Is it a good company at a reasonable price? A company to succeed must not only have increasing revenue, it has to be able to make a profit. Analysts do not expect any profit for this company until 2027. However, analysts often change their minds about what might happen in two years’ time. Obviously, buying this company is a risk. They also have some awful debt ratios. On the other hand, the stock price is cheap.
I do not own this stock of Dorel Industries Inc (TSX-DII.B, OTC-DIIBF), but I used to. This was a stock recommended by Investment Reporter as a conservative investment. I sold the stock in 2006 because I had it for 7 years from 1999 and it was going nowhere. I bought this stock before I stopped working and at that time I did not mind buying stocks with no dividends.
When I was updating my spreadsheet, I noticed that they lost money in 2024 because their costs are too high, but also because they took an impairment loss in 2024. Note that the 5 year return is high because the company sold some of its business and gave out a dividend payment to shareholders because of this sale. The stock price has really tanked. It reached a high of $41.97 in 2015 and the stock price has been declining since and recently at $1.45.
If you had invested in this company in December 2014, for $1,000.50 you would have bought 25 shares at $40.02 per share. In December 2024, after 10 years you would have received $581.32 in dividends. The stock would be worth $97.27. Your total return would have been $678.57. This would be a total loss of 5.32% per year with 20.79% from capital loss and 15.47% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $40.02 | $1,000.50 | 25 | 10 | $581.32 | $97.25 | $678.57 |
The company currently pays not dividends. So, there is no dividend yield for Dividend Payout Ratios to talk about..
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.35 and currently far too high at 1.54. The Liquidity Ratio for 2024 is too low at 0.88 and 0.88 currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.06 and currently at 0.94. A good ratio is 1.50 or higher. The Debt Ratio for 2024 is too low at 1.06 and 1.03 currently. A good ratio is at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2024 are far too high at 19.05 and 18.05 and currently at 32.88 and 31.88. Good ratios are below 3.00 and below 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.35 | 1.54 |
| Intang/GW | 0.71 | 1.73 |
| Liquidity | 0.88 | 0.88 |
| Liq. + CF | 0.98 | 0.94 |
| Debt Ratio | 1.06 | 1.03 |
| Leverage | 19.05 | 32.88 |
| D/E Ratio | 18.05 | 31.88 |
The Total Return per year is shown below for years of 5 to 32 to the end of 2024 in CDN$. 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% | 45.68% | -7.84% | 53.51% |
| 2014 | 10 | 0.00% | -5.32% | -20.79% | 15.47% |
| 2009 | 15 | 0.00% | -0.19% | -13.20% | 13.01% |
| 2004 | 20 | 0.00% | -1.37% | -11.14% | 9.78% |
| 1999 | 25 | 0.00% | 1.28% | -7.32% | 8.60% |
| 1994 | 30 | 0.00% | 9.39% | 0.01% | 9.38% |
| 1992 | 32 | 0.00% | 7.11% | -1.08% | 8.19% |
The Total Return per year is shown below for years of 5 to 32 to the end of 2024 in US$. 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% | 42.29% | -10.52% | 52.81% |
| 2014 | 10 | 0.00% | -7.47% | -22.66% | 15.19% |
| 2009 | 15 | 0.00% | -2.36% | -15.18% | 12.82% |
| 2004 | 20 | 0.00% | -1.91% | -12.04% | 10.13% |
| 1999 | 25 | 0.00% | 1.99% | -7.30% | 9.29% |
| 1994 | 30 | 0.00% | 9.96% | -0.17% | 10.13% |
| 1992 | 32 | 0.00% | 8.50% | -0.58% | 9.08% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and useless. The corresponding 10 year ratios are negative and useless. The corresponding historical ratios are 7.95, 10.86 and 12.81. The current P/E Ratio is negative, so I cannot do any testing here. Analysts expect the company to have earnings in 2027 and for then, the P/E is 3.42 based on EPS of $0.42 and stock price of $1.45. This ratio is very low and it is below the low ratio of the historical median ratios. This stock price testing suggests that the stock price is relatively cheap (maybe).
I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are negative and useless. The corresponding 10 year ratios are 3.90, 6.04 and 6.84. The corresponding historical ratios are 7.73, 9.23 and 11.03. The current P/AESP is negative so unusable. Analysts expect the company to give earnings in 2027 and for then, the P/AEPS is 4.61 based on AEPS of $0.31 and stock price of $1.45. This ratio is between the low and median ratio 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 $2.67 (maybe as we only have positive earnings in 2027). The 10-year low, median, and high median Price/Graham Price Ratios are 0.53, 0.69 and 0.97. The current P/GP Ratio is 0.54 based on a stock price of $1.45. This ratio is between the low and median ratio of 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. (This is an uncertain test because the company had so many years of earnings losses, so I am basically guessing at GP and its ratio.)
I get a 10-year median Price/Book Value per Share Ratio of 0.80. The current P/B Ratio is 1.44 based on Book Value of $24.1M, Book Value per Share of $0.74 and a stock price of $1.06. The current ratio is 80% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$, but you will get similar results in CDN$. (Book Value has currently tanked also.)
I get a 10-year median Price/Cash Flow per Share Ratio of 3.91. The current ratio is 1.06 based on Cash Flow per Share estimate for 2025 of $1.00, Cash Flow of $32.6M and a stock price of $1.06. The current ratio is 73% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$, but you will get similar results in CDN$.
I cannot do any dividend yield tests as this stock no longer pays a dividend.
The 10-year median Price/Sales (Revenue) Ratio is $0.22. The current P/S Ratio is 0.03 based on Revenue estimate for 2025 of $1,377M, Revenue per Share of $42.20 and a stock price of $1.06. The current ratio is 89% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$, but you will get similar results in CDN$.
Results of stock price testing is that the stock price is probably cheap, but cheap for a reason. The P/S Ratio test says that the stock price is cheap and this is a good test. There are problems with the P/E Ratio, P/AEPS Ratio, and P/GP Ratio testing. The P/B Ratio test says that the stock is expensive and the P/CF Ratio test says the stock price is cheap.
When I look at analysts’ recommendations, I find Hold (1), and Sell (1). The consensus would be an Underperform. The 12 month stock price consensus is $1.74 ($1.27 US$) with a high of $2.26 ($1.65 US$) and low of $1.22 ($0.89 US$). The consensus stock price of $1.74 implies a total return of 20% and all from capital gains based on a current stock price of $1.45.
The last entry was in 2023 on Stock Chase and the analyst said Do Not Buy. Amy Legate-Wolfe on Motley Fool wrote about this stock in 2023 and thought it was undervalued then. The company put out a Press Release about their fourth quarter of 2024 results. The company put out a Press Release about their first quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and says it is fairly valued. They say that revenue is expected to grow in the near future. Simply Wall Street has two warnings out on this stock of earnings have declined by 17.4% per year over past 5 years; and does not have a meaningful market cap (CA$51M).
Dorel Industries Inc is a Canadian company that sells juvenile products and furniture. Geographically, it derives key revenue from the United States, followed by Europe, Latin America, Canada, Asia, and other regions. Its web site is here Dorel Industries Inc.
The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more. The next stock I will write about will be Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more on Wednesday, July 23, 2025 around 5 pm. Tomorrow on my other blog I will write about TFSA Features.... learn more on Tuesday, July 22, 2025 around 5 pm.
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