Is it a good company at a reasonable price? Shares are up 18% after a decline of 24% in 2024. There is a takeover in progress that offers shareholders cash and equity in the takeover company. The company is testing at a current reasonable price with lots of tests showing that the stock price is currently cheap. That is interesting. However, the current company has too much debt.
I do not own this stock of Parkland Fuel Corp (TSX-PKI, OTC-PKIUF). I decided to do a spreadsheet on this stock as it was a stock recommended by Roger Conrad in Money Show 2013.
When I was updating my spreadsheet, I noticed that Revenue, Earnings and Cash Flow all went down in 2024 from 2023. Revenue is down 13%. Adjusted Earnings is down 35%. EPS is down 73% and Cash Flow is down 14%. The first quarter of 2025 was a mixed bag, but analysts expect Revenue, Earnings and Cash Flow all to pick this this year or next.
The shareholders have voted for the company to be taken over by Sunoco LP. See article on CTV News. The deal is cash and equity. See article on Parkland site.
If you had invested in this company in December 2014, for $1,000.04 you would have bought 46 shares at $21.74 per share. In December 2024, after 10 years you would have received $549.40 in dividends. The stock would be worth $1,495.46. Your total return would have been $2,044.86. This would be a total return of 8.72% per year with 4.11% from capital gain and 4.61% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $21.74 | $1,000.04 | 46 | 10 | $549.40 | $1,495.46 | $2,044.86 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.77%. The 5, 10 and historical dividend yields are also moderate and all at 3.50%. The dividend growth is low (below 8% per year) at 3.2% per year over the past 5 years. The last dividend increase was low at 2.9%. This increase occurred in 2025.
The Dividend Payout Ratios (DPR) are fine, but lower would be better. The DPR for 2024 for Earnings per Share (EPS) is far too high at 193% with 5 year coverage at 97%. The DPR for 2024 for Distributable Cash Flow (DCF) is good at 44% with 5 year coverage at 32%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is fine at 61% with 5 year coverage at 67%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 17% with 5 year coverage at 16%. The DPR for 2024 for Free Cash Flow (FCF) is fine at 50% with 5 year coverage at 29%. However, there is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 193.06% | 96.76% |
| DCF | 43.57% | 31.88% |
| AEPS | 60.70% | 66.69% |
| CFPS | 16.79% | 15.93% |
| FCF | 49.59% | 28.87% |
Debt Ratios are showing that the debt level is too high. The Long Term Debt/Market Cap Ratio for 2024 is too high at 1.13 and currently at 0.96. The Liquidity Ratio for 2024 is too low at 1.32 and 1.34 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.71 and currently at 1.72. The Debt Ratio for 2024 is too low at 1.29 and 1.29 currently. I like to see this ratio at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2024 are far too high at 4.44 and 3.44 and currently at 4.42 and 3.42.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.13 | 0.96 |
| Intang/GW | 0.63 | 0.53 |
| Liquidity | 1.32 | 1.34 |
| Liq. + CF | 1.71 | 1.72 |
| Debt Ratio | 1.29 | 1.29 |
| Leverage | 4.44 | 4.42 |
| D/E Ratio | 3.44 | 3.42 |
The Total Return per year is shown below for years of 5 to 36 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 | 3.17% | -4.32% | -7.38% | 3.06% |
| 2014 | 10 | 2.80% | 8.72% | 4.11% | 4.61% |
| 2009 | 15 | 0.66% | 12.19% | 6.09% | 6.11% |
| 2004 | 20 | 4.53% | 18.33% | 7.78% | 10.55% |
| 1999 | 25 | 17.44% | 17.39% | 8.30% | 9.09% |
| 1994 | 30 | 15.89% | 15.69% | 8.78% | 6.90% |
| 1989 | 35 | 13.47% | 12.46% | 7.68% | 4.78% |
| 1988 | 36 | 13.07% | 12.95% | 8.10% | 4.86% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 37.02, 55.22 and 66.43. The corresponding 10 year ratios are 35.65, 46.37 and 53.20. The corresponding historical ratios are 10.80, 13.91 and 17.00. The current P/E Ratio is 15.53 based on a stock price of $38.24 and EPS estimate for 2025 of $2.46. The P/E Ratios for this company are very high, but 15.53 is a reasonable ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.48, 15.82 and 18.16. The corresponding 10 year ratios are 16.00, 20.56 and 25.44. The corresponding historical ratios are 13.84, 17.36 and 20.26. The current P/AEPS Ratio is 10.71 based on a stock price of $38.24 and AEPS estimate for 2025 of $3.57. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have Distributable Cash Flow (DCF) data. The 5-year low, median, and high median Price/ Distributable Cash Flow Ratios are 6.19, 8.93 and 10.25. The corresponding 10 year ratios are 8.77, 11.18 and 14.78. The corresponding historical ratios are 7.98, 9.47 and 10.63. The current P/DCF Ratio is 9.51 based on a stock price of $38.24 and DCF estimate for 2025 of $4.02. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $38.15. The 10-year low, median, and high median Price/Graham Price Ratios are 1.27, 1.62 and 1.97. The current ratio is 1.00 based on a stock price of $38.24. 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 2.70. The current ratio is 2.11 based on a stock price of $38.24, Book Value of $3,159M and Book Value per Share of $18.12. The current ratio is 22% 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 6.74. The current P/CF Ratio is 4.46 based on Cash Flow per Share estimate for 2025 of $8.58, Cash Flow of $1,496M and a stock price of $38.24. The current ratio is 34% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.50%. The current dividend yield is $3.77% based on a stock price of $38.24 and dividends of $1.44. The current ratio is 8% 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 also of 3.50%. The current dividend yield is $3.77% based on a stock price of $38.24 and dividends of $1.44. The current ratio is 8% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. There is the problem with this test of recent dividend cuts and this test works best for dividend growth stocks, but it is a negative when dividends are cut.
The 10-year median Price/Sales (Revenue) Ratio is 0.33. The current ratio is 0.23 based on a stock price of $38.24, Revenue estimate for 2025 of $28,577M, and Revenue per Share of $163.88. The current ratio 30% 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 reasonable. The dividend yield tests say this. However, the P/S Ratio test says it is cheap. It is surprising how many tests are saying that the stock price is relatively cheap, but the stock is being bought out.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2), Hold (3), Sell (1). The consensus would be a Hold. The 12 months stock price consensus is $43.10 with a high of $45.00 and low of $41.00. The 12 month stock price consensus implies a total return of 16.47% with 12.71% from capital gains and 3.77% from dividends.
Analysts on Stock Chase generally do not like this company. Some say there is a takeover offer currently for $44. Amy Legate-Wolfe on Motley Fool thought this company was a buy in March 2025. The company put out a Press Release for the fourth quarter of 2024. The company put out a Press Release about the first quarter of 2025.
Simply Wall Street had four warnings on this stock of interest payments are not well covered by earnings; large one-off items impacting financial results; profit margins (0.7%) are lower than last year (1.2%); and dividend of 3.79% is not well covered by earnings.
Parkland Corp is a fuel distributor, marketer, and convenience retailer, with operations in countries across the Americas. Parkland delivers refined fuels, propane, and other high-quality petroleum products to motorists, businesses, consumers, and wholesale customers across the Americas. The company’s operating segments include: Canada, International, USA, Refining, and Corporate. It derives maximum revenue from Canada segment. Its web site is here Parkland Fuel Corp.
The last stock I wrote about was about was CI Financial Corp (TSX-CIX, NYSE-CIXX) … learn more. The next stock I will write about will be Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF) … learn more on Monday, June 30, 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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