GCG-A.TO  Guardian Capital Group Ltd

Exchange

TSX

Sector

Diversified Industries

Industry

Market Cap.

762.02M

Vuru Grade

70.04/100

Current Price

$27.47
+0.12 (+0.44%)

Growth Price

$35.47
Undervalued by 29.12%

Stability Price

$18.88
Overvalued by 31.25%

Company Metrics

  • P/E 11.54
  • P/S 5.19
  • P/B 1.25
  • EPS 2.38
  • Cash ROIC 3.94%
  • Cash Ratio -
  • Dividend 0.40 / 1.46 %
  • Avg. Vol. 5,180.00
  • Shares 27.74M
  • Market Cap. 762.02M

Company Description

Guardian Capital Group Limited, through its subsidiaries, operates as a diversified financial services company in Canada. The company provides various institutional investment management services to pension plan sponsors, open and closed-end funds and mutual funds, operating and endowment funds, wrap programs, group retirement plans, charitable organizations, and foundations; and investment and as... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

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Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for GCG-A.TO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate GCG-A.TO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$27.47 Current Price

$35.47 Growth Price (DCF)

Undervalued by 29.12%


Growth Rate Assumed by Market: -4.94%


Future Free Cash Flow Growth Rate: 14.7%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$18.88 Stability Price (EPV)

Overvalued by 31.25%


Discount Rate: 15.0%

$20.99 Book Price

Overvalued by 23.60%


Poor Cash Return on Invested Capital over the past 5 years

GCG-A.TO has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

GCG-A.TO has only created $3.94 of cash for every $100 invested.
Figures in CAD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 20.12M 24.18M 33.84M 29.75M 36.37M
divided by
Invested Capital 510.75M 645.06M 736.76M 804.60M 982.26M
Cash ROIC 3.94% 3.75% 4.59% 3.70% 3.70%

Poor Return on Equity over the past 5 years

GCG-A.TO has shown an inability to deliver strong results for shareholders. This could be due to poor management, GCG-A.TO operating in a highly competitive industry, or having a weak business in general.

GCG-A.TO has only generated $8.59 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in December
20122013201420152016
Net Income 22.56M 34.43M 37.02M 44.11M 69.48M
divided by
Stockholders' Equity 353.76M 414.99M 488.84M 504.26M 580.18M
Return on Equity 6.38% 8.30% 7.57% 8.75% 11.97%

Excellent Business Performance over the past 10 years

GCG-A.TO has been able to maintain profitability in good times and bad. This could mean GCG-A.TO has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

GCG-A.TO has created positive free cash flow for 9 or more of the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 17.39M 10.52M 10.44M 16.51M 19.06M 20.12M 24.18M 33.84M 29.75M 36.37M

Good Balance Sheet

GCG-A.TO's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 453.27M 311.13M 438.80M 462.39M 470.12M 510.75M 645.06M 736.76M 804.60M 982.26M
Current Liabilities - - - - - - - - - -
Total Liabilities 107.90M 95.51M 121.01M 131.80M 147.51M 157.00M 230.08M 247.92M 300.34M 402.09M
Stockholder' Equity 345.37M 215.62M 317.78M 330.59M 322.62M 353.76M 414.99M 488.84M 504.26M 580.18M
Current Ratio - - - - - - - - - -
TL-to-TA 0.24 0.31 0.28 0.29 0.31 0.31 0.36 0.34 0.37 0.41

Consistent Reinvestment of Profits over the past 10 years

GCG-A.TO has consistently retained profits. This may put GCG-A.TO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, GCG-A.TO can greatly improve their long-term economic picture.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 210.94M 202.51M 201.33M 199.98M 196.73M 231.04M 245.96M 269.75M 291.32M 327.67M
Retained Earnings Growth - -4.00% -0.58% -0.67% -1.62% 17.44% 6.46% 9.67% 7.99% 12.48%

Inconsistent Net Profit Margins over the past 10 years

GCG-A.TO potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$19.63 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 27.03M 7.94M 14.27M 15.08M 16.46M 22.56M 34.43M 37.02M 44.11M 69.48M
divided by
Revenue 73.55M 62.43M 107.19M 117.28M 128.25M 138.10M 163.01M 192.06M 214.06M 227.85M
Net Profit Margin 36.75% 12.72% 13.32% 12.85% 12.83% 16.33% 21.12% 19.27% 20.60% 30.49%

Weak Pricing Power over the past 10 years

GCG-A.TO is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that GCG-A.TO has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 73.55M 62.43M 107.19M 117.28M 128.25M 138.10M 163.01M 192.06M 214.06M 227.85M
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

GCG-A.TO has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that GCG-A.TO may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

9.99% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.53M 917,000.00 86,000.00 480,000.00 2.28M 3.78M 6.49M 4.24M 4.03M 6.15M
divided by
Net Income 27.03M 7.94M 14.27M 15.08M 16.46M 22.56M 34.43M 37.02M 44.11M 69.48M
Capital Expenditure Ratio 5.65% 11.55% 0.60% 3.18% 13.87% 16.76% 18.84% 11.45% 9.13% 8.84%

Very Strong Dividend History over the past 10 years

GCG-A.TO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests GCG-A.TO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 5.38M 5.91M 5.32M 4.95M 5.20M 5.39M 9.21M 7.25M 8.65M 9.74M
divided by
Shares Outstanding 39.69M 39.00M 35.21M 33.58M 32.96M 32.21M 34.93M 31.47M 30.87M 30.02M
Dividend Paid Per Share 0.13 0.15 0.15 0.15 0.16 0.17 0.26 0.23 0.28 0.32
Price at Year End 10.05 4.11 7.70 8.52 9.60 10.40 15.30 17.60 18.19 25.05
Dividend Yield 1.34% 3.66% 1.95% 1.72% 1.63% 1.60% 1.71% 1.30% 1.53% 1.28%

Strong History of Stock Buybacks over the past 10 years

GCG-A.TO has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 39.69M 39.00M 35.21M 33.58M 32.96M 32.21M 34.93M 31.47M 30.87M 30.02M
Stock Bought Back - 1.76% 10.76% 4.87% 1.87% 2.33% -7.78% 10.99% 1.96% 2.80%
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