Friday, December 29, 2017

Bird Construction Inc.

Sound bite for Twitter and StockTwits is: Dividend Construction firm. Stock price would seem to be cheap to reasonable and below the median. To do well in the stock market you buy good companies when they are cheap. Of course this company is in construction and would probably be still at a medium risk. See my spreadsheet on Bird Construction Inc.

I do not own this stock of Bird Construction Inc. (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock.

What I noticed is that this company has a lot of cash on hand. It goes up and down a lot over the years depending on how good or not so good the cash flow is. At the end of 2016 there was $6.16 cash for every share and it covered some 68% of the stock's price. Now there is $2.27 per share on hand and this covers 22.7% of the cost of the shares. Cash on hand does not see to go below 20% of the cost of the shares.

The dividend yield is current moderate at 3.90%. Dividend used to be higher but this company used to be an income trust and this would account for the higher rates. Going forward I would suspect dividend yield would be in the moderate range, although they may go to 4%. It is hard to say.

A lot of companies have had trouble switching from income trusts to corporations although with this company when their revenue declined the cost of construction did not decline as much. In other words the cost of construction was a higher proportion of the revenue. This is the cause of the decline in profits.

They really could not afford the dividends they were paying since 2013 when the Dividend Payout Ratio became over 100% at 267.75%. With the decline in dividends the DPR for 2017 is expected to be 116% and then declining to 65% in 2018. No one seems to expect the dividends to grow again within the next few years.

The debt ratios are below what I like to see. The Liquidity Ratio for 2016 is 1.19 with 5 year median of 1.24. Even with adding in cash flow after dividends the ratio is only 1.21 with 5 year median of 1.24. The Debt Ratio for 2016 is 1.25 with 5 year median of 1.35. I like to see both of these at 1.50 or above.

The Leverage and Debt/Equity Ratios are quite high with the current ones at 5.00 and 4.00 respectively. The 5 year median ratios are somewhat better at 3.75 and 2.75. However I would per these ratios to be below 3.00and below 2.00 respectively.

The long term debt compared to the market cap is very low at a ratio of 0.02. However, if you compare the Accounts Payable to the market cap, the ratio is very high and hitting the highest ever in 2016 at 1.19. It has since dropped back 0.89.

The total return for the past 5, 10, 15 and 10 years are 2.33%, 4.10%, 34.54% and 49.91% per year. It is not really surprising that the return is really good over the past 20 years. Stock prices tend to go up when dividends are started and dividends started to be paid some 20 years ago.

The 5 year low median and high Price/Earnings per Share Ratios are 14.92, 19.37 and 23.83. The corresponding 10 year values are 10.67, 13.17 and 16.87. The historical ratios are 6.91, 9.98 and 11.30. The current P/E Ratio is 28.14 based on a stock price of $10.13 and 2017 EPS estimate of $0.36. This stock price testing suggests that the stock price is relatively expensive.

Problem is that the EPS is expected to drop by 395 in 2017 from 0.59 to $0.36. This is probably reasonable as the EPS for the 12 month period to the end of the third quarter is $0.30.

I get a Graham Price of 5.49. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 1.44 and 1.69. The current P/GP Ratio is 1.85 based on a stock price of $10.13. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.99. The current P/B Ratio is 2.73 based on a stock price of $10.31, Book Value of $158M and Book Value per Share of $3.85. The current P/B Ratio is some 9% lower than the 10 years ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

There is not much use in doing a stock price test based on the dividend yield. The dividend yield has dropped because dividends have been cut in 2017.

The 10 year Price/Sales (Revenue) Ratio is 0.41. The current P/S Ratio is 0.30 based on 2017 Revenue estimate of $1.453M, Revenue per Share of $34.17 and a stock price of $10.31. The current P/S Ratio is some 28% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (2) and Hold (2). The consensus would be a Buy. The 12 month stock price if $11.00. This implied a total return of 12.44% with 3.85% from dividends and 8.59% from capital gains.

There is an interesting analysis of this stock on Capital Cube. The company announced a new contract on Cision. Safety in Value on Seeking Alpha gives a review of this stock. See what analysts are saying about this company on Stock Chase. They generally think it is a good company.

