Is it a good company at a reasonable price? This stock has only been around for 3 years. It probably has good growth potential and it has been growing quickly. The dividend is far to low for me to consider this stock. I generally do not buy stocks with dividends less that 1% and this company has low dividends yield running around 0.16%. The dividends are growing, but from a very low base. With the dividend so low, it would take too many years of owning this company to get any meaningful dividend. So the company is just sort of a dividend growth company and not one I would like at present.
I do not own this stock of GFL Environmental Inc (TSX-GFL, NYSE-GFL). GFL Environmental (TSX:GFL) is small, pays dividend and talked about by Amy Legate-Wolfe on Motley Fool
When I was updating my spreadsheet, I noticed that it was usual in that it pays the dividend in US$, but the reporting or financials are in CDN$. Also, it may be dividend paying but the yield at 0.16% is so small it is hard to think of it as a dividend paying stock. For most items in the following chart, there is growth, but with Net Income, the values are just less bad than they used to be. Net Income 4 years ago was a $483.4M loss and now it is a loss of $311.8M,
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 4 | Revenue Growth | 264.96% | 29.55% |
| 2 | AEPS Growth | 188.24% | 23.58% |
| 4 | Net Income Growth | 35.50% | 6.26% |
| 4 | Cash Flow Growth | 3628.91% | 106.21% |
| 2 | Dividend Growth | 66.66% | 10.76% |
| 3 | Stock Price Growth | 76.52% | 12.04% |
If you had invested in this company in December 2019, for $1,008.00 you would have bought 45 shares at $22.40 per share. In December 2022, after 3 years you would have received $7.09 in dividends. The stock would be worth $1,779.30. Your total return would have been $1,786.39. This is a total return would be 21.04% per year with 20.85% from capital gains and 0.19% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $22.40 | $1,008.00 | 45 | 3 | $7.09 | $1,779.30 | $1,786.39 |
The current dividend yield is very low with dividend growth moderate. The current dividend yield is low (below 2%) and barely visible at 0.16%. The 3 year median is also very low at 0.14%. This company has only been paying dividends for 3 years. The dividend growth for the last couple of years is moderate (8% to 14% ranges) at 8.4% per year. The last dividend increase was 2023 and it was for 8.3%.
The Dividend Payout Ratios (DPR) are good. DPR for Earnings per Share (EPS) for 2022 is negative. The 3 year coverage is also negative. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 13% with 3 year coverage at 10%. The DPR for Cash Flow per Share (CFPS) for 2022 is 2% with 5 year coverage at 1%. The DPR for Free Cash Flow (FCF) for 2022 is 4% with 3 year coverage at 10%.
| Item | Cur | 3 Years |
|---|---|---|
| EPS | -5.89% | -1.49% |
| AEPS | 12.99% | 9.69% |
| CFPS | 1.47% | 1.40% |
| FCF | 4.00% | 10.44% |
Debt Ratios currently fine after the second quarter of 2023, but Liquidity Ratio was a problem for 2022. The Long Term Debt/Market Cap Ratio is fine at 0.62. The Liquidity Ratio is very low at 0.51. Even if you add in Cash Flow after dividends, you still get to only 0.91. That means that the current assets cannot cover the current liability. This can be a problem is you suddenly hit bad times. It improves to 1.63 after the second quarter. The Debt Ratio is fine at 1.44, but I prefer it to be at 1.50 or higher. It is better at 1.62 after the second quarter. The Leverage and Debt/Equity Ratios are too high for 2022 at 3.27 and 2.27, but improve to 2.61 and 1.61 currently (after second quarter of 2023).
