Monday, January 16, 2017

Sylogist Ltd

Sound bite for Twitter and StockTwits is: Lost Momentum. This tech stock seems to have lost momentum lately and seems to have a comparatively high price. There has been insider buying this year, but most insider bought stock around $9.00. See my spreadsheet on Sylogist Ltd.

I do not own this stock of Sylogist Ltd (TSX-SYZ, OTC-SYZLF). I learned about this stock from the newsletter I subscribe to. This is a small cap stock that I have not reviewed before.

This is a relatively small Tech company that is growing fast. They are currently worth some $237M, but just 10 years ago the company was worth just $12M. This stock also pays a dividend. It started to pay dividends in 2007 and has a done a good job of increasing the dividends each year. Dividends have grown at 22.7% per year over the past 5 years. The last dividend increase was for 13.7% and it was made in 2016.

The dividends are moderate with current good growth in dividends as discussed above. The current dividend is 2.71% based on dividends of $0.28 and a stock price of $10.35. The 5 year median dividend yield is 2.91%. However, dividend yield has been much higher as it topped out in 2012 at 7.84%.

The dividend growth has slowed down. Probably because they were paying out too much in regards to earnings. The Dividend Payout Ratio for 2016 is 89%, but the 5 year coverage DPR is 118%. The DPR for CFPS is also a bit high at 44% with 5 year coverage at 61.6%. Basically it is preferred that DPR for EPS be at or under 80% and for CFPS at or under 40%. (Note the financial year ends in September each year.)

In 2012, CEO Jim Wilson says the company's practice is to pay out, over the year, less than one-half of its expected annual operating cash flow. However, over the last 3 years they have been paying out 85.95%, 70.23% and 53.56% of the annual operation cash flow. Maybe the expected cash flow was less than expected.

Even with this high dividend payout, the company is in quite good shape. It has cash on hand of $1.24 per share which is some 15.7% of the stocks' price. It also has some very good debt ratios. The Liquidity Ratio for 2016 is 2.61 with a 5 year median of 3.49. The Debt Ratio for 2016 is 3.57 with a 5 year median ratio of 3.97. The Leverage and Debt/Equity Ratios for 2016 are 1.39 and 0.39 with 5 year median ratios of 1.34 and 0.34 respectively. Whichever way you look at this stock, they have very little debt.

This stock has certainly been rewarding its investors. The total return over the past 5 and 10 years to the end of December 2016 is 40.38% and 28.94% per year. The portion of this return attributable to dividends is 5.96% and 3.04% per year. The portion of this return attributable to capital gains is 34.42% and 25.83% per year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 22.07, 31.30 and 40.54. The corresponding 10 year ratios are 14.63, 22.63 and 29.17. It would seem that the stock price rise has a lot to do with increasing P/E Ratios. If we use the EPS for 2016 of $0.28 and the current price of $10.35, then the P/E Ratio is 39.96. This would appear to be a rather high P/E Ratio.

I get a Graham Price of $3.49. The 10 year low, median and high median Price/Graham Price Ratios are 1.16, 1.64 and 2.11. The current P/GP Ratio is 2.97 based on a stock price of $10.35. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.68. The current P/B Ratios is 5.36 a value 100% higher. The current P/B Ratio is based on BVPS of $1.93 and a stock price of $10.35. The problem is that the stock price is rising faster than Book Value. This stock price testing suggests that the stock price is relatively expensive.

The 5 year and 7 year median dividend yields are 2.85% and 2.91%. They are some 5% and 7% higher than the current dividend yield of 2.71%. The current dividend yield is based on dividends $0.28 and a stock price of $10.35. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Generally the time to buy fact rising tech stocks is when they have rising momentum. This stock seems to have lost its momentum in August 2016 and has been mucking about since then. You can often make money on tech stocks with very high P/E Ratios if they have momentum.

I cannot find any analysts that follow this stock so there are no recommendations. However, Stephen Groff on Stock Chase gave it a Buy Rating in December 2016 at $10.25.

Nick Waddell of CanTech talked about this stock in 2012 and said it reminds some of a junior version of Constellation Software. Staff at Stock Newsweek say that the Value Composite score for this stock is 66. This is using a scale from 0 to 100 where a lower score may indicate an undervalued company and a higher score would represent an expensive or possibly overvalued company. Some analysts at Stock Chase like this company. The Catalyst Tree has an interesting post on Seeking Alpha. He says that Sylogist buy backs have been funded by issuing shares.

The last stock I wrote about was about was Calian Technologies Ltd. (TSX-CTY, OTC- CLNFF)... learn more . The next stock I will write about will be Toronto Dominion Bank (TSX-TD, NYSE-TD)... learn more on Wednesday, January 18, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Payout Ratios... learn more on Tuesday, January 17, 2017 around 5 pm.

Sylogist Ltd. is a technology innovation and licensing company, which, through strategic acquisitions, investments and operations management, provides intellectual property solutions to a range of public and private sector customers. Its web site is here Sylogist Ltd.

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

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

Friday, January 13, 2017

Calian Group Ltd

Sound bite for Twitter and StockTwits is: Good dividend, no debt. This stock is probably at the high end of the buy range or into the expensive range. It is still a health company and his no debt. See my spreadsheet on Calian Group Ltd.

I own this stock of Calian Group Ltd. (TSX-CGY, OTC-CLNFF). In 2011 this looked like an interesting stock with a very nice dividend so I did a spreadsheet on it and decided to buy. This stock came up on a Globe Investor site. The Globe Investor Number Cruncher is an investment column about screening for stocks and funds. They did one on companies with little to no debt. I also noted that the Financial Blogger has this stock on his Top Ten Canadian Dividend Stocks list.

