Positives
Earnings are forecast to grow 33.56% per year
Earnings grew by 83.6% over the past year
Negatives
Interest payments are not well covered by earnings
High level of non-cash earnings
Dividend of 2.02% is not well covered by cash flows
Significant insider selling over the past 3 months
They also gave it poor marks for valuation to peers in their Snowflake Analysis diagram
Thanks for your always valuable analysis ......
Insiders can sell for a variety of reasons, and while there were insider sells in March, insiders continue to own a significant 48% of the company.
PRL has an interest coverage ratio of 2.7X, which we consider to be good, at least a minimum of 2X is considered to be fine.
Its cash flows are negative although the company is highly profitable. This is because there is a constant negative change in net operating assets, similar to GSY. This essentially represents the change in gross consumer loans receivable, which offsets positive cash flows. Viewing its cash from operations before net growth in gross consumer loans receivables' places it at $212M in operating cash for the last 12-months, more than enough for its $10M dividend payments.
PRL trades at a slightly higher valuation than GSY, but it is also growing faster and has more operations in the US, which typically has higher valuations than Canada.