Is it a good company at a reasonable price? The dividend yield is very high at over 9%. I would always be very careful when buying any stock with dividends over 5%. They may be cheap or a value trap. Often very high dividends are not sustainable. No one seems to think that that this company will be going bankrupt or anything, but it does seem to be struggling. It would not interest me at this point in time. However, a positive is some insider buying.
I do not own this stock of Superior Plus Corp (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009.
When I was updating my spreadsheet, I noticed that even though the company has not done well lately, a number of insiders have been buying shares in the past year. The CEO increased his shares by 64%, the new CFO bought shares, the Chairman increased his share by .5%, but then he has over 102,000 shares. This company, as of the first quarter, has changed their reporting into US$ from CDN$.
If you had invested in this company in December 2013, for $1,000.35 you would have bought 81 shares at $12.35 per share. In December 2023, after 10 years you would have received $574.29 in dividends. The stock would be worth $708.03. Your total return would have been $1,354.32. This would be a total return of 3.88% per year with 2.46% from capital loss and 6.34% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.35 | $1,000.35 | 81 | 10 | $574.29 | $780.03 | $1,354.32 |
The current dividend yield is high with dividend growth flat. The current dividend is high (7% and above) at 9.22%. The 5 and 10 year median dividend yields are good (5% to 6% ranges) at 6.32% and 6.22%. The historical median dividend yield is high at 8.91%. This stock used to be an income trust, and income trust companies can pay much higher dividend yields than corporations. This is why the historical median dividend yield is so high. The dividends have been flat since 2015. Dividends were cut when the company went from an income trust to a corporation. They we cut around 63%.
The Dividend Payout Ratios (DPR) are fine for Cash Flows. The DPR for 2023 for Earnings per Share (EPS) is too high at 313% with 5 year coverage at 190%. The DPR for 2023 for Adjusted Operations Cash Flow (AOCF) is good at 34% with 5 year coverage at 38%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 40% with 5 year coverage at 30%. The DPR for 2023 for Free Cash Flow (FCF) is too high at 126% with 5 year coverage at 77%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 313.04% | 190.48% |
| AOCF | 33.96% | 38.35% |
| CFPS | 39.53% | 30.09% |
| FCF | 125.50% | 77.38% |
Debt Ratios shows that the company has too much debt, with Liquidity fine. The Long Term Debt/Market Cap Ratio for 2023 is high at 0.93 and currently at 0.83. The Liquidity Ratio for 2023 is far too low at 0.87 and 0.96 currently. If you added in Cash Flow after dividends, the ratios are low at 1.36 and currently at 1.52. I prefer this ratio to be 1.50 or better. It is currently, but not for 2023. The Debt Ratio for 2023 is good at 1.52 and 1.57 currently. The Leverage and Debt/Equity Ratios for 2023 are too high at 3.63 and 2.39 and currently at 3.39 and 2.16. I prefer these ratios to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.93 | 0.83 |
| Intang/GW | 1.06 | 0.98 |
| Liquidity | 0.87 | 0.96 |
| Liq. + CF | 1.36 | 1.52 |
| Debt Ratio | 1.52 | 1.57 |
| Leverage | 3.63 | 3.39 |
| D/E Ratio | 2.39 | 2.16 |
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 | 0.00% | 7.35% | -0.10% | 7.45% |
| 2013 | 10 | 1.84% | 3.88% | -2.46% | 6.34% |
| 2008 | 15 | -5.26% | 8.06% | -0.85% | 8.91% |
| 2003 | 20 | -5.60% | 2.12% | -4.78% | 6.90% |
| 1998 | 25 | -2.18% | 10.03% | -1.74% | 11.78% |
| 1996 | 27 | -1.21% | 10.65% | -1.30% | 11.95% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.22, 14.29 and 16.63. The corresponding 10 year ratios are 12.08, 14.19 and 16.30. The corresponding historical ratios are 12.60, 15.32 and 18.86. The current P/E Ratios are 19.77 based on a stock price of $7.81 and EPS estimate for 2024 of $0.40. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Operations Cash Flow (AOCF) data. The 5-year low, median, and high median Price/ Adjusted Operations Cash Flow Ratios are 4.54, 5.05 and 6.29. The corresponding 10 year ratios are 5.43, 6.68 and 7.67. The current P/AOCF Ratio is 3.91 based on a stock price of $7.81 and AOCF estimate for 2024 of $2.00. This 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 Graham Price of $6.35. The 10-year low, median, and high median Price/Graham Price Ratios are 1.09, 1.28 and 1.60. The current P/GP Ratio is 1.23 based on a stock price of $7.81. The current ratio is between the low and median ratios of 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/Book Value per Share Ratio of 2.02. The current P/B Ratio is 2.02. The current P/B Ratio is 1.72 based on a stock price of $7.81, Book Value of $1,128M and Book Value per Share of $4.54. The current ratio is 15% 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 7.35. The current ratio is 4.24 based on a stock price of $7.81, Cash Flow per Share estimate for 2024 of $1.84 and Cash Flow of $458M. The current ratio is 42% 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 8.91%. The current dividend yield is 9.22% based on dividends of $0.72 and a stock price of $7.81. The current ratio is 3.2% above the historical median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. Note that this company used to be an income trust and income trust companies have a lot higher dividends that corporations.
I get a 10 year median dividend yield of 6.22%. The current dividend yield is 9.22% based on dividends of $0.72 and a stock price of $7.81. The current ratio is 48%% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.72. The current P/S Ratio is 0.51 based on Revenue estimate for 2024 of $3,817M, Revenue per Share of $15.35 and a stock price of $7.81. The current ratio is 29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The 10 year dividend yield tests says that the stock price is relatively cheap. The P/S Ratio test confirms this. Most of the rest of the testing says that the stock price is cheap or reasonable.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5) and Hold (4). The consensus would be a Buy. The 12 months stock price consensus is $11.95 with a high of $14.00 and low of $10.00. The consensus price of $11.95 implies a total return of 62.23% with 53.01% from capital gains and 9.22% from dividends based on a current stock price of $9.81.
From analyst on Stock Chase for 2024 there are 4 buys, a Hold, a Risky and the most recent are 2 Do Not Buy and one Sell. The stock seems to be struggling. Stock Chase gives this stock 4 stars out of 5. Amy Legate-Wolfe on Motley Fool thinks this is a smart stock to buy and hold forever. Jitendra Parashar on Motley Fool thinks you should buy because of their recent declines. The company put out a press release via Financial Post on their fourth quarter results for 2024. The company put out a press release via Yahoo Finance about their first quarter results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has three warnings on this stock of dividend of 9.15% is not well covered by earnings or free cash flows; interest payments are not well covered by earnings; and large one-off items impacting financial results. Simply Wall Street gives this stock 2 and one half stars out of 5.
Superior Plus Corp is a Canadian-based company that distributes energy and specialty chemicals. The company is organized into three business segments: U.S. Propane, Canadian Propane & Wholesale Propane, out of which the majority is from the U.S. Propane segment. Its web site is here Superior Plus Corp.
The last stock I wrote about was about was Evertz Technologies Ltd (TSX-ET, OTC-EVTZF) ... learn more. The next stock I will write about will be Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) ... learn more on Monday, August 12, 2024 around 5 pm.
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