Is it a good company at a reasonable price? I still like this company and I plan to hold on to my shares. However, this is a small cap and therefore is rather risky. You should not buy it with money you cannot afford to lose. Results of stock price testing is that the stock price could be reasonable, but it is not cheap.
I own this stock of Adentra Inc (TSX-ADEN, OTC- HDIUF). In April 2017, I asked for suggestions on what stocks I should now follow because of a number that I had followed had been bought out. This was one of the suggestions. I bought the stock in 2020 as Hardwoods Distribution Inc (TSX-HDI, OTC- HDIUF). In 2022 the company changed its name to Adentra Inc (TSX-ADEN, OTC-HDIUF).
When I was updating my spreadsheet, I noticed I have done very well with this stock. I have owned it for almost 4 years and my total return if 37.78% per year with 34.45% from capital gains and 2.33% from dividends.
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 stock is growing quite well.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth US$ | 169.33% | 21.91% | -2.00% | <-12 mths |
| 5 | AEPS Growth | 105.92% | 15.54% | 4.58% | <-12 mths |
| 5 | Net Income Growth | 52.92% | 8.87% | 2.98% | <-12 mths |
| 5 | Cash Flow Growth | 7745.11% | 139.29% | -26.77% | <-12 mths |
| 5 | Dividend Growth CDN$ | 74.79% | 11.82% | 7.69% | <-12 mths |
| 5 | Stock Price Growth | 229.76% | 26.95% | 14.18% | <-12 mths |
| 10 | Revenue Growth US$ | 541.61% | 20.43% | 3.96% | <-this year |
| 10 | AEPS Growth | 223.12% | 12.44% | 25.42% | <-this year |
| 10 | Net Income Growth | 193.42% | 11.36% | 92.55% | <-this year |
| 10 | Cash Flow Growth | 5510.92% | 49.59% | 145.93% | <-this year |
| 10 | Dividend Growth CDN$ | 285.19% | 14.44% | 21.15% | <-this year |
| 10 | Stock Price Growth | 171.54% | 10.51% | 14.18% | <-this year |
If you had invested in this company in December 2013, for $1,003.22 you would have bought 103 shares at $9.74 per share. In December 2023, after 10 years you would have received $331.15 in dividends. The stock would be worth $3,292.91. Your total return would have been $3,624.06. This would be a total return of 14.44% per year with 12.62% from capital gain and 1.82% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.74 | $1,003.22 | 103 | 10 | $331.15 | $3,292.91 | $3,624.06 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.47%. The 5, 10 and historical median dividend yields are also low at 1.73%, 1.61% and 1.88%. The dividend growth is moderate (8% to 14% ranges) at 11.8% per year over the past 5 years. The last dividend increase was in 2024 and it was for 7.7%. This company went public as a Income Trust and that would explain the fact the dividends are now lower than they were 15 to 19 years ago. They did initially cut the dividends, then they suspended them and then restarted dividends and have been increasing them every since.
The Dividend Payout Ratios (DPR) are all good. The DPR for 2023 for Earnings per Share (EPS) is good at 25% with 5 year coverage at 11%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 16% with 5 year coverage at 13%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 5% with 5 year coverage at 5%. The DPR for 2023 for Free Cash Flow (FCF) is good at 3% with 5 year coverage at 5%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 24.73% | 11.02% |
| AEPS | 16.38% | 13.34% |
| CFPS | 5.22% | 4.66% |
| FCF | 2.33% | 5.45% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.61 and currently at 0.53. The Liquidity Ratio for 2023 is good at 2.56 and 2.46 currently. The Debt Ratio for 2023 is good at 1.75 and 1.74 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.34 and 1.34 and currently at 2.34 and 1.34.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 0.61 | 0.53 |
| Intang/GW | 0.81 | 0.70 |
| Liquidity | 2.56 | 2.46 |
| Liq. + CF | 3.57 | 4.72 |
| Debt Ratio | 1.75 | 1.74 |
| Leverage | 2.34 | 2.34 |
| D/E Ratio | 1.34 | 1.34 |
The Total Return per year is shown below for years of 5 to 19 to the end of 2023 in CDN$. 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 | 11.82% | 26.57% | 24.13% | 2.45% |
| 2013 | 10 | 14.44% | 14.44% | 12.62% | 2.26% |
| 2008 | 15 | -0.95% | 29.91% | 26.42% | 1.86% |
| 2004 | 19 | -1.76% | 7.77% | 5.36% | 2.69% |
The Total Return per year is shown below for years of 5 to 19 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 | 12.51% | 29.62% | 26.95% | 2.66% |
| 2013 | 10 | 11.97% | 12.16% | 10.51% | 1.66% |
| 2008 | 15 | -1.46% | 29.76% | 26.00% | 3.76% |
