Wednesday, January 16, 2019

Bank of Nova Scotia

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. A number are showing it relatively cheap and the P/S Ratio test and dividend yield test are showing it as cheap and below the median (by around 15%). So price is cheap or leading towards cheap. See my spreadsheet on Bank of Nova Scotia.

I do not own this stock of Bank of Nova Scotia (TSX-BNS, NYSE-BNS). This is one of the big banks of Canada. All our big banks are dividend growth companies. Besides, my son owns shares in this bank.

When I was updating my spreadsheet, I noticed that last year was not a good year for this stock. The 5 year total return for the year end values was 4.78% with 0.48% from capital gains and 4.30% from dividends. Their financial year is in October each year, so the last financial year end was October 30, 2018.

There was better dividend growth in the past than recently as you can see from the chart below. Currently the dividends are moderate at 4.77%. The 5, 10 and historical dividend yields are also moderate at 4.26%, 4.15% and 4.12%. Dividend growth recently has been low. Dividend growth over the past 5 years was just 6.54% per year. Dividends went up 7.6% this year with the last increase of 4.9% in 2018. They often do two increases a year.

Their Dividend Payout Ratio for EPS for the 2018 financial year 48.09% with 5 year coverage at 47.65%. Their DPR for CFPS for 2018 was 22.60% with 5 year coverage at 30.63%. The important ratio here is the one for EPS.

Their Long Term Debt/Covering Assets Ratio for 2018 was really low at just 0.41. The median ratio for the last 5 years was 0.93. The Debt Ratio was good for 2018 at 1.07. The 5 year median ratio was also 1.07.

The Total Return per year is show below for years of 5 to 33 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

As you can see, shareholders have done very well for most years. Problem with the 5 year total return is that the stock price is not much higher than it was 5 years ago. This happens sometimes. Most analysts see the stock heading higher.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 6.54% 4.78% 0.48% 4.30%
2008 10 5.50% 12.79% 7.40% 5.39%
2003 15 9.51% 9.43% 4.96% 4.47%
1998 20 11.09% 11.84% 7.22% 4.62%
1993 25 10.34% 14.17% 9.13% 5.04%
1988 30 9.96% 16.00% 10.24% 5.76%
1985 33 9.38% 14.30% 9.35% 4.95%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.14, 11.29 and 12.52. The 10 year corresponding ratios are 10.22, 11.30 and 12.68. The historical corresponding ratios are 7.04, 11.29 and 14.57. The current P/E Ratio is 9.80 based on a current stock price of $71.28 and 2019 EPS estimate of $7.27. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $90.21. The 10 year low, median, and high median Price/Graham Price Ratios are 0.83, 0.93 and 1.02. The current P/GP Ratio is 0.79 based on a stock price of $71.28. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 1.43 based on Book Value of $64,044, Book Value per Share of $49.75 and a stock price of $71.28. The current P/B Ratio is some 22.34% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 4.12. The current dividend yield is 4.77% based on dividends of $3.40 and a stock price of 71.28. The current yield is some 15.77% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.29. The current P/S Ratio is 2.81 based on 2019 Revenue estimate of $31,151M, Revenue per Share of $22.66 and a stock price of $71.28. The current ratio is 14.70% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The testing is showing that the stock price is on the cheap side. A number are showing it relatively cheap and the P/S Ratio test and dividend yield test are showing it as cheap and below the median (by around 15%). So price is cheap or leading towards cheap.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (7), Hold (4), Underperform (1). The consensus would be a Buy. The 12 month stock price is $84.01. This implies a total return of 22.73% with 17.96% from Capital Gain and 4.77% from dividends.

Paul Bagnell on BNN Bloomberg talks about recent BNS deals. Mary Kom on Fairfield Current talks about recent target prices for this bank. Doug Alexander in a Toronto Star article talks about this bank selling their bank holding in Thailand. Nelson Smith on Motley Fool says that this is his favourite bank. See what analysts are saying about this bank on Stock Chase. Analysts seem to like Canadian Banks. Some think this one is a good buy at present.

The Bank of Nova Scotia is known as Canada's "international bank" and is a global financial services provider. The bank has three business segments: Canadian banking, international banking, and global banking and markets. It is the third- largest bank in Canada. The bank's international operations span numerous countries, and are more concentrated in Central and South America. Its web site is here Bank of Nova Scotia.

