Sound bite for Twitter and StockTwits is: Dividend Growth Materials. The stock price seems reasonable. The dividend yields are low with dividend growth good. The Dividend Payout Ratios (DPR) are good. Debt Ratios are fine. See my spreadsheet on CCL Industries Inc.
Is it a good company at a reasonable price? The stock price is testing as reasonable. Because of a pass growth spurt this stock has some rather high ratios. For example, a P/E Ratio is 18.65 is on the high side. The P/GP Ratios are also high. The growth spurt ended in 2015 and you must wonder if they will have another one. However, Alpha Spread gives this stock a valuation of $67.48. So, they do not think the stock is overvalued. It is on the Money Sense list with a C rating. Although, personally, I am not interested in this stock.
I do not own this stock of CCL Industries Inc (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard about before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.
When I was updating my spreadsheet, I noticed that as the chart below shows, this stock has really taken off in the last 10 years and have earned their shareholders a lot of money. It has a stock price growth spurt from 2012, 2013, 2014 and 2015, growing 39.58%, 84.28%, 58.89%, 78.26% over these four years. Growth rates have moderated since then. From 2015 to today covering almost 7 years, total growth is 49%. So, growth over this period is at 5.88% per year (with Total Growth at 6.88% per year). See difference in 5 and 10 year investments below.
If you had invested in this company in December 2011, for $1,004.08 you would have bought 163 shares at $6.16 per share. In December 2021, after 10 years you would have received $728.28 in dividends. The stock would be worth $11,056.29.59. Your total return would have been $11,784.57.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $6.16 | $1,004.08 | 163 | 10 | $728.28 | $11,056.29 | $11,784.57 |
If you had invested in this company in December 2016, for $1,002.44 you would have bought 19 shares at $52.73 per share. In December 2021, after 5 years you would have received $61.18 in dividends. The stock would be worth $1,288.77. Your total return would have been $1,349.95.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $52.76 | $1,002.44 | 19 | 5 | $61.18 | $1,288.77 | $1,349.95 |
The dividend yields are low with dividend growth good. The current dividend yield is low (below 2%) at 1.46%. The 5 and 10 year median dividend yields are low at 1.16% and 1.12%. The historical median dividend yield is moderate (2% to 4% ranges) at 2.03%. The dividend yield has in the past broken into the 2% ranges. The dividend growth has been good (15% or higher) at 16% per year over the past 5 years. The last dividend increase was for 14% and it occurred in 2022.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 is 25% with 5 year coverage at 23%. The DPR for Adjusted Earnings per Share (AEPS) for 2021 is 25% with 5 year coverage at 22%. The DPR for Cash Flow per Share (CFPS) is 13% with 5 year coverage at 11%. The DPR for Free Cash Flow for 2021 is 28% with 5 year coverage at 23%. The number produced by CCL and another site are different but close.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is 0.14 and is good and low. The Liquidity Ratio for 2021 is good at 1.73. The Debt Ratio for 2021 is good at 1.97. The Leverage and Debt/Equity Ratios are fine at 2.04 and 1.04.
The Total Return per year is shown below for years of 5 to 34 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 | 16.00% | 6.24% | 5.15% | 1.09% |
| 2011 | 10 | 19.62% | 29.26% | 27.11% | 2.15% |
| 2006 | 15 | 16.41% | 19.43% | 17.99% | 1.45% |
| 2001 | 20 | 13.74% | 18.55% | 17.03% | 1.51% |
| 1996 | 25 | 11.44% | 14.46% | 13.28% | 1.17% |
| 1991 | 30 | 9.45% | 13.87% | 12.56% | 1.31% |
| 1987 | 34 | 9.06% | 13.36% | 11.92% | 1.44% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 18.39, 2.02, and 25.52. The corresponding 10 year ratios are 16.02, 21.24 and 25.58. The corresponding historical ratios are 11.99, 14.57 and 20.73. The current P/E Ratio is 18.65 based on a stock price of $66.95 and EPS estimate for 2022 of $3.59. This 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 $41.39. The 10-year low, median, and high median Price/Graham Price Ratios are 1.36, 1.76 and 2.07. The current P/GP Ratio is 1.62 based on a stock price of $66.95. 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. Although, the P/GP Ratios are very high. Any ratio over 1.20 is considered high.
I get a 10-year median Price/Book Value per Share Ratio of 3.38. The current P/B Ratio is 3.16 based on a Book Value of $3,823M, Book Value per Share of $18.33 and a stock price of $66.95. The current ratio is 7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. These ratios are high also.
I also have an estimate for 2022 for the Book Value per Share of $22.60. This Book Value per Share gives a P/B Ratio of 2.96 based on a stock price of $66.95 and a Book Value of $4,073M. This P/B Ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.04. The current ratio is 10.30 based on Cash Flow per Share estimate for 2022 of $6.50 and a stock price of $66.95. This ratio is 21% 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 2.03%. The current dividend yield is 1.43% based on a stock price of $66.95 and dividends of $0.96. The current dividend yield is 29% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.12%. The current dividend yield is 1.43% based on a stock price of $66.95 and dividends of $0.96. The current dividend yield is 28% 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 1.97. The current P/S Ratio is 1.89 based on Revenue estimate for 2022 of $6,382M, Revenue per Share of $35.41 and a stock price of $66.95. 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.
Results of stock price testing is that the stock price is probably reasonable. The current thinking is that the 10 year median dividend yield should be used rather than the historical one. The 10 year median dividend yield test says that the stock is cheap. The P/S Ratio test says it is reasonable. Most of the testing is showing the stock price as reasonable.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (7) and Hold (1). The consensus would be a Strong Buy. The 12 months stock price consensus is $78.40. This implies a total return of 18.98% with 17.55% from capital gains and 1.43% from dividends based on a stock price of $66.95.
Analysts in 2022 on Stock Chase think this stock is a Buy. Stock Chase gives this stock 4 stars out of 5. It is on the Money Sense list with a C Rating. Ambrose O'Callaghan on Motley Fool thinks this stock is overbought. (That is that too many people are buying and that has pushed the price up.) Christopher Liew on Motley Fool thinks this is a good stock to buy in a challenging market. The company has a press release on Yahoo about their 2021 results. The company has a press release on Accesswire about their second quarter of 2022 results.
Simply Wall Street on Yahoo Finance reviews this stock. Simply Wall Street lists to risk warnings of has a high level of debt and significant insider selling over the past 3 months.
CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments, which include The CCL segment, which generates most of the revenue, the Avery segment; the Checkpoint segment and the Innovia segment. Its geographical segments include Canada; USA and Puerto Rico; Mexico, Brazil, Chile & Argentina; Europe; and Asia, Australia, Africa & New Zealand. Its web site is here CCL Industries Inc.
The last stock I wrote about was about was Brookfield Asset Management Inc (TSX-BAM.A, NYSE-BAM) ... learn more. The next stock I will write about will be Ovintiv Inc (TSX-OVV, NYSE-OVV) ... learn more on Wednesday, October 26, 2022 around 5 pm. Tomorrow on my other blog I will write about Toxic Brew for Pension Funds .... learn more on Tuesday, October 25, 2022, O around 5 pm.
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