Daily Stock Tip: Devro PLC

I'm now looking for a third consumer defensive sector representative for my new Ivy portfolio.

That defensive sector includes thirteen industries all related to providing convenient packaged goods we've just gotta have. Industries like: beverages, brewed, soft, or distilled; confections; discount stores; education & training; farm products; food distribution; grocery stores; household & personal products; packaged goods; pharmaceutical retailers; tobacco.

Today I'm reviewing a small-cap packaged foods concern named Devro PLC. Its trading ticker symbol is DEVOY. I last reported on Devro PLC on March 8, 2018.

Devro PLC is a manufacturer of collagen products for the food industry. Its core product is collagen casings. Collagen casing is used to manufacture all varieties of sausages. It has edible, non-edible, films and plastics types.

The firm's other products are a variety of sausages and meat products. The company's manufacturing sites are in USA, UK, Czech Republic and Australia. The firm has Americas, Asia Pacific, and European geographic segments.

It derives a majority of its revenues from Europe segment. The company's revenue comes mainly from the sale of collagen products to food manufacturers and local distributors.

I use three key data points to gauge the value of any dividend equity-like Devro PLC (DEVOY):

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

DEVOY Price

Devro's price per share closed at $5.45 yesterday. A year ago in March, its price was $6.20. So price dropped  $0.75 per share last year, over 12%.

Assuming Devro's stock trades in the range of $5 to $9 next year, Devro's recent $5.45 price could drop by another $0.15 and go to $5.30 by early-February, 2020.

DEVOY Dividends

Devro's most recent Semi-Annual dividend was $0.0711 paid October 22nd.

Last year's two payouts equated to a  $0.2361 annual payout and a yield of 4.3% at yesterday's $5.45 closing price.

Gains For DEVOY?

Adding the $0.2361 annual estimated dividend to my -$0.15 Devro estimated price downside shows a $.0861 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we put a little under $1,000.00 today at the $5.45 recent stock price would buy us 182 Devro PLC shares.

A $10 broker fee paid half at purchase and half at sale costs $0.055 per share.

Subtract that $0.055 brokerage cost from the estimated $0.861 gross annual gain leaves a net gain of $0.0311 X 182  shares

= $5.66

for 0.56% net gain on a $991.90 investment.

Therefore, Devro PLC whose trading ticker symbol is DEVOY now shows a possible net drain reducing its 4.2% dividend yield to 0.56%.

No  brokers cover this stock:

Therefore, you can look at Devro PLC and see it has made money, is making money, but might not make more than its dividend over the next year eroding its 4.2% estimated dividend yield. It could be more, it could be less.

Best wait until DEVOY starts to climb in price again before buying.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Devro PLC is worth your time and money.