Wednesday, December 6, 2023

Magna International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Results of stock price testing is that the stock price is reasonable and maybe cheap. Debt Ratios are fine, but liquidity could be improved. The Dividend Payout Ratios (DPR) are fine. The current dividend yield is moderate with dividend growth moderate. See my spreadsheet on Magna International Inc.

Is it a good company at a reasonable price? Because of the volatility of dividends, this company would not be the sort I would invest in currently. The company is selling at a reasonable price and it may even by cheap accounting to the dividend testing.

I do not own this stock of Magna International Inc (TSX-MG, NYSE-MGA), but I used to. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold. Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy.

When I was updating my spreadsheet, I noticed EPS and AEPS was lower in 2022 but are expected to recover in 2023. Expenses were high in 2022 due to impairments to operations and Russia and losses on some investments. AEPS was $5.13 in 2021, $4.10 in 2022, and are expected to be $5.52 this year. EPS was $5.00 in 2021, $2.03 in 2022, and are expected to be $5.01 this year.

I have data for dividends for the last 34 years and dividends increased in 24 of these years and was decreased in 7 of those years. Even though this company is on the three dividend lists that I follow (probably because the last decrease was in 2009), I have to wonder if this is a good dividend growth stock because of the volatility in dividends in the past. I have invested in stock that have had one decrease over a number of years, because economic problems or necessary reorganizations can happen. But that is my limit.

The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.32%. The 5 and 10 year median dividend yields are also moderate at 2.75%, 2.28%. The historical median dividend yield is low (below 2%) at 1.97%. The dividend increases are moderate (8% to 14% ranges) at 10% per year over the past 5 years. The last dividend increase was in 2023 and it was for 2.2%. The dividends have been quite volatile for this stock. I have data for the past 34 years and dividends were increased in 24 years and decreased in 7 years.

The Dividend Payout Ratios (DPR) are fine. The Dividend Payout Ratios (DPR) are good. The DPR for 2022 for Earnings per Share (EPS) is 89% with 5 year coverage at 36%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 44% with 5 year coverage at 32%. The DPR for 2022 for Cash Flow per Share (CFPS) is 21% with 5 year coverage at 15%. The DPR for 2022 for Free Cash Flow (FCF) is 124% with 5 year coverage at 27%.

Item Cur 5 Years
EPS 88.67% 36.32%
AEPS 43.90% 32.35%
CFPS 21.29% 15.25%
FCF 124.15% 27.49%

Debt Ratios are fine, but liquidity could be improved. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.18 and currently at 0.26. The Liquidity Ratio for 2022 is a bit low at 1.14 and 1.11 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.28 and 1.29. I prefer this ratio to be at 1.50 or above. The Debt Ratio for 2022 is fine at 1.69 and 1.59 currently. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.54 and 1.50 and currently at 2.70 and 1.70.

Type Year End Ratio Curr
Lg Term R 0.18 0.26
Intang/GW 0.15 0.22
Liquidity 1.14 1.11
Liq. + CF 1.28 1.29
Debt Ratio 1.69 1.59
Leverage 2.54 2.70
D/E Ratio 1.50 1.70

The Total Return per year is shown below for years of 5 to 34 to the end of 2022 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.
2017 5 13.11% 4.13% 1.32% 2.82%
2012 10 16.03% 15.37% 11.84% 3.53%
2007 15 15.41% 11.77% 9.53% 2.25%
2002 20 7.86% 8.46% 6.64% 1.82%
1997 25 10.86% 6.76% 5.14% 1.61%
1992 30 13.83% 11.27% 8.80% 2.47%
1988 34 9.26% 13.02% 10.11% 2.91%

The Total Return per year is shown below for years of 5 to 34 to the end of 2022 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.
2017 5 10.35% 2.61% -0.17% 2.79%
2012 10 12.59% 11.65% 8.43% 3.22%
2007 15 13.01% 9.49% 7.09% 2.40%
2002 20 8.69% 9.61% 7.24% 2.37%
1997 25 11.10% 7.53% 5.57% 1.96%
1992 30 13.59% 11.04% 8.46% 2.58%
1988 34 8.90% 12.59% 9.65% 2.94%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.01, 16.90, and 19.76. The corresponding 10 year ratios are 8.05, 9.66 and 11.71. The corresponding historical ratios are 8.48, 11.83 and 13.11. The current P/E Ratio is 11.13 based on a stock price of $75.72 and EPS estimate for 2023 of $6.80 ($5.01 US$). 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 CDN$.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 7.10, 12.37 and 18.61. The corresponding 10 year ratios are 7.34, 10.35 and 12.60. The current P/AEPS Ratio is 10.12 based on a stock price of $55.85 and AEPS estimate for 2023 of $5.52. The current ratio is between low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.

I get a Graham Price of $92.41. The 10-year low, median, and high median Price/Graham Price Ratios are 0.66, 0.88 and 1.06. The current P/GP Ratio is 0.82 based on a stock price of $75.72. The current P/GP Ratio is between the low and median ratios of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.

I get a 10-year median Price/Book Value per Share Ratio of 1.63. The current P/B Ratio is 1.36 based on a stock price of $55.85, Book Value of $11,748M, and Book Value per Share of $41.09. The current ratio is 17% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.

I also have a Book Value per Share (BVPS) estimate for 2023 of $42.90. This implies a P/B Ratio of 1.30 for a Stock Price of $55.85 and with a Book Value of $12,266M. This ratio is 20% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.