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.62 | 0.44 |
| Intang/GW | 0.76 | 0.57 |
| Liquidity | 0.51 | 0.77 |
| Liq. + CF | 0.91 | 1.63 |
| Debt Ratio | 1.44 | 1.62 |
| Leverage | 3.27 | 2.61 |
| D/E Ratio | 2.27 | 1.61 |
The Total Return per year is shown below for years of 5 to 3 to the end of 2022 in CDN$. 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. |
|---|---|---|---|---|---|
| 2019 | 3 | 10.00% | 21.04% | 20.85% | 0.17% |
The Total Return per year is shown below for years of 5 to 3 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. |
|---|---|---|---|---|---|
| 2019 | 3 | 10.00% | 20.47% | 20.27% | 0.18% |
The 3-year low, median, and high median Price/Earnings per Share Ratios are negative over the last 3 years and so useless. This stock only went public 3 years ago. The current P/E Ratio is 490.89 based on a stock price of $44.63 and EPS estimate for 2023 of $0.09. If a P/E of 30 is high, this is very high.
I have Adjusted Earnings per Share (AEPS) Data. The 3-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 82.81, 102.74 and 122.67. The current P/AEPS 39.85 based on stock price of $44.63 and AEPS of $1.12. This is still a very high P/AEPS Ratio. However, the current ratio is below the low ratios of the 3 years median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $21.02. The 3-year low, median, and high median Price/Graham Price Ratios are 2.42, 3.51 and 4.32. The current P/GP Ratio is 2.12 based on a stock price of $44.63. The current ratio is below the low ratio of the 3 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 3-year median Price/Book Value per Share Ratio of 2.10 The current P/B Ratio is 2.55 based on a Book Value of $7,116M, Book Value per Share of $17.53 and a stock price of $44.63. The current ratio is 21% the 3 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2023 of 18.70. This produces a P/B Ratio is 2.39 and Cash Flow of $7,591M with a stock price of $44.63. This ratio is 13% above the 3 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 3-year median Price/Cash Flow per Share Ratio of 16.09. The current P/CF Ratio is 11.16 based on a stock price of $44.63, Cash Flow per Share estimate of $4.00 and Cash Flow of $1,624M. The current ratio is 31% below the 3 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 3 year and historical median dividend yield of 0.14. The current dividend yield is 0.16% based on a dividend of 0.07 and a stock price of $44.63. The current dividend yield is 11% above the 3 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 3-year median Price/Sales (Revenue) Ratio is 2.23. The current P/S Ratio is 2.44 based on a stock price of $44.63, Revenue estimate for 2023 of $7,422M and Revenue per Share of $18.28. The current ratio is 10% above the 3 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably still reasonable. The dividend yield test says this and the P/S Ratio test confirms a reasonable price. Some of the ratios are very high, especially the P/E Ratios. Most of the other testing is say the stock price is reasonable or cheap.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (8) and Sell (1). The consensus would be a Strong Buy. The 12 month stock price is $54.06. This implies a total return of 21.28% with 21.13% from capital gains and 0.16% from dividends.
The last two entries on Stock Chase is Do Not Buy. High debt level and weak management are mentioned. Stock Chase gives this stock 3 stars out of 5. It is not on any dividend list. Daniel Da Costa on Motley Fool says this is a defensive growth stock. Vishesh Raisinghani on Motley Fool thinks this stock is a safe haven. The company put out a press release on Newswire about their 2022 year end results. The company put out a Press Release on their second quarter of 2023.
Simply Wall Street via Yahoo Finance put out a report on this stock. They have two warnings of shareholders have been diluted in the past year; and significant insider selling over the past 3 months. Simply Wall Street gives this stock 2 and one half stars out of 5.
GFL Environmental Inc is an environmental services company. Its offerings include non-hazardous solid waste management, infrastructure, soil remediation, and liquid waste management services. GFL's geographical segments are Canada and the United States. Its web site is here GFL Environmental Inc.
The last stock I wrote about was about was Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) ... learn more. The next stock I will write about will be Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more on Wednesday, August 16, 2023 around 5 pm. Tomorrow on my other blog I will write about Best Stocks New Canadians .... learn more on Tuesday, August 15, 2023 around 5 pm.
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