Wednesday, November 30, 2016

Crescent Point Energy Corp

Sound bite for Twitter and StockTwits is: Cheap and risky. Dividends stocks hit their low point after a dividend cut. The dividend cut on this stock happened a while ago and the stock is currently recovering somewhat. So the time to get the cheapest price is when a dividend cut is announced. 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 stock has been cutting it dividends since 2015 after keeping the dividend flat for 5 years. Dividends since 2015 are down by 87%. The latest dividend cut was in 2016 and it was for 70%. It is not surprising as this stock is into oil and gas exploration. Earnings for 2015 were negative and they are expected to remain negative this year and next year.

Shares have increased a lot over the past 5 and 10 years. Outstanding shares are up by 13.6% and 44.2% per year over the past 5 and 10 years. This means that when looking at this stock, it is the per share values that would point to any growth. You can really see this when looking at Revenue, where Revenue growth is 12.8% and 27.3% per year over the past 5 and 10 years. Revenue per Share has declined by 0.7% and 0.8% per year over the past 5 and 10 years. They really are not currently growing where Revenue is concerned.

One of the analysts from Stock Chase pointed out that people bought this stock for the dividends. Others have said this too. However, I do not think that it is wise to count on dividends from an oil and gas producer. These companies go through boom and bust all the time. They tend to have busts in the bad times and that may be the times when dividend investors can least afford a big cuts to dividends.

However, when dividends are good you can benefit. On this stock if you bought it 5, 10 or 15 years ago dividends would have covered your original price if you paid a median price by 25.89%, 124.39% and 972.95%. However, past performance does not necessarily show what the future performance will be. This stock also used to be an income trust stock.

The 15 year low, median and high median Price/Earnings per Share Ratios are 12.11, 14.97 and 16.74. This might be useful in the future when they are again earning money. However, you cannot really test stock price using P/E Ratios as 2016 and 2017 EPS are expected to be negative and 2018 earnings will be low.

I get a Graham Price of $11.77 after doing some fudging because of lack of earnings in 2016. The low, median and high median Price/Graham Price Ratios are 1.50, 1.82 and 2.25. These are rather high. However, the current P/GP Ratio is currently at 1.35 based on a stock price of $15.90. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 1.68. The current P/B Ratio is 0.85 a values some 495 lower. The current P/B Ratio is based on BVPS of $18.64 and a stock price of $15.90. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median P/S Ratio is 4.20. The current P/S Ratio is 3.38 based on 2016 Revenue estimate of $2549M with Revenue per Share of $4.71 and a current stock price of $15.90. The current P/S Ratio is 19.6% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. (Really to be cheap, the current ratio needs to be 20% lower, but it is very close.)

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The most recommendation is a Buy recommendation and the consensus recommendation is a Buy. The 12 month stock price consensus is $23.22. This implies a total return of 48.30% with 46.04% from capital gains and 2.26% from dividends based on a current stock price of $15.90.

Alexander John Tun of Motley Fool thinks that this company is trading at a price too hard to ignore. He believes that it is also trading relatively lower than similar stock. Geoffrey Morgan in the Financial Post says that the company's losses in the third quarter have narrowed because of technological improvements. Analysts have different views of this stock at Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report hereand here.

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 2, 2016 around 5 pm. Tomorrow on my other blog I will write about Debt Ratios... learn more on Thursday, December 1, 2016 around 5 pm.

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.

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.

Monday, November 28, 2016

Innergex Renewable Energy

Sound bite for Twitter and StockTwits is: Bit expensive. I do not like this stock. They cannot afford their dividends and the Long Term Debt/ Market Cap Ratio is above 1.00. Also their book value is dropping. See my spreadsheet on Innergex Renewable Energy.

I do not own this stock of Innergex Renewable Energy (TSX-INE, OTC-INGXF), but I used to. I bought this stock in 2006 as it was highly rated and it was in the alternative energy field. I bought Innergex Power on a buy rating and favorable report from TD although it has only been going from 2003. 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.

This company used to be an income trust. On March 29, 2010 the company changed from an income trust of Innergex Power (IEF.UN) to Innergex Renewable Energy (INE) and the strategic combination of Innergex Power Income Fund and Innergex Renewable Energy became effective. For INE shareholders, dividends were cut in 2010 and then increased in 2011, so in the end dividends were only cut by just over 14%.

Dividends have been growing lately and the growth is at 6% per year over the past 5 years. However, dividends have declined over the past 10 years by 0.5%. Dividend yield is currently at 4.64% based on dividends of $0.64 and a stock price of $13.80. By my standards the dividend growth for the past 5 years is low and the dividends are good.

They are not earning enough to cover the dividends. In the past 5 years they have paid out in dividends more than they have earned. In 2015 they had an earnings loss of $0.37 and paid out $0.59 in dividends. Dividends have been covered by CFPS where 93.7% of the CFPS was paid out in dividends. The 5 year median payout via CFPS is better at 43%.

The Liquidity Ratio is good at 2.15. The Debt Ratio is very low at just 1.18 where you want to see a ratio of 1.50 or better. Leverage and Debt/Equity Ratios are very high at 6.63 and 5.63 where you want to see ratios of less than 3.00 and 2.00 respectively.

However, what really bothers me about their debt is that their long term debt is currently at a ratio to the market cap of 1.63. The market is valuing this company way below just the long term debt. This is not good.

I cannot test the stock price using Price/Earnings per Share Ratio because I just have negative P/E Ratios.

I get a 10 year median Price/Book Value per Share Ratio of 1.87. The current P/B Ratio is 4.48 a value some 140% higher. The current P/B Ratio is based on BVPS of $3.08 and a Stock Price of $13.80. This stock price testing suggests that the stock price is relatively expensive. In absolute terms a P/B Ratio of 4.48 is high.

I get a Graham Price of $3.90. The 10 year low, median and high median Price/Graham Price Ratios are 1.28, 1.42 and 1.57. The current P/GP Ratio is 3.54 based on a stock price of $13.80. This stock price testing suggests that the stock price is relatively expensive. In absolute terms a P/GP Ratio of 3.54 is high. Problem is earnings are low and Book Value is dropping.

You cannot use historical median dividend yields as this stock used to be an income trust. The 5 year median Dividend Yield is 5.57% and the current Dividend Yield is 4.64% a value some 18% lower. By this measure, the stock price seems to be reasonable but above the median. It is getting close to expensive.

The 10 year median P/S Ratio 5.25 and the current P/S Ratio is 5.13 a value some 2.4% lower. This stock price testing suggests that the stock price is reasonable and below the median. I think a P/S Ratio of 5.13 is a rather high one however.

When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. Most are a hold and the consensus recommendations would be a Hold. The 12 month stock price is $16.41. This implies a total return of 23.55% with 18.91% from capital gains and 4.64% from dividends.

Demetris Afxentiou of Motley Fool likes this stock and the renewable energy field. Some technical analysis is done on this stock at Wall Street Confidential. The Williams Percent Range shows that this stock is neither oversold nor overbought. There is a positive report on this company at World Finance.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.

