Is it a good company at a reasonable price? This stock has a large portion of its total return in dividends. I like to buy a range of companies, so with high dividends and some with moderate dividends and some with low dividends. Note that there is a trade off between dividend yield and growth. I own this company and will continue to do so. I still like it. The stock price seems reasonable and below the median and may even be cheap.
I own this stock of Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF). I own this stock of Alaris Equity Partners Income Trust (TSX-AD, OTC-ALARF). This is a stock that Dividends in Hand Blogger had bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest. The Blogger Dividends in Hand sold his position in this company in April 29, 2020.
When I was updating my spreadsheet, I noticed I have had this for just over 5 years. Last year at the end of March 2022, I had total return of 9.92%, with 2.74% from capital gains and 7.18% from dividends. This year, my total return to the end of March 2023 is just 6.04% with a capital loss of 1.54% and dividends of 7.58%.
The following chart shows growth over past 5 and 10 years. The stock crashed when dividends were cut in 2020 and so both dividends are stock price are down over the past 5 years.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 113.32% | 16.36% |
| 5 | EPS Growth | 775.76% | 54.20% |
| 5 | Net Income Growth | 998.12% | 61.48% |
| 5 | Cash Flow Growth | 107.93% | 15.77% |
| 5 | Dividend Growth | -22.73% | -4.01% |
| 5 | Stock Price Growth | -28.87% | -4.95% |
| 10 | Revenue Growth | 491.87% | 19.46% |
| 10 | EPS Growth | 236.05% | 12.75% |
| 10 | Net Income Growth | 624.54% | 21.90% |
| 10 | Cash Flow Growth | 475.94% | 19.13% |
| 10 | Dividend Growth | 12.82% | 1.21% |
| 10 | Stock Price Growth | -47.82% | -3.83% |
If you had invested in this company in December 2012, for $1,019.53 you would have bought 43 shares at $23.71 per share. In December 2022, after 10 years you would have received $628.34 in dividends. The stock would be worth $689.72. Your total return would have been $1,318.06.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $23.71 | $1,019.53 | 43 | 10 | $628.34 | $689.72 | $1,318.06 |
The current dividend yield is high with dividend growth restarted. The current dividend yield is high (7% or higher) at 8.11%. The 5, 10 and historical median dividend yields are also high at 7.77%, 7.29% and 7.29%. Dividends were cut in 2019. The company again started to raise dividends in 2021. The last dividend increase was in 2023 and it was fore 3.03%. Dividends are still 18% below the high dividend for 2019.
The Dividend Payout Ratios (DPR) are fine currently, but are expected to be rather too high in 2023. The DPR for EPS for 2022 is 47% with 5 year coverage at 77%. The DPR for EPS is expected to be around 74% in 2023. The DPR for Cash Flow per Share (CFPS) is 35% with 5 year coverage at 49%. The DPR for CFPS for 2023 is expected to be around 61%. The DPR for Free Cash Flow (FCF) for 2022 is 39% with 5 year coverage at 57%. The DPR for FCF is expected to be round 64%.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.38. The Liquidity Ratio for 2022 is good at 2.90. The Debt Ratio for 2022 is good at 2.90. The Leverage and Debt/Equity Ratios are also good at 1.53 and 0.53.
The Total Return per year is shown below for years of 5 to 15 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 | -4.01% | 2.54% | -4.95% | 7.49% |
| 2012 | 10 | 1.21% | 3.42% | -3.83% | 7.25% |
| 2007 | 15 | 2.24% | 12.51% | 3.20% | 9.31% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.93, 11.26 and 12.59. The corresponding 10 year ratios are 12.10, 18.34 and 22.35. The corresponding historical ratios are 11.16, 13.84 and 17.17. The current P/E Ratio is 9.11 based on a stock price of $16.77 and EPS estimate for 2023 of $1.84. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $28.70. The 10-year low, median, and high median Price/Graham Price Ratios are 0.74, 1.04 and 1.28. The current P/GP Ratio is 0.58 based on a stock price of $16.77. 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.
I get a 10-year median Price/Book Value per Share Ratio of 1.23. The current P/B Ratio is 0.84 based on a stock price of $16.77, Book Value of $898M, and Book Value per Share of $19.90. The current ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I have a Book Value per Share estimate for 2023 of $20.50. This implies a ratio of 0.82 with stock price of $16.77 and Book Value of $925.6M. This ratio is 34% 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 10.08. The current P/CF Ratio is 7.49 based on Cash Flow per Share estimate for 2023 of $2.24, Cash Flow of $101M and a stock price of $16.77. The current ratio is 26% 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 also of 7.29%. The current dividend yield is 8.11% based on dividends of $1.36 and a stock price of $16.77. The current dividend yield is 11% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 7.29%. The current dividend yield is 8.11% based on dividends of $1.36 and a stock price of $16.77. The current dividend yield is 11% above the historical median dividend yield. 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 7.74. The current P/S Ratio is 4.73 based on Revenue estimate for 2023 of $160M, Revenue per Share of $3.54 and a stock price of $16.77. The current ratio is 39% 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 reasonable and below the median. The dividend yield tests show this. The P/S Ratio test confirms this with a stock price test of cheap. All the other tests are showing the stock price as cheap, so the stock price may even be cheap.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (1). The consensus would be a Buy. The 12 months stock price consensus is $22.00. This implies a total return of 39.30% with 31.19% from capital gain and 8.11% from dividends based on a current stock price of $16.77.
On the TD WebBroker site, Geoffrey Kwan to RBC Capital gives this stock a Hold rating and price target of $19.00. See Tipranks . They say that this company has outperformed its overall industry. There seems to be only one analyst following this stock. The last time there was a Buy recommendation was in August 2022 when stock was at $17.80. Since then, the ratings have been a Hold.
Recent analysts’ remarks on Stock Chase are positive. Stock Chase gives this stock 4 stars out of 5. It is not on the Money Sense list, but it is on the Maple Money List. Adam Othman on Motley Fool thinks this stock will take off in the next bull market. Vishesh Raisinghani on Motley Fool thinks this stock is undervalued. The company put out a press release on Global Newswire about their 2022 results. Simply Wall Street reviewed this stock on Yahoo Finance last year. Simply Wall Street gives out 3 warnings on this stock of earnings are forecast to decline by an average of 18.8% per year for the next 3 years; unstable dividend track record; and significant insider selling over the past 3 months. Simply Wall Street gives this stock 3 stars out of 5.
Alaris Equity Partners Income Trust is an open-ended trust. The Trust, through its subsidiaries, indirectly provides alternative financing to private companies (Partners) in exchange for distributions with the principal objective of generating stable and predictable cash flows for payment of distributions to unitholders of the Trust. Its web site is here Alaris Equity Partners Income Trust.
The last stock I wrote about was about was Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more. The next stock I will write about will be Toromont Industries Ltd (TSX-TIH, OTC-TMTNF) ... learn more on Friday, April 14, 2023 around 5 pm. Tomorrow on my other blog I will write about What Drives Stock Returns.... learn more on Thursday, April 13, 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.
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.
No comments:
Post a Comment