Is it a good company at a reasonable price? I have kept this stock as I have not lost faith in the company, although I must admit it has not done much lately for me, although there is a clear pickup in 2024. Revenue is up 48%, EPS up 33%, Stock up 73%. It is a Tech stock, so you should keep a eye on it. I have seldom thought of Tech stocks as long term buys. The stock price for P/S Ratio test is testing reasonable, but most of the other tests are saying the stock price is relatively expensive. You wonder about dividend tests because of declining dividends.
I own this stock of Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF). When selling SNC in July 2008, I was looking for something to buy. This company is a dividend paying growth stock that would also be considered to be a small cap with a capitalization at that time of around $115 million. At that time Insiders were buying this stock. It has great growth and it is information technology a favourite sector of mine. When I sold some of my TD Bank stock in June 2009, I bought some more.
When I was updating my spreadsheet, I noticed that this company, after hitting a peak in 2014/15, it did little for a while, but finally this year, it is picking up again with better Revenue, Earnings, and stock price. The real low that the stock hit was a low in 2019/20. It cut its dividend in 2021. However, 2023 you see a real improvement, especially in the stock price.
It would also seem that a number of insiders sold when the price went higher in the past year. They all had a lot of shares. The CEO bought shares last year and other sold or stayed the same.
If you had invested in this company in December 2013, for $1,011.56 you would have bought 76 shares at $13.31 per share. In December 2023, after 10 years you would have received $243.20 in dividends. The stock would be worth $769.88. Your total return would have been $1,013.08. This would be a total return of 0.02% per year with 2.69% from capital loss and 2.71% from dividends. Note that for other time periods, the total return is better. See chart in the appropriate paragraph below.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.31 | $1,011.56 | 76 | 10 | $243.20 | $769.88 | $1,013.08 |
The current dividend yield is low with dividend growth non-existent. The current dividend yield is low (below 2%) at1.54%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 3.80%, 3.91% and 3.65%. The dividends were decease in 2020 by 50% and they have been flat ever since.
The Dividend Payout Ratios (DPR) are mostly fine, especially the current ones. The DPR for 2023 for Earnings per Share (EPS) is fine at 63% with 5 year coverage too high at 92%. The DPR for 2023 for Funds from Operations (FFO) is good at 42% with 5 year coverage fine at 67%. The DPR for 2023 for Free Cash Flow provide by the company (FCF) is good at 45% with 5 year coverage fine at 76%. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 43% with 5 year coverage at 68%. The DPR for 2023 for Free Cash Flow (FCF) is good at 46% with 5 year coverage fine at 78%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 62.50% | 92.31% |
| FFO | 42.33% | 68.64% |
| FCF C. | 45.45% | 76.30% |
| CFPS | 42.55% | 67.90% |
| FCF | 45.91% | 77.80% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.01 and currently at 0.01. The Liquidity Ratio for 2023 is good at 1.65 and 1.65 currently. The Debt Ratio for 2023 is good at 1.65 and 1.65 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.54 1.54 and currently at 2.54 and 1.54.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.01 | 0.01 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.65 | 1.65 |
| Liq. + CF | 1.97 | 2.10 |
| Debt Ratio | 1.65 | 1.65 |
| Leverage | 2.54 | 2.54 |
| D/E Ratio | 1.54 | 1.54 |
The Total Return per year is shown below for years of 5 to 27 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 | -12.94% | 14.13% | 10.71% | 3.42% |
| 2013 | 10 | -5.84% | 0.02% | -2.69% | 2.71% |
| 2008 | 15 | 3.05% | 23.23% | 12.57% | 10.66% |
| 2003 | 20 | 12.88% | 36.45% | 18.50% | 17.95% |
| 1998 | 25 | 45.36% | 25.45% | 19.92% | |
| 1996 | 27 | 18.56% | 12.99% | 5.57% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 19.45, 24.73 and 30.50. The corresponding 10 year ratios are 20.34, 26.60 and 33.03. The corresponding historical ratios are 13.64, 20.90 and 26.60. The current P/E Ratio is 34.45 based on a stock price of $12.54 and EPS estimate for 2025 of $0.36. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 12.87, 16.83 and 22.42. The corresponding 10 year ratios are 15.62, 20.83 and 25.94. The current P/FFO Ratio is 26.54 based on a stock price of $12.54 and FFO per share for the last 12 months of $0.47. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $2.61. The 10-year low, median, and high median Price/Graham Price Ratios are 2.78, 3.67 and 4.51. The current P/GP Ratio is 4.80 based on a stock price of $12.54. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. There ae really high ratios where normal ratios would be around 0.80 to 1.20.