The company operates from 12 offices across Canada serving the heavy industrial market in all provinces as well as serving the industrial, commercial and institutional (ICI) markets in all provinces with the exception of Quebec. The work of the company is split almost evenly between the heavy industrial market and the ICI sector. Its web site is here Bird Construction Inc.

The last stock I wrote about was about was Magna International Inc. (TSX-MG, NYSE-MGA)... learn more. The next stock I will write about will be Metro Inc. (TSX-MRU, OTC-MTRAF)... learn more on Tuesday, January 2, 2018 around 5 pm.

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

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

Thursday, December 28, 2017

Magna International Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably reasonable and around the median. Outstanding shares have been dropping so look for real growth in Net Income not EPS. Dividends are well covered. See my spreadsheet on Magna International Inc.

I do not own this stock of Magna International Inc. (TSX-MG, NYSE-MGA), but I used to. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.

The dividends are low and the dividend growth is moderate. The current dividend is 1.92% with 5, 10 and historical median yields at 1.86%, 1.82% and 1.77%. The dividend growth over the past 5 and 10 years in US$ is 14.9% and 10.2% per year. Dividends are paid in US$.

This company can afford their dividends. The Dividend Payout Ratio for 2016 is 19% US$ with 5 year cover at 18% US$. The DPR for CFPS is 11.5% US$ for 2016 and 5 year coverage at 11.6% US$. The values are not much different in CDN$, but dividends are paid in US$ and reporting is in US$.

For Canadians, the long term total return is rather interesting. The 5, 10, 15, 20 and 25 year total returns are 31.04%, 11.11%, 7.13%, 7.31% and 15.25% per year. Here the total per year returns is lowest for investing in this stock for 15 and 20 years. I would consider good long term (like 15, 20 or 25 years) at 8% per year to be good. Note total return is dividends plus stock price gains or capital gains. The Canadian returns are affected by the currency exchange rates.

In US$ the long term return for 5, 10, 15, 20 and 25 years is different. These returns are 24.19%, 9.62%, 8.66%, 8.29% and 7.07% per year. As with the returns for Canadians, the best is for the past 5 years. Note that for the 25 year return it is much lower than for Canadians.

The outstanding shares have declined by 3.91% and 1.39% per year over the past 5 and 10 years. To see real growth you have to look at things like Revenue, not Revenue per Share and Net Income not EPS. For example, the EPS is up by 19.70% and 15.75% per year US$ over the past 5 and 10 years. Net Income is up by 15.30% and 14.66% per year US$ over the past 5 and 10 years. Earnings growth is not as good as it appears using EPS.

Also earnings growth is not as good as it might appear because the Comprehensive Income ROE is lower than the Net Income ROE. The Net Income ROE for 2016 is 21.2% US$ and 5 year median is 21.2% US$. The Comprehensive Income ROE for 2016 is 20.00% with 5 year median of 14.7%. This suggests that the earnings may not be of good quality.

The 5 year low, median and high median Price/Earnings per Share Ratios are 7.04, 8.53 and 10.93. The 10 year ratios are 7.34, 9.71 and 12.51. The historical ratios are 8.65, 12.38 and 13.39. The current P/E Ratio is 9.70 based on a stock price of $72.11 CDN$ and 2017 EPS estimate of $7.50. This stock price testing suggests the stock price is relatively reasonable and around the median. (You will get a similar result in US$ testing.)

I get a Graham Price of $79.95. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.87 and 1.04. The current P/GP Ratio is 0.90 based on a stock price of $72.11. This stock price testing suggests that the stock price is relatively reasonable and just above the median.

I get a 10 year median Price/Book Value per Share of 1.25 US$. The current P/B Ratio is 1.89 US$ based on Book Value of $10.999M US$, Book Value per Share of $30.24 US$ and a stock price $57.01 US$. The current P/B Ratio is some 50% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive. (You will get a similar result in CDN$ testing.)

I get a Historical Median Yield 1.77% US$. The current Dividend Yield is 1.93% based on dividends of $1.10 US$ and a stock price of $57.01 US$. The current dividend yield is some 9% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. (You will get a similar result in CDN$ testing.)

