Friday, April 24, 2015

DH Corp

Sound bite for Twitter and StockTwits is: No longer dividend growth stock. However, I do have hope that this company will again become one. See my spreadsheet at dh.htm.

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.

A couple of things I notice right away when I reviewed by spreadsheet. A worry for me has been that the Intangible and Goodwill Assets were higher than the market cap of this stock. For the financial year of 2014 they are backing down again to 86% of market cap. The other thing is that the dividend has not changed since 2012 and most analysts seem to think that this will not change anytime soon.

This stock had a good record of increasing dividends when it was issued as an income trust. The change from Income Trust to a corporation had this company decrease their dividends by 35% in 2011. It may not have been enough as they have struggled to have earnings greater than dividends.

The dividends have only increased once since 2010 and that was in 2012. The dividend yield is quite good at 3.06%. Some analysts think that there might be a modest increase in the dividends in this year or the next but most do not.

The Dividend Payout Ratios for 2014 for EPS is 98% and for CFPS is 37%. The 5 year median DPR for EPS is 107% and for CFPS is 46%. The DPR for EPS is expected to be much better in 2015, but analysts do not think that CFPS will cover the current dividends. This company is also putting out an Adjusted EPS. With the Adjusted EPS the 2014 DPR is 55% and the 5 year median DPR is 78%.

I have done well with this stock. My total return is 27.06% per year with 20.30% per year from capital gains and 6.76% per year from dividends. The total return over the past 5 and 10 years to date is 20.97% and 11.46% per year with 16.11% and 6.08% per year from capital gains and 4.87% and 5.38% per year from dividends.

The Outstanding Shares have increased by 10.2% and 8.6% per year over the past 5 and 10 years. This means for me per share values are the most important ones. Revenue is up moderately. There is no growth in EPS except for the Adjusted EPS the company also puts out. Cash Flow growth is moderate to good.

The Revenue is up by 18.8% and 15.3% per year over the past 5 and 10 years. Revenue per Share is up by 7.8% and 6.1% per year over the past 5 and 10 years. Cash Flow is up by 20% and 15.8% per year over the past 5 and 10 years. CFPS is up by 9.1% and 6.6% per year over the past 5 and 10 years.

EPS is down by 7.9% and 0.9% per year over the past 5 and 10 years. 2013 was not a good year for this company as far as EPS goes. However, EPS was up by 102% in 2015 and is expected to climb in 2015, 2016 and 2017. The Adjusted EPS has only been out for a few years, but the 4 year growth is at 12.1% per year.

Over the past 4 years the Return on Equity was below 10%. Before 2012 it was always above 10%. The ROE for 2014 was 7.6% and its 5 year median is at 9.8%. The ROE on comprehensive income for 2014 was 12.3% and its 5 year median is 12.3%. This suggests that EPS might be better than they appear to be. This is probably why they have an adjusted EPS value.

The Liquidity Ratio has consistently been rather low and they rely on cash flow to cover current liabilities. The 2014 Liquidity Ratio is 0.82. When this ratio is below 1.00, it means that current assets will not cover the current liabilities. However, if you add in cash flow after dividends the ratio rises to 1.13. Not great, but at least current liabilities are covered.

The Debt Ratio has consistently been good and the 2014 ratio is 1.85. Leverage and Debt/Equity Ratios are rather mediocre at 2.18 and 1.18, respectively.

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

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.

Thursday, April 23, 2015

Russel Metals Inc. 2

Sound bite for Twitter and StockTwits is: Price is reasonable. This stock has come down lately so now maybe the time to buy. See my spreadsheet at rus.htm.

I own this stock of Russel Metals Inc. (TSX-RUS, OTC-RUSMF). In 2007 I needed to reduce my holdings of Loblaws and buy something to help replace the dividends I had been earning. With Russel Metals, both Mike and TD recommend buying at this time.

When I look at insider trading, I find 9.4M of insider buying and 10.9M of insider selling for net insider selling of 1.5M. The outstanding shares were increased by 708,000 shares for stock options for 2014. The book value of these shares was $17.5M and this number of shares was worth $18.3M at the end of 2014.

