Friday, December 15, 2017

Stella-Jones Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. It would seem on some measures that the stock is relatively expensive. Also, I generally do not like buying stocks which have a dividend yield of less than 1%. However this is a good stock with great debt ratios and good ROEs. See my spreadsheet on Stella-Jones Inc.

I do not own this stock of Stella-Jones Inc. (TSX-SJ, OTC- STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.

The company has very good debt ratios. The Liquidity Ratio for 2016 is 8.57 with a 5 year median ratio of 8.46. The Debt Ratio for 2016 is 2.10 with 5 year median ratio of 2.10. The Leverage and Debt/Equity Ratios for 2016 is 1.91 and 0.91.

The Return on Equity has been 15% or above for the past 5 years. It has been above 10% for the past 10 years. The ROE for 2016 is 15% with 5 year median of 15.5%. The Comprehensive Income has varied but is similar with 2016 ROE on Comprehensive Income at 13.5% and 5 year median of 19.8%. Another good factor is the Book Value (or Equity) has been increasing by 23.4% and 21.3% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.76, 20.24 and 22.30. The 10 year corresponding ratios are 12.31, 15.52 and 19.71. The corresponding historical ratios are 8.14, 10.60 and 13.35. The current P/E Ratio is 24.23 based on 2017 EPS estimate of $2.05 and a stock price of $49.68. The 2018 P/E Ratio is 20.79 based on 2018 EPS estimate of $2.39 and a stock price of $49.68. This stock price testing suggests that the stock price may be reasonable, but it is certainly above the median and close to expensive.

I get a 2017 Graham Price of $26.61 and a 2018 Graham Price of $28.73. The 10 year low, median and high median Price/Graham Price Ratios are 0.99, 1.32 and 1.68. The current P/GP Ratio is 1.87 and for 2018 is 1.73. These P/GP Ratios are based on a stock price of $49.68. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.53. The current P/B Ratio is 3.24 a value some 28% higher based on Book Value of $1,064M, Book Value per Share of $15.35 and a stock price of $49.68. This stock price testing suggests that the stock price is relatively expansive.

The historical median dividend yield is 1.14%. The current dividend yield is 0.89% based on dividends of $0.44 and a stock price of $49.68. The current dividend yield is some 22% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expansive.

They certainly can afford their dividend. The Dividend Payout Ratio for 2016 is 18% with 5 year coverage of 16%. The DPR for CFPS is 10% with 5 year coverage of 9.5%. This are very good rates. Also the growth in dividends is good with growth at 26% and 27.6% per year over the past 5 and 10 years.

The 10 year median Price/Sales (Revenue) Ratio is 1.56. The current P/S Ratio is 1.85 based on 2017 Revenue estimate of $1,863M, Revenue per share of $26.87 and a stock price of $49.68. The 2018 P/S Ratio is 1.80 based on 2018 Revenue estimate of $1,919M, Revenue per Share of $27.68 and a stock price of $49.68. The current P/S Ratio and the 2018 P/S Ratio is some 18% and 15% respectively above 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Buy (4) and Hold (4) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $52.88. This implies a total return of 7.33% with 6.44% from capital gains and 0.89% from dividends based on a current stock price of $49.68.

Liliana Gabriel on Simply Wall Street takes a look at this stock. A JCTY Staff Writer on JCTY News talks about this stock. See what analyst are saying on Stock Chase. They generally like this company.

Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella-Jones Inc.

The last stock I wrote about was about was First Capital Realty (TSX-FCR, OTC-FCRGF)... learn more. The next stock I will write about will be Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)... learn more on Monday, December 18, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, December 13, 2017

First Capital Realty

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. Price is probably reasonable, but some tests show it as expensive. They have not raised their dividends for a couple of years, but this is typical of this company. See my spreadsheet on First Capital Realty.

I do not own this stock of First Capital Realty (TSX-FCR, OTC-FCRGF). In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.

Net Insider Selling (NIS) for 2017 is at 0.08% of the stock's market cap. However, all the selling is by officers. You never know why people sell, but a few officers have left this company in the past year. In contrast the Chairman has increased his holdings of share by 7.8% and the CFO by 2.8%. A 10% holder called Gazit Canada Inc. controlled by Chaim Katzman and with Dori Segal as president (the current Chairman of FCR) has sold 10% of their stake in this company.

Since the outstanding shares have increased by 6.44% and 7.29% per year over the past 5 and 10 years, you should be looking at the per share values to get an accurate handle on growth. This can make a difference. For example, Revenue has grown at 5.13% and 7.35% over the past 5 and 10 years. However, Revenue per Share as declined by 1.24% and grown by 0.05% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.38, 18.045 and 19.71. The corresponding 10 year ratios are 18.73, 20.21 and 21.68. The corresponding historical ratios are 18.68, 19.90 and 22.25. The current P/E Ratio is 9.01 based on a current stock price of $20.90 and 2017 EPS estimate of $2.32. The P/E Ratio for 2018 is 25.80 based on a stock price of $20.90 and 2018 EPS estimate $0.81. This stock price testing for suggests that the stock price is relatively cheap for 2017.

EPS for this stock tends to be quite volatile as is the EPS estimates given. A better measure might be using the Price/Funds from Operations (FFO) Ratio. The 5 year low, median and high median Price/FFO Ratios are 17.26, 18.49 and 17.26. The 10 year corresponding ratios are 15.80, 17.27 and 18.77. The current P/FFO Ratio is 17.86 based on FFO estimate for 2017 of $1.17 and a stock price of 20.90. The 2018 P/FFO Ratio is 16.85 based on FFO estimate for 2018 of 1.27 and a stock price of $20.90. This stock price testing suggests that stock price is relatively reasonable and below the median.

A problem with FFO is that how it is calculated has changed over time. It used to be called Distributable Cash. However, this can be true of a number of things. For example, how EPS is calculated has also changed over time as has all accounting rules. Accounting rules in Canada used to be under Canadian GAAP and are now under IFRS, but there are always amendments. To get an idea of this visit Deliotte’s site.