The last stock I wrote about was about was Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more. The next stock I will write about will be National Bank of Canada (TSX-NA, OTC-NTIOF) ... learn more on Friday, January 18, 2019 around 5 pm. Tomorrow on my other blog I will write about Long Term Returns.... learn more on Thursday, January 15, 2019 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, January 14, 2019

Toronto Dominion Bank

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Stock price testing suggest price is relatively reasonable. This has been a great investment over the years. If you had paid $1,000.40 for shares in 1976, you would current own 1,220 shares worth $84,221.40 and have collected $3,184.20 in dividends so far. See my spreadsheet on Toronto Dominion Bank.

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). This is one of the big 5 banks of Canada. I think all Canadians should have at least one bank in their portfolio. I have three banks of BMO, RY and TD.

When I was updating my spreadsheet, I noticed that they seemed to have had a good year with revenue up by 7.3% and EPS up by 9.3%. They raised their dividends higher in 2018 than in previous few years. Last dividends increase in 2018 was 11.67%. Increase in dividends in years 2015 was 8.7%, for 2016 was 8% for 2017 was 8.8% and now for 2018 an increase of 11.1%. Financial year end is October 31 for this stock, so last financial year date is October 31, 2018.

Dividend growth is moderate as is the dividend yields. Mostly the increases have been in the 10 to 11% range. The last increase was for 11.67% and it occurred in 2018. The current dividend yield is 3.89%. The 5, 10 and historical median yields are 3.50%, 3.62% and 3.50%. They have a moderate dividend rate and moderate dividend increases.

I believe that they can afford their dividends. The Dividend Payout Ratio for 2018 for EPS is 43% with 5 year coverage at 45%. The DPR for CFPS for 2018 is 31% with 5 year coverage at 29%.

For banks you need to look at Long Term Debt/Coverage Assets Ratio. For TD bank for 2018, this ratio is 0.85. The other debt ratio that is applicable to banks is the Debt Ratio. The current one for this bank is 1.06. This is a good ratio for a bank.

The Total Return per year is show below for years of 5 to 43 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

As you can see from the chart below, the total return for most years is quite good. The lowest seems to be the last 5 years at 10.12% per year growth.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 10.01% 10.12% 6.28% 3.84%
2008 10 8.26% 16.85% 12.06% 4.78%
2003 15 10.55% 11.87% 8.08% 3.78%
1998 20 10.89% 12.08% 8.43% 3.65%
1993 25 11.05% 18.72% 10.73% 7.99%
1988 30 10.59% 13.23% 9.51% 3.72%
1983 35 10.21% 14.83% 10.50% 4.33%
1978 40 11.33% 16.61% 11.32% 5.29%
1975 43 11.01% 15.47% 10.88% 4.59%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.40, 12.41 and 13.33. The corresponding 10 year ratios are 11.41, 12.52 and 13.58. The corresponding historical ratios are 11.42, 11.55 and 13.92. The current P/E Ratio is 10.16 based on a stock price of $68.87 and 2019 EPS estimate of $6.78. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $78.56. The 10 year low, median, and high median Price/Graham Price Ratios are 0.87, 0.97 and 1.07. The current P/GP Ratio is 0.88 based on a stock price of $68.87. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.61. The current P/B Ratio is 1.70 based on a stock price of $68.87, Book Value of $79,047M and Book Value per Share of $40.45. The current P/B Ratio is 5.63% above the 10 year median ratio. This stock price testing suggests that the stock price is reasonable but above the median.

I get an historical median dividend yield of 3.50%. The current dividend yield is 3.89% based on dividends of $2.68 and a stock price of $68.87. The current yield is 11.18% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.13. The current P/S Ratio is 3.19 based on 2019 Revenue Estimate. The current ratio is 1.89% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and around the median.

Putting all the testing together it would suggest that the stock price is relatively reasonable. My favourite test using the dividend yield shows that the stock price is below the median.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (8), Hold (2) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $85.27. This implies a total return of 27.70% with 23.81% from capital gains and 3.89% from dividends.

