I do not currently own this stock (TSX-CCL.B). This company is on the dividend lists that I follow. This is why I have done a spreadsheet on them. They are a good dividend paying company. Some may have a problem with the fact that this is a company with two classes of shares and the original family owns 94% of the votes.
What I do not like about this company is that insiders have more stock options than shares. This, unfortunately, is not uncommon, but it does not mean I have to like it. There is lots of insider selling to the tune of some $8M. However, to put this into perspective, it is less than 1% (.79%) of the market value of the company. There is no insider buying.
I get a 5 year median low P/E ratio of 11.6 and a 5 year median high P/E ratio of 14.8. So, on a relative basis the current one of 14.3 is high for this stock. The company is expected to earn a decent profit this year and the stock price has been rising. This is not a bad P/E ratio. The problem with this stock is that the earnings tend to fluctuate. When I look at the Graham price, I get one of $33.48 and this is some 8% higher than the current stock price of $30.77. Here again, there is a problem in that the earnings fluctuate, so the Graham Price has fluctuated a lot. Another point is that stock price is often lower than the Graham Price on this stock is.
When I look at the current yield of 2.1%, it is better than the 5 year average of 1.8%. The 10 year average yield is 2.1%. I get a Price/Book Value Ratio of 1.33 and I have a 10 year average P/B of 1.27. The 5 year average P/B is 1.42. So the current ratio is not far off the average. All of this point to the fact that the stock price is no bargain, but neither is it high.
When I look at what the analysts’ recommendations are, I find a Strong Buy, a Buy and a Hold. The consensus would be a Buy. (See my site for information on analyst ratings.) Analysts still seem to feel that the stock price can move up a bit more over the next year, but not by much. If you look at expected stock movement of approximately 4% and a 2% dividend, it would give you a total return over the next year of 6%. This is a little low for a total return. However, do not forget these are estimates and no one knows what the market can throw at us over the next year.
Currently, I plan to continue to track this stock as it is on the dividend stock lists that I follow. It would seem from all the above that if you are interested in this stock, it might be wise to wait for it to drop a bit before buying. But, here is another opinion from a recent Globe and Mail article.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
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