I get a Graham Price of $22.32. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 0.98 and 1.07. The current P/GP Ratio is 0.94 based on a stock price of $20.90. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year Price/Book Value per Share Ratio is 1.19. The current P/B Ratio is 1.10 a value some 7.2% lower. The P/B Ratio is based on Book Value of $4,618M, BVPS of $18.93 and a stock price of $20.90. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The Book Value has been growing at the rate of 4.86% and 8.58% per year over the past 5 and 10 years. The Book Value after stalling a bit in value in 2014 and 2015 grew by 6.75% in 2016 and 9.87% so far in 2017.

The historical median dividend yield is 5.45%. The current dividend yield is 4.11% based on dividends of $0.86 and a stock price of $20.90. The current dividend yield is some 24.5% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.

The dividends have not grown much lately. The 5 and 10 year dividend growth is at 1.46% and 1.21% per year. The last time there was a dividend increase was in 2014 when the increase was for 2.4%. With REITs you expect a good dividend (4 and 5% range) and growth at least at the rate of inflation. As far as I can gather from the Bank of Canada inflation for the past 5 years is at 1.55%, so the increase at 1.46% over the past 5 years for this REIT is lower, but not by much.

They can afford their dividends as the Dividend Payout Ratio for 2016 is 54.1% with 5 year coverage at 65.9%. However, coverage of dividends is better gauged with CFPS or FFO. The coverage with CFPS is at 49.9% with 5 year coverage of 45.8%. This is a little high as 40% is a better coverage rate. The coverage with FFO is at 77.5% for 2016 with 5 year coverage at 82%. This coverage is just fine for FFO.

The 10 year median Price/Sales (Revenue) Ratio is 5.77. The current P/S Ratio is 7.23 a value some 25% higher. The current P/S Ratio is based on Revenue of $705M, Revenue per Share of $2.89 and a stock price of $20.90. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy (2); Buy (4) and Hold (2) recommendations. The consensus would be a Buy. The 12 month stock price is $23.38. This implies a total return of 15.98% with 11.87% from capital gains and 4.11% from dividends based on a current stock price of $20.90.

The company talks about their third quarterly results on Cision. Armando Maloney on Simply Wall Street takes a look at this stock. I wonder how valid P/E Ratios are for REITs. Will Ashworth on Motley Fool discusses this stock. See what analysts are saying about this REIT at Stock Chase. They mostly like it.

First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers located predominantly in growing metropolitan areas.. Its web site is here First Capital Realty.

The last stock I wrote about was about was DHX Media Ltd (TSX-DHX.B, OTC-DHXMF)... learn more. The next stock I will write about will be Stella-Jones Inc. (TSX-SJ, OTC- STLJF)... learn more on December 15, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividends.... learn more on Thursday, December 14, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, December 11, 2017

DHX Media Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Media Co. The stock price is probably reasonable. This stock seems to be priced as a tech stock, but it is not a tech stock. There is a concern about their debt load. Considering the history of price on this stock, this might be a time when you can get it rather cheap. See my spreadsheet on DHX Media Ltd.

I do not own this stock of DHX Media Ltd (TSX-DHX.B, OTC-DHXMF). In the CanTech Letter of May 2014 Byron Capital says investors should accumulate DHX Media aggressively.

What I noticed is the high level of debt and Goodwill and Intangibles against the current market cap. Of course the market cap has been falling because investors are worried about the high debt level. For long term debt the Debt/Market Cap Ratio is 0.97 for the 2017 financial year and is currently at 1.34. The Goodwill and Intangibles/Market Cap Ratio is 1.03 for the 2017 financial year and is currently at 1.44. These ratios being close or above 1.00 are a very bad sign.

The Liquidity Ratio is low for the June 2017 financial year. This ratio has had its ups and downs. The 5 year median is 1.84. Any ratio of 1.50 and above is good. The Debt Ratio for the June 2017 financial year is also low at just 1.31. Here again the 5 year median is good at 1.60.

The high debt loads are showing up in the Leverage and Debt/Equity Ratios. These ratios for the 2017 financial year are 4.24 and 3.24. The current ratios are a bit better at 3.49 and 2.49.

The 5 year low, median and high median Price/Earnings per Share Ratios are 38.71, 35.36 and 62.56. The 10 year ratios are 26.52, 35.27 and 44.02. This stock was just issued some 12 years ago and the 12 year ratios are the same as the 10 year ratios. The current P/E Ratio is 22.33 based on a stock price of $4.02 and 2018 EPS estimates of 0.18. This stock price testing suggests that the stock is relatively cheap.

The P/E Ratios on stock are very high considering the type of stock it is. Even the current P/E of 22.33 is rather high than reasonable for this stock. The $0.18 EPS is rather optimistic, but I must admit that in the first quarter of this financial year the EPS was $0.06. Last year they had an earnings loss of $0.03. For the prior year the EPS was $0.22. However, the median EPS for this stock over the past 12 years is just $0.02. Earnings have not only been low, but have been quite volatile.

I get a Graham Price of $3.57. The 10 year low, median and high median Price/Graham Price Ratios are 1.37, 2.08 and 2.74. The current P/GP Ratio is 1.13 based on a stock price of $4.02. This stock price testing suggests that the stock price is relatively cheap.

The P/GP Ratios are also quite high for this stock. However, where a P/GP Ratio of 1.00 or less on an absolute basis suggests that a stock is cheap, a P/GP Ratio of 1.13 is a reasonable ratio.

The 10 year median Price/Book Value per Share Ratio is 1.26. The current P/B Ratio at 1.28 is only 1.4% higher. The current P/B Ratio is based on Book Value of $422.3M, BVPS of $1.35 and a stock price of $4.02. This stock price testing suggests that the stock price is reasonable and around the median.

The P/B Ratios has often been low to reasonable (but not always) on this stock. A good P/B Ratio is considered to be at 1.50 or below. The current P/B Ratio of 1.28 on an absolute basis says that the stock price is relatively cheap. This is an important ratio in judging a stock.

