Friday, September 19, 2014

Telus Corp.

I do not own this stock of Telus Corp. (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from KeyStone Financial Publishing Corp talked about having recommended this stock.

Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. Telus Corp (TSX-T) was one of three stocks he recommended in 2009.

What you first notice about this company is that growth in revenue, earnings and cash flow is better over the last 10 years than over the last 5 years. This is most notable with earnings and cash flows. The number of outstanding shares have move slightly lower over the past 5 and 10 years and shares have decrease by 0.38% and 1.2% over these periods.

If you look at growth in revenue per share it is at 3.8% and 6.1% per year over the past 5 and 10 years. EPS has grown at 2.8% and 16% per year over the past 5 and 10 years. It is not surprising that EPS growth has slowed and growth in revenue was much lower over the last 10 years. CFPS has grown at 2% and 5% per year over past 5 and 10 years.

Dividends are also growing faster than revenue. The dividends have grown at the rate of 8% and 18% per year over the past 5 and 10 years. Dividends were increased twice in 2014 for growth at 5.9% and 5.6% for a total growth of 11.8% for 2014.

The 5 year median Dividend Payout Ratios are 60.50% and 24.50% for EPS and CFPS. The DPRs for 2013 were not far off with DRP for EPS at 65% and for CFPS at 26.9%. This stock is generating a good dividend yield and good growth in dividends. The current dividend yield is 3.81% and the 5 year median is 4.17%. As I have mentioned above, dividends have grown at 8% and 18% over the past 5 and 10 years.

The Return on Equity has been over 10% each year of the last 5 years. The ROE for 2013 was at 16.1% and the 5 year median is 16.1%. The comprehensive income and net income varies a lot. For 2013 the ROE on Comprehensive Income was 28.5% a value some 76% higher. However, ROE on comprehensive income was 28% lower than that for net income in 2012.

The debt ratios are ok, but the company relies on cash flow to cover current liabilities. The Liquidity Ratio for 2013 was just 0.71. This means that current assets cannot cover current liabilities. If you add it cash flow after dividends, the ratio is 1.02. The Debt Ratio is 1.59. Leverage and Debt/Equity Ratios for 2013 were at 2.69 and 1.69.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.17, 13.79 and 15.41. The corresponding 10 year values are slightly higher at 13.45, 15.38 and 16.94. The current P/E ratio is 16.96 based on a stock price of $39.85 and 2014 EPS estimate of $2.35. This stock price test suggests that this stock is expensive.

I get a Graham Price of $26.48 and the 10 year low, median and high medina Price/Graham Price Ratios are 1.08, 1.24 and 1.43. The current P/GP Ratio is 1.51 based on a stock price of $39.85. This stock price test suggests that this stock is expensive.

However, if you look at dividend yield, it is suggesting that the stock price maybe reasonable. The 5 year median Dividend Yield of 4.71% is just 8.5% higher than the current Dividend Yield of 3.81%. The historical average Dividend yield is 4.12% and the historical median Dividend Yield is 3.91%. These are just 7.3% and 2.5% higher than the Current Dividend yield.

When I look at analysts' recommendations I find Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month target stock price is $43.70. This implies a total return of 13.48% with 3.81% from dividends and 9.66% from capital gains.

There is an interesting article in the Toronto Star about this company issuing a first transparency report. There is a recent Motley Fool report about why this stock is a must have one for dividend investors.

Sound bit for Twitter and StockTwits is: Dividend growth stock in Telecom sector. See my spreadsheet at tel.htm.

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

Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus.

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, September 18, 2014

MacDonald, Dettwiler & Associates 2

I do not own this stock of MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also. It is a Tech stock with dividends.

When I look at insider trading, I find no insider buying and no insider selling. Shares were not increased due to stock options, as shares for stock options are bought on the open market. Shares have, however, been increased due to the Employees Stock Purchase Plan.

There is some insider ownership with the CEO owning shares worth around $3.4M and the CFO owning shares around $2.3M. However, insider ownership is a very small part of outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.74, 18.62 and 22.51. These are slightly lower than the corresponding 10 year P/E Ratios. The current P/E Ratio is 23.78 based on a stock price of $84.65 and 2014 EPS estimate of $3.56. This stock price test suggests that the stock price is relatively expensive.

