Is it a good company at a reasonable price? I generally like dividend growth stocks, but for it takes at least 10 years for the benefit of compounding on these stocks to work. I can see the attraction for retired people who want a high return to use such passive income stocks as this one. The yields in the 5% to 6% ranges can be attractive and most analysts think that the dividend is safe. Most of the return on this stock is in dividends. The stock price does look reasonable at this time.
I do not own this stock of Rogers Sugar Inc (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be an Income Trust (TSX-RSI.UN) but it has been converted to a corporation. On its change to a corporation, it lowered its dividend.
When I was updating my spreadsheet, I noticed this company issued new shares in 2024. They seemed to use the money to pay off their debt and make additions to Property, Plant and Equipment.
If you had invested in this company in December 2014, for $1,002.25 you would have bought 211 shares at $4.75 per share. In December 2024, after 10 years you would have received $759.60 in dividends. The stock would be worth $1,237.57. Your total return would have been $1,998.17. This would be a total return of 9.12% per year with 2.14% from capital gain and 6.98% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $4.75 | $1,002.25 | 211 | 10 | $759.60 | $1,238.57 | $1,998.17 |
The current dividend yield is good with dividend growth non-existent. The dividend yield is good (5% to 6% ranges) at 6.13%. The 5 and 10 year median dividend yields are good at 6.59% and 6.45%. The historical median dividend yield is high (7% or higher) at 7.91%. There has not been a dividend increase in over 10 years.
The Dividend Payout Ratios (DPR) are too high. The DPR for 2024 for Earnings per Share (EPS) is too high at 88% with 5 year coverage at 122%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is to high at 64% with 5 year coverage at 96%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 38% with 5 year coverage at 36%. The DPR for 2024 for Free Cash Flow (FCF) is too high at 1323% with 5 year coverage at 189%. Here again, not every site agrees on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 87.80% | 122.45% |
| AEPS | 64.29% | 95.78% |
| CFPS | 37.84% | 35.85% |
| FCF | 1323.51% | 188.55% |
Debt Ratios are mostly fine, but the Liquidity Ratio, an important one needs improving. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.27 and currently at 0.26. The Liquidity Ratio for 2024 is too low at 1.23 and 1.23 currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.32 and currently at 1.33. I prefer this ratio to be at 1.50 or higher. The Debt Ratio for 2024 is good at 1.64 and 1.64 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.55 and 1.57 and currently at 2.55 and 1.57.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.27 | 0.26 |
| Intang/GW | 0.34 | 0.33 |
| Liquidity | 1.23 | 1.23 |
| Liq. + CF | 1.32 | 1.33 |
| Debt Ratio | 1.64 | 1.64 |
| Leverage | 2.55 | 2.55 |
| D/E Ratio | 1.57 | 1.57 |
The Total Return per year is shown below for years of 5 to 27 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% | 10.45% | 3.59% | 6.86% |
| 2014 | 10 | 0.00% | 9.12% | 2.14% | 6.98% |
| 2009 | 15 | -1.62% | 8.87% | 1.25% | 7.62% |
| 2004 | 20 | -1.50% | 9.67% | 1.34% | 8.34% |
| 1999 | 25 | -3.66% | 9.20% | 0.49% | 8.72% |
| 1997 | 27 | 7.12% | -0.65% | 7.77% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.38, 12.27 and 13.33. The corresponding 10 year ratios are 11.78, 12.58 and 13.47. The corresponding historical ratios are 10.69, 11.87 and 13.05. The current P/E Ratio is 10.48 based on a stock price of $5.87 and EPS estimate for 2025 of $0.56. 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 13.33, 14.25 and 16.46. The corresponding 10 year ratios are 12.78, 14.13 and 15.81. The current P/AEPS Ratio is 10.30 based on a stock price of $5.87 and AEPS estimate for 2025 of $0.57. 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 Graham Price of $6.41. The 10-year low, median, and high median Price/Graham Price Ratios are 1.03, 1.14 and 1.26. The current P/GP Ratio is 0.91 based on a stock price of $5.87. 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 10-year median Price/Book Value per Share Ratio of 1.87. The current P/B Ratio is 1.80 based on a stock price of $5.87, Book Value of $417M and Book Value per Share of $3.26. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.73. The current ratio is 9.00 based Cash Flow estimate for 2025 of $8.34M, Cash Flow per Share of $0.65 and a stock price of $5.87. The current ratio is 7% 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 7.91%. The current dividend yield is 6.13% based on Dividends of $0.36 and a stock price of $5.87. The current dividend yield is 22% 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 6.45%. The current dividend yield is 6.13% based on Dividends of $0.36 and a stock price of $5.87. The current dividend yield is 5% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.69. The current P/S Ratio is 0.60 based on Revenue estimate for 2025 of $1,247M, Revenue per Share of $9.75 and a stock price of $5.87. The current ratio is 12% 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. The 10 year dividend yield testing says that the stock price is reasonable and below the median. Although this test works best on dividend growth stocks and this has never been a dividend growth stock, it still seems like a reasonable test. The P/S Ratio test also says that the stock price is reasonable and below the median. A number of the other tests are showing the stock price as relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1) and Hold (3). The consensus would be a Buy. The 12 month stock price is $6.75 with a high of $7.25 and low of $6.25. The 12 months stock price consensus of $6.75 implies a total return of 21.12% with 14.99% from capital gains and 6.13% from dividends.
Stock Chase. Stock Chase gives this stock 3 stars out of 5. It is not well followed but a November 2024 gives the stock a Hold rating, but does not say why. Christopher Liew on Motley Fool says to buy this consumer defensive stock. Adam Othman on Motley Fool says to buy this stock for its attractive dividend . The company put out a press release via Newswire about their fourth quarter of 2024 results.
Simply Wall Street via Yahoo Finance does a positive review of this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. Simply Wall Street has 4 warnings out on this stock of shareholders have been diluted in the past year; has a high level of debt; dividend of 6.13% is not well covered by free cash flows; and significant insider selling over the past 3 months.
Rogers Sugar Inc is a Canada-based sugar-producing company. Along with its subsidiaries, it offers products like Brown sugar, Yellow sugar, Icing sugar, and other related sugar products. Geographically, the company derives a majority of its revenue from its customers in Canada and the rest from the United States, Europe, and other regions. Its web site is here Rogers Sugar Inc.
The last stock I wrote about was about was Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more. The next stock I will write about will be Calian Group Ltd (TSX-CGY, OTC-CLNFF) ... learn more on Friday, January 10, 2025 around 5 pm. Tomorrow on my other blog I will write about Something to Buy January 2025.... learn more on Thursday, January 9, 2025 around 5 pm.
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