The current dividend yield is 1.99%. The historical median dividend yield is 0.98% a value some 103% lower. The current dividend yield is based on dividends of $0.08 and a stock price of $4.02. This stock price testing suggests that the stock price is relatively cheap.

The company can afford their dividends. They had an earnings loss for the June 2017 financial year, so we cannot cover the 2017 dividends, but the 5 year coverage is 58.6%. This is good 5 year coverage and is an important value. It is nice when the dividends can be covered in the year paid, but it is essential that they are covered by dividends over time.

The DPR for Cash Flow per Share is good. The DPR for CFPS is 26% for the June 2017 year and the 5 year coverage is 20%. For CFPF coverage, you want the ratio to be 40% or less.

I get a 10 year median Price/Sales (Revenue) Ratio of 1.94. The current P/S Ratio is 1.15 a value 41% less. The current P/S Ratio is based on 2018 Revenue estimate of $470, Revenue per Share of $3.51 and a stock price of $4.02. This stock price testing suggests that the stock price is relatively cheap.

Revenue is expected to increase because a purchase that includes an 80% controlling interest in peanuts. See the Press Release by DHX Media on this purchase.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (2) and Hold (8). The consensus would be a Hold. The 12 months stock price is $5.52. This implies a Total Return of 39.30% with 1.99% from dividends and 37.31% from capital gains.

Joyce Ramirez on The Ledger Gazette talks about this company raising their dividends for 2018. Jesse Mackey on Stock News Times talk about some positive rating changes for this stock. Note Outperform is a Buy and Section Perform is a Hold rating. See what analysts are saying about this company on Stock Chase. They are generally worried about the high debt level.

DHX Media is a leader in the creation, production and marketing of family entertainment. DHX Media owns, markets and distributes over 10,000 episodes of entertainment programming worldwide and licenses its owned properties through its dedicated consumer products business. Its web site is here DHX Media Ltd.

The last stock I wrote about was about was Northland Power Inc. (TSX-NPI, OTC-NPIFF)... learn more. The next stock I will write about will be First Capital Realty (TSX-FCR, OTC-FCRGF)... learn more on Wednesday, December13, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth 2017.... learn more on Tuesday, December 12, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, December 8, 2017

Northland Power Inc.

Sound bite for Twitter and StockTwits is: Dividend Utility Stock. The stock seems on the relatively expensive side currently. I do not like the Debt/Market Cap Ratio. A positive is that the just raised their dividends. There is a possibility that it will become a dividend growth stock. See my spreadsheet on Northland Power Inc.

I do not own this stock of Northland Power Inc. (TSX-NPI, OTC-NPIFF). This company is into generating electric power. I have a lot invested in pipelines and I would like to have more invested in electric power as my utilities investment. I read a report on this stock that said it was a good defensive stock to buy. That is, it is a good stock to hold in a stock market correction. I can certainly see the logic of using utility stocks as defensive stocks.

This company changed from an income trust company to a corporation in 2011. They have kept their dividends flat since 2007 and have only just announced a dividend increase effective in 2018. Income trust company could afford to pay dividends higher than their EPS, but corporations cannot.

Since becoming a corporation they have paid out more than they have earned. The Dividend Payout Ratio for 2016 is 169% with 5 year coverage of 900%. The DPR for 2017 is expected to be 107% and for 2018 it is expected to be 82%. The DPR for cash flow has been better with the DPR for CFPS at 44% and 5 year coverage at 47%.

The first dividend increase after some 10 years of flat dividend says that the company is confident about the future. Analysts seem to agree with the company on this. This might become a dividend growth stock again.

Outstanding shares have increased by 7.54% and 10.75% over the past 5 and 10 years. This means that to see if there is growth you have to look at the per share values. This can make a difference. For example Revenue has grown by 25.27% and 20.89% per year over the past 5 and 10 years. Revenue per Share has grown at 16.48% and 9.16% per year over the same time periods.

The Long Term Debt/Market Cap Ratio for 2016 is 1.46 and the current one is 1.65. This means that the market is pricing this stock below what it has in Long Term Debt. This says that the long term debt is way too high.

I do not like some of the other debt ratios either. The Liquidity Rati is 1.40 for 2016. When you add in cash flow after dividends the ratios is good at 2.50. This means that the company depends on cash flow to give adequate coverage to current liabilities. A lot of utilities are in this situation. The Debt Ratio is low at 1.19 for 2016 and is currently at 1.17. What I like to see is this ratio at 1.50 or higher for safety's sake. The problem with low debt ratios is that a company could get into trouble in a recession.

The Leverage and Debt/Equity Ratios are also very high. For utilities these ratios tend to be high, but for this stock they are higher than for most utilities at 6.30 and 5.30 for 2016 and current ones at 6.89 and 5.89. By the way the 5 year median ratios are a lot lower and better at 2.98 and 1.98. However, I think the one to be worried about is the Long Term Debt/Market Cap Ratio.

The Return on Equity is low with the one for 2016 at 8.8%, but the 5 year median at just 0.1%. The Comprehensive Income ROE is lower for 2016 at 6.2%, but the 5 year median is better at 3.6%. However, all these ROEs are low.

The 5 year low, median and high median Price/Earnings per Share Ratios are negative values as is the 10 year values. This is because of a number of years of earning losses. The 20 year or historical values are 13.13, 15.34 and 17.89. The current P/E Ratio is 23.52 based on a stock price of $23.76 and 2017 EPS estimate of $1.01. This stock price testing suggests that the stock price is relatively expensive.

The P/E Ratio for 2018 is 16.27 based on a stock price of $23.76 and 2018 EPS estimate of $1.46. If we use the 12 month EPS to the end of the third quarter of $1.54 the P/E Ratio becomes 15.43 based on a stock price of $23.76. Using either one of these P/E Ratio gives a stock price in a reasonable range, but still above the median.

