Monday, February 27, 2017

Canadian Real Estate Investment Trust

Sound bite for Twitter and StockTwits is: Diversification Buy. On many levels the current stock price seems reasonable, but if you test with dividend yield, the current price seems a bit expensive. It may not be the time to buy. I would expect a dividend yield of at least 4% for a REIT. See my spreadsheet on Canadian Real Estate Investment Trust.

I own this stock of Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF). I started to follow some REITs because I wanted to diversify my portfolio into REITs. I was mainly interested in ones that have commercial properties. In September 2009, I wanted to buy another REIT after having to sell Summit. I already have lots of RioCan. I looked at H&R and CDN REIT. I thought that CDN REIT was a better buy at that time. I was not interested in CAP as it is only Apartments.

I bought this company in September 2006 so I have had this stock for just over 10 years. I have earned a total return of 10.46% per year with 5.81% per year from capital gains and 4.65% per year from Dividends. Dividends have paid for some 60% of the cost of my stock.

Current dividends are moderate but have been good in the past. Dividend growth is low. The current dividends are 3.67% based on a stock price of $49.92 and dividends of $1.83. The five year dividend is 3.75% and the 10 year median dividend is 4.13%, but the historical median dividend yield is 6.38%. Dividends were quite high until 2010.

The dividend growth for this REIT is a good one. Basically with the REIT you want good dividends (4% to5% range) and dividend growth at or slightly about the rate of inflation. With this REIT you currently get a slightly lower dividend (3.67%) and dividend growth at 4.95% and 3.49% per year over the past 5 and 10 years. As far as I can see total inflation is 1.33% and 1.46% per year over the past 5 and 10 years. So with this REIT you have slightly lower dividend yield but a higher than inflation growth in dividends.

Dividend Payout Ratios are good for this stock. The DPR for CFPS for 2016 was 52.9% with a 5 year payout at 48.6%. The DPR for FFO for 2016 was 55.4% and the 5 year rate is 56.9%. The DPR for AFFO for 2016 was 71.8% and the 5 year rate is 67.6%. For REITs DPR for AFFO is best to be topped between 75% and 95%. So this is well within these parameters.

One of the downsides to REITs is that a lot of the distributions are taxed as other income that is at the full tax rate. You do not get the good lower tax rate that applies to dividend income. On the other hand some of the distribution is considered to be return of capital and therefore not taxable until the total return of capital you receive exceeds your purchase price. Over the past 5 years some 86% of the distributions were from other income and less than 1% was return of capital.

Instead of Price/Earnings per Share Ratios for REITs, it is probably better to use Price/Funds from Operations Ratios to judge a REITs price. The 5 year low, median and high median P/FFO Ratios are 13.89, 15.25 and 16.61. The 10 year ratios are 13.04, 14.36 and 15.78. The current P/FFO Ratio is 14.95 based on a stock price of $49.92 and 2017 FFO estimate of $3.34. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $58.54. The 10 year low, median and high median Price/Graham Price Ratios are 0.86, 1.01 and 1.16. The current P/GP Ratio is 0.85 based on a stock price of $49.92. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio 1.69. However, the new accounting rules greatly affected the book value for REITs. So I feel that using the 5 year median P/B Ratio is the better one to use. That one is 1.03. The current P/B Ratio is 1.09 a value close to the 5 year median. This stock price testing suggests that the stock price is relatively reasonable and around the median.

The only time that the stock price does not look reasonable is when using the historical median dividend yield. This yield is 6.38% and the current dividend yield at 3.67% is some 42% lower. The current dividend yield is based on distributions of $1.83 and a stock price of $49.92.

However, both the 5 year and 10 year median dividend yields are lower and closer to the current one. The 5 year median dividend yield is 3.79% a value some 3% above the current dividend yield. The 10 year dividend yield is 4.13% a value 11% higher than the current dividend yield. Do not forget with dividend yields you want the current one to be the highest one for a cheap or reasonable stock price. With both these the stock price looks reasonable, but above the median.

The analysts certainly do not expect much in the way of capital gains over the next 12 months. They expect capital gains of only some 2.4% which is rather low for an REIT and perhaps they are saying that they think the price of the REIT is relatively high.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. Most are in the Hold category, but the consensus would be the Buy category. The 12 month stock price consensus is $51.14. This implies a total return of 6.11% with 3.67% from dividends and 2.44% from capital gains.

There is a press release by the company on Market Wired about this REITS fourth quarterly results. Robert V. Boyd on Daily Quint talks about Scotiabank reaffirming a sector perform rating and a12 months stock price of $51.00. Joseph Solitro of Motley Fool likes this stock because of its high and safe dividends.

Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is here Canadian Real Estate Investment Trust.

The last stock I wrote about was about was Bombardier Inc. (TSX-BBD.B, OTC-BDRBF)... learn more . The next stock I will write about will be RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more on Wednesday, March 1, 2017 around 5 pm. Tomorrow on my other blog I will write about If I knew then 2... learn more on Tuesday, February 29, 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.

Friday, February 24, 2017

Bombardier Inc.

Sound bite for Twitter and StockTwits is: High risk stock. Any company connected with Airplanes is high risk and can be quite volatile at times. This not only applies to companies that make airplanes, but also Air Travel companies. This company is probably relatively cheap but it is a risk. See my spreadsheet on Bombardier Inc.

I own this stock of Bombardier Inc. (TSX-BBD.B, OTC-BDRBF). The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I never sold.

When I look at my total return on this stock, it is rather shocking. I am surprise I have done so well at a total return of $10.86% per year since I bought it in 1987. I just expected that it would not be a winner. However, there are a lot of dividends involved. The total return is made up of 5.07% in capital gains and 5.79% in dividends. So the total return might not be what is expected.

Dividends have covered my stock price by 319%. Dividends have been an off and one affair with this company. For my stock, dividends were paid from purchase in 1987 to 2004. They were cut until 2009 and then paid from paid from 2009 to 2014 when they were cut again. This is a bit of a problem for me as I live off my dividends.

This may not be the best stock to hold in a portfolio, but it probably has not done much harm either. If you have a diversified portfolio buying a few duds is probably not going to much harm. It would seem from what I have read that doing a lot of trading is far more harmful to a portfolio that buying stock and holding on to them through thick and thin.

This company currently has a debt is a problem. The debt itself did not so much balloon but the ratio to the market cap of the stock did. In 2014 the debt was $7,627M with a ratio to market cap of 1.22. In 2015 the debt was up almost 17% to 8,908 but the ratio to market cap was 4.13. In 2016 the debt declined slightly by some 1.9%, with the ratio to market cap now at 2.42. Any Debt/Market Cap Ratio above 1.00 is a concern. It was last below 1.00 in 2013. But as you can see the big part of the Debt/Market Cap ratio has to do more with the volatility of the stock price.

