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Companies, Andrews, Baldwin, Chesty, Digby, Erie And Essay

¶ … companies, Andrews, Baldwin, Chesty, Digby, Erie and Ferris. They vary in terms of overall sales, return on assets, market share, and productivity as well as their utilization shares, and S&P ratings (variable, with none in the A or top range). Andrews is the base business model, with sales of $327 m and a profit in the last fiscal year of $46.3 m, or about 14.2%. In general, if we use an overall rating system, we find that the ranking of the organizations in terms of profitability overall may be expressed as: Company

Sales

Profit

% Profit

Market

Millions

Millions

Share

Erie

Andrews

Chester

Baldwin

Digby

Ferris

Erie shows the largest profit as a percentage of sales, but Andrews is the clear market leader, with 21% market share and only slightly below .7% Erie in terms of profit percentage in relation to sales. In addition, Andrews has $131m more in profit, or about 65% more than Erie.

Stock Prices

The market is only confident for Andrews (BB), with small levels of confidence in Baldwin and Chester (CC) and low levels of confidence in Digby, Erie, and Ferris. Stock prices for the companies are as follows:

Company

Price

Notes

Andrews

$106.47

Strong ROE, BB Rating, high productivity rate (116%), positive free cash flow, and ratios show ability to pay dividends, and a more consistent profitability over time.

Erie

$85.78

Erie is healthy in terms of sales, assets, and equity, and is slightly undercapitalized (seasonality) with $1.5 million, or just over 2 months in working capital, but a productivity ratio of 105%. They can perhaps pay a small dividend, but are also rated at CCC, which means unlikely.

Digby

$74.54

Relatively high stock price with a ROS of 6.23%, high productivity at 106.4%, but a $5 million negative in free cash flow that moves to a CCC rating with low potential for dividends and a potentially problematical few quarters (less than 2 months of working capital).

Baldwin

$64.33

Baldwin is profitable in sales, has a small ROA and ROE, with a positive working capital and yet -$18 million in free cash flow, or just over 1 month. It is rated at CC, with 107% productivity, Unlikely to pay dividends of any substance.

Ferris

$42.29

While Ferris has a relatively strong productivity index of 108%, it is negative in ROS, ROA, and ROE. Ferris has 54 days of working capital, and yet a free cash flow %of -$18.5 m, small or no dividend likely

Chester

$38.22

Chester has a negative ROS and ROA/ROE, is the lowest of all in terms of productivity at 103.6%, and is -$20m in free cash flow, with only 6 weeks of working capital, again, low ability to pay dividends (CC Rating). Chester is the weakest in plant utilization, at 91% as well as overall market...

Over the past 6 years, their performance has been marginal, but bumped up a bit in year 8.
Stock Market Summation

We are given 8 years of stock market trends in which to analyze for the competitors. There will be several ways was can interpret this data. First, over the 8-year period, we see that in general, some of the firms were able to pay dividends on their stock, others were not. Andrews and Ferris were the most consistent firms in the payment of dividends over time, but not the highest, which was Baldwin. Hover, while Baldwin's average performance over 8 years was 3.5%, since they only paid dividends 50% of the time, the ROI for the average stakeholder was no consistently made: 50% of the time the investor sat on their money, and had they not waited through the total period, would have only made less than 2% on their investment.

Thus, the overview of the Dividend/Yield:

Company

Y1

Y2

Y3

Y4

Y5

Y6

Y7

Y8

Total Y Pd

Average

Andrews

Y

4.9%

Y

3.2%

Y

2.1%

Y

1.4%

Y

3.5%

Y

10.1%

6

3.15%

Baldwin

Y

8.6%

Y

4.5%

Y

.6%

Y

14%

4

3.5%

Chester

Y

2.4%

Y

5.6%

Y

12.4%

3

2.55%

Digby

Y

2.1%

Y

1.8%

Y

7%

3

1.36%

Erie

Y

2.4%

Y

1.3%

Y

3.1%

Y

5.6%

4

1.55%

Ferris

Y

8.7%

Y

3.3%

Y

.4%

Y

1.2%

Y

11.8%

5

3.18%

(Note: Averages are calculated over 8 years since a 0-year means no dividend performance and should thus be a negative).

Now, if we look at stock prices over time and then compare with dividends, we find the following:

Company

Stock Price Average ($)

EPS ($)

Avg.

Dividend Ave. (%)

Andrews

78.93

8.21

3.15

Baldwin

62.58

4.83

3.5

Chester

58.25

4.41

2.55

Digby

68.71

5.33

1.36

Erie

61.50

4.90

1.55

Ferris

50.94

3.03

3.18

When we look at stock prices and dividends, we must…

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