Is it a good company at a reasonable price? For utilities I would expect to receive at 4% from capital gains and 4% from dividends. Analysts think that the DPR for EPS will go down over the next few years and that would be good. The current P/E Ratios are good, but the dividend yield is showing that the stock price might be on the high side. You generally do not lose money on Utilities and they provide good dividends. The stock price could still be reasonable, but it is at the top of the reasonable range.
I do not own this stock of Keyera Corp (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect.
When I was updating my spreadsheet, I noticed that Revenue was expected at $6,900M (a drop of 2%) and it came in higher at $7,138M (an increase of 1.2%). Last year they expected Revenue to come in at $6,960M and $7,419M for 2025 and 2026, now they expect the Revenue for 2025 to be $6,279M and for 2026 to be $8,383M. As of the second quarter, Revenue for the last 12 months is $7,269M.
This stock has done better in last 5 years with a 10.46% total return. The capital gain for the last 5 years is 5.26% and dividends are 5.20%.
If you had invested in this company in December 2014, for $1,013.25 you would have bought 51 shares at $40.53 per share. In December 2024, after 10 years you would have received $447.25 in dividends. The stock would be worth $1,099.00. Your total return would have been $1,546.25. This would be a total return of 5.02% per year with 0.82% from capital gain and 4.20% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $40.53 | $1,013.25 | 25 | 10 | $447.25 | $1,099.00 | $1,546.25 |
The current dividend yield is good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 5.16%. The 5, 10 and historical dividend yields are also good at 6.26%, 5.68% and 5.98%. The dividend growth is low (below 8% per year) at 2.1% per year over the past 5 years. The last dividend increase was in 2025 and it was for 3.9%.
The Dividend Payout Ratios (DPR) mostly fine but could improve. The DPR for 2024 for Earnings per Share (EPS) is far too high at 96% with 5 year coverage at 136%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is fine at 61% with 5 year coverage at 60%. The DPR for 2024 for Funds from Operations (FFO) is good at 50% with 5 year coverage at 50%. The DPR for 2024 for Cash Flow per Share (CFPS) is high at 49% with 5 year coverage at 50%. I like to see the CFPS ratios at 40% or lower. The DPR for 2024 for Free Cash Flow (FCF) is fine at 46% with 5 year coverage too high at 151%. The FCF for 2024 varies from $710M to $1,013M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 96.23% | 135.56% |
| AFFO | 60.71% | 59.77% |
| FFO | 50.46% | 50.39% |
| CFPS | 48.57% | 50.34% |
| FCF | 46.15% | 150.65% |
Debt Ratios need to be improved and they have a lot of debt. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.34 and currently at 0.34. The Liquidity Ratio for 2024 is low at 0.95 and 1.00 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.62 and currently too low at 1.12. I prefer these ratios to be at 1.50 or higher. The Debt Ratio for 2024 is low at 1.48 and too low 1.12 currently. I prefer these ratios be at 1.50 or better. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.09 and 2.09 and currently at 3.76 and 2.76.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.34 | 0.34 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 0.95 | 1.00 |
| Liq. + CF | 1.62 | 1.12 |
| Debt Ratio | 1.48 | 1.36 |
| Leverage | 3.09 | 3.76 |
| D/E Ratio | 2.09 | 2.76 |
The Total Return per year is shown below for years of 5 to 22 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 | 2.09% | 10.46% | 5.26% | 5.20% |
| 2014 | 10 | 5.00% | 5.02% | 0.82% | 4.20% |
| 2009 | 15 | 5.61% | 15.80% | 8.90% | 6.90% |
| 2004 | 20 | 6.82% | 17.51% | 9.47% | 8.04% |
| 2002 | 22 | 10.06% | 19.18% | 10.39% | 8.79% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.91, 9.76 and 11.61. The corresponding 10 year ratios are 9.39, 10.90 and 12.60. The corresponding historical ratios are 17.18, 20.64 and 24.09. The current P/E Ratio is 18.50 based on EPS estimate for 2025 of $2.26 and a stock price of $41.86. 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 Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 16.31, 20.12 and 23.82. The corresponding 10 year ratios are 17.41, 20.64 and 23.87. The corresponding historical ratios are 9.32, 11.27 and 13.41. The current P/AFFO Ratio is 10.18 based on AFFO estimate for 2025 of $4.11 and a stock price of $41.86. 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 Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 6.92, 8.47 and 9.84. The corresponding 10 year ratios are 7.54, 9.13 and 10.73. The corresponding historical ratios are 7.69, 9.60 and 11.52. The current P/FFO Ratio is 10.89 based on FFO estimate for 2025 of $3.84 and a stock price of $41.86. The current ratio is above high ratio 10 year median ratios. This stock price testing suggests that the stock price is expensive.
I get a Graham Price of $25.07. The 10-year low, median, and high median Price/Graham Price Ratios are 1.28, 1.59 and 1.86. The current ratio is 1.67 based on a stock price of $41.86. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.56. The current P/B Ratio is 3.39 based on a stock price of $41.86, Book Value of $2,829M and Book Value per Share of $12.35. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.27. The current ratio is 11.10 based on Cash Flow per Share estimate for 2025 of $3.77, Cash Flow of $863.9M and a stock price of $41.86. The current ratio is 19.8% 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 5.98%. The current dividend yield is 5.16% based on a stock price of $41.86 and dividends of $2.16. The current dividend yield is 13.7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 5.68%. The current dividend yield is 5.16% based on a stock price of $41.86 and dividends of $2.16. The current dividend yield is 9% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.60. The current P/S Ratio is 1.53 based on Revenue estimate for 2025 of $6,279M, Revenue per Share of $27.40 and a stock price of $41.86. The current ratio is 4.8% below the 10 year median ratios. 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 might still be reasonable. The dividend yield testing is saying that the stock price is reasonable, but above the median. The P/S Ratio test is saying that the stock price is reasonable but below the median. The rest of the testing is mixed from reasonable to expensive.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (3) and Hold (5). The consensus is a Buy. The 12 month stock price is $51.21 with a high of $61.00 and low of $43.00. The consensus stock price of $51.21 implies a total return of 27.50% with 22.34% from capital gains and 5.16% from dividends based on a current price of $41.86.
There are lots of analysts commenting on this stock on Stock Chase. Most are positive, however, there are a couple of negative entries. One was worried about earnings. Iain Butler on Motley Fool thinks this is one of the companies to benefit from Phase 2 of the LNG Canada Project. Jitendra Parashar on Motley Fool says after BCE’s dividend cut, this company offers higher and steadier income and is a better dividend alternative. The company put out a Press Release about their annual results for 2024. The company put out a Press Release about their second quarter results for 2025.
Simply Wall Street via Yahoo Finance says this stock is undervalued because bold revenue targets, rising profit margins and a future corporate multiple. Simply Wall Street has one risk warning of has a high level of debt.
Keyera is a midstream energy business that operates primarily out of Alberta. The firm currently has interests in about a dozen active gas plants and operates over 4,000 kilometers of pipelines. Its web site is here Keyera Corp.
The last stock I wrote about was about was Trigon Metals Inc (TSX-TM, OTC-PNTZF) ... learn more. The next stock I will write about will be Cenovus Energy Inc (TSX-CVE, NYSE-CVE) learn more on Friday, October 31, 2025 around 5 pm.
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