Is it a good company at a reasonable price? I still like this small tech stock. The stock price is cheap. I am not buying any more as I believe I have enough of this company. I am holding on to my shares as I believe that I will do better in the future. Since it is a small cap, it is rather risky.
I own this stock of Evertz Technologies Ltd (TSX-ET, OTC-EVTZF). I came across an article in G&M about ET and it seemed a good dividend paying company. It has high dividends and is probably riskier than average. The company also has a large amount of insider ownership. The financial year ends April 30 each year, so I am looking at the financial year ending April 30, 2022.
When I was updating my spreadsheet, I noticed Revenue estimate for 2022 was $412M and it came in at 441M. EPS estimate for 2022 was $0.83 and it came in at $0.94. This is always a good sign.
If you had invested in this company in December 2011, $1,008.45 you would have bought 83 shares at $12.15 per share. In December 2021, after 10 years you would have received $926.28 in dividends. The stock would be worth $1,090.62. Your total return would have been $2,016.90.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.15 | $1,008.45 | 83 | 10 | $926.28 | $1,090.62 | $2,016.90 |
The dividend yields are good with dividend growth is flat. The current dividend yield is good (5% to 6% ranges) at 5.16%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 4.40% 4.28% and 3.42%. The current dividends have been flat since 2016, with a dip in the dividends in 2021. The company gave out a special dividend in 2022 and in 2020.
The Dividend Payout Ratios (DPR) are better without the special dividends, but still a bit high. The DPR for EPS for 2022 is 183% with 5 year coverage at 191%. If we exclude the special dividends granted in 2020 and 2022, the DPR for EPS for 2022 is 77% and with a 5 year coverage at 83%. The DPR for Cash Flow per Share (CFPS) for 2022 is 122% with 5 year coverage at 91%. If we exclude the Special dividends paid, the DPR for CFPS for 2022 is 51% with 5 year coverage at 58%. The DPR for Free Cash Flow (FCF) for 2022 is 87% with 5 year coverage at 81%.
Debt Ratios are good. As of 2022, the company has no Long Term Debt. Before 2022, the Long Term Debt was so low that the ratio was 0.00. The Liquidity Ratio for 2022 is 1.97. The Debt Ratio is 2.25. The Leverage Debt/Equity Ratios for 2022 are 1.80 and 0.80.
The Total Return per year is shown below for years of 5 to 15 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 | 0.00% | 1.99% | -4.90% | 6.89% |
| 2011 | 10 | 4.58% | 9.59% | 0.79% | 8.81% |
| 2006 | 15 | 9.58% | 5.53% | -0.23% | 5.76% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 14.47, 16.27 and 21.33. The corresponding 10 year ratios are 14.86, 17.23 and 20.26. The corresponding historical ratios are 14.47, 17.70 and 20.24. The current P/E Ratio is 17.01 based on a stock price of $13.95 and EPS estimate for 2023 of $0.82. 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 Graham Price of $7.48. The 10-year low, median, and high median Price/Graham Price Ratios are 1.49, 1.70 and 1.93. The current P/GP Ratio is 1.87 based on a stock price of $13.95. 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 10-year median Price/Book Value per Share Ratio of 3.55. The current P/B Ratio is 1.60 based on a Book Value of $230.94, Book Value per Share of $3.03 and a stock price of $13.95. The current ratio is 30% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.87. The current ratio is 7.75 based on Cash Flow per Share estimate for 2023 of $1.80, Cash Flow of $137M, and a stock price of $13.95. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.00%. The current dividend yield is 5.16% based on dividends of $0.72 and a stock price of $13.95. The current dividend yield is 29% 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 4.28%. The current dividend yield is 5.16% based on dividends of $0.72 and a stock price of $13.95. The current dividend yield is 20.7% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 3.14. The current P/S Ratio is 2.32 based on a stock price of $13.95, Revenue estimate for 2023 of $458M and Revenue per Share of $6.01. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. Both the dividend yield tests are saying this as is the P/S Ratio test. All the stock price tests are good, including the P/E Ratio test as P/E Ratios are consistent. Most tests are looking to the future, except the P/B Ratio test which is showing how the company is doing currently. The future looking tests show that the stock is relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $16.33. This implies a total return of 22.22% with 17.06% from capital gains and 5.16% from dividends.
Not much in comments lately on Stock Chase. Some analysts feel the company pays out too much of their cash flow in dividends. Christopher Liew on Motley Fool says this company is a rare tech gem with dividends. Ambrose O'Callaghan on Motley Fool says this tech company is too often ignored. The company talks on Newsfile about their fourth quarter 2022 results. Simply Wall Street on Yahoo Finance talks about who owns this company. They have one warning of unstable dividend track record.
Evertz Technologies Ltd is a Canadian provider of telecommunications equipment and technology solutions to the television broadcast and new-media industries. More than half of the firm's revenue is generated in the United States. Its web site is here Evertz Technologies Ltd.
The last stock I wrote about was about was Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF) ... learn more. The next stock I will write about will be Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more on Friday, August 12, 2022 around 5 pm. Tomorrow on my other blog I will write about Wealthsimple Trading.... learn more on Thursday, August 11, 2022 around 5 pm.
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