Wednesday’s TSX breakouts: This industry leader has a 4% yield, 27% upside forecast

Equity markets remain in a standstill ahead of Thursday's Brexit vote.

On Tuesday, the S&P/TSX composite index was basically unchanged, declining just 3 points to 14,012 with trading volume very low. Within the Index, 104 stocks advanced, 130 securities declined, and six stocks closed unchanged. Year to date, the TSX index is up 7.7 per cent.

On today's breakouts report, there are 28 securities on the positive breakouts list (stocks with positive price momentum) compared to just 12 securities on the negative breakouts list (stocks with negative price momentum).

Discussed today is a high dividend paying stock whose share price has been in a solid uptrend since 2012 - until recently. The stock price has come under pressure for this industry leader causing it to make an appearance on the negative breakouts list. The stock I am referring to is Whistler Blackcomb Holdings Inc. (WB-T).

A brief outline is provided below that may serve as a springboard for further fundamental research.

The company

Whistler Blackcomb Holdings has a 75-per-cent interest in the Whistler Mountain Resort Limited Partnership as well as Blackcomb Skiing Enterprises Limited Partnership. The Whistler Blackcomb mountain resort has a reputation as one of the premier ski resorts in the world.

On May 11, the company reported strong second quarter fiscal 2016 financial results. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $98.9-million, ahead of the consensus estimate of $96.6-million. Earnings per share (EPS) was $1.23, relatively in-line with the consensus estimate of $1.24. The stock price closed down 3.8 per cent that day.

We are now headed into the relatively quiet earnings period for this seasonal stock. The fiscal second quarter is when Whistler Blackcomb generates most of its revenue.

Dividend policy

Management has maintained its quarterly dividend at 24.375 cents per share since 2011. This equates to 97.5 cents per share on a yearly basis, or an annualized dividend yield of 4.1 per cent.

The free cash flow payout ratio was 80 per cent in fiscal 2015.

Valuation

According to Bloomberg, the stock is trading at an enterprise value-to-EBITDA multiple of 8.5 times the fiscal 2017 consensus estimate, which is below its historical three-year average of 8.9 times. Over the past three years, the stock has largely traded at a forward EV/EBITDA multiple between 8 times and 10 times, and is currently approaching the bottom end of this range.

Analysts' recommendations

According to Bloomberg, the one-year price target is $30.39, which is based on six buy recommendations and one hold recommendation. There are no sell recommendations. This suggests the share price may appreciate nearly 27 per cent over the next 12 months. Price targets range from a low of $28.50 to a high of $32. Individual price targets are as follows: $28.50, $29, $30, two at $31, $31.25 and $32.

The Street is forecasting EBITDA of $124.7-million in fiscal 2016, anticipated to rise nearly 8 per cent to $134.4-million in fiscal 2017. The consensus earnings per share estimate is $1 in fiscal 2016, with an 11 per cent increase forecast to $1.11 in fiscal 2017.

Chart watch

The stock price has been in an uptrend since 2012. However, in recent weeks, the share price has come under pressure, falling 13 per cent since May 4, turning its year-to-date gain into a 4 per cent loss.

The stock price may soon find support at its 200-day moving average (at $23.77). Failing that, there is downside support at $22.

The relative strength index is at 31, suggesting the shares are approaching oversold territory. Generally, a reading at or below 30 indicates an oversold condition.

The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company's dividend policy, analysts' recommendations, and provides a brief technical analysis for a security to provide readers with more information.

If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.

A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.

Below is a list of securities principally from the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows. Securities on the positive breakouts list have displayed positive price momentum during this period. Securities on negative breakouts list have experienced negative price momentum.