Is it a good company at a reasonable price? This company does have along history of delivering for its shareholders. See chart below on Total Return. Currently, the only thing not growing is the stock price, see 5 year growth chart below. It is on all the dividend stock lists that I follow. I do not own this stock, but I cannot own everything. It would seem to be a reasonable stock to have in a dividend growth portfolio. The stock price is cheap, but please note that you are always taking a risk when you buy a stock that is cheap.
I do not own this stock of CCL Industries Inc (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.
When I was updating my spreadsheet, I noticed growth has slowed except for the dividend increases. You can see this in the chart below showing growth over the past 5 and 10 years.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 34.20% | 6.06% |
| 5 | AEPS Growth | 32.71% | 5.82% |
| 5 | Net Income Growth | 31.34% | 5.60% |
| 5 | Cash Flow Growth | 39.60% | 6.90% |
| 5 | Dividend Growth | 108.70% | 15.85% |
| 5 | Stock Price Growth | -0.41% | -0.08% |
| 10 | Revenue Growth | 387.73% | 17.17% |
| 10 | AEPS Growth | 513.40% | 19.89% |
| 10 | Net Income Growth | 538.73% | 20.37% |
| 10 | Cash Flow Growth | 398.09% | 17.42% |
| 10 | Dividend Growth | 515.38% | 19.93% |
| 10 | Stock Price Growth | 572.71% | 21.00% |
If you had invested in this company in December 2012, for $1,005.97 you would have bought 117 shares at $8.60 per share. In December 2022, after 10 years you would have received $616.82 in dividends. The stock would be worth $6,767.28. Your total return would have been $7,384.10. This is a total return would be a total return of 23.28% per year with 21.00% from capital gain and 2.28% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.60 | $1,005.97 | 117 | 10 | $616.82 | $6,767.28 | $7,384.10 |
If you had invested in this company in December 2017, for $1,045.44 you would have bought 18 shares at $58.08 per share. In December 2022, after 5 years you would have received $66.96.82 in dividends. The stock would be worth $1,041.12. Your total return would have been $1,108.08. This is a total return would be a total return of 1.20% per year with 0.08% from capital loss and 1.28% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $58.08 | $1,045.44 | 18 | 5 | $66.96 | $1,041.12 | $1,108.08 |
The current dividend yield is low with dividend growth good. The current dividend yield is low (below 2%) at 1.92%. The 5 and 10 year median dividend yields are also low at 1.28% and 1.12%. The historical median dividend yield is moderate (2% to 4% ranges) at 2.00%. The dividends have grown at a good rate (15% or higher) over the past 5 years at 15.9%. The last dividend increase was in 2023 and it was for 10.4%. Dividend increases have varied a lot over time and varied from 6% to 31% over the past 5 years.
The Dividend Payout Ratios (DPR) are good. The DPR for 2022 for Earnings per Share (EPS) is 28% with 5 year coverage at 25%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 27% with 5 year coverage at 24%. The DPR for 2022 for Cash Flow per Share (CFPS) is 14% with 5 year coverage at 12%. The DPR for 2022 for Free Cash Flow (FCF) is 28% with 5 year coverage at 26%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 27.59% | 24.80% |
| AEPS | 26.89% | 23.72% |
| CFPS | 13.62% | 11.80% |
| FCF | 27.66% | 25.61% |
Debt Ratios are generally good. The Long Term Debt/Market Cap Ratio for 2022 is fine at 0.21. The Liquidity Ratio for 2022 is good at 1.88. The Debt Ratio for 2022 is good at 1.97. This last two I like to be 1.50 or higher and they are. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.03 and 1.03, and current ones are good at 1.93 and 0.93.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.21 | 0.22 |
| Intang/GW | 0.31 | 0.33 |
| Liquidity | 1.88 | 2.05 |
| Liq. + CF | 2.43 | 2.92 |
| Debt Ratio | 1.97 | 2.07 |
| Leverage | 2.03 | 1.93 |
| D/E Ratio | 1.03 | 0.93 |
The Total Return per year is shown below for years of 5 to 35 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 | 15.85% | 1.20% | -0.08% | 1.28% |
| 2012 | 10 | 19.93% | 23.28% | 21.00% | 2.28% |
| 2007 | 15 | 16.59% | 16.23% | 14.65% | 1.57% |