The 10 year low, median and high median Price/Graham Price Ratios are 1.93, 2.20 and 2.47. The current P/GP Ratio is 2.52 based on a stock price of $23.76. This stock price testing suggests that the stock price is relatively expensive. The P/GP Ratios are very high for a utility stock. The problem is the number of years of low earnings and earning losses that this company has had.

I get a 10 year median Price/Book Value per Share of 3.31. The current one is 6.08 a value some 83.5% higher. The current P/B Ratio is based on a Book Value of $683M, Book Value per Share of $3.91 and a stock price of $23.46. I get the book Value of $683.6M with Gross Book Value of $1,423.4M, Non-Controlling Interest of $479M and Preferred Shares of $260.9M for a net of $683.6M. This stock price testing suggests that the stock price is relatively expensive.

A problem with the book value is that it has declined by 6.8% and 7.5% per year over the past 5 and 10 years. A declining book value is never good. It can also make the Return on Equity (ROE) look better than it actually is.

I get an historical median dividend yield of 8.06%. Because this company used to be an income trust I also looked at the dividend yield median since 2009. The median is 6.45%. In both cases, the current dividend yield is lower at 5.05%. For the median since 2009 it is some 21.7% lower. This stock price testing suggests that the stock price is relatively high.

There is only one test where this stock looks cheap. The 10 year Price/Sales (Revenue) Ratio 4.11. The current P/S Ratio is 3.13 a value some 23.7% lower. The current P/S Ratio is based on 2017 Revenue Estimate of $1,325M, Revenue per Share of $7.58 and a stock price of $23.76. This stock price testing suggests that the stock price is relatively cheap. However, on the other hand the P/S Ratios for this stock are very high for a utility.

When I look at analysts' recommendations, I find Strong Buy (3); Buy (6) and Hold (3) recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $26.43. This implies a total return of 16.29% with 11.24% from capital gains and 5.05% from dividends based on a current stock price of $23.76.

Jesse Mackey on Stock News Times talks about some insider selling and some research analysts reports. JCTY Staff Writer on JCTY News says that the stock is neither over nor undervalued. Ploutos Investing on Seeking Alpha does a review of this company. Generally to read articles on Seeking Alpha you have to register, but it is free and they do have good articles. See what analysts are saying about this stock on Stock Chase. They generally like this company, but one analyst thinks it is expensive.

Northland Power Inc. indirectly owns interests in power projects. Northland's assets comprise facilities that produce electricity from "clean" natural gas and "green" renewable sources such as wind and biomass. Electricity generation is sold under long-term PPAs with creditworthy customers, and any fuel for natural-gas-fired projects, where required, is purchased under long-term contracts to assure stability of operating margins. This company operates in Canada, US and Germany. Its web site is here Northland Power Inc.

The last stock I wrote about was about was Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF)... learn more. The next stock I will write about will DHX Media Ltd (TSX-DHX.B, OTC-DHXMF)... learn more on Monday, December 11, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, December 6, 2017

Chesswood Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. I think that this stock is showing in stock tests as expensive because the risk is high. For many tests on an absolute basis the stock is cheap. For example both the P/B Ratio of 1.37 and the P/GP Ratio of 0.95 are actually quite low or show a cheap stock price. See my spreadsheet on Chesswood Group Ltd.

I do not own this stock of Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF). A reader wrote me in 2012 that he was researching and found a company that he hoped I could give him a brief outlook on. He said that the company is Chesswood Group and they are basically a financial leasing company. From 2009 to 2012 they increased their dividends from 2.5 cents to 5.5 cents per month. This is a 120% increase.

The dividend increase was true, but in 2009 and the previous year dividends were decreased by just over 70%. The big increases have stopped and the dividend growth for the past 5 years is 5.7% per year or 31.9%. There was no dividend growth over the past 10 years as dividends have declined by 0.7% per year or 6.6%. The most recent dividend increase was for 2016 and it was for 7.7%.

The year is almost over and Chesswood has said there will be no dividend increase in 2017. Analysts do not comment on when the next one might be.

The company was an income trust that changed to a corporation in 2011. The dividend decreases probably occurred in 2008 and 2009 because the new law for Income Trusts was announced in October 2006. Income Trust can afford to pay higher dividends than corporations.

The outstanding shares have increased by 10.98% and 8.90% over the past 5 and 10 years. This means that to measure growth you need to look at the per share values. This can make a big difference sometimes. For the company the Revenue has grown at 6.49% and 4.78% per year over the past 5 and 10 years. However, Revenue per Share has declined by 6.75% and 3.78% per year over the past 5 and 10 years. The real growth for a shareholder is the per share growth and in this case there is none.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.05, 10.03 and 12.01. The corresponding historical ones are 7.43, 9.36 and 11.92. The current P/E Ratio is 14.71 based on a stock price of $11.47 and 2017 EPS estimate of $0.78. The P/E Ratio is relatively high as EPS is expected to drop some 41% in 2017. That is the EPS is expected to go from $1.33 to $0.78. This stock price testing suggests that the stock price is relatively expensive.

If we use the 12 month EPS to the end of the second quarter of $0.91 the P/E Ratio becomes 12.60. This testing still suggests that the stock price is relatively expensive.

I get a Graham Price of $12.11. The 10 year low, median and high median Price/Graham Price Ratios are 0.54, 0.76 and 0.92. The current P/GP Ratio is 0.95 based on a stock price of $11.47. This stock price testing suggests that the stock price is relatively expensive. However, note that a stock is considered cheap is the P/GP Ratio is below 1.00.

The 10 year median Price/Book Value per Share Ratio is 1.21. The current P/B Ratio is 1.37 based on a stock price of $11.47 and Book Value of $138M, BVPS of $8.36 and a stock price of $11.47. The current P/B Ratio is some 13% higher than the 10 year median. This testing still suggests that the stock price is relatively expensive.

However, note that a P/B Ratio of 1.50 and below is considered a good P/B Ratio. The Book Value per Share has grown at 11.6% and 2.9% per year over the past 5 and 10 years. The 5 year growth is good, but the 10 year one is really low.

