December 10, 2018

SPB Superior Plus Corp

 

Superior Plus Corporation (SPB) is a company that spans three main divisions.  Their main focus is maintaining the stability of their divided, and even though recent times have been a little rough on the stock, it still generates a considerable dividend yield.  The Energy Services segment of the company is involved in the distributions and wholesale procurement of propane and other heating fuels across Canada and parts of the USA.  The division also possesses some natural gas assets in British Columbia, Quebec and Ontario.  The Speciality Chemicals division focuses on the production of sodium chlorate and other chemicals used to make pulp and paper finished products.  They also do business in the fields of chloralkali and potassium-based products.  Finally, the third main division of Superior Plus is the Construction Products division.  They are a wholesale supplier of walls, insulation, and ceilings to the North American construction industry.

 

The last couple of years have been difficult ones for the company.  In 2011 warmer-than-average temperatures across North America negatively affected the energy supply division, and was a serious drag on overall profits.  After trading around the $14 dollar mark early in the year, the stock slid as far as $5.50 (it has since recovered considerably from these lows).  The negative stimulus that preceded this downfall was the slashing of the all-important divided.  A balance sheet that had too much in the debt column was the chief culprit for this refocused strategy.  Last year’s CEO Wayne Bingham reported, “We are intently focused on our debt and debt management and our capital structure,” he went onto say, “There is no plan to reduce the dividend, we are extremely comfortable with the 50% payout ratio.”  After these reassurances, the stock has now rebounded somewhat.  Superior Plus (SPB) recently named a new CEO and President.  On November 14, 2011 Luc Desjardins replaced Mr. Bingham and is set to take the reins going forward.

 

While Superior Plus clearly has some fundamental issues with its balance sheet, it just might be the stereotypical case of investors overreacting to a dividend cut at play.  The stock might offer substantial value at the current rate if you believe in the new management, and the general efficiency of the company.  The debt pay down has went as planned, and the company is now leveraged considerably less than before, even if the payout ratio to shareholders did suffer as a result.  The company would stand to benefit from higher natural gas prices, as well as a renewed interest in the American construction industry.  As long as those aspects of the economy stay well below their historical norms, it will be difficult for Superior Plus (SPB) to see much capital growth.

 

The stock most recently opened at $7.57.  Superior Plus has a fairly large market capitalization of around $825 million.  Even after it was reduced twice in the past year, the company’s annual dividend is still a solid $0.60.  This gives it a dividend yield of 7.9%.  Dividend investors who don’t mind a bit of risk could be amply rewarded with this stock going forward.

 

 SPB Superior Plus Corp Dividend Stock Graph:

TSE SPB

SPB Superior Plus Corp Trend Analysis:

SPB TrendSPB is trading on a strong uptrend, read the technical analysis here.

SPB Superior Plus Corp Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioINDUSTRY_SUBGROUPDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
SPBSuperior Plus Corp11.7510.21#VALUE!Retail-Propane Distrib0.997642-8.296323-4.320991