Is it a good company at a reasonable price? This company has some quite high ratios. For example, the P/B Ratio is 4.55 when a good one is around 1.50. The P/GP Ratios are also high with a median of 2.33 when a ratio over 1.20 is considered high. This is why I would be cautious about this company. It is testing a relatively reasonable, but above the median.
I do not own this stock of Quebecor Inc (TSX-QBR.B, OTC-QBCRF). I thought I should cover another Telcom Stock, so I choice Quebecor. Since I need another stock currently to review, I am reviewing this one with a year end of 2022 and covering 2022 and the third quarter of 2023.
When I was updating my spreadsheet, I noticed few of the board members or executives have shares in the company. The company lists Pierre Karl Peladeau as the CEO, but on the INK Research report, it says he ceased to be an insider in October 30, 2015?
If you had invested in this company in December 2012, for $1,005.68 you would have bought 104 shares at $9.67 per share. In December 2022, after 10 years you would have received $431.96 in dividends. The stock would be worth $3,140.80. Your total return would have been $3,572.76. This would be a total return of 13.94% per year with 12.06% from capital gain and 1.86% from dividends. This calculation takes into consideration stock splits, which means that the original cost would be lowered by these splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.67 | $1,005.68 | 104 | 10 | $431.96 | $3,140.80 | $3,572.76 |
The current dividend yield is moderate with dividend growth currently moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.81%. The 5 year median dividend yield is moderate at 2.61%. The 10 year and historical median dividend yields are low (below 2%) at 0.61% and 0.73%. The dividend yields were very low, then in 2015 the company started to ram up the dividends, so yields are currently much higher. The dividend increases have been very high lately, with the dividends up 62% per year over the past 5 years. However, the last increase was 9.1% which is a moderate range (8% to 14% ranges).
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 47% with 5 year coverage too high at 669%, but the DPR for AEPS is more important. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 45% with 5 year coverage at 32%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 21% with 5 year coverage at 14%. The DPR for 2023 for Free Cash Flow (FCF) is good at 29% with 5 year coverage at 43%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 47.06% | 669.03% |
| AEPS | 45.17% | 32.45% |
| CFPS | 20.90% | 13.78% |
| FCF | 28.96% | 43.63% |
Debt Ratios are a concern. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.78 and currently at 0.96, which is rather high. The Liquidity Ratio for 2023 is very low at 0.71 and 0.81currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.10 and 1.38. I prefer them at 1.50 or higher. The Debt Ratio for 2023 is too low at 1.16 and 1.16 currently. I prefer this ratio to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2023 are far too high at 7.83 and 6.74 and currently at 7.58 and 6.51. I prefer these ratios to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.78 | 0.96 |
| Intang/GW | 0.72 | 0.84 |
| Liquidity | 0.71 | 0.81 |
| Liq. + CF | 1.10 | 1.38 |
| Debt Ratio | 1.16 | 1.16 |
| Leverage | 7.83 | 7.58 |
| D/E Ratio | 6.74 | 6.51 |
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 | 62.62% | 7.84% | 5.06% | 2.77% |
| 2012 | 10 | 37.41% | 13.93% | 12.07% | 1.86% |
| 2007 | 15 | 23.60% | 8.93% | 7.70% | 1.27% |
| 2002 | 20 | 21.48% | 12.58% | 11.31% | 1.28% |
| 1997 | 25 | 13.56% | 7.46% | 6.41% | 1.04% |
| 1992 | 30 | 13.30% | 7.83% | 6.84% | 0.99% |
| 1990 | 32 | 10.23% | 9.02% | 1.26% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.55, 13.07 and 14.59. The corresponding 10 year ratios are 11.76, 13.48 and 15.19. The corresponding historical ratios are 11.23, 12.25 and 13.27. The current P/E Ratio is 11.84 based on a stock price of $33.03 and EPS estimate of $2.97. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Earnings per Share Ratios (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.70, 13.24 and 14.78. The corresponding 10 year ratios are 11.40, 13.61 and 13.08. The current P/AEPS Ratio is 11.12 based on a stock price of $33.03 and AEPS estimate for 2023 of $2.97. 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 Graham Price of $22.01. The 10-year low, median, and high median Price/Graham Price Ratios are 1.91, 2.23 and 2.48. The current P/GP Ratio is 1.50 based on a stock price of $33.03. 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 7.12. The current ratio is 4.55 based on a stock price of $33.03, Book Value of $1,675M, and Book Value per Share of $7.25. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. But note how high the P/B Ratio is at 4.55. In theory the breakup value of this company is $7.25 per share, but the stock price is $33.03. This is not particularly good.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.64. The current P/CF Ratio is 5.25 based on Cash Flow for the past 12 months of $1,452M, Cash Flow per Share of $6.29 and a stock price of $33.03. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 0.73%. The current dividend yield is 3.63% based on dividends of $1.20 and a stock price of $33.03. The current dividend yield is 398% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. However, it was the company’s radically increase the dividends in the pass little while. You have to therefore wonder how good this test is.
I get a 10 year median dividend yield of 0.61%. The current dividend yield is 3.63% based on dividends of $1.20 and a stock price of $33.03. The current dividend yield is 495% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. However, it was the company’s radically increase the dividends in the pass little while. You have to therefore wonder how good this test is also.
The 10-year median Price/Sales (Revenue) Ratio is 1.35. The current P/S Ratio is 1.39 based on Revenue estimate for 2023 of $5,409M, Revenue per Share of $23.42 and a stock price of $33.03. The current ratio is 4.6% 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 be cautious. The dividend yield tests say the stock price is cheap. The P/S Ratio testing saying it is reasonable and above the median does not confirm the dividend yield tests and for a good reason. Dividends have skyrocket recently. The Price/Graham Price Ratio test is saying the stock price is cheap, but the ratios are very high. Generally speaking, a high P/GP Ratio is anything over 1.20 and the median P/GP Ratio is 2.23. I do not like the very high Price/Book Value Ratios also.
When I look at analysts’ recommendations, I find Strong Buy (5) and Buy (10). The Consensus would be a Buy. The 12 months stock price consensus is $39.52 with a low of $35.00 and a high of $46.00. The consensus price of $39.52 implies a total return of 23.28% with 19.65% from capital gains and 3.63% from dividends.
The latest recommendations on Stock Chase is a buy. There were also lots of buy recommendations for last year. Stock Chase gives this stock 4 stars out of 5. Joey Frenette on Motley Fool says to buy for income and growth. Christopher Liew on Motley Fool thinks this company is a top performing Telcom. The company put out a Press Release on their 2022 year end results. The company put out a Press Release on their third quarter of 2023.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is a buy. They have one risk of debt is not well covered by operating cash flow. Simply Wall Street gives this stock 3 and one half stars out of 5.
Quebecor primarily provides telecom services in Quebec, where it has internet subscribers’ and mobile subscribers. With the acquisition of Freedom Mobile in April 2023, Quebecor got mobile subscribers in Ontario, British Columbia, and Alberta. Quebecor also offers a French-language subscription video on demand service and has a media segment that owns and operates television stations, publishes newspapers and magazines, and produces and distributes films and television shows. A very small portion of Quebecor's business engages in live event production and promotion and has ownership of live-event venues. Its web site is here Quebecor Inc.
The last stock I wrote about was about was Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more. The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more on Wednesday, January 31, 2024 around 5 pm. Tomorrow on my other blog I will write about BMO and Metro .... learn more on Tuesday, January 30, 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment