Is it a good company at a reasonable price? Long time shareholders have done well with this company. It has been increasing the dividends for over 25 years. Currently the dividend yield is quite high relative to the past. However, this is a relatively small company, so there is a risk to that. Stock price testing is saying that the stock price is relatively cheap. When I reviewed this stock last year, the analyst thought they there would be good rise in the stock price over the last year, but the stock price fell instead.
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 this year is lower for all items but the expected stock growth. This lowers my confidence in strong stock price growth.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 41.92% | 7.25% | 1.03% | <-12 mths |
| 5 | AEPS Growth | 88.68% | 13.54% | -0.50% | <-12 mths |
| 5 | Net Income Growth | 62.67% | 10.22% | -9.56% | <-12 mths |
| 5 | Cash Flow Growth | 55.05% | 9.17% | ||
| 5 | Dividend Growth | 80.00% | 12.47% | 5.56% | <-12 mths |
| 5 | Stock Price Growth | 49.24% | 8.34% | -2.34% | <-12 mths |
| 10 | Revenue Growth | 46.74% | 3.91% | 8.95% | <-this year |
| 10 | AEPS Growth | 88.68% | 6.55% | -12.00% | <-this year |
| 10 | Net Income Growth | 97.67% | 7.05% | -16.74% | <-this year |
| 10 | Cash Flow Growth | 18.03% | 1.67% | ||
| 10 | Dividend Growth | 157.14% | 9.90% | 5.56% | <-this year |
| 10 | Stock Price Growth | 14.00% | 1.32% | 30.43% | <-this year |
I do not own this stock of Algoma Central Corporation (TSX-ALC, OTC-AGMJF). I got the name from the internet. The description was that Algoma Central Corporation is a Canadian shipping company. It operates Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes. The company operates its business through six segments that are Domestic Dry-Bulk, Product Tankers, Ocean Self Unloaders, Corporate, Investment Properties, and Global Short Sea Shipping.
When I was updating my spreadsheet, I noticed that investors in this rather small cap have done well over the years. Look at the Total Return paragraph below and the chart following.
If you had invested in this company in December 2093, for $1,000.50 you would have bought 817 shares at $1.22 per share. In December 2023, after 30 years you would have received $9,683.08 in dividends. The stock would be worth $12,214.15. Your total return would have been $21,897.23. This would be a total return of 13.78% per year with 8.70% from capital gain and 508% 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 |
|---|---|---|---|---|---|---|
| $1.22 | $1,000.50 | 817 | 30 | $9,683.08 | $12,214.15 | $21,897.23 |
If you had invested in this company in December 2013, for $1,009.82 you would have bought 77 shares at $13.11 per share. In December 2023, after 10 years you would have received $716.10 in dividends. The stock would be worth $1,151.15. Your total return would have been $1,867.25. This would be a total return of 7.18% per year with 1.32% from capital gain and 5.86% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.11 | $1,009.82 | 77 | 10 | $716.10 | $1,151.15 | $1,867.25 |
The current dividend yield is good with dividend growth moderate. The current dividend yield is good (5% to 6% ranges) at 5.21%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 4.27%, 3.75% and 2.79%. The dividend growth over the past 5 years is moderate (8% to 14% per year) at 12.5% per year.
The Dividend Payout Ratios (DPR) are fine looking at the ratios for AEPS and CFPS. The DPR for 2023 for Earnings per Share (EPS) much too high at 104% with 5 year coverage at 89%. However, the DPR for AEPS is more important. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 36% with 5 year coverage at 36%. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 56% with 5 year coverage good at 40%. The DPR for 2023 for Free Cash Flow (FCF) is far too high at 1606% with 5 year coverage at 144%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 103.50% | 88.76% |
| AEPS | 36.00% | 35.80% |
| CFPS | 56.49% | 39.97% |
| FCF | 1606.29% | 143.51% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.55 and currently at 0.69. The Liquidity Ratio for 2023 is too low at 1.10 and fine at 1.46 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.40 and currently at 2.26. The Debt Ratio for 2023 is good at 2.38 and 2.19 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.73 and 0.73 and currently at 1.84 and 0.84.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.55 | 0.69 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 1.10 | 1.46 |
| Liq. + CF | 1.40 | 2.26 |
| Debt Ratio | 2.38 | 2.19 |
| Leverage | 1.73 | 1.84 |
| D/E Ratio | 0.73 | 0.84 |
The Total Return per year is shown below for years of 5 to 35 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 | 12.47% | 21.12% | 8.34% | 12.78% |
| 2013 | 10 | 9.90% | 7.18% | 1.32% | 5.86% |
| 2008 | 15 | 10.02% | 15.54% | 9.13% | 6.41% |
| 2003 | 20 | 10.37% | 9.92% | 5.57% | 4.35% |