This number of shares for stock options represents 1.15% of outstanding shares. This is rather high as most companies increase shares by around 0.50% for stock options. The increase for stock options was also high in 2013 at 1.21%. However, the increase in outstanding shares for stock options was 0.47%, 0.16% and 0.22% in the years of 2010 to 2012.

There is some insider ownership with the CEO owing shares worth around $3.2M and the CFO owning shares worth around $2.3M. However, the above shares are only some 0.35% of the outstanding shares of this company and so a very small percentage.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.80, 16.09 and 19.21. The corresponding 10 year values are lower at 11.58, 14.00 and 15.99. The current P/E Ratio is 16.85 based on a stock price of $26.79 and 2015 EPS estimate of $1.59. Note that the 2015 EPS estimate is some 18.5% lower than the EPS for 2014 of $1.95. However, it would seem that analysts expect lower EPS in 2015 than there was for 2014. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $23.31. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.05 and 1.22. The current P/GP Ratio is 0.97 based on a stock price of $26.79. This stock price testing suggests that the stock price is relatively reasonable.

The 10 year Price/Book Value per Share Ratio is 1.79. The current P/B Ratio at 1.76 is some 1.2% lower. The current P/B Ratio is based on a Book Value per Share value of $15.18 and a stock price of $26.79. This stock price testing suggests that the stock price is relatively reasonable.

The 5 year median dividend yield is 4.94% and the current dividend yield at 5.67% is some 14.8% higher. The current dividend yield is based on dividends of $1.52 and stock price of $26.79. This stock price testing suggests that the stock price is relatively reasonable.

The historical average dividend yield is 6.19% and the historical median dividend yield is 5.12%. The historical average dividend yield is some 8.34% higher than the current dividend yield and suggests that the stock price is relatively reasonable. The historical median dividend yield is probably a better measure and is 10.8% below the current dividend yield. The historical median dividend yield stock price test suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Buy and Hold recommendations. There are more Hold recommendations (3 to 2) than Buy recommendations, so the consensus recommendation is a Hold. The 12 month stock price is $27.00. This implies a total return of 6.46% with 0.78% from capital gains and 5.67% from dividends.

This article in Sleek Money talks about Scotiabank lowering their 12 months stock price to $26.00 from $26.50 recently. According to NASDAQ, Russel Metals was named as a Top 25 stock by Canada Stock Channel in August 2014. In March 2015 Andrew Walker of Motley Fool says why this company should be on your stock watch list.

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

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.

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 22, 2015

Russel Metals Inc.

On my other blog I am today writing about Goodwill and Intangible Assets continue...

Sound bite for Twitter and StockTwits is: Industrial Dividend Growth Stock. If you are in stocks for the longer term, they are going to have difficulties at some point and probably cut dividends. Having a diversified portfolio will see that some stocks are doing well as others are not. Not all bear markets and recession affect companies in the same way. See my spreadsheet at rus.htm.

I own this stock of Russel Metals Inc. (TSX-RUS, OTC-RUSMF). In 2007 I needed to reduce my holdings of Loblaws and buy something to help replace the dividends I had been earning. With Russel Metals, both Mike and TD recommend buying at this time.

This company started to pay dividends in 2000. They have a fairly good record of dividend increases, but did decrease them by about 44% in 2009. The latest increase was for 8.6% and the 5 and 10 years dividend growth rates are 7.9% and 7.6% per year. However, the yearly dividend at $1.52 is still lower than the $1.80 dividend of 2008.

The Dividend Payout Ratios for 2014 was at 75% for EPS and 52% for CFPS. The 5 year median DPRs are 82% for EPS and 61% for CFPS. The projected DPRs for 2015 are expected to be 96% for EPS and 72% for CFPS. Analysts seem to expect both the EPS and CFPS to drop in 2015.

Outstanding shares have increased by 2% and 0.6% per year over the past 5 and 10 years. Shares have increased due to Stock Options, Share Issues and Bond Conversions. They have decreased due to Buy Backs. There has been low to good growth in Revenue, no growth to good growth in EPS and Cash Flow.

The problem is 2009 when Revenue and Cash Flow dropped and they had an earnings loss. 2009 was not a good year for this company. Things have been picking up for this company since then.

