Friday, April 29, 2016

SNC-Lavalin Group Inc.

Sound bite for Twitter and StockTwits is: Stock is cheap to reasonable. The company has had some past problems. I believe that I will continue to do well in this company so I am keeping my investment in it. See my spreadsheet on SNC-Lavalin Group Inc.

I own this stock of SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF). This stock was one from Mike Higgs' list of dividend growth stocks. I liked the idea of low dividends and high dividend increases. When you are building up a portfolio, low dividends are good for tax reasons. High dividend increases are attractive for the future.

By 2008 this stock had grown so much it was too high a percentage of my portfolio. I sold 1/3 of my stock. In 2012 I bought 100 shares for my trading account. I was selling low paying dividend stocks from my Pension RRSP and I still wanted SNC as part of my portfolio.

The dividends yields have been higher than usual lately because this company has had some problems. The 5 year median dividend yield is 2.17%. The historical median dividend yield is 1.43%. The current yield is 2.21% based on dividends of $1.04 and a stock price of $47.11.

The dividend growth has been lower than usual lately with dividend increases really slowed down after 2012. The 5 and 10 year growth in dividends is at 8% and 15.8% per year. The last increase was in 2016 and it was for 4%. Recent increases have been in the 4 to 5% range. This is a lot lower than in the past.

I have well in this company. My total return is 25.36% with 22.83% from capital gains and 2.53% from dividends. I have made $8.54 in dividends per share. My shares cost me $5.66. Therefore dividends have paid for my shares by 150.9%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.06, 24.93 and 20.50. The corresponding 10 year ratios are 15.35m, 20.77 and 26.07. The corresponding historical ratios are 13.87, 18.39 and 23.90. The current P/E Ratio is 19.25 based on a stock price of $47.11 and 2016 EPS estimate of $2.45. This stock price testing suggests that the stock price is relatively reasonable and possibly below the median.

I get a Graham Price of $37.73. The 10 year low, median and high median Price/Graham Price Ratios are 1.53, 1.91 and 1.53. The current P/GP Ratio is 1.25. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share Ratio is 4.18. The current P/B Ratio is 1.82 based on a stock price of $47.11 and BVPS of $25.83. The current P/B Ratio is some 56% below the 10 year median. This stock price testing suggests that the stock is relatively cheap. (On an absolute basis a P/B Ratio of 1.50 is considered cheap.)

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price consensus is $51.50. This implies a total return of 11.535 with 9.32% from capital gains and 2.21% from dividends based on a current price of $47.11.

There is an article by Dave Seglins of CBC News about the difficulties SNC has been having with bribery charges. An article in the Daily Commercial News talks about SNC getting an asphalt facility contract in Saudi Arabia. This article by CTV News talks about problems SNC has with McGill University Health Centre. Monica Rizk and Ron Meisels do some technical analysis on this stock at the G&M. They are bullish. Laurent Cadotte at Seeking Alpha does a nice review of this stock.

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

The last stock I wrote about was about Veresen Inc. (TSX-VSN, OTC-FCGYF)... learn more . The next stock I will write about will be Fortis Inc. (TSX-FTS, OTC-FRTSF)... learn more on Monday, May 2, 2016 around 5 pm.

SNC-Lavalin are involved with engineering and construction work around the world, this includes infrastructure and Buildings; infrastructure and construction; power (nuclear, thermal, hydro etc); chemicals and petroleum; environmental projects; mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is here SNC-Lavalin Group Inc.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Wednesday, April 27, 2016

Veresen Inc.

Sound bite for Twitter and StockTwits is: Cheap and Risky. It is risky because the dividend yield is very high and dividends could be cut. See my spreadsheet on Veresen Inc.

I own this stock of Veresen Inc. (TSX-VSN, OTC-FCGYF). I bought this stock in 2008 as Fort Chicago Energy Partnership. At that time it was a publicly traded limited partnership with increasing and high dividends. In 2010 the company changed to a corporation.

The big question on this stock is, is the dividend safe? I do not think so and others seem to agree. They are now a corporation and have been one since 2011. They cannot afford their dividend as they cannot cover it with earnings.

I have done well by this stock mainly because of the high dividend it has paid in the past. My total return is 17.09% per year with 14.05% per year from dividends and 3.04% from capital gains. I have received $7.14 in dividends on stock I paid $7.08 for. Since 100% of the cost of the stock has been paid for, I am never going to lose on this stock, but will I make any money in the future? One buys stocks so that they can continue to pay you. I do not think that they will cancel the dividend or go bankrupt at this point, but their future seems at present to be unclear.

If they cut the dividend in half, they might begin to be able afford their dividend in the near future and the dividend yield would still be above 5%. Depending on how you look at Dividend Payout Ratios, some are not so bad. In 2015, the DPR for AFFO was 94%. A lot of dividends are not paid in cash as investors are using DRIPs to increase their shares.

