Is it a good company at a reasonable price? Although others do not seem to be bothered by the debt and low Liquidity Ratio, I do think that is a negative. Expect volatility if investing in this company, but this applies to all Industrial companies. The stock price is almost to the highs of 2014. A positive for the future is that the company has begun to raise dividends again the analysts feel this will continue. The stock price seems reasonable, but it is in the top of this range, I believe.
I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock in 2016.
When I was updating my spreadsheet, I noticed that the stock price for this company has recently taken off. Also, the Total Return to December 10, 2023 is much better than the Total Return showing below to the end of 2022.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2017 | 5 | 1.48% | 23.03% | 18.22% | 4.80% |
| 2012 | 10 | -5.64% | 4.44% | -0.59% | 3.84% |
| 2007 | 15 | -0.94% | 11.97% | 5.13% | 6.84% |
| 2002 | 20 | 2.09% | 27.37% | 9.68% | 17.68% |
| 1997 | 25 | 6.23% | 35.38% | 14.33% | 21.05% |
If you had invested in this company in December 2012, for $1,004.72 you would have bought 76 shares at $13.22 per share. In December 2022, after 10 years you would have received $410.55 in dividends. The stock would be worth $617.12. Your total return would have been $1,027.47. This is a total return would be a total return of 0.29% per year with 4.76% from capital loss and 5.04% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.22 | $1,004.72 | 76 | 10 | $410.35 | $617.12 | $1,027.47 |
If you had invested in this company in December 2013, for $1,010.80 you would have bought 76 shares at $13.30 per share. In December 10, 2023, after 10 years you would have received $385.27 in dividends. The stock would be worth $1,072.36. Your total return would have been $1,457.63. This is a total return would be a total return of 4.44% per year with 0.59% from capital loss and 3.84% from dividends. So, you would have done better for the 10 years to almost the end of 2023.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.30 | $1,010.80 | 76 | 10 | $385.27 | $1,072.36 | $1,457.63 |
The current dividend yield is moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 3.04%. The 5, 10 and historical dividend yields are good (5% to 6% ranges) at 5.06%, 5.70% and 5.82%. The dividends were decreased in 2017 and then were flat until 2023 when they were increased. The last dividends increase in 2023 was for 10%.
This company used to be an Income Trust. Income Trust can give much higher dividends than corporations. A lot of old Income Trust companies are having a hard time getting the dividends right after being forced to become corporations.
The DPR for 2022 for Earnings per Share (EPS) is 42% with 5 year coverage at 71%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 45% with 5 year coverage at 61%. The DPR for 2022 for Cash Flow per Share (CFPS) is 18% with 5 year coverage at 30%. The DPR for 2022 for Free Cash Flow (FCF) is 134% with 5 year coverage at 49%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 41.94% | 71.43% |
| AEPS | 45.35% | 61.13% |
| CFPS | 18.31% | 30.52% |
| FCF | 133.98% | 48.99% |
This company has too much debt and the Liquidity Ratio is too low. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.16 and currently at 0.08. The Liquidity Ratio for 2022 is a low at 1.23 and 1.22 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.26 and 1.28. I prefer this ratio to be at 1.50 or higher. The Debt Ratio for 2022 is low at 1.29 and 1.29 currently. I prefer this ratio to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2022 are too high at 4.50 and 3.50 and currently at 4.46 and 3.46. I prefer these ratios to be below 3.00 and below 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.16 | 0.08 |
| Intang/GW | 0.21 | 0.13 |
| Liquidity | 1.23 | 1.22 |
| Liq. + CF | 1.26 | 1.28 |
| Debt Ratio | 1.29 | 1.29 |
| Leverage | 4.50 | 4.46 |
| D/E Ratio | 3.50 | 3.46 |
The Total Return per year is shown below for years of 5 to 25 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 | -1.51% | -0.15% | -4.35% | 4.20% |
| 2012 | 10 | -5.75% | 0.29% | -4.76% | 5.04% |
| 2007 | 15 | 0.05% | 2.48% | -2.92% | 5.40% |
| 2002 | 20 | 7.04% | 32.74% | 8.61% | 24.12% |
| 1997 | 25 | 6.16% | 49.57% | 16.46% | 33.12% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.23, 8.39 and 10.55. The corresponding 10 year ratios are 14.14, 17.54 and 20.94. The corresponding historical ratios are 6.91, 9.98 and 11.30. The current P/E Ratio is 10.94 based on a stock price of $14.11 and EPS estimate for 2023 of $1.28. This 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 6.73, 9.07 and 11.02. The corresponding 10 year ratios are 11.47, 13.95 and 16.43. The current P/AEPS Ratio is 10.69 based on a stock price of $14.11 and AEPS estimate for 2023 of $1.32. This 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 Graham Price of $12.98. The 10-year low, median, and high median Price/Graham Price Ratios are 1.22, 1.50 and 1.79. The current P/GP Ratio is 1.09 based on a stock price of $14.11. This 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 2.43. The current P/B Ratio is 2.49 based on a stock price of $14.11, Book Value of $273M and Book Value per Share of $5.08. The current ratio is 2.3% 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 6.65. The current P/CF Ratio is 8.15 based on a stock price of $14.11 and Cash Flow estimate for 2023 of $93.00. The current ratio is 22% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 5.82%. The current dividend yield is 3.04% based on a stock price of $14.11 and dividends of $0.4296. The current dividend yield is 47% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.70%. The current dividend yield is 3.04% based on a stock price of $14.11 and dividends of $0.4296. The current dividend yield is 48% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 0.26. The current P/S Ratio is 0.28 based on Revenue estimate for 2023 of $2,731M, Revenue per of $50.86 and a stock price of $14.11. The current ratio is 8% above 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 reasonable, but at the top end of the range. The dividend yield tests are not good ones. The P/S Ratio test is a good one and shows the stock price as reasonable but above the median. The P/AEPS Ratio and P/GP Ratio tests are good ones and show the stock price is cheap. The P/B Ratio test is a good one and show the stock price as reasonable but above the median.
There are problems with the dividend yield test as this company used to be an income trust which could produce much higher dividends than a corporation. The current yield is probably still too high for a construction firm.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4). The consensus would be a Strong Buy. The 12 month stock price consensus is $15.94, with a high of $17.50 and low of $14.50. A stock price of $15.94 implies a total return of 16.01% with 12.97% from capital gains and 3.04% from dividends.
There is only one recommendation on Stock Chase for 2023 and it is a Hold. Stock Chase gives this stock 3 stars out of 5. It is not on any of the dividend lists that I follow. Christopher Liew on Motley Fool says this stock has strong business momentum. Ambrose O'Callaghan on Motley Fool say you can pursue growth and value by buying this stock. The company put out a Press Release on their 2022 results. The company put out a press release on Newswire about their third quarter of 2023.
Simply Wall Street put out a review on this stock via Yahoo Finance. Simply Wall Street gives this stock 5 stars out of 5. It lists no warnings on this stock.
Bird Construction Inc is a construction company operating from coast-to-coast and servicing all of Canada's major markets. The group provides a comprehensive range of construction services from new construction for industrial, commercial, institutional, and civil infrastructure markets, to industrial maintenance, repair and operations services, heavy civil construction, and mine support services. Its web site is here Bird Construction Inc.
The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more on Monday, December 18, 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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