Is it a good company at a reasonable price? This is a printing company getting into packaging. It has been doing better lately, but there is a risk to this stock. However, the dividend yield is at the top end of the moderate range and the dividends are probably safe. It is also reasonably price. So that could be the reason to buy, reasonable price, 4.9% yield.
I own this stock of Transcontinental Inc (TSX-TCL.A, OTC-TCLAF). I own this company. When I bought this company in 2015 it was a dividend growth company and has done quite well so far long term.
When I was updating my spreadsheet, I noticed it is rather a mixed bag when it comes to total returns on this stock. This company hit a high 20 years ago that it has not yet matched. If you look at total returns a paragraph below, you see the 20 year return is just 1.91% per year with a capital loss of 1.13% per year.
I have had this stock for 10 years and I have made a total return of 6.79% per year with 1.82% from capital gains and 4.97% from dividends. This stock is in my TFSA, which is my fooling around money. There is always a trade-off between yield and growth. This stock is one which currently has a good yield of 5.13%.
If you had invested in this company in December 2014, for $1,010.16 you would have bought 61 shares at $16.56 per share. In December 2024, after 10 years you would have received $510.88 in dividends. The stock would be worth $1,132.77. Your total return would have been $1,643.65. This would be a total return of 5.91% per year with 1.15% from capital gain and 4.76% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $16.56 | $1,010.16 | 61 | 10 | $510.88 | $1,132.77 | $1,643.65 |
The current dividend yield is moderate with dividend growth has stopped. The current dividend yield is moderate (2% to 4% ranges) at 4.93%. The corresponding 5 year median dividend yield is good (5% to 6%) ranges at 6.38%. The corresponding 10 year and historical median dividend yield is moderate at 4.60% and 2.28%. The dividend growth has stopped in 2021. I have had dividend history for the past 31 years and they have raised their dividends in 22 of those years. The last time dividends were flat was more than 20 years ago. I can see why they are flat as Dividend Payout Ratios were getting higher than they were in the past.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is too high at 65% with 5 year coverage at 65%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 38% with 5 year coverage at 39%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 18% with 5 year coverage at 17%. The DPR for 2024 for Free Cash Flow (FCF) is good at 37% with 5 year coverage at 36%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 63.83% | 63.85% |
| AEPS | 38.46% | 39.23% |
| CFPS | 18.22% | 17.64% |
| FCF | 37.14% | 35.81% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.46 and currently at 0.43. The Liquidity Ratio for 2024 is good at 1.59 and 1.59 currently. The Debt Ratio for 2024 is good at 2.11 and 2.11 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.90 and 0.90 and currently at 1.90 and 0.90.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.46 | 0.43 |
| Intang/GW | 1.04 | 0.98 |
| Liquidity | 1.59 | 1.59 |
| Liq. + CF | 2.03 | 2.09 |
| Debt Ratio | 2.11 | 2.11 |
| Leverage | 1.90 | 1.90 |
| D/E Ratio | 0.90 | 0.90 |
The Total Return per year is shown below for years of 5 to 36 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 | 0.68% | 8.53% | 3.19% | 5.34% |
| 2014 | 10 | 3.71% | 5.91% | 1.15% | 4.76% |
| 2009 | 15 | 2.06% | 7.59% | 2.45% | 5.14% |
| 2004 | 20 | 8.69% | 1.91% | -1.13% | 3.04% |
| 1999 | 25 | 10.17% | 6.22% | 2.72% | 3.50% |
| 1994 | 30 | 9.45% | 9.11% | 5.25% | 3.86% |
| 1989 | 35 | 8.59% | 8.94% | 5.57% | 3.37% |
| 1988 | 36 | 9.61% | 6.14% | 3.47% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.05, 11.08, and 13.12. The corresponding 10 year median ratios are 7.67, 9.72 and 11.66. The corresponding historical median ratios are 10.21, 12.74 and 14.74. The current P/E Ratio is 10.54 based on a stock price of $18.54 and EPS estimate for 2025. The current 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 but above the median.
I have also Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.03, 6.70 and 8.37. The corresponding 10 year median ratios are 6.22, 7.40 and 8.58. The corresponding 10 year median ratios are 7.67, 9.72 and 11.66. The current ratio is 7.66 based on a stock price of $18.54 and AEPS estimate for 2025 of $2.42. The current ratio is below the low ratio for the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $35.06. The 10-year low, median, and high median Price/Graham Price Ratios are 0.46, 0.59 and 0.72. The current P/GP Ratio is 0.53 based on a stock price of $18.54. 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 10-year median Price/Book Value per Share Ratio of 0.98. The current ratio is 82 based on a stock price of $18.54, Book Value of $1,909.3M and Book Value per Share of $22.58. 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.
I also have a Book Value per Share value for 2025 of $23.40. This implies a ratio of 0.79 based on a Book Value of $1,978.6M and a stock price of $18.54. This ratio is 19% 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 5.03. The current ratio is 3.39 based on Cash Flow for the last 2025 of $5.47 and a stock price of $18.54. This ratio is 33% 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 2.28%. The current dividend yield is 4.85% based on a stock price of $18.54 and dividends of $0.90. The current dividend yield is 113% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.60%. The current dividend yield is 4.85% based on a stock price of $18.54 and dividends of $0.90. The current dividend yield is 5.6% above the historical 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 0.61. The current ratio is 0.57 based on Revenue estimate for 2025 of $2,476M, Revenue per Share of $32.48 and a stock price of $18.54. The current ratio is 6% 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 below the median. The 10 year dividend yield testing says this. It is confirmed by the P/S Ratio test. The rest of the testing is mixed, but results are either cheap or reasonable.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (1). The current recommendation would then be a Buy. The 12 month stock price consensus is $22.71 with a high if $26.00 and low of $20.00. The 12 month stock price of $22.71 implies a total return of 27.35% with 22.49% from capital gain and 4.85% from dividends.
Analyst on Stock Chase are advising you to sell since 2022. It is a printing company, but it is trying to get into packaging. Last 4 entries say sell. Stock Chase gives it 3 stars out of 5. Amy Legate-Wolfe on Motley Fool says the company has potential and has shown resilience and adaptability in a challenging market.. Jitendra Parashar on Motley Fool says to buy this stock for income. The company put out a press release via Global Newswire about its fourth quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock and puts out a positive report. Simply Wall Street has one warning out on this stock of large one-off items impacting financial results. Simply Wall Street gives this stock 4 stars out of 5.
Transcontinental Inc or TC Transcontinental is a Canadian printer and flexible packaging provider that operates in three segments: packaging, Printing and Media, and Retail Services. Geographically in Canada, USA, UK. Maximum Revenue is gained from USA. Its web site is here Transcontinental Inc.
The last stock I wrote about was about was Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more. The next stock I will write about will be Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more on Friday, January 24, 2025 around 5 pm. Tomorrow on my other blog I will write about My Fooling Around Money.... learn more on Thursday, January 23, 2025 around 5 pm.
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