For the Price/Earnings Ratios, the 5 and 10 year values do not make much sense because of years of earnings losses, so I will go right to the historical ratios. The low, median and high median P/E Ratios are 11.21, 15.47 and 19.79. The P/E Ratio is negative for 2017 as the earnings are expected to be negative. The P/E Ratio for 2018 is 60.99 based on a 2018 EPS estimate of $0.04 and a stock price of $2.40 CDN$. The Ratio of 2019 is 14.08 based on a 2019 EPS estimate of $0.17 and a stock price of $2.40 CDN$. There is not much to work with here. However, it would appear that the stock price is relatively cheap.

I cannot do a Graham price test as the Book Value is negative. I cannot do any stock price testing using the Price/Book Value per Share ratio because of the negative Book Value. There are no dividends currently so I cannot do any stock price testing using dividend yield.

The 10 year median P/S Ratio is 0.42 US$. The current P/S Ratio is 0.25 using 2017 Revenue estimate of $16738M, Revenue per Share estimate of $7.45 and a stock price of $1.84 in US$. The current P/S Ratio is some 41% lower than the 10 year median. This stock price testing suggests that the stock price is relatively cheap. I am doing this in US$ as the company reports in US$ so the testing is more accurate in US$.

The 10 year median Price/Cash Flow per Share ratio is 8.47 US$. The current P/CF Ratio is 16.73 based on CFPS of estimate of $0.11 and a stock price of $1.84 US$. The current P/CF Ratio is some 97% above the 10 year median. However, CFPS is expected to improve in 2018 with a CFPS estimate of $0.26 US$. This gives a ratio of 7.08 US$. This testing suggests that the stock price might be relatively reasonable.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are Hold recommendations. The consensus recommendation is a Buy. The 12 month stock price is $2.14 US$ or $2.81 CDN$. This implies a total return of 16.95% with it all from capital gains.

Andrew Walker of Motley Fool thinks the heavy debt load, ongoing difficulties in the rail group and a weak business jet market are significant concerns. Reuters on the Financial Post says that Bombardier Inc. reported a wider-than-expected fourth-quarter loss as revenue declined. According to Brent Sawyer on Sports Perspective Desjardins had boosted its target price from C$2.25 to C$2.75. See what analysts are saying about this stock on Stock Chase. They are mostly positive.

Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. Its web site is here Bombardier Inc.

The last stock I wrote about was about was Emera Inc. (TSX-EMA, OTC-EMRAF)... learn more . The next stock I will write about will be Canadian Real Estate Investment Trust (TSX-REF.UN, OTC- CRXIF)... learn more on Monday, February 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.

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, February 22, 2017

Emera Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is reasonable and around the median. This is a relatively good price to buy this stock. There is a problem with Long Term Debt where the Debt/Market Cap ratio is 1.55. This is mostly due to the recent acquisition. Analysts seem to see the TECO Energy acquisition in a positive light. See my spreadsheet on Emera Inc.

I own this stock of Emera Inc.(TSX-EMA, OTC-EMRAF). I found this company in Mike Higg's site. Mike's site has a spreadsheet showing Dividend Paying Canadian Growth stocks. In 2005, I wanted to buy something for my Locked in RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account.

Dividends are good and the dividend increases are moderate. The current dividend is 4.62% based on dividends of $2.09 and a stock price of 45.27. Dividend growth over the past 5 and 10 years is at 8.7% and 8.4% per year. This company has set a target of 8% dividend increases to 2020.

The Dividend Payout Ratio for 2016 was 151%, but the 5 year DPR is 77%. It has a target payout ratio of 70-75%. The DPR for CFPS is 46% in 2016 and the 5 year ratio is 35.6%. I have dividend information going back to 1993 or some 21 years. It is only in 2003 and 2006 that dividends received in one year were not higher than the previous year.

If you bought the stock today and they increased the dividend at 8% per year then in 5, 10 or 15 years times you should be making 6.78%, 9.97% or 14.65% on the current stock price of $45.27. If you had bought this stock 5, 10 or 15 years ago you would be making 6.17%, 10.31% or 12.48% on your original purchase price if you paid a median price for the stock.

Outstanding shares have increased by 11.3% and 6.6% per year over the past 5 and 10 years. In order to gage the growth of this company you need to look at pre share values. It can make a difference. For example, Revenue has increase by 15.7% and 13.9% per year over the past 5 and 10 years. Revenue per Share has increase by 3.9% and 6.8% per year over the past 5 and 10 years.

I have done well with this stock. My total return to the end of January 2017 is 12.93% per year with 8.34% per year from capital gains and 4.59% per year from dividends.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.66, 19.25 and 20.07. The 10 year values are 14.31, 16.26 and 18.06. The historical ones are 13.06, 15.05 and 16.96. The current P/E Ratio is 16.34 based on a stock price of $45.27 and 2017 EPS of $2.77. This testing suggests that the stock price is reasonable and around the median.

P/E Ratios have been increasing. Part of this is due to low EPS in 2016 which is expected to increase in 2017. The low EPS was due mostly to higher interest charges for debt incurred for the TECO purchase. But EPS is expected to rise in 2017 back to around that of 2015.

I get a Graham Price of $42.18. The 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.17 and 1.39. The current P/GP Ratio is 1.07. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 10 year Price/Book Value per Share Ratio of 1.84. The current P/B Ratio is 1.59 a values some 14% lower. The current P/B Ratio is based on a stock price of $45.27 and BVPS of $28.54. This stock price testing suggests that the stock price is reasonable and below the median.

I get a historical median dividend yield of 4.76%. The current dividend yield is some 3% higher at 4.62%. The current dividend yield is based on dividends of $2.09 and a stock price of $45.27. This stock price testing suggests that the stock price is reasonable and around the median. Note that both the 5 year and 10 year median dividend yields are lower than the current one with the 5 year median at 4.22% and the 10 year at 4.29%.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy, but the consensus recommendation would be a Hold. The 12 month stock price is $52.88. This implies a total return of 21.43% with 16.81% from capital gains and 4.62% from dividends.

Kay Ng of Motley Fool thinks this stock is a good investment. There is an article where Emera announces in the Street Insider the TECO Energy acquisition. Wayne Landers on Sports Perspective talks about National Bank Financial raising their 2017 EPS for Emera. A Report by DividendChannel.com on NASDAQ talks about this stock being named as a Top 25 dividend stock.

Emera Inc. is geographically diverse energy and services company headquartered in Halifax, Nova Scotia. The company invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services. Emera has investments throughout northeastern North America, and in four Caribbean countries. Its web site is here Emera Inc.

