Is it a good company at a reasonable price? This company has been in business a very long time. I have data for the past 36 years. They have produced a reasonable return to shareholders over this time. I believe a reasonable return to be 8% including capital gains and dividends. It is a bit cyclical, so you have to buy at a reasonable price. It could be cheap as the dividend yield tests say this and the Dividend Payout Ratio is reasonable (that is at or below the 40% range). Also. dividend increases are sporadic.
I do not own this stock of Algoma Central Corporation (TSX-ALC, OTC-AGMJF). I got the name from the internet. The description was that Algoma Central Corporation is a Canadian shipping company. It operates Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes. The company operates its business through six segments that are Domestic Dry-Bulk, Product Tankers, Ocean Self Unloaders, Corporate, Investment Properties, and Global Short Sea Shipping.
When I was updating my spreadsheet, I noticed that the 5 year total return per year of 15.56% is a lot higher than the 10 year total return per year of 7.75%. The last time that the total return per year was below 8% was for year 20 when it was 7.97% per year. One analyst says the business is cyclical, so this does point to this.
If you had invested in this company in December 2014, for $1,010.61 you would have bought 78 shares at $12.96 per share. In December 2024, after 10 years you would have received $762.84 in dividends. The stock would be worth $1,154.40. Your total return would have been $1,917.24. This would be a total return of 7.75% per year with 1.34% from capital gain and 6.41% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.96 | $1,010.61 | 78 | 10 | $762.84 | $1,154.40 | $1,917.24 |
If you had invested in this company in December 2016, for $1,001.84 you would have bought 92 shares at $10.89 per share. In December 2024, after 5 years you would have received $675.28 in dividends. The stock would be worth $1,361.60. Your total return would have been $2,036.88. This would be a total return of 18.56% per year with 6.33% from capital gain and 12.23% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $10.89 | $1,001.84 | 92 | 5 | $675.28 | $1,361.60 | $2,036.88 |
The current dividend yield is good with dividend growth moderate. The dividend yield is good (5% to 6% ranges) at 5.16%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 4.66%, 3.93% and 2.93%. The dividend growth is moderate (8% to 14% ranges) at 13% per year over the past 5 years. The last dividend increase was for 5.3% and it occurred in 2025. The company has had 14 dividend increases in the past 36 years. Over the last 7 years the increases were 2.50%, 21.95%, 36.00%, 0.00%, 5.88%, 5.56%, and 5.26%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is good at 33% with 5 year coverage high at 71%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 39% with 5 year coverage at 36%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 21% with 5 year coverage at 37%. The DPR for 2024 for Free Cash Flow (FCF) is non-calculable because of a negative FCF with 5 year coverage high at 183%. FCF varies a lot depending on where you look.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 33.19% | 70.71% |
| AEPS | 38.58% | 35.71% |
| CFPS | 20.81% | 37.38% |
| FCF | -69.16% | 182.77% |
Debt Ratios are fine, but they should improve the Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2024 is fine at 0.56 and currently at 0.69. The Liquidity Ratio for 2024 is too low at 0.73 and 0.52 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.39 and currently too low 0.94. If you add back in current portion of the debt, the ratio is still low at 1.34 and fine currently at 1.77. The Debt Ratio for 2024 is good at 2.44 and 2.05 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.69 and 0.69 and currently at 1.95 and 0.95.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.56 | 0.69 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 0.73 | 0.52 |
| Liq. + CF | 1.39 | 0.94 |
| Liq. + CF+D | 1.34 | 1.77 |
| Debt Ratio | 2.44 | 2.05 |
| Leverage | 1.69 | 1.95 |
| D/E Ratio | 0.69 | 0.95 |
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 | 13.14% | 18.56% | 6.33% | 12.23% |
| 2014 | 10 | 10.50% | 7.75% | 1.34% | 6.41% |
| 2009 | 15 | 10.08% | 11.90% | 5.97% | 5.93% |
| 2004 | 20 | 10.67% | 7.97% | 3.74% | 4.23% |
| 1999 | 25 | 8.45% | 12.94% | 7.79% | 5.15% |
| 1994 | 30 | n/c | 12.69% | 7.65% | 5.03% |
| 1989 | 35 | 6.64% | 11.73% | 7.69% | 4.04% |
| 1988 | 36 | 7.31% | 9.79% | 6.30% | 3.48% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.16, 7.72 and 8.31. The corresponding 10 year ratios are 7.02, 8.34 and 9.62. The corresponding historical ratios are 7.01, 8.19 and 9.62. The current P/E Ratio is 8.24 based on a stock price of $15.50 and EPS estimate for 2025 of $1.88. 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 and below the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.13, 7.50, and 7.84. The corresponding 10 year ratios are 9.08, 10.23 and 11.38. The corresponding historical ratios are 7.15, 8.47 and 10.42. The current ratio is 8.24 based on a stock price of $15.50, AEPS estimate for 2025 of $1.88. 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 and below the median.
