Thursday, January 29, 2015

Rogers Sugar Inc. 2

I do not own this stock of Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has recently converted to corporation. On change to a corporation, it lowered its dividend.

When I look at insider trading for the past year, I find $0.3M of insider buying and no insider selling. This is a very small amount of insider buying being some 0.06% of the market cap of this stock. In 2014 there was no increase to outstanding shares due to stock options. There have been increases to outstanding shares due to stock options in the past.

There is very little insider ownership with the CEO owing shares worth around $0.6M and the chairman owning shares worth around $0.7M. There are only 5 directors for this company and none of these directors is a women or of a minority group.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.90, 14.79 and 15.62. The corresponding 10 year P/E Ratios are a lot lower at 8.50, 9.71 and 11.10. The thing is that the P/E Ratios increased after this company because a corporation and this is quite common when income trust companies became corporations.

The current P/E Ratio is 13.82 based on a stock price of $4.56 and 2015 EPS estimate of $0.33. Using the 5 year range of P/E Ratios, this stock price test suggests that the stock price is relatively cheap.

I get a Graham Price of $4.43. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.85 and 0.97. The current P/GP Ratio is 0.99. This stock price test suggests that the stock price is relatively expensive. However note that on an absolute basis, a P/GP Ratio of less than 1.00 says the stock price is cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.58. The current P/B Ratio at 1.72 is based on a BVPS of $2.65 and a stock price of $4.56. The current P/B Ratio is just 9% higher than the 10 year median P/B Ratio. The stock price testing suggests that the stock price is relatively reasonable.

(Note that yesterday I was incorrect about the drop in BVPS and it is at 2.8% and 4% over the past 5 and 10 years and not at the 17% and 11% per year I stated. Yesterday's blog has been updated on this point. My spreadsheet had an error.)

Because this company used to be an income trust, there is not much point in doing a test using historical average or historical median dividend yields. For all x-income trust companies, the current dividend yields are considerably lower. However, the 5 year median dividend yield at 6.18% is some 27.7% lower than the current dividend yield of 7.89%. This stock price test suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Hold and Underperform recommendations. The consensus recommendation is a Hold as most of the recommendations are a Hold. The 12 month consensus stock price is $4.56. Since I am dealing with a current stock price of $4.56, the total return over the next 12 months would be 7.89% with 0% from capital gains and 7.89% from dividends.

Brenda Bouw of the Globe and Mail thinks that investors are growing sour on this company. She says that a TD Bank analyst sees a dividend cut in the near future because of this company's challenging outlook.

The company just reported on the first quarter of 2015 today. Revenue is down by 6% compared to the first quarter of 2014. Net income is down by 25% and EPS is down by 23%.

Sound bite for Twitter and StockTwits is: Price is cheap. Maybe dividend cut risk. See my spreadsheet at rsi.htm.

This is the second of two parts. The first part was posted on Wednesday, January 28, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Rogers Sugar.

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.

Wednesday, January 28, 2015

Rogers Sugar Inc.

On my other blog I am today writing about what I am doing with my new TFSA money in 2015 continue...

I do not own this stock of Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has recently converted to corporation. On change to a corporation, it lowered its dividend.

This is not a dividend growth company. The dividends have fluctuated many times in the past. For example, the dividends were $0.58 in 2001, a decrease of 26%; $0.42 in 2002, a decrease of 28.5%; and $0.48 in 2003, an increase of 15.7%. They were at one time an Income Trust company and when they became a corporation in 2011 they cut their dividends by around 30%.

The other thing to mentions, of course, is the dividend yield. The 5 year median dividend yield is quite good at 6.18% but the current one is even better at 7.89%. Of course as an income trust, this stock had high dividend yields. The historical average and historical median are at 10.58% and 10.09%. The stock hit lows of dividends in 2012, but dividends were still north of 5%.

The current dividend at $0.36 has been stable since 2013. They also paid a special dividend they could ill afford in 2013. The company has had high Dividend Payout Ratios, which occurred after 2011 and especially in regards to earnings. The 5 year DPR for EPS is 107.8% and for CFPS is 57.6%. The DPR in 2014 for EPS was 116% and for CFPS was 54.4%.

When a company pays out more than earnings in dividends this basically cause a decline in book value. The book value for this company has been declining. The Book Value per Share has decreased by 17% and 11% per year over the past 5 and 10 years. Book value hit a peak in 2011 and has been decreasing since then.

There has been little to no growth in revenues, but analysts expect some growth over the next couple of years. EPS have been volatile and analysts do not see much growth over the next couple of years. There has been little to no growth in CFPS, but analysts see some growth in 2015.