I get 10 year median Price/Sales (Revenue) Ratio of 0.39 US$. The current P/S Ratio is 0.54 US$ based on 2017 Revenue estimate of $38,682M US$, Revenue per Share of $106.34 US$ and a stock price of $57.01 US$. The current P/S Ratio is some 39% higher than the 10 year ratios. This stock price testing suggests that the stock price is relatively expensive. (You will get a similar result in CDN$ testing.)

When I look at analysts' recommendations, I find Strong Buy (2), Buy (8), Hold (4) and Underperform (1). The consensus would be a Buy. The 12 month stock price is $62.12 US$ or $78.53 CDN$. This implies a total return of 10.83% with 8.90% from capital gains and 1.93% from dividends.

Danielle Lockwood on Street Observer discusses MG's P/E Ratio. Ambrose O'Callaghan on Motley Fool talks about whether nor not shareholders should worry about NAFTA. See what analysts are saying about this stock on Stock Chase. There are mixed views on effect of NAFTA.

Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna International Inc.

The last stock I wrote about was about was Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more. The next stock I will write about will be Bird Construction Inc. (TSX-BDT, OTC- BIRDF)... learn more on Friday, December 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, December 27, 2017

Methanex Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. As far as I can see this is showing as relatively expensive or very close to expensive. The 20 years return is 9.6% per year is very good, but now may not be the time to buy this stock. Note that dividends have only been paid for 15 years. See my spreadsheet on Methanex Corp.

I do not own this stock of ). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid "C" grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.

The year 2016 was not a good year for this company. They mainly had an earnings loss because of a drop in revenue and higher depreciation and amortization resulting in very low operating income. Analysts expect better this year with revenue rising some 53%. If you compare the 12 months period to the end of the third quarter of 2017 with 2016 the revenue is up some 39%. The analysts are probably correct or at least they sound reasonable.

Earnings are volatile for this company. When earnings are volatile, then 5 year running average are important. This is where you compare current 5 years to years 6 to 10 and compare current 5 years to 10 and 15 years back. In this case I am comparing 5 years average ending in 2016 to 5 year average ending in 2011 and 5 year average ending in 2016 to 5 year average ending in 2006.

For this stock the 5 year running average to years 2016 compared to 5 year running average to 2011 has EPS growing at 1.09% per year. For the 5 year running average to years 2016 to 5 year running average to 2006, the EPS has grown by 1.36%. Since the reporting is in US$, I am using US$ amounts. Growth is very low as far as earnings go.

Growth is better when looking at revenue. Revenue per Share declined by 4.47% and climbed by 1.11% per year over the past 5 and 10 years. However, looking at 5 year running averages they are at 5.13% and 7.51% per year over the past 5 and 10 years. These are better than EPS growth.

Cash Flow for the past 5 is good. Cash Flow per Share is up by 9.8% and down by 4.3% per year over the past 5 and 10 years. However, if you look at 5 year running averages they are better with the 5 and 10 years growth at 13.9% and 5.3% per year.

Earnings, Revenue and Cash Flow have been retreating over the past 2 years, but analysts expect these to improve in 2017, but then retreat somewhat in 2018 and 2019. Of course, the further out analysts look the less reliable are their estimates.

Dividends are moderate with dividend growth also moderate. The current dividend yield is 2.02% with a 5 year median yield at 2.31% and historical median yield at 2.46%. The dividends have grown 10.6% and 8.53% per year over the past 5 and 10 years. This is in US$ as dividends are paid in US$.

Since the EPS was negative in 2016, I will use only the 5 year coverage in the Dividend Payout Ratio. The 5 year coverage to 2016 was 51%. This is fine. The DPR for CFPS for 2016 was 33% and the 5 year coverage is 16%. This is also fine. They can afford their dividends.

It is important that a stock make money over the longer term for shareholders who buy and hold. With price and dividends the total return per year over 5, 10, 15 and 20 years is at 23.55%, 8.33%, 16.68% and 9.60%. If a stock can make you 9.6% per year over a 20 year period, that is a good stock. However with this stock there is volatility and you have to be able to look pass that to long term.

The 5 year low, median and high median P/E Ratios are 8.68, 12.37 and 15.19. The corresponding 10 year ratios are 9.12, 12.59 and 15.27. The historical ones are 7.41, 10.40 and 14.64. The current P/E Ratio is 16.64 based on a stock price of $75.59 and 2017 EPS estimate of $4.54 CDN$ ($3.56 US$) and a stock price of $75.59 CDN$. This stock price testing suggests that the stock is relatively expensive.