Doug Alexander on Financial Post says the bank is on a deal-making winning streak. Thomas Auclair of Simply Wall Street talks about the banks P/E Ratio. Joey Frenette on Motley Fool thinks that this bank is selling at a good bargain price. See what analysts are saying about this bank on Stock Chase. Analysts seem to like to this bank.

Toronto-Dominion is one of Canada's two largest banks and operates three business segments: Canadian retail banking, U.S. retail banking, and wholesale banking. The bank's U.S. operations span from Maine to Florida, with a strong presence in the Northeast. It also has a 42% ownership stake in TD Ameritrade, a discount brokerage. Its web site is here Toronto Dominion Bank.

The last stock I wrote about was about was Calian Group Ltd (TSX-CGY, OTC- CLNFF) ... learn more. The next stock I will write about will be Bank of Nova Scotia (TSX-BNS, NYSE-BNS) ... learn more on Wednesday, January 16, 2019 around 5 pm. Tomorrow on my other blog I will write about Choice Properties REIT.... learn more on Tuesday, January 15, 2018 around 5 pm. http://www.spbrunner.blogspot.com/2018/01/bank-of-nova-scotia.html

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, January 11, 2019

Calian Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. The stock is a bit pricey, but not overly so. It had a hard time coming out of the last recession, but had some good increase in sales for the 2018 financial year. See my spreadsheet on Calian Group Ltd .

I do not own this stock of Calian Group Ltd (TSX-CGY, OTC-CLNFF). This is an interesting company with a very nice dividend. 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.

When I was updating my spreadsheet, I noticed that there is a lot of general insider selling but not by important insiders like CEO and CFO. Selling is basically insiders not taking up options. They give a lot of options, relatively speaking. The financial year ends in September each year, so the last financial year ended September 30, 2018.

The dividend yields have varied widely from low to good. Currently the yield is moderate at 3.61%. The 5, 10 and historical median dividend yields are good at 4.69%, 5.31% and 4.36%. The dividends have been flat since 2013 and analysts do not see that changing over the next couple of years.

I think there is no problems with dividend coverage. The Dividend Payout Ratio for 2018 financial year is 54% with 5 year coverage at 65%. The DPR for CFPS for 2018 is 34% with 5 year coverage at 40%. The DPR for CFPS has been a little too high in the past but is currently fine.

The debt ratios I follow are shown below. As you can see all the ratios are great. The company has no long term debt. This is a small company and it is in the Tech sector, so their very good debt ratios will see them through any tough times.

Ratio Curr. 5 Yr. Med
Long Term Debt/Market Cap Ratio 0.00 0.00
Liquidity Ratio 2.32 2.51
Debt Ratio 2.92 3.01
Leverage (Assets/Book Value) Ratio 1.52 1.50
Debt/Equity Ratio 0.52 1.52


The Total Return per year is show below for years of 5 to 25 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

It has not done that well lately and the dividend growth has declined. The 2008 recovery has been hard on a lot of companies. This company has had a flat dividend since 2013.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% 12.60% 7.77% 4.83%
2008 10 7.57% 17.96% 10.23% 7.73%
2003 15 13.39% 10.85% 6.10% 4.76%
1998 20 16.75% 11.46% 5.30%
1993 25 8.63% 4.59% 4.03%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.54, 13.90 and 16.75. The 10 year corresponding ratios are 2.17. 11.37 and 15.63. The historical ratios are 9.64, 11.38 and 13.41. The current P/E Ratio is 13.20 based on a stock price of $31.01 and 2019 EPS estimate of $2.35. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $26.06. The 10 year low, median, and high median Price/Graham Price Ratios are 0.97, 1.06 and 1.16. The current P/GP Ratio is 1.19. 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 2.20. The current P/B Ratio is 2.41 based on a Book Value of $99.7M, Book Value per Share of $12.84 and a stock price of $31.01. The current ratio is 10% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 4.36%. The current dividend yield is 3.61% based on dividends of $1.12 and a stock price of $31.01. The current dividend yield is 17% below the historical yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is0.64. The current P/S Ratio is 0.70 based on 2019 Revenue estimate of $343M, Revenue per Share of $44.17 and a stock price of $31.01. The current ratio is some 10% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is showing that the stock price is This stock price testing suggests that the stock price is relatively reasonable but above the median. So, it is a bit pricey, but not overly so.