From the time they started to pay dividends in 2003 until 2013 they had a good record of dividend increases. However, since 2013 their dividend has been flat. Their Dividend Payout Ratio for EPS was rather high in 2015 at 84%, but it was lower at 61% in 2016 and it is expected to be lower still in 2017. However, analysts (there seems to be 2 following this stock) do not think that they will raise the dividend in the near future. They probably want to get the Dividend Payout Ratio back to the 30 to 40% range.

I did buy some more of this stock this year, but will not purchase anymore until they again start to raise the dividends again. The dividend yield on this stock is still in the good range at 4.40% based on dividends of $1.12 and a stock price of $24.45. This is below the historical median dividend yield of 4.67% and the 5 year median dividend yield of 5.69%.

This stock is doing better lately as the stock price moved up some 52% in 2016 and is up almost 4% so far this year. The Total Return to the end of 2016 over the past 5 and 10 years is 12.81% and 13.17%. The portion of this return attributable to dividends is 5.68% and 6.29% over the past 5 and 10 years. The portion of this return attributable to capital gain is 7.13% and 6.88% over the past 5 and 10 years.

This company has no debt. The Liquidity Ratio is 2.51 with a 5 year median value of 2.51. The Debt Ratio is 2.99 with a 5 year median of 3.04. Leverage and Debt/Equity Ratios are 1.50 and 0.50 with 5 year median also of 1.50 and 0.50, respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.43, 11.57 and 12.58. The 10 year values are 10.45, 10.91 and 13.39. The historical values are 9.03, 10.76 and 12.62. The current P/E Ratio is 13.32 based on a stock price of $25.45 and 2017 EPS of $1.91. This stock price testing suggests the stock price is relatively expensive.

I get a Graham Price of $21.21. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.02 and 1.13. The current P/GP Ratio is 1.20 based on a stock price of $24.45. This stock price testing suggests the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 2.05. The current P/B Ratio is 2.43, a values some 19% higher. The current P/B Ratio is based on a stock price of $24.45 and BVPS of $10.47. The problem is that the stock price is going up quicker than the book value. The book value is going up slow because of the high dividends being paid relative to earnings. This stock price testing suggests the stock price is relatively expensive.

The current dividend yield is 4.40%. The historical median dividend yield is 4.67% a value some 5.8% higher. The current dividend yield is based on a stock price of $24.45 and dividends of $1.12. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find (2) Buy Recommendations on this stock. The consensus recommendations would be a Buy. The 12 month consensus stock price is $27.70. This implies a total return of 13.24% with 8.84% from capital gains and 4.40% from dividends.

Darlene McCollum at Daily Quint talks about analysts at Desjardins reducing they FY2014 earnings estimates to $1.90 from $2.00. There is sponsored information on Caligan's success story with Canadian Military in the Ottawa Business Journal. This stock is mentioned in Stock Chase but it is not well covered or well known. There is some analysis of this company on Capital Cube. Brendan Caldwell has this as a top pick on BNN.

The last stock I wrote about was about was Rogers Sugar Inc. (TSX-RSI, OTC- RSGUF)... learn more . The next stock I will write about will be Sylogist Ltd (TSX-SYZ, OTC-SYZLF)...learn more on January 16, 2017 around 5 pm.

Calian Ltd. is a leading program delivery partner for both government and industry customers. The Company operates through two divisions: Systems Engineering Division (SED), and the Business and Technology Services Division (BTS). Its web site is here Calian Group Ltd.

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

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

Wednesday, January 11, 2017

Rogers Sugar Inc.

Sound bite for Twitter and StockTwits is: Buy for yield. Bearish. This stock has a very good yield and it does not take a very long time to cover the cost of your stock purchase. In a lot of 10 year periods cost coverage was around 100%. A drawback is with the low dividend growth, you do not see that much dividend growth. Price seems to be relatively high. It is an interest commodity stock. See my spreadsheet on Rogers Sugar Inc.

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

You would expect this stock to provide a nice dividend yield and little in the way of capital gains. The dividends would be good, but dividend growth would be expected at the rate of inflation. This is similar to expectations from Real Estate. You would buy this stock for diversification purposes.

The current dividend yield is 5.33%. The dividend growth is 2.17% over the past 5 years and is a negative 1.11% over the past 10 years. These hide a number of things. First this company used to be an income trust and when it ceased to be one it lowered its dividend by just under 30%. They then started to raise the dividend by 6.7% and 4.4% in 2012 and 2013. Since then the dividend has been flat.

The dividend has been flat because they raised the dividends to much too soon and put themselves in the position of not being able to afford their dividends. Their Dividend Payout Ratio was 184% in 2013. It has been traveling south ever since. They would have been better off if they just raised the dividend by 2% or so each year. Note that the financial year ends in September each year.

The Dividend Payout Ratio for 2016 reasonable at 56%. It is expected to be around 80% in 2017 and then fall again in 2018. The DPR for CFPS for 2016 is at 30% and this is also an acceptable ratio. The 5 year DPR for CFPS is 55% and this is too high. It needs to be 40% or less.

Book Value has declined over the past 5 and 10 years by 3% and 0.1%. A declining book value is never a good sign. The book value is fall basically because they are paying out more in dividends that they have earned.

The 5 year Low, Median and High Median Price/Earnings per Share Ratios are 14.49, 16.21 and 18.52. The corresponding 10 year values are 9.53. 10.62 and 11.89. The corresponding historical values are 8.79, 9.82 and 11.10. So it would appear that part of the capital gain for this stock is due to rising P/E Ratios. This is not uncommon for small caps. In 1999 it was worth $290M and today it is worth around $633M.