Since this used to be an income trust company, I will use the Median Dividend Yield from 2009 which is 7.87%. The current dividend yield is 7.32% based on dividends of $0.84 and a stock price of $11.47. The current dividend yield is some 6.9% below the dividend yield since 2009. This testing still suggests that the stock price is relatively expensive.

However, a yield of 7.32% is a very good yield and denotes a cheap stock. On the other hand when a company has a yield at 6% and above, it could indicate a very risky stock and a stock than should be handled with caution.

The 10 year median Price/Sales (Revenue) Ratio is 0.89. The current P/S Ratio is 2.00 based on 2017 Revenue estimate of $94.8M, Revenue per Share of $5.72 and a stock price of $11.47. The current ratio is some 124% above the 10 year median. This testing still suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy (1), Buy (1) and Hold (2). There are not many analysts following this stock. The consensus would be a Buy. The 12 months stock price consensus is $13.50. This implies a total return of 25.02% with 17.70% from capital gains and 7.32% from dividends.

The company comments on the third quarterly results on Cision. Willa Russo has an interesting discussion about this company's ROE on Simply Wall Street. See what analysts are saying about this company on Stock Chase. They seem to think it is a potential takeout candidate.

Chesswood Group Limited is a financial services company operating primarily in the specialty finance industry. Chesswood's approach is to acquire financial services businesses. Its web site is here Chesswood Group Ltd.

The last stock I wrote about was about was Quarterhill Inc. (TSX-QTRH, NASDAQ-QTRH)... learn more. The next stock I will write about will be Northland Power Inc. (TSX-NPI, OTC-NPIFF)... learn more on Friday, December 8, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2017... learn more on Thursday, December 7, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, December 4, 2017

Quarterhill Inc.

Sound bite for Twitter and StockTwits is: Dividend Paying Telecom. The stock is probably cheap. They cannot afford their dividends and never could so far. They are patent troll but are trying to get into the Internet of Things. See my spreadsheet on Quarterhill Inc.

I do not own this stock of Quarterhill Inc. (TSX-QTRH, NASDAQ-QTRH), but I used to. I bought this company in 2000 as WiLan Inc. (TSX-WIN, OTC-WILN. It was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. The other thing is that they completely refocused their company to earn money on their patents.

The company cut their dividends by over 76% in 2017. They are expected to do better in 2017 and then worse again in 2018. Dividends were probably cut because they could not afford them. In 2016 Dividend Payout Ratios was 172%. In the last 5 years they have paid out more than they have earned. Or more correctly they have a total earnings loss over the past 5 years so a 5 year coverage calculation is not possible. DPR is expected to be around 19% in 2017, but rising to 131% in 2018 before falling to 74% in 2019.

They started to pay dividends in 2009, but from the beginning they could not afford them. They had earning losses in 2008, 2009 and 2010. Since 2009 they have paid out way more in dividends then they have made in earnings.

The dividends are currently covered by Cash Flow. The Dividend Payout Ratio for CFPS is 39% in 2016 with 5 year coverage at 33%.

The debt ratios are quite good. The Liquidity Ratio is 4.97 for 2016 with 5 year median of 3.59. The Debt Ratio for 2016 is 7.29 with 5 year median of 5.66. Leverage and Debt/Equity Ratios for 2016 are 1.16 and 0.16 with 5 year medians of 1.15 and 0.15.

The Return on Equity is quite low with the ROE for 2016 at 4.5% with a 5 year median of 4%. The Comprehensive Income for 2016 is also 4.5% with 5 year median of 4%. Another problem is the declining Book Value. Book Value has decreased by 5.2% per year over the past 5 years or by 23.4%.

They have lots of cash on hand at $0.38 or 17.5% of the stock's price.

Unfortunately the company has had too many years of earnings losses to get a fix on any sort of past or historical Price/Earnings per Share Ratios. The current P/E Ratio is 8.23 CDN$ based on a stock price of $2.20 CDN$ and 2017 EPS estimate of $0.27 CDN$ ($0.21 US$). A P/E Ratio of 8.23 is a relatively low one.

I get a Graham Price of $4.16 CDN$. The 10 year low, median and high median Price/Graham Price ratios are 0.63, 1.12 and 1.56 CDN$. The current P/GP Ratio is 0.53 based on a stock price of $2.20 CDN$. However, note that the Graham Price calculations also suffer when you have lots of earnings losses years. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.63 US$. The current P/B Ratio is 0.77 US$. The current P/B Ratio is some 53% lower than the 10 year ratios. The current P/B Ratio is based on Book Value of $267M US$, BVPS $2.26 US$ and a stock price of $1.74 US$. You would get basically the same results if you used CDN$. This stock price testing suggests that the stock price is relatively cheap.

The median historical dividend yield is 3.06%. The current dividend yield is 2.27% based on dividends of $0.05 CDN$ and a stock price of $2.20 CDN$. The current dividend yield is 25.7% lower than the median historical yield. Note that the dividends have just been cut by some 76%. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Sales (Revenue) Ratio is 5.46 US$. The current P/S Ratio is 1.50 US$. The current P/S Ratio is based on 2017 Revenue estimate of $137M US$, Revenue per Share of 1.15 US$ and a stock price of $1.74 US$. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Strong Buy (1), Buy (2) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $3.11 CDN$ ($2.44 US$). This implies a total return of $43.45 with 2.27% from dividends and 41.18% from capital gains.

There is a news release on Cision about the company appointing Douglas Parker as new CEO. MTNV Staff Contributor on MTNV News gives some analysis of this stock. There is a Press Release on Cision about the company's third quarterly results. See what analysts are saying about this stock on Stock Chase.

Quarterhaill Inc., formerly Wi-LAN Inc. is a diversified investment holding company focused on acquiring technology companies in the Industrial Internet of Things segment. It targets companies which capture, analyze and interpret data. Its web site is here Quarterhill Inc.