I get a Graham Price of $43.21. The 10 year Price/Graham Price Ratios are 1.61, 1.86 and 2.25. The current P/GP Ratio is 1.96 based on a stock price of $84.65. This stock price test suggests that the stock price is relatively reasonable.

The 10 year Price/Book Value per Share Ratio is 3.77. The current P/B Ratio is 3.63 a value some 3.6% lower. The current P/B Ratio is based on a stock price of $84.65 and a BVPS of $23.31. This stock price test suggests that the stock price is relatively reasonable.

Looking a P/CF and P/S Ratios do not help much is the P/CF Ratio test says that the stock is relatively expensive and the P/S Ratio test says it is relatively reasonable. The 10 year median P/CF Ratio is 11.03 and the current P/CF Ratio at 13.59 is some 23% higher. The 10 year P/S Ratio is 1.54 and the current P/S Ratio is 1.46 a value some 5% lower.

I cannot get any historical dividend yields as you need at least 4 years data for this and I only have 3 years of data. The 3 year median dividend yield is 2.00% and the current Dividend yield of 1.54% is some 23% lower. This stock price test suggests that the stock price is relatively expensive.

If you look at these values in absolute terms, the P/E Ratio of 23.78 is not particularly high. However, a P/GP Ratio of 1.96 is rather high. The P/CF Ratio at 13.59 and the P/S Ratio at 1.46 are not particularly high. However, what is certain is that the stock is not cheap as none of the ratios are low. However, none of the ratios are particularly high. The stock price maybe reasonable but the price is towards the higher end of a reasonableness range.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy. The consensus recommendation is a Buy. The 12 month stock price consensus is $93.70. This implies a total return of 12.23% with 10.69% from capital gains and 1.54% from dividends from current stock price of $84.65.

There is a recent CanTech report talking about this company becoming a global commercial satellite powerhouse. You can also see their archive of article on MDA from CanTech here. A recent number cruncher article in the G&M named this stock as one of twenty stocks that are good wealth creators.

Sound bit for Twitter and StockTwits is: Price may still be reasonable for this tech stock. See my spreadsheet at mda.htm.

This is the second of two parts. The first part was posted on Wednesday, September 17, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

MacDonald, Dettwiler & Associates Ltd. is a global communications and information company providing operational solutions to commercial and government organizations worldwide. Its web site is here MacDonald.

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, September 17, 2014

MacDonald, Dettwiler & Associates

On my other blog I am today writing about people being enraged about stock write ups continue...

I do not own this stock of MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also. It is a Tech stock with dividends.

This stock just started to pay dividends in 2011. They have had one dividend increase in 2012 and it was a large 30% increase. There were no increases in dividends in 2013 or this year. Dividends are paid semi-annually. It will be interesting to see if this stock turns out to be a dividend growth stock or not.

The Dividend Payout Ratio for 2013 is at 43% for EPS and at 15.7% for CFPS. The DPR for 2014 is expected to be around 37% for EPS and 21% for CFPS.

Shareholders have done well over the past 5 and 10 years with the total return over these periods at 16.34% and 12.91% per year. The capital gain portion of this total return is 14.72% and 12.16% per year. The dividend portion of this total return is at 1.62% and 0.75% per year. The portion of the return for dividends is low because the company just started to pay dividends.

The outstanding shares have decreased over the past 5 and 10 years by 2.2% and 0.6% per year. The shares have increased due to Share Issues and Employee Stock Purchase Plan. The outstanding shares have decreased due to Buy Backs. Shares for Stock Options are bought on the open market.

There is good growth in revenues, earnings and cash flow. The growth in Revenue per Share is at 11.5% and 11.8% per year over the past 5 and 10 years. The growth in EPS is at 20.3% and 10.3% per year over the past 5 and 10 years. The growth in CFPS is at 19% and 16.4% per year over the past 5 and 10 years.

One thing that I do not like about this stock is the debt ratios. The Liquidity Ratio for 2013 is at 0.71. Even adding in cash flow less dividends just gets to a ratio of 0.81. If you add back in the current portion of the long term debt and cash flow less dividends we are still just at 0.87. When this ratio is below 1.00, it means that the current assets cannot cover the current liabilities.