The last stock I wrote about was about was Manulife Financial Corp. (TSX-MFC, NYSE-MFC)... learn more . The next stock I will write about will be Bombardier Inc. (TSX-BBD.B, OTC-BDRBF)... learn more on Friday, February 24, 2017 around 5 pm. Tomorrow on my other blog I will write about If I knew then... learn more on Thursday, February 23, 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.

Tuesday, February 21, 2017

Manulife Financial Corp

Sound bite for Twitter and StockTwits is: Dividend growth stock. I still have hope that my investment in this stock will turn out to be a good investment. So far it has not been great either for capital gains or dividend growth. It does seem to be turning around. See my spreadsheet on Manulife Financial Corp.

I own this stock of Manulife Financial Corp. (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria. I bought some more stock in October 2005. I had some more money to spend and wanted to buy stock of dividend paying company I owned, for which I did not own too much. In April 2009, I was looking for something else to buy and Manulife was at a good price. In April 2013, I need to buy higher dividend stocks for my RRIF account. There was some money after RRSP sells, so I bought more MFC.

I have a fairly large investment in this stock, but it has not done well. I first bought this stock in 2005 and have made several purchases since then. My total return is 2.21% per year. I have a return because of dividends. My total return includes 2.33% dividends per year and a slight loss of capital at 0.12% per year. Dividends have paid for some 21.5% of the cost of the stock I hold.

The company has had problems since the last recession. They cut the dividend 50% in 2009. Dividends were flat for a few years then they started to increase them again in 2014. Dividend growth is at 7.3% and 0.2% per year over the past 5 and 10 years. They have just declared another dividend increase for March 2017 which is an increase of 10.8%. Current dividends at $0.82 are not quite back to the $1.00 they were in 2008.

The good things are that the Assets under Management, Comprehensive Income and Cash Flow are growing. The AUM has grown by 14.4% and 9% per year over the past 5 and 10 years. Comprehensive Income has grown at 25.6% and 20.1% per year over the past 5 and 10 years.

Cash Flow has increased by 11.9% and 8.9% per year over the past 5 and 10 years. However, since the outstanding shares have increased by 1.9% and 2.5% per year over the past 5 and 10 years, the Cash Flow per Share is lower at 9.8% and 6.3% per year over the past 5 and 10 years. Because of the increase in outstanding shares, per share values are a better indicator of growth.

EPS has grown over the past 5 years. The growth is at 134% per year. The 10 year growth is a negative 5.6%. The 5 year growth when compared to the past does not look as good. The 5 and 10 year running average growth is 13% and a negative 3.3%. This points out that while the current growth is good it does not compare as well to the past EPS.

I get 5 year Price/Earnings per Share Ratios of 10.82, 13.74 and 15.86. The corresponding 10 year ratios are 11.42, 17.27 and 16.82. The historical ones are 11.37, 14.14 and 16.31. The current P/E Ratio is 11.82 based on a stock price of $24.83 and 2017 EPS estimate of $2.10. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is getting close to being relatively cheap.

I get a Graham Price of $30.25. The 10 year low, median and high median Price/Graham Price Ratios are 0.74, 0.93 and 1.15. The current P/GP Ratio is 0.79 based on a stock price of $24.83. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is getting close to being relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.16. The current P/B Rati o is 1.28 based on BVPS of $19.37 and a stock price of $24.83.The current P/B Ratio is 10.3% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. The problem is that Book Value and BVPS declined after 2008 and is now growing again. The decline in book value was basically the lack of earnings.

The historical dividend yield is 2.47%. The current dividend yield is 3.30% based on dividends of $0.82 and a stock price of $24.83. The current dividend yield is some 34% higher than the historical one. This stock price testing suggests that the stock price rather cheap. However it is not that near to the historical high of 5.37%.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price consensus is $27.53. This implies a total return of 14.185 with 10.87% from capital gains and 3.30% from dividends.

Demetris Afxentiou of Motley Fool thinks that this company is currently a great investment opportunity. Brent Sawyer on Sports Perspective say this company has a consensus recommendation of Buy from 12 analysts. The Financial Canadian did an extensive review of this stock on Dividend Earner blog. See what analysts are saying about this stock on Stock Chase. Most like this company going forward.

This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. Its web site is here Manulife Financial Corp.

The last stock I wrote about was about was Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more . The next stock I will write about will be Emera Inc. (TSX-EMA, OTC-EMRAF)... learn more on Wednesday, February 22, 2017 around 5 pm. Today on my other blog I will write about Socialism... learn more .

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, February 17, 2017

Home Capital Group

Sound bite for Twitter and StockTwits is: Dividend growth stock cheap. On all my testing this stock is coming out cheap. It is an alternative bank so probably more risky than the other banks, but it is cheap. It has done relatively well with growth mostly good, but there is some moderate growth in the last 5 years. See my spreadsheet on Home Capital Group.

I do not own this stock of Home Capital Group (TSX-HCG, OTC-HMCBF). I started reviewing this company in September 2009. It is a dividend growth company and was coming up on lists of good dividend paying stocks. It is on some dividend paying companies lists that I look at.

Dividends are low to moderate and dividend growth is good. The current dividend is 3.96%. However, the 5 year median dividend yield is 1.78%, the 10 year median is 1.68% and the historical median is 1.48%. Current higher dividend caused by higher Dividend Payout Ratio and lower stock price. The Dividend Payout Ratios for EPS for 2016 is 26.4% and has a 5 year ratio of 18.6%. Dividends have growth at 20.9% and 21.9% per year over the past 5 and 10 years.

If you had this stock 5, 10 or 15 years ago, your current dividend yield would be 4.11%, 5.58% or 32.12%. If you buy at the current price of $26.27 and the dividends grow at 15% per year, then in 5, 10 or 15 years' time you could be earning 7.96%, 16.02% or 32.21% on your investment.

The debt ratio is good for a bank at 1.09. Other banks have this ratio currently at 1.06 or 1.07. Their deposit liability as a ratio to its market cap is 7.87. This is middle of the road against the other banks.

The 5 year low, median and high median Price/Earnings per Share Ratios are 6.59, 9.11 and 11.72. The corresponding 10 year ratios are 6.69, 9.06 and 11.30. The historical ratios are 6.79, 9.11 and 11.72. The current P/E Ratio is 6.47 based on a stock price of $26.27 and 2017 EPS estimate of $4.06. P/E Ratios are rather consistent over time. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $46.11. The 10 year low, median and high median Price/Graham Price Ratios are 0.66, 0.91 and 1.11. The current P/GP Ratio is 0.57 based on a stock price of $26.27. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 2.06. The current P/B Ratio is 1.13 a value some 45.2% lower than the 10 year median. The current P/B Ratio is based on a BVPS of $23.27 and a stock price of $26.27. This stock price testing suggests that the stock price is relatively cheap.