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 30, 2016 around 5 pm. Tomorrow on my other blog I will write about Valeant Pharmaceuticals and Debt... learn more on Tuesday, November 29, 2016 around 5 pm.

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.

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.

Friday, November 25, 2016

PFB Corp

Sound bite for Twitter and StockTwits is: Price seems reasonable. In testing of the stock price I had mixed results. However, there were questions or problems with most of the tests. Price is probably relatively reasonable. The company has good debt ratios to see it through some tough times. 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.

This company started to pay dividends in 1997, almost 20 years ago. It has only raised the dividend 3 times. In 2001 the increase was 50%, in 2005 it was 60% and in 2016 the increase was 16.7%. Dividend growth to the end of 2015 for the past 5 and 10 years is 0%. If you look at dividends to date you get a 5 year increase of 3.13% per year. This is higher than the rate of inflation. I would prefer stocks that raised the dividend each year.

The current dividend yield is moderate at 3.21%. The 5 year median dividend yield is 4.08%. The 10 year median dividend yield is 3.94% and the historical dividend yield is 2.90%. So yield has fluctuated, but has remained within the moderate zone. However the 5 year rate is getting into the good zone.

Over the 5 year period to the end of 2015 the EPS has covered the dividend at 91%. The coverage by CFPS is at 49.8%. The coverage has varied each year because EPS and CFPS are rather volatile. This is an industrial stock so that should be expected.

If you had held this stock for 5, 10 or 15 years, you could be earning 4.6%, 2.6% and 8.18% yield on your original stock price, if you paid a median price. Yes, the 10 years yield is correct at 2.6% because the stock price was quite high exactly 10 years ago. If you had held this stock for 5, 10 or 15 years the dividends would have covered 37.9%, 32.7% and 140.6% of the cost of your stock if you paid a median price.

This company had a very good year in 2015. They are not expected to do as well in 2016 and in 2015, but they are still expected to do well. Because outstanding shares have not really changed over the past 5 and 10 years, you can look at things like Revenue or Revenue per Share. However, since earnings and cash flow are volatile, it is best to look at the 5 year running averages.

The best growth is in Revenue per Share. Revenue per Share has grown by 8.3% and 2.1% per year over the past 5 and 10 years. Revenue per Share using the 5 year running average has growth over the past 5 and 10 years of 4.8% and 3.2% per year.

For EPS, EPS is up by 22.1% and down by 1.9% per year over the past 5 and 10 years. As stated the best way to judge growth is the 5 year running average. EPS using the 5 year running average shows growth of 0.6% and a decline of 1.3% per year over the past 5 and 10 years. This is really low growth. A lot of companies are having trouble coming out of the 2008 recession.

The bright spot in earnings is that the growth using 5 year running averages for comprehensive income over the past 5 years is at 5.4%. Net Income growth over the past 5 years using 5 year running averages is just 1.3%. This could point to the company doing better than it might first appear in earnings growth. It is a good sign when comprehensive income is higher than net income. (There is no 10 year 5 year running average for comprehensive income as statements have only included comprehensive income since 2006.)

CFPS looks decent for the past 5 and 10 years with growth of 16.4% and 3.6% per year over the past 5 and 10 years. However, using 5 year running averages growth is a lot lower with a decline in CFPS of 1.9% and an increase of 0.5% per year over the past 5 and 10 years. This again is really low growth.

The debt ratios are really good for this company. The Liquidity Ratio for 2015 is 2.45 with a 5 year median value of 2.45. The Debt Ratio is 2.61 with a 5 year median value also of 2.61. The Leverage and Debt/Equity Ratios for 2015 is at 1.62 and 0.62 respectively with 5 year median values of 1.45 and 0.45 respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.23, 12.51 and 14.79. The 10 year values are 11.16, 14.04 and 17.23. The historical values are 8.20, 10.36 and 14.79. The current P/E Ratio is 12.82 based on a stock price of $8.72 and 2016 EPS estimate of $0.68. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $10.72. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.93 and 1.07. The current P/GP Ratio is 0.81 based on a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share Ratio is 0.93. The current ratio is 1.16 which is some 24.5% higher than the 10 year ratio. The current ratio is based on BVPS of $7.51 and a stock price of $8.72. This testing suggests that the stock price is relatively expensive. The current ratio is also much lower than what is considered to be a good ratio of 1.50. The problem with this test is that the P/B Ratios are very low ratio as a good ratio is considered to be 1.50.

The historical dividend yield is 2.90%. The dividend yield at 3.21% is some 10.7% higher. The current dividend yield is based on dividends of $0.28 and a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable and below the median. Problem with this test is that can we consider this stock to be a dividend growth stock?

The 10 year P/S Ratio is 0.51. The current P/S Ratio is 0.57 based on Revenue estimate for 2016 of $101.9M and Revenue per Share of $15.2M and a stock price of $8.72. This stock price testing suggests that the stock price is relatively reasonable but above the median. A problem with this testing is that the P/S Ratios are very low as a good P/S Ratio is around 1.00.

There are two analysts following this stock. Both analysts rate this stock as a Buy. The consensus would also be a Buy. The 12 month stock price is $12.68. This implies a total return of 48.62% with 45.41% from capital gain and 3.215 from dividends based on a current stock price of $8.72.

PFB Corp put out a News Wire about their third quarterly results. Sales and net income are lower. Analysis of this stock is showing on Stock News Week. Piotroski F-Score of 6 is mediocre. There is some more analysis on Wall Street Confidential. CCI is rather high at 90.48. There is also some analysis of this stock's dividend on Guru Focus.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

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 Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more on Monday, November 28, 2016 around 5 pm.

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. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB Corp.

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.

Wednesday, November 23, 2016

IBI Group Inc.

Sound bite for Twitter and StockTwits is: Price is Cheap to Reasonable. Price is hard check because of cancelled dividend and negative book value. I think it is a viable company, but it may take some time to recover. See my spreadsheet on IBI Group Inc.

I do not own this stock of IBI Group Inc. (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.

This company had 3 bad years of negative earnings in 2012 to 2014 inclusive. They suspended the dividends in 2013 after paying only 1 dividend. This used to be an income trust. A lot of income trust companies are having a hard time adjusting to being corporations. There is no mention of when they might resume dividends, but they did make a profit in 2015 but not in the first 3 months 2016.

Some analysts have complained about the high debt of this company. They seem to be trying to reduce debt. For the third quarter of 2016, the Debt/Market Cap Ratio moved to 0.35 from 1.31. Debt went down (50%), but market cap also went up (180%).

One serious problem is that the Book Value of this company is negative. This means that break value of the company is negative. This has occurred because of the three years of negative earnings.

The 12 year low, median and high median Price/Earnings per Share Ratios are 6.20, 9.45 and 12.17. They are probably a bit low. If you include only positive P/E Ratios the ratios are 10.49, 11.34 and 15.95. The current P/E Ratio is 21.34 based on a stock price of $6.19 and 2016 EPS estimate of $0.29. This is rather high. If you use the 2017 EPS estimate of $0.52 gives you get a P/E Ratio of 11.90. This probably points to the stock price is being reasonable and around the median.

