Is it a good company at a reasonable price? The only entry on Stock Chase for 2024 said that the CEO left in a huff over compensation and that the stock was going nowhere. See Newswire announcement that the CEO did leave because of compensation. If you look at the price of the stock in 2023, it $88.67 CDN$, and at the end of $2020 it Was 88.48 CDN$. However, the stock is up 12% year to date and currently at $99.06 CDN$. This stock is covered in a number of recent reports from Simply Wall Street and these reports are positive. It has certainly done well for its shareholders over the past 25 years. So it does look like a good dividend stock.
I do not own this stock of RB Global Inc (TSX-RBA, NYSE-RBA). This was a stock suggestion I got and also it was a dividend growth stock found in the Canadian All Star List. See site.
When I was updating my spreadsheet, I noticed that they have made an acquisition. See news item on RB Global Inc.
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. Chart show that growth has been quite good over the past 5 and 10 years. Growth to the end of this year looks reasonable. Dividend growth has been low than Revenue and AEPS.
| Yr | Item | Tot. Growth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth US$ | 214.49% | 25.75% | -42.86% | <-12 mths |
| 5 | AEPS Growth | 176.85% | 22.59% | 14.38% | <-12 mths |
| 5 | Net Income Growth | 43.45% | 7.48% | 75.50% | <-12 mths |
| 5 | Cash Flow Growth | 277.04% | 30.40% | 33.47% | <-12 mths |
| 5 | Dividend Growth | 54.29% | 9.06% | 0.00% | <-12 mths |
| 5 | Stock Price Growth | 103.19% | 15.23% | 8.69% | <-12 mths |
| 10 | Revenue Growth US$ | 687.24% | 22.92% | 15.72% | <-this year |
| 10 | AEPS Growth | 255.95% | 13.54% | 8.36% | <-this year |
| 10 | Net Income Growth | 85.35% | 6.36% | 183.50% | <-this year |
| 10 | Cash Flow Growth | 187.65% | 11.14% | 70.11% | <-this year |
| 10 | Dividend Growth | 113.86% | 7.90% | 4.17% | <-this year |
| 10 | Stock Price Growth | 191.71% | 11.30% | 8.69% | <-this year |
If you had invested in this company in December 2013, for $1,023.12 you would have bought 42 shares at $24.36 per share. In December 2023, after 10 years you would have received $489.94 in dividends. The stock would be worth $3,724.14. Your total return would have been $4,214.08. This would be a total return of 16.29% per year with 13.79% from capital gain and 2.50% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $24.36 | $1,023.12 | 42 | 10 | $489.94 | $3,724.14 | $4,214.08 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.47%. The 5 year and historical median dividend yields are also low at 1.69% and 1.81%. The 10 year median dividend yield is moderate (2% to 4% ranges) at 2.01%.
The Dividend Payout Ratios (DPR) are mostly good. The DPR for 2023 for Earnings per Share (EPS) is too high at 104% with 5 year coverage fine at 70%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 36% with 5 year coverage at 47%. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 57% with 5 year coverage good at 41%. The DPR for 2023 for Free Cash Flow (FCF) is good at 46% with 5 year coverage at 33%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 103.85% | 70.34% |
| AEPS | 36.12% | 46.97% |
| CFPS | 57.43% | 40.48% |
| FCF | 46.33% | 32.81% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.25 and currently at 0.22. The Liquidity Ratio for 2023 is low at 1.35 and 1.29 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.53 and currently at 1.78. The Debt Ratio for 2023 is good at 1.84 and 1.86 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.40 and 1.30 and currently at 2.38 and 1.38.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 0.25 | 0.22 |
| Intang/GW | 0.61 | 0.55 |
| Liquidity | 1.35 | 1.29 |
| Liq. + CF | 1.65 | 1.78 |
| Debt Ratio | 1.84 | 1.86 |
| Leverage | 2.40 | 2.38 |
| D/E Ratio | 1.30 | 1.28 |
The Total Return per year is shown below for years of 5 to 25 to the end of 2023 in CDN$. 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 | 9.06% | 17.11% | 14.70% | 2.41% |
| 2013 | 10 | 7.90% | 16.29% | 13.79% | 2.50% |
| 2008 | 15 | 2.05% | 10.20% | 8.45% | 1.75% |
| 2003 | 20 | 12.63% | 12.80% | 10.78% | 2.02% |
| 1998 | 25 | 12.36% | 10.77% | 1.58% |
The Total Return per year is shown below for years of 5 to 25 to the end of 2023 in US$. 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 | 9.06% | 17.71% | 15.23% | 2.48% |
| 2013 | 10 | 7.90% | 13.54% | 11.30% | 2.24% |
| 2008 | 15 | 2.05% | 9.73% | 7.89% | 1.85% |
| 2003 | 20 | 12.63% | 12.88% | 10.64% | 2.24% |
| 1998 | 25 | 13.29% | 11.41% | 1.88% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 24.66, 35.06 and 50.14. The corresponding 10 year ratios are 24.98, 32.18 and 39.53. The corresponding historical ratios are 22.46, 28.43 and 32.45. The current P/E Ratio is 31.53 based on a stock price of $99.06 and EPS estimate for 2024 of $3.14 ($2.30 US$). 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. The ratios are quite high. This testing is in CDN$.
