Is it a good company at a reasonable price? The dividend is good if you want a stock with a high dividend yield. It would be good if you want passive income. Personally, I like stocks with lower yield and dividend growth. A problem is the high debt level. The stock price seems reasonable currently.
I do not own this stock of Superior Plus Corp (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009.
When I was updating my spreadsheet, I noticed that this company is another income trust that has not done particularly well since being force to be a corporation. See Total Returns below.
If you had invested in this company in December 2012, for $1,003.52 you would have bought 98 shares at $10.24 per share. In December 2022, after 10 years you would have received $683.06 in dividends. The stock would be worth $1,100.54. Your total return would have been $1,783.60. This is a total return would be 7.42% per year with 0.93% from capital gains and 6.50% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $10.24 | $1,003.52 | 98 | 10 | $683.06 | $1,100.54 | $1,783.60 |
The current dividend yield is high with dividend growth non-existent. The current dividend yield is high (7% and above) at 7.07%. The 5 and 10 year median dividend yields are good (5% to 6% ranges) at 6.30% and 6.07%. The historical median dividend yield is high at 9.11%. The median dividend yield since the company became a corporation is good at 6.31%. This stock started with very high dividend yields because it used to be an income trust. The dividends have been flat since 2015 and analysts expect this to continue.
The Dividend Payout Ratios (DPR) are fine for AOCF and CFPS, so I think fine. The DPR for Earnings per Share (EPS) for 2022 cannot be calculated because of an earnings loss. The 5 year coverage is 250%. The Adjusted Operations Cash Flow (AOCF) for 2022 is 45% with 5 year coverage at 39%. The DPR for 2022 for Cash Flow per Share (CFPS) is 32% with 5 year coverage at 31%. The DPR for 2022 for Free Cash Flow (FCF) is 115% with 5 year coverage at 70%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 250.00% |
| AOCF | 45.28% | 39.09% |
| CFPS | 31.80% | 30.35% |
| FCF | 114.96% | 70.31% |
Most Debt Ratios need improving. The Long Term Debt/Market Cap Ratio is 0.85 and is higher than what I like but probably fine. The Intangible and Goodwill/Market Ratio is currently at 1.02 and that is too high. The Liquidity Ratio is low at 1.16, and add in Cash Flow after dividends and it is still rather low at 1.30 and better currently at 1.89. The Debt Ratio is a bit low at 1.48, but is fine. The Leverage and Debt/Equity Ratios are too high at 4.04 and 2.72. I prefer these to be under 3.00 and under 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.85 | 0.86 |
| Intang/GW | 0.98 | 1.02 |
| Liquidity | 1.16 | 1.37 |
| Liq. + CF | 1.30 | 1.89 |
| Debt Ratio | 1.48 | 1.54 |
| Leverage | 4.04 | 3.70 |
| D/E Ratio | 2.72 | 2.40 |
The Total Return per year is shown below for years of 5 to 26 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 | 0.00% | 5.09% | -1.10% | 6.19% |
| 2012 | 10 | 1.84% | 7.42% | 0.93% | 6.50% |
| 2007 | 15 | -5.06% | 8.56% | -0.27% | 8.83% |
| 2002 | 20 | -4.95% | 5.97% | -2.77% | 8.74% |
| 1997 | 25 | -1.68% | 11.61% | -0.66% | 12.27% |
| 1996 | 26 | -1.26% | 10.77% | -0.76% | 11.54% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.94, 14.09 and 15.96. The corresponding 10 year ratios are 12.08, 14.19 and 16.30. The corresponding historical ratios are 12.22, 14.90 and 18.18. The current P/E Ratio is 18.20 based on a stock price of $10.19 and EPS estimate for 2023 of $0.56. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Operations Cash Flow AOCF) data. The 5-year low, median, and high median Price/ Adjusted Operations Cash Flow Ratios are 4.90, 5.98 and 4.90. The corresponding 10 year ratios are 5.88, 6.98 and 7.90. The current P/AOCF Ratio for 2023 is 5.82 based on an AOCF for 2023 of $1.75 and a stock price of $10.19. This 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 Graham Price of $8.21. The 10-year low, median, and high median Price/Graham Price Ratios are 1.09, 1.25 and 1.50. The current P/GP Ratio is 1.24 based on a stock price of $10.19. 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 2.14. The current ratio is 1.91 based on a Book Value of $1,073M, Book Value per Share of $5.34 and a stock price of $10.19. The current ratio is 11% 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 7.77. The current P/CF Ratio is 5.07 based on Cash Flow per Share estimate for 2023 of $2.01, Cash Flow of $403M and a stock price of $10.19. The current ratio is 35% 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 9.11%. The current dividend yield is 7.07% based on dividends of $0.72 and a stock price of $10.19. The current dividend yield is 22% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that the company used to be an income trust and income trusts had very high dividend yields before they had to become corporations.
I get a 10 year median dividend yield of 6.07%. The current dividend yield is 7.07% based on dividends of $0.72 and a stock price of $10.19. The current dividend yield is 16% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. A problem is that the dividends have been flat since 2015.
The 10-year median Price/Sales (Revenue) Ratio is 0.71. The current P/S Ratio is 0.49 based on a stock price of $10.19, Revenue estimate for 2023 of $4,198 and Revenue per Share of $20.92. The current ratio is 31% 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 that the stock price is cheap. I know that the dividends have been flat for some time, but dividends are important. They give a current picture, whereas for estimates, they give a possible future picture. Several tests have a result of the stock price being reasonable.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (7) and Hold (1). The consensus would be a Buy. The 12 months consensus stock price is $13.83. This implies a total return of $42.79% with 35.72% from capital gains and 7.07% from dividends.
Most, but not all the analysts on Stock Chase like this stock. Stock Chase gives this stock 3 stars out of 5. Jitendra Parashar on Motley Fool likes this stock because of its high dividend. Ambrose O'Callaghan on Motley Fool also likes this stock because of its high dividend. The company put out a Press Release on their 2022 year end. The company put out a press release via Business Wire on their second quarter of 2023 results.
Simply Wall Street put out a report on Yahoo Finance about this company. Simply Wall Street gives this stock 3 stars out of 5. They put out 2 warnings of interest payments are not well covered by earnings; dividend of 7.29% is not well covered; and shareholders have been diluted in the past year.
Superior Plus Corp is a Canadian-based company that distributes energy and specialty chemicals. The company is organized into three business segments: U.S. Propane, Canadian Propane & Wholesale Propane, out of which the majority is from the U.S. Propane segment. Its web site is here Superior Plus Corp.
The last stock I wrote about was about was Evertz Technologies Ltd (TSX-ET, OTC-EVTZF) ... learn more. The next stock I will write about will be Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) ... learn more on Friday, August 11, 2023 around 5 pm. Tomorrow on my other blog I will write about Best Stocks Stock Trades.... learn more on Thursday, August 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment