Is it a good company at a reasonable price? I will continue to hold my shares in this company and wait and see what happens next. I do not generally sell companies just because they are overpriced. I think that since they are making changes to the company, it rises the risk level. It also seems overpriced currently.
I own this stock of Transcontinental Inc (TSX-TCL.A, OTC-TCLAF). This stock was a dividend growth stock when I bought it in 2015. It is was on the Canadian Dividend Aristocrats Index in 2015. It was on a number of dividend lists. However, it fell on hard times after 2008, but was recovering but then hit another low in 2019 and its recovery is uneven.
When I was updating my spreadsheet, I noticed the stock price went up in December. This was because the company sold its packaging business and will pay a special dividend to shareholders. They will now focus on their Retail Services and Printing and Educational Publishing businesses. See their announcement on their site. This is not the first time for the company to reinvent itself, but it has been in business since 1976.
Most the officers and directors I follow, including CEO and Chairman have not changed the number of shares that they own since 2023.
If you had invested in this company in December 2015, for $1,001.08 you would have bought 26 shares at $17.26 per share. In December 2025, after 10 years you would have received $557.09 in dividends. The stock would be worth $1,317.76. Your total return would have been $1,874.85. This would be a total return of 7.56% per year with 2.79% from capital gain and 4.77% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.26 | $1,001.08 | 58 | 10 | $557.09 | $1,317.76 | $1,874.85 |
The current dividend yield is moderate with dividend growth has stalled. The current dividend yield is moderate (2% to 4% ranges) at 3.91%. The 5, 10 and historical dividend yields are all moderate at 4.98%, 4.79% and 2.58%. the dividend yields jumped form under 2% to over 3% in 2009. It has been in the moderate range since, but in some years, it has been over 5%. The dividend increases stopped in 2020, although even before that dividend increases have varied a lot and some years there were none. Over the past 32 years, the dividends have increased 22 times and declined 1 time.
The Dividend Payout Ratios (DPR) are currently good. The DPR for 2025 for Earnings per Share (EPS) is good at 44% with 5 year coverage too high at 73%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 34% with 5 year coverage at 39%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 17% with 5 year coverage at 22%. The DPR for 2025 for Free Cash Flow (FCF) is too high at 65% with 5 year coverage at 46%. I have two FCF for 2025 of $254.70 and $245.60 and I am using the latter on.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 44.12% | 72.66% |
| AEPS | 34.75% | 39.32% |
| CFPS | 17.37% | 21.90% |
| FCF | 64.74% | 45.53% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.25 and currently at 0.22. The Intangible and Goodwill Ratios is getting quite high at .92 and currently somewhat better currently at 0.78. The Liquidity Ratio for 2025 is low at 1.29 and 1.29 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.68 and currently a little low at 1.49. The Debt Ratio for 2025 is good at 2.34 and 2.34 currently. The Leverage and Debt/Equity Ratios for 2025 are good at 1.74 and 0.74 and currently at 1.74 and 0.74.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.25 | 0.22 |
| Intang/GW | 0.92 | 0.78 |
| Liquidity | 1.29 | 1.29 |
| Liq. + CF | 1.68 | 1.49 |
| Debt Ratio | 2.34 | 2.34 |
| Leverage | 1.74 | 1.74 |
| D/E Ratio | 0.74 | 0.74 |
The Total Return per year is shown below for years of 5 to 37 to the end of 2025. 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. |
|---|---|---|---|---|---|
| 2020 | 5 | 0.11% | 7.10% | 2.07% | 5.04% |
| 2015 | 10 | 3.00% | 7.56% | 2.79% | 4.77% |
| 2010 | 15 | 0.48% | 7.03% | 2.37% | 4.67% |
| 2005 | 20 | 7.55% | 4.24% | 0.90% | 3.34% |
| 2000 | 25 | 9.19% | 7.71% | 4.01% | 3.70% |
| 1995 | 30 | 9.45% | 8.36% | 4.92% | 3.44% |
| 1990 | 35 | 8.31% | 12.82% | 8.29% | 4.53% |
| 1988 | 37 | 9.86% | 6.55% | 3.32% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.05, 11.08, and 13.12. The corresponding 10 year ratios are 8.06, 9.72 and 11.66. The corresponding historical ratios are 10.12, 12.63 and 14.69. The current ratio is 19.18 based on EPS estimate for 2026 of $1.20 and a stock price of $23.01. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. 19.18 is a rather high P/E Ratio for this type of company.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.34, 7.34 and 8.37. The corresponding 10 year ratios are 6.35, 7.40 and 8.46. The corresponding historical ratios are 7.17, 10.08 and 12.12. The current ratio is 19.18 based on AEPS estimate for 2026 of $1.20 and a stock price of $23.01. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $24.83. The 10-year low, median, and high median Price/Graham Price Ratios are 0.45, 0.55 and 0.67. The current ratio is 0.93 based on a stock price of $23.01. 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 10-year median Price/Book Value per Share Ratio of 0.88. The current ratio is 1.01 based on a Book Value of $1912.9M, Book Value per Share of $22.88 and a stock price $23.01. The current ratio is 14% 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 4.90. The current ratio is 8.85 based on Cash Flow per Share estimate for 2026 of $2.60 and a stock price of $23.01. The current ratio is 81% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.58%. The current ratio is 3.91% based on dividends of $0.90 and a stock price of $23.01. The current dividend yield is 52% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. Note that this test does not work well when dividends are flat.
I get a 10 year median dividend yield of 4.79%. The current ratio is 3.91% based on dividends of $0.90 and a stock price of $23.01. The current dividend yield is 18% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This stock price testing suggests that the stock price is relatively reasonable but above the median. Note that this test does not work well when dividends are flat.
The 10-year median Price/Sales (Revenue) Ratio is 0.55. The current P/S Ratio is 1.69 based on Revenue estimate for 2026 of $1,141M, Revenue per Share of $13.65 and a stock price of $23.01. The current ratio is 204% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. R
esults of stock price testing is that the stock price is probably relatively expensive. The Dividend Yield tests are saying it might be reasonable, but these are not good tests when the dividends are flat. Dividends go from growing to flat for a reason. The P/S Ratio test says that the stock price is expensive. Most of the rest of the testing is saying that the stock price is relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (2). The consensus is a Buy. The 12 month stock price consensus is $27.14 with a high of $29.00 and low of $24.00. The consensus 12 month stock price of $27.14 implies a total return of 21.86% with 17.95% from capital gains and 3.91% from dividends based on a current stock price of $23.01.
Analysts from 2023 to present have on Stock Chase Sell recommendations. What is interesting is that the stock price on this stock has risen from October 2023 to the present and it at a current high. Kay Ng on Motley Fool says this is a popular stock to buy. Jitendra Parashar on Motley Fool says to buy this stock if you are looking for a lifetime of dividend income. The company put out a press release via Globe Newswire about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and its dividend payments. Simply Wall Street has one warning out on this stock of Earnings are forecast to decline by an average of 33.6% per year for the next 3 years.
Transcontinental Inc operates in flexible packaging, retail marketing services, printing, and French-language educational publishing across Canada, the United States, Latin America, and the United Kingdom. Although note that the company has just sold its packaging business. Its web site is here Transcontinental Inc.
The last stock I wrote about was about was Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more. The next stock I will write about will be Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more on Monday, January 26, 2026 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.
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