Is it a good company at a reasonable price? The bad news is that the stock price has not gone anywhere over the past 10 years. Another negative is lack of Revenue Growth. The good news is that they have growing earnings. Also, there is insider buying by the CEO and CFO. Another positive event is they have been increasing the dividends lately, so this shows that the company has a positive attitude towards the future. The stock price is relatively cheap.
I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is of average risk. The MPL Communication’s site is here. Ryan Irvine of Keystone also likes this company. Looks like I started to follow this company in 2013.
When I was updating my spreadsheet, I noticed Adjusted Earnings per Share estimates are lower in 2023 than they were last year. Last year, the estimate for 2023 was $1.60 and today it is $1.34. Although the AEPS for 2022 came in at $1.48 when the estimate was lower at $1.35.
A problem I see with growth is that Revenue is not growing. They have some good earnings and cash flow growth, but the stock price has not gone anywhere over the past 10 years.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth US$ | 1.51% | 0.30% |
| 5 | AEPS Growth US$ | 59.14% | 9.74% |
| 5 | Net Income Growth US$ | 86.68% | 13.30% |
| 5 | Cash Flow Growth US$ | -254.40% | N/C |
| 5 | Cash Flow Gth Excl. WC US$ | 111.63% | 16.18% |
| 5 | Dividend Growth CDN$ | -23.89% | -5.31% |
| 5 | Stock Price Growth US$ | -14.03% | -2.98% |
| 10 | Revenue Growth US$ | 13.36% | 1.26% |
| 10 | AEPS Growth US$ | 17.46% | 1.62% |
| 10 | Net Income Growth US$ | 3270.49% | 42.16% |
| 10 | Cash Flow Growth US$ | -196.42% | N/C |
| 10 | Cash Flow Gth Excl. WC US$ | 35.05% | 3.05% |
| 10 | Dividend Growth CDN$ | 104.76% | 7.43% |
| 10 | Stock Price Growth US$ | -38.30% | -4.71% |
If you had invested in this company in December 2012, for $1,008.96 you would have bought 64 shares at $15.77 per share. In December 2022, after 10 years you would have received $265.28 in dividends. The stock would be worth $881.28. Your total return would have been $1,146.56. This is a total return would be 1.45% per year with 1.34% from capital loss and 2.80% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $15.77 | $1,008.96 | 64 | 10 | $265.28 | $881.28 | $1,146.56 |
The current dividend yield is moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 4.31%. The 5, 10 and historical dividend yields are 3.22%, 2.59% and 2.56%. The dividend growth over the past 5 years is negative and dividends are down by 5.3% per year over the past 5 years. They made a big cut in dividends 2019 of 65.5%. They started to raise the dividends again in 2020. Dividends are still 10% lower today than in 2018. Dividends are paid in CDN$ but the company reports in US$.
The Dividend Payout Ratios (DPR) are good. The DPR for Earnings per Share (EPS) for 2022 is 20% with 5 year coverage at 32%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 21% with 5 year coverage at 27%. The DPR for Cash Flow per Share (CFPS) for 2022 is 10% with 5 year coverage at 11%. The DPR for Free Cash Flow (FCF) for 2022 is negative with 5 year coverage at 50%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 20.35% | 31.79% |
| AEPS | 21.45% | 26.56% |
| CFPS | 9.70% | 10.82% |
| FCF | -11.65% | 50.32% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is a bit high at 0.70 and it is preferred to be at 0.50 or lower. The Liquidity Ratio for 2022 is good at 1.74 and this is an important ratio. The Debt Ratio for 2022 is good at 1.59. The Leverage and Debt/Equity Ratios are fine at 2.69 and 1.69.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.70 | 0.80 |
| Intang/GW | 0.84 | 0.96 |
| Liquidity | 1.74 | 2.13 |
| Liq. + CF | 1.69 | 2.39 |
| Debt Ratio | 1.59 | 1.75 |
| Leverage | 2.69 | 2.34 |
| D/E Ratio | 1.69 | 1.34 |
The Total Return per year is shown below for years of 5 to 39 to the end of 2022 in CDN$. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | -5.31% | 1.08% | -1.47% | 2.55% |
| 2012 | 10 | 7.43% | 1.45% | -1.34% | 2.80% |
| 2007 | 15 | 10.21% | 11.21% | 7.24% | 3.97% |
| 2002 | 20 | 8.44% | 9.35% | 6.24% | 3.11% |
| 1997 | 25 | 6.64% | 4.58% | 2.06% | |
| 1992 | 30 | 5.84% | 4.21% | 1.63% | |
| 1987 | 35 | -1.77% | -2.65% | 0.88% | |
| 1983 | 39 | 0.85% | -0.13% | 0.99% |
The Total Return per year is shown below for years of 5 to 18 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. |