The current P/E Ratio is 15.00 based on a stock price of $6.75 and 2017 EPS estimate of $0.45. This testing suggests that the stock price might be relatively reasonable. This is based on 5 year P/E Ratios. If you look longer term, the stock is relatively expensive.

I get a Graham Price of $5.34. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 0.88 and 1.02. The current P/GP Ratio is 1.26. This stock price testing suggests that the stock price might be relatively expensive. For this sort of stock, I would suggest that on an absolute basis, the price is not good if the P/GP Ratio is above 1.00.

The problem in testing the stock price is that the Book Value per Share is declining. The 10 year median Price/Book Value per Share Ratio is 1.67. The current P/B Ratio is 2.40 a value some 43% higher. I also think that for this sort of stock the P/B Ratio of 2.40 is too high. This stock price testing suggests that the stock price is relatively expensive.

The last thing to look at is the dividend yield. This is a hard test to do on this stock because the dividends were reduced after the company became a corporation. It was expected that this sorts of stocks would end up with dividend yield in the 4 to 5% range. The stock did this as the current dividend yield is 5.33%.

Since dividend yield is not a great test, I should probably also look at P/S Ratio. The 10 year median value is 0.83. The current P/S Ratio is 0.95 a value some 14% higher. The current P/S Ratio is based on 2017 Revenue estimate of $670 or $7.14 per share. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

When I look at analysts' recommendations, I find 4 analysts following this stock and all give it a Hold recommendation. The 12 month stock price is $6.56. This is 3% below the current stock price of $6.75. The total return would be 2.52% with 5.33% from dividends and a capital loss of $2.81%.

Donald Swayze on Daily Quint says that TD Securities has raised the target of this stock of $6.50 recently. Rogers has put out a Press Release of their fourth quarterly results. )...The staff at Wall Street Confidential say this stock as a Relative Strength Index of 59.15. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum. )...See what analysts are saying at Stock Chase

The last stock I wrote about was about was Royal Bank of Canada (TSX-RY, NYSE-RY)...learn more . The next stock I will write about will be Calian Group Ltd. (TSX-CGY, OTC-CLNFF)... learn more on Friday, January 13, 2017 around 5 pm. Tomorrow on my other blog I will write about Year 2016... learn more on Thursday, January 12, 2017 around 5 pm.

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

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

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

Monday, January 9, 2017

Royal Bank of Canada

Sound bite for Twitter and StockTwits is: Buy for dividends/growth. This stock is good for both dividends and growth. It is a bit expensive at present, so I am rather neutral on this stock. See my spreadsheet on Royal Bank of Canada.

I own this stock of Royal Bank of Canada (TSX-RY, NYSE-RY). At the time I bought this stock it was on Mike Higgs' list of Canadian Dividend Growth Stocks and on the dividend lists I followed as were all the banks. In 1995 I bought this stock and this is the second bank stock that I have bought.

Banks can be good money makers. They tend to have good yields and moderate dividend growth. Dividends grow very well over time. I have had this stock for almost 21 years and I am making a yield of 45.7% on the original cost of my stock. This is almost the same as BMO but over less time. Also the dividends received have paid for my stock 440% or in other words over 4 times.

This stock has a dividend yield that is moderate to almost good and dividend growth that is moderate. The current dividend is 3.58% based on dividends of $3.32 and a stock price of $92.72. The historical median dividend yield is 3.92% and the 5 and 10 year median dividend yields are 3.92% and 3.93%, respectively. I think that any dividend above 4% is a good dividend, but this stock does not quite make that good category.

For me dividend growth has been at 11.4% per year over the past 21 years. Dividends growth has slowed lately. The 5 and 10 year dividend growth is at 9% and 8.9% per year. However, this is not unusual. We had a period of no dividend growth in 2009 and 2010. There was also a period from 1991 to 1994 inclusive when this stock had no dividend growth. Dividend growth will vary over time for any stock.

I have made a total return of 17.99% per year since I bought this stock. This is composed of capital gain at 13.34% per year and dividends at 4.65% per year. Growth over the past 5 and 10 years is not as good as it is at 16.02% and 8.85% per year. The portion of this growth attributable to dividends is at 4.52% and 3.64% per year. The portion of this growth attributable to capital gains is at 11.82% and 5.05% per year.

This bank has kept the Dividend Payout Ratio for EPS with the generally accepted range for banks of between 40 and 55%. The DPR for the financial year ending in October 2016 is 47.20%. For the past 5 years the DPR for this bank is 45.83%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.98, 11.33 and 12.46. The 10 year values are 10.93, 12.90 and 14.21. The historical values are 10.29, 12.58 and 14.21. P/E Ratios have been lower in the past 5 years than historically. The current P/E Ratio is 13.26 based on a stock price of $92.72 and 2017 EPS estimate of $6.99. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham price of $82.55. The 10 year low, median and high median Price/Earnings per Share Ratio are 0.95, 1.14 and 1.32. The current P/GP Ratio is 1.12 based on a stock price of $92.72. This stock price testing suggests that the stock price is relative reasonable and below the median.

I get a 10 year Price/Book Value per Share Ratio of 2.06. The current P/B Ratio is 2.14 a values some 3.7% higher. This current P/B Ratio is based on a stock price of $92.72 and BVPS of $43.32. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

I get a current dividend yield of 3.58% based on dividends of $3.32 and a stock price of $92.72. The historical median dividend yield is 3.92% a value some 8.7% higher. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The most are in the Buy and Hold Categories. The consensus would be a Hold. The 12 month stock price is $90.98. This implies a total return of 1.70% with a capital loss of 1.88% and dividends of 3.58%.