I get a Graham Price of $47.02 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.21 and 1.46. The current P/GP Ratio is 1.61 based on a stock price of $75.59 CDN$. This stock price testing suggests that the stock is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.03 CDN$. The current P/B Ratio is 3.49 CDN$ a value some 72%. The current P/B Ratio is based on Book Value of $1943M CDN$, Book Value per Share of $21.63 CDN$ and a stock price of $75.59 CDN$. This stock price testing suggests that the stock is relatively expensive. (You get similar results in US$.)

The current dividend yield is 2.02% in US$ based on dividends of $1.20 US$ and a stock price of $59.50 US$. The historical median dividend yield is 2.47% a value some 18% higher. This stock price testing suggests that the stock price is reasonable but above the median. (You get a similar result in CDN$.)

I get a 10 year median Price/Sales (Revenue) Ratio of 1.13 US$. The current P/S Ratio is 1.75 US$, a value some 55% higher. The P/S Ratio is based on 2017 Revenue estimate of $3,061M US$, Revenue per Share of $34.08 US$ and a stock price of $59.50 US$. This stock price testing suggests that the stock is relatively expensive. (You get similar results in US$.)

When I look at analysts' recommendations I find Strong Buy (2), Buy (5), Hold (2) and Underperform (1) recommendations. The consensus would be a Buy. The 12 month stock price is $62.09 US$ or $79.25 CDN$. This implies a total return of 6.85% CDN$ with 4.82% from capital gains and 2.03% from dividends.

An EBU Staff Writer The Business Union thinks that the stock is expensive and may have reached or is close to its top. A Baxter contributor on Baxter Review also thinks this stock is overbought. Louis Casey on Frisco Fastball talks about some recent analysts ratings. (Note they are in US$.) See what analysts are saying about this stock on Stock Chase. Reviews are rather mixed.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex Corp.

The last stock I wrote about was about was Stantec Inc. (TSX-STN, NYSE-STN)... learn more. The next stock I will write about will be Magna International Inc. (TSX-MG, NYSE-MGA)... learn more on Thursday, December 28, 2017 around 5 pm. Today on my other blog I will write about RRSP Accounts.... learn more on Wednesday, December 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, December 22, 2017

Stantec Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Construction. It would seem on a number of measure that the stock price is reasonable and below the median. They have good dividend coverage with dividends low and growth moderate. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN), but I used to. I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. I lot of people were recommending it as a great stock. There are many that think this company will profit from government money promised for infrastructure building. I bought and sold this stock between 2008 and 2011 and did not make any money. It was a non-core holding. With their new policy of dividends, this stock has become more interesting.

They started to pay dividends in 2012 and dividends have grown at 10.2% per year over the past 4 years. The dividend has been low with the current dividend at 1.43 and the 5 year median at 1.25%. The dividend growth is in the median range. Dividends are growing currently at 10.2% per year.

They can afford their dividends. The Dividend Payout Ratio for 2016 is 36.3% with 5 year coverage at 41%. This is expected to be 42% this year with 5 year coverage at 36%. The DPR for CFPS is at 2% for 2016 with 5 year coverage at 3.5%. It would seem that they adequate coverage and room to grow.

The shareholders of this stock have made money over the past 5 and 10 years. The total return over these periods is 21.58% and 11.26% per year. The portion of the total return attributable to dividends is 1.85% and 0.71% per year respectively. Do not forget that dividends were only paid for the last 5 years. The portion of the total return attributable to capital gains is 19.73% and 10.55% per year respectively.

The Return on Equity for 2016 was 6.6% with 5 year median of 15.1%. The ROE for 2017 is expected to be 7.4% with 5 year median of 11.8%. The ROE on Comprehensive Income for 2016 is 6.7% with 5 year median at 19.6%. The higher ROE on Comprehensive Income suggests that the earnings for this company are of a good quality.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.38, 17.66 and 22.88. The 10 year ratios are 15.79, 20.34 and 24.12. The historical ratios are 11.60, 15.04 and 18.48. The current P/E Ratio is 30.22 based on a current stock price of $35.05 and 2017 EPS estimate of $1.16. The 2018 P/E Ratio is 17.70 based on a stock price of $35.05 and 2018 EPS estimate of $1.98. This stock price testing suggests that the stock price is relative reasonable using the 2018 number. It is a reasonable one to use as we are close to 2018.

