Is it a good company at a reasonable price? First this is a small cap and therefore risky. Secondly, there is not much current growth. However, a bright spot is that the company decided that they can pay dividends again. This suggests that the management have an optimistic view of the future. Another bright spot is that during the past year, the CEO, CFO and Chairman all bought stock. The balance sheet is strong and that is another positive. The stock price is probably cheap, but it would also be a risky buy. You should not buy any shares of the company with money you cannot afford to lose.
I do not own this stock of Pulse Seismic Inc (TSX-PSD, OTC-PLSDF). I wanted to invest some extra money in a dividend paying small cap. I used a Stock Filter. I asked for companies that were priced between $1 and $5.50 and had a yield between 4% and 20%. Pulse Seismic Inc. was one of the companies that were returned. This is not a stock I chose to invest in but I found it of interest so I am following it.
When I was updating my spreadsheet, I noticed that Revenue declined a lot in 2022 from $49.15M to $9.57M. However, Revenue is better in the first quarter of 2023 at $8.41M compared to the first quarter of 2022 when it was $1.86M. Revenue in the first quarter of 2021 was $4.83M.
This company has a great balance sheet. The Liquidity Ratio is 6.76 in 2022 and currently at 13.28. The Debt Ratio is 20.41 in 2022 and currently at 24.15. This is when a good ratio for either of these items is at 1.50 or higher.
If you had invested in this company in December 2012, for $1,000.96 you would have bought 368 shares at $2.72 per share. In December 2022, after 10 years you would have received $192.28 in dividends. The stock would be worth $669.76. Your total return would have been $861.04. This is a total return would be loss of 1.67% per year with a capital loss of 3.94% and dividends of 1.26%.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $2.72 | $1,000.96 | 368 | 10 | $192.28 | $669.76 | $862.04 |
The current dividend yield is moderate with dividends restarting. The current dividend yield is moderate (2% to 4% ranges) at 3.02%. The 5 and 10 median dividend yields are low (below 2%) at 0.00% and 0.35% because of no dividend payments from 2016 to 2020 inclusive. The historical median dividend yield is moderate at 2.13%. The 5 year dividend growth is 0% because of no dividends between 2016 and 2020. Dividends were restarted in 2021. The last dividend increase was in 2023 and it was for 10%. Dividend increases, when made were good, but over the past 19 years, dividends went up in 7 years and went down in 3 years and were flat or had no dividends the rest of the time.
The Dividend Payout Ratios (DPR) could be better but they have just restarted and the restart of dividends is promising. The DPR for 2022 for Earnings per Share (EPS) is 0% because there is an earnings loss in 2022. The 5 year coverage is 342%. The DPR for 2022 using the company’s Free Cash Flow (FCF) is 84% with 5 year coverage at 19%. The DPR for 2022 for Cash Flow from Operations (CFFO) is 22% with 5 year coverage at 6%. The DPR for 2022 for Cash Flow per Share is 103% with 5 year coverage at 7%. The DPR for 2022 for Free Cash Flow (FCF) is 24% with 5 year coverage negative.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 341.67% |
| C. FCF | 83.91% | 18.54% |
| CFFO | 22.39% | 6.37% |
| CFPS | 102.85% | 7.49% |
| FCF | 23.57% | -49.76% |
Debt Ratios are very good and point to a strong Balance Sheet. The Long Term Debt/Market Cap is 0% because there is no long term debt. The Liquidity Ratio is very good and high at 6.76. The Debt Ratio is very good and high at 20.41. The Leverage and Debt/Equity Ratios are good at 1.05 and 0.05.
| Type | Ratio '22 | Ratio Curr |
|---|---|---|
| Lg Term R | 0.00 | 0.00 |
| Intang/GW | 0.28 | 0.27 |
| Liquidity | 6.76 | 13.28 |
| Liq. + CF | 14.89 | 19.77 |
| Debt Ratio | 20.41 | 24.15 |
| Leverage | 1.05 | 1.04 |
| D/E Ratio | 0.05 | 0.04 |
The Total Return per year is shown below for years of 5 to 24 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. |
|---|---|---|---|---|---|
| 2007 | 5 | 0.00% | -9.68% | -10.62% | 0.94% |
| 2002 | 10 | -3.65% | -1.67% | -3.94% | 2.26% |
| 1997 | 15 | -7.56% | -0.18% | -2.60% | 2.42% |
| 1992 | 20 | 0.00% | 7.40% | 2.19% | 5.21% |
| 1998 | 24 | 12.99% | 6.25% | 6.74% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and therefore useless. The corresponding 10 year ratios are also negative and useless. The corresponding historical ratios are 2.24, 4.09 and 5.50 are low because of the years of earning losses. The current P/E Ratio is 45.50 and is quite high and at a range generally thought of as expensive.