I cannot do any P/B Ratio testing or any Graham Price testing because the Book Value for this stock is negative. I can do no dividend yield testing because the dividend is suspended.

The 10 year median P/S Ratio is 0.60. The current P/S Ratio is 0.44 based on a stock price of $6.19, Revenue of $353M and Revenue per Share of $14.14M. The current P/S Ratio is some 27% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Another way to look at this stock is to see how Revenue per Share, Cash Flow per Share and EPS is changing relatively to the stock price change. On this stock you need to look at per share values because the outstanding shares have been rising by 14% and 17% per year over the past 5 and 10 years.

The stock price has been falling at 14.1% and 6.5% per year over the past 5 and 10 years. The Revenue per Share has been falling by 11.1% and 2.2% per year over the past 5 and 10 years. EPS has been fall by 16.2% and 14.1% per year over the past 5 and 10 years. Cash Flow per share has been falling by 27.9% and 14.2% per year over the past 5 and 10 years.

So what do we see in this data. First Revenue for the 12 month period ending in the third quarter is close to the estimate for Revenue in 2016. Revenue has not fallen as much as the stock price. This again shows that the stock price is relatively cheap.

EPS has dropped a little faster than the stock price. The 12 month period to the end of the third quarter shows negative EPS, but analysts expect earnings of $0.29. They could be right. This would suggest price is relatively reasonable.

There are lots of problems looking at cash flow. First for the 12 month period to the end of the third quarter, Cash Flow is down by just 9.7%, but the 2016 estimates shows Cash Flow down by 51%. Cash Flow has been volatile. Cash flow was negative 5 years ago.

When I look at analysts' recommendations I find Buy and Hold recommendations. There is more Buy than Hold recommendations. The consensus recommendation would be a Buy. The 12 months stock price consensus is $7.10. This implies a total return of 14.70% all from capital gains based on a current stock price of $6.19.

The company recently put out a Press Release about the partial redemption of their 6% convertible debentures. The company also put out a Press Release about their third quarterly results for 2016. There is a recent technical analysis of this company on Wall Street Confidential. Some analysts said positive things about this company at The Cerbat Gem . Most analysts are positive about this company at Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was Johnson and Johnson (NYSE-JNJ)... learn more . The next stock I will write about will be PFB Corp. (TSX-PFB, OTC-PFBOF)... learn more on Friday, November 25, 2016around 5 pm. Tomorrow on my other blog I will write about the Five Year Rule... learn more on Thursday, November 24, 2016around 5 pm.

IBI Group Inc. is an international, multi-disciplinary provider of a range of professional services focused on the physical development of cities. The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology.) Its web site is here IBI Group Inc.

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.

Monday, November 21, 2016

Johnson and Johnson

Sound bite for Twitter and StockTwits is: Price reasonable to expensive. On an historical basis the stock price seems cheap to reasonable. However, comparing to values over the past 10 years the stock is reasonable, but above the median. See my spreadsheet on Johnson and Johnson.

I do not own this stock of Johnson and Johnson (NYSE-JNJ), but I used to. As Canadians, we are told we should be buying US stocks for our portfolio. It is often recommended that we have at least 25% of our portfolio in US stocks. I have never followed this, although I have tried dipping into the US market, but I have never made any money there. I bought some of this stock in June 2005 and realized a year later, in June of 2006 that it was going nowhere for me and sold. I lost almost 17% of my investment. When I bought in 2005, all the analysts were saying that it was a good buy at that time.

Since this is a US dividend growth stock, dividends payments will vary with the exchange rate and so as a Canadian you will never know exactly what dividends you will receive. Over the past 5 and 10 years dividends have grown at 6.9% and 8.8% per year in US$. Over the past 5 and 10 years the dividends have grown at 14.2% and 10.7% in CDN$. At different time periods this will be different.

The dividends are moderate as are the dividend increases. The current dividend yield is 2.78%. The historical median dividend yield is 2.18%. The 5 year median dividend yield is 3.12%. The 10 year median dividend yield is 3.06%.

For the 5 year periods ending in December 2014 and 2015, the total return has been good for Canadian investors in the stock with total return at 15.4% and 21.5% per year. For Canadians in the 5 year periods ending in December 2001 and 2002 Total Return was also good at 24.83% and 14.26%, respectively. However, the 5 year periods ending in December 2003 to 2011 the total return per year were negative or very low. This is a 9 year period.

If you had held this stock for 5, 10 or 15 year periods and paid a median price, you would be earning a dividend yield 5.02%, 5% or 6.2% per year on your original investment. If dividend growth continues at 6.9% per year over the next 5, 10 or 15 year periods you could be earning a dividend yield of 3.89%, 5.43% or 7.58% based on today's stock price of $ $114.91.

This stock has very good debt ratios. The Liquidity Ratio for 2015 is 2.17 with a 5 year median of 2.20. The Debt Ratio is 2.14 with a 5 year median of 2.14. Leverage and Debt/Equity Ratios for 2015 are 1.88 and 0.88 with 5 year median values of the same.

Growth over the past 5 and 10 years has been low to moderate. The Revenue per Share growth over the past 5 and 10 years is at 2.5% and 4.6% per year. The EPS growth over the past 5 and 10 years is at 2.8% and 4.7% per year. The CFPS growth over the past 5 and 10 years is at 0.7% and 4.7% per year. This is lower growth than the stock price growth with capital gains at 10.7% and 5.5% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.12, 17.45 and 19.41. The corresponding 10 year ratios are 15.33, 17.22 and 18.82. The historical ratios are 16.32, 18.09 and 19.93. The current P/E Ratio is 19.22 based on a current stock price of $114.91 and 2016 EPS estimate of $5.98. This stock price testing suggests that the stock price is reasonable but above the median. It is getting close to expensive.

I get a Graham Price of $59.61. The 10 year low, median and high median Price/Graham Price Ratios are 1.41, 1.58 and 1.80. The current P/GP Ratio is 1.93 based on a stock price of $114.91. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 3.71. The current P/B Ratio is 4.35 a values some 17% higher. The current P/B Ratio is based on a stock price of $114.91 and current BVPS of $26.41. This stock price testing suggests that the stock price is reasonable but above the median. It is getting close to expensive.

The current dividend yield is 2.78% based on dividends of $3.20 and a stock price of $114.91. The historical median Dividend yield is 2.18% a value some 27.7% lower. This suggests that the stock price is cheap on a historical basis. The 10 year median dividend yield is higher at 3.06%, a value some 9% higher than today dividend yield. On a 10 year basis, today stock is relatively reasonable, but above the median.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. There are more Holds than Buys, but the consensus is a Buy. The 12 month stock price consensus is $126.53. This implies a total return of $12.90% with 10.11% from capital gains and 2.78% from dividends.