Revenue per Share is down by 1.9% and up by 1.6% per year over the past 5 and 10 years. Revenues per Share peaked in 2010 and 2011and have been going down since. Analysts expect little to happen in 2015, but expect growth of around 4% in 2016.

EPS is down by 7% and 2.8% per year over the past 5 and 10 years. However because of the volatility of EPS, if you look at 5 year running averages, EPS is up by 2.8% and 4% per year over the past 5 and 10 years. Analysts expect EPS to be flat in 2015 and 2016 at $0.33.

For Cash Flow per Share there has been a decline of 4.6% per year over the past 5 years and no change over the past 10 years. CFPS is also a bit volatile, but even looking at 5 year running averages there is no growth over the past 5 years and 1.4% per year growth over the past 10 years. Analysts' consensus expect some growth in 2015 but none in 2016.

The Return on Equity has been over 10% every year over the past 5 and 10 years, so this is good. The ROE for 2014 was 11.7% and has a 5 year median of 14.6%. The ROE on comprehensive income is slightly higher and is 11.8% in 2014 and has a 5 year median of 15.2%.

The Liquidity Ratio has been quite volatile, but is good in 2014 at 1.61. However, the 5 year median is just 1.34. The Debt Ratios have always been good and is at 1.79 in 2014. Leverage and Debt/Equity Ratios have been a bit high over the past while and were at 2.27 and 1.27 in 2014. These ratios have 5 year medians of 2.16 and 1.16, respectively.

Stock price has been fall after hitting a peak in 2012. Total return to date is 5.25% and 12.90% per year over the past 5 and 10 years. The dividend portion of this return is at 8.35% and 10.79% per year. The capital gain portion is a negative 3.11% and a positive 2.11% per year. This shows the value of dividends. Investors have a tendency not to lose much with dividend stock.

Sound bite for Twitter and StockTwits is: Not dividend growth, but yield is good. It has problems with lack of revenue growth and declining book value. They need to lower the DPR for EPS and this many not happen anytime soon. Some see a dividend cut in the future. See my spreadsheet at rsi.htm.

This is the first of two parts. The second part will be posted on Thursday, January 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Rogers Sugar.

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.

Tuesday, January 27, 2015

Transcontinental Inc. 2

I do not own this stock of Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). This is a dividend growth stock. It was on a number of dividend lists. However, it fall on hard times after 2008, but currently seems to be recovering. It is still on the Canadian Dividend Aristocrats Index.

Over the past year there has been $0.5M of inside selling and no insider buying. All the selling seems recent and it would seem from the insider trading reports that insiders are getting rid of or not holding on the stock options. However, this selling is at 0.04% of market cap and therefore a relatively small amount.

There is insider ownership. One director Rémi Marcoux seems to own some 88% of the Class B shares which have 20 votes per share compared to the Class A share's one vote. His shares are worth around $199M.

The 5 year low, median and high median Price/Earnings per Share Ratios based on Adjusted EPS are 5.20, 6.89, and 7.89. The corresponding 10 year P/E Ratios are similar at 6.09, 6.99 and 8.41. Also note that prior to 2008, the P/E Ratios were much higher and the 5 year median P/E Ratio was 14.02. The current P/E Ratio is 7.11 based on a stock price of $15.72 and 2015 Adjusted EPS estimate of $2.21. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $21.95. The 10 year Price/Graham Price Ratios are 0.80, 0.91 and 1.02. The current P/GP Ratio is 0.72 based on a stock price of $15.72. This stock price test suggests that the stock price is cheap. Also, a stock price is considered good if the P/GP Ratio is below 1.00.

The 10 year Price/Book Value per Share Ratio is 1.28. The current P/B Ratio is 1.55 based on BVPS of $10.15 and current stock price of $15.72. The current P/B Ratio is some 21% higher than the 10 year median P/B Ratio. This stock price test suggests that the stock price is expensive. Note that BVPS has been declining by 6% and 0.8% per year over the past 5 and 10 years.

The current dividend yield is 4.07%. The 5 year median, historical average and historical median dividend yields are 4.10%, 2.73% and 1.26%. Since 2008, the dividend yields have been climbing. Prior to 2008, the median dividend yield was around 1%. The dividend yield hit highs in 2011 and has been falling since then.

The current dividend yield is a bit above the 5 year median, but it is 49% below the historical average and some 233% lower than the historical median dividend yield. It is about 13% lower than the historical high dividend yield. Most of this stock price testing suggests that the stock price is relatively cheap.

