Is it a good company at a reasonable price? The stock price hit a high in 2020 and the stock price has been going down ever since. The P/E Ratios were really high in 2020. The current P/E Ratios are still a bit high in the 19 range, but not unusually high. This stock is rated a High Risk. For dividend growth companies, I generally do not buy unless the dividend yield is at least 1% and this company’s yield is just over 1%. It is still growing well. I think this stock should do well in the future, but I doubt it will do as well as it has in the past. The current stock price is probably reasonable.
I do not own this stock of Cargojet Inc (TSX-CJT, OTC-CGJTF). I read about this stock on Motley Fool in an article by Joey Frenette. See article.
When I was updating my spreadsheet, I noticed that the website is not set up properly for downloading financials. I had to go into their coding to get the financials I wanted. I realize that not everyone will be able to do this. Although this is not the only company where I found problems in getting information I wanted.
This company has grown a lot since it first went public 17 year ago. See the chart below on the 5 and 10 year growth. The dividend growth has been the lowest and it mostly barely makes 1%.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 155.92% | 20.68% |
| 5 | AEPS Growth | 425.91% | 39.37% |
| 5 | Net Income Growth | 704.22% | 51.73% |
| 5 | Cash Flow Growth | 258.96% | 29.12% |
| 5 | Dividend Growth | 48.57% | 8.24% |
| 5 | Stock Price Growth | 98.38% | 14.68% |
| 10 | Revenue Growth | 480.61% | 19.23% |
| 10 | AEPS Growth | 2014.58% | 35.68% |
| 10 | Net Income Growth | 5265.72% | 48.92% |
| 10 | Cash Flow Growth | 1287.85% | 30.09% |
| 10 | Dividend Growth | 89.85% | 6.62% |
| 10 | Stock Price Growth | 1260.82% | 29.83% |
If you had invested in this company in December 2005, for $1,000.35 you would have bought 105 shares at $9.60 per share. In December 2022, after 17 years you would have received $1,400.12 in dividends. The stock would be worth $12,216.75. Your total return would have been $13,616.87. This is a total return would be 19.53% per year with 15.81% from capital gains and 3.72% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.60 | $1,008.00 | 105 | 17 | $1,400.12 | $12,216.75 | $13,616.87 |
If you had invested in this company in December 2012, for $1,000.35 you would have bought 117 shares at $8.55 per share. In December 2022, after 10 years you would have received $934.01 in dividends. The stock would be worth $13,612.95. Your total return would have been $14,546.96. This is a total return would be 33.24% per year with 29.83% from capital gains and 3.41% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.55 | $1,000.35 | 117 | 10 | $934.01 | $13,612.95 | $14,546.96 |
The current dividend yield is low with dividend growth just in the moderate range. The current dividend yield is low (below 2%) at 1.17%. The 5 and 10 year median ratios are also low at 0.85% and 1.29%. The historical dividend yield is moderate (2% to 4% ranges) at 4.04%. The historical dividend yield is so much higher because this company started as an income trust and income trusts have higher dividend yields. The dividend growth is currently moderate (8% to 14% ranges) at 8.2% per year over the past 5 years.
