TMX Group Ltd
Is it a good company at a reasonable price? This company has been performing well for shareholders. It is a dividend growth stock as I like. However, it is currently testing as relatively expensive.
I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I looked at this stock in 2008 after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks.
When I was updating my spreadsheet, I noticed they have well for their shareholders giving good dividend raises and the stock price has gone up with rising Revenue and Earnings.
If you had invested in this company in December 2014, for $1,001.88 you would have bought 99 shares at $10.12 per share. In December 2024, after 10 years you would have received $519.95 in dividends. The stock would be worth $4,383.72. Your total return would have been $4,903.67. This would be a total return of 18.51% per year with 15.91% from capital gain and 2.61% from dividends. This calculation takes into consideration stock splits, which means that the original cost would be lowered by these splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $10.12 | $1,001.88 | 99 | 10 | $519.95 | $4,383.72 | $4,903.67 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.45%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 2.35%, 2.56% and 2.78%. The dividend increases are moderate (8% to 14% ranges) at 8.6% per year over the past 5 years. The last dividend increase was for 5.3%. and it was in 2025. Dividend increases have been tracking lower since 2021 when the increase year over year was 10.66%.
The Dividend Payout Ratios (DPR) are good. The current dividend yield is low with dividend growth moderate. The DPR for 2024 for Earnings per Share (EPS) is good at 43% with 5 year coverage at 46%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 44% with 5 year coverage at 46%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 26% with 5 year coverage at 29%. The DPR for 2024 for Free Cash Flow (FCF) is good at 40% with 5 year coverage at 45%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 43.35% | 45.85% |
| AEPS | 44.12% | 45.57% |
| CFPS | 25.73% | 28.62% |
| FCF | 40.72% | 44.64% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.15 and currently at 0.12. The Liquidity Ratio for 2024 is low at 1.01 and 1.01 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.02 and currently at 1.02. The Debt Ratio for 2024 is fine for a financial at 1.14 and 1.10 currently.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.15 | 0.12 |
| Intang/GW | 0.41 | 0.48 |
| Liquidity | 1.01 | 1.01 |
| Liq. + CF | 1.02 | 1.02 |
| Debt Ratio | 1.14 | 1.10 |
The Total Return per year is shown below for years of 5 to 22 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 8.62% | 16.72% | 14.51% | 2.21% |
| 2013 | 10 | 8.89% | 18.51% | 15.91% | 2.61% |
| 2008 | 15 | 6.21% | 16.36% | 13.50% | 2.86% |
| 2003 | 20 | 9.78% | 13.98% | 11.13% | 2.85% |
| 2002 | 22 | 11.96% | 21.19% | 14.79% | 6.40% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 18.11, 22.17 and 23.71. The corresponding 10 year ratios are 14.85, 18.62 and 23.71. The corresponding historical ratios are 17.35, 21.74 and 24.79. The current P/E Ratio is 32.20 based on a stock price of $55.26 and EPS estimate for 2025 of $1.72. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 17.27, 19.66 and 21.95. The corresponding 10 year ratios are 15.57, 18.59 and 19.99. The corresponding historical ratios are 14.53, 17.06 and 19.68. The current P/AEPS Ratio is 28.19 based on a stock price of $55.26 and AEPS estimate for 2025 of $1.96. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $27.23. The 10-year low, median, and high median Price/Graham Price Ratios are 0.93, 1.22 And 1.35. The current P/GP Ratio is 2.03 based on a stock price of $55.26. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.66. The current P/B Ratio is 3.29 based on a Book Value of $4,670M, Book Value per Share of $16.81 and a stock price of $55.26. The current ratio is 98% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2025 of $17.86. This implies a ratio of 3.09 based on a stock price of $55.26 and Book Value of $4,925M. This ratio is 86% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 15.43. The current P/CF Ratio is 22.29 based on a stock price of $55.26, Cash Flow per Share estimate for 2025 of $2.48 and a Cash Flow of $689M. The current ratio is 45% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.78%. The current dividend yield is 1.45% based on dividends of $0.80 and a stock price of $55.26. The current dividend yield is 48% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 2.56%. The current dividend yield is 1.45% based on dividends of $0.80 and a stock price of $55.26. The current dividend yield is 43% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 6.98. The current P/S Ratio is 9.30 based on Revenue estimate for 2025 of $1,650M, Revenue per Share of $5.94 and a stock price of $55.26. The current ratio is 33% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably relatively expensive. The dividend yield tests are saying that. It is confirmed by the P/S Ratio test. All the tests are saying the same thing.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (1), and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $56.62 with a high of $59.00 and low of $54.00. The consensus stock price of $56.62 implies a total return of 3.91% with 2.46% from capital gains and 1.45% from dividends.
Analysts like this stock on Stock Chase. They do rate it a buy, but the last entry says that the stock is not cheap. Amy Legate-Wolfe on Motley Fool says this is a good stock to buy for life. Brian Paradza on Motley Fool says this is one of his favourite financial stocks. The company put out a Press Release about its fourth quarter of 2024. The company put out a Press Release about its first quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall list not risks for this stock.
TMX Group Ltd is a company that operates several markets to provide investment opportunities for its clients. Company has four operating segments: Global Solutions, Insights & Analytics, Capital Formation, Derivatives Trading & Clearing, and Equities and Fixed Income Trading & Clearing. Company geographically operates in Canada, USA, UK, Germany, and Other Countries, with maximum revenue from Canada. Its web site is here TMX Group Ltd.
The last stock I wrote about was about was Suncor Energy Inc (TSX-SU, NYSE-SU) … learn more. The next stock I will write about will be Obsidian Energy Ltd (TSX-OBE, NYSE-OBE) … learn more on Wednesday, July 16, 2025 around 5 pm. Tomorrow on my other blog I will write about Using Home Equity…. learn more on Tuesday, July 15, 2025 around 5 pm.
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