According to Joseph Solitro of the Motley Fool this stock is cheap and it has current strong earnings growth. Brenda Bouw in October 2014 says in a Globe and Mail that investors are sticking with Transcontinental as it diversifies.

When I look at analysts' recommendations I find Buy, Hold and Underperform Recommendations. The consensus recommendation would be a Hold as most of the recommendations are a Hold. The 12 month stock price target is $16.90. This implies a total return of 11.58% with 4.07% from dividends and 7.51% from capital gains.

Sound bite for Twitter and StockTwits is: Stock price is cheap, but there is risk. If you are interested in this stock, now is the time to buy. The company has had its problems, but it does seem to be recovering and diversifying. The best time to buy is when a recovery is on the way. Once a stock is recovered, the price would probably be recovered also. I needed something to buy with my new TFSA money so bought some of these shares. See my spreadsheet at tcl.htm.

This is the second of two parts. The first part was posted on Monday, January 26, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the third-largest in North America. Its web site is here Transcontinental 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. Follow me on Twitter or StockTwits.

Monday, January 26, 2015

Transcontinental Inc.

On my other blog I am today writing about analysts' recommendations and what they mean continue...

I do not own this stock of Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). This is a dividend growth stock. It was on a number of dividend lists. However, it fall on hard times after 2008, but currently seems to be recovering. It is still on the Canadian Dividend Aristocrats Index.

First, let's talk about the companies dividends. They did not raise the dividends in 2009, but because of the timing of dividend increase in 2008, the amount of dividends to shareholders in 2009 did go up. The most recent dividend increase was in 2014 and that increase was for 10.3%. This shows that the company seems confident in making money in the future for shareholders.

The current dividend yield on this stock is good and the dividend increases are good. The current dividend yield is 4.07% and the 5 year median dividend yield is 4.1%. The 5 and 10 years dividend growth is at 14.3% and 13.9% per year. However, the good dividend yield has only occurred since 2008. Prior to that year the median dividend for the previous 10 years was at 1%.

This means that the historical highs for dividend yields are very recent dividend yields. Shareholders who bought this stock 10 years ago are only making a yield on their original investment of 2.7%. Shareholders who bought this stock 15 years ago are only making a yield on their original investment of 7.1%.

However, if you bought this stock today, and with a 4.1% dividend and the dividend increases remain around 13.9%, then in 10 years' time you could be earning 15% on your current investment or in 15 years' time you could be earning 28.7% on your current investment.

Cash flow seems to be recovering from 2008, EPS is now increasing and revenue is going down less. The company has decreased the outstanding shares by .7% and 1.3% per year over the past 5 and 10 years. This makes things like Cash Flow more important than Cash Flow per Share.

Revenue is down by 14.8% since 2008. The average decrease since 2008 is 2.96% and in 2014 revenue decreased by 1.9%. For EPS, the company suffered losses in 2012 and 2013. In 2014 they made $1.34 per share however; this EPS is still lower than the $1.42 they made in 2007.

The company has for a while published an Adjusted EPS value. This Adjusted EPS value excludes unusual items and discontinued operations. According to the Adjusted EPS, the company has growth in earnings of 6.1% and 4.1% per year over the past 5 and 10 years.

Cash Flow has increased by 7.1% and 2.4% per year over the past 5 and 10 years. Cash Flow per Share has increased by 7.8% and 3.7% per year over the past 5 and 10 years.

The Return on Equity has been below 10% 5 times in the past 10 years and 3 times in past 5 years. The ROE for 2014 was good at 13.3%, but the 5 year median is just 5.9%. The ROE on Comprehensive Income has been better with the one for 2014 at 16.7% and the 5 year median at 9.6%.

The higher ROE on Comprehensive Income suggests that the company is doing better than raw EPS suggests and perhaps this is why they have an Adjusted EPS and analysts seem to be paying some attention to the Adjusted EPS.

The Debt Ratios are not the best, but they are ok. The Liquidity Ratio is just 1.08. I would prefer to see this at 1.50 or above. If you add in cash flow after dividends, this ratio is 1.62. This suggests that the company could be dependent on cash flow to balance off current liabilities. The Debt Ratio is good at 1.64.

Leverage and Debt/Equity Ratios are a little high but not untypical of an industrial stock. The ratios are 2.56 and 1.56 and I would prefer to see the Leverage and Debt/Equity Ratios below 2.00 and below 1.00, respectively.

Shareholders have made money on this stock in the past. For example, the 5 and 10 years prior to 2006 the total returns was at 10.34% and 16.59% per year with 9.26% and 15.34% per year from capital gains and 1.08% and 1.26% per year from dividends.