I get a 10-year median Price/Cash Flow per Share Ratio of 5.58. The current P/CF Ratio is 5.53 based on Cash Flow per Share estimate for 2023 of $10.10, Cash Flow of $2,888M and a stock price of $55.85. The current ratio is .9% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.

I get an historical median dividend yield of 1.99%. The current Dividend Yield is 3.29% based on dividends of $1.84 and a stock price of $55.85. The current yield is 66% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.

I get a 10 year median dividend yield of 2.33%. The current Dividend Yield is 3.29% based on dividends of $1.84 and a stock price of $55.85. The current yield is 42% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.

The 10-year median Price/Sales (Revenue) Ratio is 0.46. The current P/S Ratio is 0.37 based on Revenue estimate for 2023 of $42,649M, Revenue per Share of $149.16 and a stock price of $55.85. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.

Results of stock price testing is that the stock price is reasonable and maybe cheap. The dividend yield tests are saying the stock price is relatively cheap. The P/S Ratio test is saying the stock price is reasonable, but it is almost in the cheap area. Most of the other tests are saying the stock price is reasonable.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (6), and Hold (10). The consensus would be a Buy. The 12 month stock price consensus is $97.35 ($71.69 US$) with a high of $105.09 ($77.39 US$) and low of $91.37 ($67.29 US$). With the consensus price of $97.35, the implied total return would be 31.86% with 28.56% from capital gains and 3.30% from dividends.

Some analysts do not like this stock on Stock Chase. One was bearish on the auto sector because of EV cars. Stock Chase gives this stock 4 stars out of 5. This company is on the dividend lists that I follow. Aditya Raghunath on Motley Fool thinks this is a stock to buy and hold for the next decade. Amy Legate-Wolfe on Motley Fool thinks you should consider buying Magna. The company issued a press release on Global Newswire about its 2022 year end results. The company put out a press release on Global Newswire about their third quarter of 2023.

Simply Wall Street put out a report on this stock via Yahoo Finance. They suggest caution when dealing with this company. Simply Wall Street gives this stock 3 and one half stars out of 5. They list two warnings of dividend of 3.28% is not well covered by cash flows; and large one-off items impacting financial results.

Magna International supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contract vehicle assembly. In 2022, roughly 50% of Magna's revenue came from North America while Europe accounted for approximately 38%. Its web site is here Magna International Inc.

The last stock I wrote about was about was Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more. The next stock I will write about will be Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more on Friday, December 8, 2023 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2023 .... learn more on Thursday, December 7 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, December 4, 2023

Methanex Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. Results of stock price testing is that the stock price is probably cheap. Some Debt Ratios could be improved like the Leverage and Debt/Equity Ratios. The Dividend Payout Ratios (DPR) are fine. The current dividend yield is low with dividend growth restarting. See my spreadsheet on Methanex Corp.

Is it a good company at a reasonable price? Dividends were cut in 2020 and even though they have been raised since, they are still 48% below the high of 2019. Dividend cuts are never a positive sign. Also, the company has a lot of debt and this is also a negative. Earnings have been volatile. Over the past 20 years, its return to shareholders have been ok. But for an ok return it would seem to be a risky stock. It would not be a favourite of mine. The results of the stock testing shows the stock price is probably cheap.

I do not own this stock of Methanex Corp (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid “C” grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.

When I was updating my spreadsheet, I noticed that they have a new CEO and CFO. Although both of these has worked for the company in other capacities. They also have several new directors. The Chairman has been in place since around 2017. Analysts expect that both AEPS and EPS will drop significantly in 2023, AEPS by 57% and EPS by 32%. However, both tend to be quite volatile. It is interesting that its biggest market is China.

The current dividend yield is low with dividend growth restarting. The current dividend yield is low (below 2%) at 1.71%. The 5 and 10 median dividend yields are also low at 1.67% and 1.86%. The historical median dividend yield is moderate (2% to 4% ranges) at 2.32%. The Dividend growth has restarted after dividends were cut in 2020. The last dividend increase was for 9.1% and it was in 2023 and it was for 5.7%. Dividends are still 47% below the high dividends of 2019. Over the past 20 years, dividends were raised in 17 years and decreased in 2 years (2020 and 2021). Dividends are paid in US$.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2022 for Earnings per Share (EPS) is 9% with 5 year coverage at 25%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 13% with 5 year coverage at 30%. The DPR for 2022 for Cash Flow per Share (CFPS) is 4% with 5 year coverage at 8%. The DPR for 2022 for Free Cash Flow (FCF) is 11% with 5 year coverage at 18%.

Item Cur 5 Years
EPS 9.48% 24.64%
AEPS 12.94% 29.57%
CFPS 4.25% 7.58%
FCF 10.72% 17.69%

Some Debt Ratios could be improved like the Leverage and Debt/Equity Ratios. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.81, although I know some analysts like this to be 0.50 or less. The Liquidity Ratio for 2022 is good at 1.99 and 1.64 currently. The Debt Ratio for 2022 is fine at 1.58 and 1.46 currently. The Leverage and Debt/Equity Ratios for 2022 are too high at 3.14 and 1.99. They are still too high currently at 3.24 and 2.08. I prefer them to be below 3.00 and 2.00.

