Is it a good company at a reasonable price? I was trying out this stock. I still believe in it and I am keeping it, but currently not buying anything more. I am no longer putting anything into my RSP accounts. It is my RSP accounts because the dividend payments are classified as interest payments. It would seem that this stock is selling at a relatively cheap price.
I own this stock of Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). I saw this on company on the Canadian Dividend All-Star List. It has only been around since 2012 and has good dividends. It has just recently started to pay dividends and dividends are good but are taxed as income.
When I was updating my spreadsheet, I noticed all the leadership team and the Chairman bought shares in the past year. I have owned this stock for 7 years and I have made a total return of 8.88% with a capital loss of 0.99% and interest payments of 9.87%. Note that dividends are considered to be interest payments, so this stock is best held in your RSP or TFSA.
If you had invested in this company in December 2014, for $1,005.30 you would have bought 90 shares at $11.17 per share. In December 2024, after 10 years you would have received $889.50 in dividends. The stock would be worth $981.90. Your total return would have been $1,871.40. This would be a total return of 8.57% per year with 0.24% from capital loss and 8.80% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.17 | $1,005.30 | 90 | 10 | $889.50 | $981.90 | $1,871.40 |
The current dividend yield is high with dividend growth low. The current dividend yield is high (7% and above) at 8.64%. If you include the special dividend for 2025 the yield is 10.12%. This company has been issuing special dividends each year. The 5, 10 and historical dividend yields are high at 7.99%, 7.25 and 7.24%. If you include special dividends the 5, 10 and historical dividend yields are high at 8.86%, 7.95 and 7.77%. The dividend growth is 0% for the last 5 years for the regular dividends. However, if we look at all dividends paid, the dividend growth is low (less than 8% per year) at 4.8% per year. Note that the dividends are taxed as interest payments.
Note that total dividends have gone both up and down. In the past 11 years, total dividends have gone up 9 times and down 2 times. Total dividends, so far for 2025 have gone down 8.4%. Note the Special Dividend paid each year depending on how well the company did the previous year.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is too high at 114% with 5 year coverage at 100%. However, if you look at the dividends paid in cash, the DPR is 96% and with 5 year coverage at 87%. The DPR for 2024 for Cash Flow per Share (CFPS) is high at 50% with 5 year coverage at 62%. The DPR for 2024 for Free Cash Flow 1 (FCF 1) is good at 49% with 5 year coverage fine at 69%. The DPR for 2024 for Free Cash Flow 1 (FCF 1) is fine at 51% with 5 year coverage at 70%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 114.42% | 100.19% |
| Tot Div | 95.95% | 87.23% |
| CFPS | 50.00% | 61.99% |
| FCF 1 | 49.38% | 69.23% |
| FCF 2 | 51.10% | 70.00% |
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Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is fine at 0.64 and currently at 0.64. The Liquidity Ratio for 2024 is good at 1.61 and 1.61 currently. The Debt Ratio for 2024 is good at 2.49 and 2.49 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.67 and 0.67 and currently at 1.67 and 0.37.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.64 | 0.64 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.61 | 1.61 |
| Liq. + CF | 4.00 | 4.94 |
| Debt Ratio | 2.49 | 2.49 |
| Leverage | 1.67 | 1.67 |
| D/E Ratio | 0.67 | 0.67 |
The Total Return per year is shown below for years of 5 to 13 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 | 4.83% | 2.39% | -5.53% | 7.92% |
| 2014 | 10 | 3.20% | 8.57% | -0.24% | 8.80% |
| 2009 | 13 | 4.50% | 7.11% | 1.34% | 5.77% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.69. 11.52 and 13.64. The corresponding 10 year ratios are 11.37, 12.37 and 13.56. The corresponding historical ratios are 11.65, 12.40 and 13.47. The current ratio is 10.56 based on a stock price of $10.77 and EPS estimate for 2025 of $1.02. The current ratio is below the low ratio of 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $15.86. The 10-year low, median, and high median Price/Graham Price Ratios are 0.73, 0.79 and 0.87. The current P/GP Ratio is 0.68 based on a stock price of $10.77. The current 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 1.14. The current ratio is 0.98 based on a stock price of $10.77, Book Value of $517M and Book Value per Share of $10.96. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2025 of $11.00. This implies a book Value of $519M and a ratio of 0.98 based on a stock price of $10.77. This ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.77. The current P/CF Ratio is 7.46 based on Cash Flow for the last 12 months of $68.1M, Cash Flow per Share of $1.44 and a stock price of $10.77. The current ratio is 24% 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 7.25%. The current dividend is 8.64% based on dividends of $0.93 and a stock price of $10.77. This dividend yield is 19% 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 7.24%. The current dividend is 8.64% based on dividends of $0.93 and a stock price of $10.77. This dividend yield is 19% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 7.77% for the dividend and special dividends paid. The current dividend is 10.12% based on dividends of $0.93, special dividend for 2025 of $0.16 and a stock price of $10.77. This dividend yield is 30% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 7.95% for the dividend and special dividends paid. The current dividend is 10.12% based on dividends of $0.93, special dividend for 2025 of $0.16 and a stock price of $10.77. This dividend yield is 27% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 7.48. The current P/S Ratio is 5.66 based on Revenue estimate for 2025 of $89.75, Revenue per Share of $1.90 and a stock price of $10.77. The current ratio is 24% 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 probably cheap. I looked dividend yield testing using both the current dividend and the current dividend and current special dividends. I did this because they are paying a special dividend each year. The dividend yield tests say that the stock price is reasonable but below the median, but when I add in the current special dividend, the tests say the stock price is cheap. The P/S Ratio testing is saying that the stock price is relatively cheap. Most of the rest of the testing is saying that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (2) only. The consensus would be a Strong Buy. The 12 month stock price consensus is $12.89 with a high of $13.00 and low of $12.78. The current consensus stock price of $12.89 implies a total return of 29.81% with 19.68% from capital gains and 10.12% from dividends.
There is only one entry on Stock Chase for this stock. It is a Top Pick and the analyst says it is not well followed. Christopher Liew onMotley Fool says to buy because it is low risk, 2024 was a very successful year and they have monthly dividends with a special dividend depending on its financial performance. Amy Legate-Wolfe on Motley Fool says it is a good time to buy because the stock is down. The company put out a press release via Globe and Mail about their fourth quarter of 2024 results.
Simply Wall Street via Yahoo Finance reviews this stock and think it is undervalued. They say a fair value of $14.74. They have two warnings out on this stock of unstable dividend track record; and has a high level of debt. They do not understand the dividend payments of monthly dividends and a special one after the year end depending on how well the company did.
Atrium Mortgage Investment Corp is a mortgage investment corporation in Canada. The company is a provider of financing solutions to commercial real estate and development communities in urban centers in Ontario and Western Canada. The company generates its revenue from mortgage interest and fees and rental income. Its web site is here Atrium Mortgage Investment Corp.
The last stock I wrote about was about was Hydro One Ltd (TSX-H, OTC-HRNNF) … learn more. The next stock I will write about will be Manulife Financial Corp (TSX-MFC, NYSE-MFC) … learn more on Friday, March 28, 2025 around 5 pm. Tomorrow on my other blog I will write about Study Supports 100% Equity Investing … learn more on Thursday, March 27, 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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