I get a current dividend yield of 3.96% based on dividends of $1.04 and a stock price of $26.27. The historical median dividend yield is 1.48% a values some 167% lower. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. The consensus would be a Hold recommendation. The 12 months consensus stock price is $30.20. This implies a total return of 18.92%, with 3.96% from dividends and 14.96% from capital gains.

Ryan Goldsman of Motley Fool thinks investors should seriously consider buying this bank. Joanna Charbonneau on Chaffey Breeze says that Scotia Bank has reaffirmed their sector perform rating (Hold) on these shares and has a target price of $30.00. Garry Marr in the Financial Post says that lower than lower-than-anticipated retention and renewal levels along with elevated expenses continued to drive down results at Home Capital Group Inc. He says that they are still recovering from a decline in its insured originations from 2015 when a number of brokers had falsified income documents to help clients obtain mortgages. See what analysts are saying about this stock on Stock Chase. Some have shorted this stock and others say that it is too dependent on the Canadian Housing market.

Home Capital Group Inc. operates through one subsidiary, Home Trust Company, to provide mortgage lending, deposit, retail credit and credit card issuing services. They have subprime mortgages. Its stock is widely held. Its web site is here Home Capital Group.

The last stock I wrote about was about was ARC Resources Ltd. (TSX-ARX, OTC-AETUF)... learn more . The next stock I will write about will be Manulife Financial Corp. (TSX-MFC, NYSE-MFC)... learn more on Tuesday, February 21, 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.

Wednesday, February 15, 2017

ARC Resources Ltd

Sound bite for Twitter and StockTwits is: Buy for diversification. Current price of $20.74 could be reasonable. You should make both capital gains and dividends over the longer term, but expect a lot of volatility. See my spreadsheet on ARC Resources Ltd.

I do not own this stock of ARC Resources Ltd. (TSX-ARX, OTC-AETUF). When TFSA first came out, this stock was recommended for this account as it was an income trust at that point and most of the distributions were taxable. This stock is no longer an income trust and the distributions are now dividends and taxed as normal Canadian dividends.

It continues to be a sad tale for dividends. After the cuts in 2009, dividends were flat until 2016 when they were decreased again. The problem is that they cannot afford the dividends were they paying. For 2016 they paid out 123% more in dividends than earnings. For the past 5 years that figures is 275%. Analysts generally expect that within the next couple of years, they will be able to cover their dividends with earnings.

The bad news is that revenues, earnings, funds from operations and cash flow have all declining. Analysts expect that all these items will start to increase in 2017.

The good news is that they have great debt ratios. The Liquidity Ratio for 2016 is 2.58. The Debt Ratio for 2016 is 2.39. The Leverage and Debt/Equity Ratios are 1.72 and 0.72 respectively. These great ratios should help see the company through the bad times.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 26.39, 34.47 and 39.69. The 10 year corresponding values are 19.80, 23.40 and 27.00. The historical ones are 11.14, 12.37 and 14.47. The ratios have been going higher as EPS has come down. The current P/E Ratio is 39.88 based on a stock price of $20.74 and 2017 EPS estimate of $0.52. This stock price testing suggests that the stock price is relatively expensive. However, this may not be the best test for this sort of company.

I get a Graham Price of $10.74. The 10 year low, median and high median Price/Graham Price Ratios are 1.32, 1.62 and 1.87. The current P/GP Ratio is 1.93 based on a stock price of $20.74. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 2.25. The current P/B Ratio is 2.10 based on BVPS of $9.86 and a stock price of $20.74. The current P/B Ratio is some 6.42% lower than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This may be the best test for this company.

The Dividend Yield testing for this stock pay might not be valid because the company used to be an income trust and as such had high yields. The 5 year dividend yield is 4.52%. The current yield at 2.89% is some 36% lower. The current dividend yield is based on dividends of $0.60 and a stock price of $20.74. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median P/S Ratio is 4.84. The current one is 5.20 based on 2017 Revenue estimate of $1408M or $3.99 per Share and a stock price of $20.74. This current ratio is 7.5% above the 10 year median ratio. This suggests the stock price is reasonable but above the median.

I get a 10 year Price/Funds from Operations Rati of 9.62. The current P/FFO Ratio is 9.14 based on 2017 FFO estimate of $2.27 and a stock price of $20.74. The current ratio is 5% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $27.06. This implies a total return of 33.37% with 30.47% from capital gains and 2.89% from dividends based on a current price of $20.74.

This news item on RTT News gives a quick overview of this company's fourth quarterly results. Renee Jackson on The Cerbat Gem talks about the Royal Bank of Canada lowering its price objective for this company. Rives staff says on the Rives Journal that this company has an RSI at 47.81 which suggests that it is neither overbought nor oversold. See what analysts are saying about this stock on Stock Chase. They mostly like this company.

ARC Resources Ltd. is one of Canada's leading conventional oil and gas companies. Its focus is on acquiring and developing long-life oil and gas properties across western Canada. Industry: Oil and Gas (Oil and Gas Producers) Its web site is here ARC Resources Ltd.

The last stock I wrote about was about was Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more . The next stock I will write about will be Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more on Friday, February 17, 2017 around 5 pm. Tomorrow on my other blog I will write about Taking your Time... learn more on Thursday, February 16, 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.

Tuesday, February 14, 2017

Mullen Group Ltd 2

In the spirit of never letting any work go to waste, I am publishing an updated report on this company because I did it for the investment club I belong to.

Sound bite for Twitter and StockTwits is: Buy for Diversification. I find that their shifting around with the dividend a bit disconcerting. The recent private placement at $13.30 is at some 28% lower than the current price. You have to wonder from this if the current price is not too high for this stock and the private placement is closers to a more reasonable price. I might yet regret selling Ensign to buy this stock. See my spreadsheet on Mullen Group Ltd.

I own this stock of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and decreased it dividends.

They have, unfortunately, fooled around with dividend payments. Before they became an income trust in 2005, they were paying dividends twice a year. As an Income Trust they paid dividends every month. When they changed to a corporation in 2009 they started to pay dividends quarterly. In 2013 they again switched dividends to monthly. Another thing is that the representation on their site of why to invest in the company only shows dividends to 2015. They did not show that they were decreased in 2016. This is rather misleading.

They cut the dividends in 2009 when they changed to a corporation. They started to again raise the dividends in 2011. However, this company services the oil and gain industry and unfortunately by 2011 they could no longer sustain the dividends they were paying. In 2016 they reduced the dividends by some 70%. Analysts seem to feel that starting in 2017 the company can again afford the dividends it is paying. I was hardly surprised by the dividend cuts considering the problems with the oil and gas industries.

It is hard to know what they will do with the dividends. The last time they raised the dividends, they probably raised them too fast. I am sure that they will be more cautious in the future. At least I hope they will.