Alexander John Tun in a late December post on Motley Fool asks if Royal Bank or TD Bank is a better buy and comes up with no clear winner. The staff at Wall Street Confidential Report says the stock has a Williams Percent Range of -28.87 where values can range from 0 to -100. A reading between -80 to -100 may be typically viewed as strong oversold territory. A value between 0 to -20 would represent a strong overbought condition. So it is neither overbought nor oversold but closer to overbought. See what analysts are saying about this bank at Stock Chase . Barry Schwartz says to wait for a pull back before buying Canadian Banks.

The last stock I wrote about was about was Bank of Montreal (TSX-BMO, NYSE-BMO)... learn more . The next stock I will write about will be Rogers Sugar Inc. (TSX-RSI, OTC- RSGUF)... learn more on Wednesday, January 11, 2017 around 5 pm. Tomorrow on my other blog I will write about Yield and Cost Coverage... learn more on Tuesday, January 10, 2017 around 5 pm.

Royal Bank of Canada and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here Royal Bank of Canada.

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

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

Friday, January 6, 2017

Bank of Montreal

Sound bite for Twitter and StockTwits is: Buy for income/cap gains. This stock is showing as relatively expensive with the Dividend Yield test. The rest of the test show it is relatively reasonable but above the median. Now may not be the time to buy this stock. See my spreadsheet on Bank of Montreal.

I own this stock of Bank of Montreal (TSX-BMO, NYSE-BMO). When I bought this stock in 1983, I thought it was the best bank stock to buy at that time. You would buy for income and some capital gains.

Dividend growth stock can deliver great returns over the longer term. For this stock which I bought in 1983 some 34 years ago, I am making a dividend yield of 47.8% on my original purchase price. Since 1983 dividends on this stock has grown at an average of 6% per year or a total of 618%. Dividend growth lately has been lower. Since dividends have restarted in 2013, 4 years ago, the average growth is 4.7% per year.

My quicken data is only from 1987. After my original purchase in 1983 I bought more stock under DRIP. I also purchase more shares in 2008 and 2013. So with quicken I can look at the stock I held in 1987 plus my other purchase. If I look at all the dividends I have received since 1987 and my cost of my three purchases, I have covered my purchase price of my shares by 173%.

Both these sets of data are important. Investors seldom just buy a stock once. Stocks are usually bought over a number of years like I bought BMO for my trading account.

This stock has a dividend yield that is moderate to good and dividend growth that is low. The current dividend is 3.60% based on dividends of $3.52 and a stock price of $97.81. This historical median dividend yield is 4.52% and the 5 and 10 year median dividend yields are 4.29% and 4.58%, respectively. Any dividend above 4% is a good dividend.

The long term dividend growth is at 6% as stated above. The growth of dividends over the past 5 and 10 years is at 3.7% and 4.1% per year. Part of the reason for the lower growth over the past 5 and 10 years is that dividends were level 2008 to 2012, inclusive. However for 2016 the dividends only grew by 4.35%. Good dividends with low growth can produce very good yields on your original purchase price over time.

This bank has kept the Dividend Payout Ratio for EPS with the generally accepted range for banks of between 40 and 55%. The DPR for the financial year ending in October 2016 is 48.55%. For the past 5 years the DPR for this bank is 47.48%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.05, 11.33 and 12.61. The corresponding 10 year values are 10.06, 11.63 and 12.97. The historical values are 10.51, 11.63 and 13.54. These are fairly stable. I get a current P/E Ratio of 12.90 based on a stock price of $97.81 and 2017 EPS estimate of $7.58. This stock price testing suggests that while the stock price may be relatively reasonable it is above the median.

I get a Graham Price of $101.57. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 087 and 0.99. The current P/GP Ratio is 0.96 based on a stock price of $97.81. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year Price/Book Value per Share of $1.53. The current P/B Ratio is 1.62, a values some 5.4% higher. The current P/B Ratio is based on a stock price of $97.81 and BVPS of $60.49. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Dividend Yield of $3.60%. The historical median dividend yield is 4.52% a value some 50.4% higher. This current dividend yield is based on dividends of $3.52 and a stock price of $97.81. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Almost all are Hold recommendations and the consensus recommendation is a Hold. The 12 months stock price is $96.02. This is below the current stock price of $97.81 and implies a total return of 1.77% with 3.60% from dividends and a capital loss of 1.83%.

The money reporter on Daily Buy and Sell Advisor says that this is one of the top Financial stocks to buy. If you want advice on investment income from a variety of sources from GICs to stocks, this is a good report to buy. Linda Roger talks about this stock on Frisco Fastball. Note prices are in US$. Also see what analysts are saying on Stock Chase. Demetris Afxentiou of Motley Fool likes this stock because it has been paying dividends since 1829.

The last stock I wrote about was about was Bird Construction Inc. (TSX-BDT, OTC-BIRDF)... learn more . The next stock I will write about will be Royal Bank of Canada (TSX-RY, NYSE-RY)...learn more on Monday January 9, 2017 around 5 pm. .

BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here Bank of Montreal.

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

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

Wednesday, January 4, 2017

Bird Construction Inc.

Sound bite for Twitter and StockTwits is: Buy for diversification. The stock price testing shows stock price is relatively cheap to reasonable. The stock has vulnerabilities in its debt ratios and the non-growth in BVPS. See my spreadsheet on Bird Construction Inc.