For the 5 year period coming into the end of 2014 the total return was good at 9.97% per years with 5.09% per year from capital gains and 4.88% per year from dividends. However, the 10 years total return over the 10 years period to the end of 2014 was not good with a total loss of 0.8% per year with a capital loss of 3.36% per year and dividends 2.52% per year

Analysts seem to expect higher EPS in 2015 and 2016, but they expect lower Revenues and lower Cash Flow. Ultimately, the company's revenue is going to have to grow for cash flow and earnings to grow. The company with their recent dividend increase of 10.3% seems to be more hopeful than the analysts following this stock.

Sound bite for Twitter and StockTwits is: Dividend Growth Stock with some problems. There is the lack of revenue growth, low Liquidity Ratio and Low ROE. I was not interested in buying this company prior to 2008 because of the very low dividend yield. The yield now is high, but so is the risk of buying this company. See my spreadsheet at tcl.htm.

This is the first of two parts. The second part will be posted on Tuesday, January 27, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the third-largest in North America. Its web site is here Transcontinental 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. Follow me on Twitter or StockTwits.

Friday, January 23, 2015

National Bank of Canada 2

I do not own this stock of National Bank of Canada (TSX-NA, OTC-NTIOF). I thought I should follow one of the smaller Canadian Banks. This seems like a good choice.

Over the past year there has been insider trading, with insider selling at $10.4M and insider buying at $1.3M. The net insider selling is at $9.1M and since this is only 0.05% of the stock's market cap, it is a relatively small amount.

In 2014 some 2.945M shares were issued for stock options purposes. This represents 0.89% of the outstanding shares and is a little high. As you can see from the table below the relative amount of stock options shares issued for the National Bank is much higher than the other banks. Whether you are looking at percentage of outstanding shares or market cap, the percentage is the same. On a relatively basis, which is the one that really counts, National Bank is issuing more stock options than the other banks.

Bank Symbol Shares % of o/s Shares Value 2014
Bank of Montreal BMO 2.133 0.33% $173.187M
Bank of Nova Scotia BNS 3.493 0.29% $241.121M
Royal Bank RY 2.723 0.19% $217.867M
National Bank NA 2.945 0.89% $155.117M
TD Bank TD 5.000 0.27% $277.350M


There is some insider ownership with the CEO having shares worth around $13.8M and the chairman having shares worth around $1.3M. The above ownership does not add up to much of a percentage of outstanding shares. They are around 0.09% of outstanding shares or market cap.

The 5 year low, median and high median Price/Earnings Ratios are 9.26, 10.28 and 11.30. The corresponding 10 year median P/E Ratios are similar at 9.36, 10.49 and 12.18. The current P/E Ratio is 9.71 based on a stock price of $45.04 and 2015 EPS estimates of $4.64. This stock price test suggests that the stock price is relatively reasonable. The stock price is good because it is relatively below the median.

It is interesting to compare historical ratios. If you look at 5 year median P/E Ratios, National Bank has the lowest of all the other banks. This means that investors are willing to pay relatively more money for the other banks than for this bank.

Bank Symbol Low Median High
Bank of Montreal BMO 10.51 11.34 12.10
Bank of Nova Scotia BNS 10.64 11.88 13.11
Royal Bank RY 11.34 12.60 13.85
National Bank NA 9.26 10.28 11.30
TD Bank TD 11.40 12.63 13.84


I get a Graham Price of $51.86. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 0.89 and 1.05. The current P/GP Ratio is 0.87 based on a stock price of $45.04. This stock price test suggests that the stock price is relatively reasonable. The stock price is good because it is relatively below the median.

It is also interesting to look at the relative 10 year low, median and high P/GP Ratios for all the bank stocks. The chart below shows the 10 year low, median and high Price/Graham Price Ratios. This chart really shows the same results as the last chart. Investors are willing to pay more relative to the Graham Price for the other bank stocks than for National Bank.

Bank Symbol Low Median High
Bank of Montreal BMO 0.82 0.93 1.12
Bank of Nova Scotia BNS 0.97 1.09 1.24
Royal Bank RY 1.03 1.21 1.41
National Bank NA 0.80 0.89 1.05
TD Bank TD 0.88 1.00 1.11


I get a 10 year median Price/Book Value per Share Ratio of 1.79. The current P/B Ratio is 1.75 based on a stock price of $45.04 and Book Value per Share of $25.76. The current P/B Ratios is some 2% lower than the 10 years P/B Ratio. This stock price test suggests that the stock price is relatively reasonable. The stock price is good because it is relatively below the median.

