Is it a good company at a reasonable price? This stock is cheap for a reason, and that reason being the recent earnings losses and low earnings. However, the stock is doing better this year. A stock being cheap does not necessarily mean the stock is a good buy. This stock, in the past, has provided a decent return with dividends. However, I like growth stocks that provide a minimum total return of 8% per year (capital gains and dividends). The return on this stock has generally been less than 8% per year. Currently I would not be interested in this stock.
I do not own this stock of Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF). I am doing a report on this stock because it was on the Top 100 Canadian Dividend Stocks by Maple Money . It also was on the Top 100 Dividend Stocks Money Sense for 2021 gets a solid C Rating from Money Sense.
When I was updating my spreadsheet, I noticed that they have had earnings losses over the past 2 years. However, with the first and third quarters they had positive earnings and overall, by the third quarter the earnings are positive.
If you had invested in this company in December 2013, for $1,007.40 you would have bought 60 shares at $16.79 per share. In December 2023, after 10 years you would have received $322.80 in dividends. The stock would be worth $1,514.40. Your total return would have been $1,837.20. This would be a total return of 6.67% per year with 4.16% from capital gain and 2.51% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $16.79 | $1,007.40 | 60 | 10 | $322.80 | $1,514.40 | $1,837.20 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.02%. The 5 year median dividend yield is also moderate at 2.60%. The 10 year and historical median dividend yields are low (below 1%) at 1.86% and 1.49%. It is only in the last 5 year that the dividend yield has been above 2%. The dividend growth for the last 5 year is moderate (8% to 14% ranges) at 10.07%. The last dividend increase was in 2024 and it was for 4.8%. Last year it was 5%.
The Dividend Payout Ratios (DPR) are too high because of recent earnings losses and low cash flow, but analysts expect this to improve. The DPR for 2023 for Earnings per Share (EPS) is non-calculable because of earnings losses. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is far too high at 933% with 5 year coverage at 230%. This is also because of earning losses. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 134% with 5 year coverage at 71%. The DPR for 2023 for Free Cash Flow (FCF) is non-calculable because of negative FCF with 5 year coverage good at 34%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 0.00% |
| AEPS | 933.33% | 230.13% |
| CFPS | 134.37% | 71.58% |
| FCF | -381.36% | 33.99% |
Debt Ratios are fine and better currently than for 2023. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.50 and currently fine at 0.52. The Liquidity Ratio for 2023 is low at 1.17 and 1.26 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.22 and currently good at 1.62. The Debt Ratio for 2023 is low at 1.49 and good at 1.51 currently. The Leverage and Debt/Equity Ratios for 2023 are too high at 3.04 and 2.04 and currently fine at 2.95 and 1.95.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.50 | 0.55 |
| Intang/GW | 0.11 | 0.13 |
| Liquidity | 1.17 | 1.26 |
| Liq. + CF | 1.22 | 1.62 |
| Debt Ratio | 1.49 | 1.51 |
| Leverage | 3.04 | 2.95 |
| D/E Ratio | 2.04 | 1.95 |
The Total Return per year is shown below for years of 5 to 33 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 | 10.07% | 1.12% | -1.58% | 2.70% |
| 2013 | 10 | 18.04% | 6.67% | 4.16% | 2.51% |
| 2008 | 15 | 11.69% | 7.83% | 5.65% | 2.19% |
| 2003 | 20 | 8.64% | 6.34% | 4.48% | 1.86% |
| 1998 | 25 | 6.86% | 3.61% | 2.17% | 1.43% |
| 1993 | 30 | 2.68% | 3.75% | 2.27% | 1.48% |
| 1990 | 33 | 2.43% | 4.34% | 2.58% | 1.76% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 22.43, 28.04 and 33.65. The corresponding 10 year ratios are 21.07, 26.39 and 31.72. The corresponding historical ratios are 16.08, 19.62 and 24.24. The current ratio is 21.04 based on a stock price of $21.88 and EPS estimate for 2024 of $1.04. The current 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 23.06, 26.90 and 30.74. The corresponding 10 year ratios are 20.76, 25.09 and 29.41. The current ratio is 34.19 based on a stock price of $21.88 and AEPS estimate for 2024 of $0.64. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. However, note that AEPS estimate for 2025 is $1.32 with a P/E Ratio of 16.58 a value below the low ratio of the 10 year median ratios.
I get a Graham Price of $13.28. The 10-year low, median, and high median Price/Graham Price Ratios are 1.16, 1.44 and 1.65. The current P/GP Ratio is 1.65 based on a stock price of $21.88. This ratio is at the top 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 1.74. The current P/B Ratio is 1.79 based on a book Value of 1,514M, Book Value per Share of $12.36 and a stock price of $21.88. The current ratio is 2.5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have a Book Value per Share estimate for 2024 of $12.24. This implies a ratio of 1.79 based on a stock price of 21.88 and a Book Value of $1,510. This ratio is 2.5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 12.01. The current ratio is 6.44 based on a stock price of $21.88, Cash Flow per Share estimate for 2024 of $3.40 and Cash Flow of $512M. This ratio is 46% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.49%. The current dividend yield is 4.02% based on dividends of $0.88 and a stock price of $21.88. The current dividend yield is 170% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 1.86%. The current dividend yield is 4.02% based on dividends of $0.88 and a stock price of $21.88. The current dividend yield is 117% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.85. The current P/S Ratio is 0.55 based on Revenue estimate for 2024 of $4,898M, Revenue per Share of $37.96 and a stock price of $21.88. This ratio is 35% 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 dividend tests are saying that the stock price is relatively cheap. It is confirmed by the P/S Ratio test. The rest of the testing range from cheap to expensive. A number say relatively reasonable but above the median.
When I look at analysts’ recommendations, I find Strong Buy (3), and Buy (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $29.80 with a high of $34.00 and low of 26.00. The 12 month consensus price implies a total return of $40.22% with 36.20% from capital gains and 4.02% from dividends.
Both entries on Stock Chase for 2024 and 2023 say Do Not Buy. Worry is economic weakness and inflation. Stock Chase gives this stock 3 stars out of 5. Jitendra Parashar on Motley Fool thinks you should buy because it is very cheap. Karen Thomas on Motley Fool thinks you should buy because problems are temporary and stock is attractively valued. The company put out a Press Release about their fourth quarter of 2024. The company put out a Press Release.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street shows 3 warnings of earnings have declined by 43.6% per year over past 5 years; interest payments are not well covered by earnings; and dividend of 4.09% is not well covered by earnings. Simply Wall Street gives this stock 2 and one half stars out of 5.
Maple Leaf Foods Inc is a producer of food products under leading brands, including Maple Leaf, Maple Leaf Prime, Maple Leaf Natural Selections, Schneiders, Schneiders Country Naturals, Mina, Greenfield Natural Meat Co., Lightlife, and Field Roast. Its main markets are Canada, the United States, Japan, and China. Its web site is here Maple Leaf Foods Inc.
The last stock I wrote about was about was Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more. The next stock I will write about will be KP Tissue Inc (TSX-KPT, OTC-KPTSF) ... learn more on Friday, December 20, 2024 around 5 pm. Tomorrow on my other blog I will write about Debt Advice.... learn more on Thursday, December 19, 2024 around 5 pm.
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