| 2004 | 19 | -2.25% | 7.43% | 4.87% | 2.56% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.52, 9.98 and 12.13. The corresponding 10 year ratios are 9.14, 11.54 and 15.00. The corresponding historical ratios are 7.69, 10.47 and 14.09. The current P/E Ratio is 12.18 based on a stock price of $40.98 and EPS estimate for 2024 of $3.37 ($2.46 US$). The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 3.86, 8.53 and 11.23. The corresponding 10 year ratios are 7.76, 9.72 and 13.25. The current P/AEPS Ratio is 9.95 based on a stock price of $40.98 and AEPS estimate for 2024 of $4.12 ($3.01 US$). The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a Graham Price of $47.17. The 10-year low, median, and high median Price/Graham Price Ratios are 0.61, 0.81 and 1.16. The current ratio is 0.87 based on a stock price of $40.98. The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 1.38. The current P/B Ratio is 1.21 based on a Book Value of $527M, Book Value per Share of $24.02 and a stock price of $28.96. The current ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result in CDN$.
I also have a Book Value per Share estimate for 2024 of 25.60. This implies a Book Value of $539M and a ratio of 1.13 based on a stock price of $28.96. This ratio is 18% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.62. The current P/CF Ratio is 7.43 based on a stock price of $28.96, Cash Flow per Share estimate for 2024 of $3.90 and Cash Flow of $87.48. The current ratio is 14% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result in CDN$.
I get an historical median dividend yield of 1.88%. The current dividend yield is 1.37% based on dividends of $0.56 and a stock price of $40.98. The current dividend yield is 27% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$ and dividends are paid in CDN$ even though the financials are reported in US$.
I get a 10 year median dividend yield of 1.61%. The current dividend yield is 1.37% based on dividends of $0.56 and a stock price of $40.98. The current dividend yield is 15% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$ and dividends are paid in CDN$ even though the financials are reported in US$.
The 10-year median Price/Sales (Revenue) Ratio is 0.33. The current P/S Ratio is 0.30 based on the Revenue estimate for 2024 of $2,199M, Revenue per Share of $98.04 and a stock price of $28.96. The current ratio is 10% below 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result in CDN$.
Results of stock price testing is that the stock price could be reasonable. The 10 year median dividend yield says it is reasonable, but above the median. The P/S Ratio test says it is reasonable but below the median. The rest of the testing is showing the stock price as reasonable and above or below the median.
When I look at analysts’ recommendations, I find Strong Buy (3), and Buy (4). The consensus would be a Strong Buy. The 12 months stock price consensus is $50.74 ($37.09 US$) with a high of $53.99 ($39.46 US$) and low of $44.98 ($32.88 US$). The consensus price of $50.74 implies a total return of 25.19% with 23.82% from capital gains and 1.37% from dividends.
There are only two entries on Stock Chase both are Top Picks and one for 2024 and one for 2023. Stock Chase gives this stock 4 stars out of 5. Aditya Raghunath on Motley Fool in 2023 thought this company was a good buy because it was off its high. Robin Brown on Motley Fool talked about this stock in 2022. The company put out a Press Release on their fourth quarter of 2023. The company put out a Press Release on their first quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. Simply Wall Street put out two warnings on this stock of interest payments are not well covered by earnings; and profit margins (1.7%) are lower than last year (3.8%).
Adentra Inc is a distributor of architectural products to fabricators, home centers and professional dealers servicing the new residential, repair and remodel, and commercial construction end markets. The company operates a network in North America of 86 facilities in the United States and Canada. Its web site is here Adentra Inc.
The last stock I wrote about was about was IA Financial Corp (TSX-IAG, OTC-IDLLF) ... learn more. The next stock I will write about will be Ensign Energy Services (TSX-ESI, OTC-ESVIF) ... learn more on Friday, June 7, 2024 around 5 pm. Tomorrow on my other blog I will write about Something to Buy June 2024.... learn more on Thursday, June 6, 2024 around 5 pm.
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