Of course, because the number of outstanding shares is going up, growth per share values are quite low. For example, Revenue is down by 11.3% and 8% per year over the past 5 and 10 years, but Revenue per Share is down by 21.8% and 15.4% per year over the same time period. Shares are not only going up for DRIPs, but because of debentures converting to common shares and share issues. The outstanding shares have increased by 13.5 and 8.7% per year over the past 5 and 10 years.

As the EPS has been going down, the P/E Ratios have been rising. The 5 and 10 year median P/E Ratios at 65.26 and 35.86 respectively are much too high for a utility. The historical median P/E Ratios are much more reasonable at 17.63, 21.10 and 24.87 for low, median and high median ratios. The current P/E Ratios 50.72 based on a stock price of $9.13 and 2016 EPS estimate of $0.18. This is nonsense for a P/E Ratio for a utility and P/E Ratio does not help in pricing this stock.

The 10 year Price/Book Value per Share Ratio is 1.83. The current P/B Ratio is 1.07 based on BVPS of $8.53 and a stock price of $9.13. The current P/B Ratio is 41.5% lower than the 10 year median. A P/B Ratio of 1.07 is a very low P/B Ratio. This testing suggests that the stock price is relatively cheap. This is also a good test because it does not rely on estimate.

Because this stock used to be an income trust, the historical high dividend yield is very high at almost 15%. The historical median dividend yield is somewhat lower at 7.8%. It was thought that most old income trust companies would end up with dividend yields of 4 to 5%. This stock never really got that low. The current dividend yield is very high currently at 11%. This would suggest that the stock price is cheap. Also such a high dividend suggests that the stock is also risky.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month stock price is $10.98. This implies a total return of 31.22% with 20.26% from capital gains and 10.95% from dividends.

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

The last stock I wrote about was about was Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)... learn more . The next stock I will write about will be SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF)... learn more on Friday, April 29, 2016 around 5 pm.

Nelson Smith writing in January 2016 for Motley Fool seemed to think the dividend was safe. By March 2016, Nelson Smith of Motley Fool is not so sure that the dividend is all that safe. The company is paying out $1.00 and the company has recently said that payout for 2016 will be between $0.94 and $1.08. Late last year Ryan Vanzo also of Motley Fool thinks that this company has put the company in jeopardy with their Jordan Cove terminal project. Just recently the US regulators have denied the company's plan to build the Jordan Cove terminal. Veresen has filed for a rehearing on Jordan Cover Terminal, but it probably is not likely to proceed.

Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen Inc.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Monday, April 25, 2016

Canadian Natural Resources

Sound bite for Twitter and StockTwits is: Price relatively cheap. The stock hit a high of $49.70 in 2011 and it is still some 22% below this. I think the dividend is currently safe and I expect to profit in the longer term. Too bad I have not extra money to buy more shares. See my spreadsheet on Canadian Natural Resources.

I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I started to follow this stock in 2008 because it was on the dividend growth lists that I followed. I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. I got it with a yield of 1.32%. In April 2013 I bought more shares of this stock because the yield is now at 1.54%.

This stock has usually paid out a small amount of its earnings and has had a very low dividend yield. The historical high dividend yield is 3.1% and the historical low is 0.4%. Until recently, the Dividend Payout Ratio for EPS was below 15% and often running below 7%. This has changed recently.

The DPR for 2015 was a negative 158% because the company had an earnings loss. However, if you compare the last 5 years of EPS to the last 5 years of dividends, the DPR is 33%. Analysts expect the company to have an earnings loss again this year and that could rise the 5 year DPR to 70%. However, analysts seem to be consistently wrong on EPS estimates for this company.

Even though the dividend yields are low the dividend growth has been good. The dividend growth over the past 5 and 10 years is at 27% and 23% per year. However, the last increase was this year and the increase was only 2.2%. They have increased the dividend every year since they started dividends in 2001.

Even with should good growth, I do not buy dividend growth stocks with dividend yields below 1%. That is why when this stock's dividend yield got above 1%, I bought. I expect to do better in the future when oil prices pick up. So far I have a total return of 4.95% with 2.70% from capital gains and 2.25% from dividends. I have dividends per share at $2.39 against a stock price of $32.21. So dividends have paid 7.4% of the cost of my stock.

I cannot valuate this stock price based on Price/Earnings per Share Ratios. This is because the EPS estimate for 2016 is negative. Also, the EPS estimate for 2017 is very low. However, I will say that the 5 year low, median and high median P/E Ratios are 12.04, 15.55 and 17.28. The 10 years values are a bit lower at 14.46, 14.35 and 16.76. This historical P/E Ratios are 10.88, 14.13 and 17.28. The Price/Graham Price Ratio would not get a proper test for the same reasons as the P/E Ratio will not.