| 1998 | 25 | 8.22% | 9.82% | 5.87% | 3.95% |
| 1993 | 30 | N/C | 13.78% | 8.70% | 5.08% |
| 1988 | 35 | 7.36% | 9.86% | 6.52% | 3.34% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.91, 7.92 and 8.94. The corresponding 10 year ratios are 7.16, 8.55 and 9.98. The corresponding historical median ratios are 7.11, 8.26 and 9.65. The current ratio is 8.30 based on a stock price of $14.60 and EPS estimate for 2024 of $1.76. This 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 7.13, 7.72 and 8.31. The corresponding 10 year ratios are 9.22, 10.23 and 11.38. The current ratio is 8.30 based on a stock price of $14.60 and AEPS estimate for 2024 of $1.76. 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 $26.95. The 10-year low, median, and high median Price/Graham Price Ratios are 0.50, 0.56 and 0.61. The current P/GP Ratio is 0.54 based on a stock price of $14.60. 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 get a 10-year median Price/Book Value per Share Ratio of 0.69. The current P/B Ratio is 0.80 based on a stock price of $14.60, Book Value of $709M and Book Value per Share of $18.34. The current ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.75. The current P/CF Ratio is 4.54 based on a stock price of $14.60, Last 12 months of Cash Flow of $124M and Cash Flow per Sareh of 3.21. The current ratio is 4% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 2.79%. The current dividend yield is 5.21% based on dividends of $0.76 and a stock price of $14.60. The current dividend yield is 87% 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 5.21% based on dividends of $0.76 and a stock price of $14.60. The current dividend yield is 39% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.94. The current P/S Ratio is 0.72 based on Revenue estimate for 2024 of $785.8M, Revenue per share of $20.33 and a stock price of $14.60. The current ratio is 23% 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 10 year dividend yield test is showing the stock price as cheap and it is confirmed by the P/S Ratio test. Most of the other testing is showing the stock price as reasonable, except this P/AEPS Ratio test which is also showing the stock price as cheap.
When I look at analysts’ recommendations, I find a Buy (1) recommendations only 12 month stock price consensus of $19.50, as the only stock price given. Another site givens Buy (2) recommendation with a consensus stock price of $22.25 with a high of $25.00 and low of $19.50. Another site gives a Strong Buy (1) and a Buy (1) recommendations for a consensus of a Buy. The 12 months stock price consensus is $22.25 with a high of $25.00 and a low of $19.50.
The consensus stock price of $22.25 implies a total return of 57.60% with 52.40% from capital gains and 5.21% from dividends, The 12 month stock price of $19.50 implies a total return of $38.77 with 33.36% from capital gains and 5.21% from dividends based on a current stock price of $14.60. This stock is not well followed.
Last year the 12 month consensus stock price is $23.25. This implies a total return of 56.67% with 51.96% from capital gains and 4.71% from dividends based on a current stock price of $18.21. However, what happened was a stock price decline from $18.21 to $14.60, a decline of 19.8%
There are few entries on this stock at Stock Chase, but the analysts seem to like the stock. Stock Chase gives this stock 4 stars out of 5. Ambrose O'Callaghan on Motley Fool last look at this stock in 2022 and called it a dependable equity to buy. Nikhil Kumar on Motley Fool reviewed this stock in 2021 and thought it served long-term shareholders well. The company put out a press release via Business Wire about their 2023 fiscal results.
Simply Wall Street via Yahoo Finance writes about the CEO’s pay. Simply Wall Street point out 4 warnings signs of has a high level of debt; profit margins (11.5%) are lower than last year (17.7%); shareholders have been diluted in the past year; and dividend of 5.25% is not well covered by cash flows. Simply Wall Street gives this stock 2 and one half stars out of 5.
Algoma Central Corp owns and operates a fleet of dry and liquid bulk carriers operating on the Great Lakes, St. Lawrence Waterway. The company operates its business through six segments that are Domestic Dry-Bulk which generates key revenue, Product Tankers, Ocean Self-Unloaders, Corporate, Investment Properties, and Global Short Sea Shipping. Its web site is here Algoma Central Corporation.
The last stock I wrote about was about was WSP Global Inc (TSX-WSP, OTC-WSPOF) ... learn more. The next stock I will write about will be Thomson Reuters Corp (TSX-TRI, NYSE-TRI) ... learn more on Wednesday, May 8, 2024 around 5 pm. Tomorrow on my other blog I will write about Capital Gains .... learn more on Tuesday, May 7, 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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