The last stock I wrote about was about was Finning International Inc. (TSX-FTT, OTC-FINGF)... learn more. The next stock I will write about will be Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF)... learn more on Wednesday, December 06, 2017 before 10 am. Tomorrow on my other blog I will write about Dividend Stocks December 2017... learn more on Tuesday, December 5, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, December 1, 2017

Finning International Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. I think that the best test on price is the dividend yield test and this is showing that the company is relatively cheap. See my spreadsheet on Finning International Inc.

I do not own this stock of Finning International Inc. (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought. Now, the only reason I would not buy this company is because I own Toromont Industries Ltd. They are both involved with Caterpillar equipment, although the companies are often classified in different sectors. I classify these companies as industrials, but Stock Channel classifies Finning as Construction and Finning as Industrial.

2016 was the first year since 2009 that this company did not increase their dividends. There was an increase for 2017 but it was only for 4.1%. The average increase for the 5 years to 2009 was 17.5%. The average increase for the 5 year to 2016 was 7.5%. Current for this dividend growth stock, dividends are moderate and the dividend increases are low. The current dividend yield is 2.51% and the dividend growth for the past 5 and 10 years is at 7.4% and 8.2% per year. Prior to 2009, the dividend yield was low (1% range) and the dividend increases were good (above 15% per year).

In 2015 they had an earnings loss. The reason for the earnings loss was because they took a loss on assets and goodwill. Without these write-offs they would have had earnings of around $1.36. Revenue was down by 10% also in 2015. Revenue was again down 9% in 2016. Revenue is expected to be higher in 2017.

I think that they can afford their dividends. The Dividend Payout Ratio for 2016 was 192%, which is high. However, the 5 year DPR is 63%. Earnings are expected to be higher in 2017 and the DPR to be 56% and the 5 year DPR to be 77%.

The debt ratios are good. This means that the company can well survive bad times. If there will be volatility in earnings and cash flow, good debt ratios are required. The Liquidity Ratio is 2.74 with a 5 year median of 2.53. The Debt Ratio is 1.63 with a 5 year median of 1.63. Leverage and Debt/Equity Ratios are 2.58 and 1.58 with 5 year medians of 2.59 and 1.59. These last ratios are rather normal for this sort of company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.13, 13.17 and 15.20. The 10 year values are 12.47, 15.85 and 19.23. The historical ratios are 12.28, 15.54 and 18.42. The current P/E Ratio is 22.98 based on a stock price of $30.33 and 2017 EPS estimate of $1.32. The 2018 P/E Ratio is 17.84 based on a stock price of $30.33 and 2018 EPS estimate of $1.70. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $18.45 for 2017 and $20.93 for 2018. The 10 year low, median and high median Price/Graham Price Ratios are 1.15, 1.54 and 1.87. The 2017 P/GP Ratio is 1.64 and the one for 2018 is 1.45. This stock price testing suggests that the stock price is relatively reasonable and around the median.

The 10 year Price/Book Value per Share Ratio is 2.34. The current P/B Ratio is 2.65 based on a stock price of $30.33, Book Value of $1,926M and BVPS of $11.46. The current P/B Ratio is some 13% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The historical dividend yield is 1.64%. The current dividend is 2.51% based on dividends of $0.76 and a stock price of $30.33. The current dividend yield is 52.8% higher than the historical one. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy (2), Buy (5) and Hold at (1). The consensus would be a Buy. The 12 month stock price is 35.72. This implies a total return of $20.28% based on a current stock price of $30.33. The return is made up of 17.77% from capital gains and 2.51% from dividends.

Joseph Solitro on Motley Fool likes this stock and feels it is still inexpensive. Market Desk at Union Trade Journal says that the current Value Composite Score says the stock is slightly undervalued. Kyle Sanford on Simply Wall Street talks about buying dividend stocks and Finning stock in particular. See what analysts think of this stock on Stock Chase. Stephen Groff thinks that the worst is over and that the business has bounced off the bottom.

This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is here Finning International Inc.

The last stock I wrote about was about was Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG)... learn more. The next stock I will write about will be Quarterhill Inc. (TSX-QTRH, NASDAQ-QTRH)... learn more on Monday, December 4, 2017 around 5 pm. Quarterhill Inc. used to be WiLan Inc. (TSX-WIN, OTC-WILN).

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, November 29, 2017

Crescent Point Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Resource Stock. It would seem that the current stock price is rather cheap. However, since it is a resource stock there is lots of risk in this stock. See my spreadsheet on Crescent Point Energy Corp.

I do not own this stock of Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.

This is a dividend paying stock. However, it is a resource stock and because of this the earnings are volatile. Dividends go up and down and sometimes remain the same. Over the past 5 and 10 years dividends are down by 27% and 13% per year. If you bought this stock 5, 10 or 15 years ago at a median price your current yield would be 0.87%, 1.96% or 5.16%.

If you bought this sock 5, 10 or 15 years ago at a median price the dividends would have covered your stock cost by 20.91%, 121.38% or 457.70%. The stock price coverage by yield is good. It would seem that you can collect a lot in dividends over the longer term. However, there will be volatility in dividends.

We should talk about their debt ratios. The Long Term Debt/Market Cap ratio rose from 0.34 in 2016 to 0.84 at present. This has to do with the drop in share price and I think there nothing to worry about at this time. The Liquidity Ratios are very low. The one for 2016 is 0.48 and currently at 0.72. The 5 year median is 0.48. When it is below 1.00 it means that the current assets cannot cover the current liabilities.

If you add in cash flow after dividends, the Liquidity Ratio becomes 1.92 and 2.62 for these time periods. This means that the company relies on cash flow to cover current liabilities. This is fine if the company is assured of enough cash flows. There seems to be no problems with cash flows.

The Debt Ratios are good at 2.46 for 2016 with a 5 year median of 2.61. The Leverage and Debt/Equity Ratios are also fine at 1.69 and 0.69 for 2016 with 5 year medians of 1.56 and 0.56 respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 18.12, 14.97 and 11.81. The corresponding 10 year values are 11.60, 11.54 and 11.48. The historical ones are 10.79, 14.70 and 14.28. (Note the problem with the P/E high median P/E Ratios and this is because of negative earnings years.) Since the next three years have no positive earnings, you cannot do any P/E Ratio testing on stock price.