When I look at analysts’ recommendations, I find only Buy (4) recommendations. The 12 month stock price consensus is $35.50. This implies a total return of 27.77% with 3.61% from dividends and 24.15% from capital gains.

Kevin Ford, CEO of Calian Group Ltd on Ottawa Business Journal talks about the company’s ability to respond to its customers’ needs. Wade Goff on Simply Wall Street says this company has a beta of 1.02 which is surprising for such a small company. Margaret Staats on Enbulletin says that first quarterly EPS is expected to be $0.55. Kris Knutson on Motley Foolthinks this company will provide excellent returns over time. See what analysts are saying about this company on Stock Chase. There are few analysts following this company, but they seem to like this company.

Calian Group Ltd is a Canada-based company. It operates in various business segments that are Systems Engineering, which involves planning, designing, and implementing solutions that meet a customer's specific business and technical needs, in the satellite communications sector; and Business and Technology Services, which involves short and long-term placements of personnel to augment customers' workforces as well as the long-term management of projects, facilities and customer business processes. Its web site is here Calian Group Ltd.

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 Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more on Monday, January 14, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, January 9, 2019

Rogers Sugar Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumers. I am assuming that the dividends will start to increase again sometime in the future. For now, it sees that the stock is selling at a reasonable price. For the last 5 years there has been Net Insider Buying at rates of 0.07% to 0.06% of outstanding shares. This is high as generally it is in the range of 0.01%. 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.

When I was updating my spreadsheet, I noticed that they have finally gotten their Dividend Payout Ratio for EPS under 100%. For 2018 it was 84% with 5 year coverage at 97%. There is still insider buying. The financial year ends at September 30 each year.

This stock used to be an income trust. Income Trust stocks had much higher dividends that other stocks and they also paid out all they could in dividends. The current dividend yield is very good at 6.57%. When they became a corporation, they decreased their dividends by 30% in 2011 and then kept their dividends flat. Analysts do not see any increase in dividends over the next two years.

Because of past high dividends, the historical median dividend yield is 9.32%. Dividends in the past went as high as 16%. Even if you look at dividends since 2011 it is high at 6.14%. The 5 and 10 year dividend yields are 6.70 and 6.44%.

Problem has been that their earnings were not covering their dividends. EPS has been volatile and they have not made much progress in growing their EPS. When they were an income trust, the rules were different on what the company could afford in divdends. Then dividends (or distributions) were measured against Adjusted Funds from Operations (AFFO). Now the company’s dividends are compared to the EPS to see if they can afford their dividends.

There is no good coverage of dividends by earnings and cash flow. There has been a couple of years plus the financial year of 2018 when the company could cover the dividends with earnings. Analysts expect dividends to be covered by EPS going forward. The dividends are not well covered by CFPS. The DPR for CFPS for 2018 is 41% with 5 year coverage at 46%. Top acceptable coverage is 40%.

Debt Ratios are fine. Long Term Debt/Market Cap Ratio for 2018 is 0.27. The Liquidity Ratio is 1.97 with 5 year median at 1.61. The Debt Ratio is 1.67 with 5 year median at 1.77. Leverage and Debt/Equity Ratios are 2.49 and 1.51 with 5 year medians at 2.19 and 1.19.

The Total Return per year is show below for years of 5 to 21 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

As you can see from the table, most of the return is in dividends (distributions). Capital gain is non-existent to very low. The problem with the long term of 20 and 21 years is that the stock price went down after the stock was initially issued. Going forward, I do think that there will continue to be low growth in capital gains, but dividends are going to be lower as company is no longer an income trust.