While the Debt Ratios, Leverage and Debt/Equity Ratios are not what I really like, they are acceptable. The Debt Ratio for 2013 was at 1.45. Leverage and Debt/Equity Ratios are at 3.25 and 2.25. The positive thing I can say is that they are much better than for 2012.

The Return on Equity was been below 10% once over the past 5 years and twice over the past 10 years. The ROE for 2013 was at 13.2% and the 5 year median is 20.3%. The ROE on comprehensive income is much higher with the one for 2013 at 36.6% and the 5 year median at 26.9%.

Sound bit for Twitter and StockTwits is: An interesting dividend tech stock. If I bought this stock, I would be worried about the debt ratios. The problem with low Liquidity Ratios is that a company could easily get into trouble in a recession. Companies with good debt ratios have an easier time weathering bad times. See my spreadsheet at mda.htm.

This is the first of two parts. The second part will be posted on Thursday, September 18, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald.

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, September 16, 2014

Just Energy Group Inc.

I do not own this stock of Just Energy Group Inc. (TSX-JE, NYSE-JE). I started to follow this is July 2010. It was one of the high yield income trusts that people were talking about, so I decided to check it out. However, I never liked its business plan and I like even less that the book value is negative.

As far as dividends goes, this company has just reduced their dividends by 40.5% and changed the dividend payments to quarterly from annually. I noticed a number of analysts now feel that this new dividend is sustainable, even though no one seems to suggest that the company will be making a profit for the next financial year ending in March 2015.

If you look at dividend growth over the past 5 and 10 years, it is at a negative 7.4% and a positive 1.6% growth over these periods. Because of negative profit in 2012, the 5 year median Dividend Payout Ratios are not valid. The DPR for EPS in the 2014 financial year is 89% and for CFPS is 95%. The DPR for Distributable Income is at 112% for the 2014 financial year.

The problem with EPS is that this value over the past has been all over the place; that is it has varied greatly year to year. Another problem is that the EPS/CF Ratio has been over 1.00 four times in the last 5 years. This is not a good sign. This ratio should be under 1.00. You want the CFPS to be higher than EPS.

Outstanding shares have increased by 5.2% and 3.4% per year over the past 5 and 10 years. The shares have increased due to DRIP, Stock Options and Share Issues. They have decreased due to Buy Backs. Revenues have grown over the past 5 and 10 years, but the company cannot seem to grow the earnings and cash flows with the growing revenues.

Revenues per share are up by 8% and 13.4% per year over the past 5 and 10 years. EPS is down by 15% and up by 17% over the past 5 and 10 years. Cash flow is down by 10% and up by 2% per year over the past 5 and 10 years.

On some basis, the current stock price is cheap. I guess the Graham Price is around $6.22. With a current price of $6.03 that would give this stock a P/GP Ratio of 0.97. This low ratio points to a cheap stock price on an absolute basis. It would also point to a cheap stock price on the basis of the 10 year low, median and high median P/GP Ratios of 1.10, 1.43 and 1.83.

The 10 year Price/Cash Flow per Share Ratio is 10.50 and the current P/CF Ratio at 7.44 is some 29% lower and points to a relatively cheap stock price. However, a P/CF Ratio of 7.44 is not cheap on an absolute basis.

The 10 year Price/Sales Ratio is 0.77 and the current P/S Ratio of 0.25 is some 68% lower. This low ratio points to relatively cheap stock price. On an absolute basis, a P/S Ratio is 0.25 is quite low and also points to a cheap stock price.

When I look at analysts' recommendations, I find Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 month consensus stock price is $6.19. This implies total returns of 10.95% with 2.65% from capital gains and 8.29% from dividends. However, can we be sure that this new dividend rate will hold up?

Sound bit for Twitter and StockTwits is: Book Value is negative. I wonder if I need to say more about why I do not like this stock besides the book value is negative. Even with a cheap stock price, is it worth the risk of buying this stock? I do not see that risk and reward is in balance. See my spreadsheet at je.htm.

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

Just Energy's business involves the sale of natural gas and/or electricity to residential and commercial customers under long-term fixed-price and price-protected contracts. Just Energy derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the associated volumes from its suppliers. The company also offers "green" products through its Just Green program. Through its subsidiary Terra Grain Fuels, the Fund produces and sells wheat-based ethanol. Its web site is here Just Energy.