For Book Value, the lower the P/B Ratio is, the more book value you get for your money. Theoretically, the book value is the difference between assets and liabilities and therefore is the potential value a company is worth or the breakup value of the stock for the shareholders. Here, on a relative basis shareholders are paying or are willing to pay more for than for TD and BNS stock than for National Bank stock based on the bank's book value.

Bank Symbol P/B Ratio
Bank of Montreal BMO 1.59
Bank of Nova Scotia BNS 2.16
Royal Bank RY 2.25
National Bank NA 1.79
TD Bank TD 1.72


When I look at the dividend yields, the current dividend yield is 4.44%. The 5 year median, Historical Average and the Historical Median Dividend yields are 4.06%, 4.77% and 3.84%. The current dividend yield is higher than both the 5 year median and the Historical Median dividend yields by 9.3% and 15.6%. The current yield is lower than the Historical Average by 6.8%.

The 5 year median and the Historical Median dividend yields are probably the best ones to use. The current dividend yield is higher than both of these yields. This stock price test suggests that the stock price is relatively reasonable. The stock price is good because it is relatively below the median.

If you compared dividend yields that I have on my spreadsheet for 5 year median, Historical Average and Historical Median, mostly National Bank is higher than all but the for BMO. The only other exception is for Royal Bank's Historical Median Dividend Yield which is higher than National Bank's Historical Median Dividend yield.

Bank Symbol 5 Year Hist. Ave Hist. Med
Bank of Montreal BMO 4.69% 5.30% 4.62%
Bank of Nova Scotia BNS 3.92% 4.18% 3.81%
Royal Bank RY 3.91% 4.23% 3.92%
National Bank NA 4.06% 4.77% 3.84%
TD Bank TD 3.52% 3.49% 3.40%


A problem with my spreadsheets is that I have a different number of years of data for different companies. If I use only the data on Dividend Yield going back to 1988, which is the first year I have data for the National Bank, then things change a bit. The National Bank's dividend yield is higher than all but for BMO's dividend yield.

Bank Symbol 5 Year Hist. Ave Hist. Med
Bank of Montreal BMO 4.69% 5.13% 4.46%
Bank of Nova Scotia BNS 3.92% 4.18% 3.81%
Royal Bank RY 3.91% 4.05% 3.65%
National Bank NA 4.06% 4.77% 3.84%
TD Bank TD 3.52% 3.40% 3.33%


When I look at analyst's recommendations, I find only Hold and Underperform recommendations. The consensus recommendations would be a Hold. Almost all recommendations are Hold recommendations. The 12 month stock price consensus is $53.60. This implies a total return of 23.45% with 4.44% from Dividends and 19.01% from capital gains.

FINRA, a US securities regulator fined National Bank $20,000 this year. The Ticket Reporter site talks about analysts giving National Bank Hold and Sell recommendations. A number of sites are talking about an insider selling National Bank stocks. A recent article from the Motley Fool suggests that this bank might be a good long term investment.

Sound bite for Twitter and StockTwits is: Stock Price is good. I really do not see the point in giving a recommendation of Hold or lower when a stock comes in at a good price. It is the right time to buy a stock when the price is good unless you think that the company is in trouble it is not likely to be able to handle. If you want this stock in your portfolio for the long term, perhaps now is the time to look at buying it. See my spreadsheet at na.htm.

This is the second of two parts. The first part was posted on Thursday, January 22, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

National Bank of Canada provides financial services to consumers, small and medium-sized enterprises, and large corporations & has branches in every province in Canada. It is also represented in the U.S. and Europe through its subsidiaries and alliances. Its web site is here Nation Bank.

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.

Thursday, January 22, 2015

National Bank of Canada

I do not own this stock of National Bank of Canada (TSX-NA, OTC-NTIOF). I thought I should follow one of the smaller Canadian Banks. This seems like a good choice.

This bank did quite well through the most recent bear market with keeping the dividend level for just over 2 years. This is a dividend growth stock. It has a good dividend and moderate to good dividend growth. The current dividend yield is 4.44% and the 5 year median dividend yield is 4.05%. The 5 and 10 year dividend growth is 8.2% and 10.8% per year.

The last dividend increase was in 2015 and the dividend increase was for 5.2%. This bank also has the habit of increasing their dividends more than once in a calendar year.

The Dividend Payout Ratios are good with the 5 year median DPR for EPS at 39% and for CFPS at 32%. The DPRs for 2014 was at 42% for EPS and 32% for CFPS. The DPRs are generally lower than the other banks, especially in regards to EPS.