Years Div. Gth Tot Ret Cap Gain Div.
5 0.00% 6.84% 0.18% 6.66%
10 -2.32% 13.37% 3.65% 9.72%
15 -1.90% 13.16% 2.79% 10.37%
20 -3.26% 5.11% -2.03% 7.14%
21 4.42% -2.42% 6.85%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.90, 16.21 and 18.52. The corresponding 10 year ratios are 13.08, 13.84 and 14.67. The corresponding historical ratios are 9.82, 10.73 and 11.89. The current P/E Ratio is 12.18 based on current stock price of $5.48 and 2019 EPS estimate of $0.45. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $5.74. The 10 year low, median, and high median Price/Graham Price Ratios are 0.97, 1.10 and 1.21. The current P/GP Ratio is 0.95 based on a stock price of $5.48. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 1.68 based on Book Value of $3,445M, Book Value per Share of $3.26 and a stock price of $5.48. The current ratio is 9% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 9.32%. The 5 and 10 median yields are 6.42% and 6.44%. The median yield since 2011 is 6.14%. The current yield is 6.57% based on dividends of $0.36 and a stock price of $5.48. The current yield is above all the yields except for the historical one. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.83. The current P/S Ratio is 0.72 based on 2019 Revenue estimate of $802M, Revenue per Share of $7.58 and a stock price of $5.48. The current P/S Ratio is some 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

For testing this stock, the best one might be the P/S Ratio. In that case, the stock price would be reasonable and below the median. Another good one is the P/B Ratio test and that comes up with the same results. The dividend yield test is not good for old income trust companies nor for companies that do not rise their dividends. The P/E Ratios have gone up over time. A P/E Ratio of 12.18 is a good one, but it does not point to a cheap price for this sort of stock.

When I look at analysts’ recommendations, I find Buy (1) and Hold (4). The consensus would be a Hold. The 12 month consensus stock price is $6.05. This implies a 16.97% total return with 10.40% from capital gains and 6.57% from dividends.

Rogers Sugar Inc is on Small Cap Power’s list of 4 Canadian Dividend Stocks with a Good Mix of Income and Growth. Lisa Matthews on Fairfield Current talks about recent insider buying. says that the Williams Percent Range is -29.61 and stock with this Indicator below -20 says the stock is overbought (too high). Nelson Smith on Motley Fool thinks this is a good boring stock. See what analysts are saying about this stock on Stock Chase. It is not a favourite with analysts. One analyst mentioned that the expansion into Maple Syrup did not go all that well.

Rogers Sugar Inc is a Canada based sugar producing company. The company through its subsidiary is principally engaged in refining, packaging, and marketing of sugar products. Its web site is here Rogers Sugar Inc.

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 11, 2018 around 5 pm. Tomorrow on my other blog I will write about Why Buy Food Stocks.... learn more on Thursday, January 10, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, January 7, 2019

Royal Bank of Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. Testing of the stock price shows that the price is reasonable and below the median. I doubt you will get a better price outside a bear market. 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.

When I was updating my spreadsheet, I noticed how well I have done with this stock. My total return is 17.35% per year with 5.70% per year from dividends and 11.65% per year from capital gains. The yield on my original 1995 investment is 54% per year. However, past results do not tell you the future.

Our banks may not make out as well in the future. They did well in the past because they took over the other financial pillars of Trust Companies and Brokerage Firms and they are taking over Insurance now too. They are now expending by going international. It is hard to know how successful they will be in the long term in going international. This stock’s financial year ends in October each year.

Dividend yield is currently good with past yields being moderate. Dividend growth recently is low, but in the past it was was moderate. The current dividend yield is 4.18% with 5, 10 and historical yields at 3.69%, 3.92% and 3.92%. Banks tend to have more than one increase in dividends yearly. The last increase was in 2018 and was for 4.3%. The last two increases total 7.7%.

The Dividend Payout Ratio for EPS for 2018 Financial year was 44% with 5 year coverage at 45%. The DPR for CFPS for 2018 was 38% with 5 year coverage at 40%. I see no problem.

For Financials you do not compare debt to market cap but rather to covering assets. For this bank that ratio is good at 0.72. No analyst thinks that the Liquidity Ratio is important for banks. For Banks the Debt Ratio is good if at 1.04 or higher. This bank has a Debt Ratio of 1.06.

The Total Return per year is show below for years of 5 to 35 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

They are underperforming for the last 5 years compared to other years. The stock is down almost 9% in 2018.