|---|---|---|---|---|---|
| 2017 | 5 | -6.75% | -0.52% | -2.98% | 2.46% |
| 2012 | 10 | 4.20% | -2.31% | -4.71% | 2.41% |
| 2007 | 15 | 7.92% | 8.81% | 5.05% | 3.76% |
| 2004 | 18 | 7.73% | 8.46% | 5.05% | 3.40% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.95, 8.52 and 11.20. The corresponding 10 year ratios are 12.01, 14.29 and 19.63. The corresponding historical ratios are 8.16, 10.35 and 12.58. The current P/E Ratio is 6.71 based on a stock price of $12.18 and EPS estimate for 2023 of $1.82. (1.34 US$). 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. This testing is done in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.96, 7.99 and 8.91. The corresponding 10 year ratios are 7.64, 11.99 and 16.18. The current P/AEPS Ratio is 6.65 based on AEPS estimate for 2023 of $1.34 and a stock price of $8.91. The current ratio is below the low ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is done in US$ and you will get a similar result in CDN$.
I get a Graham Price of $25.42. The 10-year low, median, and high median Price/Graham Price Ratios are 0.56, 0.92 and 1.27. The current P/GP Ratio is 0.48 based on a stock price of $12.18. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is done in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 1.55. The current P/B Ratio is 0.76 based on a Book Value of $387M, Book Value per Share of $11.67 and a stock price of $8.91. The current ratio is 51% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is done in US$ and you will get a similar result in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 5.10. The current P/CF Ratio is 4.01 based on Cash Flow per Share of $2.22, Cash Flow estimate for 2023 of $73.7M and a stock price of $8.91. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is done in US$ and you will get a similar result in CDN$.
I get an historical median dividend yield of 2.56%. The current dividend yield is 4.27% based on Dividends of $0.52 and a stock price of $12.18. The current dividend yield is 67% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is done CDN$. Dividends are paid in CDN$.
I get a 10 year median dividend yield of 2.59%. The current dividend yield is 4.27% based on Dividends of $0.52 and a stock price of $12.18. The current dividend yield is 65% above the histo10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is done CDN$. Dividends are paid in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 0.41. The current P/S Ratio is 0.27 based on a stock price of $8.91, Revenue estimate for 2023 of $1,101M and Revenue per Share of $33.18. The current ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is done in US$ and you will get a similar result in CDN$.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio test. All the other tests seem to be saying the same thing.
When I look at analysts’ recommendations, I find Buy (1) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $18.20 ($13.43 US$). This implies a total return of 53.66% with 49.39% from capital gains and 4.27% from dividends.
There is only one entry for 2023 on Stock Chase and it is a Top Pick. The company is only on the Maple Money dividend list I follow. Stock Chase gives this stock 3 stars out of 5. Ambrose O'Callaghan on Motley Fool thinks is one of the best Canadian Food stocks today. Christopher Liew on Motley Fool thinks this is an overlooked stock. The company put out a press release on Newswire about their results for 2022. The company put out a press release via Newswire about their results for the second quarter of 2023.
Simply Wall Street Via Yahoo Finance talks about who owns this company. Simply Wall Street put out two warnings of debt is not well covered by operating cash flow; and dividend of 4.32% is not well covered. Simply Wall Street gives them 3 stars out of 5.
High Liner Foods Inc is a Canadian company which is mainly engaged in the processing and marketing of prepared and packaged frozen seafood products. The company sells its products to institutions, health care facilities, and quick-service family and casual dining establishments. Its web site is here High Liner Foods.
The last stock I wrote about was about was Boralex Inc (TSX-BLX, OTC- BRLXF) ... learn more. The next stock I will write about will be Titanium Transportation Group Inc (TSX-TTNM, OTC-TTNMF) ... learn more on Tuesday, September 5, 2023 around 5 pm.
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