Is it a good company at a reasonable price? This is not the sort of company I tend to like because it does not grow it dividends. With all higher yield stock comes little to no dividend growth. I like companies with dividends in the 2% to 4% ranges. Although, all old income trust companies are having hard times getting its dividends right and few can grow they dividends unless they cut them severely first. However, this stock would be fine for anyone wanting passive income. The stock price is reasonable and maybe cheap.
I do not own this stock of Rogers Sugar Inc (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be an Income Trust (TSX-RSI.UN) but it has been converted to a corporation. On its change to a corporation, it lowered its dividend.
When I was updating my spreadsheet, I noticed that the company had an earnings loss because they had a Goodwill Impairment Charge. Dividends have made up a large part of their total return. Look at the chart below and the 15 year return. Shareholders got a total return of 9.49% with 1.28% from capital gains and 8.21% from dividends.
This company used to be an income trust. Income trust can pay much higher dividends than corporations. So, dividends in the future will be a smaller and smaller part of the total return.
If you had invested in this company in December 2012, for $1,000.33 you would have bought 167 shares at $5.99 per share. In December 2022, after 10 years you would have received $661.32 in dividends. The stock would be worth $905.23. Your total return would have been $1,611.55.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.99 | $1,000.33 | 167 | 10 | $661.32 | $950.23 | $1,611.55 |
If you had invested in this company in December 1997 when the stock was first issued, for $1,001.00 you would have bought 143 shares at $7.00 per share. In December 2022, after 25 years you would have received $1,375.76 in dividends. The stock would be worth $813.67. Your total return would have been $2,189.43.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.00 | $1,001.00 | 143 | 25 | $1,375.76 | $813.67 | $2,189.43 |
However, if you had invested in this company in December 1999 two years after it was issued, for $1,003.60 you would have bought 193 shares at $5.20 per share. In December 2022, after 23 years you would have received $1,856.80 in dividends. The stock would be worth $1,098.17. Your total return would have been $2,954.97.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.20 | $1,003.60 | 193 | 23 | $1,856.80 | $1,098.17 | $2,954.97 |
The dividend yields are good with dividend growth non-existent. The current dividend yield is good (5% and 6% ranges) at 6.29%. The 5 and 10 year median dividend yields are also good at 6.32% and 6.51%. The historical median dividend yield is high (7% and over) at 8.57%. The dividend is currently flat. The company has not raised the dividend since 2013. No one expects the dividends to be raised any time soon.
The Dividend Payout Ratios (DPR) are fine for AEPS and CFPS. The DPR for EPS for 2022 is negative because of an earnings loss. The 5 year coverage is at 186%. The DPR for Adjusted Earnings per Share for 2022 is 92% with 5 year coverage at 94%. The DPR for Cash Flow per Share for 2022 is 37% with 5 year coverage at 38%. There is a huge difference in what people think the Free Cash Flow for this stock is, running from 41M to a negative 2.2M.
Some Debt Ratios need to improve. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.37. The Liquidity Ratio for 2022 is good at 1.80. The Debt Ratio is a bit low for 2022 at 1.45 and I prefer to see it at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 3.22 and 2.26. I prefer to see these ratios below 3.00 and below 2.00.
The Total Return per year is shown below for years of 5 to 25 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% | 3.85% | -2.08% | 5.93% |
| 2012 | 10 | 0.43% | 6.42% | -0.51% | 6.93% |
| 2007 | 15 | -1.13% | 9.49% | 1.28% | 8.21% |
| 2002 | 20 | -0.71% | 9.46% | 0.96% | 8.50% |
| 1997 | 25 | -2.73% | 7.10% | -0.83% | 7.93% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.75, 12.11 and 13.48. The corresponding 10 year ratios are 11.82, 13.75 and 15.68. The corresponding historical ratios are 8.92, 10.73 and 11.89. The current P/E Ratio is 12.81 based on a stock price of $5.72 and EPS estimate for 2023 of $0.45. 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.
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.26, 13.72 and 15.71. The corresponding 10 year ratios are 13.06, 14.48 and 16.08. The current P/AEPS Ratio is 13.30 based on a stock price of $5.72 and AEPS estimate for 2023 of $0.43. 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.
I get a Graham Price of $5.25. The 10-year low, median, and high median Price/Graham Price Ratios are 1.02, 1.14 and 1.25. The current P/GP Ratio is 1.09 based on a stock price of $5.72. The current ratio is between the low and median ratios of the 10 year 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 1.90. The current P/B Ratio is 2.09 based on a stock price of $5.72, Book Value of $286M and a Book Value per Share of $2.74. The current ratio is 10% 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 11.33. The current ratio is 7.16 based on Cash Flow estimate for 2023 of $83.4M, Cash Flow per Share of $0.80 and a stock price of $5.72. The current ratio is 37% 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 8.57%. The current dividend yield is 6.29% based on dividends of $0.36. The current dividend yield is 27% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, the dividend yield tests do not work well with companies that do not raise their dividends and with companies that used to be income trusts.
I get a 10 year median dividend yield of 6.51%. The current dividend yield is 6.29% based on dividends of $0.36. The current dividend yield is 3% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. However, the dividend yield tests do not work well with companies that do not raise their dividends and with companies that used to be income trusts.
The 10-year median Price/Sales (Revenue) Ratio is 0.77. The current P/S Ratio is 0.58 based on a stock price of $5.72, Revenue estimate for 2023 of $1,028M and Revenue per Share of $9.85. The current ratio is 24.8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is close to cheap.
Results of stock price testing is that the stock price is probably reasonable and maybe cheap as the P/S Ratio test is showing that it is close to it. The dividend yield tests do not work well when dividends are not increasing. This used to be a income trust and income trusts had high dividend yields. Dividend is still quite high. Most of the testing is showing that the stock price is reasonable.
When I look at analysts’ recommendations, I find only Hold (5) recommendations. The 12 month stock price consensus is $6.20. This implies a total return of $14.69% with 8.39% from capital gains and 6.29% from dividends. Brian Madden on Stock Chase says: "Doesn't think dividend will be guillotined. Disappointing because it doesn't grow. Sugar is not a growth business. It is not a growth stock and probably never will be. Hold and try to trade it at the middle of its range. "
Analysts on Stock Chase are negative on this stock. Stock Chase gives this stock 1 star out of 5. It is not on the Money Sense List. Ambrose O'Callaghan on Motley Fool likes the yield on this stock. Christopher Liew on Motley Fool likes this stock for safety and passive income. The company put out a Press Release on Globe Newswire about their fourth quarter of 2022 results.
Simply Wall Street report via Yahoo Finance wonder how variable the dividend payments are. They have 3 warnings on this stock of debt is not well covered by operating cash flow; dividend of 6.33% is not well covered by earnings or cash flows; significant insider selling over the past 3 months. Simply Wall Street gives this stock 3 stars out of 5.
Rogers Sugar Inc is a Canada based sugar producing company. The company along with its subsidiaries is principally engaged in refining, packaging, and marketing sugar products. Its geographical segments include Canada, which is the key revenue generator; the United States; Europe; and others. Its web site is here Rogers Sugar Inc.
The last stock I wrote about was about was Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more. The next stock I will write about will be Calian Group Ltd (TSX-CGY, OTC-CLNFF) ... learn more on Wednesday, January 11, 2023 around 5 pm. Tomorrow on my other blog I will write about The Free Press .... learn more on Tuesday, January 10, 2023 around 5 pm.
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