Revenue is up by 14% and 4.8% per year over the past 5 and 10 years. Revenue per Share is up by 14% and 2.6% per year over the past 5 and 10 years. EPS is up by 27% and down by 5.9% per year over the past 5 and 10 years. The good growth in EPS is because 5 years ago they had an earnings loss.

Cash Flow is up by 42.6% and down by 2% per year over the past 5 and 10 years. CFPS is up by 42% and down by 4% over the past 5 and 10 years. Again, good growth is showing over the past 5 year because of negative cash flow 5 years ago.

Return on Equity was below 10% 3 times in last 10 years and 2 times in the last 5 years. The ROE for 2014 is 12.8% and the 5 year median is 11.9%. The ROE on comprehensive income for 2014 is 16.5% and the 5 year median is 13.8%. The good ROE for comprehensive income suggests that the earnings are of good quality.

This is a small company in a rather risky business and as such it has relatively good debt ratios, especially for the Liquidity Ratio. The Liquidity Ratio for 2014 is 2.91. The Debt Ratio is 1.90. Leverage and Debt/Equity Ratios are a little higher than what I like to see at 2.12 and 1.12.

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

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.

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, April 21, 2015

Toromont Industries Ltd. 2

Sound bite for Twitter and StockTwits is: stock price is reasonable to expensive. It is only the 5 year median and historical median dividend yield tests that suggest that the current stock price could be relatively reasonable. All other testing is showing the stock price as relatively expensive. See my spreadsheet at tih.htm.

I own this stock of Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF). This is one of the stocks I bought after selling Loblaws in 2008. I bought more in 2008 after selling Onex and AGF Management. This was a stock on Mike Higgs' Canadian Dividend Growth Stock list.

The outstanding shares were increased by 414,000 shares in 2014 for stock options. This had a book value of $8.7M and the value of this number of shares at the end of 2014 is $11.8M. This number of shares is 0.54% of the outstanding shares.

There is some insider ownership with the CEO owning shares worth around $2.2M and the Chairman owning shares worth around $58.3M. These shares in total would be around 2.8% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.62, 15.25 and 16.88. These are a bit higher than the corresponding 10 year P/E Ratios of 12.68, 14.70 and 16.52. The current P/E Ratio is 19.16 based on a stock price of $33.72 and 2015 EPS estimate of $1.76. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $18.50. 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 1.82 based on a stock price $33.72. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.85. The current P/B Ratio at 3.90 is some 36.7% higher. The current P/B Ratio is based on a Book Value per Share of $8.65 and a stock price of $33.72. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 2.02% based on dividends of $0.68 and a stock price of $33.72. The 5 year median dividend yield is 2.16% which is only 6.8% above and this suggests that the stock price is relatively reasonable. The historical median dividend yield is 1.85% and this is some 9% below the current dividend yield and suggests that the stock price is relatively reasonable.

The dividend yield test that says otherwise is the historical average dividend yield of 3.05%. This is some 34% higher than the current dividend yield of 2.02% and suggests that the stock price is relatively expensive. A median value is often preferred to an average value as it shows were the yield is most like to be.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority of the recommendations are a Hold. The consensus recommendations would be a Hold. The 12 month stock price consensus would be $30.60. This is below the current stock price. This implies a total return loss of 7.24% with a capital loss of 9.25% and dividends of 2.02%.

Dakota Financial News says that on April 8, 2015 nine brokerages gave this stock a rating of Hold and one issued a Buy recommendations on Toromont Industries. This Globe and Mail article by Brenda Bouw talks about how Toromont is weathering the oil price storm. This article in the Winnipeg Free Press talks about a boost in quarter four profits and dividends for Toromont.

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

There are two sections to this company. The Equipment Group is for Caterpillar dealerships. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Its web site is here Toromont.

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 20, 2015

Toromont Industries Ltd.

On my other blog I am today writing about Ben Bernanke's Blog continue...

Sound bite for Twitter and StockTwits is: Industrial dividend growth stock. The returns have been reasonable and they have been growing the dividend. Revenue and EPS has grown over the past 3 years and cash flow over the past 2 years. See my spreadsheet at tih.htm.

I own this stock of Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF). This is one of the stocks I bought after selling Loblaws in 2008. This was a stock on Mike Higgs' Canadian Dividend Growth Stock list. I bought more in 2008 after selling Onex and AGF Management.

