Is it a good company at a reasonable price? I had bought this stock as a small cap tech called Calian Tech first in 2011. I was looking for another stock and wanted one with low debt and dividend paying. They changed their name in 2016. They were a Dividend Growth Stock then, but are no longer. I have done well in this stock, so I am going to hold on to my shares, but I will not buy anymore because it is no longer a dividend growth company. The stock price is reasonable and according to some testing it is relatively cheap.
I own this stock of Calian Group Ltd (TSX-CGY, OTC-CLNFF). In 2011 I found Calian to be an interesting company with a very nice dividend. This stock came up on a Globe Investor site. The Globe Investor Number Cruncher is an investment column about screening for stocks and funds. They did one on companies with little to no debt. I also noted that the Financial Blogger has this stock on his Top Ten Canadian Dividend Stocks list.
When I was updating my spreadsheet, I noticed I have done well with this stock with a total return to the end of 2024 of 12.11% with 7.91% from capital gains and 4.20% from dividends. I am disappointed that dividends stopped increasing in 2013, 11 years ago. When I first started following this stock, it was in the Tech Sector. I noticed lately, it is considered to by in the Services sector of the Industrials. I have changed its sector listing accordingly.
The other thing to mention is that the company talks a lot about increasing their Revenue, which has increased by 17% and 13% per year over the past 5 and 10 years. However, the Revenue per Share has only increased by 8% and 8% per year over the past 5 and 10 years. This is because outstanding shares have been increased by 9% and 5% per year over the past 5 and 10 years.
You can see from the chart below their growth for the last 5 and 10 years and expected in the next year. 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 | 117.64% | 16.83% | 0.48% | <-12 mths |
| 5 | Rev Growth per Sh | 46.22% | 7.90% | ||
| 5 | AEPS Growth | 79.67% | 12.43% | -2.54% | <-12 mths |
| 5 | Net Income Growth | -44.08% | -10.97% | -34.33% | <-12 mths |
| 5 | Cash Flow Growth | 666.24% | 50.27% | -100.00% | <-12 mths |
| 5 | Dividend Growth | 0.00% | 0.00% | 0.00% | <-12 mths |
| 5 | Stock Price Growth | 30.75% | 5.51% | 6.10% | <-12 mths |
| 10 | Revenue Growth | 253.41% | 13.46% | 10.00% | <-this year |
| 10 | Reve Growth per Sh | 120.21% | 8.21% | ||
| 10 | AEPS Growth | 198.62% | 11.56% | 15.70% | <-this year |
| 10 | Net Income Growth | 5.66% | 0.55% | 137.39% | <-this year |
| 10 | Cash Flow Growth | 662.55% | 22.53% | -40.38% | <-this year |
| 10 | Dividend Growth | 0.00% | 0.00% | 0.00% | <-this year |
| 10 | Stock Price Growth | 146.22% | 9.43% | 54.31% | <-this year |
If you had invested in this company in December 2014, for $1,006.05 you would have bought 57 shares at $17.65 per share. In December 2024, after 10 years you would have received $638.40 in dividends. The stock would be worth $2,755.95. Your total return would have been $3,394.35. This would be a total return of 14.94% per year with 10.60% from capital gain and 4.34% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.65 | $1,006.05 | 57 | 10 | $638.40 | $2,755.95 | $3,394.35 |
The current dividend yield is moderate with dividend growth non-existent. The current dividend yield is moderate (2% to 4% ranges) at 2.30%. The 5 year median dividend yield is low (below 2%) at 1.81%. The 10 year and historical median dividend yields are moderate at 2.79% and 3.57%.
