Why is CPX rated so low for dividend and growth?

I’m a bit surprised to see that CPX gets only a 2/5 for growth and 3/5 for its dividend. Both scores are below what you give for EMA and FTS, and of the three companies, CPX seems to have the best fundamentals. Its dividend is growing at a faster rate, its payout ratio is lower, its interest coverage on debt is much better, and its revenue growth rate is much higher over three and five years. The only obvious knock is the negative growth estimates for this year and next, which given every thing else is hard to understand. Can you explain?

Marked as spam

Asked on March 29, 2024 3:49 pm

45 views

▲

▼

✔

Private answer

Hey there,

So when it comes to growth - weightings are higher for growth rates, which is why you'll see it rank lower than EMA and FTS. There is also things to take into consideration like consistency in terms of revenue and earnings growth, of which FTS knocks them both out of the park. So there are many factors at play that leads to FTS having a higher growth score.

Similarly, FTS longevity of dividend growth given them a higher score in that area and they also get higher points for EPS streak. A lot of the other stuff in percentage wise is assigned points by 'range' so for example. Anything below 50% for payout ratio is assigned the same score - so whether you have 38% or 48% - you'll have the same amount of points. Why? Because we consider that safe. Points start to be lost when your payout ratio rises about 50%, 60% and so forth. Likewise, you might lose a point if your dividend growth rate slows, such as the case with CPX. So once again, several factors to consider as there a dozens of data points with different weightings assigned.

Mat

Marked as spam

Posted by Mathieu Litalien

Answered on April 1, 2024 7:45 am

« Back to Previous Page