Is it a good company at a reasonable price? Basically, I like stocks that grow their dividends and produce at least an 8% total return (dividends and capital gains) in most periods. The dividends for this stock have been fine. They have been paying dividends for 25 years and just recently had problems. If you keep stock for the long term, companies can run into problems. The problem I see is that in a lot of periods, this company is not paying an 8% total return. The stock price is currently reasonable and maybe cheap as the dividend tests point out.
I did my testing using CDN$ rather than US$. The financials are in US$, but the dividend is paid in CDN$. The problem I have is that this stock is seldom traded in US$. I thought testing is CDN$ was more valid.
I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). When I started to follow this stock, it was liked by the Investment Reporter and was considered to be of average risk. The Investment reporter no longer exists. Ryan Irvine of Keystone also liked this company at that time.
When I was updating my spreadsheet, I noticed there seems to be a number of changes in officers between last year and this year. A number of people on the INK reports of insiders in 2023 are not in the 2024 report and there are a number of new people in the 2024 report. Also, although officers have options, only one person seems to have shares. This is different from the Directors who mostly hold common shares in the company.
If you had invested in this company in December 2013, for $1,004.64 you would have bought 42 shares at $23.92 per share. In December 2023, after 10 years you would have received $182.07 in dividends. The stock would be worth $496.44. Your total return would have been $678.51. This would be a total loss of 4.32% per year with 6.81% from capital loss and 2.48% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $23.92 | $1,004.64 | 42 | 10 | $182.07 | $496.44 | $678.51 |
Contrast the above 10 year return and this 5 year return. If you had invested in this company in December 2018, for $1,003.46 you would have bought 42 shares at $7.66 per share. In December 2023, after 5 years you would have received $235.15 in dividends. The stock would be worth $1,548.42. Your total return would have been $1,783.57. This would be a total return of 12.88% per year with 9.06% from capital gain and 3.81% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.66 | $1003.46 | 131 | 5 | $235.15 | $1,548.42 | $1,783.57 |
The current dividend yield is moderate with dividend growth restarted. The current dividend yield is moderate (2% to 4% ranges) at 4.44%. The 5, 10 and historical dividend yields are also moderate at 3.12%, 2.92% and 2.57%. Over the past 5 years, the dividends have declined by 1.4% per year. Dividends were cut in 2019. They started to increase them again in 2021. Dividends currently are 3% higher than 2018. The last dividend increase was in 2023 and it was for 15.4%. Over the past 25 years, dividends have gone up in 14 years and have declined in 2 years.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 44% with 5 year coverage at 29%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 36% with 5 year coverage at 23%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 15% with 5 year coverage at 10%. The DPR for 2023 for Free Cash Flow (FCF) is good at 6% with 5 year coverage at 18%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 43.90% | 28.40% |
| AEPS | 35.81% | 23.21% |
| CFPS | 15.20% | 10.04% |
| FCF | 6.36% | 17.75% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.83 and currently at 0.78, but are better if below 0.50. The Liquidity Ratio for 2023 is good at 2.55 and 2.88 currently. The Debt Ratio for 2023 is good at 1.86 and 1.98 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.16 and 1.16 and currently at 2.02 and 1.02.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.83 | 0.78 |
| Intang/GW | 0.99 | 0.94 |
| Liquidity | 2.55 | 2.88 |
| Liq. + CF | 3.57 | 3.21 |
| Debt Ratio | 1.86 | 1.98 |
| Leverage | 2.16 | 2.02 |
| D/E Ratio | 1.16 | 1.02 |
The Total Return per year is shown below for years of 5 to 40 to the end of 2023 in CDN$. 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 | -1.42% | 12.88% | 9.06% | 3.81% |
| 2013 | 10 | 4.43% | -4.32% | -6.81% | 2.48% |
| 2008 | 15 | 11.28% | 14.12% | 8.45% | 5.67% |
| 2003 | 20 | 9.28% | 7.48% | 4.14% | 3.33% |
| 1998 | 25 | 5.45% | 3.11% | 2.34% | |
| 1993 | 30 | 6.97% | 4.80% | 2.17% | |