This associated press release in the Toronto Star talks about some women winning suit against Johnson and Johnson over the use of talcum power. There are different opinions about the use of talcum powder and unfortunately being in health care industry can include being suited. The blogger Income Investor really likes this stock. Todd Campbell of TMFEB Capital puts in a good word for this stock on Motley Fool. Alessandro Pasetti on Seeking Alpha puts in a cautious word on this company because a federal judge in Boston invalidated a key patent on Johnson & Johnson's blockbuster arthritis drug Remicade.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

The last stock I wrote about was about was Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more . The next stock I will write about will be IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more on Wednesday, November 23, 2016 around 5 pm. Tomorrow on my other blog I will write about Failed Stocks... learn more on Tuesday, November 22, 2016 around 5 pm.

Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here Johnson and Johnson.

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.

Friday, November 18, 2016

Cenovus Energy Inc.

Sound bite for Twitter and StockTwits is: Relatively cheap? Resource stocks tend to go up and down and if you want to make money you have buy them when they are down. See my spreadsheet on Cenovus Energy Inc.

I do not own this stock of Cenovus Energy Inc. (TSX-CVE, NYSE-CVE). This is another stock that was talked about at the 2010 Money Show in Toronto. There were those who liked oil companies and they mentioned both Suncor Energy Inc. (TSX-SU) and Cenovus Energy Inc. (TSX-CVE). This company was split off from EnCana (TSX-ECA) in 2009. I was also following Alberta Energy Co. (TSX-AEC) into EnCana.

Dividends have been cut. They were cut by 40% in 2015 and then another 69% in 2016, this year. This is hardly surprising as all oil companies are not doing well. The current dividend is low at 1.01% based son dividends of $.20 and a stock price of $19.81.

If you bought this stock 5, 10 or 15 years ago, your dividend yield on your original stock price if a median price is 0.58%, 0.76% and 1.90%. So having bought it 5 or 10 years ago, the dividend yield on your original price is lower than buying today. However, if you bought this stock 5, 10 or 15 years ago, dividends paid would have covered 11.5%, 29.8% or 81% of your original stock price if you paid a median price.

Even at today’s low dividend analysts do not think that dividends will be covered by EPS until 2018. It is expected that by the end of 2016 dividends paid over the past 5 years will be 124% of EPS over the past 5 years.

For this stock, the stock price is falling further than Revenues or Cash Flow are falling. Capital loss over the past 5 and 10 years is at 12.06% and 3.70% per year. Over the say time period Revenue per share is down by 1.4% per year over the past 5 years, but up by 5.11% per year over the past 10 years. Cash Flow per share is down by 8.8% over the past 5 years which is not as fast as capital loss of the stock price. However, the CFPS has fallen further over the past 10 years with decline in CFPS at 8.3% per year over the past 10 years.

The Liquidity Ratio is generally low on this company, but it has been rising lately. The Liquidity Ratio for 2015 is 3.48. The one for the end of the third quarter of 2016 is still high at 3.10. This is a good sign that they are ensuring a good Liquidity Ratio when times are bad. It will help them through a rough patch.

The 5 year low, median and high median Price/Earnings per Share Ratios are 21.23, 27.54 and 34.12. The corresponding 10 year ratios are 19.19, 23.25 and 27.17. The historical ratios are 14.77, 17.58 and 20.40. We cannot do any testing of 2016 P/E Ratio as the EPS is negative and is expected to be very low in 2017.

I get a Graham Price of $16.36 using in the formula the last 3 earnings rather than the 2016 estimate. I cannot use a negative EPS in this formula. The 10 year Price/Graham Price Ratios are this basis are 0.94, 1.20 and 1.43. The current P/GP Ratio is 1.21 based on a stock price of $19.81. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.13. The current P/B Ratio is 1.44 a values some 32% lower. The current P/B Ratio is based on BVPS of $13.72 and a stock price of $19.81. This stock price testing suggests that the stock price is relatively cheap. This test maybe the best test to use. It is not based on estimates and is based on very recent values.

I cannot do any testing on Dividend Yield as I normally do because of the recent dividend cuts. However, the last time they cut the dividends the Dividend Yield got to a median of 0.79% (2004). The current dividend yield of 1.01% is some 27.8% higher. This might be suggestive of a current relatively cheap stock price.

The 10 year P/S Ratio is 1.61. The current P/S Ratio is 1.38 based on 2016 Revenue estimates of $11958M and $14.35 Revenue per Share. The current P/S Ratio is some 14% lower than the 10 year ratio. This stock price testing suggests that the stock price is reasonable and below the median.

When I look at analysts’ recommendations, I find Buy and Hold recommendations. There are more Hold recommendations that Buy recommendations and the consensus recommendation would be a Hold. The 12 month stock price consensus is $22.43. This implies a total return of 14.245 with 13.23% from capital gains and 1.01% from dividends.

Judy McKinnon talks on Wall Street Journal about the third quarter results including an earnings loss. Stock Talk Staff talks about some technical analysis on this stock at Stock Talk Daily. See what views analysts have of this stock at Stock Chase. One thinks it is overvalued.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was Alimentation Couche-Tard Inc. Redone (TSX-ATD.B, OTC-ANCUF)... learn more . The next stock I will write about will be Johnson and Johnson (NYSE-JNJ)... learn more on Monday, November 21, 2016 around 5 pm.

Also, on my book blog I have put a review of the book The Bonobo and the Atheist by Frans de Waal learn more...

Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus Energy Inc.

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.

Thursday, November 17, 2016

Alimentation Couche-Tard Inc. Redone

Sound bite for Twitter and StockTwits is: Still rather expensive. I was looking again at this stock for my investment club. The stock has gone down some from September. When I looked then it was $68.26 and now it is some 7% lower at $63.38. See my spreadsheet on Alimentation Couche-Tard Inc. .

I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

They started to pay a dividend in 2006. The dividends are very low with good growth. The current dividend is 0.56%. The historical median dividend yield is 0.60%. The historical high is 1.31%. Mind here historical means 10 years of dividends. The growth in dividends over the past 5 and 9 years was 32.5% and 23.5% per year. I generally do not buy stocks with dividends less than 1% because it takes so long to get to a really good dividend yield on your original stock purchase.

The dividends are very affordable with the 2016 Dividend Payout Ratio for EPS at 9.2% and the CFPS at 6.1%. The last dividend increase was this year for 14.8%. However, they often increase the dividend more than once a year. Last year total dividend increase was 40%. (Note that the financial year for this company ends around the end of April each year.)

This stock reports in US$. Growth is good for Revenue, Earnings and Cash Flow. There is little change in outstanding shares. Revenue grew at 12.5% and 12.9% per year over the past 5 and 10 years. EPS grew at 26.3% and 21% per year over the past 5 and 10 years. Cash Value grew at 22.8% and 18.8% per year over the past 5 and 10 years. All this growth is in US$.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.48, 15.96 and 19.85. The 10 year corresponding values are 12.26, 15.9 and 19.64. The historical values are 12.50, 17.40 and 20.80. They are remarkable similar. The current P/E Ratio is 20.36 based on a stock price of $63.38 and 2017 EPS estimate of $3.11 CDN$ ($2.31 US$). This suggests that the stock price is relatively expensive.

I get a Graham Price of $29.69. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81. The current P/GP Ratio is 2.13 based on a stock price of $63.38. This suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 2.88. The current P/B Ratio is 5.03 based on BVPS of $12.14 and a stock price of $63.38. The current P/B Ratio is some 75% higher than the 10 year median ratio. This suggests that the stock price is relatively expensive.