Let's look at Dividend Yield. The current dividend yield is 2.38% based on a stock price of $38.68 and dividends of $0.92. The 5 year median dividend yield is 1.48% and the current one of 2.38 is some 60% higher. The historical dividend yield is even lower at just 0.86% and the current one is some 177% higher. By dividend yield measure, the stock price looks relatively cheap. It is not to the historical high 3.07%, but it is still relatively quite high.

The next test I want to look at is the Price/Book Value per Share Ratio test. The 10 year median P/B Ratio is 1.74 and the current P/B Ratio is 1.55 based on a stock price of $38.68 and BVPS of $24.93. This test suggests that this stock is relatively reasonable and below the median.

This company is having problems with the low price of oil and it is affecting earnings, revenue and cash flow. Testing using ratios from these would not show the price is cheap. However, since the company is having problems with the low price of oil, this can be expected.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The most recommendations are a buy and the consensus recommendation is a buy. The 12 months stock price is $39.05. This implies a total return of 3.34% with 2.38% from dividends and 0.96% from capital gains. I am playing a longer game and expect to make good money from this stock in the longer, but not shorter, term.

Ryan Vanzo of Motley Fool asks if investors should be worried about a dividend cut. He thinks that the dividends are currently safe. Finding Value at Seeking Alpha does an analysis of this company and thinks it is solid. Some recent analysts' recommendations is shared by Jorge Valdez on Market News and Analysis.

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

The last stock I wrote about was about was Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA)... learn more . The next stock I will write about will be Veresen Inc. (TSX-VSN, OTC-FCGYF)... learn more on Wednesday, April 27, 2016 around 5 pm.

Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Friday, April 22, 2016

Pembina Pipelines Corp.

Sound bite for Twitter and StockTwits is: Price could still be reasonable. On some measure this stock looks expensive, but the dividend yield is high and would seem to be solid. See my spreadsheet on Pembina Pipelines Corp.

I own this stock of Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA). In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock it was an Income Trust company.

When this company changed to a corporation from an Income Trust, they just kept their dividends level for a couple of years, then return to increasing the distributions. The increases are not large, but they are increasing the distributions. The dividend growth over the past 5 and 10 years is at 2.4% and 5.4% per year.

Why the 5 year dividend growth is low is because these 5 years include years with no increases a couple with increases less than 2%. The last dividend increase in 2016 was for 4.9%.

The EPS do not cover the dividends. They are still not expected to cover the dividends within the next few years. The Dividend Payout Ratio for 2015 was 175%. The coverage for cash flow was better at 44.6%. Most analysts are looking at AFFO and the coverage for AFFO was 70.8% in 2015. This is a good AFFO coverage.

I have done very well with this stock. I have total return of 16.98% per year with 8.71% per year from capital gains and 8.27% per year from dividends. The dividends I have received today cover the cost of my stock by some 167%. However, I do not think that the future will look like to past. When I bought the stock the dividend yield was just over 9%. The dividend is currently at 5.1% and will most likely not get as high as it has in the past.

I also made capital gains when the company went from an Income Trust to a Corporation. Most of these companies saw dividend yields drop because of stock price increases. This onetime event will not occur again. A lot of utilities make a return of around 8%. However, some pipeline companies, like Enbridge Inc. (TSX-ENB, NYSE-ENB) have done much better than 8%.

I find 5 year low, median and high median Price/Earnings per Share Ratios at 27.89, 32.30 and 35.28. The corresponding 10 year P/E Ratios are lower at 20.57, 24.44 and 28.30. The historical P/E Ratios are also lower at 19.92, 23.04 and 26.15. The current P/E Ratio is 29.48 based on a stock price of $37.74 and 2016 EPS estimate of $1.28. I think that the P/E ratios for the past 5 and 10 years are rather high for a utility. Even at that, the current P/E is above the median high P/E Ratios over the last 10 years or historically. This is suggesting that the stock price is relatively expensive.

I get a Graham Price of $23.94. The 10 year low, median and high median Price/Graham Price Ratios are 1.29, 1.54 and 1.74. The current P/GP Ratio is 1.58 based on a stock price of $37.74. This suggests that the stock price is relatively, reasonable, but above the median. I think that the P/GP Ratios are all rather high.

I get a 10 year Price/Book Value per Share Ratio 1.93. The current P/B Ratio is 1.90 based on a stock price of $37.74 and BVPS of $19.90. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median P/S Ratio 2.74 and the current P/S Ratio at 2.48 based on a stock price of $37.74 and Revenue estimates for 2016 of $5,687M and 15.25 Revenue per Share. The current P/S is some 9.8% lower than the 10 year median. This testing suggests that the stock price is relatively reasonable and below the median.

I cannot do much testing of the stock price using dividend yield. This is because this stock used to be an income trust and income trusts had higher dividend yields than corporations. However, it was felt that old income trusts would end up with dividend yields of 4 to 5%. This stock has a slightly higher dividend yield at 5.09%. I note that the 5 year median dividend yield is 5%. Because the higher the dividend yields the better the stock price, this testing would suggest that the stock price is cheap to reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The Buy recommendations are 10 to 1 for both Strong Buy and Hold. The consensus recommendation would be a Buy. The 12 month stock price consensus is $40.08. This implies a total return of 11.29% with 5.09% from dividends and 6.20% from capital gains based on a current stock price of $37.74.

