The Company Stock Description:
Today we are taking a closer look at a “smaller” company with an interesting value. Guardian Capital Group is a founder CEO company founded in 1962. Guardian is active in 2 segments:
– Investment management and financial advisory services (institutional)
– Financial services to domestic and international clients (retail)
They have 16.3 billion in assets under management as of December 31st 2010. Overall, it’s a small stock on an up trend:
Stock Graph
The Company Ratios and Financial Info:
Dividend Metrics:
– Current Dividend Yield: 1.54%
– 5 year Dividend Growth : 5.92%
– 1 year Dividend Growth : 6.66%
Company Metrics :
– Sales Growth (1yr): 9.25%
– Sales Growth (5yr): 6.09%
– P/E Ratio: 23.6
– Payout Ratio: 32.83%
– Return on Equity: 4.65%
– Debt to Capital Ratio: 0.14
Stock Metrics:
– Ticker: GCG (TSE)
– Price: $10.62
– Trading Volume: 91.533 (low volume)
– Trend (technical analysis): trading over its 200 days moving average
Upcoming opportunities and dangers:
I’ll tell you upfront what caught my attention: back in 2001, Guardian sold its mutual funds activities to BMO in exchange for 4.96 million of BMO shares. Therefore, holding Guardian is like holding a part of BMO at the same time. With the dividend payout generated by those shares, Guardian is sitting on a huge money making machine (they have received 3.7M$ in dividend income in the third quarter of 2010). It gives them great income stability allowing them to develop their segments of business.
The other thing I like about this company is that the founder (and important shareholder 😉 ) recently declared an estate freeze. In most cases, shareholders making an estate freeze prefer to pay taxes now and postpone taxes for their heirs. I think it could be another indication where the CEO thinks the best is yet to come.
Final Thoughts on Guardian
I don’t think Guardian is a stock for everyone. Since the trading volume is low, it could be subject to high fluctuations. Buying this stock is taking a bet that the CEO knows what he is doing while the BMO shares will continue to go up. If you don’t like BMO, I would rather stay away from Guardian too ;-).
Disclaimer: I don’t hold GCG
I like BMO very much! Therefore I will look at Guardian. Yield is a bit low and you would think the yield growth would be substancial?
I think you would be better off hoping for stock growth than dividend growth with this pick. I was just interested by the fact that the company owned so much BMO in their portfolio and that it was a CEO founder managing the company.