Calian Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Tech. I think that the current stock price is on the expensive side, but maybe not by much. Debt Ratios are good. The Dividend Payout Ratios (DPR) are fine. The dividend yields are low with dividend growth non-existent. See my spreadsheet on Calian Group Ltd.

Is it a good company at a reasonable price? This is not my usual choice as I like dividend growth companies. However, this stock was for the Tax Free Savings Account (TFSA), where I want to give potential companies a chance to see what they can do. I still like this company and I will keep it. I cannot complain about the return which for me is 17.22% per year with 13.41% from capital gains and 3.81% from dividends. I have had it for 12 years. Currently, it would seem that the stock price is relatively high.

I own this stock of Calian Group Ltd (TSX-CGY, OTC-CLNFF). This is an interesting company with a very nice dividend. This stock came up on a Globe Investor site. The Globe Investor Number Cruncher is an investment column about screening for stocks and funds. They did one on companies with little to no debt. I also noted that the Financial Blogger has this stock on his Top Ten Canadian Dividend Stocks list.

When I was updating my spreadsheet, I noticed that although they are still not increasing their dividends, I have done well on this stock. I have had stock for just over 11 years and my total return is 17.22% with 13.41% from capital gains and 3.81% from dividends.

If you had invested in this company in December 2012, for $1,005.60 you would have bought 48 shares at $20.95 per share. In December 2022, after 10 years you would have received $537.60 in dividends. The stock would be worth $3,205.92. Your total return would have been $3,743.52.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$20.95	$1,005.60	48	10	$537.60	$3,205.92	$3,743.52

If you had invested in this company in December 1994 when this stock was first issued, for $1,004.48 you would have bought 146 shares at $6.88 per share. In December 2022, after 29 years you would have received $2,578.36 in dividends. The stock would be worth $9,751.34. Your total return would have been $12,329.70.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$6.88	$1,004.48	146	29	$2,578.36	$9,751.34	$12,329.70

The dividend yields are low with dividend growth non-existent. The current dividend yield is low (below 2%) at 1.73%. The 5, 10 year and historical dividend yields are moderate (2% to 4% ranges) at 2.36%, 3.96% and 3.96%. The company has not raised their dividends since 2013.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2022 is 94% with 5 year coverage at 62%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 29% with 5 year coverage at 40%. The DPR for Cash Flow per Share (CFPS) for 2022 if 19% with 5 year coverage at 26%. The DPR for Free Cash Flow (FCF) for 2022 is 35% with 5 year coverage at 62%.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2022 is 0. They do have debt, but it is very low. The Liquidity Ratio for 2022 is 1.40. It is currently at 2.19. The Debt Ratio for 2022 is 2.26. The Leverage and Debt/Equity Ratios for 2022 are good at 1.79 and 0.79.

The Total Return per year is shown below for years of 5 to 29 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%	18.50%	15.82%	2.68%
2012	10	0.55%	15.74%	12.29%	3.45%
2007	15	6.76%	16.13%	11.39%	4.74%
2002	20	10.43%	20.03%	14.04%	5.99%
1997	25		18.22%	13.86%	4.36%
1993	29		10.13%	8.15%	1.98%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 30.13, 30.43 and 30.72. The corresponding 10 year ratios are 12.40, 13.31 and 12.40. The corresponding historical ratios are 10.12, 11.41 and 14.05. The current P/E Ratio is 23.46 based on a stock price of $64.74 and EPS estimate for 2023 of $2.76. The current ratio is above the high of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The P/E Ratio has been high for the last few years because EPS fell a lot, but stock price fell little. This can happen if a company goes through a hard time in earnings, but perceived value of the company does not fall.

I also have Adjusted Earnings per Share (AESP) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.80, 14.25 and 15.44. The corresponding 10 year ratios are 12.05, 12.88 and 14.26. The current P/AEPS Ratio is 15.64 based a stock price of $64.74 and AEPS estimate for 2023 of $4.14. The current ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $49.49. The 10-year low, median, and high median Price/Graham Price Ratios are 1.02, 1.10 and 1.21. The current P/GP Ratio is 1.31 based on a stock price of $64.74. 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 10-year median Price/Book Value per Share Ratio of 2.17. The current P/B Ratio is 2.46 based on a Book Value of $305M, Book Value per Share of $26.29 and a stock price of $64.74. The current ratio is 14% 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 12.10. The current P/CF Ratio is 16.37 based on a stock price of $64.74, Cash Flow estimate for 2023 of $45.9M, and Cash Flow per Share of $3.95. The current ratio is 32% 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 3.96%. The current dividend yield is 1.73% based on dividends of $1.12 and a stock price of $64.74. The current dividend yield is 56% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The dividend yield test does not work well when the dividends do not grow.