Years Div. Gth Tot Ret Cap Gain Div.
5 7.27% 9.55% 5.52% 4.03%
10 6.96% 14.77% 9.98% 4.79%
15 9.46% 11.96% 7.80% 4.16%
20 11.19% 12.27% 8.36% 3.91%
25 10.98% 15.60% 10.87% 4.73%
30 9.26% 15.10% 10.46% 4.64%
35 8.95% 12.78% 9.22% 3.57%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.85, 12.09 and 12.92. The corresponding 10 year ratios are 10.68, 12.13 and 13.21. The corresponding historical ratios are 10.51, 12.27 and 13.93. The current P/E Ratio is 10.46 based on a stock price of $93.68 and 2019 EPS estimate of $8.53. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $99.04. The 10 year low, median, and high median Price/Graham Price Ratios are 0.92, 1.03 and 1.14. The current P/GP Ratio is 0.95 based on a stock price of $93.68. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.98. The current P/B Ratio is 1.83 based on Book Value of $73,552M, Book Value per Share of $51.11 and a stock price of $93.68. The current ratio is some 7.5% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.92%. The current yield is 4.18% based on Dividends of $3.92 and a stock price of $93.68. The current yield is 6.8% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and above the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.14. The current P/S Rati is 3.08 based on 2019 Revenue estimate of $43,763M, Revenue per Share of $30.41 and a stock price of $93.68. The current ratio is 4.9% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.

The P/E Ratios for this stock is surprisingly consistent. This is generally not my favourite test. However, in all my testing I find the same answer that the stock price testing suggests that the stock price is relatively reasonable and above the median.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (7), Hold (3) and Underperform (2). The consensus would be a Buy. The 12 month stock price consensus is $111.79. This implies a total return of 23.52% with 4.18% from dividends and 19.33% from capital gains.

Emilia D'Anzica on Walk Me Blog talks about Royal Bank improving their customer service. Lakeland Staff Writer on Lakeland Observer says this bank is trading near its 52 week lows. Matt Scuffham of Reuters on the Financial Post says that it is harder for borrowers to switch lenders because of the new lending rules. Joey Frenette on Motley Fool thinks that it is a good time to buy this stock. See what analysts are saying about this stock on Stock Chase. They like this bank but one analyst says it is trading at a premium.

Royal Bank of Canada is one of the two largest banks in Canada. It is a diversified financial services company, offering personal and commercial banking, wealth-management services, insurance, corporate banking, and capital markets services. The bank is concentrated in Canada, with additional operations in the U.S. and other countries. Its web site is here Royal Bank of Canada.

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 January 9, 2019 around 5 pm. Tomorrow on my other blog I will write about Capital Compounders by Robin Speziale.... learn more on Tuesday, January 8, 2019 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, January 4, 2019

Bank of Montreal

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. This bank has had fairly consistent growth over the longer term. I bought in 1983 but have only followed it on Quicken since 1987. Since 1987 have earned a total return of 15.395 per year. Total return consists of capital gains and dividends. See my spreadsheet on Bank of Montreal .

I own this stock of Bank of Montreal (TSX-BMO, NYSE-BMO). I am following this stock because I own it. When I bought this stock in 1983, I thought it was the best bank stock to buy at that time.

When I was updating my spreadsheet, I noticed growth has been fairly consistent over time. All banks had a hard time in 2008 and this is showing up in growth over the past 10 years. Dividend increases were in the 7% range except for the last 5 and 10 year periods. For these periods the growth was 2.88% and 4.96%. Dividends were flat from 2009 to 2012 inclusive. The financial year ends in October every year.

Dividend yields are in the good range and the growth is in the low range. The current dividend yield is 4.43%, with the 5, 10 and historical medians at 4.10%, 4.38% and 4.47%. Dividend growth is below 8%, so it is low. See the chart below.

They can afford their dividends. The Dividend Payout Ratio for 2018 is 45.5% with 5 year coverage at 47%. The DPR for CFPS is $40% in 2018 with 5 year coverage at 54%.

The expectations for debt ratios are different for banks. You do not judge the debt against the market cap but to the assets the bank has to cover the debt. For 2018 that ratio is 0.91. Analysts ignore the Liquidity Ratio for banks. A good Debt Ratio is at 1.04 and above. Since 2008 the Debt Ratios for banks have been running higher and this bank has a Debt Ratio of 1.06. Leverage and Debt/Equity Ratios for banks are in the double digits and this bank has them at 16.93 and 15.93.

