Is it a good company at a reasonable price? The problem I have with stock is stock is that the dividend yield is below 1%. I generally do not buy dividend growth stocks when the dividends are lower than 1%. Also, this stock has a low dividend growth only of 6% per year over the past 5 years. They do have too much debt also and this is a negative. A positive is the total return has generally been quite good. If you look at the 5 year total return to date, it would be 7.12% with 6.22% from capital gains and 0.90% from dividends. The result of testing the stock price is that the stock price is reasonable. Even here there is caution because the 10 year dividend test says the stock price is reasonable but above the median.
The reason I do not like yield below 1% is that takes too long for the dividend yield on the original price to get to a reasonable yield. In this case the growth of dividends is low, so if this stock continued as usual, in 25 years the yield on the original price would be 3.8%.
I do not own this stock of Logistec Corp (TSX-LGT.B, OTC-LTKBF). I got this stock from Dividend Growth Investing and Retirement blogger’s all-star spreadsheet for March 2017.
When I was updating my spreadsheet, I noticed that just to make their statements complicated, this company reports separately on Class A and Class B stock for things like EPS. I do not see the point of this and I know of no other company with different classes to do this.
The share price is up some 41% this year. This is because they make a recent acquisition. See item on Globe & Mail. Usually, when a stock takes off like this one, analysts start to follow it. There are still no analysts following this stock. Probably this is because the company is still rather small, but also because most of the company, under Class A shares, are closely held.
The current dividend yield is low with dividend growth low. The current dividend yield is low (below 2%) at 0.86%. The 5, 10 and historical median dividend yields are also low at 1.01%, 0.91% and 1.83%. The dividends are growing at a low rate (below 8% per year) at 6% per year for the past 5 years. The last dividend increase was in 2022 and it was for 20%. Dividend increases have varied a lot over time, with yearly increases varying from 0% to over 19%. Over the past 26 years, they have increased the dividends in 20 year and have no decreases year to year.
The Dividend Payout Ratios (DPR) are good. The DPR for Earnings per Share (EPS) for 2022 is 10% with 5 year coverage at 14%. The DPR for 2022 for Cash Flow per Share (CFPS) for 2022 is 4% with 5 year coverage at 5%. The DPR for 2022 for Free Cash Flow (FCF) for 2022 is 12% with 5 year coverage at 10%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 10.39% | 14.25% |
| CFPS | 3.97% | 4.95% |
| FCF | 12.04% | 10.22% |
Debt Ratios are mostly fine, but they do have too much current debt. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.43. The Liquidity Ratio for 2022 is good at 1.65. The Debt Ratio for 2022 is good at 1.58. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.74 and 1.73. However, they are too high currently at 3.32 and 2.31 and I prefer them to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.43 | 0.44 |
| Intang/GW | 0.43 | 0.41 |
| Liquidity | 1.65 | 1.29 |
| Liq. + CF | 2.15 | 1.80 |
| Debt Ratio | 1.58 | 1.43 |
| Leverage | 2.74 | 3.32 |
| D/E Ratio | 1.73 | 2.31 |
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 | 6.04% | -0.56% | -1.51% | 0.95% |
| 2012 | 10 | 8.87% | 15.22% | 12.97% | 2.25% |
| 2007 | 15 | 7.28% | 10.89% | 9.25% | 1.64% |
| 2002 | 20 | 6.83% | 14.13% | 11.44% | 2.69% |
| 1997 | 25 | 5.83% | 10.37% | 8.48% | 1.89% |
| 1996 | 26 | 5.81% | 12.34% | 9.98% | 2.37% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.27,12.87 and 12.79. The corresponding 10 year ratios are 12.58, 15.83 and 19.07. The corresponding historical ratios are 9.84, 10.93, and 12.85. The current P/E Ratio is 18.69 based on a stock price of $58.51 and EPS for the last 12 months of 3.13. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $43.28. The 10-year low, median, and high median Price/Graham Price Ratios are 1.07, 1.32 and 1.47. The current P/GP Ratio is 1.35 based on a stock price of $58.51. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.03. The current P/B Ratio is 2.20 based on a Book Value of $341M, Book Value per share of $26.59 and a stock price of $58.51. The current ratio is 8.5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.49. The current P/CF Ratio is 5.68 based on Cash Flow for the last 12 month of $135M, Cash Flow per Share of $10.56 and a stock price of $58.51. The current ratio is 33% 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 for Class B of 1.83%. The current dividend yield is 0.89% based on a stock price of $58.51 and dividends of $0.46. The current dividend yield is 52% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield for Class B of 0.91%. The current dividend yield is 0.89% based on a stock price of $58.51 and dividends of $0.46. The current dividend yield is 2.9% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.94. The current P/S Raio is 0.80 based on Revenue for the last 12 months of $941M, Revenue per Share of $73.42 and a stock price of $58.51. The current ratio is 15% below the 10 year median ratio.
Results of stock price testing is that the stock price is probably reasonable. The 10 year dividend yield test says the stock price is reasonable and above the median. The P/S Ratio test says the stock price is reasonable and below the median. The other tests vary from cheap to expensive.
When I look at analysts’ recommendations, I find none.
An analyst’s recommendations on Stock Chase for 2023 is Top Pick. Stock Chase gives this stock 4 stars out of 5. There seems to be only one analyst. The company is not on any dividend list I have. Christopher Liew on Motley Fool says this stock is defying the strong headwinds. Steven Porrello on Motley Fool says this company is one of the top Canadian Industrial stocks for 2023. The company put out a Press Release for their 2022 year end results. The company put out a Press Release on their second quarter of 2023 results.
Simply Wall Street put out a report on this company. Simply Wall Street has one warning of interest payments are not well covered by earnings.
Logistec Corp provides specialized cargo handling and other services to a wide variety of marine, industrial, and municipal customers. The company is organized and operate in two industry segments: Marine services, and Environmental services. The Marine Services Segment which is the key revenue-generating segment provides cargo handling and other services to marine and industrial customers. It has a business presence in Canada and the US. Its web site is here Logistec Corp.
The last stock I wrote about was about was Teck Resources Ltd (TSX-TECK.B, NYSE-TECK) ... learn more. The next stock I will write about will be North West Company (TSX-NWC, OTC-NWTUF) ... learn more on Friday, October 6, 2023 around 5 pm. Tomorrow on my other blog I will write about Something to Buy October 2023 learn more on Thursday, October5, 2023 around 5 pm.
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