This is a dividend growth Industrial stock. The dividend yield is moderate as is the dividend increases. The current dividend is 2.02% and the 5 year median dividend yield is 2.16%. The dividend growth over the past 10 years is 8.4% per year and over the past 20 years is 14.3% per year.

I am showing a 5 year growth of 0% because I am treating the spin-off of Enerflex in 2011 as a special dividend rather than a spin off. The problem with Enerflex is that Toromont did not have it for very long, only from January 20, 2010 to June 1, 2011. Basically, I treating the money I got from it as a special dividend payment. I sold Enerflex as soon as I could and sold for less than the spin off price.

This company says that they have paid dividends every year since going public in 1968 and have raised their dividends every year since 1988. I have history on this stock back to 1992 and my historical median dividend yield is 1.85%.

Including my Enerflex spin-off, I have made a total return of 9.70% per year on this stock. The portion of this return attributable to dividends is 1.96% per year and the portion of this return attributable to capital gains is 7.74% per year. The 5 and 10 years total return is at 11.48% and 8.12% per year.

The outstanding shares have increase by 3.6% and 2.1% per year over the past 5 and 10 years. This will make the per share growth data more important to me. There is little to no growth in revenue, no growth to moderate growth in EPS and no growth to moderate growth in Cash Flow over the past 5 and 10 years.

Revenue is down by 1.9% and up by 1.1% per year over the past 5 and 10 years. Revenue per Share is down by 5.2% and 0.9% per year over the past 5 and 10 years. EPS is down by 1.7% and up by 4.6% per year over the past 5 and 10 years. Cash Flow is up by 1% and 5.6% per year over the past 5 and 10 years while CFPS is down by 2.5% and up by 3.5% per year over the past 5 and 10 years.

The Return on Equity has not been below 10% once during the last 10 years. The ROE at 2014 is 19.9% and with a 5 year median of 21.3%. The ROE on comprehensive income is 19.3% for 2014 and the 5 year median is at 22.8%. So basically, the comprehensive income suggests that the net income is of good quality.

All the debt ratios are good. The Liquidity Ratio is 1.73 in 2014. The Debt Ratio is 2.52 in 2014. The Leverage and Debt/Equity Ratios are 1.66 and 0.66.

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

There are two sections to this company. The Equipment Group is for Caterpillar dealerships. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Its web site is here Toromont.

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 17, 2015

Manulife Financial Corp. 2

Sound bite for Twitter and StockTwits is: Stock price is cheap to reasonable. The stock price seems at least reasonable. Insurance companies seem to be making progress lately. They seem to be ready to be dividend growth stocks again. One way to make money is to buy good companies at reasonable prices and hold them for the long term. See my spreadsheet at mfc.htm.

I own this stock of Manulife Financial Corp. (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria. I bought some more stock in October 2005, in April 2009 and in April 2013.

The 5 year low, median and high median Price/Earnings per Share are 10.82, 11.78 and 12.98. These are lower than the 10 year corresponding ratios of 12.40, 14.75 and 15.88. The current P/E Ratio is 12.36 based on a stock price of $22.24 and 2015 EPS of $1.80. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $25.82. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.12 and 1.32. The current P/GP Ratio is 0.86 based on a stock price of $22.24. This stock price test suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.26. The current P/B Ratio is 1.35 a value just 6.8% higher. The current P/B Ratio is based on BVPS of $16.46 and a stock price of $22.24. This stock price test suggests that the stock price is relatively reasonable.

The 5 year median dividend yield 3.54% and this is some 21% higher than the current dividend yield of 2.79%. This stock price test suggests that the stock price is relatively expensive. The historical average dividend yield is 3.27% a value some 14.6% higher than the current dividend yield of 2.79%. This stock price test suggests that the stock price is relatively reasonable.

However, if you look at the historical median dividend yield, it is just 2.20% and this is some 27% below the current dividend yield of 2.79. This stock price test suggests that the stock price is relatively cheap. The current dividend yield is based on a stock price of $22.24 and dividends at $0.62.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month stock price consensus would be $24.60. This implies a total return of 13.40% with 2.79% from dividends and 10.61% from capital gain.