The historical median dividend yield is 0.60%. The current dividend at 0.49% is based on dividends of $0.31 and a stock price of $63.38. The current dividend is some 18.5% lower than the historical median. This suggests that the stock price is relatively reasonable but below the median. This is a change from September when the current dividend was at 0.45% and was some 24% below the historical median and therefore relatively expensive

When I look at analysts' recommendations I find Strong Buy, Buy and Underperform. The vast majority of the recommendations are a Buy. This has not changed from September. When I looked in September the 12 months stock price is $78.38 CDN$ ($60.30 US$). This implied a total return of $15.29% with 14.83% from capital gains and 0.45% from dividends. The 12 month stock price is now $81.48 ($60.47 US$) and this implies a total return in CDN$ of 29.05% with 28.56% from capital gains and 0.49% from dividends. The higher gain is caused by the lower stock price and the higher currency exchange rate.

Will Ashworth of Motley Fool talks about this company buying CST Brands Inc. They have also bought 53 Cracker Barrel locations. Unfortunately, Canadian companies buying American companies have not always worked to our benefit. Jared Coughlin on Community Financial News talks about Desjardins' increasing their target price. See what analysts are saying at Stock Chase.

The last stock I wrote about was about was Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more . The next stock I will write about will be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more on Friday, November 18, 2016 around 5 pm

Today on my other blog I will write about Money Show 2016 - Tom Sosnoff... learn more .

Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard Inc. .

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.

Wednesday, November 16, 2016

Keyera Corp

Sound bite for Twitter and StockTwits is: Not cheap. I think that the stock price is on the high side and the stock ratios are too high for a utility stock. I would also prefer to see them get the dividends better in line with the EPS. The company has a lot of good features; it is just priced too high for my liking. When interest rates again raise dividend paying utilities may not be so sought after. See my spreadsheet on Keyera Corp.

I do not own this stock of Keyera Corp. (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. Some of the stocks pointed out where good stocks, some not so much.

This used to be an Income Trust company. They did not cut the dividends in changing to a corporation; they just held the dividend steady for one year. However, as a result they are still payout out more in dividends than they earn. They are still judging their payouts by Distributable Cash (really AFFO). According to that the payout is 49.2%.

The Dividend Payout Ratio for 2015 for EPS is 117.4% with a 5 year median also of 117.4%. The DPR for CFPS for 2015 is 46.5% with a 5 year median of 49.5%. Over the past 5 years they have paid out 108% of the EPS in dividends.

The current Dividend Yield is good with moderate dividend growth. The current dividend yield is 4.25% based on a stock price of $37.41 and Dividends of $1.59. The 5 year median Dividend Yield is 3.96%. As an Income Trust, the Dividend Yields were higher in the past. The historical high is 12%. The historical median is 6.02%. Dividends have only been paid for 13 years. The company went public in 2003.

The dividends have grown at 9.2% and 8% per year over the past 5 and 10 years. The last dividend increase was for 6% and it occurred this year. If this company was bought 5 or 10 years ago, Dividend Yield on the original stock price if at a median price would be 7.3% and 15.2%. If this company was bought 5 or 10 years ago, Dividends would have paid 30% and 108% of the original stock price if a median price was paid for the stock.

The Liquidity Ratio is low at 0.87 in 2015. The 5 year median Liquidity Ratio is 1.36. If you add in cash flow after dividends the Liquidity Ratio would be 1.59. So the company is counting on cash flow to cover current liabilities. The problem with low Liquidity Ratios is that it can make the company vulnerable, especially in bad times. The Debt Ratio is also low at 1.48 in 2015. The 5 year median ratio is also 1.48. I prefer both these ratios to be 1.50 for safety's sake.

The 5 year low, median and high median Price/Earnings per Share Ratios are 22.83, 29.21 and 34.19. The corresponding 10 year values are 20.02, 24.08 and 28.14. The 13 year values are 18.04, 22.18 and 26.32. It would seem that stock price has been rising because of higher P/E Ratios. The current P/E Ratio is 25.45 based on a stock price of $37.41 and 2016 EPS estimate of $2.55. If you use the 10 year values, this stock price testing suggests that the stock price is relatively reasonable. However, I think that the P/E Ratios are rather high for a utility stock.

I get a Graham Price of $18.81. The 10 year low, median and high median Price/Graham Price Ratios are 1.75, 2.11 and 2.47. Here again I thing that the ratios are quite high for a utility stock. The current P/GP Ratio is 1.99 based on a stock price of $37.41. This stock price testing suggests that the stock price is relatively reasonable and below the median. On an absolute basis, a ratio of 1.99 is high, especially for a utility stock.

The 10 year median Price/Book Value per Share Ratio is 3.27. The current P/B Ratio is 3.50 a value some 7.1% higher. This current P/B Ratio is based on BVPS of $10.69 and a stock price of $37.41. Here again I think that the ratio is quite high. On a relative basis the stock price is reasonable but above the median.

The 10 year median P/S Ratio is 1.12. The current P/S Ratio is 2.61 based on 2016 Revenue estimates of $2461M, Revenue per share at $14.33 and a stock price of $37.41. The current P/S Ratio is some 132% above the 10 year median. This stock price testing suggests that the stock price is expensive.

The 10 year median Price/Cash Flow per Share Ratios is 12.48. The current P/CF Ratio is 12.90, a value some 3.5% higher. The current P/CF Ratio is based on 2016 CFPS estimate of $2.90 and a stock price of $37.41. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy with Hold a close second. The consensus recommendations would be a Buy. The 12 months stock price is $44.43. This implies a total return of 23.025 with 18.77% from capital gains and 4.25% from dividends based on a current price of $37.41.

The Dividend Channel via Forbes talk about their approval of this stock and its good dividends. On November 8, 2016, Keyera put out a News Wire about their recent third quarter. Donnie Miller on Nov 15th, on Baseball News Source talked about Scotiabank reissued their sector perform rating. He also talked about other recommendations for this company. See what analysts are saying about this company on Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

The last stock I wrote about was about was Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more . The next stock I will write about will Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more on Friday, November 18, 2016 around 5 pm.

Tomorrow on my other blog I will write about Money Show 2016 - Tom Sosnoff... learn more on November 17, 2016 around 5 pm. Also on this blog a will write about will Alimentation Couche-Tard Inc. Redone (TSX-ATD.B, OTC-ANCUF)... learn more on Friday, November 17, 2016 around 5 pm.

Keyera provides essential services and products to oil and gas producers in western Canada, and markets related natural gas liquids (NGLs) throughout North America. Its web site is here Keyera Corp.

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.

Tuesday, November 15, 2016

Dollarama Inc.

Sound bite for Twitter and StockTwits is: Awful, awful, and awful. The stock price is very expensive, BVPS dropping like a stone and high debt ratios with Debt/Equity Ratio an astounding 7.27. I am really disappointed. I looked this stock because I had been hearing great things about it. It is a real disappointment. See my spreadsheet on Dollarama Inc.

