Tuesday, September 5, 2017

Alimentation Couche-Tard Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Price is probably reasonable. It is only cheap using the dividend yield method. See my spreadsheet on Alimentation Couche-Tard Inc.

I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I once did. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

In updating the spreadsheet what is noticeable is that all the growth figures are green. For example EPS has increase by 20.6% and 21.1% per year over the past 5 and 10 years. CFPS is up by 21.6% and 18.5% per year over the past 5 and 10 years. Book Value has grown by 21.2% and 18.8% per year over the past 5 and 10 years. All the figures are in US$ as this company reports in US$.

There is not much difference in the outstanding shares so you can look at both say Revenue and Revenue per Share. Shares have increased by 1.14% per year over the past 5 years and decreased by 0.65% per year over the past 10 years. This is a bit of difference as Revenue has grown by 10.51% and 12.11% per year over the past 5 and 10 years. Revenue per Share has grown by 9.27% and 12.85% per year over the past 5 and 10 years. All these are still good growth figures.

One thing to be cautious about is that the Liquidity Ratios tend to be low. The ratio for 2017 (annual report date is April 2017) is 0.98 with a 5 year median of 1.08. That means that the current assets cannot cover the current liabilities. If you add in Cash Flow after dividends this ratio is 1.52 with a 5 year mean of 1.72. So they rely on cash flow to cover current liabilities. This could be looked at as a vulnerability.

Dividends are really low this stock. The current dividend yield is 0.60%. However, the dividend increases are good with the past 5 and 10 years of growth at 29.6% and 24.8% per year over the past 5 and 10 years. The last dividend increase was in 2017 and it was for 16.1%.

This would be a good stock for people building a portfolio in a trading account. Dividends are low so your taxes would be low. At retirement you could sell it for a stock that pays a higher dividend yield and double or triple your income.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.93, 20.44 and 23.86. The 10 year corresponding ratios are 12.26, 15.95 and 19.64. The historical ones are 12.79, 18.12 and 21.50. The current P/E Ratio is 17.16 based on a stock price of $59.74 and 2017 EPS estimate of $3.48 CDN$ ($2.81 US$). This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $33.35. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81 based on CDN$. The current P/GP Ratio is 1.79 based on a stock price of $59.74 CDN$. This stock price testing suggests that the stock price is reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.88. The current P/B Ratio is 4.21 based on Book Value of $8,069M, BVPS of $$14.19 and a stock price of $59.74 CDN$. The current P/B Ratio is some 46% higher than the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 0.58% CDN$. The current dividend yield is 0.60% based on dividends of $0.36 CDN$ and a stock price of $59.74 CDN$. The current dividend yield is 3.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio Close is 0.33 in US$. The current P/S Ratio is 0.58 in US$ based on 2017 Revenue estimate of $47,225M US$, Revenue per Share of $67.64 US$ and a stock price of $48.19 US$. The current P/S Ratio is some 78% higher than the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (11) and Hold (1). Most are Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price consensus is $59.04US$ OR $73.15 CDN$. This implies a total return of 23.05% with 22.45% from capital gains and 0.60% from dividends.

Chris MacDonald of Motley Fool likes this stock and the recent dividend raise. Felix Olson on Simple Wall Street talks about this company's good ROE. The Herald Staff give a technical view of this stock on The Hiram Herald. See what analysts are saying about this stock on Stock Chase. They generally like this stock.

Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard Inc.

The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more. The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Wednesday, September 06, 2017 around 5 pm. Today on my other blog I will write about Dividend Stocks September 2017... learn more on Tuesday, September 5, 2017 around 5 pm

This blog is meant for educational purposes only, and is not to provide investment advice. 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 website for stocks followed and investment notes. 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 or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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