Is it a good company at a reasonable price? The stock price has gone no-where for a while, but analysts feel that it will now move up. It has been growing its dividend. I do not like the low Liquidity Ratio but I expect that to improve also. The dividend yield is higher than it ever been, and this points to a current cheap price. The stock price is testing as cheap.
I do not own this stock of Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF). I am doing a report on this stock because it was on the Top 100 Canadian Dividend Stocks by Maple Money . It also was on the Top 100 Dividend Stocks Money Sense for 2021 gets a solid C Rating from Money Sense.
When I was updating my spreadsheet, I noticed expenses were higher than sales and they had an impairment charge. In 2022, the cost of Sales and Selling and other expenses was higher than Sales. Also, they took a high goodwill impairment charge in 2022. The total return has been moderate (3% to 8%) range to date currently and that is because the stock price has not done much lately. Generally, in the past this stock produced acceptable total returns of at least 8%.
If you had invested in this company in December 2012, for $1,005.48 you would have bought 84 shares at $11.97 per share. In December 2022, after 10 years you would have received $394.80 in dividends. The stock would be worth $2,053.80. Your total return would have been $2,448.60. This is a total return would be a total return of 10.00% per year with 7.40% from capital gain and 2.59% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.97 | $1,005.48 | 84 | 10 | $394.80 | $2,053.80 | $2,448.60 |
However, if you had invested in this company in December 2007, for $1,009.80 you would have bought 68 shares at $14.85 per share. In December 2022, after 15 years you would have received $374.00 in dividends. The stock would be worth $1,166.60. Your total return would have been $2,036.60. This is a total return would be a total return of 5.14% per year with 3.38% from capital gain and 1.76% from dividends. You would have done better buying this stock only 10 years ago than 15 years.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.85 | $1,009.80 | 68 | 15 | $374.00 | $1,662.60 | $2,036.60 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.38%. The 5 historical median dividend yield is moderate at 2.51%. The 10 and historical median dividend yields are low (below 2%) at 1.58% and 1.48%. The dividends are growing at a moderate rate (8% to 14%) at 12.7% per year over the past 5 years. The last dividends increase at 2023 and it was for 5%.
The Dividend Payout Ratios (DPR) awful, but are expected to improve over the next few years. The DPR for 2022 for Earnings per Share (EPS) is 0% with 5 year coverage at 543% because of a large earnings loss in 2022. The DPR for EPS is expected to be 131% in 2023 and then dropping to 42% in 2024. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 0% with 5 year coverage at 52% because of an earnings loss in 2022. The DPR for 2022 for Cash Flow per Share (CFPS) is 197% because of very low cash flow with 5 year coverage at 32%. The DPR for 2022 for Free Cash Flow (FCF) is -24% because of very low FCF with 5 year coverage at 102%. This DPR is not expected to be good until 2025.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 543.33% |
| AEPS | 0.00% | 51.99% |
| CFPS | 197.38% | 32.28% |
| FCF | -24.04% | 102.61% |
Debt Ratios are fine, but Liquidity Ratio is low currently. The Long Term Debt/Market Cap Ratio for 2022 is fine at 0.57 and currently at 0.52. The Liquidity Ratio for 2022 is a good at 1.65 and but low at 1.16 currently. Even adding in Cash Flow after dividends, the current ratio is still low at 1.20. I like them to be at 1.50 or better. The Debt Ratio for 2022 is fine at 1.60 and 1.50 currently. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.67 and 1.67 and currently at 2.98 and 1.98.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.57 | 0.52 |
| Intang/GW | 0.12 | 0.12 |
| Liquidity | 1.65 | 1.16 |
| Liq. + CF | 1.50 | 1.20 |
| Debt Ratio | 1.60 | 1.50 |
| Leverage | 2.67 | 2.98 |
| D/E Ratio | 1.67 | 1.98 |
The Total Return per year is shown below for years of 5 to 32 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 | 12.70% | -5.20% | -7.35% | 2.15% |
| 2012 | 10 | 17.46% | 10.00% | 7.40% | 2.59% |
| 2007 | 15 | 11.33% | 5.14% | 3.38% | 1.76% |
| 2002 | 20 | 8.38% | 5.80% | 4.10% | 1.70% |
| 1997 | 25 | 6.65% | 3.08% | 1.76% | 1.31% |
| 1992 | 30 | 2.51% | 3.12% | 1.73% | 1.39% |
