Is it a good company at a reasonable price? This stock is not well followed current and this is not a good sign. However, it has done better recently that it has for a while. Personally, I am not interested in this stock, but some people think it might be worth a look at. The stock price seems to be currently reasonable.
I do not own this stock of AGF Management Ltd (TSX-AGF.B, OTC-AGFMF), but I used to. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed. It has yet to recover.
When I was updating my spreadsheet, I noticed it has been doing better of late. Dividends were cut in 2015 and 2016 and then were flat until 2021 when they were again raised. However, dividends are still some 60% below what they were. As you can see from the following calculations of holding this stock for 10, 30 and 25 years, investors have, because of dividends, not lost or not lost much. You often find this with dividend stocks. Also, notice that their return is good for the last 5 years at 16.01% per year. See chart below on total return.
If you had invested in this company in December 2013, for $1,008.52 you would have bought 76 shares at $13.27 per share. In December 2023, after 10 years you would have received $330.60 in dividends. The stock would be worth $585.96. Your total return would have been $916.56. This total return would be a total loss of 1.16% per year with 5.29% from capital loss and 4.12% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.27 | $1,008.52 | 76 | 10 | $330.60 | $585.96 | $916.56 |
Interestingly, if you had invested in this company in December 1993, for $1,002.33 you would have bought 301 shares at $3.33 per share. In December 2023, after 30 years you would have received $4,397.61 in dividends. The stock would be worth $2,320.71. Your total return would have been $6,718.32. This Total Return would be a total gain of 10.68% per year with 2.84% from capital gain and 7.84% 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 |
|---|---|---|---|---|---|---|
| $3.33 | $1,002.33 | 301 | 30 | $4,397.61 | $2,320.71 | $6,718.32 |
But, if you had invested in this company in December 1998, for $1,009.20 you would have bought 87 shares at $11.60 per share. In December 2023, after 25 years you would have received $1,225.83 in dividends. The stock would be worth $670.77. Your total return would have been $1,896.60. This Total Return would be a total gain of 3.93% per year with 1.62% from a capital loss and 5.55% 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 |
|---|---|---|---|---|---|---|
| $11.60 | $1,009.20 | 87 | 25 | $1,225.83 | $670.77 | $1,896.60 |
The current dividend yield is good with dividend growth reviving. The current dividend yield is good (5% to 6% ranges) at 5.77%. The 5 and 10 year median dividend yields are good at 5.56% and 5.86%. The historical median dividend yield is moderate (2% to 4%) at 4.71%. The dividends have been increasing lately and they are up by 6.1% per year over the past 5 years. The last dividend increase was in 2023 and it was for 10%.
The Dividend Payout Ratios (DPR) are good currently. The DPR for 2023 for Earnings per Share (EPS) is good at 33% with 5 year coverage at 32%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 25% with 5 year coverage at 28%. The DPR for 2023 for Free Cash Flow (FCF) is good at 31% with 5 year coverage at 42%. The DPR for 2023 for Free Cash Flow (FCF) according to the company is good at 33% with 5 year coverage at 45%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 33.08% | 31.97% |
| CFPS | 24.95% | 28.73% |
| FCF MS | 31.21% | 41.73% |
| FCF Comp | 32.61% | 45.21% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.01. The Liquidity Ratio for 2023 is a bit low at 1.39. If you added in Cash Flow after dividends, the ratios are fine at 2.09. The Debt Ratio for 2023 is good at 4.29. The Leverage and Debt/Equity Ratios for 2023 are good at 1.30 and 0.30.
