Is it a good company at a reasonable price? They are a dividend growth stock, but have not done as well over the past 5 and 10 years as they had done earlier. They had some problems in 2016 and they have been recovering. Still, they have been raising the dividends over the past 5 and 10 years. They have a history of paying dividends as my records shows that they have paid dividends consistently over the past 39 years. The last dividend increase was for 10.6%, and this shows managements is positive about the future. The dividend tests are showing the stock price as cheap, but the P/S Ratio test is just showing stock price as reasonable.
I do not own this stock of Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). I have known about this stock for some time before I decided to follow it. This stock has a financial year ending in end of April or first of May each year. This is a dividend growth stock with a low dividend and moderate dividend increases. This is the sort of company I like to buy.
When I was updating my spreadsheet, I noticed that the INK report shows lots of insider selling, but they are just not picking up the stock options. When I compare last year to this year in shares held by insiders that I follow, officers are buying, but directors are not.
If you had invested in this company in December 2013, for $1,1015.98 you would have bought 42 shares at $24.19 per share. In December 2023, after 10 years you would have received $210.00 in dividends. The stock would be worth $1,472.10. Your total return would have been $1,682.10. This would be a total return of 5.49% per year with 3.78% from capital gain and 1.71% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $24.19 | $1,015.98 | 42 | 10 | $210.00 | $1,472.10 | $1,682.10 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 2.29%. The 5, 10 and historical dividend yields are low (below 2%) at 1.56%, 1.63% and 1.45%. The dividend increases are moderate (8% to 14% per year ranges) at 10.7% per year over the past 5 years. The last dividend increase was in 2024 and it was for 10.6%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 25% with 5 year coverage at 23%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 27% with 5 year coverage at 23%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 8% with 5 year coverage at 7%. The DPR for 2023 for Free Cash Flow (FCF) is good at 14% with 5 year coverage at 13%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 25.00% | 22.65% |
| AEPS | 26.55% | 22.59% |
| CFPS | 8.19% | 7.26% |
| FCF | 14.24% | 12.72% |
Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.12 and currently at 0.11. The Liquidity Ratio for 2023 is too low at 0.80 and 0.80 currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.28 and currently at 1.27. I prefer this ratio to be 1.50 or higher. The Debt Ratio for 2023 are a bit low at 1.48 and 1.48 currently. I also prefer this ratio to be at 1.50 or higher The Leverage and Debt/Equity Ratios for 2023 are too high at 3.14 and 2.14 and currently at 3.14and 2.14. I prefer these ratios to be below 3.00 and below 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.12 | 0.11 |
| Intang/GW | 0.42 | 0.39 |
| Liquidity | 0.80 | 0.80 |
| Liq. + CF | 1.28 | 1.27 |
| Debt Ratio | 1.48 | 1.48 |
| Leverage | 3.14 | 3.14 |
| D/E Ratio | 2.12 | 2.12 |
The Total Return per year is shown below for years of 5 to 39 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 | 10.66% | 5.87% | 3.98% | 1.86% |
| 2013 | 10 | 7.73% | 5.49% | 3.78% | 1.76% |
| 2008 | 15 | 7.90% | 7.03% | 5.26% | 1.74% |
| 2003 | 20 | 8.87% | 9.07% | 7.06% | 1.73% |
| 1998 | 25 | 11.75% | 9.73% | 7.78% | 2.13% |
| 1993 | 30 | 10.84% | 10.69% | 8.72% | 2.26% |
| 1988 | 35 | 9.92% | 9.82% | 8.13% | 1.72% |
| 1984 | 39 | 9.91% | 14.41% | 11.40% | 2.87% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.60, 14.34 and 16.30. The corresponding 10 year ratios are 13.37, 15.89 and 18.95. The corresponding historical ratios are 11.25, 13.03 and 14.21. The current P/E Ratio is 11.70 based on a stock price of $34.97 and EPS estimate for 2025 of $2.99. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 11.60, 13.66 and 15.59. The corresponding 10 year ratios are 12.55, 14.61 and 17.08. The current P/AEPS is 11.70 based on a stock price of $34.97 and AEPS estimate for 2025 of $2.99. 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 Graham Price of $37.66. The 10-year low, median, and high median Price/Graham Price Ratios are 0.95, 1.14 and 1.32. The current P/GP Ratio is 0.93 based on a stock price of $34.97. 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 10-year median Price/Book Value per Share Ratio of 1.87. The current P/B Ratio is 1.66 based on a stock price of $34.97, Book Value of $5,341M and a Book Value per Share of $21.09. The current ratio is 11% 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 6.31. The current P/CF Ratio is 4.42 based on Cash Flow per Share estimate for 2025 of $7.91, Cash Flow of $2,004M and a stock price of $34.97. The current ratio is 30% 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 1.45%. The current dividend yield is 2.29% based on a stock price of $34.97 and dividends of $0.80. The current dividend yield is 58% 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 1.60%. The current dividend yield is 2.29% based on a stock price of $34.97 and dividends of $0.80. The current dividend yield is 43% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.30. The current ratio is 0.28 based on Revenue estimate for 2025 of $31,140M, Revenue per Share of $122.94 and a stock price of $34.97. The current ratio is 6% below the 10 year median ratio. 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 reasonable and maybe cheap. The dividend yield tests are saying that the stock price is cheap. However, this is not confirmed by the P/S Ratio test which says the stock price is reasonable. The rest of the testing says either the stock price is cheap or it is reasonable.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1), Hold (4), and underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $38.29 with a high of $41.00 and low of $33.00. The consensus stock price of $38.29 implies a total return of 11.78% with 9.49% from capital gains and 2.29% from dividends based on a current stock price of $34.97.
The entries for 2023 on Stock Chase give us 2 Buys and a Wait. Stock Chase gives this stock 4 stars out of 5. Kay Ng on Motley Fool says this stock could outperform. Joey Frenette on Motley Fool thinks this company is worth checking out. The company put out a press release via Newswire about their results for fiscal year ending 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has no warnings out on this company. Simply Wall Street gives this company 3 and one half stars out of 5.
Empire Co Ltd key businesses are food retailing, investments, and other operations. The food retailing division owns, affiliates, or franchises more than 1,500 stores in 10 provinces, under retail banners including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Lawton's Drug Stores, and multiple retail fuel locations. The company's investment and other operations segment include the investment in Crombie REIT, Genstar Development Partnership. Its web site is here Empire Company Ltd.
The last stock I wrote about was about was Saputo Inc (TSX-SAP, OTC-SAPIF) ... learn more. The next stock I will write about will be Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF) ... learn more on Wednesday, July 3, 2024 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2024 learn more on Tuesday, July 2, 2024 around 5 pm.
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