| 2002 | 20 | 14.15% | 16.02% | 14.45% | 1.57% |
| 1997 | 25 | 12.04% | 13.39% | 12.07% | 1.32% |
| 1992 | 30 | 9.94% | 13.47% | 11.96% | 1.50% |
| 1987 | 35 | 9.21% | 12.64% | 11.05% | 1.59% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 17.46, 19.84 and 22.21. The corresponding 10 year ratios are 16.51, 21.24 and 25.58. The corresponding historical ratios are 12.07, 15.09 and 20.61. The current P/E Ratio is 14.62 based on a stock price of $55.10 and EPS estimate for 2023 of 3.77. 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 (data). The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 17.15, 19.48 and 21.82. The corresponding 10 year ratios are 12.50, 19.57 and 22.95. The current P/AEPS Ratio is 14.73 based on a stock price of $55.10 and AEPS estimate for 2023 of $3.74. 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 $46.21. The 10-year low, median, and high median Price/Graham Price Ratios are 1.36, 1.76 and 2.07. The current P/GP Ratio is 1.19 based on a stock price of $55.10. 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 3.38. The current P/B Ratio is 2.19 based on a stock price of $55.10, Book Value of $4,473M, and a Book Value per Share of $25.17. The current ratio is 35% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have Book Value per Share estimate for 2023 of $26.60. The implies a P/B Ratio of 2.07 with a Book Value of $4,727M when the stock price is $55.10. The current ratio is 39% 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 13.04. The current P/CF Ratio is 7.29 based on a stock price of $55.10, Cash Flow per Share estimate for 2023 of $7.56 and Cash Flow of $1,343M. The current ratio is 44% 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 2.00%. The current dividend yield is 1.92% based on a stock price of $55.10 and Dividends of $1.06. The current dividend yield is 3.8% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 1.12%. The current dividend yield is 1.92% based on a stock price of $55.10 and Dividends of $1.06. The current dividend yield is 72% above the 10 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 1.46 based on Revenue estimate for 2023 of $6,716M, Revenue per Share of $37.79 and a stock price of $55.10. The current ratio is 26% below the 10 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 cheap. The 10 year dividend yield test says this and it is confirmed by the P/S Ratio test. The Historical dividend yield is higher the 10 year yield because before 2013, dividend yields were higher. Other tests are saying the same thing. The P/E Ratio tests do not, but the Graham Price was developed Benjamin Graham as a method to better value stocks. The P/GP Ratio test says that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $76.25 with a high of $81.00 and low of $71.00. With a price consensus of $76.25, this implies a total return of 40.31% with 38.38% from capital gains and 1.92% from dividends.
All the analysts on Stock Chase say it is a buy. Stock Chase gives this stock 4 stars out of 5. It is on all the dividend lists I follow. Amy Legate-Wolfe on Motley Fool thinks this stock is undervalues with significant long-term potential. Karen Thomas on Motley Fool also thinks this stock is undervalued. The company put out a press release on Ink World about their 2022 results. The company put out a press release on Accesswire about their second quarter of 2023 results.
Simply Wall Street via Yahoo Finance has a report on this stock. Simply Wall Street has no warnings out on this stock.
CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments, which include the CCL segment, the Avery segment, and the Checkpoint segment. Its geographical segments include Canada; USA and Puerto Rico; Mexico, Brazil, Chile, and Argentina; Europe; and Asia, Australia, Africa, and New Zealand. Its web site is here CCL Industries Inc.
The last stock I wrote about was about was Brookfield Corp (TSX-BN, NYSE-BN) ... learn more. The next stock I will write about will be Ovintiv Inc (TSX-OVV, NYSE-OVV) ... learn more on Monday, October 23, 2023 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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