Is it a good company at a reasonable price? The stock price is currently cheap. I own shares in my TFSA, which is my fooling around money. I bought some more shares in this company today for my TFSA account. This stock is about music and I do not think that people are going to stop listening to music.
I own this stock of Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE). I was following Newfoundland Capital Corp and Stingray Bought them out. Also, I read the blub on CEO, Eric Boyko. The site says he is an entrepreneur with nearly two decades of experience with start-ups. Mr. Boyko has extensive expertise in early stage business innovations. The financial year for this company ends at March 31 each year, so the annual report I am looking at is for March 31, 2022.
When I was updating my spreadsheet, I noticed there is insider buying and this is always a good thing. I have not done well on this stock to June 2022. I have a negative total return of 3.74% with a capital loss of 7.97% and dividends of 4.23%. This is after holding this stock for 4 years.
If you had invested in this company in December 2014, $1000.50 you would have bought 138 shares at $7.25 per share. In December 2021, after 7 years you would have received $216.66 in dividends. The stock would be worth $216.66. Your total return would have been $1097.10.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.25 | $1,000.50 | 138 | 7 | $216.66 | $880.44 | $1,097.10 |
The dividend yields are moderate with dividend growth moderate. The current dividend yield is good (5% to 6% ranges) at 4.84%. The 5 and 6 year median dividend yields are moderate (2% to 4% ranges) at 4.12% and 2.82%. The Dividend growth over the past 5 years has been moderate (8% to 14% ranges) at 14% per year. The last dividend increase occurred in 2020 and it was for 7.1%. Dividends have been flat since 2020 and analysts do not expect any increases over the next 3 years.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2022 is 64% with 5 year coverage at 119%. The DPR for Adjusted Earnings per Share (AEPS) is 38% with 5 year coverage at 39%. The DPR for Cash Flow per Share (CFPS) is 24% with 5 year coverage at 25%. The 33% with 5 year coverage at 35%.
Debt Ratios need improving. The Long Term Debt/Market Cap is 0.65. It rises to 0.82 in 2023. This is because of a drop in the stock price. This is higher than I like to see. The Liquidity Ratio for 2022 is 0.87. If you add in Cash Flow after dividends, it is just 1.34. I prefer this ratio to be 1.50 or higher. The Debt Ratio for 2022 is 1.45 and I also prefer this to be 1.50 or higher. The Leverage and Debt/Equity Ratios are 3.23 and 2.23. I prefer these to be below 3.00 and below 2.00
The Total Return per year is shown below for years of 5 to 7 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 | 14.12% | -2.59% | -6.04% | 3.45% |
| 2014 | 7 | 15.71% | 1.42% | -1.81% | 3.23% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.57, 15.51 and 17.45. The corresponding 10 year ratios are 18.06, 24.86 and 28.45. The corresponding historical ratios are 18.06, 24.86 and 28.45. The current P/E Ratio is 9.69 based on a stock price of $6.20 and EPS estimate for 2023 of $0.64. The current P/E Ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.08, 9.23 and 10.70. The corresponding 10 year ratios are 9.30, 11.82 and 13.60. The current P/AEPS Ratio is 7.29 based on AEPS estimate for 2023 of $0.85 and a stock price of $6.20. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $7.39. The 10 year low, median, and high median Price/Graham Price Ratios are 1.41, 1.78 and 2.23. The current P/GP Ratio is 0.84 based on a stock price of $6.20. The current 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 10-year median Price/Book Value per Share Ratio of 2.09. The current P/B Ratio is 1.63 based on a stock price of $6.20, Book Value of $273.5M and Book Value per Share of $3.79. The current P/B Ratio is 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.23. The current P/CF Ratio is 4.63 based on Cash Flow per Share estimate for 2023 of $1.34, Cash Flow of $96.6M and a stock price of $6.20. The current P/CF Ratio is 54% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 2.82%. The current dividend yield is 4.84% based on dividends of $0.30 and a stock price of $6.20. The current dividend yield is 72% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 6 year median dividend yield of 2.82%. The current dividend yield is 4.84% based on dividends of $0.30 and a stock price of $6.20. The current dividend yield is 72% above the 6 year dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.86. The current P/S Ratio is 1.37 based on Revenue estimate for 2023 of $326M, Revenue per Share of $4.52 and a stock price of $6.20. The current ratio is 26% 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 relatively cheap. The dividend yield test shows this and it is confirmed by the P/S Ratio test. All the other tests are pointing to the stock price as being relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $8.00. This implies a Total Return of 33.87% with 29.03% from capital gains and 4.84% from dividends based on a stock price of $6.20.
Few analysts cover this stock on Stock Chase. Stock Chase gives it 1 star out of 5 stars. It is not on the Money Sense list. Christopher Liew on Motley Fool recently looked at this stock. Christopher Liew on Motley Fool talks about this company teaming up with Dollarama. The company put out a Press Release on their fourth quarter results.
Simply Wall Street on Yahoo Finance reviews this company. Simply Wall Street lists 3 risks with this company of has a high level of debt; unstable dividend track record and profit margins (11.8%) are lower than last year (18.2%).
Stingray Group Inc is a music, media, and technology company. The company generates maximum revenue from the Broadcasting and commercial music segment. Its web site is here Stingray Digital Group Inc.
The last stock I wrote about was about was Loblaw Companies Ltd (TSX-L, OTC-LBLCF) ... learn more. The next stock I will write about will be BlackBerry Ltd (TSX-BB, NYSE-BB) ... learn more on Friday, August 5, 2022 around 5 pm. Tomorrow on my other blog I will write about Something to Buy August 2022.... learn more on Thursday, August 4, 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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