Is it a good company at a reasonable price? This stock is not well followed. There seems to be only 1 analyst following it currently. He thinks that the stock is going to do well in the future. The company admits that they have problems due to the oversupply in the food and beverage market, but they are hopeful for the future. I suggest caution. The stock price does seem to be cheap at this time.
I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment clubs suggested this stock.
When I was updating my spreadsheet, I noticed that this company seemed to have hit a peak in 2020 and since then Revenue, Earnings and Cash Flow has declined. Analyst think that Revenue, Earnings and Cash Flow will also decline this year. They had stopped growing their dividends in 2018. Investors that invested 5 years ago would have made on 4.17% on their investment with a 0.20% capital loss and 4.37% in dividends. This is very different from investors who invested 10 years ago.
If you had invested in this company in December 2013, for $1,009.92 you would have bought 96 shares at $10.52 per share. In December 2023, after 10 years you would have received $1,292.54 in dividends. The stock would be worth $3,326.40. Your total return would have been $4,588.94. This would be a total return of 19.99% per year with 12.66% from capital gain and 7.33% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $10.52 | $1,009.92 | 96 | 10 | $1,262.54 | $3,326.40 | $4,588.94 |
The current dividend yield is moderate with dividend growth non-existent. The current dividend yield is moderate (2% to 4% ranges) at 4.43%. The 5 and 10 year median dividend yields are also moderate at 2.60% and 3.59%. The historical median dividend yield is good (5% to 6% ranges) at 6.21%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 61% with 5 year coverage good at 23%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is fine at 54% with 5 year coverage at 51%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 39% with 5 year coverage at 30%. The DPR for 2023 for Free Cash Flow (FCF) is fine at 53% with 5 year coverage good at 30%. (There is disagreement on what the FCF is.)
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 61.46% | 23.33% |
| AEPS | 54.49% | 50.70% |
| CFPS | 39.38% | 30.34% |
| FCF | 52.74% | 35.21% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.05 and currently at 0.01. The Liquidity Ratio for 2023 is good at 1.67 and 1.63 currently. The Debt Ratio for 2023 is good at 2.30 and 2.54 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.77 and 0.77 and currently at 1.65 and 0.65.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.05 | 0.01 |
| Intang/GW | 0.35 | 0.42 |
| Liquidity | 1.67 | 1.63 |
| Liq. + CF | 2.16 | 1.87 |
| Debt Ratio | 2.30 | 2.54 |
| Leverage | 1.77 | 1.65 |
| D/E Ratio | 0.77 | 0.65 |
The Total Return per year is shown below for years of 5 to 19 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% | 4.17% | -0.20% | 4.37% |
| 2013 | 10 | 5.32% | 19.99% | 12.66% | 7.33% |
| 2008 | 15 | 1.09% | 20.56% | 12.53% | 8.03% |
| 2004 | 19 | 3.71% | 12.48% | 6.28% | 6.21% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.84, 12.61, 17.85. The corresponding 10 year ratios are 13.75, 16.08 and 18.68. The corresponding historical ratios are 12.90, 15.40 and 17.92. The current P/E Ratio is 9.20 based on a stock price of $29.81 and EPS estimate for 2024 of 3.24. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is 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 13.04, 15.45 and 18.99. The corresponding 10 year ratios are 13.98, 16.47 and 19.38. The current Ratio is 9.20 based on a stock price of $29.81 and AEPS estimate for 2024 of $3.24. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $35.20. The 10-year low, median, and high median Price/Graham Price Ratios are 1.38, 1.62 and 1.89. The current P/GP Ratio is 0.85 based on a stock price of $29.81. 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 10-year median Price/Book Value per Share Ratio of 3.54. The current ratio is 1.75 based on a Book Value of $194M, Book Value per Share of $17.00 and a stock price of $29.81. The current ratio is 50% 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 11.11. The current P/CF Ratio is 6.10 based on Cash Flow for the last 12 months of $55.80, Cash Flow per Share of 4.89 and a stock price of $29.81. The current ratio is 45% 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 6.21%. The current dividend yield is 4.43% based on dividends of $1.61 and a stock price of $29.81. The current dividend yield is 29% 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 3.59%. The current dividend yield is 4.43% based on dividends of $1.61 and a stock price of $29.81. The current dividend yield is 23% 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 1.19. The current P/S Ratio is 0.85 based on Revenue of $401.3M Revenue per share of $35.15 and a stock price of $29.81. 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 test says so. It is confirmed by the P/S Ratio test. Most of the rest of the testing is pointing at the stock price being cheap.
When I look at analysts’ recommendations, I find Strong Buy (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $40.00 with a high of $40.00 and low of $40.00. There seems to be only 1 analyst following this stock. The stock price consensus of $40.00 implies a total return of 38.61% with 34.18% from capital gains and 4.43% from dividends.
There was only one analyst on Stock Chase following this stock in 2024 and he suggested a stop at $31.00. Stock did go below that. Stock Chase gives this stock 4 stars out of 5. Amy Legate-Wolfe on Motley Fool thinks this is a steady and reliable company to have. Aditya Raghunath on Motley Fool thinks you have pay this stock for passive income. The company put out a press release on Newswire about their 2023 results. The company put out a press release via Newswire about their third quarter results for 2024.
Simply Wall Street via Yahoo Finance reviews this stock. They wonder if there here might be some external threat to the business, that's hampering its growth. Simply Wall Street gives this stock 4 stars out of 5. They list no warnings for this stock.
Richards Packaging Income Fund is involved in packaging distribution businesses. The company principally distributes plastic and glass containers and associated closures. It is used in packaging for cosmetics, healthcare, food, beverage, and other products. Geographically, it derives a majority of its revenue from Canada. Its web site is here Richards Packaging Income Fund.
The last stock I wrote about was about was Magna International Inc (TSX-MG, NYSE-MGA) ... learn more. The next stock I will write about will be Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more on Monday, December 9, 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.
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