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

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

Monday, September 15, 2014

High Liner Foods 2

On my other blog I am today writing about my dividends covering the cost of my stock continue...

I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. The MPL Communication's site is here. Ryan Irvine of Keystone also likes this company.

When I look at insider trading, I find insider selling at $3.2M and net insider selling at $3M. There is a bit of insider buying. Insider selling is just 0.47% of the market cap of this stock and so is a relatively small amount.

There is insider ownership with the Hennigar Family's holding company owning some 38% of the outstanding stock and worth some $275M. The CEO owns shares worth around $11M and the Chairman, who is of the Hennigar Family, owns shares worth around $4.7M.

In 2013, outstanding shares were increased by 157,000 for stock options. These stock options had a book value of $1.4M. This number of shares was worth $3.7M at the end of 2013 and would be some 0.52% of the outstanding shares. Stock Options for 2013 at 0.52% of the outstanding shares are a relatively reasonable percentage.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.59, 12.73 and 13.87. These are lower than the corresponding 10 year values of 12.75, 14.42 and 15.66. The current P/E Ratio is 14.42 based on a stock price of $21.20 and 2014 EPS estimate of $1.47 CDN$ (or $1.35 US$). This test says that the stock price is relatively reasonable.

A problem I see with EPS is that analysts had expected the EPS to grow by almost 35% in 2014 over 2013. We are into the Quarter 2 of 2014 and if you look at the 12 month EPS to the end of June 2014 compared to the 12 month EPS to the end of 2013, EPS is only up almost 8%. It makes you wonder about this company meeting the 2014 earnings estimates.

I get a current Graham Price of $15.16. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 0.86 and 0.99. The current P/GP Ratio is 1.40. This test says that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratios is 1.34 and the current P/B Ratio at 3.05 is some 127% higher. The current P/B Ratio is based on a stock price of $21.20 and BVPS of $6.95. This test says that the stock price is relatively expensive.

The 5 year median Dividend Yield is 2.58% and the current Dividend Yield at 1.98% is some 23% lower. This test says that the stock price is relatively expensive. However the historical average Dividend Yield is 2.41% and the historical median Dividend yield is 2.15%. These are some 18% and 8% higher than the current Dividend Yield. These tests say that the stock price could be relatively reasonable.

When I look at analysts' recommendations, I find Buy and Hold recommendations, with the consensus being a Hold recommendations as there are more Hold recommendations than Buy recommendations. The 12 month consensus stock price is $24.80. This implies a total return of 18.96% with 16.98% from capital gains and 1.98% from dividends.

There is a CBC News article on a challenging second quarter for this company. It also talks about how the company might be affected by sanctions on Russia. There is a recent positive article on this company at Seeking Alpha.

Sound bit for Twitter and StockTwits is: Stock price could be expensive. I do like this stock, but I think that it is currently getting a little pricey. See my spreadsheet at hlf.htm.

This is the second of two parts. The first part was posted on Friday, September 12, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner Foods.

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, September 12, 2014

High Liner Foods

I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. The MPL Communication’s site is here. I have been meaning to look at it for a while. Ryan Irvine of Keystone also likes this company.

This company has been around for quite a while, but they just started to pay dividends in 2004. The Dividend Payout Ratios, especially for EPS has varied a lot of the years. The 5 year DPRs for EPS and CFPS are at 33% and 17%. The 2013 DPRs for EPS and CFPS are at 36% and 18.5%.

The current dividend yield is decent at 1.98% and the growth in dividends has been very good. The dividends have increased by 26% and 15% per year over the past 5 and 9 years. They increased the dividend again in 2014 with a 20% increase.

The shareholders total return has also been very good. The 5 and 10 year total returns are at 38.56% and 17.10% per year with 35.60% and 15.38% per year from capital gains and 2.97% and 1.72% per year from dividends.

The Outstanding Shares have decreased by 4.5% and increased by 3.4% per year over the past 5 and 10 years. The shares have increased due to Debenture Conversions, Share Issues and Stock Options. They have decreased due to Buy Backs.

