Is it a good company at a reasonable price? I still like this company. I have not bought much as I am trying it out. I have it in my trading account and in my RIF. The current stock price seems reasonable.
I own this stock of Adentra Inc (TSX-ADEN, OTC- HDIUF). In April 2017, I asked for suggestions on what stocks I should now follow because of a number that I had followed had been bought out. This was one of the suggestions.
When I was updating my spreadsheet, I noticed Hardwoods Distribution Inc (TSX-HDI, OTC-HDIUF) is now Adentra Inc (TSX-ADEN, OTC- HDIUF). Even though the company is now reporting in US$, the estimates I find are in CDN$. They started to report in US$ in 2021.
I first bought this stock in 2020 and then bought more in 2022. I have made a total return of 11.42%, 9.24% from capital gains and 2.18% from dividends. I do not have much in this company as I was trying it out. Note that this company started out as an income trust and that is why dividend growth is negative beyond 15 years. Dividends were suspended in 2009 and 2010 and then reinstated in 2011. They have been growing sine 2011.
In the following growth chart, you can see that the dividend and stock price growth are the lowest. Cash Flow seems to have the best growth.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth US$ | 91.08% | 13.83% |
| 5 | AEPS Growth | 391.42% | 37.50% |
| 5 | Net Income Growth | 438.87% | 40.05% |
| 5 | Cash Flow Growth | 1376.23% | 71.33% |
| 5 | Dividend Growth | 77.50% | 12.16% |
| 5 | Stock Price Growth | 34.98% | 6.18% |
| 10 | Revenue Growth US$ | 413.42% | 17.77% |
| 10 | AEPS Growth | 1312.76% | 30.32% |
| 10 | Net Income Growth | 1971.72% | 35.40% |
| 10 | Cash Flow Growth | 6138.91% | 51.19% |
| 10 | Dividend Growth | 204.96% | 11.80% |
| 10 | Stock Price Growth | 317.55% | 15.36% |
If you had invested in this company in December 2012, for $1,004.25 you would have bought 195 shares at $5.15 per share. In December 2022, after 10 years you would have received $551.85 in dividends. The stock would be worth $5,526.30. Your total return would have been $6,078.15.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.15 | $1,004.25 | 195 | 10 | $551.85 | $5,526.30 | $6,078.15 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.74%. The 5, 10 and historical dividend yields are also low at 1.90%, 1.61% and 1.90%. The dividends have been increasing at a moderate rate (8% to 14% ranges) at 13% per year over the past 5 years. The last dividend increase was in 2023 and it was for 8.3%. (Note: the dividends increased between 2021 and 2022 was 20%.)
The Dividend Payout Ratios (DPR) are fine and low. The DPR for EPS for 2022 was 6.5% with 5 years coverage at 10%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) was 6% with 5 year coverage at 14%. The DPR for 2022 for Cash Flow per Share (CFPS) was 3% with 5 year coverage at 5%. The DPR for 2022 for Free Cash Flow (FCF) was 3% with 5 year coverage at 9.5%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 6.48% | 10.16% |
| AEPS | 6.24% | 13.81% |
| CFPS | 3.02% | 4.99% |
| FCF | 2.71% | 9.46% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is good and low at 0.76. The Liquidity Ratio for 2022 is good and high 1.75. The Debt Ratio for 2022 is good at1.55. The Leverage and Debt/Equity Ratios or 2022 are fine at 2.82 and 1.82.