I do not own this stock of Dollarama Inc. (TSX-DOL, OTC-DLMAF). I belong to an investment club and this was a stock I volunteered to look at. I had, of course, heard of this stock before and people have mentioned that it is doing very well for shareholders. I would not consider buying this stock while the dividends are below 1%.

Note that the financial year end is February 1 or thereabouts each year. So the 2014 financial year ends February 1, 2015 and the 2015 financial year ends January 31, 2016.

There is only 7 years of data on this company that went public in 2009. They started the company in 1992. Dividends have been paid since 2012. However, since the dividends have never reached 1% can we really call it a dividend company? The current dividend is 0.41% based on dividends of $0.40 and a stock price of $98.61. Dividend increases are good with them at 18.1% per year over the past 4 years. The last dividend increase was in this year and it was for 11.1%.

The Dividend Payout Ratios are low. The DPR for 2015 for EPS was 11.7% and the 5 year median is 14.2%. The DPR for CFPS for 2015 was 9% and the 5 year median is 11%.

An interesting note is that for people who bought stock 5 years prior to 2015 are receiving a yield on their original purchase price of 2.8% and those that bought the stock 5 years prior to this present have a yield on their original purchase of 2.1%. This is caused by good dividend increases. Also the stock price has risen sharply.

The total return over the past 5 and 8 years to date (11 November 2016) is at 35.75% and 34.59% per year. The portion of this return attributed to dividends over the past 5 and 8 years is at 0.76% and 0.56% per year. The portion of this return attributed to capital gains over the past 5 and 8 years is at 34.99% and 34.03% per year. This is quite a return for a retail stock.

The total return over the past 5 and 7 years to the end of their financial year of February 2015 is at 40.17% and 34.92% per year. The portion of this return attributed to dividends over the past 5 and 8 years is at 0.88% and 0.56% per year. The portion of this return attributed to capital gains over the past 5 and 8 years is at 39.29% and 34.36% per year.

There total return far higher than the growth in Revenue and Earnings. The Revenue per Share has grown at 17.35 and 7.8% per year over the past 5 and 7 years. The EPS has grown at around 27% and 31.09% per year over the past 5 and 6 years. The Cash Flow per Share has grown 37.1% and 14.7%. The Cash Flow growth over the past 5 year is quite high.

Another wrinkle is that because outstanding shares are declining over the past 5 years, it would be best to look at Net Income increase over the past 5 years rather than EPS increase. Over the past 5 year Net Income has increased by 27% per year.

The Liquidity Ratio is generally quite good with the 2015 ratio at 2.72 and the 5 year median at 2.78. However the Liquidity Ratio for the second quarter is low at 1.22. This low ratio is caused by the current portion of their long term debt. The Debt Ratios vary a lot. The ratio for 2015 is 1.35. It has a 5 year median of 2.23. The Debt Ratio for the second quarter is just 1.16.

The Leverage and Debt/Equity Ratios are currently very high for a consumer discretionary stock. The ratios for 2015 are 3.89 and 2.89. In the second quarter they are 7.27 and 6.27 and these are extremely high. The increase is due to the fact that Book Value and Book Value per Share has been dropping rapidly lately. BVPS is down 33% in 2015 and then another 44.6% in the second quarter of 2016. This is a bad development.

The biggest reason for the drop in BVPS is the repurchase of outstanding shares. Outstanding shares are down by 3.7% per year over the past 5 years. They are down by 5.8% in 2015 and so far in 2016, outstanding shares are down by another 2.8%.

Book Value is theoretically the breakup value of the company. This is up by 18% per year over the past 10 years, but down by 5.3% per year over the past 5 years to the end of Financial year of February 2016. It is down by 19% per year over the past 5 years to date. I do not like this development either.

The ROE is very high. The ROE for the 2015 financial year is 82.5%. The ROE for the 12 months to the end of the second quarter is 164%. Very high ROE is not a good thing. There is an article that talks about difference between Dell and Apple in Forbes. This article is from 2012 but relevant to this discussion. It talks how Dell's ROE is better than Apple. However, it is only better because Dell was buying back shares and increasing its debt. This is what Dollarama is doing. The problem shows up in the very high the Leverage and Debt/Equity Ratios and rapidly declining BVPS. When the ROE is very high, you need to look below the surface.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.79, 21.37 and 25.94. The corresponding 7 year ratios are 15.10, 18.65 and 22.20. These are high for a consumer discretionary stock. The current P/E Ratio is 28.58 based on a stock price of $98.61 and 2016 EPS estimate of $3.45. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $12.82. The 7 year low, median and high median Price/Graham Price Ratios are 1.53, 1.89 and 2.25. These are very high for a consumer discretionary stock. The current P/GP Ratio is astoundingly high at 7.69 based on a stock price of $98.61. This stock price testing suggests that the stock price is relatively expensive.

The 7 year Price/Book Value per Share Ratio is 3.66. The current P/B Ratio is 6.27 a value some 1172% higher. The current P/B Ratio is based on a BVPS of $2.12 and a stock price of $98.61. This stock price testing suggests that the stock price is relatively expensive.

The median Dividend Yield is 0.66%. The current Dividend Yield is 0.41% a values some 39% lower. The current Dividend Yield is based on dividends of $0.40 and a stock price of $98.61. This stock price testing suggests that the stock price is relatively expensive.

Will Ashworth at Motley Fool gives one good reason not to own this stock and that is valuation. He thinks the P/E Ratio is much too high for this sort of company. I agree with him. See what analysts are saying at Stock Chase. Here is what some other analysts' are saying on Money Making Articles. Damon van der Linde talks about this company doing a large private offering in senior unsecured notes on Financial Post.

The analysts' recommendations are all over the place. I am surprise there is no sell recommendations as there is every other one of Strong Buy, Buy, Hold and Underperform. Most of the recommendations are a Buy, so the consensus recommendation is a Buy. The 12 month stock price is $109.00. This implies a total return of $10.94% with 10.54% from capital gains and 0.41% from dividends. However, the price seems to be currently dropping as it was $98.61 when I last looked on Friday, but apparently it closed at $95.70. Not lower enough to make any of my valuations invalid.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

The last stock I wrote about was about was Encana Corp. (TSX-ECA, NYSE-ECA)... learn more . The next stock I will write about will be Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more on Wednesday, November 16, 2016 around 5 pm. Today on my other blog I will write about Inequality... learn more on Tuesday, November 15, 2016 around 5 pm.

Dollarama is a major player in the value retail industry. Headquartered in Montreal, Dollarama owns and operates over 1,000 stores across all ten Canadian provinces. All stores are corporately owned and operated. Its web site is here Dollarama Inc.

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.

Monday, November 14, 2016

Encana Corp

Sound bite for Twitter and StockTwits is: I think cheap. The time to buy resource stocks is when they cut their dividends. I think that this stock may have hit bottom although that is always a hard call. You can generally only see if they hit bottom after the fact. However, generally big dividend cuts generally point to bottoms. A suspended dividend is diffidently a bottom. See my spreadsheet on Encana Corp.

