Is it a good company at a reasonable price? I realized when I bought this stock that I was taking a chance on it, but I wanted to buy some small companies to round out my portfolio which was in large cap stocks. I plan to keep the stock that I have. I am not buying more because I am not buying anything at present. A positive is the Simply Wall Street via Yahoo Finance has a positive report on this stock. Another positive is some insider buying. The current stock price could be cheap as is shown by the 10 year dividend yield test.
I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.
When I was updating my spreadsheet, I noticed that the Chairman and one Director that I follow have bought shares in the past year. Some shares by insiders were bought around $15.00 and others just above $14.00.
The current dividend yield is moderate with dividend growth current good. The current dividend yield is moderate (2% to 4% ranges) at 4.40%. The 5 year median dividend yield is good (5% to 6% ranges) at 6.57%. The 10 year and historical median dividend yields are moderate at 3.44% and 3.74%. The current dividend growth is good (15% and above) at 20% per year. Note they restarted dividends 5 years ago after two years of no dividends. This increase also includes a 50% dividend cut in 2024. The last dividend change was in 2024 and it was a dividend cut of 50%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 32% with 5 year coverage at 25%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is good at 15% with 5 year coverage at 15%. The DPR for 2024 for Cash Flow per Share (CFPS) is negative, due to negative cash flow in 2024 with 5 year coverage good at 25%. The DPR for 2024 for Free Cash Flow (FCF) is high at 84% with 5 year coverage good at 27%. (There is no agreement on what the FCF is)
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 31.65% | 25.48% |
| AFFO | 15.20% | 15.39% |
| CFPS | -487.20% | 25.38% |
| FCF | 84.55% | 26.60% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.00 and currently at 0.00. The Liquidity Ratio for 2024 is good at 3.28 and 3.28 currently. The Debt Ratio for 2024 is good at 3.41 and 3.41 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.42 and 0.42 and currently at 1.42 and 0.42.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.00 | 0.00 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 3.28 | 3.28 |
| Liq. + CF | 3.07 | 3.07 |
| Debt Ratio | 3.41 | 3.41 |
| Leverage | 1.42 | 1.42 |
| D/E Ratio | 0.42 | 0.42 |
The Total Return per year is shown below for years of 5 to 33 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 | 20.11% | 31.14% | 20.76% | 10.37% |
| 2014 | 10 | 1.06% | 6.69% | 3.09% | 3.60% |
| 2009 | 15 | 0.70% | 4.54% | 1.17% | 3.37% |
| 2004 | 20 | 1.95% | 4.70% | 0.65% | 4.05% |
| 1999 | 25 | 5.22% | 9.06% | 3.53% | 5.53% |
| 1994 | 30 | 6.77% | 14.44% | 5.75% | 8.69% |
| 1991 | 33 | 8.90% | 12.69% | 5.60% | 7.09% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 2.37, 3.76 and 5.22. The corresponding 10 year ratios are 4.52, 5.84 and 7.19. The corresponding historical ratios are 7.08, 8.05 and 10.12. The current P/E Ratio is 7.20 based on a stock price of $11.37 and EPS for the last 12 months of $1.58. The current ratio is above the high ratio of the 10 year median ratios. The 10 year median ratios imply that this stock price is expensive.
The current ratio of 7.20 is between the low and median ratios of the historical median ratios. Note that the 10 P/E Ratios are very low because of years of earnings losses. The 5 year ratios are low because of a couple of years of very high EPS. Generally speaking, a ratio of 10 or less is considered cheap. The current P/E Ratio compared to the 10 year P/E Ratio does not seem to be a good test.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 1.41, 1.81 and 2.51. The corresponding 10 year ratios are 3.66, 4.18 and 4.69. The current ratio is 3.46 based on AFFO for the last 12 months of $3.29 and a stock price of $11.37. 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 Graham Price of $29.44. The 10-year low, median, and high median Price/Graham Price Ratios are 0.42, 0.48 and 0.54. The current P/GP Ratio is 0.39 based on a stock price of $11.37. 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 0.57. The current P/B Ratio is 0.47 based on a Book Value of $206M, Book Value per Share of $24.38 and a stock price of $11.37. The current ratio is 18% 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 3.24. The current ratio is negative because of a negative cash flow for 2024. The P/CF Ratio test cannot be done.
However, I do have Cash Flow Without WC per Share. The 10 year median ratio is 4.16. The current ratio is 3.44 based on CF Without WC of $3.31. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. (WC is Working Capital.)
I get an historical median dividend yield of 3.74%. The current dividend yield is 4.40% based on dividends of $0.50 and a stock price of $11.37. The current yield is 18% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 3.44%. The current dividend yield is 4.40% based on dividends of $0.50 and a stock price of $11.37. The current yield is 28% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This is surprising as the dividend were recently cut by 50%.
The 10-year median Price/Sales (Revenue) Ratio is 0.14. The current P/S Ratio is 0.19 based on Revenue for the last 12 months of $509.5M, Revenue per Share of $60.25 and a stock price of $11.37. The current ratio is 33% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem here is declining revenue over the past two years.
Results of stock price testing is that the stock price is could be cheap. The 10 year dividend yield test says that the stock price is relatively cheap. A positive is that the Dividend Payout Ratios are currently reasonable. A problem is that the P/S Ratio test says that the stock price is relatively expensive because of declining Revenue. Other testing is showing the stock price a cheap or reasonable.
When I look at analysts’ recommendations, I find Strong Buy (1) only on WSJ. The consensus would be a Strong Buy. The 12 month stock price consensus is $11.10. This stock price of $11.10 implies a total return of 2.02% with a capital loss of 2.37% and dividends of 4.40%. All the other sites say there is no analyst’s recommendations. WSJ also shows old data of 2010.
This stock is not on Stock chase or on Motley Fool. Analysts are not following this stock. The company put out a press release via Global Newswire about their fourth quarter of 2024 results ending in November 2024.
Simply Wall Street via Yahoo Finance talks about insider buying. Simply Wall Street via Yahoo Finance reviews this stock and thinks it has potential of a Multi-Bagger. Simply Wall Street has two warnings out of does not have a meaningful market cap (CA$103M); and dividend of 4.1% is not well covered by free cash flows.
Goodfellow Inc is engaged in various business activities related to the remanufacturing and distribution of lumber and wood products. The majority of the company's revenue is generated from the sale of Lumber. The company operates in Canada and The United States; the majority of its revenue is generated from Canada. Its web site is here Goodfellow Inc.
The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Wednesday, April 9, 2025 around 5 pm. Tomorrow on my other blog I will write about Credit Card Debt.... learn more on Tuesday, April 8, 2025 around 5 pm.
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