Is it a good company at a reasonable price? The company has a lot of debt and that is a negative. The stock price has skyrocketed since 2023, so if you like this company perhaps it is best to wait for the stock price is pull back. Earnings and Cash Flow do show volatility. So, you should not buy if you do not like volatility. Currently I my testing is showing that the stock price is relatively expensive. I know that analysts consensus is a Buy, but most analyst consensuses are a Buy.
I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock in 2016.
When I was updating my spreadsheet, I noticed that this stock has done well lately. The stock price is up 89% this year, after an increase of 77% last year. Dividends were increased twice this year and the second increase was for 50%. However, they did cut the dividends by 49% in 2017.
If you had invested in this company in December 2013, for $1,010.80 you would have bought 76 shares at $13.30 per share. In December 2023, after 10 years you would have received $385.27 in dividends. The stock would be worth $1,094.40. Your total return would have been $1,479.67. This would be a total return of 4.61% per year with 0.80% from capital gain and 3.82% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.30 | $1,010.80 | 76 | 10 | $385.27 | $1,094.40 | $1,479.67 |
The current dividend yield is moderate with dividend growth low. The dividend yield is low (2% to 4% ranges) at 3.09%. The 5, 10 and historical median dividend yields are good (5% to 6% ranges) at 5.71%, 5.00% and 5.38%. The current dividend growth is low at 1.5% per year over the past 5 years. However, the dividends were cut in 2017. They were flat for the next few years and then increased in 2023 and 2024. The current dividend is 10.5% higher than it was in 2018.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 32% with 5 year coverage at 49%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 30% with 5 year coverage is high at 67%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 16% with 5 year coverage at 24%. The DPR for 2023 for Free Cash Flow (FCF) is good at 22% with 5 year coverage at 33%. There is no agreement on what FCF is from various sites.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 31.56% | 48.52% |
| AEPS | 30.41% | 67.21% |
| CFPS | 15.63% | 23.88% |
| FCF | 22.56% | 32.81% |
Debt Ratios need improving and company has too much debt. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.08 and currently at 0.09. The Liquidity Ratio for 2023 is low at 1.26 and 1.25 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.31 and currently at 1.40. I prefer this ratio to be 1.50 or higher. The Debt Ratio for 2023 is too low at 1.29 and 1.30 currently. I prefer this ratio to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2023 are too high at 4.42 and 3.42 and currently at 4.38 and 3.38. I prefer these ratios to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.08 | 0.09 |
| Intang/GW | 0.13 | 0.15 |
| Liquidity | 1.26 | 1.25 |
| Liq. + CF | 1.31 | 1.40 |
| Debt Ratio | 1.29 | 1.30 |
| Leverage | 4.42 | 4.38 |
| D/E Ratio | 3.42 | 3.38 |
The Total Return per year is shown below for years of 5 to 26 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 | 1.48% | 23.48% | 18.70% | 4.77% |
| 2013 | 10 | -5.64% | 4.61% | 0.80% | 3.82% |
| 2008 | 15 | -0.94% | 12.07% | 5.27% | 6.80% |
| 2003 | 20 | 2.09% | 27.39% | 9.79% | 17.60% |
| 1998 | 25 | 6.23% | 47.84% | 16.91% | 30.93% |
| 1997 | 26 | 49.58% | 18.36% | 31.22% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.23, 8.53 and 11.03. The corresponding 10 year ratios are 11.58, 13.61 and 15.64. The corresponding historical ratios are 6.70, 9.93 and 11.22. The current ratio is 14.31 based on a stock price of $27.17 and EPS estimate for 2024 of $1.90. 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.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 6.73, 9.07 and 11.02. The corresponding 10 year ratios are 8.87, 10.89 and 13.11. The current ratio is 13.65 based on a stock price of $27.17 and AEPS for 2024 of $1.99. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $18.18. The 10-year low, median, and high median Price/Graham Price Ratios are 1.08, 1.37 and 1.62. The current ratio is 1.49 based on a stock price of $27.17. 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.
I get a 10-year median Price/Book Value per Share Ratio of 2.30. The current ratio is 3.68 based on a Book Value of $408.8M, Book Value per Share of $7.38 and a stock price of $27.17. The current ratio is 60% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 6.65. The current ratio is 8.39 based on Cash Flow per Share estimate for 2024 of $3.24, Cash Flow of $179.4 and a stock price of $27.17. The current ratio is 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 5.71%. The current dividend yield is 3.09% based on a stock price of $27.17 and Dividends of $0.84. The current ratio is 45% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.38%. The current dividend yield is 3.09% based on a stock price of $27.17 and Dividends of $0.84. The current ratio is 43% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 0.23. The current ratio is 0.44 based on Revenue estimate for 2024 of $3,404M, Revenue per Share of $64.46 and a stock price of $27.17. The current ratio is 92% above the 10 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 is probably expensive. Both dividend tests say this. The P/S Ratio test also says that the stock price is expensive. The rest of the testing is saying that the stock price is reasonable, but above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (3) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $35.38 with a high of $38.00 and low of $32.00. This consensus stock price of $35.38 implies a total return of 33.31% with 30.22% from capital gains and 3.09% from dividends.
Analysts on Stock Chase mainly like this stock. One analyst with a Hold rating says the stock has gone up a lot this year. Stock Chase gives this stock 3 stars out of 5. Adam Othman on Motley Fool says he is still bullish on this stock. Jitendra Parashar on Motley Fool says it is not too late to invest in this stock. The company put out a Press Release on their fourth quarter results for 2023. The company put out a Press Release about their third quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has two warnings on this stock of dividend of 3.1% is not well covered by free cash flows; and shareholders have been diluted in the past year.
Bird Construction Inc is a construction company operating from coast-to-coast and servicing all of Canada's major markets. Its web site is here Bird Construction Inc.
The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more on Monday, December 16, 2024 around 5 pm.
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