The Dividend Payout Ratios (DPR) are currently good. The DPR for Earnings per Share (EPS) for 2022 is 11% and the 5 year coverage is 29%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 16% and 5 year coverage at 39%. The DPR for Cash Flow per Share (CFPS) for 2022 is 6% and 5 year coverage at 7%. The DPR Free Cash Flow (FCF) for 2022 is 11% and the 5 year coverage is negative.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 10.76% | 29.21% |
| AEPS | 15.71% | 39.04% |
| CFPS | 5.91% | 6.53% |
| FCF | 11.25% | -18.63% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.31 and still good currently at 0.32. The Liquidity Ratio for 2022 is low at 0.77, but if you add in Cash Flow after dividends, it is good at 2.52. The current one with Cash Flow is fine at 1.43. The Debt Ratio for 2022 is good currently at 2.39. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.39 and 1.39.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.31 | 0.33 |
| Intang/GW | 0.03 | 0.03 |
| Liquidity | 0.77 | 0.73 |
| Liq. + CF | 2.52 | 1.43 |
| Debt Ratio | 1.72 | 1.78 |
| Leverage | 2.39 | 2.29 |
| D/E Ratio | 1.39 | 1.29 |
The Total Return per year is shown below for years of 5 to 17 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. | check |
|---|---|---|---|---|---|---|
| 2017 | 5 | 8.24% | 15.93% | 14.68% | 1.24% | 15.93% |
| 2012 | 10 | 6.62% | 33.24% | 29.83% | 3.41% | 33.24% |
| 2007 | 15 | -0.36% | 17.20% | 14.98% | 2.22% | 17.20% |
| 2005 | 17 | 2.15% | 19.53% | 15.81% | 3.72% | 19.53% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.02, 14.87 and 23.28. The corresponding 10 year ratios are 15.63, 20.60 and 26.83. The corresponding historical ratios are 11.60, 14.87 and 18.84. The current ratio is 19.72 based on a stock price of $96.25 and EPS estimate for 2023 of $4.88. 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/Adjusted Earnings per Share Ratios are 16.09, 21.72 and 36.53. The corresponding 10 year ratios are 18.16, 24.02 and 32.40. The current P/AEPS Ratio is 19.89 based on a stock price of $96.25 and AEPS estimate for 2023 of $4.84. 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 Graham Price of $74.78. The 10-year low, median, and high median Price/Graham Price Ratios are 2.33, 2.96 and 3.71. The current ratio is 1.29 based on a stock price of $96.25. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 4.31. The current P/B Ratio is 1.87 based on a stock price of $96.25, Book Value of $883.7M and Book Value per Share of $51.35. The current ratio is 57% 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 $51.40. With a Book Value of $884.6M and a stock price of $56.25, this implies a P/B Ratio of 1.87. This ratio is 57% 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 8.49. The current P/CF Ratio is 8.60 based on Cash Flow per Share estimate for 2023 of $11.60, Cash Flow of $199.6M and a stock price of $96.25. The current ratio is 2% 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 4.04%. The current dividend yield is 1.19% based on dividends of 1.144 and a stock price of $96.25. The current dividend yield is 71% lower than 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 was put on the TSX as an income trust. Income trust companies can have quite high dividend yields.
I get a 10 year median dividend yield of 1.29%. The current dividend yield is 1.19% based on dividends of 1.144 and a stock price of $96.25. The current dividend yield is 8% lower than the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 5 year median dividend yield of 0.85%. The current dividend yield is 1.19% based on dividends of 1.144 and a stock price of $96.25. The current dividend yield is 40% higher than the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.97. The current P/S Ratio is 1.74 based on Revenue estimate for 2023 of $954M, Revenue per Share of $55.43 and a stock price of $96.25. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests are not as good as usual because the company used to be an income trust company which had high dividend yields. The 5 and 10 year median dividend yield tests are fairly reasonable. The P/S Ratio test says that the stock price is reasonable. Most of the other testing is showing the stock price as relatively cheap to reasonable.
When I look at analysts’ recommendations, I find Strong Buy (5), Buy (3) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $144.33, with a high of $197.00 and a low of $110.00. The consensus stock price implies a total return of 51.25% with 50.06% from capital gains and 1.19% from dividends.
There are several analysts saying Do Not Buy on Stock Chase . Stock Chase gives this stock 5 stars out of 5. This seems to be because the stock has been treating down since 2020. The ones saying buy, say it is a long term buy. Sneha Nahata on Motley Fool thinks this stock is a buy because it has strong fundamentals. Daniel Da Costa on Motley Fool thinks this stock is a buy because it has potential for long term growth. The company put out a press release on Aviation News about their results for 2022. The company put out a press release on Newswire about their second quart of 2023.
Simply Wall Street via Yahoo Finance talk about who owns shares in this company. Simply Wall Street has 3 warnings on this stock of interest payments are not well covered by earnings; earnings are forecast to decline by an average of 2.2% per year for the next 3 years; and high level of non-cash earnings. When there are non-cash earnings, look at the Adjusted Earnings per Share. Simply Wall Street gives this stock 2 and one half stars out of 5.
Cargojet Inc operates a domestic air cargo co-load network between sixteen major Canadian cities. The company provides dedicated aircraft to customers on an Aircraft, Crew, Maintenance, and Insurance basis, operating between points in Canada, USA, Mexico, and Europe. The company also operates scheduled international routes for multiple cargo customers between the USA and Bermuda, between Canada, UK, and Germany, and between Canada and Mexico. Its web site is here Cargojet Inc.
The last stock I wrote about was about was SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) ... learn more. The next stock I will write about will be Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more on Monday, September 11, 2023 around 5 pm.
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