The Revenues and Cash Flows has been growing well. Earnings have done well over the past 5 year, but not over the past 10 years. The company also reports an Adjusted Net Income and some analysts think that it better reflects on how the company is really doing as far as earnings go. Also, this company just started to report in US$ in 2012.

Revenues are up by 10.5% and 12.4% per year over the past 5 and 10 years. Revenue per Share is up by 15.6% and 8.6% per year over the past 5 and 10 years.

EPS is up by 22.8% and down by 6.3% per year over the past 5 and 10 years. The Adjusted EPS is up by 23% and 12% per year over the past 5 and 10 years. Net Income is up by 18.8% and down by 3.13% per year over the past 5 and 10 years.

The Return on Equity has only been below 10% once in the past 5 years. The 5 years before, that is 6 to 10 years ago, it did not break the 10% level.

Cash Flow is up by 19% and 12% per year over the past 5 and 10 years. CFPS is up by 24.6% and 8.6% per year over the past 5 and 10 years. The ROE for 2013 was 17% and the 5 year median ROE is at 12.6%. The ROE on comprehensive income is close with a ROE for 2013 at 16.5% and a 5 year median ROE at 12%.

The debt ratios are generally good. The Liquidity Ratios for 2013 was 1.73. The Debt Ratio for 2013 is at 1.38 with a 5 year median at 1.35. This is acceptable, although a bit lower than I would like. Leverage and Debt/Equity Ratios are a bit higher than what I would like with 2013 values at 3.66 and 2.66.

Sound bit for Twitter and StockTwits is: Consumer Discretionary Dividend Growth Stock. See my spreadsheet at hlf.htm.

This is the first of two parts. The second part will be posted on Monday, September 15, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner Foods.

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, September 11, 2014

Exchange Income Corp.

I do not own this stock of Exchange Income Corp. (TSX-EIF, OTC-EIFZF). One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind. This article is available here.

This company has been on the stock exchange since 2004. They have been inconsistent in increasing the dividends. The dividend increases were better before 2008 than after that date. The 5 and 9 year dividend growth is at 2.22% and 6.18% per year. The last time I checked inflation it was running at 1.50% over the past 10 years and slightly lower over the past 5 years.

The dividend yield is still very high on this old income trust company. The current dividend yield is running at 8.51% currently. It was expect that income trust companies would end up with dividend yields between 4 and 5% from increases in stock prices and/or dividend decreases. The company did not decrease their dividends on the change to a corporation; they have just really slowed the dividend increases.

The Dividend Payout Ratios are still very high for this company. The 5 year median DPR for EPS is at 132% and the one for 2013 was at 400%. It is expected to be around 158% in 2014. The DPR for CFPS is better with a 5 year median of 58% and the DPR for 2013 at 58%.

The total return for shareholders has been quite good. The 5 and 10 year total return is at 19.67% and 20.41% per year with 8.85% and 8.35% per year from capital gains and 10.82% and 12.07% per year from dividends.

The outstanding shares have increased by 17% and 42% per year over the past 5 and 10 years. The shares have increased due to Debenture Conversions, Stock Options, DRIP and Share Issues. Revenues and Cash Flows have increased nicely, but Earnings have not. Because of big increase in outstanding shares, the most important increases are in the per share values.

Revenues have increased by 46% and 55% per year over the past 5 and 9 years. However, Revenue per Share has only increased by 24% and 13% per year. Cash Flow has increased by 28% and 45% per year over the past 5 and 9 years. CFPS has increased by 9% and 5.8% per year over the past 5 and 9 years.

Unfortunately, although earnings are up EPS is down. The Net Income has increased by 23 and 25% per year over the past 5 and 9 years. However, EPS is down by 5.3% and 6.9% per year over the past 5 and 9 years.

Return on Equity only broke through the 10% mark once in the past 5 years and that was 5 years ago. The ROE for 2013 was just 2.9% and the 5 year median was at 9%. The ROE on comprehensive income was a bit better for 2013 at 5.4% and its 5 year median is 8.5%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.62, 17.81 and 20.99. The 10 year values are lower at 11.77, 13.40 and 15.03. The current P/E Ratio is 18.61 based on a stock price of 19.73 and 2014 earnings estimates of $1.06. This stock price testing suggests that the stock price is relatively reasonable.