I get a Graham Price of $20.77 for 2017 and 27.13 for 2018. The Price/Graham Price Ratios for 2017 is 1.69 and for 2018 is 1.29 based on a stock price of $35.05. The 10 year low, median and high median Price/Graham Price Ratios are 1.16, 1.47 and 1.74. Using the 2018 P/GP Ratio the current stock price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share is 2.24. The current P/B Ratio is 2.12. (Note this is from the most recent quarter so there are no 2017 and 2018 ratios here.) The current P/B Ratios is based on a Book Value of $1,882M, Book Value per Share, and a stock price of $35.05. The current P/B Ratio is some 5% below the 10 year median. This stock price testing suggests that the stock price is reasonable and below the median.

The current dividend yield is 1.43%. The historical median is 1.25%. The current dividend yield is some 14% higher than the historical median. The current dividend yield is based on dividends $0.50 and a stock price of $35.05. This stock price testing suggests that the stock price is reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.15. The 2017 P/S Ratio is 1.15 and the 2018 P/S Ratio is 1.07. The current P/S Ratio is based on Revenue of $3,484M, Revenue per Share of $30.59 and a stock price of $35.05. The 2018 P/S Ratio is based on Revenue of $3,740M, Revenue per Share of $32.84 and a stock price of $35.05. The 2017 and 2018 P/S Ratio is some 0.7% and 7% below the 10 year median 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 (5) and Hold (6) recommendations. The consensus recommendations would be a Hold. The 12 month stock price is $39.35. This implies a total return of 13.69% with 12.27% from capital gains and 1.43% from dividends based on a current stock price of $35.05.

Tatum Peregrin on Ledger Gazette talk about some recent analysts rating changes. Devon Dixon on Week Herald talks about institutional investor Guardian Capital LP increasing their shares in this company by 10%. Nelson Research Staff on Nelson Research talk about this stock. Note that they are using US$. See what analysts are saying at Stock Chase . They have varying views on this company.

Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec Inc .

The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV)... learn more. The next stock I will write about will be Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more on Wednesday, 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, December 20, 2017

FirstService Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. It would seem at the present time that the stock price is relatively expensive. There is a wide gap between the ROE on Net Income and Comprehensive Income. See my spreadsheet on FirstService Corp.

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSV), but I used to. I bought FirstService Corp in 2002 as I thought it was a good solid company that knows how to make money. I bought more of this company in 2007 from my profit from RIM. FSV was a non-dividend paying stock, but it had issued preferred shares to shareholders. Their way of paying dividends by issuing preferred shares was interesting. However, only if you held shares at the time of the special dividend of preferred shares would you get any dividends.

A curious thing is that the estimates for future years were given in CDN$ and this company reports in US$. Other years future estimates were in US$. All the financial reports are in US$ including the most recent one for the third quarter of 2017.

The company started to pay dividends in 2013 and they are paid in US$. The dividends were flat from 2013 to 2015 inclusive. They raised the dividends by 10% in 2016 and then by 11.4% in 2017. They can afford their dividends as the Dividend Payout Ratio for 2016 was 47%. It is expected to be 33% in 2017 with 5 year coverage of 53%. The Dividend Payout Ratio for CFPS was 16.5% in 2016. It is expected to be 16% in 2017 with 5 year coverage at 16%.

