Back in 2013, I identified what I thought was an amazing company and promptly invested $5,000 CAD in it. The company promptly crashed 33% and I doubled my position. Since then, I doubled my position again and the stock is up 250% since it slow – all this while paying an amazing dividend that was increased twice since then (from 5.83 cents to 6.07 cents, then 6.19 cents). I consider this company one of my best investments, ever, and I see no reason why it should slow down.
Crius Energy’s business models has flaws, I’ll be the first to admit that. First, it’s a trust, one weird exemption in Canadian taxation laws allowing them to avoid almost all taxes if they respect some conditions, such as holding mostly foreign assets (which they do, they own assets in the US). It is hard to fathom why a canadian company, or rather a trust based in Canada, would end up with american assets; you might think Americans companies would want those assets for themselves if they were any good. When Crius acquired customers from Comcast (!?), I admit I was lost. In fact, Crius even has customers in Australia (!?!?!):
Furthermore, it is quite difficult to make sense of their business plan, and their entire strategy depends on acquiring and retaining customers, something that is far from a trivial task. Also, at a $345M market valuation, it’s hard to understand how it is so big, with nearly a million customers.
With that being said, results don’t lie: Crius is doing an outstanding job and it shows in every field of activity:
It is growing, it is growing fast and it has plenty of room to grow. The dividend, too, is extremely attractive:
With a payout ratio at 63%, I envision a 2-3% dividend increase every year or so. Heck, Crius just acquired assets from SunEdison and Verengo to expand its solar energy profile and this bodes well for future growth. Plainly said, these guys know what they are doing.
I admit the small cap, along with the risky business (Crius sells energy directly to customers) make this a company that can easily lose 50% of its value within days and that the slightest mistake can wipe out years of dividends, but then again, isn’t this the case for all small cap companies? The distribution, paid monthly, is outstanding, and unless there are major problems, sure to grow. It is rare to find a company of such quality in this market and I’ve been collecting the dividend for years now.
I would warmly recommend this company to all income+growth oriented investors, as a fairly high-risk, but potentially very lucractive, investment.