Is it a good company at a reasonable price? The stock price has recently gone up a lot. The company has too much debt. They now seem to have set the dividends at a good level of payment. I do not like the Liquidity Ratio as it is too low. I know that analysts’ recommendation is a Strong Buy, but they put that on most stocks. This stock is testing as being in the expensive range.
I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock in 2016.
When I was updating my spreadsheet, I noticed that over the past 5 years, this stock’s capital gain was 29.5% per year. The stock increased in price in 2023 by 77% and in 2024 by 81%. The stock is only up 9.63% this year so far. All the officers and one director I am following bought shares in the past year. The latest purchase was for $25.31. This company has a lot of debt. The Leverage and Debt/Equity Ratios are 4.20 and 3.20. You want these ratios to be below 3.00 and 2.00. Dividends are inconsistent. In the last 24 years, dividends were up in 13 years and down in 4 years.
The current dividend yield is moderate with dividend growth currently low. The current dividend yield is moderate (2% to 4% ranges) at 2.94%. The 5year median dividend yield is moderate at 4.23%. The 10 year and historical median dividend yields are good (5% to 6% ranges) at 5.03% and 5.70%. The dividend growth over the past 5 years is low (below 8%) at 7.16%. The last dividend increase was for 50% and it was in 2024. Note that dividends were cut in 2017. Dividends for 2025 are now 10% above dividends in 2016.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 30% with 5 year coverage at 38%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 27% with 5 year coverage at 37%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 13% with 5 year coverage at 23%. The DPR for 2024 for Free Cash Flow (FCF) is good at 19% with 5 year coverage at 25%. FCF varies in 2024 from $96.21M to $160M. I am using the $96.21M value.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 29.95% | 37.56% |
| AEPS | 27.01% | 37.16% |
| CFPS | 13.35% | 22.57% |
| FCF | 18.75% | 25.42% |
Debt Ratios have problems and there is too much debt. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.09 and currently at 0.08. The Liquidity Ratio for 2024 is low at 1.27 and 1.28 currently. If you added in Cash Flow after dividends, the ratios are low at 1.35 and currently at 1.37. The Debt Ratio for 2024 is low at 1.31 and 1.33 currently. The Leverage and Debt/Equity Ratios for 2024 are far too high at 4.20 and 3.20 and currently at 4.06 and 3.06. I like to see these ratios below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.09 | 0.08 |
| Intang/GW | 0.16 | 0.15 |
| Liquidity | 1.27 | 1.28 |
| Liq. + CF | 1.35 | 1.37 |
| Debt Ratio | 1.31 | 1.33 |
| Leverage | 4.20 | 4.06 |
| D/E Ratio | 3.20 | 3.06 |
The Total Return per year is shown below for years of 5 to 27 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 | 7.16% | 33.23% | 29.52% | 3.71% |
| 2014 | 10 | -3.16% | 11.29% | 8.13% | 3.16% |
| 2009 | 15 | 0.11% | 9.40% | 5.63% | 3.77% |
| 2004 | 20 | 2.70% | 29.76% | 12.82% | 16.94% |
| 1999 | 25 | 7.21% | 36.44% | 15.63% | 20.80% |
| 1997 | 27 | 49.59% | 20.23% | 29.36% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.23, 8.53 and 11.03. The corresponding 10 year ratios are 8.58, 12.02 and 15.46. The corresponding historical ratios are 6.91, 9.98 and 11.30. The current ratio is 18.09 based on a stock price of $28.57 and EPS estimate for 2025 of 1.58. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.64, 9.07 and 11.02. The corresponding 10 year ratios are 7.45, 10.45 and 13.11. The corresponding historical ratios are 8.12, 10.03 and 11.41. The current ratio is 15.04 based on a stock price of $28.57 and AEPS estimate for 2025 of 1.90. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $18.79. The 10-year low, median, and high median Price/Graham Price Ratios are 0.89, 1.24 and 1.63. The current P/GP Ratio is 1.52 based on a stock price of $28.57. 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 2.30. The current P/B Ratio is 3.46 based on a stock price of $28.57, Book Value of $457.4M and Book Value per Share of $8.26. The current ratio is 51% 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 7.42. The current P/CF Ratio is 11.41 based on Cash Flow per Share estimate for 2025 of $2.50, Cash Flow of $138.7M and a stock price of $28.57. The current ratio is 54% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 5.70%. The current dividend yield is 2.94% based on a stock price of $28.57 and dividends of $0.84. The current ratio is 48% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.03%. The current dividend yield is 2.94% based on a stock price of $28.57 and dividends of $0.84. The current ratio is 42% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The reason for quite high past dividend yields is that this stock used to be an Income Trust. Income Trust could pay much higher dividends than corporations could and so had high dividend yields. However, this company changed to a corporation in 2011, more than 10 years ago. On the other hand, old Income Trusts have had a hard time setting dividends at the right level.
The 10-year median Price/Sales (Revenue) Ratio is 0.23. The current P/S Ratio is 0.46. Based on a stock price of $28.57, Revenue estimate for 2025 of $3,429M and Revenue per Share of $61.91. The current ratio is 101% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is showing that the stock price is relatively expensive. The dividend yield tests are showing this. It is confirmed by the P/S Ratio test. The rest of the testing I have done says the same thing.
When I look at analysts’ recommendations, I find Strong Buy (5), and Buy (3). The consensus is a Strong Buy. The 12 month stock price is $33.62 with a high of $36.00 and low of $31.00. The consensus stock price of $33.62 implies a total return of 20.62% with 17.68% from capital gains and 2.94% from dividends based on a current stock price of $28.57.
A couple of analysts on Stock Chase point to this company’s small size. One analyst says that the company needs a bit more consistency in execution and meeting estimates. Sneha Nahata on Motley Fool says the stock is under $30 and a screaming buy. She says it is a solid long term buy. Amy Legate-Wolfe on Motley Fool says the company is Under-the-radar Canadian industrials that could reward patient investors. The company put out a Press Release about its fourth quarter 2024 results. The company put out a Press Release about its fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock. They do not like their inconsistency in dividends. They have one warning of Dividend of 3.05% is not well covered by free cash flows.
Bird Construction Inc. is a construction company operating from coast to coast and servicing all Canada's markets. It also provides vertical infrastructure, including electrical, mechanical, and specialty trades. Its web site is here Bird Construction Inc.
The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more on Friday, December 12, 2025 around 5 pm. Tomorrow on my other blog I will write about Secure Waste Infrastructure Corp.... learn more on Thursday, December 11, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures. Also, on my book blog I have put a review of the book On Democracies and Death Cults by Douglas Murray learn more...
No comments:
Post a Comment