Is it a good company at a reasonable price? It is a negative that the dividends are flat. Also, the total return has been quite inconsistent in the past. They have a lot of debt, but a lot of utilities have lots of debt. I follow 6 insiders including the CEO, CFO and Chairman and all 6 have bought shares in the last year, so this is a positive. Another positive is that the stock price is probably reasonable.
I do not own this stock of Boralex Inc (TSX-BLX, OTC-BRLXF). This stock is on the Money Sense Dividend list and the Maple Money Dividend List. This is a new stock that I am following.
When I was updating my spreadsheet, I noticed that the second quarterly report, for at least some items only show their values for 3 months to June and 12 months to June. I expect all values to be shown 3 months to June and 6 months to June. Are they trying to make things difficult? For example, this is for Discretionary Cash Flow (or AFFO).
In the chart below, you can see that Revenue is growing and this is a good sign. The stock price is not growing faster than the Revenue. This points to a reasonable price.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 72.94% | 11.58% |
| 5 | AEPS Growth | 3.45% | 0.68% |
| 5 | Net Income Growth | 36.36% | 6.40% |
| 5 | Cash Flow Growth | 253.79% | 28.75% |
| 5 | Dividend Growth | 10.00% | 1.92% |
| 5 | Stock Price Growth | 70.30% | 11.24% |
| 10 | Revenue Growth | 350.84% | 16.25% |
| 10 | AEPS Growth | 314.29% | 15.27% |
| 10 | Net Income Growth | 686.28% | 22.90% |
| 10 | Cash Flow Growth | 982.37% | 26.89% |
| 8 | Dividend Growth | 26.92% | 2.41% |
| 10 | Stock Price Growth | 336.42% | 15.88% |
If you had invested in this company in December 2012, for $1,008.70 you would have bought 110 shares at $9.17 per share. In December 2022, after 10 years you would have received $600.71 in dividends. The stock would be worth $4,402.20. Your total return would have been $5,002.91. This is a total return would be 18.85% per year with 15.88% from capital gains and 2.97% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.17 | $1,008.70 | 110 | 10 | $600.71 | $4,402.20 | $5,002.91 |
If you had invested in this company in December 1991, for $1,001.30 you would have bought 589 shares at $1.70 per share. In December 2022, after 30 years you would have received $3,001.54 in dividends. The stock would be worth $23,571.78. Your total return would have been $26,573.32. This is a total return would be 12.20% per year with 11.10% from capital gains and 2.97% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $1.70 | $1,001.30 | 589 | 30 | $3,001.54 | $23,571.78 | $26,573.32 |
The current dividend yield is low with dividend growth non-existent. The current dividend yield is low (below 2%) at 1.98%. The 5, 10 and historical median dividend yields are 2.16%, 3.08% and 0.00%. The dividends have increased by 1.9% per year over the past 5 years, but there has been no dividend increases since 2019.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2022 for Earnings per Share (EPS) is 220% with 5 year coverage at 2516%. There have been too many years of earnings losses. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 40% with 5 year coverage at 55%. The DPR for 2022 for Cash Flow per Share (CFPS) is 14% with 5 year coverage at 16%. The DPR for 2022 for Free Cash Flow (FCF) is 54% with 5 year coverage at 49%. The AEPS is a better standard for judging DPR than EPS.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 220.00% | 2516.15% |
| AEPS | 40.49% | 54.76% |
| CFPS | 13.62% | 15.88% |
| FCF | 53.83% | 48.60% |
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio is high at 0.70. Utilities tend to have lots of debt. The Liquidity Ratio is low at 0.78, but better at 1.40 when you add in Cash Flow after dividends but I prefer this to be 1.50 or better. The Debt Ratio for 2022 is low at 1.45 and I also prefer this to be at 1.50. Leverage and Debt/Equity Ratios are too high at 3.89 and 2.68 and I prefer these to be below 3.00 and 2.00, but they have been much higher in the past and are improving.