I do not own this stock of Bird Construction Inc. (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock. It has been a year since I last reviewed this stock.

You would buy this stock for diversification purposes. Since this is an industrial stock, expect volatility in the short term, but expect to earn both capital gains and rising dividend income in the longer term. You should expect volatility especially concerning Earnings and Cash Flow.

This stock used to be an income trust. As such it had high dividends. When it changed to a corporation, it did not lower its dividends. In fact it continued to raise its dividends. However, the dividends have become unaffordable as of the last three years. They just recently decreased the dividends by 48.7% to make them more affordable. This is the proper decision for the company to make.

The financial statements are not yet in for 2016, but the Dividend Payout Ratio is likely to be around 127% and likely decreasing to 83% in 2017. These are still rather high as I would prefer to Dividend Payout Ratio to be at 60% or lower for this type of stock. The potential Dividend Payout Ratio for CFPS is likely to be around 46% in 2017 and declining to a much better rate of 27% in 2017. I prefer DPR for CFPS to be at 40% or less. Until DPRs improve, I believe that the dividend could still be at risk.

A weakness for this stock is the debt ratios. The Liquidity Ratio for 2015 is 1.24. Even when you added in cash flow less dividends it is still low at 1.32. The 5 year median values for these ratios are 1.28 and 1.32 respectively. I prefer to see this ratio for at 1.50 or above for safety's sake. The Debt Ratio is also low at just 1.30 in 2015 and a 5 year median at 1.30. This gives the stock vulnerability in bad times.

The Leverage and Debt/Equity Ratios are a little too high. The ratios for 2015 are 4.30 and 3.30 with 5 year median values at 3.75 and 2.75. Also, their accounts payable is rather high as regards to the market cap of this stock in 2016. It is true that the market cap is falling, probably due to the dividend cut, but this is vulnerability for the company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.36, 15.71 and 18.49. The 10 year corresponding ratios are 8.67, 10.40 and 13.54. The corresponding historical ratios are 6.70, 9.93 and 11.22. The current P/E Ratio is 14.38 based on 2017 EPS of $0.63 and a stock price of $9.06. This Stock Price testing suggests that the stock price may be relatively reasonable.

I get a Graham Price of $7.26. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 1.40 and 1.67. The current Price/Graham Price Ratios is 1.25 based on a stock price of $9.06. This Stock Price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year Price/Book Value per Share Ratio of 3.07. The current P/B Ratio is 2.32 based on BVPS of $3.90 and a stock price of $9.06. The current P/B Ratio is some 24% lower than the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively cheap. There are some problems here in that the P/B Ratio has been quite high in the past and growth in BVPS is less than 1% over the past 5 years. This shows more vulnerability for this company.

I cannot do any testing on dividend yield as this company has just decreased their dividends. However, the dividends have been rather high and the decrease brings this company's dividend yield more in line with other former income trust companies. The current dividend is 4.30% based on dividends of $0.39 and a stock price of $9.06.

The 10 year P/S Ratio is 0.41. The current P/S Ratio is 0.24 based on a stock price of $9.06 and 2016 Revenue estimate of $1,575.00 or $37.04 per share. The current P/S Ratio is some 40% lower than the 10 year median. This Stock Price testing suggests that the stock price is relatively cheap. A P/S Ratio below 1.00 normally shows a cheap stock price.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price consensus is $10.00. This implies a total return of 14.68% with 10.38% from capital gains and 4.30% from dividends based on a current stock price of $9.06.

The company put out a Press Release about a new project on January 2, 2017. Staff writers on Wall Street Confidential have put out some technical statistics on this stock. The Williams Percent Range is -84.75. A reading between -80 to -100 may be typically viewed as strong oversold territory. This would indicate a low price. See what analysts are saying about this stock on Stock Chase.

The last stock I wrote about was about was Metro Inc. (TSX-MRU, OTC-MTRAF)... learn more . The next stock I will write about will be Bank of Montreal (TSX-BMO, NYSE-BMO)... learn more on Wednesday, January 4, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy January 2017... learn more on Thursday, January 5, 2017 around 5 pm.

The company operates from 12 offices across Canada serving the heavy industrial market in all provinces as well as serving the industrial, commercial and institutional (ICI) markets in all provinces with the exception of Quebec. The work of the company is split almost evenly between the heavy industrial market and the ICI sector. Its web site is here Bird Construction Inc.

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

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

Tuesday, January 3, 2017

Metro Inc.

Sound bite for Twitter and StockTwits is: Buy for Dividend Growth. The stock price is relatively reasonable but above the median to relatively expensive. It has been having a great run. The company has been doing a lot of Buy Backs so EPS growth shows better than earnings are actually growing. See my spreadsheet on Metro Inc.

I own this stock of Metro Inc. (TSX-MRU, OTC-MTRAF). I bought this stock first at the end of 2001 because it is a good time to purchase as market is relatively low and Metro was on my hit list. I think that this is a solid dividend growth company and should be considered when looking at Consumer Staple stocks. This stock has an annual reporting date near September 30 each year.

Dividends are low and dividend growth is good. The current dividend is 1.39% based on dividends of $0.56 and a stock price of $40.16. The historical median dividend yield is 1.44% and the 5 year median dividend yield is 1.46%. The dividend growth over the past 5 and 10 years is at 17.3% and 14.5% per year. The last dividend increase was in 2016 and it was for 20%.

They can afford their dividends. The Dividend Payout Ratio for EPS for 2016 is 22.5% and the 5 year coverage is 19.3%. The DPR for CFPS is 13.4% with 5 year coverage at 12%.