However, the P/E Ratios have been moving up quite a bit and this generally does not suggest a stock is at a good price. Although a P/E Ratio of 18.61 is not high, however, it does not point to a cheap stock. Also, the EPS estimates are an increase of some 152% over that for 2013. If you look at EPS for the last 12 months, it is lower than the 12 months earnings to end of 2013.

I get a Graham Price of $17.49. The 10 year Price/Graham Price Ratios are 0.76, 0.89 and 1.00. The current P/GP Ratio is 1.13 based on a stock price of $19.73. This stock price test suggests that the stock price is relatively high.

The 10 year Price/Book Value per Share Ratio is 1.36. The current P/B Ratio is 1.54 a value some 13% higher. This suggests that the stock price is relatively reasonable but a bit on the high side of the reasonableness range.

The 5 year median Dividend Yield is 7.43% and the current Dividend Yield is some 15% higher at 8.51%. This stock price test suggests that the stock price is reasonable.

When I look at analyst's recommendations, I find Strong Buy, Buy and Hold Recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $25.80. This implies a total return of 39.28% per year with 30.77% from capital gains and 8.51% per year from dividends.

In an G&M article, the CEO challenges critic over the earning power of his company. The negative reporting from G&M is here. Some people think that the dividend is in jeopardy.

Sound bit for Twitter and StockTwits is: I would like better EPS growth. It would seem that the company is not producing good growing EPS. In the long term, the production of good growing EPS is the most important. See my spreadsheet at eif.htm.

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

Exchange Income Corporation was created to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States and to distribute stable monthly cash dividends to its shareholders. The Company currently owns subsidiaries in two niche business segments, aviation and specialty manufacturing. Its web site is here Exchange Income 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, September 10, 2014

Chemtrade Logistics Income Fund

On my other blog I am today writing about my 3 blogs and my web site continue...

I do not own this stock of Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.

This company has purchased General Chemical Holding Company. An article in the Financial Post says that Chemtrade doubles in size with the purchase of General Chemical.

This company gave out dividend increases from their start in 2001 until 2007. They decreased the dividends in 2007 by just over 16%. The dividends have been flat since 2007. The 5 and 10 years change in is dividends are flat for the past 5 years and dividends were decrease by 1% per year over the past 10 years. Some analysts do expect dividends to start to rise again in 2014, but so far I see no sign of that.

The company was an income trust back when it started. The distributions or dividends were, of course, much higher than the EPS. They are still paying out higher dividends than EPS with the 5 year median Dividend Payout Ratio at 105% and the DPR for 2013 at 923%. They earned little last year. The DPR for EPS for 2014 is expected to be187% and for 2015 it is expected to be 103%.

The 5 year DPR for CFPS is at 53% and the DPR for CFPS for 2014 was at 46%. If dividends do not change it is expected to be around 36% this year. The DPR for 2013 for AFFO is 46% and for FFO is 66%. I know people are still looking at AFFO and FFO for this stock, but it is now a corporation, no matter what the name says.

The dividends are still quite high on this stock with the current dividend yield at 5.64% and the 5 year median at 8.98%. It was expected after the income trust tax changes were announced in late 2006 that income trust dividend yields would go down to around 4 to 5% because of stock price increases and/or dividend cuts. This stock hit a high of dividend yields in 2006 of 14.3% and since then they have been gradually declining.

Shareholders have not done badly with this stock over the past 5 and 10 years. The 5 and 10 years total returns are at 22.76% and 6.80% per year with 14.08% and 0.47% per year from capital gains and 8.68% and 6.33% per year from dividends.

The Return on Equity was lower than 10% only once in the last 5 years and that year was 2013 when it was just 1.8%. The 5 year median is 17.8%. The ROE on comprehensive income was 11.9% in 2013. Some of the financing costs of acquiring General Chemical Holding Company were written off in 2013 and this is the main reason for the low EPS in 2013.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.71, 11.00 and 13.28. The comparable 10 year ratios are 13.91, 15.68 and 17.45. The current P/E Ratio is 33.23 based on a stock price of $21.27 and 2014 earnings of $0.64. The P/E Ratio for 2015 is 18.34 based on a stock price of $21.27 and 2015 EPS of $1.16. No matter how you look at P/E Ratio testing, it shows that the stock price is relatively expensive.