This BOE report talks about a recent Asset Acquisition by this company. Brenton Akerman at Share Trading News talks about recent analysts' recommendations. Davin Research at Seeking Alpha gives an analysis of this stock. He likes it better than TransCanada Corp. (TSX-TRP, NYSE-TRP) or Enbridge Inc. (TSX-ENB, NYSE-ENB), but his preference is in Inter Pipeline Ltd. ( TSX-IPL, OTC-IPPLF). There are some analysts' comments on this stock at Stock Chase.

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

On my other blog I last wrote about recent advice to sell for coming bear market... learn more . The next stock I will write about will be Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)... learn more on Monday, April 25, 2016 around 5 pm.

Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina Pipelines Corp.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Wednesday, April 20, 2016

Barclays PLC ADR

Sound bite for Twitter and StockTwits is: Stock probably relatively cheap. This bank seems to have had a hard time recovering from 2008. See my spreadsheet on Barclays PLC ADR.

I own this stock of Barclays PLC ADR (LSE-BARC, NYSE:-BCS). I bought this stock when Barrett took over in 2000. Barrett used to run Bank of Montreal in Canada. At that time it was a good dividend paying stock and I thought it would give me some geographical diversifications.

The first thing I should mention about dividends is that this UK company pays dividends differently that Canadian and US companies do. At the end of each year, depending on how well the bank does, the bank declares a dividend to be paid in the first quarter of the following year. For the remaining three quarters, a nominal dividend is paid.

For Barclays in the past year, £0.035 was paid in the first quarter and £0.01 was paid in the following quarters. The dividends have been flat year after year since 2012. Prior to that there was a 97% decline in dividends in 2009. Then in 2010, dividends increased by 350%. There were also increases in 2011 and 2012. Still, the current dividends are 81% lower in 2015 than they were in 2008.

The last few years have not been kind to this bank. I look at my spreadsheet and there is lots of red. They have earning losses in 2012, 2014 and 2015. Analysts expect positive earnings for 2016, but they also thought there would be positive earnings in 2015 and this did not happen.

I get historical low, median and high median Price/Earnings per Share Ratios of 8.14, 9.98 and 12.51. Since there have been a number of earnings losses lately, I can get no good figures for the last 5 and 10 years in regards to P/E Ratios. The current P/E Ratio is 19.65 based on a stock price of $9.89 and 2016 EPS estimate of £0.089 or $0.50 US$. This stock price testing would suggest that the stock price is relatively expensive.

I get a Graham Price of $14.73. The 10 years low, median and high median Price/Graham Price Ratios are 0.59, 0.74 and 0.89. The current P/GP Ratio is 0.67. This stock price testing suggests that the stock price is relatively reasonable and below the median. The historical median P/GP Ratio is 1.05 which is a more reasonable one. The P/GP Ratios have been quite low lately. If you do the testing based on the historical P/GP Ratio, that the stock price is relatively cheap.

The historical median dividend yield is 3.16%. The current dividend yield is 3.74% based on a stock price of $9.89 and dividend of $0.39. The stock price testing suggests that the stock price is reasonable and below the median. (If I use dividends and stock price in UK pounds, you get the same results.)

I get a 10 year Price/Book Value per Share Ratio of 0.67. The historical median P/B Ratio is more reasonable at 1.82. The current P/B Ratio is 0.47. This testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform recommendations. There are more Hold recommendations, but there is also almost as many Strong Buy recommendations. The consensus recommendation is a Buy. The 12 months Stock price is £2.16 or $12.28 US$. This implies a total return of 27.9% with 3.74% from dividends and 24.17% from capital gains.

This recent article in American Banking News talks about a director buying shares in this bank. Royston Wild of Motley Fool thinks now is a good time to buy this stock. John Burford does a technical analysis of this stock on Interactive Investor.

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

On my other blog, the last item I wrote about was Investment Report Cheap... learn more . The next stock I will write about will be Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA)... learn more on Friday, April 22, 2016 around 5 pm.

One of the largest financial services groups in the United Kingdom, Barclays is engaged in banking, investment banking and asset management worldwide. Its web site is here Barclays PLC ADR.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Monday, April 18, 2016

Leon's Furniture Ltd.

Sound bite for Twitter and StockTwits is: Stock price is cheap to reasonable. I still think that this stock is a good long term buy in the consumer discretionary sector. I often wonder if analysts have heard that you are supposed to buy good stocks when they are cheap. See my spreadsheet on Leon's Furniture Ltd.

I own this stock of Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.

This stock used to be a dividend growth stock and it maybe that again. However, dividends have not increased since 2013 and we are in the fourth year or no dividend increases. The analyst that follows this stock does not see any increase in dividends over the next two years.