| 1990 | 32 | 2.35% | 4.29% | 2.56% | 1.73% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 28.96, 33.79 and 38.61. The corresponding 10 year ratios are 21.07, 26.39 and 31.72. The corresponding historical ratios are 16.76, 19.72 and 24.60. The current P/E Ratio is 38.86 based on a stock price of $24.87 and EPS estimate for 2023 of $0.64. This ratio above the high ratios for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
However, EPS is very low for 2023 and the estimate for 2024 of $2.01 which gives us a P/E Ratio of 12.37 based on a stock price of $24.87. This ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share Ratios (Data). The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 21.70, 25.40 and 29.73. The corresponding 10 year ratios are 18.90, 23.24 and 27.26. The current P/AEPS Ratio is 95.65 based on a stock price of $24.87. This ratio above the high ratios for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
However, the AEPS is very low for 2023 at $0.26. The AEPS for 2024 if $1.62 and this has a P/AEPS Ratio of 15.35 based on a stock price of $24.87. This ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $8.60. The 10-year low, median, and high median Price/Graham Price Ratios are 1.09, 1.38 and 1.61. The P/GP Ratio is 2.89 based on a stock price of $24.87. This ratio is above the high ratio of the 10 year median ratios. This ratio above the high ratios for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
However, the Graham Price for 2024 is 21.46. Here the P/GP Ratio would be 1.16 based on a stock price of $24.87. This ratio is between the low the median ratio 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 10-year median Price/Book Value per Share Ratio of 1.69. The current P/B Ratio is 1.97 based on a Book Value of $1,547M, Book Value per Share of $12.63 and a stock price $14.87. This ratio is 17% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Book Value per Share estimate for 2023 of $12.90. This implies a P/B Ratio of 1.93 and a Book Value of $1,580M based on a stock price of $24.87. This ratio is 14% 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 10.65. The current P/CF Ratio is 17.89 based on Cash Flow per Share estimate for 2023 of $1.39. 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 of 1.48%. The current dividend yield is 3.38% based on a stock price of $24.87 and dividends of $0.84. The current dividend yield is 128% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 1.58%. The current dividend yield is 3.38% based on a stock price of $24.87 and dividends of $0.84. The current dividend yield is 114% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.85. The current P/S Ratio is 0.62 based on Revenue estimate for 2023 of $4,923M, Revenue per Share of $40.20 and a stock price of $24.87. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. Both dividend yield tests say this. It is confirmed by the P/S Ratio test. Most of the other tests that are good are saying the stock price is either reasonable or cheap.
When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $35.00 with a high of $40.00 and low of $31.00. The consensus price of $35.00 implies a total return of 44.11% with 40.73% from capital gains and 3.38% from dividends.
There is only one analyst recommendation on Stock Chase and it is for 2022. It is a Do not Buy. Stock Chase gives this stock 1 star out of 5. This stock is on the Maple Money and Aristocrats dividend lists. Amy Legate-Wolfe on Motley Fool thinks this stock will recover. Karen Thomas on Motley Fool likes the 3.44% dividend. The company put out a Press Release on their 2022 results. The company put out a Press Release on their third quarter of 2023.
Simply Wall Street via Yahoo Finance reviewed this stock and its dividend. Simply Wall Street gives 3 warnings on this stock of earnings have declined by 58.6% per year over past 5 years; dividend of 3.35% is not well covered by earnings or cash flows; and debt is not well covered by operating cash flow. Simply Wall Street gives this stock 1 and one half stars out of 5.
Maple Leaf Foods Inc is a producer of food products under leading brands, including Maple Leaf, Maple Leaf Prime Maple Leaf Natural Selections, Schneiders, Schneiders Country Naturals, Mina, Greenfield Natural Meat Co., Lightlife, and Field Roast. Its main markets are Canada, the United States, Japan, and China. Its web site is here Maple Leaf Foods Inc.
The last stock I wrote about was about was Neighbourly Pharmacy Inc (TSX-NBLY, OTC- NBLYF) ... learn more. The next stock I will write about will be KP Tissue Inc (TSX-KPT, OTC-KPTSF) ... learn more on Tuesday, December 26, 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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