Is it a good company at a reasonable price? For 2023 Revenue is up 26% and it is expected to go up again in 2024 by 8.8%. Net Income for 2023 was up 39% and is expected to go up 30% in 2024. EPS was up 39% in 2023 and is expected to go up 28% in 2024. So, it would appear that the company is recovering. The stock price is testing as cheap.
I do not own this stock of Exco Technologies Ltd (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.
When I was updating my spreadsheet, I noticed that there has not been much in the way of growth over the past 5 year. In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the first quarter in 2024 and expected growth over the next year. This shows growth over the past 5 years is lower than over the past 10 years for most items. It also shows better growth is expected over the next year. Cash Flow growth is weak.
| Year | Item | Tot. Growth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 7.60% | 1.48% | 4.68% | <-12 mths |
| 5 | AEPS Growth | -32.00% | -7.42% | 11.76% | <-12 mths |
| 5 | Net Income Growth | -37.82% | -9.06% | 11.96% | <-12 mths |
| 5 | Cash Flow Growth | 19.12% | 3.56% | ||
| 5 | Dividend Growth | 25.37% | 4.63% | 0.00% | <-12 mths |
| 5 | Stock Price Growth | -21.06% | -4.62% | -2.14% | <-12 mths |
| 10 | Revenue Growth | 153.18% | 9.73% | 8.83% | <-this year |
| 10 | AEPS Growth | 11.48% | 1.09% | 27.94% | <-this year |
| 10 | Net Income Growth | 11.22% | 1.07% | 30.06% | <-this year |
| 10 | Cash Flow Growth | 154.19% | 9.78% | -20.06% | <-this year |
| 10 | Dividend Growth | 143.48% | 9.31% | 0.00% | <-this year |
| 10 | Stock Price Growth | 15.30% | 1.43% | -2.14% | <-this year |
If you had invested in this company in December 2013, for $1,008.00 you would have bought 120 shares at $8.40 per share. In December 2023, after 10 years you would have received $396.00 in dividends. The stock would be worth $945.60. Your total return would have been $1,341.60. This is a total return would be a total return of 3.32% per year with 0.64% from capital loss and 3.95% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.40 | $1,008.00 | 120 | 10 | $396.00 | $945.60 | $1,341.60 |
The current dividend yield is good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 5.59%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 4.57%, 3.79% and 2.97%. The dividend growth is low (below 8%) at 4.6% per year over the past 5 years. The last dividend increase was in 2023 and it was for 5%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 62% with 5 year coverage at 56%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is fine at 62% with 5 year coverage at 54%. This DPR is expected to improve over the next 2 years. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 23% with 5 year coverage at 27%. The DPR for 2023 for Free Cash Flow (FCF) is good at 85% with 5 year coverage at 101%. Problem again with FCF, sites do not agree and none agree with the company.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 61.76% | 56.16% |
| AEPS | 61.76% | 53.85% |
| CFPS | 23.27% | 26.83% |
| FCF | 85.17% | 101.35% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.36. The Liquidity Ratio for 2023 is good at 2.48 currently. The Debt Ratio for 2023 is good at 2.54. The Leverage and Debt/Equity Ratios for 2023 are good at 1.65 and 0.65.