Type Year End Ratio Curr
Lg Term R 0.81 0.72
Intang/GW 0.00 0.00
Liquidity 1.99 1.64
Liq. + CF 2.99 2.31
Debt Ratio 1.58 1.56
Leverage 3.14 3.24
D/E Ratio 1.99 2.08

The Total Return per year is shown below for years of 5 to 27 to the end of 2022 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.
2017 5 -10.64% -5.98% -7.61% 1.63%
2012 10 1.53% 8.07% 4.93% 3.14%
2007 15 3.01% 6.96% 4.22% 2.73%
2002 20 8.71% 10.38% 6.98% 3.40%
1997 25 8.62% 6.22% 2.41%
1995 27 8.44% 6.24% 2.20%

The Total Return per year is shown below for years of 5 to 27 to the end of 2022 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.
2017 5 -12.00% -7.38% -8.96% 1.59%
2012 10 -1.55% 4.48% 1.74% 2.74%
2007 15 0.86% 5.51% 2.78% 2.74%
2002 20 9.55% 12.14% 7.83% 4.31%
1997 25 9.23% 6.45% 2.78%
1995 27 8.76% 6.28% 2.48%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.02, 8.41 and 10.80. The corresponding 10 year ratios are 7.69, 10.67 and 13.21. The corresponding historical ratios are 8.68, 9.49 and 14.94. The current P/E Ratio is 13.24 based on a stock price of $58.29 and EPS estimate for 2023 of $4.40. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a Graham Price of $61.87. The 10-year low, median, and high median Price/Graham Price Ratios are 0.83, 1.19 and 1.48. The current P/GP Ratio is 0.94 based on a stock price of $58.29. The current ratio is between the low and medina ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.

I get a 10-year median Price/Book Value per Share Ratio of 2.53. The current P/B Ratio is 1.51 based on a Book Value of $1,981M, Book Value per Share of $28.60 and a stock price of $43.16. The current P/B Ratio is 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.

I also have Book Value per Share estimate for 2023 of $29.40. This implies a ratio of 1.47 based on a stock price of $43.16 and Book Value of $2,036M. This ratio is 42% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.

I get a 10-year median Price/Cash Flow per Share Ratio of 6.03. The current P/CF Ratio is 4.57 based on Cash Flow per Share estimate for 2023 of $9.45 and a stock price of $43.16. The current ratio is 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 2.32%. The current dividend yield is 1.71% based on stock price of $43.16 and dividends of $0.74. The current dividend yield is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.

I get a 10 year median dividend yield of 1.86%. The current dividend yield is 1.71% based on stock price of $43.16 and dividends of $0.74. The current dividend yield is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$. You will get a similar result in CDN$.

The 10-year median Price/Sales (Revenue) Ratio is 1.32. The current P/S Ratio is 0.81 based on a stock price of $43.16, Revenue estimate for 2023 of $3,671M and Revenue per Share of $53.02. The current P/S Ratio is 38% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is probably cheap. The dividend test says the stock price is reasonable, but since dividends have been cut, this is not a good test. On the other hand, a company cutting dividends is never a good sign. The P/S Ratio test is good and it says the stock price is cheap. Some of the other tests say the same thing, but I do get mixed results.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $70.91 ($52.50 US$), with a high of $81.04 ($60.00 US$) and Low of $60.78 ($45 US$). The 12 month stock price consensus of $70.91 ($52.50 US$) implies a total return of 23.37% with 21.65% from Capital Gains and 1.71% from dividends.

Some analysts on Stock Chase like this stock and some do not. Stock Chase gives this stock 4 stars out of 5. Christopher Liew on Motley Fool thinks this stock has long term growth potential. Adam Othman on Motley Fool says this is the lead company in its market. The company put out aPress Release on their 2022 results. The company put out a press release on their third quarter of 2023 results.

Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has two warnings on this stock of has a high level of debt; and profit margins (4.8%) are lower than last year (11.2%). Simply Wall Street gives this stock 2 and one half stars out of 5.

Methanex Corp manufactures and sells methanol. Methanex distributes its products through a global supply chain that includes the operation of port terminals, tankers, barges, rail cars, trucks, and pipelines. China generates the most revenue of any geographical segment. Its web site is here Methanex Corp.

The last stock I wrote about was about was Stantec Inc (TSX-STN, NYSE-STN) ... learn more. The next stock I will write about will be Magna International Inc (TSX-MG, NYSE-MGA) ... learn more on Wednesday, December 6, 2023 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks December 2023 .... learn more on Tuesday, December 5 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, December 1, 2023

Stantec Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Results of stock price testing is that the stock price is relatively expensive. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are good. The current dividend yield is low with dividend growth low. See my spreadsheet on Stantec Inc.

Is it a good company at a reasonable price? I do like this company. It has done well for shareholders in the past and expect shareholders in the future will also do well. However, to me, this stock seems currently to be expensive and it may not be the time to buy. There are obviously others that disagree with my assessment.

I do not own this stock of Stantec Inc (TSX-STN, NYSE-STN), but I used to. I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. A lot of people were recommending it as a great stock. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. I did not profit from this but sold in 2011 because it was non-core stock with no dividends and I was reassessing what stocks I wanted to continue to hold. I paid too much for this stock in 2008.

When I was updating my spreadsheet, I noticed that this company had a good year in 2022 with Revenue up by 23%, Adjusted Earnings per Share (AEPS) up by 29% and Earnings per Share (EPS) up by 23%. They are doing well also in 2023 with Revenue up in the last 12 months by 11% and Adjusted Earnings per Share (AEPS) up by 18% and Earnings per Share (EPS) up by 34%.