A plus for this company is the strong balance sheet. The Liquidity Ratio for 2015 is 2.13. The current one is still high at 2.01. The Liquidity Ratio has always been good. The Debt Ratio at 1.80 in 2015 is lower than it has been but this is still a very good ratio. The current one is higher but it is a financial year's ratio that is most important. The Leverage and Debt/Equity Ratios is a little high but still fine at 2.25 and 1.25 for 2015.

They have increased the outstanding shares by 3.1% and 6.9% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs. They did another private placement in 2016 and increased the shares by some 13%. Actually increasing shares is not a bad thing in itself, but the thing is that per share values become the important ones.

You can see the results of increased shares when you look at Revenue and Revenue per Shares. The Revenue has increased by 3.2% and 9.5% per year over the past 5 and 10 years. The Revenue per Share has increase by 0.1% and 2.5% per year over the same time frame.

I get 5 year Price/Earnings per Share Ratios of 12.75, 15.80 and 18.85. The corresponding 10 years ratios are close at 12.04, 14.18 and 17.11. The historical median P/E Ratio is 14.90 and this is between the 5 and 10 year ratios. The current P/E Ratio is 21.74 based on a stock price of $18.48 and 2017 EPS estimate of $0.85. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $13.37. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.09 and 1.33. The current P/GP Ratio is 1.38 based on a stock price of $18.48. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.80. The current P/B Ratio is 1.98 a value some 9.8% here. The current P/B Ratio is based on stock price of $18.48 and BVPS of $9.35. This stock price testing suggests that the stock price is relatively reasonable but above the median.

This stock has an historical median dividend yield of 4.22%. The current dividend yield is 1.95%, a value some 53.8% lower. This testing also suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations for this stock. There are more Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price is $21.17. This implies a total return of 16.50% with 1.95% from dividends and 14.56% from capital gains.

Daniel Jordon on Sports Perspectives talks about this company receiving a Buy consensus rating from 7 Buy analysts following this stock. Six of these analysts rated it a Buy and one analyst rated it a Hold. Rives staff says on Rives Journal that the Williams Percent Range on this stock is negative 88.44. An indicator of under negative 80 means that a stock is oversold; that is cheap. Ryan Vanzo of Motley Fool puts out an interesting report on this stock.

Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in Western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen Group Ltd.

The last stock I wrote about was about was Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more . The next stock I will write about will be ARC Resources Ltd. (TSX-ARX, OTC-AETUF)... learn more on Wednesday, February 15, 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. Follow me on Twitter or StockTwits.

Monday, February 13, 2017

Absolute Software Corporation

Sound bite for Twitter and StockTwits is: High Risk Tech. This is not the sort of company I like to buy. It has a negative book value and cannot afford its dividends. This is the sort of company you can lose money one. It would be a very speculative stock buy .See my spreadsheet on Absolute Software Corporation.

I do not own this stock of ). The Motley Fool published an article by Matt DiLallo in December 2014 called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade.

This company reports in US$, but the dividends are paid in CDN$. They just started to pay dividends in 2013. I think that they cannot afford to pay dividends. The Dividend Payout Ratio for EPS for 2016 is 134%. In the past 4 year they have paid out 190% of the EPS in dividends. I think that dividends are at risk but others think not because they have lots of cash.

Their outstanding shares have decreased by 2.3% and 1.2% per year over the past 5 and 10 years. If you want to see what growth this company has you have to look at Revenue, Earnings and Cash Flow rather than the per share values. For example, the 5 and 10 year growth in Revenue is at 4.6% and 24.4% per year. The 5 and 10 year growth in Revenue per Share is 7% and 25.9% per year. Not a big difference, but there is a difference.

Their debt ratios are awful. The Liquidity Ratio for 2016 is 0.63. When this ratio is less than 1.00 it means that the current assets cannot cover the current liabilities. Cash Flow is no help as cash flow cannot cover dividends. The Debt Ratio is just 0.72. Here again when this ratio is less than 1.00 it means that the assets cannot cover the liabilities. The company has a negative book value. You cannot calculate Leverage or Debt/Equity Ratios.

The 5 year low, median and high median Price/Earnings per Share Ratios are 35.39, 46.18 and 56.98. These ratios are rather high. Longer term ratios are negative because this company did not have positive earnings before 2013. Since the EPS for 2017 is expected to be negative, I cannot get a current P/E Ratio.

The P/E Ratio for 2018 is 180.77 based on a stock price of $7.09 CDN$ and 2018 EPS of $0.04 CDN$. The P/E Ratio for 2019 is 20.09 based on a stock price of $7.09 CDN$ and 2019 EPS of $0.35 CDN$. Problem with looking so far ahead is that the EPS are probably wrong. Analysts have a hard enough time getting EPS for this year anywhere near correct, let alone EPS for future years. Future year earnings are purely speculative. But if you want to speculate, this is what to look for.

I cannot calculate a Graham Price as the book value is negative. I cannot do any testing using the book value because it is negative.

Using the dividend yield, it would seem that the current dividend yield of 4.51% is higher than the 4 year median dividend yield of 3.46% by some 30%. This would suggest that the stock price is relatively cheap. The current dividend yield is based dividends of $0.32 CDN$ and a stock price of $7.09.

Possibly the only test you can do is for Revenue. The 10 year median P/S Ratio is 3.00 in US$. The current P/S Ratio is 2.22 in US$. This value is some 26% lower than the 10 year median. The current P/S Ratio is based on 2017 Revenue estimate of $92.6M US$, Revenue per Share of $2.38 US$ and stock price of $5.28 US$. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform Recommendations. Most of the recommendations are a Strong Buy and the consensus is a Buy recommendation. The 12 month stock price is $6.58 US$ or $8.60 CDN$. This implies a total return of 25.85% with a capital gain of 21.34% and dividends of 4.51%. This is based on a current stock price of $7.09 CDN$.

Scott Perkins in an article at Simply Wall Street comments on the fact that this company has no long term debt, but does have a liquidity problem. Don Majors on Sports Perspectives says that Scotia Bank confirmed their sector perform (or Hold rating) and a target price of $7.50. This site of Investors Ideas look at Defense and Security stocks, including this company. National Bank Financial analysts Richard Tse is bearish on this company in a recent Can Tech article.

Absolute Software Corporation is the industry standard in persistent endpoint security and management for computers, laptops, tablets and smartphones. The Company, a leader in device security and management tracking for 20 years, has over 30,000 commercial customers worldwide. Its web site is here Absolute Software Corporation.

The last stock I wrote about was about was Canadian National Railway (TSX-CNR, NYSE-CNI)... learn more . The next stock I will write about will be ARC Resources Ltd. (TSX-ARX, OTC-AETUF)... learn more on Wednesday, February 15, 2017 around 5 pm. Tomorrow I will publish an update for Mullen Group Ltd. (TSX-MTL, OTC- MLLGF... learn more on Tuesday, February 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.