| Type | Year End |
|---|---|
| Lg Term R | 0.36 |
| Intang/GW | 0.33 |
| Liquidity | 2.48 |
| Liq. + CF | 2.87 |
| Debt Ratio | 2.54 |
| Leverage | 1.65 |
| D/E Ratio | 0.65 |
The Total Return per year is shown below for years of 5 to 33 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 4.63% | 1.88% | -2.69% | 4.57% |
| 2013 | 10 | 9.31% | 3.32% | -0.64% | 3.95% |
| 2008 | 15 | 12.96% | 21.79% | 13.82% | 7.97% |
| 2003 | 20 | 11.23% | 3.76% | 1.17% | 2.60% |
| 1998 | 25 | 7.35% | 4.70% | 2.65% | |
| 1993 | 30 | 5.80% | 3.79% | 2.00% | |
| 1990 | 33 | 11.73% | 9.06% | 2.67% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.19, 11.64 and 13.09. The corresponding 10 year ratios are 9.79, 12.40 and 14.38. The corresponding historical ratios are 9.06, 12.49 and 15.68. The current P/E Ratio is 8.63 based on a stock price of $7.51 and EPS for 2024 of $0.87. 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 8.91, 10.83 and 12.75. The corresponding 10 year ratios are 8.94, 11.24 and 12.92. The current P/AEPS Ratio is 8.63 based on AEPS fir 2024 of $0.87 and a stock price of $7.51. 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. Note that the AEPS do not always vary from the EPS. AEPS and EPS have been the same less often than they have been different.
I get a Graham Price of $13.66. The 10-year low, median, and high median Price/Graham Price Ratios are 0.65, 0.78 and 0.97. The current P/GP Ratio is 0.55 based on a stock price of $7.51. 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 1.14. The current P/B Ratio is 0.79 based on a stock price of $7.51, Book Value of $371M and Book Value per Share of $9.53. The current ratio is 31% 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 7.82. The current P/CF Ratio is 6.28 based on Cash Flow estimate for 2024 of $46.5M, Cash Flow per Share of $1.19 and a stock price of $7.51. The current ratio is 19.6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is very close to cheap.
I get an historical median dividend yield of 2.97%. The current dividend yield is 5.59% based on a stock price of $7.51 and dividends of $.42. The current dividend yield is 88% 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 3.79%. The current dividend yield is 5.59% based on a stock price of $7.51 and dividends of $.42. The current dividend yield is 47% 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 0.66. The current P/S Ratio is 0.43 based on Revenue estimate for 2024 of $674M, Revenue per Share of $17.32 and a stock price of $7.51. The current ratio is 34% 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. The dividend yield tests are showing the stock price as relatively cheap. The P/S Ratio test is confirming the stock price as cheap. Most of the testing is showing the stock price as cheap.
When I look at analysts’ recommendations, I find a Buy (1) recommendation only. Alpha Spread gives a 12 month stock price of $13.01, with high of $13.39 and low of $12.88. Market Screener has a 12 month stock price consensus of $12.75 with high and low at the same price as there is only one target price. Yahoo Finance has Buy (2) recommendations with one target price of $12.75.
Let’s go with the Alpha Spread’s target price of $13.01 and that implies a total return of $78.83 with 73.24% from capital gains and 5.59% from dividends. If we go with the other target of $12.75, this implies a total return of $75.37% with 69.77% from capital gains and 5.59% from dividends.
There are not recent recommendations on Stock Chase . In past reports, analysts like this stock. Stock Chase gives this stock 1 star out of 5. It is not on my dividend lists. Aditya Raghunath on Motley Fool thinks you should buy this stock as it is selling at a discount. Christopher Liew on Motley Fool thinks you should buy this stock for long term gains. The company put out a Press Release on their results for 2023 year end.
Simply Wall Street via Yahoo Finance say they are not impressed with this stock. Simply Wall Street gives out two warnings of earnings have declined by 9.7% per year over past 5 years; and significant insider selling over the past 3 months. Simply Wall Street gives this stock 3 and one half stars out of 5.
Exco Technologies Ltd is a designer, developer, and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries. The company reports in two business segments namely, the Casting and Extrusion segment and Automotive Solutions segment. It generates maximum revenue from the Automotive Solutions segment. Geographically, it derives a majority of its revenue from the United States and also has its presence in Canada, Europe, Asia, and other regions. Its web site is here Exco Technologies Ltd.
The last stock I wrote about was about was Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more. The next stock I will write about will be Quebecor Inc (TSX- QBR.B, OTC- QBCRF) ... learn more on Monday, January 29, 2024 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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