Thomson Reuters Corp.

On my other blog I am today writing about the 4% withdrawal rule for portfolios continue...

Sound bite for Twitter and StockTwits is: Mediocre dividend growth stock. With my portfolio I tried to pick dividend growth stocks that would last me for a lifetime. This is not always easy. See my spreadsheet at tri.htm.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, almost 30 years. I bought stock to give portfolio some balance as I had too many financial stocks. Performance has always been mediocre. I have made a total return of 7.71% per year with 4.42% from capital gains and 3.29% from dividends. These figures are in Canadian dollars.

I bought this stock on the TSX in CDN$. I have been holding it in a CDN$ Trading Accounts. Even though the dividends are paid in US$, each one is converted into CDN$ when deposited into to account. Dividends have been paid in US$ since 1996.

The dividends are moderate and the dividend increases are low. The current dividend yield is 3.27%. The dividend growth in US$ is at 3.7% and 5.9% per year over the past 5 and 10 years. The last dividend increase was in 2014 and the increase was at 1.5%

My spreadsheet records what dividends I have actually received in CDN$. For me, the dividend growth is at 3.1% and 3.9% per year over the past 5 and 10 years. These values are, of course, affected by the changing CDN$/US$ exchange rates.

The 5 and 10 year total return is 9.03% and 5.01% per year in CDN$. The portion of this return attributed to dividends is 3.27% and 2.82% per year. The portion of this return attributed to capital gains is 5.76% and 2.91% per year.

The total return in US$ is less at 5.28% and 4.81% per year in US$. The portion of this return attributed to dividends is 3.37% and 3.11% per year. The portion of this return attributed to capital gains is 1.91% and 1.70% per year.

The total outstanding shares have decreased by 0.8% and increased by 2% per year over the past 5 and 10 years. In Revenues, Earnings and Cash flow the growth is better in CDN$ terms than in US$ terms. However, reporting is done in US$, so I will talk about growth in US$ terms. Revenue growth is none existent to moderate. EPS growth is good, but company puts out an Adjusted EPS where growth is low. Cash Flow growth is none existent to moderate.

Revenue declined by 0.6% and grew by 4.5% per year over the past 5 and 10 years. Revenue per Share grew at 0.2% and 2.5% per year over the past 5 and 10 years.

EPS grew by 18.4% and 4.32% per year over the past 5 and 10 years. EPS has fluctuated quite a bit. If you look at EPS using 5 year running averages, EPS is down by 18% and 7% per year over the past 5 and 10 years. The Adjusted EPS is low at 1% and 1.9% per year over the past 5 and 10 years.

Cash Flow is down by 0.6% and up by 3.6% per year over the past 5 and 10 years. CFPS is up by 0.2% and 1.6% per year over the past 5 and 10 years.

The Return on Equity has often been lower than 10%. The ROE was only at or above 10% 4 times in the past 10 years and twice in the past 5 years. The ROE for 2014 was quite good at 13.6% but the 5 year median value for ROE is just 4.7%. A problem is that the ROE comprehensive income is just 0.3% in 2014. This ROE has a 5 year median value of just 2.1%. The problem with such a difference in comprehensive income suggests that the earnings are not of good quality.

The debt ratios are fine, but not great. The Liquidity Ratio is 0.79. When this ratio is below 1.00, it means that the current assets cannot current liabilities. If you add in cash flow after dividends, the Liquidity Ratio is just 1.09, a rather low number. I prefer this number to be 1.50 or better. The Debt Ratio is good at 1.92 in 2014. The Leverage and Debt/Equity Ratios are a little high at 2.09 and 1.09. I prefer these to be under 2.00 and under 1.00, respectively.

This is the first of two parts. The second part will be posted on Wednesday, May 20, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Thomson Reuters Corp is the leading source of intelligent information for businesses and professionals. The company delivers this must-have insight to the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world’s most trusted news organization. They derive the majority of their revenues from selling electronic content and services to professionals, primarily on a subscription basis. Thomson and Reuters amalgamated in 2008. Its web site is here Thomson and Reuters.

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.

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