Calian Group on Dividends, says that Calian intends to continue to declare a quarterly dividend in line with its overall financial performance and cash flow generation. Decisions on dividend payments are made on a quarterly basis by the Board of Directors. There can be no assurance as to the amount of such dividends in the future. They are also done some share buy backs. Share buybacks was used in 2024 to reduce the number of shares outstanding.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is too high at 120% with 5 year coverage at 80%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 26% with 5 year coverage at 32%. The would be more important than the one for EPS. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 15% with 5 year coverage at 20%. The DPR for 2024 for Free Cash Flow (FCF) is good at 23% with 5 year coverage at 29%. Sites do not agree on FCF, but they are relatively close.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 120.43% | 79.66% |
| AEPS | 25.87% | 32.50% |
| CFPS | 15.01% | 20.17% |
| FCF | 22.92% | 28.68% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.17 and currently at 0.16. The Liquidity Ratio for 2024 is low at 1.29 and 1.29 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.64 and currently at 1.47. The Debt Ratio for 2024 is good at 1.86 and 1.86 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.17 and 1.17 and currently at 2.17 and 1.17.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.17 | 0.16 |
| Intang/GW | 0.62 | 0.37 |
| Liquidity | 1.29 | 1.29 |
| Liq. + CF | 1.64 | 1.47 |
| Debt Ratio | 1.86 | 1.86 |
| Leverage | 2.17 | 2.17 |
| D/E Ratio | 1.17 | 1.17 |
The Total Return per year is shown below for years of 5 to 31 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 | 0.00% | 7.33% | 4.66% | 2.67% |
| 2014 | 10 | 0.00% | 14.94% | 10.60% | 4.34% |
| 2009 | 15 | 3.80% | 11.35% | 7.07% | 4.28% |
| 2004 | 20 | 8.48% | 9.99% | 6.03% | 3.96% |
| 1999 | 25 | 9.39% | 14.33% | 9.51% | 4.82% |
| 1994 | 30 | 12.20% | 8.80% | 3.40% | |
| 1993 | 31 | 9.02% | 6.49% | 2.53% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 44.89, 52.52 and 60.15. The corresponding 10 year ratios are 22.17, 22.96 and 23.75. The corresponding historical ratios are 10.45, 11.57 and 14.20. The current P/E Ratio is 19.49 based on a stock price of $48.72 and EPS estimate for 2025 of $2.50. The current ratio is below the low ratio for 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 15.35, 17.57 and 19.42. The corresponding 10 year ratios are 12.36, 13.64 and 15.12. The current P/AEPS Ratio is 9.72 based on a stock price of $48.72 and AEPS estimate for 2025 of $5.01. 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 get a Graham Price of $55.86. The 10-year low, median, and high median Price/Graham Price Ratios are 1.07, 1.20 and 1.32. The current P/GP Ratio is 0.87 based on a stock price of $48.72. 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 get a 10-year median Price/Book Value per Share Ratio of 2.21. The current ratio is 1.76 based on a stock price of $48.72, Book Value of $326.8M, and Book Value per Share of 27.69. The current ratio is 20.4% 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 11.09. The current ratio is 11.06 based on Cash Flow estimate for 2025 of $52M, Cash Flow per Share of $4.41 and a stock price of $48.72. The current ratio is 0.3% 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 3.57%. The current dividend yield is 2.3% based on a stock price of $48.72 and dividends of $1.12. The current dividend yield is 36% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is that this test does not work well with flat dividends.
I get a 10 year median dividend yield of 2.79%. The current dividend yield is 2.3% based on a stock price of $48.72 and dividends of $1.12. The current dividend yield is 18% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. The problem is that this test does not work well with flat dividends.
The 10-year median Price/Sales (Revenue) Ratio is 0.83. The current P/S Ratio is 0.70 based on Revenue estimate for 2025 of $821.3M, Revenue per Share of $69.59 and a stock price of $48.72. The current ratio is 16% 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 probably reasonable, and getting towards the cheap end. I am basing this on the P/S Ratio test which says that the stock price is reasonable and below the median. A number of tests also say that the stock price is relatively cheap. The problem with the dividend yield test is that this is really a test for dividend growth stocks and this is not one of them.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $70.86 with a high of $82.00 and low of $63.00. The stock price of $70.86 implies a total return of $47.74 with 45.44% from capital gains and $2.30% from dividends.
Stock Chase. Stock Chase gives this stock 4 stars out of 5. Last year one analyst thought it was a partial buy. Robin Brown on Motley Fool says this company is an undervalued Canadian conglomerate. Amy Legate-Wolfe on Motley Fool thinks this has exciting growth potential. The company put out a press release via Global Newswire about its fourth quarter of 2024 results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street put out 3 warnings of large one-off items impacting financial results; profit margins (1.5%) are lower than last year (2.9%); and dividend of 2.3% is not well covered by earnings. Simply Wall Street gives this stock 3 and one half stars out of 5.
Calian Group Ltd provides services and solutions to both industry and government customers in the areas of health, learning, defense, security, aerospace, engineering, AgTech, satellite communications (satcom), and IT. Geographically, the company generates the majority of its revenue from its operations in Canada and also has presence in United States, Europe, and other regions. Its web site is here Calian Group Ltd.
The last stock I wrote about was about was Rogers Sugar Inc (TSX-RSI, OTC-RSGUF) ... learn more. The next stock I will write about will be Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more on Monday, January 13, 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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