Is it a good company at a reasonable price? It is certainly a positive that this company has restarted dividend increases. It is also a positive that both the CEO and an officer bought shares in the past year. They bought shares between around $9.25 and $13.00. A negative is the amount of debt they have and the very low Liquidity Ratios. A negative also is that there are problems with a number of my tests. A number of analysts feel positive about the company’s future. However, it is testing as being expensive.
I do not own this stock of Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G & M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.
When I was updating my spreadsheet, I noticed that this stock used to be an income trust. They may have finally got their dividend payments right. They are buying too much in dividends, but they have decreased them and analysts think that their will get better soon. A problem is that the Revenue is growing, but the Revenue per Share is not. Revenue per Share is going down. It is really the Revenue per Share that counts.
The current dividend yield is good with dividend growth restarting in 2024. The dividend yield is good (5% to 6% ranges) at 5.29%. The 5, 10 and historical median dividend yields are high (7% and over at 7.19%, 7.16%, and 8.14%. This stock used to be an income trust and that is why rates are so high. Dividends are down by 11.4% per year over the past 5 years. Income trusts need to reduce dividends when they became corporations. They just started in 2024 to again raise dividends. The last dividend increase was in 2025 and it was for 4.5%.
The Dividend Payout Ratios (DPR) are improving. The DPR for 2024 for Earnings per Share (EPS) is high at 63% with 5 year coverage non-calculable because of earnings losses in the past 5 years. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is high at 64% with 5 year good coverage at 44%. The DPR for 2024 for Distributable Cash Flow (DCF) is good at 37% with 5 year coverage at 41%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 17% with 5 year coverage at 18%. The DPR for 2024 for Free Cash Flow (FCF) is good at 31% with 5 year coverage at 32%. There is no consensus on what the FCF is and for 2024 they range from $158M to $190M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 62.98% | 0.00% |
| AFFO | 63.67% | 44.47% |
| DCF | 36.39% | 41.68% |
| CFPS | 16.56% | 18.30% |
| FCF | 30.54% | 31.81% |
Debt Ratios need improving, especially the Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.26 and currently at 0.34. The Liquidity Ratio for 2024 is far too low at 0.42 and 0.50 currently. If you added in Cash Flow after dividends, the ratios are still far too low at 0.76 and currently at 0.78. You want to see this important ratio at 1.50 or higher. The Debt Ratio for 2024 is good at 1.56 and fine at 1.48 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.79 and 1.79 and currently too high at 3.07 and 2.07. I like to see these ratios below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.26 | 0.34 |
| Intang/GW | 0.42 | 0.40 |
| Liquidity | 0.42 | 0.50 |
| Liq. + CF | 0.76 | 0.78 |
| Debt Ratio | 1.56 | 1.48 |
| Leverage | 2.79 | 3.07 |
| D/E Ratio | 1.79 | 2.07 |
The Total Return per year is shown below for years of 5 to 23 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 | -11.40% | 5.69% | -0.16% | 5.85% |
| 2014 | 10 | -5.87% | -0.36% | -6.18% | 5.82% |
| 2009 | 15 | -3.96% | 9.90% | -0.04% | 9.95% |
| 2004 | 20 | -3.44% | 4.20% | -3.04% | 7.24% |
| 2001 | 23 | 1.22% | 12.81% | -0.31% | 13.12% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.70, 5.67 and 6.64. The corresponding 10 year ratios are negative and so unusable. The corresponding historical ratios are 8.11, 10.31 and 12.30. The current ratio is 13.05 based on a stock price of $13.05 and EPS estimate for 2025 of $1.00. This ratio is above the high ratio of the historical median ratios. Ratio are low on this stock because of earning losses. Generally speaking, a ratio is 10 or below is low (or cheap) and 20 and above is high (or expensive).
I also have Distributable Cash Flow (DCF) data. The 5-year low, median, and high median Price/ Distributable Cash Flow Ratios are 4.33, 5.51 and 6.69. The corresponding 10 year ratios are 7.62, 10.45 and 12.19. The corresponding historical ratios are 7.21, 8.98 and 10.37. The current ratio is 6.40 based on a stock price of $13.05 and DCF for the last 12 months of $ estimate for 2025 of $2.04. 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 $12.03. The 10-year low, median, and high median Price/Graham Price Ratios are 0.63, 0.79 and 0.94. The current ratio is 1.09 based on a stock price of $13.05. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. However, there has been a number of years of earning losses, so it could be debated that this is not a good test.
I get a 10-year median Price/Book Value per Share Ratio of 1.47. The current ratio is 2.03 based on a stock price of $13.05, Book Value of $726M and Book Value per Share of $6.43. This ratio is 38% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
There is also a Book Value per Share estimate for 2025 and it is $6.43. This is the same as the book Value per Share above, so the results will be no different.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.47. The current ratio is 5.18 based on CFPS estimate for 2025 of $2.52, Cash Flow of $285M and a stock price of $13.05. The current ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 8.14%. The current dividend yield is 5.29% based on dividends of $0.69 and a stock price of $13.05. The current dividend yield is 35% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. Problem with this test is the recent dividend cuts.
I get a 10 year median dividend yield of 7.16%. The current dividend yield is 5.29% based on dividends of $0.69 and a stock price of $13.05. The current dividend yield is 26% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. Problem with this test is the recent dividend cuts.
The 10-year median Price/Sales (Revenue) Ratio is 0.63. The current P/S Ratio is 0.76 based on Revenue estimate for 2025 of $1,927M, Revenue per Share of $15.02 and a stock price of $13.02. The current ratio is 21% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. The P/S Ratio test is saying that the stock price is expensive. There are problems with a number of the tests and that is never a good sign. The Price/Distributive Cash Flow, Price/Book Value and Price/Cash Flow are good tests. One says that the stock price is cheap, one that it is reasonable and above the median and one that says it is expensive.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (5). The consensus would be a Strong Buy. The 12 month stock price consensus is $15.50 with a high of $17.50 and low of $14.00. The consensus stock price implies a total return of 24.06% with 18.77% from capital gains and 5.29% from dividends based on a current stock price of $13.05.
The analysts on Stock Chase like this stock and think it is a current buy. It is coming out of a long turnaround after making a bad acquisition 10 years ago. Christopher Liew on Motley Fool says that this company has had a good start to the year and buy for income for your TFSA. Amy Legate-Wolfe on Motley Fool talks about why this stock had a jump in price in May. The company put out a press release about their fourth quarter of 2024 via The Canadian Press. The company put out a press release via The Globe and Mail about their second quarterly results for 2025.
Simply Wall Street via Yahoo Finance talks about this company’s fair value. They say it is slightly undervalued. Simply Wall Street has 3 warnings out on this stock of has a high level of debt; unstable dividend track record; and large one-off items impacting financial results.
Chemtrade Logistics Income Fund provides industrial chemicals and services to customers in North America and around the world. The company is organized into two operating segments: Sulphur and Water Chemicals (SWC) and Electrochemicals. Its geographical segments are Canada, the United States which derives maximum revenue, and South America. Its web site is here Chemtrade Logistics Income Fund.
The last stock I wrote about was about was Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more. The next stock I will write about will be Alimentation Couche-Tard Inc (TSX-ATD, OTC-ANCUF) ... learn more on Wednesday, August 27, 2025 around 5 pm. Tomorrow on my other blog I will write about A Sun Life Interview with the CEO.... learn more on Tuesday, August 26, 2025 around 5 pm.
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