Is it a good company at a reasonable price? This stock has a very high dividend and most of the money earned will probably be in dividends. This is a smallish company and I bought it for my Tax Free Savings Account with my fooling around money. I do not have much of this company and I plan to hold on to the shares I have. They do say that they will adjust the dividends each year depending on what they feel they can pay, so they probably do not look at the decrease in dividends in 2020 as a decrease, but as an adjustment. Most of my testing is pointing to the stock price as being cheap.
I own this stock of Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF). This is a stock that Dividends in Hand Blogger had bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest. The Blogger Dividends in Hand sold his position in this company in April 29, 2020.
When I was updating my spreadsheet, I noticed I have had this stock for 7.7 years and I have made a total return of 8.16% with 0.78% from capital gains and 7.38% from dividends. This is a stock in the Tax Free Account which I bought with fooling around money.
They had high EPS this year, but the increase was due to Foreign Exchange, and also on the gain on a subsidiary it no longer includes in their accounts. These are unlikely to be repeated in other years. The gain on foreign Exchange last year was $2.5M, but was $80.8M this year.
I notice that every officer and director that I follow, included CEO or Chairman, have increased their shares over the past year. This is seldom seen.
If you had invested in this company in December 2014, for $1,025.44 you would have bought 29 shares at $35.36 per share. In December 2024, after 10 years you would have received $421.01 in dividends. The stock would be worth $555.35. Your total return would have been $976.36. This would be a total loss of 0.61% per year with 5.95% from capital loss and 5.34% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $35.36 | $1,025.44 | 29 | 10 | $421.01 | $555.35 | $976.36 |
The current dividend yield is high with dividend growth restarted, sort of. The current dividend yield is high (7% and higher) at 7.71%. The 5, 10 and historical median dividend yields are also high at 7.69%, 7.68% and 7.57%. Dividends are down over the past 5 years by 3.8% per year. Dividends were cut in 2020 by 30%. Over the past 15 years, dividends were increased 11 times and decreased 2 times. The rest of the time they were flat. Dividends were increase in year 2021 to 2023, but not since. The last dividend increase was in 2023 and it was for 3.03%.
The Dividend Payout Ratios (DPR) are probably fine. The DPR for 2024 for Earnings per Share (EPS) is good at 27% with 5 year coverage at 45%. The DPR for 2024 for Cash Flow per Share (CFPS) is high at 101% with 5 year coverage fine at 49%. The DPR for 2024 for Free Cash Flow (FCF) is too high at 160% with 5 year coverage still high at 62%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 26.77% | 44.51% |
| CFPS | 101.14% | 48.50% |
| FCF | 160.00% | 62.16% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.07 and currently at 0.08. The Liquidity Ratio for 2024 is good at 2.49 and 2.49 currently. The Debt Ratio for 2024 is good at 12.28 and 12.28 currently. This ratio is high because they got rid of their debt. The Leverage and Debt/Equity Ratios for 2024 are good at 1.09 and 0.09 and currently at 1.09 and 0.09.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.07 | 0.08 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 2.49 | 2.49 |
| Liq. + CF | 2.38 | 4.55 |
| Liq. + CF+D | 2.60 | 2.93 |
| Debt Ratio | 12.28 | 12.28 |
| Leverage | 1.09 | 1.09 |
| D/E Ratio | 0.09 | 0.09 |
The Total Return per year is shown below for years of 5 to 17 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 | -3.79% | 3.50% | -2.67% | 6.18% |
| 2014 | 10 | -0.77% | -0.61% | -5.95% | 5.34% |
| 2009 | 15 | 2.14% | 16.22% | 5.05% | 11.17% |
| 2006 | 17 | 12.77% | 3.90% | 8.88% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.73, 5.67 and 6.60. The corresponding 10 year ratios are 9.92, 12.40 and 14.88. The corresponding historical ratios are 9.93, 13.54 and 15.97. The current P/E Ratio is 8.28 based on a stock price of $17.64 and EPS estimate for 2025 of $2.13. 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 $34.02. The 10-year low, median, and high median Price/Graham Price Ratios are 0.55, 0.82 and 0.98. The current ratio is 0.52 based on a stock price of $17.65. 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 10-year median Price/Book Value per Share Ratio of 1.04. The current ratio is 0.73 based on a Book Value of $1,102M, Book Value per share of $24.15 and a stock price of $17.65. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2025 of $25.15. This implies a ratio of 0.70 based on a stock price of $17.65 and Book Value of $1,147M. This ratio is 33% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.06. The current ratio is 7.13 based on Cash Flow per Share estimate for 2025 of $2.48, Cash Flow of $112.9M and a stock price of $17.65. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 7.57%. The current dividend yield is 7.71% based on dividends of $1.36 and a stock price of $17.65. The current ratio is 1.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 7.68%. The current dividend yield is 7.71% based on dividends of $1.36 and a stock price of $17.65. The current ratio is 0.4% above the 10 year 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 is 5.71. The current ratio is 4.18 based on a stock price of 17.65, Revenue estimate for 2025 of $192.5M and Revenue per Share $4.22. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is testing reasonable, but could be cheap. Both the dividend yield testing is saying that the stock price is reasonable, but dividends have been cut recently. (However, dividends cuts are never good.) The P/S Ratio test is saying that the stock price is cheap, so it might be. The rest of the testing is also saying that the stock price is cheap.
When I look at analysts’ recommendations, I find Strong Buy (2), and Buy (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $25.85, with a high of $27.50 and low of $24.00. The consensus stock price of $25.85 implies a total return of 54.25% with 46.54% from capital gains and 7.71% from dividends based on a current stock price of $17.64.
Last year when I looked at analysts’ recommendations, I found Strong Buy (2), Buy (3) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $21.00 with a high of $24.50 and a low of $18.00. The consensus price of $21.00 implies a total return of 33.81% with 25.67% from capital gains and 8.14% from dividends based on a stock price of $16.71. What happened was 12 month stock price of $17.64 which was a total return of 13.71% with 5.57% from capital gains and 8.14% from dividends.
The only entry for this year on Stock Chase is a Do Not Buy because analyst did not like the fact that they payout most of the profit in distributions. Last entries were more positive and were mostly buys. Aditya Raghunath on Motley Fool says to invest in this cash generating stock. Adam Othman on Motley Fool thinks this stock is a screaming buy. The company put out a press release via Globe Newswire about their fourth quarter results for 2024.
Simply Wall Street via Yahoo Finance says this stock is in the Top 3 of TSX Dividend Stocks. Simply Wall Street has 2 warnings of earnings are forecast to decline by an average of 46.3% per year for the next 3 years; and dividend of 7.87% is not well covered by free cash flows.
Alaris Equity Partners Income Trust is an open-ended trust. The Trust, through its subsidiaries, indirectly provides alternative financing to private companies (Partners) in exchange for distributions with the principal objective of generating stable and predictable cash flows for payment of distributions to unitholders of the Trust. Its web site is here Alaris Equity Partners Income Trust.
The last stock I wrote about was about was Sun Life Financial Inc (TSX-SLF, NYSE-SLF) … learn more. The next stock I will write about will be Supremex Inc (TSX-SXP, OTC-SUMXF) … learn more on Monday, April 14, 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.
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