Is it a good company at a reasonable price? This is really not a dividend stock because the dividend yield is so low at just 0.14%. It does not have much history as a company. It does have a lot of debt. Personally, I would wait to see what happens in the future. This would be a risky buy and you should not use money to buy this stock you cannot afford to lose. It would seem that the stock price may be reasonable to expensive.
I do not own this stock of GFL Environmental Inc (TSX-GFL, NYSE-GFL). GFL Environmental is small, pays dividend and talked about by Amy Legate-Wolfe on Motley Fool.
When I was updating my spreadsheet, I noticed that this company continues to have an earnings loss and this is expected to be higher next year, but with possible positive earnings in 2025. Note also that this company has their financials in CDN$, but the dividends are paid in US$.
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 growth over this year. Revenue and Cash Flow growth is good. Analysts seem to expect lower growth this year for Revenue and Cash Flow.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 305.67% | 32.32% | 5.54% | <-this year |
| 3 | AEPS Growth | 470.59% | 78.69% | -3.09% | <-this year |
| 5 | Net Income Growth | 109.39% | 15.93% | -1422.03% | <-this year |
| 5 | Cash Flow Growth | 3234.69% | 101.66% | 82.95% | <-this year |
| 3 | Dividend Growth | 32.45% | 9.82% | 0.37% | <-this year |
| 4 | Stock Price Growth | 104.06% | 19.52% | 21.99% | <-this year |
If you had invested in this company in December 2019, for $1,008.00 you would have bought 45 shares at $22.40 per share. In December 2023, after 10 years you would have received $10.13 in dividends. The stock would be worth $2,056.95. Your total return would have been $2,067.08. This would be a total return of 19.71% per year with 19.52% from capital gain and 0.19% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $22.40 | $1,008.00 | 45 | 4 | $10.13 | $2,056.95 | $2,067.08 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 0.14%. The dividends have only been paid for 4 years, so the 4 year median dividend is low at 0.15%. The dividends growth is moderate (8% to 14% per year) at 8.4% per year over the past 4 years. The last dividend increase was in 2024 and it was for 7.7%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) are negative because of earnings losses. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 7% with 5 year coverage at 11%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 1.4% with 5 year coverage at 1.4%. The DPR for 2023 for Free Cash Flow (FCF) is good at 3.8% with 5 year coverage at 26%.
| Item | Cur | 4 Years |
|---|---|---|
| EPS | -51.89% | -2.66 |
| AEPS | 6.95% | 11.08% |
| CFPS | 1.44% | 1.43% |
| FCF | 3.81% | 25.55% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.47 and currently at 0.43. The Liquidity Ratio for 2023 is very low at 0.82 and 0.89 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.35 and currently at 1.86. I prefer the Liquidity Ratio to be at 1.50 or better. The Debt Ratio for 2023 is good at 1.59 and 1.52 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.77 and 1.74 and currently at 3.01 and 1.98. I prefer these ratios to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.47 | 0.43 |
| Intang/GW | 0.59 | 0.47 |
| Liquidity | 0.82 | 0.89 |
| Liq. + CF | 1.35 | 1.86 |
| Debt Ratio | 1.59 | 1.52 |
| Leverage | 2.77 | 3.01 |
| D/E Ratio | 1.74 | 1.98 |
The Total Return per year is shown below for 4 years to the end of 2023 in CDN$. 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. |
|---|---|---|---|---|---|
| 2019 | 4 | 9.82% | 19.71% | 19.52% | 0.19% |
The Total Return per year is shown below for 4 years 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. |
|---|---|---|---|---|---|
| 2019 | 4 | 8.44% | 19.91% | 19.72% | 0.19% |
The 4-year low, median, and high median Price/Earnings per Share Ratios are all negative and useless. The company has only been on the TSX since 2019, so there are only 4 years of values.
I also have Adjusted Earnings per Share (AEPS) data. The 3-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 74.06, 91.76 and 109.46. The current P/AEPS ratio is 59.32 based on a stock price of $55.76 and AEPS estimate for 2024 of $0.94. This is below the low ratio of the 3 year median ratios. This stock price testing suggests that the stock price is relatively cheap. All these ratios are very high.
I get a Graham Price of $18.66. The 3-year low, median, and high median Price/Graham Price Ratios are 2.37, 3.25 and 3.94. The current ratio is 2.99 based on a stock price $55.76. This current ratio is between the low and median ratios of the 3 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 4-year median Price/Book Value per Share Ratio of 2.51. The current P/B Ratio is 3.39 based on a Book Value of $6,743.6M, Book Value per Share of $16.46 and stock price of $55.76. The current ratio is 35% above the 4 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Book Value per Share estimate for 2024 of $16.72. This implies a ratio of 3.33 based on a stock price of $55.76 and Book Value of $6,850M. This ratio is 33% above the 4 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 5-year median Price/Cash Flow per Share Ratio of 18.45. The current P/CF Ratio is 12.74 based on Cash Flow per Share estimate for 2024 of $4.38, Cash Flow of $1,794M and a stock price of $55.76. The current ratio is 31% below the 5 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 4-year median dividend yield of 0.15%. The current dividend yield is 0.14% base on dividends of $0.08 and a stock price of $55.76. The current yield is 8% below the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 5-year median Price/Sales (Revenue) Ratio is 2.32. The current P/S Ratio is 2.88 based on Revenue estimate for 2024 of $5,774M, Revenue per Share of $14.09 and a stock price of $55.76. The current ratio is 27% above the 5 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price could be reasonable, but at the high end of the range. This is what the dividend yield test says. The P/S Ratio test says that the stock is expensive. For the rest of the testing, results vary from cheap to expensive.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (5), Hold (3), and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $57.25 with a high of $70.00 and low of $39.50. The consensus stock price of $57.25 implies a total return of 2.81% with 2.67% from capital gains and 0.14% from dividends.
The recommendations on Stock Chase for 2024 are buys. However, one analyst is worried about the debt levels. Stock Chase gives this stock 3 stars out of 5. Daniel Da Costa on Motley Fool says this is a good Canadian stock to buy now. Amy Legate-Wolfe on Motley Fool still thinks you should buy even after the run up in this stock lately. The company put out a press release via Newswire about this company’s fourth quarter of 2023. The company put out a Press Release on their second quarter of 2024.
Simply Wall Street via Yahoo Finance says this stock is trading below its intrinsic value. Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 2 and one half stars out of 5. They have one warnings of significant insider selling over the past 3 months.
GFL Environmental Inc is an environmental services company. Its offerings include non-hazardous solid waste management, infrastructure, soil remediation, and liquid waste management services. GFL's geographical segments are Canada and the United States. The company derives the majority of its revenue from the United States. Its web site is here GFL Environmental Inc.
The last stock I wrote about was about was Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) ... learn more. The next stock I will write about will be Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more on Friday, August 16, 2024 around 5 pm. Tomorrow on my other blog I will write about Bank of Montreal .... learn more on Thursday, August 15, 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