If you had invested in this company in December 2012, for $1,013.63 you would have bought 51 shares at $19.88 per share. In December 2022, after 10 years you would have received $259.21 in dividends. The stock would be worth $3,308.88. Your total return would have been $3,568.09. This is a total return would be a total return of 14.03% per year with 12.56% from capital gain and 1.47% from dividends.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$19.88 $1,013.63 51 10 $259.21 $3,308.88 $3,568.09

The current dividend yield is low with dividend growth low. The dividend yield is low (below 2%) at 0.77%. The 5, 10 and historical dividend yields are also low at 1.59%, 1.31% and 1.37%. The dividend growth is low (below 8%) at 7.7% per year for the last 5 years. The last increase was moderate (8% to 15% ranges) at 8.3% and was done in 2023.

The Dividend Payout Ratios (DPR) are good. The DPR for 2022 for Earnings per Share (EPS) is 32% with 5 year coverage at 40%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 23% with 5 year coverage at 27%. The DPR for 2022 for Cash Flow per Share (CFPS) is 14% with 5 year coverage at 5%. The DPR for 2022 for Free Cash Flow (FCF) is 26% with 5 year coverage at 21%.

Item Cur 5 Years
EPS 31.76% 39.72%
AEPS 22.52% 26.81%
CFPS 14.00% 4.68%
FCF 26.15% 20.91%

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.16. The Liquidity Ratio for 2022 is a bit low at 1.37 and 1.39 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.53 and 1.76. The Debt Ratio for 2022 is fine at 1.68 and 1.68 currently. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.47 and 1.47.

Type Year End Ratio Curr
Lg Term R 0.16 0.12
Intang/GW 0.37 0.25
Liquidity 1.37 1.39
Liq. + CF 1.53 1.76
Debt Ratio 1.68 1.68
Leverage 2.47 2.47
D/E Ratio 1.47 1.47

The Total Return per year is shown below for years of 5 to 28 to the end of 2022. 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.
2017 5 7.66% 14.38% 13.02% 1.36%
2012 10 8.92% 14.03% 12.56% 1.47%
2007 15 9.21% 8.36% 0.85%
2002 20 15.76% 14.86% 0.90%
1997 25 17.35% 16.56% 0.79%
1994 28 11.90% 11.34% 0.56%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 22.79, 27.74 and 31.38. The corresponding 10 year ratios are 21.65, 25.53 and 29.24. The corresponding historical ratios are 15.98, 16.62 and 22.95. The current P/E Ratio is 32.17 based on a stock price of $101.33 and EPS estimate for 2023 of $3.15. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 16.18, 18.16 and 20.14. The corresponding 10 year ratios are 16.01, 18.17 and 21.07. The current P/AEPS Ratio is 27.24 based on AEPS estimate for 2023 and a stock price of $101.33. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $43.11. The 10-year low, median, and high median Price/Graham Price Ratios are 1.14, 1.33 and 1.54. The current P/GP Ratio is 2.35 based on a stock price of $101.33. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10-year median Price/Book Value per Share Ratio of 2.28. The current P/B Ratio is 4.56 based on a Book Value of $2,463M, Book Value per Share of $22.20 and a stock price of $101.33. The current ratio is 100% 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 13.76. The current P/CF Ratio is 16.37 based on a stock price of $101.33, Cash Flow per Share estimate for 2023 of $6.19 and Cash Flow of 686.8M. The current ratio is 19% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. I do wonder about this estimate as it is a 125% increase.

The 12 month Cash Flow is $490.4M, which implies a Cash Flow per Share of $4.42 and a P/CF Ratio of 22.93. This ratio is 67% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.37%. The current dividend yield is 0.77% based on a stock price of $101.33 and dividends of $0.78. The current dividend yield is 44% 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 1.31%. The current dividend yield is 0.77% based on a stock price of $101.33 and dividends of $0.78. The current dividend yield is 65% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10-year median Price/Sales (Revenue) Ratio is 124. The current P/S Ratio is 2.23 based on Revenue estimate for 2023 of $5,050M, Revenue per Share of $45.51 and a stock price of $101.33. The current ratio is 79% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is relatively expensive. The dividend yield tests say this and it is confirmed by the P/S Ratio test. All the tests show the same thing except for the P/CF Ratio and I am wondering how good that test is.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (7) and Hold (2). The consensus is a Strong Buy. The 12 month stock price consensus if $107.45 with a high of $115.00 and a low of $97.00. The consensus price of $107.45 implies a total return of 6.81% with 6.04% from capital gains and 0.77% from dividends. To me, the Strong Buy recommendation, and a total return of 6.81% does not make any sense.

Analysts give cautious buys at Stock Chase. Stock Chase gives this stock 4 stars out of 5. It is on the 3 dividend lists that I follow. Aditya Raghunath on Motley Fool thinks that this stock is not too expensive given its growth estimates. Karen Thomas on Motley Fool thinks this is a stock to buy and hold. The company put out a Press Release on their 2022 year end results. The company put out a Press Release on their third quarter of 2023 results.

Simply Wall Street via Yahoo Finance says the fair value of this stock is $106.84 CDN$. Simply Wall Street has 3 warnings for this stock of significant insider selling over the past 3 months; shareholders have been diluted in the past year; and has a high level of debt. Simply Wall Street gives this stock 2 and one half stars out of 5.

Stantec Inc is a sustainable engineering, architecture, and environmental consulting company. The company is geographically diversified in three regional operating units namely Canada, the United States and Global, offering similar services across all regions. Its web site is here Stantec Inc.