| Type | Ratio '22 | Ratio Curr |
|---|---|---|
| Lg Term R | 0.70 | 0.85 |
| Intang/GW | 0.31 | 0.37 |
| Liquidity | 0.78 | 0.99 |
| Liq. + CF | 1.40 | 1.49 |
| Debt Ratio | 1.45 | 1.46 |
| Leverage | 3.89 | 3.95 |
| D/E Ratio | 2.68 | 2.71 |
The Total Return per year is shown below for years of 5 to 32 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. Note that this company paid a couple of odd dividends, then started regular dividend payments in 2014.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2017 | 5 | 1.92% | 13.51% | 11.24% | 2.28% |
| 2012 | 10 | 3.02% | 18.85% | 15.88% | 2.97% |
| 2007 | 15 | 0.00% | 6.93% | 5.77% | 1.16% |
| 2002 | 20 | 0.00% | 13.44% | 12.20% | 1.17% |
| 1997 | 25 | 0.00% | 9.31% | 8.51% | 0.78% |
| 1992 | 30 | 4.32% | 12.20% | 11.10% | 1.09% |
| 1990 | 32 | 18.65% | 16.52% | 2.13% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 24.25, 55.46 and 86.67. The corresponding 10 year ratios are negative so unusable. The corresponding historical ratios are 7.70, 10.84 and 13.98. The current P/E Ratio is 31.21 based on a stock price of $33.39 and EPS estimate for 2023 of $1.07. The current ratio is rather high. Generally, speaking a P/E Ratio above 20 is considered high.
I have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 18.56, 24.98 and 32.18. The corresponding 10 year ratios are 15.76, 21.45 and 27.88. The current P/AFFO Ratio is 20.24 based on a stock price of $33.39. The current ratio is between the low and median ratios of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $24.72 . The 10-year low, median, and high median Price/Graham Price Ratios are 1.13, 1.56 and 1.81. The current P/GP Ratio is 1.35 based on a stock price of $33.39. 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 2.36. The current P/B Ratio is 2.03 based on a Book Value of $1,692M, Book Value per Share of $16.46 and a stock price of 33.39. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate of $16.60. With a stock price of $33.39, the Book Value would be $1,706M and the P/B Ratio 2.01. This ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.61. The current P/CF Ratio is 8.50 based on Cash Flow per Share estimate for 2023 of $3.93 and a stock price of $33.39. The current ratio is 1.3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 0% because yearly payment of dividends did not start until 2014. We can do not testing with the historical median dividend yield.
I get a 10 year median dividend yield of 2.96%. The current dividend yield is 1.98% based on dividends of $0.66 and a stock price of $33.39. The current dividend yield is 33% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. A problem is that the dividends have been flat since 2019.
The 10-year median Price/Sales (Revenue) Ratio is 3.51. The current P/S Ratio is 3.74 based on Revenue estimate for 2023 of $926M, Revenue per Share of $9.01 and a stock price of $33.39. The current ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.
Results of stock price testing is that the stock price could be reasonable. The P/S Ratio test shows this. The problem with the dividend tests is that they have been flat for a while. Dividends are important and keeping them flat could imply that the lack of confidence of the management of this company in the future. Most of the other testing is showing the stock price as reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (10) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is 44.29. This implies a total return of 34.62% with 32.64% from capital gains and 1.98% from dividends.
All the analysts on Stock Chase in 2023 think this stock is a buy. Stock Chase gives this stock 4 stars out of 5. It is on the Money Sense and Maple Money dividend lists, but not on the Aristocrat list. Ambrose O'Callaghan on Motley Fool thinks this is a cheap growth stock. Christopher Liew on Motley Fool thinks renewable energy stocks are the future. The company put out a press release on Market Screener on its fourth quarter of 2022 results. The company put out a press release on Global Newswire.
Simply Wall Street via Yahoo Finance put out a report about this company. They find its ROE low. Simply Wall Street gives this stock 2 and one half stars out of 5. They give 3 warnings of interest payments are not well covered by earnings; large one-off items impacting financial results; and profit margins (3.4%) are lower than last year (7.8%). By the way, the reason for AEPS is because of large one-off items.
Boralex is a power producer whose core business is dedicated to the development and operation of renewable energy power stations in Canada, France, the United States, and the United Kingdom. Boralex owns power generation assets across four technologies: wind, solar, hydroelectric, and thermal. Substantially all Boralex's operating assets are subject to indexed, fixed-price energy sales contracts. Its web site is here Boralex Inc.
The last stock I wrote about was about was Capital Power Corp (TSX-CPX, OTC-CPRHF) ... learn more. The next stock I will write about will be High Liner Foods (TSX-HLF, OTC-HLNFF) ... learn more on Friday, September 1, 2023 around 5 pm. Tomorrow on my other blog I will write about Virtue Investing .... learn more on Thursday, August 31, 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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