I do not own this stock of Encana Corp. (TSX-ECA, NYSE-ECA), but I used to. I had held this stock previously as Alberta Energy Company from April 2000 until August 2002 and made some 18% total returns per year. I had EnCana Corp from February 2006 to November 2009 and made a 9.54% per year total return. I sold this stock in 2009 because I only had 100 shares and the stock was going to split into two companies. I would have ended up with small investment in two companies.

This is a dividend paying resource stock. Because it generally pays a good dividend you have to expect volatility in its dividend payments. They give good dividends in good times and cut back in bad times. In 2015 they had an earnings lost. This is a good reason to cut dividends and they did. The dividend was cut by almost 79% in 2016. They decreased the dividends in 2013 and 2014 and they were flat in 2015.

Dividends grow when times are good and shrink in bad times. The dividend on this stock is up by 6.1% per year over the past 10 years, but down by 18.9% per year over the past 5 years. Currently the dividend is very low, at just 0.58% based on dividends of $0.08 CDN$ ($0.06US$) and a stock price of $13.88 CDN$ ($10.25 US$).

This brings us to another point about this stock's dividend. The dividends are paid in US$ so for a Canadian Dividends will vary with each dividend payment depending on the currency exchange rates.

You may not be getting much in the way of dividends if you held this stock for a while. If you bought it 5, 10 or 15 years ago, and you paid a median price, you would be earning a dividend yield of 0.31%, 0.29% or 0.72%. However if you bought it 5, 10 or 15 years ago, and you paid a median price, then your original cost would be cover by dividends at 8.8%, 22.2% or 62.7%. The original cost coverage is not bad.

Since there was an earning loss in 2014, they paid out more in dividends than they earned. They have also paid out more in dividends over the past 5 years than they have earned. When comparing dividends to cash flow they have done much better. In 2015 they only paid out 16.6% of the CFPS in dividends. The 5 year median Dividend Payout Ratio for CFPS is also 16.6%.

The Liquidity Ratio is low. The ratio for 2015 is just 1.21 and I preferred it to be 1.50 or higher. The 5 year median Liquidity Ratio is also low at 1.45. This means that they depend on cash flow to get a good ratio. If you add in cash flow after dividends, the ratio becomes 2.29. The problem with low Liquidity Ratios is that it can leave a company vulnerable in bad times. Other debt ratios are fine.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform Recommendations. Most of the recommendations are Buy and Hold Recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $17.46 CDN$ ($12.96 US$). This implies a total return of 26.40% with 0.58% from dividends and 25.82% from capital gains.

You cannot use recent Price/Earnings per Share Ratios as the company has had recent EPS losses. The 10 year values are not much better. The historical low, median and high median P/E Ratios are 10.21, 12.42 and 15.47. There is not much earnings until 2018. If you use the EPS 2018 estimate of $1.29 CDN$ (0.96 US$) and the current stock price of $13.88 CDN$ the P/E Ratio is 10.73. This testing suggests that the stock price is relatively reasonable and below the median. It is almost cheap.

There is a similar problem with Graham Price. If we use last year Graham Price based on the past 3 earnings years of $11.89, you get a Price/Graham Price of 1.17. The 10 year low, median and high median P/GP Ratios are 0.77, 1.00 and 1.19. This would suggest that the stock price is reasonable but above the median.

I get a 10 year Price/Book Value per Share Ratio of 1.62. The current P/B Ratio is 1.58 a value some 2.2% lower. The current P/B Ratio is based on a stock price of $13.88 and BVPS of $8.78. There are also problems with this testing because Book Value is going down. BVPS has declined by 15.60% per year over the past 5 years. The decline has been over the past 2 years.

The dividend yield highs are not that high at 4.53% because generally when resource stocks get into trouble, dividends are cut. The current dividend yield is around the historical lows at 0.58%. You cannot really do dividend yield testing on stocks which cut as well as increase dividends.

The stock price is relatively low if you look on a stock price chart for Encana Corp. The problem with trying to valuate a resource stock can be tricky because of the boom bust characteristics of resources. Generally I would not buy a stock with dividend yield less than 1%, but for resource stock, the time to buy is generally when the yields are low because they probably just cut dividends. If you want to make money in resource stocks, you buy when they cut dividends.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

Reuters in an article Financial Post passes on the information about Encana making a profit in the third quarter of 2016. Profit was due to cost cutting. Matthew DiLallo of Motley Fool talks about what he likes about this company. It is all about cash flow. Dolores Ford on Whats on Thorold comments on recent analysts' recommendations with 38% of analysts being positive about this stock. See what analysts are saying about this stock on Stock Chase.

The last stock I wrote about was about was CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more . The next stock I will write about will be Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more on Tuesday, November 15, 2016 around 5 pm. Tomorrow on my other blog I will write about Inequality... learn more on Tuesday, November 15, 2016 around 5 pm.

Encana is a leading North American energy producer that is focused on growing its strong portfolio of diverse resource plays producing natural gas, oil and natural gas liquids. Its web site is here Encana Corp.

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.

Friday, November 11, 2016

CCL Industries Inc.

Sound bite for Twitter and StockTwits is: Still expensive. This stock seems to have lost its momentum. When stock prices rise because of momentum, they will stop having momentum at some point. However, momentum can last a long time. The whole market seems to have had trouble today. It will be interesting to see what happens next week. See my spreadsheet on CCL Industries Inc.

I do not own this stock of CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.

The dividend yield used to be moderate but now it is low. The dividend increases are moderate. The current dividend is very low at just 0.88%. This is based on dividends of $2.00 and a stock price of $227.38. The 5 year median dividend yield is low at 1.32%. The historical median dividend yield is moderate at 2.13%.

The dividends are so low because the stock price has really taken off lately. Personally I do not buy dividend stock with dividend yields below 1%. I really question if they are truly dividend stocks at all. The dividend growth of the past 5 and 10 years is at 15.6% and 14.1% per year.

The Dividend Payout Ratios have been moderate but have become low recently. The DPR for EPS was 17.9% in 2015. This is low. It is expected to be 20% in 2016 and 17% in 2017. The 5 year median DPR for EPS was moderate of 27.7%. The DPR for CFPS is low and has always been rather low. The DPR for CFPS was 8.6% in 2015 and has a 5 year median of 9.8%.

The stock has momentum. The total return to date over the past 5 and 10 years is 50.92% and 24.32% per year over the past 5 and 10 years. The portion of this total return attributable to capital gains is at 49.16% and 23.14%. The portion of this total return attributable to dividends is at 1.76% and 1.19%. As you can see it is mostly capital gains.

While growth in Revenue, Earnings and Cash Flow has been rather good, it has not match the growth in the stock price. Revenue per Share is up 19.3% and 9.8% per year over the past 5 and 10 years. EPS is up by 31.55 and 5.4% per year over the past 5 and 10 years. Cash Flow per Share is up by 28% and 15.3% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.58, 16.53 and 20.49. The corresponding 10 year values are 12.17, 14.89 and 17.76. The historical values are 11.34, 13.95 and 15.03. Price rise is mainly due to rise in P/E Ratio. The current P/E Ratio is 22.51 based on 2016 EPS estimate of $10.10 and a stock price of $227.38. This stock price testing suggests that the stock price is relatively expensive.