I get a 10-year median Price/Book Value per Share Ratio of 12.61. The current ratio is 15.05 based on a stock price of $12.54, Book Value of $67,815M and Book Value per Share of $0.83. This ratio is 19% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. These ratios are also very high, where a normal good ratio would be around 1.50.
I get a 10-year median Price/Cash Flow per Share Ratio of 23.33. The current P/CF Ratio is 22.80 based on Cash Flow per Share estimate for 2025 of $0.55, Cash Flow of $44.8M and a stock price of $12.54. The current ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 3.65%. The current dividend yield is 1.59% based on dividends of $0.20 and a stock price of $12.54. The current dividend yield is 56% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 3.91%. The current dividend yield is 1.59% based on dividends of $0.20 and a stock price of $12.54. The current dividend yield is 59% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, with dividends being flat for a long time and with dividend cuts, this is probably not a good test for this stock.
The 10-year median Price/Sales (Revenue) Ratio is 8.08. The current P/S Ratio is 7.65 based on a stock price of $12.54, Revenue estimate for 224 of $133.5M and Revenue per Share of $1.64. The current ratio is 5% below the 10 year median ratios. 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 maybe reasonable, but I do wonder. The P/S Ratio test says that the stock price is reasonable and below the median. I wonder how good the dividend yield tests are considering that the dividends have been flat for the past 10 years with one year of a 50% cut. Except for the P/CF Ratio test, the stock price is testing as relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (2) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $13.14 with a high of $15.00 and a low of $11.50. The consensus stock price of $13.14 implies a total return of 6.38% with 4.78% from capital gains and 1.59% from dividends based on a current stock price of $13.54. This is not a very high capital gain for a Strong Buy recommendation.
There is only one entry for this company on Stock Chase. The analysts suggest buying some today and then make 2 more purchases. Stock Chase gives this stock 4 stars out of 5. Christopher Liew on Motley Foolsays buy now as this company continues to overcome massive headwinds. Christopher Liew on Molley Fool says buy this stock for your TFSA because it can greatly increase your TFSA value. Christopher Liew seems to be the only one following this stock on Motley Fool. The company put out a press release via Newswire about their year-end results for 2024.
Simply Wall Street via Yahoo Finance reviews this stock and says it is undervalued. They have one warning of Significant insider selling over the past 3 months. They are right about that. Simply Wall Street gives this stock 3 and one half stars out of 5.
Computer Modelling Group Ltd is a software and consulting technology company engaged in developing and licensing reservoir simulation and seismic interpretation software. The company also provides professional services consisting of highly specialized support, consulting, training, and contract research activities. The firm has operations in the Americas, Europe, Middle East, Africa, and Asia-Pacific regions. Its web site is here Computer Modelling Group Ltd.
The last stock I wrote about was about was CI Financial Corp (TSX-CIX, NYSE-CIXX) ... learn more. The next stock I will write about will be Parkland Fuel Corp (TSX-PKI, OTC-PKIUF) ... learn more on Wednesday, June 26, 2024 around 5 pm. Tomorrow on my other blog I will write about Earning Income Outside a Job.... learn more on Tuesday, June 25, 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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