Friday, February 10, 2017

Canadian National Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Stock. The stock price seems to be reasonable to expensive. See my spreadsheet on Canadian National Railway.

I own this stock of Canadian National Railway (TSX-CNR, NYSE-CNI). You should buy this stock for diversification purposes. You would expect this stock to be more volatile than a utility, but provide long term gains and increasing dividends.

Dividends are low and growth is good. The current dividend is 1.81% based on Dividends of $1.65 and a stock price of $91.17. The 5 year median dividend yield is 1.61% and the historical median is 1.52%. The dividends have grown at 18.2% and 16.35 per year over the past 5 and 10 years.

The Dividend Payout Ratios are good. The DPR for EPS for 2016 is 32% and the DPR for CFPS for 2016 is 18%. The corresponding 5 year DPR for EPS is 28% and the 5 year DPR for CFPS is 18.5%.

I have done well with this stock. For the Stock I bought 12 years ago in 2005, I am earning 9.15% on my original investment. For the stock I bought 8 years ago in 2009, I am making 7.4% on my original investment. If I look at how much of the cost of my shares have been covered by dividends as of the end of January it is some 42%.

The Liquidity Ratio is rather low at 0.70. That means that the current assets cannot cover the current liability. However, if you add in cash flow after dividends, this ratio is 2.05. If you add in the current portion of the long term debt, which has been handled, the ratio is 1.39. Now add back in the cash flow after dividends and the ratio becomes 4.06. There is a vulnerability at the low initial ratio, but I cannot image on this stock the cash flow going so low that they cannot cover the rest of the current liabilities.

The Debt Ratio is 1.67 and this is good. This ratio has a 5 year median of 1.70. The Leverage and Debt/Equity Ratios are 2.50 and 1.50 respectively. The 5 year median ratios are 2.39 and 1.39. These are not low, but are acceptable.

The outstanding shares have been decreasing at almost 3% per year over the past 5 and 10 years. That means if you want to get the real growth for this company, you need to look at Revenue, Earnings and Cash Flow and not the per share values. For example, the Revenue for the past 5 and 10 years has grown at 5.9% and 4.6% per year. The Revenue per Share has grown at 9.1% and 7.7% per year.

The real growth rate is the one for Revenue for the past 5 and 10 years at 5.9% and 4.6% per year. There is nothing wrong with increasing or decreasing shares per se. However, you should be aware of where to look for the real growth of a company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.78, 17.28 and 19.90. The corresponding 10 year values are 12.19, 13.62 and 15.18. The corresponding historical ratios are 11.83, 13.62 and 15.18. It would seem like the recent stock run up includes P/E Ratios increasing. The current P/E Ratio is 18.49 based on a stock price of $91.17 and 2017 EPS estimate of $4.93. This stock price testing suggests that the stock price is relatively on the high side, but perhaps still relatively reasonable.

I get a Graham Price of $46.48. The 10 year low, median and high median Price/Graham Price Ratios are 1.24, 1.37 and 1.51. The current P/GP Ratio is 1.96 based on a stock price of $91.17. 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 3.13. The current P/B Ratio is 4.68, a value some 50% higher. The current P/B Ratio is based on a stock price of $91.17 and BVPS of $19.48. This stock price testing suggests that the stock price is relatively expensive.

I get an historical dividend yield of 1.52%. The current dividend yield is 1.81% based on dividends of $1.65 and a stock price of $91.17. The current dividend yield is some 19% higher than historical one. At first glance it would see that this testing is showing that the stock price is relatively reasonable and below the median and getting relatively cheap. The stock price is considered cheap when the current dividend is 20% above the historical one.

However, I have only data on dividends for 18 years and with rising dividends there is a rising Dividend Payout Ratios for both EPS and CFPS. For the nearest competitor of Canadian Pacific Railway (TSX-CP, NYSE-CP), the DPR is declining for both EPS and CFPS, but the 5 year payouts are the same. The historical dividend yield is similar at 1.50%, but the current DPRs are much lower at 1.03% based on $2.00 of dividend and a stock price of $193.39.

When I look at analysts' consensus I find Strong Buy, Buy, Hold and Sell recommendations. There is not Underperform recommendation and the vast majority of the recommendations are a Hold. The consensus would be a Hold. The 12 month stock price is $88.01. This implies a total loss of 1.66% with capital loss of 3.47% and dividends of $1.81.

Staff at Canadian Manufacturing talks about this company $2.5B in capital investments in 2017. Kristine Owram on Financial Post says this company's CEO is not worried about his business being in the crosshairs of Trump's Protectionist measures. James Sands does a nice analysis of this company on Seeking Alpha. Jared Gershman of Motley Fool likes this company. See what analysts' are saying about this stock on Stock Chase. They mostly like it.

Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here Canadian National Railway.

The last stock I wrote about was about was Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)... learn more . The next stock I will write about will be Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more on Monday, February 13, 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.

Wednesday, February 8, 2017

Exco Technologies Ltd

Sound bite for Twitter and StockTwits is: Dividend growth small cap. This is a rather small company but it has done well for its shareholder. The stock price is cheap to reasonable. See my spreadsheet on Exco Technologies Ltd.

I do not own this stock of Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.

Dividend yields are moderate and the dividend growth is good. The current dividend yield is 2.97% based on dividends of $0.32 and a stock price of $10.77. Dividends have grown at 20.8% and 18.4% per year over the past 5 and 10 years. The last dividend increase was in 2017 and it was for 14%. They have raised the dividend almost every year since 2007. This is not a long record but the company only started to pay dividends in 2003.

The Dividend Payout Ratios are good. The DPR for EPS for the financial year ending September 2016 is 24% and for the last 5 years is 25%. The DPR for CFPS is also good with the one for the financial year ending in September 2016 at 17% and the 5 year ratio at 18%.

Another good thing about this stock is the debt ratios. The Liquidity Ratio for 2016 is 2.03 and the 5 year median ratio is 2.27. The Debt Ratio is for 2016 is 2.61 and it has a 5 year median of 4.84. Leverage and Debt/Equity Ratios are 1.65 and 0.65 respectively. Their 5 year median ratios are 1.26 and 0.26 respectively.

This stock has provided it shareholders with good growth over the past 5 and 10 years at 37.56% and 18.53% per year to the end of December 2016. The portion of this total return attributable to dividends is at 2.39% and 1.28% per year of these time periods. The portion of this total return attributable to capital gain is at 35.17% and 14.55% per year of these time periods.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.40, 13.17 and 15.68. The corresponding 10 year ratios are 8.95, 11.78 and 13.99. The historical ratios are 10.21, 13.66 and 17.12. The current P/E Ratio is 8.76 based on a stock price of $10.77 and 2017 EPS estimate of $1.23. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $13.48. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 0.96 and 1.21. The current P/GP Ratio is 0.80 based on a stock price of $10.77. This stock price testing suggest that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.22. The current P/B Ratio is 1.64 based on BVPS of $6.56 and a stock price of $10.77. The current ratio is some 34% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive. However, a P/B Ratio of 1.50 is considered cheap and one of 1.64 is not an expensive ratio.