I get a Graham Price of $30.24. The 10-year low, median, and high median Price/Graham Price Ratios are 0.48, 0.53 and 0.58. The current P/GP Ratio is 0.51 based on a stock price of $15.50. The current ratio is between low and median ratio of 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/Book Value per Share Ratio of 0.67. The current ratio is 0.72 based on a Book Value of $877M, Book Value per Share of $22.18 and a stock price of $15.50. The current ratio is 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.47. The current ratio is 3.87 based on Cash Flow for the last 12 months of $163M, Cash Flow per Share of $4.01 and a stock price of $15.50. The current ratio is 13% 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 2.93%. The current dividend yield is 5.16% based on dividends of $0.80 and a stock price of $15.50. The current dividend yield is 76% 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 3.93%. The current dividend yield is 5.16% based on dividends of $0.80 and a stock price of $15.50. The current dividend yield is 31% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.89. The current P/S Ratio is 0.84 based on Revenue estimate for 2025 of $735.9M, Revenue per Share of $18.14 and a stock price of $15.50. 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.
Results of stock price testing is that the stock price is probably reasonable, but could be cheap. The dividend yield tests, especially the 10 year dividend yield test, says that the stock price is relatively cheap. The P/S Ratio test says that it is reasonable, and below the median. Most of the rest of the testing is say that the stock price is reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (0), and Buy (1). The consensus would be a Buy. The 12 month target price is $19.00 with a high of $19.00 and low of $19.00. There is only one analyst following this stock. The consensus stock price of $19.00 implies a total return of 27.74% with 22.38% from capital gains and 5.16% from dividends.
There is an entry on Stock Chase for 2024 that says do not buy because its business is very capital intensive and economically cyclical. This stock is not well followed. Christopher Liew on Motley Fool says this is a transport stock to buy and hold. Ambrose O'Callaghan on Motley Fool in 2022 talked about this stock and liked it for its high dividend yield. The company put out a press release via the Globe and Mail about its fourth quarter of 2024. The company put out a press release via the Globe and Mail about their first quarter of 2025.
Simply Wall Street via Yahoo Finance reviews the Return on Capital Employed for this stock and says it is low. Simply Wall Street via Yahoo Finance talks about this stock being up 183% over past 5 years. Simply Wall Street has two warnings out for this stock of has a high level of debt; and dividend of 5.25% is not well covered by free cash flows.
Algoma Central Corp owns and operates a fleet of dry and liquid bulk carriers on the Great Lakes, St. Lawrence Waterway. The company's Canadian flag fleet consists of self-unloading dry-bulk carriers, gearless dry-bulk carriers, and product tankers. The company earns revenues from marine operations through contracts of affreightment, time charters, and pool revenue. Its web site is here Algoma Central Corporation.
The last stock I wrote about was about was WSP Global Inc (TSX-WSP, OTC-WSPOF) ... learn more. The next stock I will write about will be Thomson Reuters Corp (TSX-TRI, NYSE-TRI) ... learn more on Friday, May 9, 2025 around 5 pm. Tomorrow on my other blog I will write about Something to Buy May 2025.... learn more on Thursday, May 8, 2025 around 5 pm.
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