When the dividends stopped increasing, the Dividend Payout Ratios had grown to higher than normal values. The DPR for EPS in 2012 was 85% and for CFPS was 87%. The 10 years median values for DPR for EPS is 45% and CFPS is 44%. In 2015, the DPR for EPS was 41% and for CFPS was 37%. So from my point of view, they could increase dividends again.

They have been inconsistent in the past in dividend increases. They have never increased the dividend every year, but 4 years is a little long to wait for an increase. In the past every once in a while they have paid special dividends.

I have had this stock since 2006, but the returns have been mediocre. My total return is 6.01% per year with 3.14% per year from dividends and 2.87% per year from capital gains. I prefer stocks to have a total return per year of around 8%. However, this last recovery from a recession has been slow and long and there are a number of retailers that are having a hard time.

Stock prices are back to where they were in 2010. The 5 and 10 year total return are not great with them at 6.98% per year and 4.50% per year. The 5 and 10 years return attributable to dividends is at 3.27% and 2.98% per year and attributable to capital gains is at 3.71% and 1.52% per year.

There is good news. Leon's seems to have absorbed The Brick fine, its debt ratios are decent, it can afford their dividend payments and every once in a while, when they can afford to, the company gives out special dividends.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.16, 16.63 and 19.76. These are similar to the 10 year values of 13.43, 15.79 and 18.26. The historical values are lower at 12.15, 14.79 and 16.90. The current P/E is at 14.17, based on a stock price of $14.88 and 2016 EPS estimate of $1.05. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham price of $14.01. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.21 and 1.41. The current P/GP Ratio is 1.06. This stock price testing suggests that the stock price is relatively cheap.

When I look at dividend yield, I find that the 5 year median is 2.70% which is almost the same as the current dividend yield of 2.69% based on a stock price of $14.88 and dividends of $0.40. The historical median dividend yield is 1.87%. This is some 44% below the current dividend yield of 2.69% and suggests that the stock price is getting relatively cheap.

Ryan Vanzo of Motley Fool thinks that this is a great buy and hold stock. Darron Kloster of the Times Colonist of Victoria talks about Leon's taking over a number of Sears Home stores. This Press Release talks about recent management changes at Leon's..

There seems to be only one analyst following this stock and the recommendation is a Hold. The 12 month stock price is $15.00. The 12 month stock price implies a total return of 3.49% with 2.69% from dividends and 0.81% from capital gains.

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

The last stock I wrote about was about was Barrick Gold Corp. (TSX-ABX, NYSE-ABX)... learn more . The next stock I will write about will be Barclays PLC ADR (LSE-BARC, NYSE:-BCS)... learn more on Wednesday, April 20, 2016 around 5 pm.

Also, on my book blog I have put a review of the book The City by Joel Kotkin learn more...

Leon's Furniture Limited is a Canada-based company is retailer of home furnishings, electronics and appliances across Canada from Alberta to Newfoundland and Labrador. Leon's sells under several banners including Leon's, The Brick, Appliance Canada and United Furniture Warehouse. Its web site is here Leon's Furniture Ltd.

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, April 15, 2016

Barrick Gold Corp.

Sound bite for Twitter and StockTwits is: Perhaps stock is cheap. If you look at absolute stock value, the stock price today is less than half of what it was worth even 5 years ago. On this basis, the stock is cheap. I looked at P/S and P/CF Ratios and they show stock price is relatively cheap to reasonable. However in the last two years, Revenue and Cash Flow estimates have been way off. See my spreadsheet on Barrick Gold Corp.

I own this stock of Barrick Gold Corp. (TSX-ABX, NYSE-ABX). I bought some of this stock in April 2013 because its stock price had fallen hard. I believed the market over reacted. I just bought 100 shares as I am living off my portfolio and do not have much to invest. I bought another 100 shares in 2016.

To date I have made 15.7% total return on this stock with 14.4% from capital gains and 1.3% from dividends. I did not buy this stock for its dividends; I bought it for capital gain. My total gain is 33.3%.

This stock has not done well over the past 5 years. Revenue and earnings are down. Even if you look at the adjusted earnings the company put outs, earnings are down. Cash Flow and CFPS were down in 2013 and 2014, but increased in 2015.

I have had this stock for 3 years and I have made a good return. For people who had this stock for the past 5 and 10 years, they have losses. This stock is down by 14.4% and 4.2% per year over the past 5 and 10 years when you look at total return (that is capital gains or losses and dividends).

When I look at the 5 year and 10 years Price/Earnings per Share Ratios, I find that they are unusable due the number of years with EPS losses. The historical low, median and high median P/E Ratios are 15.64, 22.29 and 23.38. These seem reasonable. The current P/E Ratio is 37.04 based on a stock price of $20.09 and earnings of $0.42 US$ or $0.54 CDN$.