Bank Symbols DPR for EPS DPR for CFPS
Bank of Montreal BMO 47% 37%
Bank of Nova Scotia BNS 45% 36%
Royal Bank RY 52% 25%
National Bank NA 39% 32%
TD Bank TD 44% 31%


As I had said a few days ago, I color code my growth value on my spreadsheet. Red is for low or negative growth. Blue is for moderate growth and green is for good growth. Looking at this spreadsheet there is a lot of green with some blue figures and the odd red figure. Revenues are important to drive both EPS and CFPS. However, the growth figures for Revenue are all blue.

The outstanding shares have not changed much over the past 5 and 10 years, so we can look at both Revenues and Revenues per Shares and there is not much difference. Revenue per share is up by 5.3% and 4.6% per year over the past 5 and 10 years.

EPS is up by 11.8% and 7.9% per year over the past 5 and 10 years and CFPS are up by 10.1% and 10.2% per year over the past 5 and 10 years.

This bank has had a Return on Equity of over 10% per year over the past 20 years. The 2014 ROE is at 16.8% and it has a 5 year median of 17.1%. Unfortunately, the ROE on comprehensive income is low, but still good at 14.9% and this has a 5 year median of 14.9%. When the comprehensive income ROE is below that for net income it suggests that perhaps the net income is not all of good quality.

This bank also has the lowest Debt Ratio of all the banks I have reviewed. The Debt Ratio is at 1.05 which is ok for a bank as basically anything at or over 1.4 is fine for a bank. However, the other banks I have reviewed have Debt Ratios of 1.06 or 1.07. On the other hand, this bank has a lot of cash on hand at some $24.56 per share which is some 46.6% of the stock price. Only BMO has a lot of cash on hand also.

Sound bite for Twitter and StockTwits is: Dividend Growth Bank stock. I had wanted to look at one of the smaller Canadian banks. This one is out of Quebec and it has expanded in Alberta. Sometimes it is worthwhile to invest in smaller companies as they might have more room to grow. See my spreadsheet at na.htm.

This is the first of two parts. The second part will be posted on Friday, January 23, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

National Bank of Canada provides financial services to consumers, small and medium-sized enterprises, and large corporations & has branches in every province in Canada. It is also represented in the U.S. and Europe through its subsidiaries and alliances. Its web site is here Nation Bank.

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.

Wednesday, January 21, 2015

Enghouse Systems Ltd. 2

On my other blog I am today writing about a sample dividend growth stock portfolio continue...

I do not own this stock of Enghouse Systems Ltd. (TSX-ESL, OTC- EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividends.

When I look at insider trading over the past year, I see $1.4M of insider buying with $2.6M of insider selling with a net of insider selling at $1.3M. This amount of net insider selling amounts to just 0.13% of the stock's market cap and so is a relatively small amount.

There is some insider ownership with the CEO and Chairman having shares worth around $172.7M and a director having shares worth around $15.4M. Last year the number of outstanding shares was increased by 121,000 shares for stock options. The book value of these shares is $1.4M. This amount of shares has a value of $4.6M at the end of the October 2014 financial year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.70, 20.06 and 22.88. This is somewhat lower than the corresponding 10 year P/E Ratios of 17.65, 22.80 and 29.53. The current P/E Ratio is 28.01 based on a stock price of $38.93 and 2015 EPS estimate of $1.39. This stock price testing suggests that the stock price is relatively high.

I get a Graham Price of $15.78. The 10 year low, median and high median Price/Graham Price Ratios are 1.12, 1.34 and 1.65. The current P/GP Ratio is 2.47 based on a stock price of $38.93. This stock price testing suggests that the stock price is relatively high.

I get a 10 year median Price/Book Value per Share Ratio of 1.92. The current P/B Ratio is 4.89 based on a stock price of $38.93 and a current Book Value per Share of $7.96. The current P/B Ratio is 155% higher than the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively high.

The current Dividend Yield is 1.03% based on a dividend of $0.40 and a stock price of $38.93. The 5 year median, the historical average and the historical median dividend yields are 1.74%, 1.85% and 1.74%. These dividend yields are 41%, 44% and 41% higher than the current dividend yield. This stock price testing suggests that the stock price is relatively high.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus would be a Buy. However, there are only 4 analysts following this stock. The 12 month stock price consensus is $45.20. This implies a total return of 17.135 with 1.03% from dividends and 16.11% from capital gains.

Joseph Solitro of the Motley Fool thinks this stock might be an interesting long term buy but he cautions that dividend yield is low. According to Legacy there was recent insider selling and TD lowered their recommendation on this stock from a Buy to a Hold. Michael Cloherty at Number Crunchers at the Globe and Mail was looking for good wealth creator stocks and this is one he came up with. The Dividend Guy blogger talks about Enghouse being on the Canadian Aristocrats list.