According to Business Wire A. M. Best has put out a special recent report on Canadian Insurance Companies. There is an interesting article from Katia Dmitrieva, Bloomberg News at the Financial Post talking about this company getting rid of its cubicles to save money. There is another interesting article by Barbara Shecter in the Financial Post about Manulife paying DBS Bank $1.2B to sell Life and Health insurance through their Asian Branches.

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

This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is here Manulife.

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, April 16, 2015

Manulife Financial Corp.

Sound bite for Twitter and StockTwits is: Back to dividend growth stock. It looks like this stock is returning to a dividend growth stock. I have not yet made much on this stock, but I expect to see it perform better in the future. See my spreadsheet at mfc.htm.

I own this stock of Manulife Financial Corp. (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria. I bought some more stock in October 2005, in April 2009 and in April 2013.

Manulife was the first insurance company to raise dividends since 2008 and in2014 it raised its dividend by 19.2%. However, this was also the only insurance company to cut dividends since 2008 and it cut its dividend by 50% in 2009. This leaves MFC with dividend decline of 6.1% per year over the past 5 years and a dividend growth of 2% per year over the past 10 years.

The Dividend Payout Ratio was 32% for EPS and 9.6% for CFPS in 2014. The 5 year median values are DPR of 32% for EPS and 9.8% for CFPS. The 5 year median figures of DPR for EPS hide a lot. EPS was low or non-existent between 2008 and 2011 and during this period the EPS could not cover dividends.

The dividend yield on this stock has mostly been moderate. The current dividend yield is 2.79%. The 5 year median dividend yield is higher at 3.54%. The historical average and historical median dividend yields are 3.27% and 2.20% respectively.

I have not done well with this stock to date. My total return is 0.18% per year with a capital loss of 2.29% per year with dividends at 2.47% per year. The total returns are fine for the last 5 years, but has a loss over the past 10 years. The 5 year total return is 8.22% per year with 2.89% per year from dividends and 5.34% per year from capital gain. The 10 year total return is a loss of 1.85% per year with dividends at 2.34% per year and a capital loss of 4.19% per year.

Outstanding shares have grown at 1.2% and 1.4% per year over the past 5 and 10 years. Shares have growth due to Stock Options, DRIP and Share Issues and have decreased due to Buy Backs. Revenue has had moderate growth over the past 5 and 10 years. Earnings have good growth over the past 5 years, especially in the last 2 years and no growth over the past 10 years. Cash flow has had no growth over the past 5 years and moderate growth over the past 10 years.

Revenue is up by 6.3% and 7.2% per year over the past 5 and 10 years. Revenue per Share is up by 5.1% and 5.7% per year over the past 5 and 10 years. Another measure of growth for insurance companies is Assets under Management. Here growth is good for the last 5 years and moderate for the last 10 years, with growth at 9.5% per year over the past 5 years and at 7.1% per year over the past 10 years.

EPS is up by 17.03% per year over the past 5 years mainly due to EPS increases over the past 2 years. EPS is flat over the past 10 years.

Cash Flow is down by 1.4% and up by 6.7% per year over the past 5 and 10 years. The CFPS is down by 2.5% and up by 5.2% per year over the past 5 and 10 years.

The Return on Equity was good until 2008. Since then MFC has only had a ROE of 10% or more once and that was last year. However, the ROE for 2014 is not far off 10% at 9.9%. The ROE on comprehensive income has been better than the ROE on Net Income over the past two years. The 2014 ROE on comprehensive income is 18.3%.

When it comes to debt ratios, the Liquidity Ratio is not of much importance. This is the same with banks. The Debt Ratios on insurance companies tend to be low and this company is no different with the Debt Ratio for 2014 at 1.06. Leverage and Debt/Equity Ratios tend to be high on insurance companies, but this company has some of the highest ratios with the 2014 ratios at 17.04 and 16.04 respectively.

This is the first of two parts. The second part will be posted on Friday, April 17, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is here Manulife.

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 15, 2015

Sun Life Financial Inc. 2

On my other blog I am today writing about What's Wrong with Finance continue...

Sound bite for Twitter and StockTwits is: stock is cheap to reasonable. Insurance companies have been having a hard time since 2008. They are finally beginning to increase dividends again. You make money long term when you buy good companies when they are cheap. See my spreadsheet at slf.htm.