The only tests that show this stock as being reasonable to cheap are the P/S Ratio test and the P/CF Ratio test. First I will look the P/S Ratio test. The current P/S is 2.29 using 2016 Revenue estimate for of $7964M US$ and a stock price of $20.04 CDN$ or $15.64 US$. The 10 years median P/S Ratio based on closing US$ price is 3.61. A P/S of 2.29 is some 37% lower than the 2016 estimate of 3.61. This stock price testing suggests that the stock price is cheap.

Testing using P/CF Ratio, I get a current P/CF Ratio of 8.23 based on CFPS estimate for 2016 of $1.90 US$ and stock price $15.64 US$. The 10 year median P/CF Ratio using closing P/CF Ratios is 7.48. The current P/CF Ratio is some 10% higher than the 10 year median. This stock price testing suggests that stock price is reasonable, but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a hold and the consensus recommendation would be a Buy. The 12 month stock price consensus is $14.24 US$. This is lower than the current stock price of $15.64 US$. Therefore the total return would be a loss of 8.44 with capital loss of 8.95% and dividends at 0.51%.

Courage & Conviction Investing at Seeking Alpha has good reasons to say this stock is currently a sell. Andrew Walker at Motley Fool says why he thinks it is a good time to buy some Barrick stock. Doug Alexander of Bloomberg News says in the Financial Post that the Chairman's total compensation was cut by 76% after it was criticized.

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

The last stock I wrote about was Russel Metals Inc. (TSX-RUS, OTC-RUSMF)... learn more . The next stock I will write about will be Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF)... learn more on Friday, April 15, 2016 around 5 pm.

Also, on my book blog I have put a review of the book Wired for Culture by Mark Pagel learn more...

Barrick Gold Corporation is a gold mining company with a portfolio of operating mines, and advanced exploration and development projects located across five continents. Its web site is here Barrick Gold Corp.

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

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Wednesday, April 13, 2016

DH Corp

Sound bite for Twitter and StockTwits is: Stock price expensive. I think that on a number of tests this stock price is showing as expensive. In this case I rather like using the P/B Ratio as we are not using any estimates. The P/E Ratio is also rather high on an absolute basis. I must say I often wonder if analysts believe in buying low and selling high. I think that this is a good company, but I see the stock price as relatively too high at present. See my spreadsheet on DH Corp.

I own this stock of DH Corp (TSX-DH, OTC-DHIFF). This stock has been recommended a number of times by MPL Communications. So I looked into it and bought some. This was in 2009 and at that time this company was an income trust. Dividend yield was good and they had a history of dividend increases.

So, how have I done? I have had this stock for almost 5 years and have made several purchases in 2009, 2010, 2011 and 2013. The total return is 22.82% per year with 16.07% from capital gains and 6.75% from dividends. I do not think that such high gains will be made in the future and the dividends yields have gone down and are currently at 3.38% based on dividends of $1.28 and a stock price of $37.86.

In 2011 this company changed to a corporation from an Income trust and cut the dividend by around 35% and changed the frequency of the dividends from monthly to quarterly. They had a couple of small increases in 2012 and 2013 and then the dividend has been flat. Analysts expect the company to cut dividends in 2016 or 2017. The dividend cuts are probably because the payout ratios are so high. The dividend cut is expected to be in the 20% to 25% range. If dividends dropped 25%, the yield would go to 2.5%.

The Dividend Payout Ratio for EPS was 152%. The DPR for EPS was below 100% only in 2011 and 2014. The DPR for CFPS is better with the rate at 32% for 2015 and the 5 year median at 40.5%.

Part of the reason I am willing to hold on to this company is because they are in FinTech. I think that over the longer term they will be successful. The year of 2015 was not a great year for this company. Revenues and Cash Flow were up but profits were down.

The 5 year low, median and high median Price/Earnings per Share Ratios are 20.68, 24.66 and 28.65. These are a lot higher than the corresponding 10 year values of 9.80, 11.74 and 13.99. They are also a lot higher than the historical values of 10.31, 11.77 and 14.14. The current P/E Ratio is 26.66 based on a stock price of $37.86 and 2016 EPS estimate of $1.42. Even for the much higher P/E Ratios for the past 5 years, this stock price testing says that the stock price is above the median.

I think that the current P/E Ratios are too high for this company. However, the historical rates are probably now too low. A good P/E for this company is probably around 15.00.

I get a Graham price of $37.86. The 10 years low, median and high median Price/Graham Price Ratios are 0.79, 0.95 and 1.12. The current P/GP Ratio is 1.42 based on a stock price of $37.86. This stock price testing suggests that the stock is relatively expensive. On an absolute basis, a P/GP Ratio of 1.00 or less says that a stock price is relatively low or cheap

Looking at the Price/Book Value per Share Ratios, I get a 10 year median of 1.69 and a current P/B Ratio of 2.18 based on BVPS of $22.26 and a stock price of $37.86. The current P/B Ratio is some 29% higher than the 10 years median. This stock price testing suggests that the stock is relatively expensive.

