One positive to say about this stock (TSX-GZM.UN) today is that there is lots of insider buying going on in December 2008. This tells you that some insiders are confident about the future of this company. Generally speaking, it is not expected to earn in 2009 or 2010 the same EPS as it did in 2008. Cash Flow per share is also expected to go down. Generally speaking, analysts rate this stock as an Underperform or Underweight. (See my site for information on analyst ratings.)
Currently, the Graham Price is above the share price, but the Graham Price is dependent on earnings and book value, so this should go down if earnings go down. It will probably not go below the current price. The current yield on this stock is over 9% and the 5 year average is just over 7%. Also, the P/E is around 10.9% and the 5 year average is 14.6%. These indicators point to the stock being a good buy. The insider buying would indicate that the distribution amount is not likely to change in the near future from $1.24 per share.
One concern I have is the Current Asset/Current Debt ratio is only .87. In times of economic uncertainty, it would be better if they could cover their current debts, which this ratio says they cannot. The Globe gives this stock a 4 star rating, which is good, and as I said yesterday, the stability rating of SR-2 and STA-2M are also good. So it would appear that you can make a good income from this stock, but it will be a while before there is any stock price movement. However, in this market, I am sure that there will be stocks where you can get just as good a yield, but with a better Asset/Debt ratio and a better history of stock gains, as the stock price on this stock seems to have peaked in 2005. So it started its decline prior to the current bear market.
Gaz Metro Limited Partnership is a company whose core business is the distribution of Natural Gas in Quebec. Gas Metro is also, indirectly, the sole shareholder of the Vermont Gas System (VGS), and the Green Mountain Power Corp (GMP), the second largest electricity supplier in Vermont. The company operates in Canada and US. Its web site is www.gazmetro.com. Its web site is www.gazmetro.com. See my spreadsheet at www.spbrunner.com/stocks/gzm.htm. I have reloaded my spreadsheet today.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.
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