I get a Graham price of $12.16 and the 10 year Price/Graham Price Ratios ae 0.96, 1.11 and 1.27. The current P/GP Ratio is 1.75. This stock price test says that the stock price is relatively high.

The 10 year Price/Book Value per Share Ratio is 1.75 and the current P/BV Ratio at 2.07 is some 20% higher. This is based on a stock price of $21.27 and BVPS of $10.26. This stock price test says that the stock price is relatively high.

I cannot use the dividend yield to look at the stock price because this stock used to be an income trust. However, it is interesting to see that looking at Price/Cash Flow per Share Ratios shows that the current stock price is reasonable. The 10 year P/CF Ratio is 6.39 and the current P/CF Ratio is 6.39.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendations would be a Hold. The 12 month stock price consensus is $21.60. This implies a total return of 7.19% with 5.64% from dividends and 1.55% from capital gains.

Sound bit for Twitter and StockTwits is: Stock is probably expensive. The current stock price does look relatively high on a lot of measures. However, a lot of analysts seem to be excited by this company's purchase of General Chemical Holding Company and feel that it will be very good for the long term for this company.

The purchase of General Chemical Holding Company seems to be depressing the EPS. However, it is not depressing the CFPS. See my spreadsheet at che.htm.

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

This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Chemtrade Logistics.

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, September 9, 2014

Calloway Real Estate Investment Trust 2

I do not own this stock of Calloway Real Estate Investment Trust (TSX-CWT.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. Unfortunately, this stock is no longer on the Dividend Achiever's List.

When I look at insider trading, I find no action for the past year. There does not seem to be much in the way of outstanding stock options or insider ownership. However, there are convertible debentures and special voting units outstanding. Special voting units are almost 20% of the outstanding units. The SVUs are not part of the outstanding units, but have voting rights. The difference between basic and diluted outstanding units was mostly influenced by convertible debentures.

As far as stock options go, the outstanding shares were increased by around 240,000 units for these on 2013. They have a Book Value $8M and this number of shares were worth some $6M at the end of 2013. This number of shares is only 0.18% of the outstanding shares. The outstanding shares were increased a relatively small percentage for stock options in 2013.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.44, 16.94 and 18.45. The current P/E Ratio is 13.72 based on a stock price of $26.62 and 2014 earnings estimate of 1.94. This stock price test would suggest that the stock price is relatively cheap.

Since this is an income trust, we should also look at the Price/AFFO Ratios. The 5 year median P/AFFO Ratio is 15.30. The current P/AFFO Ratio is 15.30 based on AFFO estimate for 2014 of $1.74 and current stock price of $26.62. This stock price test would suggest that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 1.54. The current P/B Ratio is 1.10 based on a stock price of $26.62 and current BVPS of $24.10. The current P/B Ratio is some 28% lower than the 10 year median ratio. This stock price test would suggest that the stock price is relatively cheap.

The 5 year median yield is 6.96% and the current dividend yield at 6.01% is some 16% lower. This stock price test would suggest that the stock price is relatively reasonable, but towards the higher end of the reasonableness range. The historical average dividend yield is 9.64% and this is some 37% above the current dividend yield and says the stock price is expensive.

However, if you use the historical median dividend yield, which is 6.29%, the current dividend yield is just 4.5% lower. This stock price test would suggest that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Buy and Hold Recommendations. The consensus recommendation would be a Hold. The 12 month consensus stock price is $28.60. This implies a total return of 13.45% with 6.01% from dividends and 7.44% from capital gains.

According to a Motley Fool article this REIT as well as Boardwalk REIT (TSX-BEI.UN) and RioCan Real Estate Investment (TSX-REI.UN) are current good buys. The blogger Passive Income Earner has a recent good article about buying Canadian REITs.

Sound bit for Twitter and StockTwits is: Stock price is probably reasonable. A number of stock price tests shows that the stock price is reasonable. I still do not like the complex ownership under this stock. However, it is a good sign that dividends were raised in 2014. See my spreadsheet at cwt.htm.

This is the second of two parts. The first part was posted on Monday, September 08, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway REIT.

