Is it a good company at a reasonable price? I would worry about the debt level. However, this company has, in most years, provided a good return for its shareholders. It has also has provided dividends for the past 35 years. It is involved with the energy business, so there is volatility. Price would seem to be reasonable with a number of tests showing the stock price as cheap.
I do not own this stock of Parkland Fuel Corp (TSX-PKI, OTC-PKIUF). I decided to do a spreadsheet on this stock as it was a stock recommended by Roger Conrad in Money Show 2013.
When I was updating my spreadsheet, I noticed that the INK report showed a lot of selling, but these reports do not distinguish between options not being taken up and actual selling. When I look at actual buying and selling, I found that the officers were buying, but the directors were selling. There were not much in the way of selling by Directors. I noticed that the CFO had the biggest increase in shares with his shares increasing by 139%.
If you had invested in this company in December 2013, for $1,015.85 you would have bought 55 shares at $18.57 per share. In December 2023, after 10 years you would have received $638.45 in dividends. The stock would be worth $2,349.05. Your total return would have been $2,987.50. This would be a total return of 13.22% per year with 8.74% from capital gain and 4.48% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $18.47 | $1,015.85 | 55 | 10 | $638.45 | $2,349.05 | $2,987.50 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.74%. The 5, 10 and historical median dividend yields are also moderate at 3.33%, 3.60% and 3.42%. The current dividend growth is low (below 8% per year). Dividends have growth be 2.9% per year over the past 5 years. The last dividend increase was in 2024 and it was for 2.9%. Over the past 35 years, dividends have increased 18 times and decreased 3 times. They have paid a dividend each year for 35 years.
The Dividend Payout Ratios (DPR) are mostly good. The DPR for 2023 for Earnings per Share (EPS) is fine at 51% with 5 year coverage at 73%. The DPR for 2023 for Distributable Cash Flow (DCF) is good at 29% with 5 year coverage at 29%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 38% with 5 year coverage at 65%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 14% with 5 year coverage at 16%. The DPR for 2023 for Free Cash Flow (FCF) is good at 18% with 5 year coverage at 20%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 51.14% | 72.95% |
| DCF | 29.18% | 29.36% |
| AEPS | 38.44% | 64.50% |
| CFPS | 14.25% | 16.50% |
| FCF | 18.26% | 20.41% |
Debt Ratios are not good and the company has too much debt. The Long Term Debt/Market Cap Ratio for 2023 is a bit too high at 0.82 and currently a certainly too high at 1.00. The Liquidity Ratio for 2023 is low at 1.29 and 1.42 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.75 and currently at 1.86. The Debt Ratio for 2023 is too low 1.30 and 1.29 currently. I prefer this ratio to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2023 are too high at 3.36 and 3.36 and currently at 4.49 and 3.49. I prefer these ratios to be below 3.00 and below 2.00
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.82 | 1.00 |
| Intang/GW | 0.48 | 0.57 |
| Liquidity | 1.29 | 1.42 |
| Liq. + CF | 1.75 | 1.86 |
| Debt Ratio | 1.30 | 1.29 |
| Leverage | 4.36 | 4.49 |
| D/E Ratio | 3.36 | 3.49 |
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 | 2.85% | 7.66% | 4.43% | 3.23% |
| 2013 | 10 | 2.65% | 13.22% | 8.74% | 4.48% |
| 2008 | 15 | 0.44% | 23.67% | 13.49% | 10.18% |
| 2003 | 20 | 4.48% | 19.90% | 10.02% | 9.88% |
| 1998 | 25 | 19.20% | 19.42% | 10.83% | 8.59% |
| 1993 | 30 | 15.76% | 15.56% | 9.95% | 5.61% |
| 1988 | 35 | 13.37% | 13.36% | 9.19% | 4.17% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.60, 16.70 and 20.50. The corresponding 10 year ratios are 30.42, 35.55 and 40.68. The corresponding historical ratios are 10.75, 13.88 and 16.59. The current P/E Ratio is 12.97 based on a stock price of $38.10 and EPS estimate for 2024 of $2.94. 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. It is also a relatively low ratio as the 10 year median ratios are relatively high.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.48, 15.82 and 18.16. The corresponding 10 year ratios are 20.94, 27.21 and 32.38. The current P/AEPS Ratio is 12.25 based on a stock price of $38.10 and AEPS estimate for 2024 of $3.11. 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. It is also a relatively low ratio as the 10 year median ratios are relatively high.
I get a Graham Price of $34.91. The 10-year low, median, and high median Price/Graham Price Ratios are 1.30, 1.84 and 2.20. The current P/GP Ratio is 1.09 based on a stock price of $38.10. 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 reasonable and below the median. The current ratio is reasonable, but the company’s P/GP ratios are rather high.
I get a 10-year median Price/Book Value per Share Ratio of 2.71. The current ratio is 2.19 based on a Book Value of $3,062M, Book Value per Share of $17.42 and a stock price of $38.10. The current ratio is 19% 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 8.29. The current P/CF Ratio is 4.30 based on Cash Flow per Share estimate for 2024 of $8.87, Cash Flow of $1,559M, and a stock price of $38.10. The current ratio is 48% 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 3.42%. The current dividend yield is 3.67% based on a stock price of $38.10 and dividends of $1.40. The current dividend yield is 7.4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 3.60%. The current dividend yield is 3.67% based on a stock price of $38.10 and dividends of $1.40. The current dividend 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. There is the problem with the dividend yield tests as they are best with increasing dividends and dividends were cut 2022, but are now higher than ever.
The 10-year median Price/Sales (Revenue) Ratio is 0.33. The current ratio is 0.21 based on Revenue estimate for 2024 of $32,362M, Revenue per Share of $184.10 and a stock price of $38.10. The current ratio is 38% 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 that the stock price is probably reasonable and below the median. The dividend yield tests are saying this. The P/S Ratio testing says the stock price is cheap. A number of other tests says that the stock price is cheap.
When I look at analysts’ recommendations, I find Strong Buy (5), Buy (7) and Hold (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $53.14 with a high of 60.00 and a low of $46.00. The 12 month consensus of $53.14 implies a total return of $43.15% with 39.48% from capital gains and 3.67% from dividends.
Two recommendations for 2024 on Stock Chase is a Hold and a Buy. Stock Chase gives this stock 4 stars out of 5. Christopher Liew on Motley Fool thinks you should be this undervalued stock.
Daniel Da Costa on Motley Fool this reliable stock that offers an attractive dividend. The company put out a Press Release about their year-end results for 2023. The company put out a Press Release about their first quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 4 stars out of 5. Simply Wall Street has one warning of interest payments are not well covered by earnings for this stock.
Parkland Corp is a fuel distributor, marketer, and convenience retailer, with operations in 26 countries across the Americas. Parkland delivers refined fuels, propane, and other high-quality petroleum products to motorists, businesses, consumers, and wholesale customers across the Americas. The company's lines of business are: Retail and convenience and food stores; Commercial; Refining; and Corporate. Its web site is here Parkland Fuel Corp.
The last stock I wrote about was about was Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF) ... learn more. The next stock I will write about will be Saputo Inc (TSX-SAP, OTC-SAPIF) ... learn more on Friday, June 29, 2024 around 5 pm. Tomorrow on my other blog I will write about Pros and Cons of TFSA.... learn more on Thursday, June 27, 2024 around 5 pm.
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