Sound bite for Twitter and StockTwits is: Tech stock's price is relatively high. I still like this stock, but I would not buy it at the present price as the price seems to be high. However, this stock has been relatively higher in the past. See my spreadsheet at esl.htm.

This is the second of two parts. The first part was posted on Tuesday, January 20, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Enghouse Systems Limited is a global provider of enterprise software solutions serving a variety of distinct vertical markets. Its strategy is to build a large diverse enterprise software company through strategic acquisitions and managed growth. Its web site is here Enghouse.

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.

Tuesday, January 20, 2015

Enghouse Systems Ltd.

I do not own this stock of Enghouse Systems Ltd. (TSX-ESL, OTC- EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividend.

This company started to pay dividends in 2008. The dividends can be quite low, but the growth is very good. The current dividend yield is 1.03% and the 5 year median dividend yield is 1.74%. The dividend growth is at 26.8% and 23.8% per year over the past 5 and 6 years.

With low dividends, you generally get low Dividend Payout Ratios. This is true in this case. The 5 year median DPR for EPS is 31.5% and for CFPS is 16.6%. The DPRs for the year ending October 2014 is at 32.4% for EPS and 18.7% for CFPS.

I color code my growth value on my spreadsheet. Red is for low or negative growth. Blue is for moderate growth and green is for good growth. Looking at this spreadsheet, all I can see is green. For example the revenue per share has grown by 21.7% and 13.5% per year over the past 5 and 10 years. The EPS has grown by 32.7% and 10% per year over the past 5 and 10 years.

Shareholders have done well. The 5 and 10 year total return is at 37.39% and 17.97% per year. The portion of this return from dividends is at 1.82% and 0.84% per year over the past 5 and 10 years. The portion of this return from capital gain is at 35.57% and 17.13% per year over the past 5 and 10 years.

The debt ratios on this stock are good. However, the Liquidity Ratio has been dropping. It used to be very high, but for the 2014 financial year it is just a good normal number. For example, 5 years ago the Liquidity Ratio was 3.25 and for 2014 it is 1.50. Even last year it was 1.68.

The Debt Ratio for 2014 is very good at 2.74. This also has been dropping and 5 years ago it was 3.58. Leverage and Debt/Equity Ratios are good and they have always been good. The current ratios are 1.57 and 0.57 respectively.

Return on Equity over the past 5 years has been below 10% once and that was in 2010. The ROE was below 10% between 2005 and 2010 inclusive. So this company has been doing better since 2011.

Sound bite for Twitter and StockTwits is: Dividend growth tech stock. If you are going to buy tech stocks, I think that the first ones you should look at are those with dividends, like this company. See my spreadsheet at esl.htm.

This is the first of two parts. The second part will be posted on Wednesday, January 21, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Enghouse Systems Limited is a global provider of enterprise software solutions serving a variety of distinct vertical markets. Its strategy is to build a large diverse enterprise software company through strategic acquisitions and managed growth. Its web site is here Enghouse.

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, January 19, 2015

Toronto Dominion Bank 2

On my other blog I am today writing about Bloggers Portfolios continue...

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). This stock, as all banks, was on Mike Higgs' Canadian Dividend Growth Stock list and the other dividend lists that I followed. When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought.

When I look at insider trading, I find $79.5M of inside selling and $78.6M of net insider selling with some insider buying at $1.7M. The net insider selling is at 0.08% of market cap and therefore is a relatively small amount.

The outstanding shares were increased last year by 5M shares with a book value of $199M. The value of this number of shares was $277.4M at the end of October 2014. This number of shares is 0.27% of the outstanding shares and is therefore a relatively small number.

There is some insider ownership with the CEO owing shares worth around $17.5M, the CFO owning shares worth around $5.7M and another officer owning shares worth around $19.2M. On the other hand these three people own around 0.04% of the outstanding shares and therefore a relatively small amount of the outstanding shares.

What I am looking for is a mission statement that the company wants to do well by their customers, employees, and community and thereby earn shareholders a reasonable return. As with most stocks I have reviewed so far, I cannot find a mission statement per se. However, I did find the following statements. Our Mission is we will be the Best Run, Customer-Focused, Integrated Financial Institution, with a Unique and Inclusive Employee Culture. Our Strategy is to produce long-term, profitable growth by building great franchises and delivering value to our Customers, Shareholders and Communities.

