Is it a good company at a reasonable price? I can see why some people might like this stock as its dividend seems solid and the yield is in the 6% range. Lately, the total return is mostly from dividends and little to none from capital gains. This would not be a favourite stock for me. However, I can see why people might be interested in the relatively high dividend yield. The stock price seems reasonable at the present time and it may even be cheap.
I do not own this stock of Rogers Sugar Inc (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be an Income Trust (TSX-RSI.UN) but it has been converted to a corporation. On its change to a corporation, it lowered its dividend.
When I was updating my spreadsheet, I noticed this stock give a good return, in dividends, currently at 6.62%, but little in the way of capital gains. It all depends on what you want from a stock. It pays better than a bond and dividends are taxed lower than interest.
If you had invested in this company in December 2013, for $1,002.54 you would have bought 186 shares at $5.39 per share. In December 2023, after 10 years you would have received $669.60 in dividends. The stock would be worth $1,000.68. Your total return would have been $1,670.28. This is a total return would be a total return of 6.67% per year with 0.02% from a capital loss and 6.68% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $5.39 | $1,002.54 | 186 | 10 | $669.60 | $1,000.68 | $1,670.28 |
The current dividend yield is good with dividend growth non-existent. The current dividend yield is good (5% to 6% ranges) at 6.62%. The 5 and 10 year median dividend yields are also good at 6.32% and 6.51%. The historical dividend yield is high (7% and over) at 8.13%. This stock used to be an income trust and income trusts have generally very high yields. These companies have had a hard time getting the dividends right. The dividends on this stock have been flat since 2013.
The Dividend Payout Ratios (DPR) are still too high. The DPR for 2023 for Earnings per Share (EPS) is too high at 82% with 5 year coverage at 184%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is also too high at 86% with 5 year coverage at 99.7%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 34% with 5 year coverage at 36%. The DPR for Cash Flow is good at 40% or less. The DPR for 2023 for Free Cash Flow (FCF) is too high at 423% with 5 year coverage at 147%. The problem with FCF is sites do not agree on what it is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 81.82% | 183.67% |
| AEPS | 85.71% | 99.72% |
| CFPS | 33.55% | 36.41% |
| FCF | 422.50% | 147.27% |
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.62 and currently at 0.61. The Liquidity Ratio for 2023 is good at 1.75. The Debt Ratio for 2023 is fine, but a bit low at 1.47. I prefer it to be 1.50 or high. The Leverage and Debt/Equity Ratios for 2023 are too high at 3.13 and 2.17. I prefer these to be below 3.00 and below 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.62 | 0.61 |
| Intang/GW | 0.45 | 0.44 |
| Liquidity | 1.75 | 1.75 |
| Liq. + CF | 1.78 | 1.95 |
| Debt Ratio | 1.47 | 1.47 |
| Leverage | 3.13 | 3.13 |
| D/E Ratio | 2.17 | 2.17 |
The Total Return per year is shown below for years of 5 to 26 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 | 0.00% | 6.42% | -0.22% | 6.65% |
| 2013 | 10 | 0.00% | 6.67% | -0.02% | 6.68% |
| 2008 | 15 | -1.55% | 11.90% | 2.34% | 9.55% |
| 2003 | 20 | -1.43% | 12.39% | 2.03% | 10.37% |
| 1998 | 25 | -2.62% | 5.23% | -1.67% | 6.90% |
| 1997 | 26 | 7.02% | -1.01% | 8.02% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.75, 12.11 and 13.48. The corresponding 10 year ratios are 11.82, 13.66 and 14.83. The corresponding historical ratios are 10.62, 11.62 and 12.62. The current P/E Ratio is 13.27 based on a stock price of $5.44 and EPS estimate for 2024 of $0.41. 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 (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.33, 14.25 and 16.46. The corresponding 10 year ratios are 13.58, 14.71 and 16.49. The current P/AEPS Ratio is 13.27 based on a stock price of $5.44 and AEPS estimate for 2024 of $0.41. 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 $5.15. The 10-year low, median, and high median Price/Graham Price Ratios are 1.04, 1.15 and 1.27. The current P/GP Ratio is 1.06 based on a stock price of $5.44. The current ratio is between the low and 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 1.90. The current P/B Ratio is 1.89 based on a stock price of $5.44, Book Value of $302M and Book Value per Share of $2.87. The current ratio is 0.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 11.33. The current P/CF Ratio is 6.86 based on Cash Flow estimate for 2024 of $83.4M, Cash Flow per Share of $0.79 and a stock price of $5.44. The current ratio is 39% 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 8.13%. The current dividend yield is 6.62% based on a stock price of $5.44 and dividends of $0.36. The current yield is 19% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 6.51%. The current dividend yield is 6.62% based on a stock price of $5.44 and dividends of $0.36. The current yield is 2% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.76. The current P/S Ratio is 0.48 based on Revenue estimate for 2024 of $1,179M, Revenue per Share of $11.22 and a stock price of $5.44. The current ratio is 36% 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 testing reasonable, but could be cheap. The dividend yield tests say the stock price is relatively reasonable, however, this test is not especially good for stocks that do not increase their dividends. Of course, being unable to increase the dividends is a negative. The P/S Ratio test is a good one and it says that the stock price is relatively cheap. The rest of the testing is showing the stock price as reasonable or cheap.
When I look at analysts’ recommendations, I find Holds (5). The consensus would be a Hold. The 12 months stock price consensus is $6.05 with a high of $6.50 and low of $5.50. This stock price consensus of $6.05 implies a total return of 17.83% with 11.21% from capital gains and 6.62% from dividends.
The recommendation made on Stock Chase in February of 2023 was a Buy. Stock Chase gives this stock 4 stars out of 5. This company is not on any of the dividend lists that I follow. Christopher Liew on Motley Fool likes it for its consistent dividends. Christopher Liew on Motley Fool says this company is a reliable passive income provider. The company put out a press release on Globe Newswire about their 2023 year end results.
Simply Wall Street via Yahoo Finance has a report on this stock saying it is generating stable returns. Simply Wall Street gives this stock 2 and one half stars out of 5. They have three warnings of debt is not well covered by operating cash flow; earnings have declined by 9.6% per year over past 5 years; and dividend of 6.73% is not well covered by cash flows.
Rogers Sugar Inc is a Canada-based sugar-producing company. The company along with its subsidiaries is principally engaged in refining, packaging, and marketing sugar products. Its geographical segments include Canada, which is the key revenue generator; the United States; Europe; and others. Its web site is here Rogers Sugar Inc.
The last stock I wrote about was about was Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more. The next stock I will write about will be Calian Group Ltd (TSX-CGY, OTC-CLNFF) ... learn more on Wednesday, January 10, 2024 around 5 pm. Tomorrow on my other blog I will write about Job Ideas for Retirees .... learn more on Tuesday, January 9, 2024 around 5 pm.
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