| Type | Ratio '22 | Ratio '23 |
|---|---|---|
| Lg Term | 0.76 | 0.69 |
| Intang/GW | 1.00 | 0.91 |
| Liquidity | 1.75 | 1.88 |
| Liq. + CF | 2.22 | 3.33 |
| Debt Ratio | 1.55 | 1.60 |
| Leverage | 2.82 | 2.67 |
| D/E Ratio | 1.82 | 1.67 |
The Total Return per year is shown below for years of 5 to 18 to the end of 2022 in CDN$. 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 | 13.05% | 8.57% | 7.01% | 1.57% |
| 2012 | 10 | 16.98% | 21.02% | 18.59% | 2.42% |
| 2007 | 15 | -3.79% | 13.22% | 11.22% | 2.00% |
| 2004 | 18 | -2.29% | 7.44% | 4.96% | 2.48% |
The Total Return per year is shown below for years of 5 to 18 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 | 11.33% | 7.81% | 6.18% | 1.62% |
| 2012 | 10 | 13.43% | 17.62% | 15.36% | 2.26% |
| 2007 | 15 | -5.79% | 10.79% | 8.93% | 1.86% |
| 2004 | 18 | -2.93% | 6.81% | 4.13% | 2.69% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.52, 9.98 and 12.13. The corresponding 10 year ratios are 7.69, 10.43 and 14.41. The corresponding historical ratios are 6.85, 10.40 and 13.98. The current P/E Ratio is 9.64 based on a stock price of $29.87 and EPS estimate for 2023 of $3.10. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 3.79, 8.16 and 11.10. The corresponding 10 year ratios are 7.31, 9.80 and 13.29. The current P/AEPS Ratio is 10.37 based on an AEPS estimate for 2023 of $2.16 and a stock price of $22.40. The currant ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$ because only the AEPS estimates were done in US$.
I get a Graham Price of $38.15. The 10-year low, median, and high median Price/Graham Price Ratios are 0.59, 0.81 and 1.16. The current P/GP Ratio is 0.78 based on a stock price of $29.87. 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 10-year median Price/Book Value per Share Ratio of 1.48. The current P/B Ratio is 1.00 based on a Book Value of $680M, Book Value per Share of $29.94 and a stock price of $29.87. The current P/B Ratio is 33% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2023 of $32.30. This implies a P/B Ratio of 0.92 and Book Value of $733M with a stock price of $29.78. This current ratio is 38% 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 13.35. The current P/CF Ratio is 0.92 based on Cash Flow per Share estimate for 2023 of $32.30, Cash Flow of $733M and a stock price of $29.78. The current ratio is 93% 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 1.90. The current dividend yield is 1.74% based on a stock price of $29.78 and dividends of $0.45. The current dividend yield is 8% below the historical median dividend yield. 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 1.61. The current dividend yield is 1.74% based on a stock price of $29.78 and dividends of $0.45. The current dividend yield is 8% 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 0.36. The current P/S Ratio is 0.22 based on Revenue estimate for 2023 of $3,108M, Revenue per Share of $101.94 and a stock price of $29.78. The current ratio is 41% 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. The 10 year dividend yield test says this. The P/S Ratio test says the stock price is cheap. For the rest of the testing, price is either reasonable or cheap.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $43.79. This implies a total return of 48.34% with 46.60% from capital gains and 1.74% from dividends.
There is one recommendation on Stock Chase for 2023 and it is showing as a Top Pick. Stock Chase gives this stock 1 star out of 5. There are other comments under the old name of Hardwoods Distribution Inc. Aditya Raghunath on Motley Fool reviews this stock. He says analysts are bullish on this stock. Robin Brown on Motley Fool thinks this stock is cheap and a current buy. The company put out a press release on Newswire about their 2022 results. The company put out a press release on Newswire about their first quarter of 2023 results.
Simply Wall Street via Yahoo Finance looks at the dividends for this company. Simply Wall Street gives this stock 3 stars out of 5. They also list 3 warnings of earnings are forecast to decline by an average of 18.8% per year for the next 3 years; has a high level of debt; and profit margins (3.8%) are lower than last year (6.8%).
Adentra Inc is a world-class distributor of architectural products for the building envelope, and interior working, living, and playing environments. Geographically the company generates most of the revenue from the United States region. Its web site is here Adentra Inc.
The last stock I wrote about was about was IA Financial Corp (TSX-IAG, OTC-IDLLF) ... learn more. The next stock I will write about will be Ensign Energy Services (TSX-ESI, OTC-ESVIF) ... learn more on Friday, June 9, 2023 around 5 pm. Tomorrow on my other blog I will write about Something to Buy June 2023.... learn more on Thursday, June 8, 2023 around 5 pm.
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