Is it a good company at a reasonable price? The good thing is that the company is growing again. It is also giving dividend increases again. It has taken quite a bit of time to recover from problems that occurred around 2008. I personally would not be interested in the company again. If you like the company, now may not be the time to buy as the 10 year dividend yield test says it is relatively expensive.
I do not own this stock of AGF Management Ltd (TSX-AGF.B, OTC-AGFMF). I used to own this stock. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed. It has yet to recover.
When I was updating my spreadsheet, I noticed I can see that the company is growing again. However, analysts do not expect much this year and perhaps the next few years. Take EPS, it is $1.46 in 2024, 2025 is expected to be $1.67, but 2026 to be $1.58 and 2027 to be $1.19. Net Income is the same story as EPS. They do expect the AEPS to be a bit better and to go from $1.67 in 2024 to $1.68 in 2025, to $1.78 in 2026 and $1.79 in 2027.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the first quarter in 2025 and expected growth over this year.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 25.53% | 4.65% | 0.84% | <-12 mths |
| 5 | AEPS Growth | 135.21% | 19.46% | -7.19% | <-12 mths |
| 5 | Net Income Growth | 103.88% | 15.31% | -4.82% | <-12 mths |
| 5 | Cash Flow Growth | 98.75% | 14.73% | 0.00% | |
| 5 | Dividend Growth | 42.19% | 7.29% | 1.10% | <-12 mths |
| 5 | Stock Price Growth | 79.49% | 12.41% | 0.45% | <-12 mths |
| 10 | Revenue Growth | 18.02% | 1.67% | 5.77% | <-this year |
| 10 | AEPS Growth | 145.59% | 7.63% | 0.60% | <-this year |
| 10 | Net Income Growth | 59.29% | 4.77% | 15.61% | <-this year |
| 10 | Cash Flow Growth | 165.80% | 10.27% | ||
| 10 | Dividend Growth | -57.87% | -8.28% | 6.22% | <-this year |
| 10 | Stock Price Growth | 12.45% | 1.18% | 0.45% | <-this year |
If you had invested in this company in December 2014, for $1,001.82 you would have bought 118 shares at $8.49 per share. In December 2024, after 10 years you would have received $439.55 in dividends. The stock would be worth $1,259.06. Your total return would have been $1,698.61. This would be a total return of 6.29% per year with 2.31% from capital gain and 3.98% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $8.49 | $1,001.82 | 118 | 10 | $439.55 | $1,259.06 | $1,698.61 |
The current dividend yield is moderate with dividend growth restarted. The current dividend yield is moderate (2% to 4% ranges) at 4.09%. The 5 and 10 year median dividend yields are good (5% to 6% ranges) at 5.36% and 5.46%. The historical median dividend yield is moderate at 4.76%. Dividends were cut in 2015. Dividend increases were started again in 2021. Dividend have been increasing at a low level (below 8% per year) at 7.3% per year over the past 5 years. Dividends are still some 57% below the dividends prior to the dividend cut.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 31% with 5 year coverage at 30%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 25% with 5 year coverage at 26%. The DPR for 2024 for Free Cash Flow MS (FCF) is good at 29% with 5 year coverage at 39%. The DPR for 2024 for Free Cash Flow Company (FCF) is good at 26% with 5 year coverage at 36%. The FCF from MS and the company are fairly similar.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 31.16% | 29.82% |
| CFPS | 24.81% | 25.81% |
| FCF MS | 28.54% | 38.56% |
| FCF Comp | 26.25% | 35.88% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.02 and currently at 0.02. The Liquidity Ratio for 2024 is too low at 1.04 and 1.04 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.75 and currently low at 1.29. The Debt Ratio for 2024 is good at 3.45 and 3.45 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.45 and 0.41 and currently at 1.45 and 0.41.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.02 | 0.02 |
| Intang/GW | 0.38 | 0.38 |
| Liquidity | 1.04 | 1.04 |
| Liq. + CF | 1.75 | 1.29 |
| Debt Ratio | 3.45 | 3.45 |
| Leverage | 1.45 | 1.41 |
| D/E Ratio | 0.41 | 0.41 |
The Total Return per year is shown below for years of 5 to 34 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 7.29% | 15.50% | 10.63% | 4.87% |
| 2014 | 10 | -8.28% | 6.29% | 2.31% | 3.98% |
| 2009 | 15 | -5.11% | 1.39% | -3.06% | 4.45% |