The last stock I wrote about was about was Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more. The next stock I will write about will be Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more on Monday, December 4, 2023 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, November 29, 2023

Keg Royalties Income Fund

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. Debt Ratios are fine, but I would like to see what the ones for KRL are also. Results of stock price testing is that the stock price is probably relatively cheap. The Dividend Payout Ratios (DPR) are too high. The current dividend yield is high with dividend growth restarting. See my spreadsheet on Keg Royalties Income Fund .

Is it a good company at a reasonable price? What I do not like about this stock is that this royalty stock is completely dependent on the Keg Restaurants being able to pay royalties and we have very little information on how the Keg Restaurants are doing. For this reason, I would personally not buy this stock. The stock price does seem to be relatively cheap.

I do not own this stock of Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF). This was a stock suggested by one of my readers. I like dinning at The Keg. I find the food very good. At stock forums I viewed, investors liked this company as it is guaranteed 4% of the sales at Keg restaurants as income to the fund. So, I decided to take a look at it.

When I was updating my spreadsheet, I noticed that the last estimates for this stock was for 2019 and 2020. So, no analysts at the moment are following this stock. This is not a good sign that it has been dropped. Also, Keg Restaurant Limited owns Exchange Partnership Units, which are 32% of the units of the fund. There are currently 11,353,500 fund units and 5,325,030 Exchange Partnership Units for a total of 16,678,530 units.

The other thing to mention, which I do not like, is that this fund is entirely dependent on Keg Restaurant Limited (KRL) being able to pay royalties, but we do not get much information about. Also, as far as I can see, some 99% of Keg Royalties Income Fund Assets depend on KRL.

If you had invested in this company in December 2012, for $1,000.50 you would have bought 69 shares at $14.50 per share. In December 2022, after 10 years you would have received $691.20 in dividends. The stock would be worth $1,101.93. Your total return would have been $1,793.13. This is a total return would be a total return of 7.66% per year with 0.97% from capital gain and 6.69% from dividends.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$14.50 $1,000.50 69 10 $691.20 $1,101.93 $1,793.13

The current dividend yield is high with dividend growth restarting. The current dividend yield is high (7% and higher) at 8.67%. The 5, 10 year and historical median dividend yields are good (5% and 6% ranges) at 6.45%, 5.89% and 6.94%. The dividend growth over the past 5 years is low (below 8%) at just 0.5% per year. This is mainly because dividends were cut in 2020 and increased back to those of 2019 in 2022.

The Dividend Payout Ratios (DPR) are too high. The DPR for 2022 for Earnings per Share (EPS) is 242% with 5 year coverage at 167%. The DPR for 2022 for Distributable Cash (DC) is 105% with 5 year coverage at 103%. For this stock, this is the important one. The DPR for 2022 for Cash Flow per Share (CFPS) is 48% with 5 year coverage at 51%. The DPR for 2022 for Free Cash Flow (FCF) is 95% with 5 year coverage at 99%.

Item Cur 5 Years
EPS 241.53% 167.24%
DC 104.68% 102.90%
CFPS 48.41% 51.36%
FCF 95.36% 98.55%

Debt Ratios are fine, but I would like to see what the ones for KRL are also. The Long Term Debt/Market Cap Ratio for 2022 is fine at 0.87 and also currently at 0.96, but it is best if they are below 0.50. The Liquidity Ratio for 2022 is fine at 1.47 and good at 2.86 currently. The Debt Ratio for 2022 is good at 1.58 and good at 1.74 currently. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.73 and 1.73 and 2.34 and 1.34 currently.

Type Year End Ratio Curr
Lg Term R 0.87 0.96
Intang/GW 0.76 0.76
Liquidity 1.47 2.86
Liq. + CF 4.41 10.02
Debt Ratio 1.58 1.74
Leverage 2.73 2.34
D/E Ratio 1.73 1.34

The Total Return per year is shown below for years of 5 to 21 to the end of 2022. 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.
2017 5 0.50% 0.88% -4.39% 5.27%
2012 10 1.69% 7.66% 0.97% 6.69%
2007 15 -0.34% 9.27% 1.46% 7.81%
2002 20 3.78% 12.84% 2.77% 10.08%
2001 21 3.78% 11.18% 2.77% 8.41%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.13, 15.18, and 17.23. The corresponding 10 year ratios are 17.02, 18.98 and 24.05. The corresponding historical ratios are 11.44, 13.90 and 15.42. The current P/E Ratio is 16.17 based on a stock price of 13.10 and EPS for the last 12 months of 0.81. 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. Although, normally a ratio of 16.17 would be considered reasonable.

I get a Graham Price of $13.34. The 10-year low, median, and high median Price/Graham Price Ratios are 1.35, 1.48 and 1.79. The current P/GP Ratio is 0.98 based on a stock price of $13.10. This ratio is below the low ratio of the 10 year median ratio. 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 1.96. The current P/B Ratio is 1.34 based on a Book Value of $110.8M, Book Value per Share of $9.76 and a stock price of $13.10. The current ratio is below 10 year median ratio by 32%. 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 8.77. The current P/CF Ratio is 5.47 based on Cash Flow per Share for the last 12 months of 2.40. The current ratio is 31% 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 6.94%. The current dividend yield is 8.67% based on dividends of $1.135 and a stock price of $13.10. The current yield is 25% 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 5.89%. The current dividend yield is 8.67% based on dividends of $1.135 and a stock price of $13.10. The current yield is 47% 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 7.65. The current P/S Ratio is 5.17 based on Revenue for the last 12 months of $27.06M, Revenue per Share of $2.53 and a stock price of $13.10. The current ratio is 32% 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 relatively cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio test. All the other tests say the same thing.