I cannot do testing using the Graham Price because of so many years of negative earnings. I cannot do any testing using the dividend yield because of dividend decreases.

The 10 year median Price/Book Value per Share Ratio is 1.68. The current P/B Ratio is 0.53. This is based on Book Value of $9,248M, BVPS of $17.07 and a stock price of $9.13. The current P/B Ratio is some 68% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. When the P/B Ratio is below 1.00 the stock is selling below the company's theoretical break up price. This also suggests that the stock price is cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.20. The current P/S Ratio is 1.54 based on 2017 Revenue of $3219M, Revenue per Share of $5.94 and a stock price of $9.13. The current ratio is some 63% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy (2), Buy (11) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $13.97. This implies a total return of 56.96% with 53.01% from capital gains and 3.94% from Dividends.

Brian Zinchuk on Pipeline News talks about this company acquiring more land in Saskatchewan. Andrew Walker on Motley Fool thinks that this stock is worth buying at a price below $10.00. Wall Street News Staff at Wall Street News suggests that the Relative Strength Index show that the stock is neither overbought nor oversold. (However, it does look like this report is computer generated.) Thomas Auclair on Simply Wall Street looks at this company's debt load. See what analysts are saying about this stock on Stock Chase. Analysts have various views.

Crescent Point Energy Corp. is a Canada-based oil and gas exploration, development and production company. The Company is a conventional oil and gas producer with assets focused in properties consisting of assets light and medium oil and natural gas reserves in Western Canada and the United States. It is involved in acquiring, developing and holding interests in petroleum and natural gas properties and assets through a general partnership and wholly owned subsidiaries. Its web site is here Crescent Point Energy Corp.

The last stock I wrote about was about was Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more. The next stock I will write about will be Finning International Inc. (TSX-FTT, OTC-FINGF)... learn more on Friday, December 1, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth Stocks Part 3... learn more on Thursday, November 30, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, November 27, 2017

Innergex Renewable Energy

Sound bite for Twitter and StockTwits is: Dividend growth utility. On a lot of tests (except the P/S Ratio one, this stock is expensive. It has very high debt with Debt/Market Cap Ratio of 2.05. High debt loads can make a company a high risk. If there is any slip up or we high a recession, this could put the company in jeopardy of default on debt. See my spreadsheet on Innergex Renewable Energy.

I do not own this stock of Innergex Renewable Energy (TSX-INE, OTC-INGXF). I used to own this stock. I bought this stock in 2006 as it was highly rated and it was in the alternative energy field. In 2008 I sold Innergex as I did not think that it is a stock I want to hold as dividend increased less than the rate of inflation.

The Return of Equity may look good for 2016 because it is 10.5%. However, this is basically meaningless because the Equity part is a declining value. The other problem I see is that their long term debt is higher than the market cap. The Ratio is 2.09 currently.

This company used to be an income trust and has changed to a corporation. On March 29, 2010, Innergex Power Income Fund and Innergex Renewable Energy were amalgamated. Because of these events the dividends were decreased in 2010 by some 33%. In 2011 dividends were increase by 26% and then were flat for two years. In 2014 dividend increases were restarted and they were slightly above the rate of inflation.

One thing for sure is that they cannot afford their dividends. The Dividend Payout Ratio for 2016 was 227%. From the estimates for future EPS the DPR for 2017 will be 298%, going to 138% in 2018 and 126% in 2019. However, the further estimates go out the more unreliable there are.

Also the Debt/Market Cap Ratio is 1.72 for 2016 rising to 2.05 for the third quarter. This means that the long term debt has a value higher than what investor value the company at. This is bad situation.

The other debt ratios are also not good. The Liquidity Ratio for 2016 is 1.14 falling to 1.06 for the third quarter. The Debt Ratio is 1.16 for 2016 falling to 1.12 for the third quarter. For safety's sake you want these ratios to be at 1.50 or above. Leverage and Debt/Equity Ratios are very high at 7.43 and 6.43. These rise to 9.06 and 8.06 for the third quarter.

The Price/Earnings Ratios for 5 years, 10 years and historical are negative. This is because there were a number of years with earning losses. The current P/E Ratio is 65.50 based on a stock price of $14.41 and 23017 EPS estimate of $0.22. It does not improve much for 2018 where the P/E Ratio is 30.02 based on EPS of $0.48 and a stock price of $14.41. A P/E Ratio for a utility company is high.

I get a Graham Price of $3.82. The 10 year low, median and high median Price/Graham Price Ratios are 1.33, 1.44 and 1.58. These are high for a utility company. The current P/GP Ratio is 3.78. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratios is 2.05. The current P/B Ratio is 4.90. The current P/B Ratio is based on Book Value of $319.6M, BVPS of $2.94 and a stock price of $14.41. Gross Book Value of $471.7M less NCI of $20M and Preferred Shares of $131.1M leaves a Net Book Value of $319.6M. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 6.68%. The dividend yield since the company was a corporation is 5.57%. The current dividend is 4.58% based on dividends of $0.66 and a stock price of $14.41. The current dividend is 31.4% or 17.8% below the historical or since 2010 dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 4.95. The current P/S Ratio is 3.80, a value some 23% lower than the 10 year median ratio. The current P/S Ratio is based on 2017 Revenue estimate of $412M, Revenue per Share of 3.79 and a stock price of $14.41. This stock price testing suggests that the stock price is relatively cheap.

The 412M Revenue for 2017 is an increase of 40.7%. However, the 12 month revenue to the end of the third quarter is $365.6M a 25% increase over the Revenue for 2016. So the Revenue estimate could well be accurate. Note that this company has just bought rival Alterra Power Corp. See news of this on BNN.

When I look at analysts' recommendations I find Strong Buy (1), Buy (3) and Hold (3). The consensus would be a Buy recommendation. The 12 month stock price is $16.93. This implies a total return of 22.07% with 17.49% from capital gains and 4.58% from dividends. This is based on a stock price of $14.41.