| 2004 | 20 | 0.52% | 2.22% | -2.50% | 4.72% |
| 1999 | 25 | 4.54% | 4.73% | -0.34% | 5.07% |
| 1994 | 30 | 5.97% | 12.87% | 4.57% | 8.30% |
| 1990 | 34 | 6.14% | 16.17% | 6.56% | 9.61% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.04, 6.39and 7.75. The corresponding 10 year ratios are 6.63, 7.98 and 9.45. The corresponding historical ratios are 10.15, 12.91 and 16.72. The current P/E Ratio is 6.76 based on a stock price of $11.25 and EPS estimate for 2025 of $1.67. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 4.89, 6.95 and 8.31. The corresponding 10 year ratios are 6.94, 8.92 and 11.62. The current P/AEPS 6.70 based on a stock price of $11.25 and AEPS estimate for 2025 of $1.68. 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 $26.02. The 10-year low, median, and high median Price/Graham Price Ratios are 0.33, 0.39 and 0.50. The current P/GP Ratio is 0.43 based on a stock price of $11.25. The current ratio is between 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 0.47. The current P/B Ratio is 0.63 based on a stock price of $11.25, Book Value of $1,159M, and Book Value per Share of $17.91. The current ratio is 33% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2025 of $18.81. This implies a ratio of 0.60 based on a stock price of $11.25 and a Book Value of $1,217M. This ratio is 27% 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 7.03. The current P/CF Ratio is 12.23 based on Cash Flow per Share estimate for 2025 of $0.92, a Cash Flow of $59.52 and a stock price of $11.25. The current ratio is 74% 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 4.76%. The current dividend yield is 4.09% based on dividends of $0.46 and a stock price of $11.25. The current ratio is 14% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but below the median.
I get a 10 year median dividend yield of 5.46%. The current dividend yield is 4.09% based on dividends of $0.46 and a stock price of $11.25. The current ratio is 25% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 1.07. The current P/S Ratio is 1.26 based on Revenue estimate for 2025 of $580M, Revenue per Share of $7.73 and stock price of $11.25. The current ratio is 17% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably relatively expensive. The 10 year dividend yield test says so. The P/S Ratio test says it is reasonable but above the median. (It is close to being expensive.) Other tests are showing the stock price as relatively expensive. It is only the P/E Ratio and P/AESP Ratio tests that says the stock price might be reasonable.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (1), and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $13.21 with a high of $17.00 and low of $11.50. The consensus stock price of $13.21 implies a total return of $21.51% with 17.42% from capital gains and 4.09% from dividends.
This stock is not much followed on Stock Chase. There is one entry for 2024 and it is a sell. Analyst thinks that dividend is rising too quickly with non-quality earnings. Stock Chase gives this stock 3 stars out of 5. Adam Othman on Motley Fool says the company is undervalue and has a good dividend (2021). Amy Legate-Wolfe on Motley Fool thinks this stock is for people seeking income and long term potential. The company put out a Press Release about their fourth quarter of 2024.
Simply Wall Street via Yahoo Finance. Simply Wall Street has 2 warnings out on this stock of earnings are forecast to decline by an average of 7.4% per year for the next 3 years; and unstable dividend track record. Simply Wall Street gives this stock 3 and one half stars out of 5.
AGF Management is predominantly a Canadian-based independent asset manager (with some very minor operations and investments in the US, the UK, Ireland, and Asia). Its web site is here AGF Management Ltd.
The last stock I wrote about was about was Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more. The next stock I will write about will be Cogeco Communications Inc (TSX-CCA, OTC-CGEAF) ... learn more on Friday, January 31, 2025 around 5 pm. Tomorrow on my other blog I will write about Line of Credit for Credit Card Debt.... learn more on Thursday, January 30, 2025 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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