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, September 8, 2014

Calloway Real Estate Investment Trust

On my other blog I am today writing about a possible different way of viewing dividends continue...

I do not own this stock of Calloway Real Estate Investment Trust (TSX-CWT.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. Unfortunately, this stock is no longer on the Dividend Achiever's List.

This company started to pay dividends in 2002, but only for two months. The company increased their dividends until 2008 and then increases stopped. So dividends were flat for 5 years. At the end of this year, this company has again started to raise dividends and dividends or distributions were increased by 3.1%.

Between 2008 and 2012, this company was paying out too high a percentage of their earnings and especially more critical for a REIT, too high a percentage of their cash flow. For 2013, the Dividend Payout Ratios are a lot better with the DPR for EPS at 66.5% and the DPR for CFPS at 91.4%. Lots of analysts also look at DPR for FFO and AFFO. The DPR for FFO for 2013 was at 83.4% and for AFFO was at 88%.

Of course, this REIT was not the only one with problems with distributions between 2008 and 2013. RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) had a few years of no increases, Canadian Real Estate Trust (TSX-REF.UN, OTC-CRXIF) had some very low increases and H&R Real Estate (TSX-HR.UN, OTC-HRUFF) decreased their dividends in 2009.

When looking at dividends over the longer term, dividends are up by 3% per year over the past 10 years. However, they are up by 0% over the past 5 years. But with the 10 year increase, the dividends are up by the rate of background inflation and this is not bad for a REIT. REITs tend to have good dividend yields and this REIT has a current yield of 6% and the 5 year median dividend yield is 6.96%.

Shareholders have not done badly over the past 5 and 10 years. The total return over these periods is at 13.51% and 10.60% per year with 6.41% and 3.57% per year from capital gains and 7.10% and7.03% per year from dividends.

The number of outstanding trust units or shares has increased a lot over the past 5 and 10 years. The shares have increased by 7.1% and 28.1% per year over the past 5 and 10 years. Increasing shares are not a problem in themselves, but it does mean that investors should be very interested in per share values. That is the growth in Revenue per Share is important for the shareholder rather than growth in Revenue per se.

Revenue, earnings and cash flow have grown nicely. It is interesting that there is for this company comparatively little growth in Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). These are measures that a lot of analysts are interested in for REITs.

Revenues have grown by 5.6% and 46% per year over the past 5 and 10 years. The Revenue per Share has grown at a negative 1.4% and positive 14.1% per year over the past 5 and 10 years. (However, if you look at the 5 and 10 year running averages, Revenue per Share has grown at 4.3% and 9.5% per year over the past 5 and 10 years.)

EPS has grown at 19.62% and 6.08% per year over the past 5 and 10 years. However, a lot of this growth is due to the change in Accounting Rules from Canadian GAAP to IFRS rules. FFO has only grown by 0.5% and 4.2% per year over the past 5 and 10 years. AFFO has only grown at 0.7% and 3.51% per year over the past 5 and 10 years.

Cash Flow has grown at 6.8% and 39.8% per year over the past 5 and 10 years. CFPS has declined by 0.3% per year over the past 5 years and has increased by 9.2% per year over the past 10 years. If you look at 5 year running averages over these periods, the CFPS is better at 3.3% and 14.7% per year over the past 5 and 10 years.

The Return on Equity is not great, with the ROE for 2013 at 8.5%. However, the ROE on comprehensive income is the same. The ROE has been lower than 8%, 3 of the past 5 years.

The Liquidity Ratio is rather low at just 0.27. If it is not at 1.00, it means that current assets cannot cover current liabilities. However, if you take off the current portion of the long term debt and add in cash flow after dividends this ratio comes in at 1.03. The Debt Ratio is very good at 2.16. The Leverage and Debt/Equity Ratios are good also at 1.86 and 0.86.

Sound bit for Twitter and StockTwits is: Dividend Growth REIT with recent modest div increase. After a number of years of no dividend increases, it is nice that this REIT can now afford one. I still have reservations about the ownership structure of this REIT with the Limited Partnership and Special Voting units. My complaint is that it is complicated. See my spreadsheet at cwt.htm.

This is the first of two parts. The second part will be posted on Tuesday, September 9, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway REIT.

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.