I have Free Cash Flow (FCF) calculated by the company. The 5-year low, median, and high median Price/Free Cash Flow per Share Ratios are 7.67, 13.72 and 20.32. The corresponding 10 year ratios are 7.64, 10.54 and 13.39. The current P/ FCF Ratio is 11.40 based on FCF for the last 12 months of $0.16 and a stock price of $1.82. The current 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.
I have Cash Flow from Operations (CFFO) calculated by the company. The 5-year low, median, and high median Price/ Cash Flow from Operations per Share Ratios are 7.48, 10.26 and 13.03. The corresponding 10 year ratios are 6.35, 8.40 and 10.45. The current P/ FCF Ratio is 11.14 based on CFFO for the last 12 months of $0.16 and a stock price of $1.82. The current ratio is above the high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $0.92. The 10-year low, median, and high median Price/Graham Price Ratios are 0.91, 1.25 and 1.58. The current P/GP Ratio is 1.18 based on a stock price of $1.82. 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 3.45. The current P/B Ratio is 2.74 based on a Book Value of $35.7M, Book Value per Share of $0.66 and a stock price of $1.82. The current ratio is 21% 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 8.21. The current P/CF Ratio is 11.14 based on Cash Flow for the last 12 months of $8.78M, Cash Flow per Share of $0.16 and a stock price of $1.82. The current ratio is 36% 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 2.13%. The current dividend yield is 3.02% based on dividends of $0.055 and a stock price of $1.82. The current dividend yield is 42% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 0.35%. The current dividend yield is 3.02% based on dividends of $0.055 and a stock price of $1.82. The current dividend yield is 756% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. Although this dividend yield is very low because of the recent years of no dividends.
The 10-year median Price/Sales (Revenue) Ratio is 6.07. The current P/S Ratio is 4.82 based on Revenue estimate for 2023 of $20.3M and a stock price of $1.82. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
The Revenue for the last 12 months is $16.1M and with this, the P/S Ratio is 6.04 and the same as the 10 year median ratio. his stock price testing suggests that the stock price is relatively reasonable and at the median.
Results of stock price testing is that the stock price is probably cheap. The historical dividend yield test and the current P/S Ratio test says this. However, other tests say reasonable to expensive. This stock seems to be only followed by one analyst. The dividend yield test may not be accurate because 7 of the 19 years of dividend data, the company paid no dividends.
When I look at analysts’ recommendations, I find a Hold (1). The consensus would be a Hold. The 12 months stock price consensus is $2.10. This implies a total return of 18.41% with 15.38% from capital gains and 3.02% from dividends.
The last three analysts’ comments on Stock Chase are for 2018, 2017 and 2015. Stock Chase gives this stock 1 star out of 5. Karen Thomas on Motley Fool reviews this stock and see long term value. Ambrose O'Callaghan on Motley Fool reviews this stock and says it is a great time to buy it. The company put out a Press Release via Global Newswire about their 2022 year end results. The company put out a press release on Global Newswire about their first quarter of 2023.
Simply Wall Street on Yahoo Finance and compared to Motley Fool reviews are somewhat negative. Simply Wall Street has 2 warnings on this stock of dividend of 3.18% is not well covered; and does not have a meaningful market cap (CA$96M). Simply Wall Street gives this stock 2 and one half stars out of 5.
Pulse Seismic Inc is a Canadian company which acts as a provider of seismic data to the energy sector in western Canada. The company is engaged in the acquisition, marketing, and licensing of 2D and 3D seismic data to the energy sector. Its web site is here Pulse Seismic Inc.
The last stock I wrote about was about was Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more. The next stock I will write about will be TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more on Friday, July 21, 2023 around 5 pm. Tomorrow on my other blog I will write about Second Source of Income.... learn more on Thursday, July 20, 2023 around 5 pm.
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