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 19.71, 29.36 and 33.51. The corresponding 10 year ratios are 20.95, 28.15 and 33.67. The current P/AEPS Ratio is 22.36 based on a stock price of $99.06 and AEPS estimate for 2024 of $4.43 ($3.24 US$). 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. The ratios are quite high. This testing is in CDN$.
I get a Graham Price of $44.85. The 10-year low, median, and high median Price/Graham Price Ratios are 1.93, 2.44 and 2.86. The current P/GP Ratio is 1.62 based on a stock price of $72.70. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. These ratios are also quite high. This testing is in US$.
I get a 10-year median Price/Book Value per Share Ratio of 4.56. The current P/B Ratio is 2.63 based on a stock price of $72.70, Book Value of $5,066M, and Book Value per Share of $27.59. The current ratio is 42% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. These ratios are also quite high. This testing is in US$. You will get a similar result in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 19.24. The current P/C Ratio is 14.42 based on Cash Flow per Share estimate for 2024 of $5.04, Cash Flow of $925M and a stock price $72.70. The current ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get a similar result in CDN$.
I get an historical median dividend yield of 1.81%. The current dividend yield is 1.49% based on dividends of $1.08 and a stock price of $72.70. The current dividend yield is 18% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$, but you will get similar results in CDN$.
I get a 10 year median dividend yield of 2.01%. The current dividend yield is 1.49% based on dividends of $1.08 and a stock price of $72.70. The current dividend yield is 26% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$, but you will get similar results in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 4.49. The current P/S Ratio is 3.13 based on Revenue estimate for 2024 of $4,258M, Revenue per Share of $23.19 and a stock price of $72.70. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$, but you will get similar results in CDN$.
Results of stock price testing is that the stock price maybe relatively expensive, but could be reasonable. The dividend yield testing is showing the stock price as expensive, but the P/S Ratio testing is showing the stock price as cheap. A lot of the testing is showing the stock price as relatively cheap. Problem seems that the dividends are not growing as fast as the company.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5), Hold (1), Underperform (1). The consensus would be a Buy. There are a lot of recommendations considering there is not much coverage of this stock by analysts on Stock Chase nor Motley Fool, although Simply Wall Street has several recent reports. The 12 month stock price consensus is $110.45 ($80.78 US$) with a high of $129.89 ($95.00 US$) and low of $77.97 ($57.00 US$). The stock price consensus of $110.45 implies a total return of 12.99% with 11.50% from capital gains and 1.49% from dividends.
It is not well followed on Stock Chase and the only entry for 2024 is Do Not Buy. Analyst says stock is going nowhere and CEO has left in a huff. Stock Chase gives this stock 3 stars out of 5. Aditya Raghunath on Motley Fool thought this stock was a buy in 2023. Daniel Da Costa on Motley Fool also liked this stock in 2023. This stock is not well followed in Motley Fool either. The company put out a press release via Newswire about their fourth quarter results for 2023. The company put out a press release via Newswire about their first quarter of 2024 results.
Simply Wall Street via Yahoo Finance put out an article on this stock recently. Simply Wall Street gives this stock 3 and one half stars. They give out two warnings of significant insider selling over the past 3 months; and has a high level of debt.
RB Global operates the world's largest auction for heavy equipment. The company started as a live auctioneer of industrial equipment; since then, it has greatly expanded its operations to include the sale of construction, agricultural, oilfield, and transportation equipment. RB Global operates over 40 live auction sites in more than 12 countries, along with online marketplaces, including IronPlanet, Marketplace-E, and GovPlanet. Its web site is here RB Global Inc.
The last stock I wrote about was about was Reitmans (Canada) Ltd (TSX-RET.A, OTC-RTMAF) ... learn more. The next stock I will write about will be IA Financial Corp (TSX-IAG, OTC-IDLLF) ... learn more on Monday, June 3, 2024 around 5 pm.
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