The historical dividend yield is 1.90%. The current dividend yield is 2.97% a values some 58% higher. The current dividend yield is based on Dividends of $0.32 and a stock price of $10.77. This stock price testing suggests that the stock price is relatively cheap. Even the 5 year median dividend yield is just 1.95%.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 months stock price is 14.08. This implies a total return of 33.70% with 2.97% from dividends and 30.73% from capital gains.

The company has put out a news release for latest quarterly result. As far as I can see they have not published the first quarterly statements yet. Wayne Landers on Sports Perspectives talks about Scotiabank giving it an outperform (or Buy) rating on this stock. See what analysts are saying about this stock at Stock Chase. They mostly like this stock. There is an interesting by Jodi Pearce on Simply Wall Street.

Exco is a global designer, developer and manufacturer of dies, moulds, equipment, components and assemblies to the die-cast, extrusion and automotive industries. The Die Casting and Extrusion Technology groups operations are based in Canada, U.S., Mexico and Colombia and primarily serve automotive and industrial markets throughout the world. The Automotive Solutions Group has facilities are located in Canada, U.S., Mexico and Morocco and supply the North American, European and Asian markets. Its web site is here Exco Technologies Ltd.

The last stock I wrote about was about was AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF)... learn more . The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI)... learn more on Friday, February 10, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy February 2017... learn more on Thursday, February 9, 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.

Monday, February 6, 2017

Shaw Communications Inc.

Sound bite for Twitter and StockTwits is: Buy for diversification. You should expect some volatility in this stock because of the business it is in. The stock price is on the high side, but might be fairly reasonable. It is a dividend growth stock, but here again expect some volatility. There are negatives in the very low Liquidity Ratio and lack of dividend increases recently. See my spreadsheet on Shaw Communications Inc.

I do not own this stock of Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). I am following this stock because it was a stock on Investment Reporter's list, a MPL Communications Publication. You would buy for diversification. You should expect volatility in growth. You should expect a good dividend but some volatility in the growth of dividends.

The dividend is current good with low to good dividend growth. I have dividend information back to 1994. The current dividend is good at 4.22% based on dividends of $1.185 and a stock price of $28.07. The 5 year median dividend is 4.32%, the 10 year median dividend is 4.17%, but the historical median dividend yield is just 1.2%. That is because dividends started off very low.

The dividend growth is 5.7% and 17.4% per year over the past 5 and 10 years. The last dividend increase occurred near the beginning of 2015 and it was for 7.7%. There have been no increases since then. Analysts seem to feel that there could possibly an increase in the 2018 and/or 2019 financial years. I have records from 1994 and since then they have never deceased dividends, but there were years of no increases.

The Dividend Payout Ratio for the 2016 Financial Year for EPS was 47%. The financial year end is in August each year. The 5 year DPR for EPS is 42%. The DPR for EPS for 2017 is expected to be 102% in 2017, but reducing in 2018. The DPR for CFPS was 36% in 2016 and the 5 year one was 33%.

The lower earnings in for the first quarter of 2017 are due to loss provisions for the company's investment in Shomi. This would be a one off charge that is unlikely to affect future earnings. However, the earnings for this company tend to be somewhat volatile.

This company has vulnerability is the very low Liquidity Ratio. For the 2016 financial year the Liquidity Ratio was 0.48 and its 5 and 10 year median values are 0.54 and 0.57. If you added cash flow after dividends, the ratio goes to 1.08. This is still a low value as I like to ratio to be at least 1.50. If you exclude current long term debt and add in cash flow after dividends the ratio only goes to 1.40.

When the Liquidity Ratio is below 1.00, it means that current assets cannot cover current liabilities. This company relies on cash flow to pay current liabilities. The risk is that they could be short of cash in bad times. These ratios got very low in 2000, with the Liquidity Ratio at just 0.17 and addition of cash flow brought to 0.54 and adding back in current portion of long term debt made the ratio to 0.79. It is still under 1.00 so they could not cover current debt.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.31, 14.10 and 15.19. The 10 year corresponding ratios are 13.18, 14.83 and 17.36. The historical ratios are 13.36, 15.53 and 17.69. It would seem that the current P/E Ratios are lower today than they have been in the past.

The current P/E Ratio is 24.20 based on a stock price of $28.07 and 2017 EPS estimate of $1.16. The EPS for 2017 is expected to be some 54% lower than in 2016. This is possible as the first quarterly EPS is at $0.18 compared to $0.43 of 2016, a drop of some 58%. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $17.09. The 10 year low, median and high median Price/Graham Price Ratios are 1.24, 1.43 and 1.59. The current P/GP Ratio is 1.64 based on a stock price of $28.07. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 2.95. The current P/B Ratio is 2.51 a value some 14.9% lower. The current P/B Ratio is based on BVPS of $11.19 and a stock price of $28.07. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The historical dividend yield is 1.20%. The current dividend yield is 4.22% based on a stock price of $28.07 and dividends of $1.185. This stock price testing suggests that the stock price is cheap. There are some problems with this testing. Dividends on this stock started very low (below 1%) and then were rammed up between 2004 and 2009 into the 4% range. Other Telecoms have similar yields with BCE at 4.75% and Rogers at 3.40% currently. So this may not be the best test. However, it does suggest that the stock price is relatively cheap. On the other hand, the current stock price is at the top end of the stock price for this stock.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy or a Hold recommendation. The consensus recommendation would be a Hold. The 12 month stock price consensus is $28.46. This implies a total return of 5.61% with 1.39% from capital gains and 4.22% from dividends based on a current stock price of $28.07.

Emily Jackson in the Financial Post says that Shaw reported choppy results in the first quarterly results of 2017. Joey Frenette of Motley Fool thinks that Shaw is the best of the telecoms to buy. See what analysts are saying on Stock Chase. Some do not like this company.

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Industry: Communications & Media (Cable). Its web site is here Shaw Communications Inc.

The last stock I wrote about was about was Valener Inc. (TSX-VNR, OTC-VNRCF)... learn more . The next stock I will write about will be AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF)... learn more on Monday, February 6, 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.

AGF Management Ltd

Sound bite for Twitter and StockTwits is: Can they recover? All my stock price testing suggests that the stock is currently cheap. However, it gets you know where to buy a company cheap that goes belly up or never gets out of its rut. This stock used to be a dividend growth stock. If they can get their act together, perhaps it will be that again. See my spreadsheet on AGF Management Ltd.

