Is it a good company at a reasonable price? I do not mind companies with low dividends if the dividends are at least growing at a moderate rate, but for this company growth is low. Dividends on this stock has been inconsistent. The dividends 2022 went down by 12% when they changed from monthly to quarterly payments. They rose 25% in 2023. Over the past 19 years dividends have increased in 10 years and decreased in 3 years. Total return has slowed over the past 10 years. Personally, I would not be interested in this stock. A positive is some insiders, like the CEO and CFO and current Chairman are buying.
I do not own this stock of Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at why stocks might appeal to a conservative investor looking for income.
When I was updating my spreadsheet, I noticed that even though this company started to report in US$ in 2022, analysts are still giving estimates in CDN$.
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 over 12 months to the second quarter in 2024 and expected growth over this year. This chart shows that growth has slowed over the past 5 years compared to the past 10 years. Growth is also expected, in most categories, in 2024.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 46.95% | 8.00% | 4.87% | <-12 mths |
| 5 | ACFFO Growth | 31.35% | 5.61% | 7.36% | <-12 mths |
| 5 | Net Income Growth | -18.65% | -4.04% | -0.21% | <-12 mths |
| 5 | Cash Flow Growth | 29.54% | 5.31% | -1.14% | <-12 mths |
| 5 | Dividend Growth | 33.30% | 5.92% | 4.40% | <-12 mths |
| 5 | Stock Price Growth | 26.23% | 4.77% | -10.00% | <-12 mths |
| 10 | Revenue Growth | 178.62% | 10.79% | 14.33% | <-this year |
| 9 | ACFFO Growth | 182.03% | 12.21% | -20.00% | <-this year |
| 10 | Net Income Growth | 36.68% | 3.17% | 28.99% | <-this year |
| 10 | Cash Flow Growth | 198.05% | 11.54% | 4.74% | <-this year |
| 10 | Dividend Growth | 89.58% | 6.61% | 6.18% | <-this year |
| 10 | Stock Price Growth | 43.24% | 3.66% | 21.13% | <-this year |
If you had invested in this company in December 2013, for $1,023.12 you would have bought 36 shares at $28.42 per share. In December 2023, after 10 years you would have received $181.31 in dividends. The stock would be worth $1,465.56. Your total return would have been $1,646.87. This would be a total return of 5.14% per year with 3.66% from capital gain and 1.48% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $28.42 | $1,023.12 | 36 | 10 | $181.31 | $1,465.56 | $1,646.87 |
The current dividend yield is low with dividend growth low. The current dividend yield is low (below 2%) at 1.97%. The 5 and 10 year median dividend yields are low at 1.91% and 1.58%. The historical median dividend yield is moderate (2% to 4%) at 2.07%. The dividend growth is low (below 8% per year). The dividend growth over the past 5 years is 5.9% per year. The last dividend increase was in 2024 and it was for 4.4%. This stock is currently on the Money Sense Dividend list.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is good at 43% with 5 year coverage high at 70%. The DPR for 2023 for Adjusted Operations Cash Flow (AOCF) is good at 12% with 5 year coverage at 17%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 12% with 5 year coverage at 15%. The DPR for 2023 for Free Cash Flow (FCF) is non calculable because of a negative FCF with 5 year coverage too high at 73%. Continuing problem is FCF is lack of agreement on what that value is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 42.65% | 69.50% |
| AOCF | 11.86% | 17.04% |
| CFPS | 11.86% | 15.25% |
| FCF | -902.63% | 72.80% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.16 and currently at 0.21. The Liquidity Ratio for 2023 is fine at 1.44 and 1.65 currently. If you added in Cash Flow after dividends, the ratios are fine at 2.26 and currently at 2.59. The Debt Ratio for 2023 is good at 1.63 and 1.61 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.58 and 1.58 and currently at 2.64 and 1.64.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.16 | 0.21 |
| Intang/GW | 0.02 | 0.03 |
| Liquidity | 1.44 | 1.65 |
| Liq. + CF | 2.26 | 2.59 |
| Debt Ratio | 1.63 | 1.61 |
| Leverage | 2.58 | 2.64 |
| D/E Ratio | 1.58 | 1.64 |
The Total Return per year is shown below for years of 5 to 26 to the end of 2023 in CDN$. 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 | 5.92% | 6.47% | 4.77% | 1.70% |
| 2013 | 10 | 6.61% | 5.14% | 3.66% | 1.48% |
| 2008 | 15 | 3.29% | 18.03% | 14.30% | 3.73% |
| 2003 | 20 | 7.21% | 24.15% | 16.34% | 7.81% |
| 1998 | 25 | 10.98% | 8.90% | 2.09% | |
| 1997 | 26 | 11.42% | 9.33% | 2.09% |
