Is it a good company at a reasonable price? It has a moderate dividend yield with little growth. It is a stock that is not well followed, probably because it is a small company. It has good debt ratios and a moderate dividend yield of 3.88%. It has done well for its shareholders. However, there is a risk attached to being a small company that is not well followed. The stock price is certainly reasonable and it may even be cheap.
I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment clubs suggested this stock.
When I was updating my spreadsheet, I noticed last year they had an earnings loss because of an acquisition charge when they purchased Clarion. The stock price continues to drop from the highs of 2021.
If you had invested in this company in December 2012, for $1,007.72 you would have bought 118 shares at $8.54 per share. In December 2022, after 10 years you would have received $1,444.03 in dividends. The stock would be worth $5,121.50. Your total return would have been $6,565.23. This is a total return would be a total return of 24.76% per year with 17.65% from capital gain and 7.10% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.54 | $1,007.72 | 118 | 10 | $1,444.03 | $5,121.20 | $6,565.23 |
This stock has decent growth. See 5 and 10 year growth below.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 50.68% | 8.55% |
| 5 | AEPS Growth | 115.03% | 16.55% |
| 5 | Net Income Growth | 171.47% | 22.11% |
| 5 | Cash Flow Growth | 38.43% | 6.72% |
| 5 | Dividend Growth | 1.27% | 0.25% |
| 5 | Stock Price Growth | 39.24% | 6.84% |
| 10 | Revenue Growth | 133.57% | 8.85% |
| 10 | AEPS Growth | 487.50% | 19.37% |
| 10 | Net Income Growth | 645.29% | 22.25% |
| 10 | Cash Flow Growth | 225.87% | 12.54% |
| 10 | Dividend Growth | 67.94% | 5.32% |
| 10 | Stock Price Growth | 408.20% | 17.65% |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.88%. The 5 and 10 year median dividend yields are moderate at 2.60% and 4.22%. The historical median dividend yield is good (5% to 6% ranges) at 6.47%. The dividends have been flat since 2018, so the 5 year dividend growth rate is low (below 8%) at 0.25% per year over the past 5 years. Dividend increases have been inconsistent. Over the past 18 years dividends have increased in 7 years and decreased in 1 year. This company used to be an income trust and so had much higher dividend yields than it can have as a corporation.
The Dividend Payout Ratios (DPR) are good. The DPR for 2022 for Earnings per Share (EPS) is 63% with 5 year coverage at 53%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 61% with 5 year coverage at 52%. The DPR for 2022 for Cash Flow per Share (CFPS) is 32% with 5 year coverage at 23%. The DPR for 2022 for Free Cash Flow (FCF) is 55% with 5 year coverage at 36%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 63.01% | 53.18% |
| AEPS | 61.09% | 51.75% |
| CFPS | 31.68% | 23.60% |
| FCF | 54.65% | 35.94% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2022 is good at 0.13 and 0.09 currently. The Liquidity Ratio for 2022 is a good at 1.94 and 1.83 currently. The Debt Ratio for 2022 is good at 1.86 and 2.17 currently. The Leverage and Debt/Equity Ratios for 2022 are fine at 2.17 and 1.17 and good currently at 1.85 and 0.85.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.13 | 0.09 |
| Intang/GW | 0.28 | 0.36 |
| Liquidity | 1.94 | 1.83 |
| Liq. + CF | 1.93 | 2.32 |
| Debt Ratio | 1.86 | 2.17 |
| Leverage | 2.17 | 1.85 |
| D/E Ratio | 1.17 | 0.85 |
The Total Return per year is shown below for years of 5 to 18 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 | 0.25% | 10.90% | 6.84% | 4.06% |
| 2012 | 10 | 5.32% | 24.76% | 17.65% | 7.10% |
| 2007 | 15 | 1.09% | 16.49% | 10.82% | 5.67% |