When I look at analysts’ recommendations, I find a Hold recommendation on the Wall Street Journal site. They also give a stock target price of $3.50 US$ which would be approximately $4.17 CDN$. It is hard to know how serious to take this.

The last analyst recommendation on Stock Chase was in 2017 and it was a Hold. Stock Chase gives this stock one star out of 5. It is not on any of the dividend lists I follow. Ambrose O'Callaghan on Motley Fool says he is targeting this stock because restaurants have rebounded post-pandemic. Amy Legate-Wolfe on Motley Fool thinks this is a good royalty stock to hold in your TFSA. The company put out a Press Release on their 2022 year end results. The company put out a Press Release on their third quarter of 2023 results.

Simply Wall Street via Yahoo Finance talks about who owns shares in this company. Simply Wall Street has two warnings of interest payments are not well covered by earnings; and earnings have declined by 23.7% per year over past 5 years.

The Keg Royalties Income Fund is a Canada-based company. The organization works in the Restaurant business sector. Its primary activity is operating and franchising keg steakhouses and bar restaurants in Canada and the United States. The target market of this company is those people who want a higher-end casual dining experience. Its web site is here Keg Royalties Income Fund.

The last stock I wrote about was about was Wild Brain Ltd (TSX-WILD, OTC-WLDBF) ... learn more. The next stock I will write about will be Stantec Inc (TSX-STN, NYSE-STN) ... learn more on Friday, December 1, 2023 around 5 pm. Tomorrow on my other blog I will write about Mary Harrington.... learn more on Thursday, November 30, 2023 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, November 27, 2023

Wild Brain Ltd

Sound bite for Twitter and StockTwits is: Consumer Sector Stock. Debt Ratios are awful. This company stopped paying a dividend in 2019. See my spreadsheet on Wild Brain Ltd.

Is it a good company at a reasonable price? Certainly, a negative is the awful Debt Ratios. The company certainly does not have a great past track record. However, a positive would be that analysts seem to think that this company is going to do well in the near future. Possibly, but the risk level is high. My stock price testing points to a rather cheap stock price currently.

I do not own this stock of Wild Brain Ltd (TSX-WILD, OTC-WLDBF). In the CanTech Letter of May 2014, investors should accumulate DHX Media “aggressively”, says Byron Capital. I also saw a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014. Note that his stock has their financial year end of June 30, so I am reviewing the financial year end of June 30, 2023 and the first quarter of 2024 of September 30, 2023. Also, DHX Media was rebranded as Wild Brain Ltd in 2019.

When I was updating my spreadsheet, I noticed this company has not turned a profit since 2017. Since that time also, the stock price has declined by 82% from the high of 2017. It also cut its dividend in 2019. However, the company is expected to turn profitable in the 2025 financial year, that is next year.

Year Item Tot. Growth Per Year
5 Revenue Growth 22.66% 4.17%
5 EPS Growth -160.00% N/C
5 Net Income Growth -159.91% N/C
5 Cash Flow Growth 604.80% 47.78%
5 Dividend Growth -100.00% N/C
5 Stock Price Growth -44.23% -11.02%
10 Revenue Growth 447.87% 18.54%
10 EPS Growth -1400.00% N/C
10 Net Income Growth -1042.96% N/C
10 Cash Flow Growth 1041.81% 27.57%
10 Dividend Growth -100.00% N/C
10 Stock Price Growth 82.46% 6.20%

If you had invested in this company in December 2017, for $1,003.50 you would have bought 223 shares at $4.50 per share. In December 2022, after 5 years you would have received $0.00 in dividends. The stock would be worth $697.76. Your total return would have been $695.76. This is a total return would be a total loss of 10.25% per year with 10.25% from capital loss and 0.00% from dividends.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$4.50 $1,003.50 223 5 $0.00 $695.76 $695.76

This company stopped paying a dividend in 2019. They are not earnings any profits, so a dividend is currently out of the question.

Debt Ratios are awful. The Long Term Debt/Market Cap Ratio for 2023 is far too high at 1.54 for 2022 and 1.42 currently. Any ratio above 1.00 (and some analyst think about 0.50 is too high. It means that the market value of the company is much lower than the company’s long term debt. The Intangible and Good Will/Market Cap Ratios are much to high at 1.48 for 2023 and 1.89 now. It means that the company has intangibles on its balance sheet that show worth higher than the current market value of the company.

The Liquidity Ratio for 2023 is good at 1.60. However, this ratio is too low currently at 1.17 and even if you add in cash flow it is still low at 1.31. I prefer it to be at 1.50 or higher. The Debt Ratio for 2023 is too low at 1.37 and currently at 1.38. I prefer this to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2023 are far too high at 15.96 and 11.69 and at 16.21 and 11.74 currently. These should be under 3.00 and 2.00.