The EPS estimate for 2016 is a 20% rise from last year. However, the EPS over the past 12 months to the end of the third quarter is $9.04, an increase of 7.9% over last year's EPS. The third quarter EPS for 2016 is $7.01 compared to $6.35 of the third quarter of 2015. This is a 10.4% increase. The EPS 2016 estimate seems reasonable.

I get a Graham Price of $106.28. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 0.94 and 1.09. The current P/GP Ratio is 2.14 based on a stock price of $227.38. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share of $1.46. The current P/B Ratio is 4.57 based on BVPS of $49.70 and a stock price of $227.38. The current P/B Ratio is some 213% higher than the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median Dividend Yield of 2.13%. The current Dividend Yield is 0.88% based on dividends of $2.00 and a stock price of $227.38. The current Dividend Yield is some 59% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy and Hold. Most are a Buy Recommendation and the consensus is a Buy recommendation. The 12 month consensus stock price if $283.14. This implies a total return of 25.40% with 24.52% from capital gains and 0.88% from dividends. However, with the market seeming to crash today, who knows.

Andrew Walz on Baseball News Source talks about Scotiabank cutting their consensus price from $275 to $270. See highlights from the third quarterly results on Market Wired. See what analysts are saying about this stock on Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

The last stock I wrote about was about was Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more . The next stock I will write about will be Encana Corp. (TSX-ECA, NYSE-ECA)... learn more on November 14, 2016 around 5 pm.

A global specialty packaging pioneer, CCL is the largest label company in the world and provides innovative solutions to the Home & Personal Care, Premium Food & Beverage, Healthcare & Specialty, Automotive & Durables and Consumer markets worldwide. The Company is divided into three reporting segments: CCL Label, CCL Container and its consumer arm, Avery. Its web site is here CCL Industries Inc.

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.

Wednesday, November 9, 2016

Brookfield Asset Management Inc.

Sound bite for Twitter and StockTwits is: Price Expensive. I am doing my testing in CDN$ terms, but you will get the same results in US$ terms. I think that it is currently overpriced. Others do not see this. However, it is showing as expensive on a number of tests, not just the P/E Ratio test. See my spreadsheet on Brookfield Asset Management Inc.

I do not own this stock of Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM) but I used to own a past version of it. I bought this stock as Hees International in 1987 and more in 1988, 1989 and 1990. Between 1991 and when I sold it as Edperbrascan in 1999 there was no dividend increases. The stock was going nowhere at that time, so I sold. There have been a lot of name changes and amalgamations since I had this stock.

The company has been Brookfield Asset Management Inc. since 2005, but over the years it has changed a lot and not only in name. There is a Wikipedia entry for this company. I have tracked the dividends from 1987 and they have gone up and down and remained flat at various times. I would suggest that dividend will likely behave in the same manner in the future. This company switched to from CDN$ to US$ in 2001.

Dividends are currently low, but they have been moderate in the past. Dividend growth has been moderate lately. The current dividend is 1.5% based on a stock price of $46.03 CDN$ and dividends of $0.52 US$ ($0.70 CDN$ currently). Dividend is also 1.5% in US$ with stock price of $34.31 US$.

The growth in dividends in US$ is 6.4% and 10.5% per year over the past 5 and 10 years. In CDN$ it is better as our currency has been falling against the US$. Growth in CDN$ is 12.4% and 13.7% per year over the past 5 and 10 years. Note that the problem for Canadians holding this stock is that dividends will fluctuate.

Dividends used to be higher and that is why the 5 year median Dividend Yield in CDN$ terms is 1.62% and the historical median Dividend Yield in CDN$ terms is 2.69%. The 5 year median Dividend Yield in US$ terms is 1.57% and the historical median Dividend Yield in US$ terms is 2.88%. This stock is considered to be a dividend growth stock.

There has been good growth in Revenue and moderate to good growth in Cash Flow. Earnings have not been as good as they have been low to moderate. For example, the 5 and 10 years Revenue growth is 10.5% and 14.3% per year, the Cash Flow growth has been 5.1% and 14.4% per year over the past 5 and 10 years and the EPS has been 7.8% and 2.2% per year over the past 5 and 10 years. All these figures are in US$ terms.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.80, 11.70 and 12.61. The corresponding 10 year values are 12.04, 14.12 and 16.20. The corresponding historical values are 10.80, 12.81 and 14.93. This is rather interesting. The current P/E Ratio is 42.37. This is based on EPS estimate for 2016 of $1.09 CDN$ ($0.81 US$) and a stock price of $46.03. (Forward P/E Ratio is the same in US$ and CDN$). This stock price testing suggests that the stock price is relatively expensive. This test is in CDN$ terms.

This high P/E Ratio is because analysts' expect the EPS to drop some 64% in 2016. If you look at the 12 month period to the end of the second quarter and compare it to the 12 month period to the end of 2015, EPS has dropped some 43%. The drop in expected EPS does not seem unreasonable.

I get a Graham Price of $27.56. The 10 year low, median and high median Price/Graham Price Ratios are 0.81, 0.92 and 1.02. The current P/GP Ratio is 1.67 based on a stock price of $46.03. This stock price testing suggests that the stock price is relatively expensive. This test is in CDN$ terms.

I get a 10 year Price/Book Value per Share Ratio of 1.37. The current P/B Ratio is 1.48 based on BVPS of $31.07 and a stock price of $46.03. The current ratio is some 8.4% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable, but above the median. This test is in CDN$ terms.

The current Dividend Yield is 1.52% based on dividends of $0.70 and a stock price of $46.03. The historical median Dividend Yield is 2.69%. The current Dividend Yield is some 44% above the historical Dividend Yield. This stock price testing suggests that the stock price is relatively expensive. This test is in CDN$ terms.

The 10 year median P/S Ratio is 1.27. The current P/S Ratio is 2.11 based on 2016 Revenue estimate of $2.986M (15.647M US$) and a stock price of $46.03. This stock price testing suggests that the stock price is relatively expensive. This test is in CDN$ terms.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. Most of the recommendations are Buy Recommendations. The consensus would be a Buy recommendation. The 12 month stock price is $37.15 US$. This implies a total return of 9.79% with 8.28% from capital gains and 1.52% from dividends based on a stock price of $34.31 US$. (You get similar results in CDN$ terms.)

This article by Michael Collier in Chester Independent talks about a recent buy of BAM shares by Capital Advisors and some recent ratings on this company. Jacob Donnelly of Motley Fools thinks this is a buy and hold forever stock. See what analysts are saying about this stock on Stock Chase .

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.

The last stock I wrote about was about was TransForce Inc. (TSX-TIF, OTC-TFIFF)... learn more . The next stock I will write about will be CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Friday, November 11, 2016 around 5 pm. Tomorrow on my other blog I will write about Something to Buy November 2016... learn more on Thursday, November 10, 2016 around 5 pm..

This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Its web site is here Brookfield Asset Management Inc..

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.