I do not think that stock price testing using the dividend yield will be helpful. The problem is that this company was an Income Trust and Income Trust companies had quite high dividend yields which fell when the companies became corporations.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. Most of the recommendations are a Buy and the consensus would be a Buy. The 12 month stock price consensus is $45.44. This implies a total return of 23.40% with 3.18% from dividends and 20.02% from capital gains.

Linda Rogers on Clinton Financial says that analysts are mostly bullish on this stock. Robin Reyes in Sonoran Weekly Review says that DH Corp has been awarded a multi-year Canada Student Loans Program Contract. Lou Schizas in December 2015 in the G&M did a technical analysis of this company. He says that the stock price drop in last October was due to short sellers.

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

The last stock I wrote about was Russel Metals Inc. (TSX-RUS, OTC-RUSMF)... learn more . The next stock I will write about will be Barrick Gold Corp. (TSX-ABX, NYSE-ABX)... learn more on Friday, April 15, 2016 around 5 pm.

Also, on my book blog I have put a review of the book Identity Economics by Akerlof and Kranton learn more...

DH Corp is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here DH Corp.

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

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Monday, April 11, 2016

Russel Metals Inc.

Sound bite for Twitter and StockTwits is: Price is relatively cheap. You only get a relatively cheap stock price using dividend yield and P/B Ratios. However, this testing does not depend on estimates, so to my mind can be a better test that ones that rely on estimates. See my spreadsheet on Russel Metals Inc.

I own this stock of Russel Metals Inc. (TSX-RUS, OTC-RUSMF). This was a stock on Mike Higgs' Canadian Dividend Growth List. This is why I was following this stock and why I bought it. I have had this stock since 2007. I bought more in 2009 and 2011. It is an industrial stock so I expect to make money over the longer term, but this company will have problems in all recession.

So how have I done? My total return is 2.14% per year with capital loss at 4.22% per year and dividends at 6.36% per year. This is a low return. If you look at how much of the cost of the stock that my dividends have covered, it is some 37%. This is good after 8 years.

I made three separate purchases of this stock. This first purchase was the highest, the second was the lowest and the third was an in between price. For the first purchase, my current dividend yield is 4.68% on my original stock price compared to my original yield of 5.54%.

For my second purchase my current yield on my original stock price is 9.23% where the original yield of 6.07%. For my third purchase, my current yield on my original stock price is 6.55% compared to the original yield of 5.17%. It is only for my second purchase that my current yield on my purchase is higher than the current dividend yield for this stock at 7.67%.

This is not exactly a dividend growth stock. Dividends have gone down as well as up and dividends have been suspended in the past. An example is in 1992 when dividends were suspended for some 7 years because the company was having a difficult time making a profit. Over the past 5 and 10 years, dividends have grown by 8.7% and 4.3% per year. Analysts do not see this company changing their dividends over the next couple of years but a recent article referenced later by Motley Fool suggests just that.

Growth in Revenue, Earnings and Cash Flow over the past 5 and 10 years has been non-existent to moderate. For 2015 all of these items were lower than in 2016. On the positive side this stock has great debt ratios that will help it through the tough times. The Liquidity Ratio for 2015 is 3.07 and the Debt Ratio for 2015 is 2.18. The Leverage and Debt/Equity Ratios for 2015 were 1.85 and 0.85.

I am planning to hold on to my shares in this company. I bought this stock to diversify into industrials and this reasoning has not changed.

The 5 year low, median and high median Price/Earnings per Share ratios were 12.98, 15.70 and 17.61. These are higher than the corresponding 10 year values of 11.58, 14.00 and 15.99. They are also higher than the historical values of 8.22, 8.55 and 11.17. The current P/E Ratio is 19.61 based on a stock price of $19.81 and 2016 EPS estimate of $1.01. This stock price testing would suggest that this stock is relatively expensive. However, I wonder how valid it is to test the stock price using P/E Ratio because earnings are quite volatile.

I get a Graham Price of $17.89. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.08 and 1.29. The current P/GP Ratio is 1.11 based on a stock price of $19.81. This stock price testing suggests that the stock price is reasonable, but above the median. A problem here is that the Graham Price is also quite volatile.

If you look at dividend yield you get a different story. The 5 year median dividend yield is 5.11%. The current dividend yield is 7.67% based on a stock price of $19.81 and dividends of $1.52. The current dividend yield is some 50% higher than the 5 year median dividend yield. This stock price testing is suggesting that the stock price is relatively cheap.

You get the same results looking at the historical median dividend yield which is 4.80%. The current dividend yield of 7.67% is some 60% higher than the historical dividend yield. This stock price testing is suggesting that the stock price is relatively cheap. Note that this current dividend yield, although it is high, it is not as high as the historical high dividend yield of around 10.3%.