Type Year End Ratio Curr
Lg Term R 1.54 1.42
Intang/GW 1.48 1.89
Liquidity 1.60 1.17
Liq. + CF 1.87 1.31
Debt Ratio 1.37 1.38
Leverage 15.96 16.21
D/E Ratio 11.69 11.74

The Total Return per year is shown below for years of 5 to 17 to the end of 2022. 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.
2017 5 0.00% -7.06% -7.06% 0.00%
2012 10 0.00% 7.87% 6.20% 1.19%
2007 15 4.50% 3.55% 1.43%
2005 17 2.71% 1.97% 1.00%

The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and useless. The corresponding 10 year ratios are also negative and useless. The corresponding historical ratios are negative and useless. The current P/E Ratios is negative and useless for testing. However, P/E Ratio for 2025 is 14.25 based on a stock price of $1.14 and EPS estimate for 2025 of $0.08. A P/E Ratio of 14.25 would be moderate and so suggest a reasonable stock price.

I get a Graham Price of $0.29. The 10-year low, median, and high median Price/Graham Price Ratios are 3.10, 5.50 and 7.96. The current P/GP Ratio is 3.94 based on a stock price of $1.14. This ratio is between the low and median ratio of the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. The problem with this testing is that the Graham Price includes the EPS which has been mostly negative and the current Graham Price is an estimate.

However, for the 2025 financial year, the Graham Price is $0.82. The P/GP Ratio would be 1.39 based on a stock price of 1.14. P/GP Ratios up to 1.20 could be considered reasonable. This ratio is above 1.20 and therefore would suggest that the stock price is relatively expensive.

I get a 10-year median Price/Book Value per Share Ratio of 3.00. The current P/B Ratio is 3.07 based on a stock price of $1.14, Book Value of $74.28 and Book Value per Share of $0.37. This ratio is 2% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I also go a Book Value per Share estimate for 2024 of $0.51. This implies a ratio of 2.24 and Book Value of $120M. This ratio is 25% 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 5.55. The current P/CF Ratio is 3.56 based on Cash Flow per Share estimate for 2024 of $0.32 and a stock price of $1.14. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do any dividend yield testing because the company has cancelled its dividends.

The 10-year median Price/Sales (Revenue) Ratio is1.32. The current P/S Ratio is 0.46 based on Revenue estimate for 2024 of $498M, Revenue per Share of $2.49 and a stock price of $1.14. The current ratio is 65% 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 P/S Ratio test says this and it is a good test. The P/CF Ratio test says this also. The other tests vary and the only other ones without problems is the P/B Ratio tests and they say reasonable to cheap.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (3). The consensus would be Buy. The 12 months stock price consensus would be $2.433 with a high of $4.00 and low of $1.50. The 12 month consensus price of $2.433 implies a total return of 113.42% all from capital gains.

This stock is not listed on Stock Chase. It is not on any of my dividend lists. Adam Othman on Motley Fool says buying this stock now might allow you to leverage the next bullish phase. Ambrose O'Callaghan on Motley Fool says this stock offers exposure to a Canadian streaming stock. The company put out a press release on Newswire about their June 2023 year end results. The company put out a press release on Newswire about their first quarter of 2024 results.

Simply Wall Street via Yahoo Finance says the fair value of this stock is $1.70. Simply Wall Street put out 1 warning of shareholders have been diluted in the past year. Simply Wall Street gives this stock 2 and one half stars out of 5.

WildBrain Ltd is a children's content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget, and Degrassi franchise. Its web site is here Wild Brain Ltd.

The last stock I wrote about was about was Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more. The next stock I will write about will be Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more on Wednesday, November 29, 2023 around 5 pm. Tomorrow on my other blog I will write about Future Crunch.... learn more on Tuesday, November 28, 2023 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Also, on my book blog I have put a review of the book Values by Mark Carney learn more...

Friday, November 24, 2023

Stella-Jones Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. Results of stock price testing is that the stock price is probably reasonable and below the median. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are good. The current dividend yield is low with dividend growth moderate. See my spreadsheet on Stella-Jones Inc.

Is it a good company at a reasonable price? I have always thought of this company as a fine dividend growth company. I do not have it, but I cannot buy everything. I already have enough different stocks. Dividends may have a low yield, but they are growing nicely. A good dividend growth stock to have pre-retirement so you have low dividends and pay less taxes. This stock is at a reasonable price.

I do not own this stock of Stella-Jones Inc (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.

When I was updating my spreadsheet, I noticed the company had a good year in 2022 with Revenue up 11% and Earnings up 12.6%. This year was good also, with Revenue up for the past 12 months by 7.5% and Revenue is expected to be up by 9.8% by the end of the year. EPS for the last 12 months is up by 33.8% and is expected to be up by 42% by the end of the year. Year to date the stock price is up by 70%.

Even though this stock has a low dividend, it has grown greatly over time for shareholders. If you look at the past, dividends a lot over the years. For example, if a shareholder had this stock for 15 years, the dividend yield on the original stock price would be 13.63% and dividend increase would be 1123.49%.

Div Yd Years Div Inc
2.05% 5 84.41%
3.90% 10 249.65%
13.63% 15 1123.49%
117.76% 20 10468.96%
165.39% 25 14744.04%

Look at this second table below. If dividends continue to grow at the current 5 year rate of 12.70%, then in 15 years, the dividend yield on the current price would be 6.70% and the dividend would have grown by 501.05%.