The dividend yield is very low. The high dividend yield was 2% and the low is 0.7%. The current dividend yield is 0.72% based on a stock price of $67.87 US$ and dividends of $0.49 US$

The 5 year low, median and high median Price/Earnings per Share Ratios are 29.99, 39.55 and 46.87 CDN$. The 10 year ratios are 17.78, 24.96 and 32.14 CDN$. The historical ones are 12.87, 18.35 and 22.63 CDN$. The current P/E Ratio is 47.49 CDN$ based on a stock price of $87.39 CDN$, EPS estimate for 2017 of $1.84 CDN$. The 2018 P/E Ratio is 39.01 CDN$ based on a stock price of $87.39 CDN$ and EPS for 2018 of $2.24 CDN$. Results in US$ would be similar. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price $16.99 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.98, 2.83 and 3.52 CDN$. The current P/GP Ratio is 5.14 CDN$ based on a stock price of $87.39 CDN$. All of the P/GP Ratios are quite high. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 8.31 CDN$. The current P/B Ratio is 12.53 CDN$ based on a stock price of $87.39 CDN$, Book Value of $250.4M CDN$ and Book Value per Share of $6.98 CDN$. The current P/B Ratio is some 51% higher than the 10 year median ratio. Results in US$ would be similar. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 1.34%. The current dividend yield is $0.72% based on a stock price of $87.39 CDN$ and dividends of $0.63 CDN$. The current yield is some 46% lower than the historical one. (I use historical loosely as we only have a few years of data.) Results in US$ would be similar. This stock price testing suggests that the stock price is relatively expensive.

I get a Price/Sales (Revenue) Ratio of 0.48 US$. The current P/S Ratio is 1.45 US$ based on 2017 Revenue estimate of $1,648M, Revenue per Share of $46.77 US$ and a stock price of $67.87 US$. The current ratio is some 200% above the 10 year ratio. Results in CDN$ would be similar. This stock price testing suggests that the stock price is relatively expensive.

A negative about this stock is that the Return on Equity on the Net Income is a lot higher than the Return on Equity on Comprehensive Income. The ROE on Net Income for 2016 is 18.6% with 5 year median of 12.8%. The ROE on Comprehensive Income for 2016 is 12% with a 5 year median of just 3.1%. This would suggest that the earnings maybe not be of good quality. (This is the same in either currency.)

When I look at analysts' recommendations, I find only Hold (6) recommendations. The consensus would be a Hold. The 12 month stock price consensus is $89.29 CDN$. This implies a total return of 2.89% with 2.17% from capital gains and 0.72% from dividends based on a current stock price of $87.39 CDN$.

David Owens on Simply Wall Street thinks that this stock is overvalued (that is the current price is too high). Jennifer Salazar on Ledger Gazette talks about a director selling shares and recent analysts' recommendations. See what analysts are saying about this company on Stock Chase. They are rather positive about the company.

FirstService Corporation is a North American leader in the property services sector, serving its customers through two industry-leading service platforms: FirstService Residential, North America's largest manager of residential communities; and FirstService Brands, one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations. Its web site is here FirstService Corp.

The last stock I wrote about was about was Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)... learn more. The next stock I will write about will be Stantec Inc. (TSX-STN, NYSE-STN)... learn more on Friday, December 22, 2017 around 5 pm. Tomorrow on my other blog I will write about Start Investing.... learn more on Thursday, December 21, 2017 around 5 pm.

Also, on my book blog I have put a review of the book Money Changes Everything by William Goetzmann 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, December 18, 2017

The Keg Royalties Income Fund

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Price is reasonable to expensive. KBL must not only have revenue, but profit in order to pay into this fund. We do not know if they have profit or even positive cash flow. See my spreadsheet on The Keg Royalties Income Fund.

I do not own this stock of Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF). This was a stock suggested by one of my readers. I like dinning at The Keg. I find the food very good. At stock forums I viewed, investors liked this company as it is guaranteed 4% of the sales at Keg restaurants as income to the fund. So I decided to take a look at it.

The reason I do not like this fund is that they do not publish financial statements on Keg Restaurants Limited (KBL). All of the fund's income and some 99% of its assets depend on KBL. How can you tell if KBL is financially able to pay income to this fund if you cannot see their statements? Even worst to my mind is that they used to publish KRL's financial statements until 2010. They had 3 years of earnings losses to 2010 and stopped publishing KBL financials.

While the fund has a good yield, currently at 5.67%, there has not been much in the way of increasing distributions. Distributions are up by 1.58% and down by 0.54% over the past 5 and 10 years. Part of the reason for this is the drop in distributions that occurred in 2011 because of the change in tax rules. Another is distributions were flat from 2012 to 2014 inclusive. They started to increase distributions again in 2015. The most recent increase was in 2017 and it was for 3.1%.

