Is it a good company at a reasonable price? What I like about this small company is that they had good debt ratios. The Liquidity Ratio is important for small companies and this company has one of 4.25 (where typically a ratio of 1.50 or higher is considered good). The Debt ratio is also very good at 4.11. Leverage and Debt/Equity Ratios are good at 1.32 and 0.32. The company currently has no long term debt or bank indebtedness. The stock price testing is showing the stock as cheap with the dividend yield tests. Stock Price is probably reasonable to cheap.
I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). Goodfellow looks like a good small cap stock. It was being pushed by Investor Reporter. The report is no longer on Advice for Investors site.
When I was updating my spreadsheet, I noticed that I have not done well with this stock. I have held it for just over 12 years and have made a total return of 4.83% with 2.43% from capital gains and 2.40% from dividends. However, this is not a core stock for me. If you look at the chart below, you will see that people who bought this stock some 15 years ago have not done well. I bought at the wrong time.
The company is optimistic about the future based on their dividend increases. They stopped dividends in 2017 and 2018. However, since dividends have restarted in 2019, dividends are up by 53% per year. The other good thing is that insiders have bought shares (around $10.50 in the past year). And finally, I like to mention about this stock is that I cannot find any analysts that are following it.
If you had invested in this company in December 2012, for $1,001.88 you would have bought 121 shares at $8.28 per share. In December 2022, after 10 years you would have received $447.70 in dividends. The stock would be worth $1,511.29. Your total return would have been $1,958.99.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.28 | $1,001.88 | 121 | 10 | $447.70 | $1,511.29 | $1,958.99 |
In the Chart below on growth, Revenue is the lowest growth. Since increasing revenue is required for other long term growth, this is a problem.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 20.53% | 0.94% |
| 5 | AFFO Growth | 1974.19% | 83.39% |
| 5 | Net Income Growth | 1660.60% | 77.47% |
| 5 | Cash Flow Growth | -52.47% | -8.09% |
| 6 | Dividend Growth | 200.00% | 20.09% |
| 5 | Stock Price Growth | 51.03% | 8.60% |
| 10 | Revenue Growth | 26.06% | 2.34% |
| 10 | AFFO Growth | 562.89% | 20.82% |
| 10 | Net Income Growth | 650.38% | 22.33% |
| 10 | Cash Flow Growth | 303.00% | 14.96% |
| 10 | Dividend Growth | 350.00% | 20.09% |
| 10 | Stock Price Growth | 50.85% | 3.39% |
The current dividend yield is good with dividend growth good. The current dividend yield is good (5% to 6% ranges) at 6.67%. The 5 year dividend yield is also good at 5.79%. The 10 and historical dividend yield is moderate (2% to 4% ranges) at 3.65% and 3.74%.
The company does have an inconsistency when it comes to dividends. Over the past 31 years of data that I have, they have raised the dividend in 19 years and decreased it in 10 years. There were no dividends in 2017 and 2018. In the past 5 years they have gone from $0.00 dividends to 1.00. Over the past 7 years, dividends have gone up by 20% per year. The last dividend increase was in 2023 and it was for 25%.
The DPR for EPS for 2022 is 24% with 5 year coverage at 20%. The DPR for Adjusted Funds from Operation is 14% with 5 year coverage at 10%. The DPR for Cash Flow per Share for 2022 is 14% with 5 year coverage at 11%. The DPR for Free Cash Flow (FCF) for 2022 is 8% with 5 year coverage at 7%.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2022 is 0.00. This company has no long term debt. The Liquidity Ratio is good at 4.25. The Debt Ratio is good at 4.11. Leverage and Debt/Equity Ratios are good at 1.32 and 0.32.
The Total Return per year is shown below for years of 5 to 31 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 | 20.09% | 14.35% | 8.60% | 5.75% |
| 2012 | 10 | 16.23% | 8.32% | 4.20% | 4.12% |
| 2007 | 15 | 1.69% | 3.64% | 0.10% | 3.53% |
| 2002 | 20 | 7.81% | 10.57% | 3.98% | 6.59% |
| 1997 | 25 | 8.14% | 8.43% | 3.39% | 5.03% |
| 1992 | 30 | 10.94% | 14.40% | 6.30% | 8.11% |
| 1991 | 31 | 11.60% | 12.80% | 5.81% | 7.00% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 2.37, 3.76 and 5.22. The corresponding 10 year ratios are 5.81, 6.89 and 8.00. The corresponding historical ratios are 6.59, 8.05 and 9.15. The current P/E Ratio is 3.93 based on a stock price of $15.00 and EPS for the last 12 month of $3.82. 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 also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/AFFO Ratios are 1.41, 1.81 and 2.51. The corresponding 10 year ratios are 4.75, 5.18 and 5.62. The current P/AFFO Ratio is 2.33 based on AFFO of 6.43 for the last 12 months and a stock price of $15.00. This ratio is below the low ratio for 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $43.31. The 10-year low, median, and high median Price/Graham Price Ratios are 0.52, 056 and 0.60. The current P/GP Ratio is 0.28 based on a stock price of $15.00. 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 0.58. The current P/B Ratio is 0.69 based on a Book Value of $186.8M, Book Value per Share of $21.83 and a stock price of $15.00. The current ratio is 18% above the 10 year median ratios. 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 3.78. The current P/CF Ratio is 4.93 based on Cash Flow for the last 12 months of $26M, Cash Flow per Share of $19.2M and a stock price of $15.00. The current ratio is 61% 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 3.74%. The current dividend yield is 6.67% based on dividends of $1.00 and a stock price of $15.00. The current dividend yield is 78% 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 3.65%. The current dividend yield is 6.67% based on dividends of $1.00 and a stock price of $15.00. The current dividend yield is 82% 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 0.14. The current P/S Ratio is 0.20 based on Revenue for the last 12 months of $631.2M, Revenue per Share of $73.75 and a stock price of $15.00. The current ratio is 43% 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 cheap. This is not an easy answer. However, I will go with the dividend yield tests. It is only the P/S Ratio and P/CF Ratio tests that says the stock price is expensive. I usually like the P/S Ratio test to confirm the dividend yield tests. However, the recently raising of the dividends suggests that the company is optimistic about the future. Also, the Graham Price at $43.31 is way above the current stock price.
When I look at analysts’ recommendations, I find that according to Barron’s and Market Watch sites there seems to be one Buy rating. The only place I could find any coverage was Simply Wall Street.
There are no entries on Stock Chase for this company Simply Wall Street reviews this stock via Yahoo Finance. The company put out a press release via Globe Newswire on their fourth quarter results for 2022.
Simply Wall Street on Yahoo Finance has a recent report talking about insider buying. Simply Wall Street has two warnings of unstable dividend track record; and does not have a meaningful market cap (CA$128M). Simply Wall Street gives this company 3 stars out of 5.
Goodfellow Inc is engaged in various business activities related to remanufacturing and distribution of lumber and wood products. Majority of company's revenue is generated from sale of Lumber. The company operates in Canada and The United States; majority revenue is generated from Canada. Its web site is here Goodfellow Inc .
The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Monday, April 10, 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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