Div Yd Years At IRR Div Inc
2.03% 5 12.70% 81.82%
3.68% 10 12.70% 230.58%
6.70% 15 12.70% 501.05%
12.18% 20 12.70% 992.82%
22.14% 25 12.70% 1886.95%

If you had invested in this company in December 2012, for $1,015.48 you would have bought 53 shares at $19.16 per share. In December 2022, after 10 years you would have received $254.40 in dividends. The stock would be worth $2,571.56. Your total return would have been $2,825.96. This is a total return would be a total return of 11.27% per year with 9.74% from capital gain and 1.53% from dividends.
Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$19.16 $1,015.48 53 10 $254.40 $2,571.56 $2,825.96

The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.16%. The 5, 10 and historical dividend yields are also low at 1.56%, 1.03% and 1.28%. The dividends have grown at a moderate rate (between 8 and 14%) at 12.7% per year over the past 5 years. The last dividend increase was good (15% and higher) at 15%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2022 for Earnings per Share (EPS) is 20% with 5 year coverage at 21%. The DPR for 2022 for Cash Flow per Share (CFPS) is 10% with 5 year coverage at 10%. The DPR for 2022 for Free Cash Flow (FCF) is 33% with 5 year coverage at 38%.
Item Cur 5 Years
EPS 20.36% 21.22%
CFPS 10.35% 10.42%
FCF 33.33% 37.71%

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.33 and also currently at 0.23. The Liquidity Ratio for 2022 is good at 6.11 and 8.18 currently. The Debt Ratio for 2022 is fine at 1.51 and 1.49 currently. The Leverage and Debt/Equity Ratios for 2022 are good at 2.03 and 1.90. However, the current ratios are good at 1.97 and 0.97 and fine at 2.11 and 1.11 currently

Type Year End Ratio Curr
Lg Term R 0.33 0.23
Intang/GW 0.19 0.12
Liquidity 6.11 8.18
Liq. + CF 6.91 8.76
Debt Ratio 2.03 1.90
Leverage 1.97 2.11
D/E Ratio 0.97 1.11

The Total Return per year is shown below for years of 5 to 28 to the end of 2022. 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.
2017 5 12.70% 0.47% -0.80% 1.27%
2012 10 17.84% 11.27% 9.74% 1.53%
2007 15 18.85% 12.27% 10.92% 1.35%
2002 20 21.06% 26.83% 23.72% 3.11%
1997 25 19.96% 21.98% 20.08% 1.90%
1994 28 15.83% 14.77% 1.06%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.10, 1321 and 15.32. The corresponding 10 year ratios are 15.54, 18.17 and 21.44. The corresponding historical ratios are 9.05, 12.00 and 14.99. The current P/E Ratio is 14.25 based on a stock price of $79.49 and EPS estimate for 2023 of $5.58. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. The P/E Ratios have gone up rapidly over time.

I get a Graham Price of $59.80. The 10-year low, median, and high median Price/Graham Price Ratios are 1.22, 1.50 and 1.77. The current P/GP Ratio is 1.33 based on a stock price of $79.49. The current P/GP 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 10-year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 2.79 based on a stock price of $79.49, Book Value of $1,684M and Book Value per Share of $28.49. The current P/B Ratio is 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I also have Book Value per Share estimate for 2023 of $29.60. This implies a P/B Ratio of 2.69 with a stock price of $79.49 and Book Value of $1,750M. This ratio is 3% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10-year median Price/Cash Flow per Share Ratio of 16.35. The current P/CF Ratio is 15.26 based on Cash Flow per Share estimate for 2023 of $5.21, Cash Flow of $308M and a stock price of $79.49. The current ratio is 13% 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 1.28%. The current dividend yield is 1.16% based on a stock price of $79.49 and dividends of $0.92. The current yield is 10% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median dividend yield of 1.03%. The current dividend yield is 1.16% based on a stock price of $79.49 and dividends of $0.92. The current yield is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10-year median Price/Sales (Revenue) Ratio is 1.55. The current P/S Ratio is 1.40 based on Revenue estimate for 2023 of $3,366M, Revenue per Share of $56.94 and a stock price of $79.49. The current ratio is 10% 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 and below the median. The 10 year median dividend yield test says this and it is confirmed by the P/S Ratio test. Generally, the 10 year median dividend yield test is considered better than the historical one. Most of the other resting is saying the stock price is reasonable and above or below the median.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4) and Hold (1). The consensus is a Buy. The 12 months stock price consensus is $91.00, with a high of 96.00 and low of $83.00. The stock price consensus of $91.00 implies a total return of 15.64% with 14.48% from capital gains and 1.16% from dividends.

This stock is liked by the analysts on Stock Chase. Stock Chase gives this company 4 stars out of 5. It is on all 3 dividend lists that I follow. Christopher Liew on Motley Fool says this stock makes an excellent investment. Kay Ng on Motley Fool thinks is stock is a quality growth stock. The company put out a press release on Globe Newswire about their results for 2022. The company put out a press release on Globe Newswire about its results for the third quarter of 2023.

Simply Wall Street via Yahoo Finance put out a recent report on this stock. Simply Wall Street put out one warning on this stock of debt is not well covered by operating cash flow. (I look at Long Term Debt rather than total debt.) Simply Wall Street gives this stock 2 and one half stars out of 5. Usually, I agree with the stars from Simply Wall Street, but for this stock I agree with Stock Chase.

Stella-Jones Inc produces and sells lumber and wood products. Its geographical segments are the United States and Canada, of which the majority of its revenue is derived from the United States. Its web site is here Stella-Jones Inc.

The last stock I wrote about was about was First Capital REIT (TSX-FCR.UN, OTC-FCXXF) ... learn more. The next stock I will write about will be Wild Brain Ltd (TSX-WILD, OTC-WLDBF) ... learn more on Monday, November 27, 2023 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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