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). After I sold my CIBC bond in 2000 I had money to buy some stocks so I made a hit list and looked for ones on this list selling at a reasonable price. This stock was selling at a reasonable price at that time.

In 2014 the outstanding shares were increased by 3M shares for stock options. This is a 0.49% increase. This increase is rather normal. These shares have a book value of $83M and this number of shares would be worth $125.8M at the end of 2014.

Over the past year re insider trading, there was $32.2M of insider selling and net insider selling of $31.9M with very little insider buying. There is not much in insider ownership, but the CEO does have shares worth around $2.9M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.75, 10.40 and 12.05. The corresponding 10 year values are higher at 12.21, 13.50 and 14.78. The 5 year ratios are rather low. The current P/E Ratio is 12.38 based on a stock price of $39.61 and 2015 EPS estimate of $3.20. I think that this stock testing suggests that the stock price is reasonable. The P/E Ratio would have to be 10.00 or lower for me to think that the stock is cheap via this test.

I get a Graham price of $43.05. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 0.99 and 1.10. The current P/GP Ratio is 0.92 based on a stock price of $39.61. The theory behind the Graham Price is that if this ratio was 1.00 or less the stock was at a good price. This stock price testing suggests that the stock price is reasonable. However, the Graham Price theory suggests that the stock price is cheap.

I get a 10 year Price/Book Value per Share of 1.35. The current P/B Ratio is 1.54 based on a BVPS of $25.74 and a stock price of $39.61. The current P/B Ratio is some 14% higher than the 10 year median value. This stock price testing suggests that the stock price is reasonable.

The 5 year median dividend yield is 5.02% and the current dividend yield at 3.64% is some 27.5% lower. This initial test suggests that the stock price is expensive. The historical average dividend yield is 4.50% and this is some 19% higher than current dividend yield of 3.64%. The historical median dividend yield is 2.55% and this is a value 42.6% lower than the current dividend yield of 3.64%. The 10 year median dividend yield is 4.18% which is 13% above the current dividend yield of 3.64%.

This testing gives us a mixed bag. The historical median dividend yield is low because the dividend yields started off very low when this stock was initially issued some 15 years ago. The historical median dividend yield is interesting. A median value shows you what the dividend yield is most likely to be and at 2.55% is much lower than the dividend yield has been for the last 7 years or right around 2008 when insurance companies got into trouble.

So it would seem on an historical basis, a dividend yield of 3.64% is rather high. This would suggest that the current stock price is rather cheap.

When I look at analysts' recommendations, I find Strong Buy, buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus recommendations would be a hold. The 12 month stock price consensus is $43.80. This would imply a total return of 14.21% with 10.58% from capital gains and 3.64% from dividends. For this sort of return I would expect Buy recommendations.

This is the second of two parts. The first part was posted on Tuesday, April 14, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

David Pett in a recent Financial Post article, says that Sun Life is posed to raise their dividends for the first time since the financial crisis. There is a recent Motley Fool By Robert Baillieul talking about where you should buy Sun Life or Manulife. On Dakota Financial News Samantha Reynolds talks about recent analysts ratings for Sun Life. According to Business WireA. M. Best has put out a special recent report on Canadian Insurance Companies. You might also be interested in what analysts have to say via Stock Chase.

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. Its web site is here Sun Life.

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, April 14, 2015

Sun Life Financial Inc.

Sound bite for Twitter and StockTwits is: 2014 was an improvement, Div raise soon? If you hold stocks over the very long term like I do, there is going to be periods with all stocks where the underlying company will have problems or have to reorganize. This is normal. See my spreadsheet at slf.htm.

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). After I sold my CIBC bond in 2000 I had money to buy some stocks so I made a hit list and looked for ones on this list selling at a reasonable price. This stock was selling at a reasonable price at that time.

As with a number of insurance companies, this company has not raised their dividends for some time. They have kept their dividends level since 2008. Analysts are hopeful that 2015 will be the year when dividends will be raised again. Manulife (TSX-MFC), Power Financial (TSX-PWF) and Great West Lifeco (TSX-GWO) have now raised their dividends, Manulife in 2014 and Power Financial and Great West in 2015.