I bought this stock 12 years ago for my Trading account. Dividends paid have covered 52.7% of my stock's cost and I am earning 9.51% on my original purchase price.

Since this is a consumer staple stock, it should add stability to your portfolio. You should expect low dividends and moderate to good dividend increase. You would buy for increasing dividends and capital gains.

Since this company has been buying back shares, the outstanding shares have been decreasing at 5% and 3.8% per year over the past 5 and 10 years. To me this means that you should look for growth by looking at Revenue, Earnings and Cash Flow and not at the per share growth values.

For example, Revenue has increased by 2.3% and 1.6% per year over the past 5 and 10 years. Revenue per Share has grown by 7.7% and 5.5% per year over the past 5 and 10 years. Also Net Income has grown by 8.2% and 8.5% per year over the past 5 and 10 years, but EPS is up by 14% and 12.6% per year over the past 5 and 10 years. The thing is that share buy backs can make EPS look better than it actually is.

This stock has been doing very well until this year in the capital gain department. The total return for this stock to the end of December 2016 is 18.95% and 13.51% per year over the past 5 and 10 years. The portion of this total return attributable to capital gains is 17.41% and 12.25% per year over the past 5 and 10 years. The portion of this total return attributable to dividends is 1.54% and 1.26% per year over the past 5 and 10 years.

The stock only appreciated between 2015 and 2016 by 3.7%. The stock appreciation for the previous two years was 43.76% and 24.57% for 2014 and 2015. You wonder if the company can keep up this high growth rate.

The last thing I want to mention is the Liquidity Ratio. This is low and the ratio for 2016 was just 1.12 with a 5 year median of 1.10. If you add in cash flow after dividends, the ratio becomes 1.66 with a 5 year medina of 1.43. The company does depend on cash flow to give adequate cover to their current liabilities.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.97, 13.28 and 14.58. The corresponding 10 year values are 10.38, 11.64 and 13.47. The corresponding historical values are 9.90, 11.62 and 13.77. The current P/E Ratio is 14.09 based on a stock price of $40.16 and 2017 EPS estimate of $2.85. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $27.07. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.89 and 1.09. The current P/GP Ratio is 1.48 based on a stock price of $40.16. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.06. The current P/B Ratio is 3.51 a value some 70% higher. The current P/B Ratio is based on BVPS of $11.43 and a stock price of $40.16. Problem is that stock price is growing much faster than Book Value. Book Value per Share only grew at 6.18% over the past 5 years. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 1.44%. The current dividend yield is 1.39% based on dividends of $0.56 and a stock price of $40.16. The current dividend yield is some 3% lower than the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are Buy and Hold. The consensus recommendation would be a Buy. The 12 month stock price consensus is $46.42. This implies a total return of 16.98% with 15.59% from capital gains and 1.39% from dividends.

Staff writers in this Wall Street Confidential Report says the stock has a Williams Percent Range of -62.99 where values can range from 0 to -100. A reading between -80 to -100 may be typically viewed as strong oversold territory. A value between 0 to -20 would represent a strong overbought condition. According to Alexander John Tun of Motley Fool this stock is one of Royal Bank's picks for 2017. See what analysts are saying about this stock on Stock Chase

The last stock I wrote about was about was Magna International Inc. (TSX-MG, NYSE-MGA)... learn more . The next stock I will write about will be Bird Construction Inc. (TSX-BDT, OTC-BIRDF)... learn more on Wednesday, January 04, 2017 around 5 pm. Today on my other blog I will write about Dividend Stocks January 2017... learn more on January 3, 2017 around 5 pm.

Metro is a leader in the food and pharmaceutical sectors. It operates a network of food stores under the banners Metro, Metro Plus, Super C, Adonis and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, Metro Pharmacy and Drug Basics. Its web site is here Metro Inc.

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

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

Friday, December 30, 2016

Magna International Inc.

Sound bite for Twitter and StockTwits is: Price cheap to reasonable. Buy for capital gains and increasing dividends. See my spreadsheet on Magna International Inc.

I do not own this stock of Magna International Inc. (TSX-MG, NYSE-MGA) but I used to. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.

You would buy this stock for diversification reasons. There may be volatility in this stock, especially concerning Earnings and Cash Flow. You should buy it for both rising dividends and capital gain appreciation. You should expect low to moderate dividend yield and low to moderate dividend growth. Dividends could also be decreased as well is increased.

The current dividend yield is moderate, but the historical median dividend yield is low. The current dividend yield is 2.29%. The historical median dividend yield is 1.75%. Even the 5 and 10 year dividend yield median are low at 1.86 and 1.82 respectively. The 5 year dividend growth looks good, but that is only because dividends had been cut a little more than 5 years ago, but they were increased back to and past the old dividend number in a couple of years. The 5 and 10 year dividend growth rate is at 33.2% and 8.8% per year.

They can afford their dividends. The Dividend Payout Ratio for 2015 is 18.03% and the 5 year coverage is 18% with 5 y3ar coverage at 18.8%. This is a good coverage rate. The DPR for 2015 for CFPS is at 13.2% with 5 year coverage at 11.7%. This is in US$ terms.

Since outstanding shares have been declining it is best to look not at per share growth but growth in Revenue, Earnings and Cash Flow. Shares are down by 3.7% and 0.8% per year over the past 5 and 10 years. For example Revenue is up by 5.9% and 3.5% per year over the past 5 and 10 years. Revenue per Share is up by 10% and 4.4% per year over the past 5 and 10 years. Declining shares of course makes more of a difference over the past 5 years rather than 10 year periods.