| 1988 | 35 | -0.33% | -1.49% | 1.16% | |
| 1983 | 40 | 0.64% | -0.51% | 1.15% |
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 | -0.81% | 16.21% | 11.90% | 2.46% |
| 2013 | 10 | 2.24% | -6.60% | -8.92% | 2.41% |
| 2008 | 15 | 10.71% | 13.72% | 7.59% | 3.76% |
| 2004 | 19 | 8.74% | 7.61% | 3.80% | 3.40% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.95, 8.52 and 11.20. The corresponding 10 year ratios are 8.96, 13.90 and 18.18. The corresponding historical ratios are 8.25, 10.42 and 12.89. The current P/E Ratio is 7.82 based on a stock price of $13.40 and EPS estimate for 2024 of $1.71 ($1.27 US$). The current ratio is below the low ratio of the 10 year median ratio. 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 5.92, 7.99 and 9.47. The corresponding 10 year ratios are 6.90, 9.95 and 12.99. The current ratio is 7.36 based on stock price of $13.40 and AEPS estimate for 2024 of $1.82 ($1.35 US$). This 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 $27.07. The 10-year low, median, and high median Price/Graham Price Ratios are 0.49, 0.71 and 0.93. The current P/GP Ratio is 0.49 based on a stock price of $13.40. The current ratio is at 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 1.01. The current P/B Ratio is 0.75 based on a stock price of $13.40, Book Value of $537M and Book Value per Share of $17.88. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.52. The current ratio is 5.40 based on a stock price of $13.40, Cash Flow per Share estimate for 2024 of $2.48 ($1.84 US$) and Cash Flow of $74.7M. The current ratio is 19% 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 2.57%. The current ratio is 4.48% based on dividends of $0.60 and a stock price of $13.40. The current ratio is 74% above the historical median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 2.92%. The current ratio is 4.48% based on dividends of $0.60 and a stock price of $13.40. The current ratio is 53% 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 0.35. The current ratio is 0.32 based on Revenue estimate for 2024 of $1,339M ($926M US$), Revenue per Share of $41.68 and a stock price of $13.40. The current ratio is 8% 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 even be cheap. The dividend yield testing is showing that the stock price is cheap. The P/S Ratio testing is showing the stock price as reasonable. All the other testing is showing the stock as either cheap or reasonable.
When I look at analysts’ recommendations, I find Buy (1), Hold (2). The consensus would be a Hold. The 12 month stock price consensus is $15.14 ($11.22 US$) with a high of $17.92 ($13.28 US$) and low of $13.75 ($10.19 US$). The consensus stock price of $15.14 implies a total return of 17.44% with 4.48% from dividends and 12.96% from capital gains based on a stock price of $13.40.
Analyst on Stock Chase did not like this stock in 2020 and 2022. However, in 2023 analysts started to say this stock was a top pick for them. Stock Chase gives this stock 4 stars out of 5. Demetris Afxentiou on Motley Fool thought this was a good food stock to buy in December 2023. Ambrose O'Callaghan on Motley Fool thought this was a good food stock to buy in August 2023. This company is not well followed. The company put out a Press Release on their fourth quarterly results for 2023. The company put out a Press Release on their results for the second quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. Simply Wall Street has two warnings on this stock of unstable dividend track record; and has a high level of debt. SWS is right on both counts. There were dividend decreases in 2019 and 2020 before dividends were raised again starting in 2021. Their debt is rather high, but I think manageable.
High Liner Foods Inc is a Canadian company which is mainly engaged in the processing and marketing of prepared and packaged frozen seafood products. The company sells its products to institutions, health care facilities, and quick-service family and casual dining establishments. Its web site is here High Liner Foods.
The last stock I wrote about was about was Boralex Inc (TSX-BLX, OTC-BRLXF) ... learn more. The next stock I will write about will be SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) ... learn more on Wednesday, September 5, 2024 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks September 2024 learn more on Tuesday, September 3, 2024 around 5 pm.
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