| 2004 | 18 | 3.92% | 13.63% | 7.98% | 5.65% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.04, 15.45 and 18.38. The corresponding 10 year ratios are 13.98, 16.47 and 19.39. The corresponding historical ratios are 13.04, 15.45 and 18.00. The current P/E Ratio is 11.49 based on a stock price of $34.00 and EPS estimate for 2023 of $2.96. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 14.10, 16.24 and 18.99. The corresponding 10 year ratios are 14.78, 17.31 and 20.07. The current P/AEPS Ratio is 11.49 based on AEPS estimate for 2023 of $2.96 and a stock price of $34.00. 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 also have Distributable Cash Flow (DC) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.36, 14.24 and 16.12. The corresponding 10 year ratios are 10.10, 12.08 and 14.95. The current P/AEPS Ratio is 10.97 based on DC for the last 12 months of $3.10 and a stock price of $34.00. The current ratio is between the low and median ratios of the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $31.96. The 10-year low, median, and high median Price/Graham Price Ratios are 1.38, 1.62 and 1.89. The current P/GP Ratio is 1.06 based on a stock price of $34.00. 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 3.54. The current P/B Ratio is 2.22 based on a Book Value of $175M, Book Value per Share of $15.34 and a stock price of $34.00. The current ratio is 37% 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 11.11. The current P/CF Ratio is 4.60 based on a stock price of $34.00, Cash Flow for the last 12 months of $84.40 and Cash Flow per Share of $7.40. The current ratio is 59% 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 6.47%. The current dividend yield is 3.88% based on a stock price of $34.00 and dividends of $1.53. The current dividend yield is 40% below the historical year median yield. This stock price testing suggests that the stock price is relatively expensive. Although yields are declining because the tax department no longer allows for Income Funds.
I get a 10 year median dividend yield of 4.22%. The current dividend yield is 3.88% based on a stock price of $34.00 and dividends of $1.53. The current dividend yield is 8% below the 10 year median yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 5 year median dividend yield of 2.60%. The current dividend yield is 3.88% based on a stock price of $34.00 and dividends of $1.53. The current dividend yield is 49% above the 5 year median 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 1.19. The current P/S Ratio is 0.93 based on Revenue estimate for 2023 of $417M, Revenue per Share of $36.52 and a stock price of $34.00. The current ratio is 22% 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 reasonable and maybe cheap. There is a problem with the dividend yield tests as Income Trust set up to provide high yields are no longer legal. The yields have been coming down for this stock. It 5 year yield is higher than the current one by 49%. The P/S Ratio test says the stock price is cheap. Most of the other stock price tests says the stock price is cheap.
When I look at analysts’ recommendations, I find Buy (2). The consensus would be a Buy. The 12 month target price is $46.50, with only one quote so both the high and low is $46.50. This implies a total return of 40.65% with 36.37% from capital gains and 3.88% from dividends.
It is liked by the two analysts on Stock Chase for 2023, although one thinks the price is too high. Stock Chase gives this stock 3 stars out of 5. This stock is not on any of the dividend lists that I follow. Robin Brown on Motley Fool say to buy for passive income. Robin Brown on Motley Fool says that the company consistent earns excess cash which they distribute. The company put out a press release on Newswire about their results for 2022. The company put out a press release via Yahoo Finance on their third quarter of 2023 results.
Simply Wall Street reviews this stock via Yahoo Finance. Simply Wall Street gives this stock 4 stars out of 5. They list no warnings.
Richards Packaging Income Fund is involved in packaging distribution businesses. The company principally distributes plastic and glass containers and associated closures. It is used in packaging for cosmetics, healthcare, food, beverage, and other products. Geographically, it derives a majority of its revenue from Canada. Its web site is here Richards Packaging Income Fund.
The last stock I wrote about was about was Magna International Inc (TSX-MG, NYSE-MGA) ... learn more. The next stock I will write about will be Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more on Monday, December 11, 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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