Because of possible volatility in this company's business good debt ratios are essential and these are adequate with Liquidity Ratio at 1.53 but with a 5 year median of just 1.37. When you add in cash flow after dividends this raises to 1.81 with a 5 year median value of 1.65. Leverage and Debt/Equity Ratios for 2015 are 2.20 and 1.18, respectively.

The 5 year low, median and high median Price/Earnings per Share Ratios are 7.65, 9.79 and 12.48. The corresponding 10 year values are 7.89, 10.14 and 12.55. The corresponding historical year values are 8.94, 12.58 and 14.04. The current P/E Ratio is 8.36 based on a stock price of $59.09 and 2016 EPS Ratio of and $7.07 CDN$ ($5.22 US$). The P/E Ratio for 2017 is 7.69 based on a stock price of $59.09 and 2017 EPS Ratio of and $7.69 CDN$ ($5.68 US$). This is in CDN$, but you get similar results in US$. This stock price testing suggests that the stock price is reasonable and below the median.

I get a Graham Price of $74.06 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 0.90 and 1.04. The current Price/Graham Price Ratio is 0.80 based on a stock price of $59.09. This stock price testing suggests that the stock price is reasonable and below the median.

The historical Dividend Yield is 1.74%. The current Dividend Yield is 2.29% based on dividends of $1.35 and a stock price of $59.09 CDN$ or $1.00 and a stock price of $43.58 US$. The current yield is some 31.6% above the historical median yield. This stock price testing suggests that the stock price is cheap.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform Recommendations. Most of the recommendations are Buy and Hold and the consensus recommendation is a Buy. The 12 month stock price consensus is $53.25 US$ or $72.07 CDN$. This is implies a total return of 24.48% with 22.19% from capital gains and 2.29% from dividends. This is based on a stock price of $59.09 CDN$ or $43.58 US$.

This site shows some measures made on this company at Highland Digest. This stock's Value Composite score of 5 shows that the stock may be undervalued. Andrew Walz on Wall Street Confidential talks about additions or reductions of this company by funds. He says that Miller Howard Investments Inc. purchased a new position in Magna International Inc. See what analysts are saying about this stock on Stock Chase

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

Also, on my book blog I have put a review of the book Silk Roads by Peter Frankopan learn more...

The last stock I wrote about was about was Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more . The next stock I will write about will be Metro Inc. (TSX-MRU, OTC-MTRAF)... learn more on Tuesday, January 03, 2017around 5 pm.

Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna International Inc.

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

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

Wednesday, December 28, 2016

Methanex Corp

Sound bite for Twitter and StockTwits is: Price a bit high. Canadians seem to be doing better than Americans with this stock and this mostly likely is due to the falling CDN$. This is a dividend growth stock and could be a good for diversification and a long term hold if priced a bit lower. See my spreadsheet on Methanex Corp.

I do not own this stock of Methanex Corp. (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid "C" grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.

You would buy this stock for diversification reasons and because it operates internationally. There may be volatility in this stock, especially concerning Earnings and Cash Flow. I would expect moderate dividend yield and moderate dividend growth over the longer term, but there might also be volatility in dividends. Because dividends are paid in US$, there will be built in volatility in dividends.

The dividend yield is moderate and the dividend growth is moderate. The current dividend yield is 2.49% based on dividends of $1.10 US$ and a stock price of $44.20 US$ or dividends of $1.49 CDN$ and a stock price of 59.78 CDN$. Because of currency exchange rates, dividends will grow at dividend rates in different currencies. The dividends are paid in US$ and dividends grow by 11.6% and 10.1% per year in US$ over the past 5 and 10 years. Dividends grew by 19.3% and 12% CDN$ over the past 5 and 10 years.

They can afford their dividends. In 2015 the Dividend Payout Ratio was 53.5% for EPS in US$. Over the past 5 years the DPR was 37.2% for EPS in US$. Even with the expected loss in EPS for this year, the 5 year DPR for EPS would be 51.8% in US$. For 2015 the DPR for CPFS is just 10.6% in US$. For this stock you have to look at US$ values for dividends. Dividends are paid in US$ and the company reports in US$.

Because the outstanding shares have been decreasing at 0.5% and 2.34% per year over the past 5 and 10 years, I would look at things like Revenue rather than Revenue per Share to get real growth for this company. For a look at the difference I have Revenue growth over the past 5 and 10 years at 2.5% and 3% per year in US$. The Revenue per Share growth over the past 5 and 10 years is 3.2% and 5.5% per year in US$.

Because this is a material sector stock and you would expect volatility in Earnings and Cash Flow, having a good Liquidity Ratio is important. This stock Liquidity Ratio for 2015 was 1.77 and its 5 year median is 2.06. If you add in cash flow after dividends, the ratio is 2.98 for 2015 and its 5 year median is 2.93. (These ratios are the same in US$ and CDN$.)

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.55, 12.81 and 15.35. The corresponding 10 year values are 9.12, 12.59 and 15.27. The historical corresponding values are 7.41, 10.79 and 14.94. The P/E Ratio for 2017 is 51.36 based on a stock price of $59.78 ($44.20 US$) and EPS of $1.16 CDN$ (or 0.86 US$). If we use EPS for 2018 of $3.11 CDN$ ($2.30 US$) then we have a P/E Ratio of 19.20. All this suggests that the stock price is relatively high. However, stock's earnings tend to be volatile and so the P/E Ratio may not be the best one to use to figure out where the stock price stands.