I do not own this stock of AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF), but I used to. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve anytime soon. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed.

I broke even on capital gains and earned 2.08% per year that was all dividends. This company has yet to recover and has been destroying shareholder value for the past 10 years.

They finally realized in 2015 that they could not afford the dividends and cut them some 70%. For the 5 years to 2015 they paid out about 148% of the earnings in dividends. This is way too much. The Dividend Payout Ratio for the financial year ending November 2016, the DPR was 60%. It is expected to fall to 57% this year. They were even paying out more than their cash flow. In 2016 the DPR for CFPS was down to a just reasonable 40%.

When I look at the spreadsheet, all I see is red for declining Assets under Management (AUM) declining Revenue, declining Earnings, declining cash flow and declining book value.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.69, 16.32 and 18.96. The corresponding 10 year values are 11.14, 14.23 and 18.09. The corresponding historical values are 10.45, 15.49 and 18.96. The current P/E Ratio is 10.77 based on a stock price of $6.03 and 2017 EPS estimate of $.56. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $12.03. The 10 year Price/Graham Price Ratios are 0.71, 0.89 and 1.05. The current P/GP Ratio is 0.50 based on a stock price of $6.03. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.08. The current P/B Ratio is 0.53 based on BVPS of $11.48 and a stock price of $6.03. The current P/B Ratio is some 51% lower than the 10 year ratio. The stock is basically selling below the BVPS. This stock price testing suggests that the stock price is relatively cheap.

I get an historical dividend yield of 2.87%. The current dividend yield is 5.31% based on dividends of $0.32 and a stock price of $6.03. The current dividend yield is some 85% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are a Hold and the consensus would be a Hold. The 12 month stock price consensus is $6.06. This implies a total return of 5.80% with 5.31% from dividends and 0.50% from capital gains.

Jonathan Ratner of Financial Post says that Canaccord Genuity downgraded this stock to a sell. Sean Craig on Financial Post says AGF Investments Inc. is launching an asset management platform and seven new ETFs. This fund manager is taking steps to diversity its business. See what analysts are saying about this company on Stock Chase. They do not like it much.

AGF Management Limited is an integrated, global wealth management company, whose principal subsidiaries provide investment management for mutual funds, institutions and corporations, as well as high-net-worth clients; and trust products and services. They sell their products in Canada. Its web site is here AGF Management Ltd.

The last stock I wrote about was about was Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more . The next stock I will write about will be Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)... learn more on Tuesday, February 8, 2017around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2017... learn more on Tuesday, February 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.

Wednesday, February 1, 2017

Valener Inc.

Sound bite for Twitter and StockTwits is: Buy for Diversification. The stock price seems a little high. It has vulnerability of a very low Liquidity Ratio and I had a hard time finding the information I wanted in the accounting statements. Why I think this is a vulnerability is that it is easier to make a mistake in reading the financial statements. See my spreadsheet on Valener Inc.

I do not own this stock of Valener Inc. (TSX-VNR, OTC-VNRCF). Since this is a utility you should expect a good dividend and low dividend growth. I would be cautious about investing in this company. They at least put out the financial statements for Gaz Metro in which they have a big investment. The problem I find is that I cannot always find the information I am looking for. It has a history of lowering as well as raising the dividends.

I have dividend information going back to 1993, some 24 years. They have a habit of dividend decreases as well as dividend increases. They just started to raise the dividends again since having problems since 2005. The dividend growth over the past 5 years is 1.4% per year. Dividends are down by 2.2% per year over the past 10 years.

The last dividend increase was for this year and it was for 3.7%. They just started to raise the dividends again in 2015 after a 19% decrease in 2011 and 3 years of flat dividends. The current dividend yield is 5.47% based on dividends of $1.12 and a stock price of $20.46. This used to be considered a dividend growth stock, but this might be questionable at the moment.

They really have income rather than revenue. Income has been growing at 11.9% and 7% per year over the past 5 and 10 years. EPS growth is currently recent. The 5 and 10 year growth in EPS is at 14.5% and 2.7% per year. But if you look at the 5 year running EPS, growth it is down by 1.7% and 2.2% per year over the past 5 and 10 years. That means that the last 5 and 10 years growth in EPS is lower than the previous 5 and 10 year periods.

The debt ratio that I do not like is the Liquidity Ratio. This ratio for the last financial year ending in September 2016 is 0.77. This means that current assets cannot cover current liabilities. If you add in cash flow after dividends, the ratio becomes 1.52. This is an acceptable ratio. This also implies that the company is counting on cash flow to cover current liabilities. This is a vulnerability of the company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.66, 16.11 and 16.57. The corresponding 10 year values are 14.38, 15.47 and 16.23. The corresponding historical values are 12.45, 13.80 and 15.01. The current P/E Ratio is 15.74 based on a stock price of $20.46 and 2017 EPS estimate of $1.30. This stock price testing suggests that the stock price is relatively reasonable but above the median and also getting close to relatively expensive.

I get a Graham Price of $22.13. The 10 year low, median and high median Price/Graham Price Ratios are 0.85, 0.92 and 1.03. The current P/GP Ratio is 0.92 based on a stock price of $20.46. This stock price testing suggests that the stock price is relatively reasonable.

I get a 10 year median Price/Book Value per Share of 1.11. The current P/B Ratio is 1.22 a values some 10% higher. The current P/B Ratio is based on a stock price of $16.74 and a stock price of $20.46. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield is 7.11%. The current dividend yield is 5.47% based on dividends of $1.12 and a stock price of $20.46. The current P/B Ratio is some 23% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that dividends have gone down over the past 10 years.

When I look at analysts' recommendations I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $22.83. This implies a total return of 17.06% with 5.47% from dividends and 11.58% from capital gains.

David Glaser on Sports Perspectives says that Valener has a consensus rating of Hold from 5 ratings firms. Rives staff on Rives Journal does some technical analysis on this stock. They say that the Williams Percent Range is -92.92. This Williams Percent Range oscillates in a range from 0 to -100. A reading between 0 and -20 would indicate an overbought situation. A reading from -80 to -100 would indicate an oversold situation. This would place Valener in the oversold situation. That is the price is relatively low. Joseph Solitro of Motley Fool likes this stock. Some analysts on Stock Chase like this stock also.

The last stock I wrote about was about was Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM)... learn more . The next stock I will write about will be Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more on Friday, February 3, 2017 around 5 pm. Tomorrow on my other blog I will write about Go Forward Basis... learn more on Thursday, February 2, 2017 around 5 pm.

Valener owns 29% of Gaz Metro and also owns a stake in the Seigneurie de Beaupré wind power projects located northeast of the city of Québec. Gaz Metro is Quebec's leading natural gas distributor. Its web site is here Valener 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.