The 5 year low, median and high median Price/Earnings Ratios are 11.40, 12.63 and 13.84. The corresponding 10 year P/E Ratios are 11.41, 12.76 and 13.95 which are very close. The current P/E Ratio is 11.24 based on a stock price of $50.02 and 2015 EPS Estimates $4.45. This stock price test suggests that the stock is relatively cheap.

I get a Graham Price $53.46. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.00 and 1.11. The current P/GP Ratio is 0.94 based on a stock price of $50.02. This stock price test suggests that the stock price is relatively reasonable. However, on an absolute basis a P/GP Ratio below 1.00 suggests that the stock price is cheap.

The 10 year median Price/Book Value per Share is 1.72 and the current P/B Ratio is 1.75 based on a stock price of $50.02 and a BVPS of $28.54. The current P/B Ratio is just 2% higher than the 10 year median P/B Ratio. This stock price test suggests that the stock price is relatively reasonable.

The current dividend yield is 3.76%. The 5 year median, historical average and historical median dividend yields are 3.52%, 3.49% and 3.40% all values lower than the current dividend yield. The 5 year median, historical average and historical median dividend yields 6.8%, 7.85% and 10.54% lower than the current dividend yield. This stock price test suggests that the stock price is relatively reasonable. Although the stock price is relatively lower than the median and therefore shows it is at a good price.

When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 month stock price consensus is $60.20. This implies a total return of 24.11% with 20.35% from capital gains and 3.76% from dividends.

A report by the Motley Fool is rather positive about this bank. Another Motley Fool report by Benjamin Sinclair says why Canadian Retirees should own this bank. There is a recent Seeking Alpha report by Juri Zguri on this bank. The web site of Legacy talks about recent recommendations for this bank.

Sound bite for Twitter and StockTwits is: Stock price cheap to reasonable. On most of the testing the current stock price is showing a better than past median relative prices. This probably shows that now is a good time to buy if you want to hold this stock. See my spreadsheet at td.htm.

This is the second of two parts. The first part was posted on Friday, January 16, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank.

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.

Friday, January 16, 2015

Toronto Dominion Bank

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). This stock, as all banks, was on Mike Higgs' Canadian Dividend Growth Stock list and the other dividend lists that I followed. When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought.

This bank also just held the dividend payments steady for two years of 2009 and 2010. The 5 and 10 years dividend growth is at 5.6% and 10.5% per year. With the 5 year median dividend at 3.52% we have a stock with a good dividend with moderate increases. Also when this bank again started to increase the dividends, they started with quite good increases. The last dividend increase was in 2014 and it was for 10.6%. This bank is also currently increasing the dividends twice each year.

The Dividend Payout Ratio is good for this bank with a 5 year median DPR for EPS at 44.4%. The DPR for EPS for 2014 was also at 44.4%. One way of judging a company is how much of the original stock price has been paid by dividends. I have had this bank from almost 15 years and dividends cover some 45% of my original cost. Part of the reason is that I have had several stock purchases over the years. If you look at just the stock I bought almost 15 years ago, dividends cover some 125% of my original cost.

I have held this stock for almost 15 years and I have a total return of 14.76% per year with 11.37% from capital gains and 3.39% from dividends. Over the past 5 and 10 years to date this bank has not done as well with the 5 and 10 year total return at 9.97% and 8.53% with 6.14% and 5.05% from capital gains and 3.83% and 3.48% from dividends. For this bank the stock prices hit a low in 2009.

Because the outstanding shares have been increasing by 1.5% and 3.5% per year over the past 5 and 10 years the "per share" values, like Revenue per Share and EPS are more important to me as a shareholder than Revenue and Earnings.

For this company Revenue per Share and EPS have done well over the past 5 and 10 years with Revenue per Share up by 9.3% and 7.2% per year over the past 5 and 10 years. EPS has increased by 27.7% and 9.34% per year over the past 5 and 10 years. For this bank EPS hit a low in 2009 however revenue did not hit any lows with the 2008 bear market and subsequent recession.

By the way, revenue is up by 10.9% per year over the past 5 and 10 years. Net Income is up by 20.9% and 13.1% per year over the past 5 and 10 years.

For this bank, the Return on Equity has not been below 10% over the past 10 years. However, it has been lower in 3 years in the past 10 years. The Debt Ratio is at 1.06 which is the same as for Bank of Montreal (TSX-BMO) and Royal Bank (TSX-RY).

Sound bite for Twitter and StockTwits is: Bank Dividend Growth Stock. I think that everyone should have some exposure to banks and the financial sector. All the big Canadian banks are Dividend Growth Stock. See my spreadsheet at td.htm.

This is the first of two parts. The second part will be posted on Monday, January 19, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank.

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.