I get a 10 year median dividend yield of 3.96%. The current dividend yield is 1.73% based on dividends of $1.12 and a stock price of $64.74. The current dividend yield is 56% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The dividend yield test does not work well when the dividends do not grow.

The 10-year median Price/Sales (Revenue) Ratio is 0.72. The current P/S Ratio is 1.15 based on Revenue estimate for 2023 of $651M, Revenue per Share of $56.08 and a stock price of $64.74. The current ratio is 61% 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 probably expensive. The P/S Ratio test shows this as do most of the other tests. However, the P/AEPS shows it is not into the expensive side by very much. The dividend yield test is not much help when dividends are not growing.

I look at the total return over several years. For P/S Ratio, P/AEPS and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the beginning P/E Ratios and for beginning P/ AEPS Ratios for good returns are lower than today. This is the same with P/S Ratio. Also, the beginning yield was higher than today, although on this case, I am discounting the dividend yield testing.

In the following chart the capital gains for the 10 years to December 31, 2022 is 12.29% per year. The beginning yield was at 5.34%, and the P/E Ratio, P/AEPS and the P/S Ratio were at 11.39, 10.79 and 0.64. Does this chart change my opinion of the stock price? No.

Years	Cap Gains	Tot. Ret	B P/E	B P/AE	B P/S	B Yield
5	15.82%	18.50%	15.95	14.23	0.79	3.92%
10	12.29%	15.74%	11.39	10.79	0.64	5.34%
15	11.39%	16.13%	12.05	11.82	0.57	3.23%
20	14.04%	20.03%	11.78	0.00	0.23	0.00%
25	13.86%	18.22%	-6.05		0.43
29	8.15%	10.13%
current			23.46	15.64	1.15	1.73%

When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (5). The consensus would be a Strong Buy. The 12 months stock price is $80.75. This implies a total return of 26.46% with 24.73% from capital gains and 1.73% from dividends.

Last year when I look at analysts’ recommendations, I found Strong Buy (3) and Buy (3). The consensus would be a strong Buy. The 12 month stock price is $78.13. This implies a total return of 40.59% with 38.60% from capital gains and 1.99% from dividends based on a stock price of 56.37. What happened was that the stock price went from $56.37 to $64.74, an increase of 14.85%. The total return was 16.84 with 14.85 from capital gains and 1.99% from dividends.

This company is not covered by many analysts on Stock Chase but the latest one is a buy. Stock Chase gives this stock 4 stars out of 5. It is not on the Money Sense list. Robin Brown on Motley Fool calls this stock a defensive growth stock. Robin Brown on Motley Fool thinks this is a good stock for your TFSA. The company put out a Press Release on their results for the fourth quarter of 2022.

Simply Wall Street put out a report on this company via Yahoo Finance. Simply Wall Street lists 3 risks for this company of large one-off items impacting financial results; significant insider selling over the past 3 months; shareholders have been diluted in the past year. Simply Wall Street gives this stock 4 stars out of 5. Note the reason companies put out Adjusted Earnings per Share is because of large one-off items impacting financials. Also, what might look like insider selling is just insiders not picking up all their stock options. For this company, the CEO, CFO and Chairman all increased their holdings this year over last year.

Calian Group Ltd operates through four segments namely Advanced Technologies, Healthcare, Learning, and Information Technology. It generates maximum revenue from the Health segment. Its web site is here Calian Group Ltd.

The last stock I wrote about was about was Rogers Sugar Inc (TSX-RSI, OTC-RSGUF) ... learn more. The next stock I will write about will be Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more on Friday, January 13, 2023 around 5 pm. Tomorrow on my other blog I will write about Do Not Invest if You Do not Understand.... learn more on Thursday, January 12, 2023 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.

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