I have had this stock for 15 years. My total return is 6.03% per year with 2.27% in capital gains and 3.76% in dividends. Over the years I have received some $14.81 in dividends and this is 49% of the price of my shares.

The total return over the past 5 and 10 years is a mixed bag. Over the past 5 years the return is decent, but it is very low over the past 10 years. I consider a decent return to be 8% per year over the longer term. The total return over the past 5 and 10 years is at 8.85% and 1.33% per year. The portion of this return attributable to dividends is 3.21% and 2.96% per year. The portion of this return attributable to capital gain is 5.64% per year over the past 5 years and a loss of 1.64% per year over the past 10 years.

There is no or not much growth over the past 5 and 10 years. However, 2014 was a good year for this company as Revenue, earnings and cash flow was all up. Revenue and Revenue per Share was up in 2014 by 86% and 84% in 2014. Net Income and EPS was up by 87% and 85% in 2014. Cash Flow and CFPS was up by 187% and 186% in 2014.

EPS shows growth of 24.9% per year over the past 5 years, but that is because exactly 5 years ago was an EPS low point. If you look at 5 year running averages, EPS is down by 6.4% per year over the past 5 years. So really, there is not much growth there over the past 5 years.

The Return on Equity has been low since 2008. The ROE for 2014 was 9.3% in 2014 and this has a 5 year median of 8.6%. However, the ROE on comprehensive income has been over 10% for the last 3 years. The comprehensive income ROE for 2014 is at 16.5% and the 5 year median is 10.7%.

This is an insurance company and Liquidity Ratios are not much important, Debt Ratio will be low and Leverage and Debt/Equity Ratios will be high. The Debt Ratio is 1.09 and this is good for an insurance company. The Leverage and Debt/Equity Ratios are 11.84 and 10.84 and are rather normal or a bit low for an insurance company. These ratios often depend on the industry a company is in and so it is important to compare them to similar companies.

This is the first of two parts. The second part will be posted on Wednesday, April 15, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. Its web site is here Sun Life.

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 13, 2015

BCE Inc. 2

On my other blog I am today writing about Shorting Canada continue...

Sound bite for Twitter and StockTwits is: Good Dividend; Maybe expensive. Most of my stock price testing shows this stock to be on the expensive side. However, it may not be expensive looking at the dividend yields. See my spreadsheet at bce.htm.

I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). This is one of first stocks I bought, which was in 1982. At that time is was called an orphan and widow stock. It is not easy to figure out what I have earned on this stock because it has spun off shares for Nortel and Bell Aliant. The annoying thing with their spin offs is you always end up with an odd number of shares.

The 5 year low, median and high Price/Earnings per Share Ratios are 11.98, 13.36 and 14.75. These are not much different from the 10 year corresponding values of 11.81, 12.92 and 14.25. The current P/E Ratio is 16.73 based on a stock price of $58.88 and 2015 EPS estimate of $3.22. This stock price testing would suggest that the stock price is relatively expensive.

I get a Graham Price of $30.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.23 and 1.35. The current P/GP Ratio is 1.75 based on a stock price of $53.88. This stock price testing would suggest that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.04. The current P/B Ratio at 4.14 is some 103% higher. The current P/B Ratio is based on a BVPS of $13.02 and a stock price of $53.88. This stock price testing would suggest that the stock price is relatively expensive. The problem with BV is that it has been declining recently.

The only section were the stock price might be showing as reasonable is in comparison with the dividend yield. The current dividend yield is 4.83%. The 5 year median dividend yield is 5.19%, a value just 7% higher. The 10 year median dividend yield is 5.17 and the 15 year dividend yield is 4.67%. This could suggest that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The most recommendations are a Hold, with a few less Buy recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $55.80 and with a starting stock price of $53.88, this will mean a total return of 8.39% with 3.56% from capital gains and 4.83% from dividends.

The Motley Fool gives 3 reasons to buy BCE. Some analysts think that BCE could buy Manitoba Telecom (TSX-MBT). This Motley Fool article talks about a possible MBT buyout. This Markets Wired article talks about BCE's 2014 reporting and recent analysts' recommendation upgrades.

This is the second of two parts. The first part was posted on Friday, April 10, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE.

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.