| Type | Year End |
|---|---|
| Lg Term R | 0.01 |
| Intang/GW | 0.54 |
| Liquidity | 1.39 |
| Liq. + CF | 2.09 |
| Debt Ratio | 4.29 |
| Leverage | 1.30 |
| D/E Ratio | 0.30 |
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 | 6.09% | 16.01% | 9.85% | 6.61% |
| 2013 | 10 | -8.80% | -1.16% | -5.29% | 4.12% |
| 2008 | 15 | -5.15% | 6.85% | -1.38% | 8.23% |
| 2003 | 20 | 1.90% | 1.31% | -4.02% | 5.33% |
| 1998 | 25 | 4.90% | 3.93% | -1.62% | 5.55% |
| 1993 | 30 | 6.24% | 10.68% | 2.84% | 7.84% |
| 1990 | 33 | 6.15% | 16.08% | 5.72% | 10.36% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.89, 7.04 and 7.31. The corresponding 10 year ratios are 7.44, 8.73 and 10.01. The corresponding historical ratios are 10.17, 13.43 and 17.22. The current P/E Ratio is 6.07 based on EPS for 2024 of $1.25 and a stock price of $7.59. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.59, 7.31 and 8.38. The corresponding 10 year ratios are 7.65, 9.63 and 13.00. The current P/AEPS Ratio is 6.07 based on AEPS for 2024 of $1.25 and a stock price of $7.59. 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 Graham Price of $21.82. The 10-year low, median, and high median Price/Graham Price Ratios are 0.35, 0.45 and .056. The current P/GP Ratio is 0.35 based on a stock price of $7.59. This ratio is at the low ratio for 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 0.47. The current P/B Ratio is 0.45 based on a stock price of $7.59, Book Value of $1089M and Book Value per share of $16.93. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share value for 2024 of $17.80. This implies a ratio of 0.43 and Book Value of $1,145M with a stock price of $7.59. This ratio is 9.6% 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 8.00. The current P/CF Ratio is 8.25 based on Cash Flow per Share estimate for 2024 of $0.92 and Cash Flow of $59M and a stock price of $7.59. This ratio is 3% 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 4.71%. The current dividend yield is 5.80% based on dividends of $0.44 and a stock price of $7.59. The current yield is 23% 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 5.86%. The current dividend yield is 5.80% based on dividends of $0.44 and a stock price of $7.59. The current yield is 1% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but below the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.07. The current P/S Ratio is 1.02 based on a stock price $7.59 and Revenue estimate for 2024 of $479M and Revenue per Share of $7.44. The current ratio is 4.7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year dividend yield test says it is reasonable but above the median (1%) and the P/S Ratio test says it is reasonable and below the median. The rest of the testing is saying that the stock price is either cheap or reasonable.
When I look at analysts’ recommendations, I find Buy (2) and Hold (5). The consensus would be a Hold. The 12 month stock price consensus is $9.07 with a high of $10.00 and low of $7.50. This implies a total return of 25.30% with 19.50% from capital gains and 5.80% from dividends.
Analysts on Stock Chase do not particularly like this stock. Stock Chase gives this stock 3 stars out of 5. It is currently not on any dividend list I am following. Adam Othman on Motley Fool says this stock is undervalued and might worth considering, but this was in 2021. There is nothing in Motley Fool later than 2021. The company put out a Press Release on their fourth quarter of 2023.
Simply Wall Street via Yahoo Finance talks about insider buying at this company. Simply Wall Street gives this stock 4 stars out of 5. Simply Wall Street lists 2 warnings of earnings are forecast to decline by an average of 8.4% per year for the next 3 years; and unstable dividend track record.
AGF Management is a Canada-based asset manager with operations and investments in Canada, the United States, the United Kingdom, Ireland, and Asia. AGF Management has a more meaningful portion of its business tied to institutional clients than its peers, with one fourth of its total AUM derived from institutional and subadvised accounts. The company derives 17% of its managed assets from high-net-worth clients. Its web site is here AGF Management Ltd .
The last stock I wrote about was about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more. The next stock I will write about will be Canadian Pacific Kansas City Ltd (TSX-CP, NYSE-CP) ... learn more on Wednesday, February 7, 2024 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2024 .... learn more on Tuesday, February 6, 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