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 | 6.58% | 7.07% | 5.28% | 1.80% |
| 2013 | 10 | 4.31% | 2.58% | 1.22% | 1.36% |
| 2008 | 15 | 2.76% | 18.14% | 13.79% | 4.34% |
| 2004 | 19 | 3.45% | 15.69% | 11.17% | 4.52% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 18.74, 24.16 and 29.57. The corresponding 10 year ratios are 17.33, 23.42 and 29.17. The corresponding historical ratios are 10.67, 15.26 and 18.11. The current P/E Ratio is 18.00 based on a stock price of $36.64 and EPS estimate for 2024 of $2.04. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I have Adjusted Operations Cash Flow (AOCF) data. The 5-year low, median, and high median Price/ Adjusted Operations Cash Flow Ratios are 6.19, 7.91 and 10.39. The corresponding 10 year ratios are 6.86, 894 and 11.02. The current ratio is 7.96 based on a stock price of $36.64 and AOCF estimate for 2024 of $4.60. The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a Graham Price of $21.43. The 10-year low, median, and high median Price/Graham Price Ratios are 1.60, 2.20, and 2.70. The current P/GP Ratio is 1.71 based on a stock price of $36.64. The current ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 3.44. The current P/B Ratio is 3.65 based on a stock price of $36.64, Book Value of $343.6M, and Book Value per Share of $10.03. The current ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I also have Book Value per Share estimate for 2024 of $11.18. This implies a ratio of 3.28 with a Book Value of $385.4M and a stock price of $36.64. This ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 11.51. The current ratio is 6.93 based on Cash Flow per Share estimate for 2024 of $5.289, Cash Flow of $182.3M and a stock price of $36.64. The current ratio is 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get an historical median dividend yield of 2.07%. The current dividend yield is 1.97% based on dividends of $0.72 and a stock price of $36.64. The current dividend yield is 5% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10 year median dividend yield of 1.58%. The current dividend yield is 1.97% based on dividends of $0.72 and a stock price of $36.64. The current dividend yield is 25% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 2.08. The current P/S Ratio is 1.21 based on Revenue estimate for 2024 of $746M, Revenue per Share of $21.64 and a stock price of $36.65. The current ratio is 42% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
Results of stock price testing is that the stock price is that the stock price is probably cheap. The 10 year median dividend yield says this. It is confirmed by the P/S Ratio test. A lot of the testing is showing the stock price as reasonable.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4), and Hold (2). The consensus would be a Buy. The 12 months stock price consensus is $49.31 with a high of $55.50 and low of $42.00. The consensus stock price of $49.31 implies a total return of 36.54% with 34.58% from capital gains and 1.97% from dividends based on a currently price of $36.64.
There is only one recommendation on Stock Chase for this stock in 2023 and it is a Hold. The last two recommendations for 2022 are Holds. There are no recommendations for 2024. Stock Chase gives this stock 3 stars out of 5. Joey Frenette on Motley Fool thinks this stock will shine in the last part of 2024. Amy Legate-Wolfe on Motley Fool says this stock has risen in 2024 for it still has room to rise more. The company put out a press release on Newswire about their 2023 results. The company put out a press release via Northern News about their second quarter of 2024 results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. They give out two warnings of has a high level of debt; and dividend of 1.94% is not well covered by free cash flows.
Badger Infrastructure Solutions Ltd is North America's provider of non-destructive excavating services. Its key technology is the Badger Hydrovac, which is used predominantly for safe excavation around critical infrastructure and in congested underground conditions. Badger's two reportable segments are Canada and the United States which is the key revenue generating market. Its web site is here Badger Infrastructure Solutions Ltd.
The last stock I wrote about was about was Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more. The next stock I will write about will be GFL Environmental Inc (TSX-GFL, NYSE-GFL) ... learn more on Wednesday, August 14, 2024 around 5 pm. Tomorrow on my other blog I will write about Die with Zero.... learn more on Tuesday, August 13, 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment