Is it a good company at a reasonable price? The stock price is cheap. Shareholders have done quite well over the past 25 years. It is down over the past 5 years, but so are a lot of stocks. However, I would think that the level of risk is rather high. They have been raising their dividends after cutting them in 2019. This is a good sign. They do seem to get into financial trouble occasionally.
I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and they say it is of average risk. The MPL Communication’s site is here. Ryan Irvine of Keystone also likes this company. This was in 2013 when I started to follow this stock.
When I was updating my spreadsheet, I noticed analysts last year gave an EPS estimate of $1.22, an increase of some 47%. They were close as EPS came in at $1.20 an increase of 45%.
I noticed that this stock took off after 1983, but crashed in 1993. This accounts for the very low returns for the long term low returns for years 30 to 38. There is a problem with this stock trading in US$ as it is not often traded in the US.
If you had invested in this company in December 2011, $1,005.53 you would have bought 123 shares at $8.18 per share. In December 2021, after 10 years you would have received $482.78 in dividends. The stock would be worth $1,833.93. Your total return would have been $2,316.71.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.18 | $1,005.53 | 123 | 10 | $482.78 | $1,833.93 | $2,316.71 |
The dividend yields are moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4%) at 3.13%. The 5, 10 and historical dividend yields are also moderate at 3.22%, 2.48% and 2.48%. Dividends were cut 66% in 2019. The company started to raise the dividends again in 2020. The last dividend increase was in 2021 and it was for 43%. Current dividends are still 31% lower than they were in 2018.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2022 is 20% with 5 year coverage at 40%. The DPR is expected to be around 18% in 2022. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 18% with 5 year coverage at 33%. The DPR for Cash Flow per Share (CFPS) is 9% with 5 year coverage at 14%. The DPR for Free Cash Flow (FCF) for 2022 is 89% with 5 year coverage at 36%. The DPR for FCF in 2022 is expected to be 17%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is 0.65. (Same analysts thinks this is best under 0.50 and some under 1.00). The Liquidity Ratio for 2022 is good at 2.17. The Debt Ratio is good at 1.67. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.49 and 1.49
The Total Return per year is shown below for years of 5 to 38 to the end of 2021 in CDN$. 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 | -9.83% | -3.47% | -5.66% | 2.19% |
| 2011 | 10 | 4.74% | 9.95% | 6.19% | 3.76% |
| 2006 | 15 | 7.83% | 12.17% | 8.52% | 3.65% |
| 2001 | 20 | 6.88% | 12.93% | 9.56% | 3.37% |
| 1996 | 25 | 8.22% | 6.25% | 1.96% | |
| 1991 | 30 | 2.61% | 1.48% | 1.13% | |
| 1986 | 35 | -2.34% | -3.08% | 0.74% | |
| 1983 | 38 | 0.97% | 0.07% | 0.90% |
The Total Return per year is shown below for years of 5 to17 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 | -8.79% | -2.98% | -5.23% | 2.24% |
| 2011 | 10 | 2.50% | 8.74% | 5.02% | 3.73% |
| 2006 | 15 | 7.23% | 11.48% | 7.66% | 3.83% |
| 2004 | 17 | 6.55% | 9.18% | 6.01% | 3.17% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.31, 13.88 and 17.24. The corresponding 10 year ratios are 9.91, 15.13 and 21.02. The corresponding historical ratios are 8.30, 10.42 and 12.99. The current P/E Ratio is 5.72 based on a stock price of $12.80 and EPS estimate for 2022 of $2.24 ($1.70 US$). 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median P/AEPS Ratios are 6.51, 8.12 and 10.32. The corresponding 10 year ratios are 7.36, 11.74 and 16.12. The current ratio is 7.20 based on a stock price of $12.80 and AEPS estimate for 2022 of $1.78 ($1.35 US$). This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $26.97. The 10-year low, median, and high median Price/Graham Price Ratios are 0.72, 1.12 and 1.47. The current ratio is 0.47 based on a stock price of $12.80. The 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 10-year median Price/Book Value per Share Ratio of 2.03. The current P/B Ratio is 0.89 based on a Book Value of $480M, Book Value per Share of $14.44 and a stock price of $12.80. The current ratio is 56% 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 4.92. The current P/CF Ratio is 4.70 based on Cash Flow per Share estimate for 2022 of $2.72 ($2.07 US$). The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 2.48%. The current dividend yield is 3.13% based on a dividend of $0.40 and a stock price of $12.80. The current dividend yield is 26% 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 also of 2.48%. The current dividend yield is 3.13% based on a dividend of $0.40 and a stock price of $12.80. The current dividend yield is 26% 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 0.41. The current P/S Ratio is 0.31 based on a stock price of $12.80, Revenue estimate for 2022 of $1,369M ($1,040M US$). The current ratio is 24% 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. The dividend yield tests show this and it is confirmed by the P/S Ratio tests. Most of the other tests say the same thing. I did not do testing in US$, although I would get the same results, because this stock is seldom bought in US$. The reporting on this stock and the estimates are in US$. The dividend is paid in CDN$.
When I look at analysts’ recommendations, I find Buy (1) and Hold (2). The consensus would be a Hold. The 12 month consensus price is $18.91. This implies a total return of 50.83% with 47.74% from capital gains and 3.13% from dividends based on a current stock price of $12.80.
There are few entries, and none recent on Stock Chase. Analysts do not like this stock and Stock Chase gives the company 1 star out of 5. It is not on the Money Sense list. Daniel Da Costa on Motley Fool says to buy this stock while it is cheap. He says they have no lost money since 2012 and that is true. My data goes back to 1983 and since then they have lost money in 10 years. Stephanie Bedard-Chateauneuf on Motley Fool is impressed with the recent dividend increase of 43%, but does not mention the big increase was after a big decrease. In a Press Release the company talks about their fourth quarter 2021 results. The company talks about their second quarter results in a Press Release.
Simply Wall Street reviews this stock via Yahoo Finance. Simply Wall Street notes two warnings of debt is not well covered by operating cash flow and dividend of 3.13% is not well covered by earnings. I get a current Long Term Debt to Cash Flow of 3.6 years. Generally, 3 years or better is a good ratio.
High Liner Foods Inc is a Canadian company which is mainly engaged in the processing and marketing of prepared and packaged frozen seafood products. The company sells its products to institutions, health care facilities, and quick-service family and casual dining establishments. Its web site is here High Liner Foods.
The last stock I wrote about was about was Capital Power Corp (TSX-CPX, OTC-CPRHF) ... learn more. The next stock I will write about will be Titanium Transportation Group Inc (TSX-TTR, OTC-TTTGF) ... learn more on Tuesday, September 6, 2022 around 5 pm.
Also, on my book blog I have put a review of the book The Journey of Humanity by Oded Galor learn more...
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.
No comments:
Post a Comment