I get a Graham Price of $45.89 based on a formula using the last 3 EPS. The 10 year low, median and high median Price/Graham Price Ratios are 1.05, 1.35 and 1.63. The current P/GP Ratio is 1.30 based on a stock price of $59.78 CDN$. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.03 CDN$. The current P/B Ratio is 2.49 CDN$. This value is some 22.5% higher than the 10 year value. The current P/B Ratio is based on BVPS of $24.02 CDN$ and a stock price of $59.78 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.26%. The current dividend yield is 2.49% a value some 10.2% higher. The current dividend yield is based on dividends of $1.10 US$ and a stock price of $44.20 US$ or dividends of $1.49 CDN$ and a stock price of 59.78 CDN$. Because of currency exchange rates, dividends will grow at dividend rates in different currencies. This stock price testing suggests that the stock price is reasonable and but above the median.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most are Buy recommendations and the consensus is a Buy recommendation. The 12 month stock consensus is $53.11 US$ or $71.88 CDN$. This implies a total return of 22.74% with 20.25% from capital gains and 2.49% from dividends based on a stock price of $59.78.

James Conley on Baseball News Source talks about analysts at Cowen raising the target price from $48.00 to $51.00. The site Wall Street Confidential show some technical data. They said they Williams Percent Range currently sit at -53.86. A reading between 0 and -20 would point to an overbought situation. A reading from -80 to -100 would signal an oversold situation. So this stock is neither overbought nor oversold (that is neither too high nor very low). Joseph Solitro at Motley Fool likes this dividend stock. See what analysts are saying about this stock at Stock Chase.

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

The last stock I wrote about was about was Stantec Inc. (TSX-STN, NYSE-STN)... learn more . The next stock I will write about will be Magna International Inc. (TSX-MG, NYSE-MGA)... learn more on Friday, December 30, 2016 around 5 pm. Tomorrow on my other blog I will write about Budget Items... learn more on Tuesday, December 29, 2016 around 5 pm.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex Corp.

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

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

Tuesday, December 27, 2016

Stantec Inc.

Sound bite for Twitter and StockTwits is: Price could be reasonable. You would buy this stock for rising Dividends and Capital Gains. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN), but I used to. I bought and sold this stock between 2008 and 2011 and did not make any money. It was a non-core holding. With their new policy of dividends, this stock has become more interesting.

You would buy this stock for diversification reasons. There may be volatility in this stock, especially concerning Earnings and Cash Flow. You should buy it for both rising dividends and capital gain appreciation. You should expect low dividend yield and moderate dividend growth. Over the longer term this sort of stock should have total returns of around 10% per year with 1 to 2% from dividends and the rest from capital gains.

Dividends are low and dividend increases are moderate. The current dividend yield is 1.31% based on a stock price of $34.38 and dividends of $0.45. The dividends have grown by some 10.8% per year over the past 3 years to 2015. The most recent increase was in 2016 and it was for 7.1%. So far they have raised dividends each year since they started them.

They can afford their dividends and they Dividend Payout Ratios are rather low. The DPR for EPS for 2015 was 24.7% and the CFPS was 2.1%.

Growth in Revenues, Earnings and Cash Flow are all above 10% per year over the past 5 and 10 years. So this company has had good growth. For example, the EPS has grown at 10.1% and 12.8% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.38, 17.66 and 22.88. The 10 year corresponding values are 15.01, 18.97 and 22.92. The corresponding historical values are 8.19, 14.77 and 23.88. The current P/E Ratio is 25.28 based on a stock price of $34.38 and 2016 EPS estimate of $1.36. The P/E Ratio for 2017 is 18.38 based on a stock price of $34.38 and 2017 EPS Estimate of $1.87. This stock price testing suggests that the current stock price is relatively high, but it could still be in the reasonable price range, but above the median.

I get a Graham price of $20.71 for 2016. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.42 and 1.74. The current P/GP Ratio is 1.66. I get a 2017 Graham Price of $24.28. The P/GP for 2017 would be 1.42. This stock price testing suggests that the stock price maybe in the reasonable range, but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.37. The current P/B Ratio is 2.03 a value some 14.3% lower. The current P/B Ratio is based on a stock price of $34.38 and PVPS of $16.93. This stock price testing suggests that the stock price is reasonable and below the median.

The current dividend yield is 1.31%. The 3 year median dividend yield is 1.24%. This makes the current dividend yield some 5.9% above the 3 year median. This suggests that the stock price is reasonable and below the median. However, dividends have not been paid for long, so you wonder how valid this test is.

The 10 year median P/S Ratio is 1.21. The current P/S Ratio is 1.25 based on 2016 Revenue estimate of $3.124M ($27.42 per share). The P/S Ratio for 2017 is 1.05 based on 2017 Revenue estimate of $3738M ($32.81 per Share). This all suggests that the stock price is probably reasonable.

When I look at analysts’ recommendations, I find Buy and Hold recommendations with most being Holds. The 12 month stock price consensus is $36.23. This implies a total return of 6.69% with 1.31% from dividends and 5.38% from capital gains.

This Wall Street Transcript talks about this company and Local Motors going into a strategic alliance to accelerate the worldwide implementation of connected automated vehicles. Ruchi Gupta says in this Money Making Article says that analysts give this stock 1 Buy, 0 sells and 7 Holds. See what analysts are saying about this company on Stock Chase. Most like this company, but a few feel it is overpriced.

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

The last stock I wrote about was about was Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI)... learn more . The next stock I will write about will be Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more on Wednesday, December 28, 2016 around 5 pm.

Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec Inc.

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

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