I would not make a call on their ability to cover their distributions. They could in the past, but they are totally dependent on KRL's ability to pay them and this we do not know about. In the past the distributions have not been covered well. The Dividend Payout Ratio for 2016 for EPS is 1034% with 5 year coverage of $186%. The DPR for CFPS is better at 55% with 5 year cover at 57%. However, I like to see CFPS coverage at 40% or lower.

According to the fund, they have distributable cash of $12.8M and distributions of $12.6M with a distribution rate of 98%. However, according to the cash flow statement, the fund paid out to Fund Unit holders some $13M in distributions which gives a distribution rate of 102%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 25.82, 28.21 and 30.61. The 10 year corresponding are 14.61, 16.60 and 15.58. The historical ratios are 10.52, 11.18 and 12.77. The current P/E Ratio is 14.94 based on EPS for the 12 months to the end of the third quarter of $1.34. This stock price testing suggests that the stock price is relatively reasonable and below the median.

P/E Ratios are going up because the stock price is going up while the EPS is going down. The main reason for the drop in EPS for this stock is that the Partnership units in this stock by KRL, which are a liability to the Fund, have gone up in value by some $11.4M between 2015 and 2016. The EPS dropped by some 89% between 2015 and 2016. That is EPS when from $0.99 to $0.11. Note that EPS hit a high point in 2009 and have been dropping since then.

The difference between the EPS loss of $0.37 for the first three quarters of 2016 and the EPS profit of $0.86 for the first three quarters of 2017 has all to do with changing fair values of KBL's Partnership units. I do wonder how real these values are. I do not find that the accounting is clean, clear and straight forward.

I get a Graham Price of $14.65. The 10 year Price/Graham Price Ratios are 1.04, 1.17 and 1.28. The current P/GP Ratio is 1.37 based on a stock price of $20.02. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 1.49. The current P/B Ratio is 2.81 a values some 89% higher. The current P/B Ratio is based on Book Value of $80.85M, Book Value per Share of $7.12 and a stock price of $20.02. This stock price testing suggests that the stock price is relatively expensive.

The problem is that the Book Value for this stock is dropping. The BVPS is gone down by 5.8% and 3.9% per year over the past 5 and 10 years. BVPS dropped by 12.8% in 2016. A dropping book value is never a good sign.

Even though this company did not change from an income trust to a corporation, its tax has changed to that of a corporation. This is the reason for the distribution decrease in 2011. Because of this I am looking at the median distribution yield from 2011 and that is 6.06%. The current yield is 5.67% a values some 6.4% lower. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 7.36. The current one is 7.98 based on Total Revenue for 2017 of 428.5M, Revenue per Share of $2.51 and a stock price of $20.02. The current P/S 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.

When I look at analysts' recommendations, I only find one and that is a Buy Recommendation. The 12 month stock price given is $24.00. This implies a total return of 25.55% with 19.88% from capital gains and 5.67% from dividends based on a current stock price of $20.02.

Saundra Reilly talks about this company on Simply Wall Street. Note she is wrong about no increases in the past decade as I have shown above. Andrew Walker at Motley Fool takes a look at this stock. See what analysts are saying about this stock on Stock Chase. The company is not well covered.

The Fund is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership (the "Partnership"), a subsidiary of the Fund, owns certain trademarks and other related intellectual property used by Keg Restaurants Ltd. ("KRL"). In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool. KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool. Its web site is here The Keg Royalties Income Fund.

The last stock I wrote about was about was Stella-Jones Inc. (TSX-SJ, OTC- STLJF)... learn more. The next stock I will write about will be FirstService Corp (TSX-FSV, NASDAQ-FSV)... learn more on Wednesday, December 20, 2017 around 5 pm. Tomorrow on my other blog I will write about How I Survived Layoff at 54.... learn more on Tuesday, December 19, 2017 around 5 pm.

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

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

Friday, December 15, 2017

Stella-Jones Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wednesday, December 13, 2017

First Capital Realty

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Monday, December 11, 2017

DHX Media Ltd

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday, December 8, 2017

Northland Power Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wednesday, December 6, 2017

Chesswood Group Ltd

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Monday, December 4, 2017

Quarterhill Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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