A Melville Contributor on Melville Review says that Relative Strength Index shows that the stock is overbought. Lenox Staff on Lenox Ledger says that the Piotroski F-Score is 5 in which 1 is weak or 9 is strong financial strength. Blake Harford on Simply Wall Street thinks that the company is currently overvalued. There is only one entry this year on Stock Chase. The Edgehill Partners give it a sell because of high valuation and hefty debt.

Innergex is involved in Canada's renewable energy industry. The Company develops, owns and operates facilities located in North America, leveraging run-of-river hydroelectric power generating facilities, wind farms and photovoltaic solar parks. Its web site is here Innergex Renewable Energy.

The last stock I wrote about was about was PFB Corp. (TSX-PFB, OTC-PFBOF)... learn more. The next stock I will write about will be Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG)... learn more on Wednesday, November 29, 2017 around 5 pm. Tomorrow on my other blog I will write about Trusted an Advisor... learn more on Thursday, November 28, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, November 24, 2017

PFB Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. On most tests except for the P/S Ratio test this stock looks cheap. Long term investors have mostly done fine, but dividend growth is a problem if you are investing for income. This seems to be changing at present though with last two dividend increases. This suggests that the management is positive about the future. See my spreadsheet on PFB Corp.

I do not own this stock of PFB Corp. (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.

On this stock the dividends are moderate with very low dividend growth. The current dividend is 3.56% with the 5 year, 10 year and historical median dividend yields at 3.91%, 3.94 and 2.93%. The dividend growth over the past 5 and 10 years to the end of 2016 were at 2.38% and 1.18%. The dividend growth to date over the past 5 year is 3.86%.

For much of this stock's life dividend increases were good when given, but then dividends were flat for a long period. For example dividends were flat for 4 years and then increased by50%. Then they were flat for 4 years and then increased by 60%. After that they were flat for 10 years and they just started to increase them again in 2016 and 2017. The last two increases were for 16.7% and 14.3%.

Currently they afford their dividends with the Dividend Payout Ratio for 2016 at 39% with 5 year coverage at a higher 84%. The DPR for CFPS for 2016 is 15% with 5 year coverage at 41%. It would seem that the company is confident of its future.

It is a rather small company with a Market Cap of around 60M with quite strong debt ratios. The Liquidity Ratio for 2016 was 3.16 with a 5 year median of 2.60. The Debt Ratio for 2016 was 2.90 with 5 year median ratio of 2.61. Leverage and Debt/Equity Ratios are good with ratios for 2016 at 1.53 and 0.53 respectively. The 5 year median ratios are 1.48 and 0.48 respectively.

A problem is that the Return on Equity has not been that great. The ROE for 2016 was 9.1% with 5 year median of 9.1%. The ROE was only 10% or higher 2 years in the last 5 years and 2 years in the last 10 years. The ROE on Comprehensive Income is similar with the ROE for 2016 at 9.3% and the 5 year median also at 9.3%. Here again the ROE was only above 10% for 2 years in the past 5 and 2 years in the past 10. This is not a great showing.

The total return for investors has been mostly good. Looking at total return over 5, 10, 15and 20 years you get 16.63%, 3.19%, 10.79 ad 10.26% per year. The reason the 10 year return is low it that the was at a high 10 years ago.

If you had bought this stock 5, 10, 15 or 10 years ago, the current dividend yield on your investment if you paid a median price would be 4.7%, 3.3%, 5.6% and 5.4%. If you had bought this stock 5, 10, 15 or 10 years ago, dividends would have covered 37.2%, 39.2%, 91.1% and 136.67% or your purchase price if you paid a median price would be 4.7%, 3.3%, 5.6% and 5.4%. So holding this stock for the long term would not have been a bad decision.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.13, 13.06 and 15.00. The 10 year corresponding ratios are 11.61, 13.93 and 16.25. The historical ratios are 8.90, 11.43 and 14.89. The current P/E Ratio is 21.40 based on a stock price of $8.99 and 2017 EPS estimate of $0.42. Since we are close to the end of the year, we should also look at the 2018 EPS estimate of $0.86 and its P/E Ratio which is 10.45. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $8.38 for this stock for 2017 and $12.00 for 2018. The 10 year low, median and high median Price/Graham Price Ratios are 0.70, 0.88 and 0.99. The P/GP Ratio for 2017 is 1.07 and for 2018 are 0.75. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 0.93. The current P/B Ratio is 1.21 a value some 30% higher. The current P/B Ratio is based on Book Value of $49.96M, BVPS of $7.44 and a stock price of $8.99. By this test the stock price is relatively expensive.

However, on an absolute basis any P/B Ratio at or below 1.50 say that the stock is cheap. The 10 year median P/B Ratio is below 1.00 and this is a very low P/B Ratio. So on an absolute basis the stock price is cheap.

The current dividend yield is 3.56% based on dividends of $0.32 and a stock price of $8.99. The historical dividend yield is 2.93% which is some 21.5% lower than the current dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The Price/Sales (Revenue) Ratio is 0.51. The current P/S Ratio is 0.58 a values some 14.8% higher. This current P/S Ratio is based on 2017 Revenue of $104M, Revenue per Share of $15.49 and a stock price of $8.99. This stock price testing suggests that the stock price is reasonable but above the median. The 2018 P/S Ratio is 0.55 and would not change the result.

When I look at analysts' recommendations I find Buy (2) and Hold (1). The 12 month stock price consensus is $11.00. This implies a total return of $25.92% with 21.36% from capital gains and 3.36% from dividends.

Ingrid Hart has an interesting analysis of this company on Simply Wall Street. SDR Staff on Stock Daily Review says via the Williams Percent Range that the stock is neither overbought nor oversold. The December 2016 Daily Advice likes this company for long-term share-price gains and attractive dividends.

PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Its web site is here PFB Corp.

The last stock I wrote about was about was IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more. The next stock I will write about will be Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more on Monday, November 27, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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