Tuesday, November 29, 2016

Recent Purchase

    High Liner Foods Incorporated (HLF) is a Canadian company that is involved in the processing and marketing of prepared and packaged frozen seafood. Some of the company's retail branded products are sold in Canada, United States and Mexico. These brands of products consist of names such as High Liner, Fisher Boy, Mirabel,  and Sea Cuisine.  High Liner Foods offers its products to restaurants, institutions, food retailers and food service distributors under Icelandic Seafood  and FPI brands. The Canadian business includes 100 individual products sold under the brand High Liner.

 Information about Financials

    High Liner Foods Inc Revenue grew from $260.4 million in 2005 to $1.002 billion in 2015. This represents a CAGR = 14.43% over 10 years.

     HLF had earnings per share (EPS) has grown from an -3.93 in 2005 to $0.96 EPS in 2015.  The 2015 of EPS is after a 2:1 stock split on May 30, 2014.

   The Interest Coverage Ratio is ratio that is used to determine how easily a company is able to pay its debt. The interest coverage ratio is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense over the same period.  HLF had an  interest expense in 2015  $16,102,000 and  EBIT of $36,310,000.  Therefore the interest coverage ratio is 2.25.  With an interest coverage ratio below 2.5, the company should not take on more debt and try to increase its earnings or pay down its debt some.

   HLF paid a dividend of $0.465 per share in 2005. The stock had a 2:1 stock split on May 30, 2014. Therefore on a split adjusted basis, HLF paid a dividend of  $0.2325. In 2016, HLF will pay an annual dividend of $0.56.  This represents a CAGR of 8.32% over 11 years.


    As people are encouraged to add more seafood in their diets for a variety of reasons such as Omega 3 fatty acids, along with increase in population, the demand for their product should continue. Although people would prefer fresh fish, it is not always convenient as we live busy lives.

    On Nov 23, I purchased 50 shares of HLF at $19.99 per share for a total cost $1004.62 including commissions.  Currently, HLF pays an annual dividend of $0.56 per share. The yield on cost of these shares is  2.79%.  This purchase of 50 shares increases my annual dividend income by $28.00.  

    HLF is set to pay a dividend on December 15 and the record date is December 1. The ex-dividend date is therefore November 28. As my shares were purchased prior to the ex-dividend date, I will receive the dividend on December 15.

    I will update my investment tab spread sheet in early December with purchase.

Disclosure : Long HLF

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

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