I also want to test the stock price using the Price/Book Value per Share Ratio which shows that the stock is relatively cheap. The 10 year P/B Ratio is 1.83. The current P/B Ratio at 1.41 is some 23% lower. This stock price testing is suggesting that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The Hold recommendation is the most common and the consensus recommendation is a Hold. The 12 month stock price consensus is $19.50. This is lower than the current stock price of $19.81 and would imply a total return of 6.11% with a capital loss of 1.56% and dividend of 7.67%.

This article at Franklin Independent says that only8.3% of analysts were positive on this stock. A recent article in the Standard Tribune is positive on this stock after a gap up. Nelson Smith of Motley Fool suggests that the dividend might be cut over the next couple of years.

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

I recently wrote about Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more. The next stock I will write about will be DH Corp (TSX-DH, OTC-DHIFF)... learn more on Wednesday, April 13, 2016 around 5 pm.

Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals 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, April 8, 2016

Toromont Industries Ltd.

Sound bite for Twitter and StockTwits is: Price is reasonable to expensive. I will, of course, continue to hold on the shares I have in this company. I have made a decent return on this stock and I expect over the long term to continue to make a decent return. See my spreadsheet on Toromont Industries Ltd.

I own this stock of Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF). This was a stock on Mike Higgs' Canadian Dividend Growth Stock list.

The Dividend Paid per Share on this stock can be quite different depending on how it is calculated. If you look strictly at dividends, I have received $4.50 per share for stock price coverage of 16.4% in 8.2 years. However, they also spun off Enerflex which gave me some $10.22 more per share in returned value. This spin off covered another 37.3% of the share cost. But this event will probably not happen again.

In 2015 the outstanding share were increased by 721,000 or by 0.93% for stock options. I think that this is rather high. For the companies I follow the median increased for stock options is 21% and 70% of the companies I cover increased the outstanding shares by 49% or less.

The other thing I noticed is that there was relatively a lot of Net Insider Selling which was at 0.32% over the past year. For the companies I follow, the median NIS is 0.02% and 70% of the companies have NIS at 11% or less. Looking closer at this company, I see that both the CEO and CFO increased their shares by 25% and 21% since I last looked at this company. The Chairman of the board did not change the number of shares he has. He has shares worth some $71M. Most of the selling is by the company's officers. Insiders seem to selling off a lot of their stock options.

Because of the sector that they are in they were hit rather hard in the last recession. There has been good growth in Revenue, Earnings and Cash Flow over the past 3 years. Revenue has not come back to the peak of 2010, but Earnings and Cash Flow have.

I have had this stock since 2007 and my total return is 8.73% per year with 6.61% from capital gains and 2.12% from dividends. (In calculating CC the money from Enerflex is in with the capital gains.) Dividends have been increasing and the last increase was in 2015 and was for 5.9%. The company often does two dividend increases in a year. Last year the dividends were increased by 13.8% over those of 2014. This year dividends year over year are up by 9.1%.

Dividends were cut when they spun off Enerflex. The dividends cut from Toromont were distributed by Enerflex. This has affected the growth of dividends over the past 5 and 10 years, giving growth of dividends at just 1.6% per year over the past 5 years and at 7.5% for dividends over the past 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.62, 15.25 and 16.88. They are a bit higher than the corresponding 10 year values of 12.68, 14.70 and 16.52. Also they are of a narrow range than the historical values of 12.31, 14.62 and 18.38. The current P/E Ratio is 16.81 based on a stock price of $33.62 and 2016 EPS estimate of $2.00. However, you look at this P/E Ratio is a rather high and is above the relative median using P/E Ratios.

I get a Graham Price of $33.62. The 10 year low, median and high median Price/Graham Price Ratios are 1.21, 1.41 and 1.57. The current P/GP Ratio is 1.59 based on a stock price of $33.62. This stock price testing suggests that the stock price is relative expensive.

You get a slightly different story by looking at dividend yield. The 5 year median dividend at 2.13% is just slightly less than the current dividend yield of 2.14% based on dividends of $0.72 and a stock price of $33.62. The historical dividend yield is even lower at 1.91% and some 12% lower than the current dividend yield. This stock price testing suggests that the stock price is reasonable and below the relative median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $34.25. The stock price is close to this and has in the recent past been higher than this consensus stock price.

On this site of Franklin Independent a staff member looked at how analysts were rating this company and concluded they were 63% positive. Maddie Sorensen of Financial Market News talks about a director selling shares. Jonathan Ratner of the Financial Post say that this company may benefit from Federal Government's new infrastructure money.

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

The last stock I wrote about was Manulife Financial Corp. (TSX-MFC, NYSE-MFC)... learn more... The next stock I will write about will be Russel Metals Inc. (TSX-RUS, OTC-RUSMF)... learn more on Monday, April 11, 2016 around 5 pm.

Also, on my book blog I have put a review of the book The Colder War by Marin Katusa. learn more...

The company serves 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 Toromont Industries Ltd.

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.