15.38 and 17.79. The corresponding 10 year ratios are 12.87, 16.11 and 19.74. The current P/AEPS Ratio is 17.29 based on a stock price of $45.13 and AEPS estimate for 2023 of $2.61. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$, but you will get similar results in CDN$.
I get a Graham Price of $33.86. The 10-year low, median, and high median Price/Graham Price Ratios are 1.21, 1.50 and 1.76. The current P/GP Ratio is 1.71 based on a stock price of $58.24. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 3.32. The current P/B Ratio is 3.75 based on a Book Value of $12,438M, Book Value per Share of $12.04 and a stock price of $45.13. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$, but you will get similar results in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.92. The current P/CF Ratio is 11.48 based on Cash Flow per Share estimate for 2023 of $3.93, Cash Flow of $4,059M and a stock price of $45.13. The current ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$, but you will get similar results in CDN$.
I get an historical median dividend yield of 0.63%. The current dividend yield is 0.76% based on a stock price of $58.24 and dividends of $0.444. The current ratio is 19.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get an historical median dividend yield of 0.60%. The current dividend yield is 0.76% based on a stock price of $58.24 and dividends of $0.444. The current ratio is 25.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 0.57. The current P/S Ratio is 0.64 based on Revenue estimate for 2023 of $72,424M, Revenue per Share of $70.12 and a stock price of $45.13. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$, but you will get similar results in CDN$.
Results of stock price testing is that the stock price is probably reasonable, but above the median. The dividend yield tests show the stock price is reasonable to cheap, but this is not confirmed by the P/S Ratio test which says it is reasonable, but above the median.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (7) and Hold (2). The consensus would be a Strong Buy. The 12 month stock price is $63.04 ($48.60 US$). This implies a total return of 9% with 8.25% from capital gains and 0.76% from dividends based on a stock price of $58.24.
The last two analysts on Stock Chase think that the stock is overpriced currently. Stock Chase gives this stock 5 stars out of 5. Money Sense gives this company a C rating. Joey Frenette on Motley Fool thinks that the companies next big deal might be for Suncor’s Petro Canada retail unit. Chris MacDonald on Motley Fool is a top value stock to consider now. The company releases on Newswire its fourth quarter results for 2022. Simply Wall Street reviews this stock via Yahoo Finance. Simply Wall Street has no warning signs for this company.
Alimentation Couche-Tard Inc operates a network of convenience stores across North America, Ireland, Scandinavia, Poland, the Baltics, and Russia. Its operation is geographically divided into U.S., Europe, and Canada. Revenue from external customers fall mainly into three categories: merchandise and services, road transportation fuel, and other. Its web site is here Alimentation Couche-Tard Inc.
The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF) ... learn more. The next stock I will write about will be Exchange Income Corp (TSX-EIF, OTC-EIFZF) ... learn more on Friday, August 26, 2022 around 5 pm. Tomorrow on my other blog I will write about Compounding and Planning.... learn more on Thursday, August 25, 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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