The Total Return per year is show below for years of 5 to 35 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

From the chart below, you can see that shareholders have done well under this bank. The except is the 15 year duration. At that time the Dividend yield was unusually low at just 2.72, which is some 39% below the historical median. The P/E Ratio was fine at 15.55 which was above the 5 and 10 and historical P/E Ratios of 11.42, 11.38 and 11.62. The P/B Ratio was 2.16 which is some 42% above the 10 year median. The P/S Ratio was 2.66 which was some 4% above the 10 year median.

Years Div. Gth Tot Ret Cap Gain Div.
5 4.96% 9.05% 4.72% 4.33%
10 2.88% 17.56% 11.06% 6.51%
15 7.04% 7.51% 3.47% 4.04%
20 7.47% 9.71% 5.45% 4.26%
25 7.91% 12.89% 7.75% 5.15%
30 6.92% 15.01% 8.85% 6.15%
35 5.96% 11.67% 7.60% 4.08%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.26, 11.42, 12.77. The corresponding 10 year ratios are 10.17, 11.38 and 12.69. The corresponding historical median ratios are 10.52, 11.62 and 13.54. The current P/E Ratio is 10.20 based on a stock price of $90.21 and 2019 EPS estimate of $8.84. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $113.47. The 10 year low, median, and high median Price/Graham Price Ratios are 0.75, 0.84 and 0.95. The current P/GP Ratio is 0.80 based on a stock price of $90.21. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.45. The current P/B Ratio is 1.39 based on Book Value of $41,387M, Book Value per Share of $64.73 and a stock price of $90.21. The current P/B Ratio is some 3.9% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 4.47%. The current yield is 4.43% based on a stock price of $90.21 and dividends of $4.00. The current yield is 0.8% below the 10 year historical median yield. This stock price testing suggests that the stock price is relatively reasonable and around the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.56. The current P/S Ratio is 2.48 based on 2019 Revenue estimate of $23,219M, Revenue per Share of $36.32 and a stock price of $90.21. The current ratio is 2.9% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The P/E Ratios are remarkably stable over time, but it is only the P/E ratios that says that the stock price is relatively cheap. All the rest put it in the reasonable and below the median except the yield which is around the median. The testing for yield is probably affected by the flat dividends between 2009 and 2012 inclusive.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (8) recommendations. The consensus would be a Buy recommendation. The 12 month stock price is $111.00. This implies a total return of $27.48% with 23.05% from capital gains and 4.43% from dividends.

This stock is reviewed on Market Beat with information on such things as analyst recommendations and favorable news coverage. Dennis Golden on MS Daily says that BMO has a Neutral (Hold) rating from analysts. Ambrose O'Callaghan on Bay Street said this bank has fallen into oversold territory. Prosper Bakiny on Motley Fool says this bank is making solid strides. See what analysts are saying about this bank on Stock Chase. They think the bank is ok but like other Canadian banks better generally.

Bank of Montreal is a diversified financial services provider based in North America, operating four business segments: Canadian P&C banking, U.S. P&C banking, wealth management, and capital markets. Its web site is here Bank of Montreal .

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 Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more on Monday, January 7, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, January 2, 2019

Metro Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price may be reasonable to a bit high. There is insider buying. See my spreadsheet on Metro Inc.

I own this stock of Metro Inc (TSX-MRU, OTC-MTRAF). I was following this stock before I bought it because it was on Mike Higgs' Canadian Dividend Growth stock list and on the other dividend lists that I was following.

When I was updating my spreadsheet, I noticed Earnings were very high for 2018. This is because of disposal of assets. The Goodwill and Intangible Assets grew 163.09% during the past year due to the company buying Jean Coutu Group. This stock has a financial year ending at the end of September each year.

The dividend yield is low with good growth. The current dividend is 1.52% with 5, 10 and historical median dividend yields at 1.47%, 1.57% and 1.45%. As you can see in the chart below, the dividend growth (per year) is in the good range (15% or higher). The only year lower is for the 15 year range and dividends grew at 14.82% per year which is close the good range.

The Dividend Payout Ratio for EPS for year ending in 2018, is 9.81% with 5 year coverage at 17.07%. It is expected to be at 23% in 2019, which is a more normal value. The DPR for CFPS is 17.01% with 5 year coverage at 14.21%. They can certainly afford their dividends.

Debt Ratios are fine for this company. Debt/Market Cap Ratio is good for 2018. Long Term Debt has expended by 82% and the ratio for 2018 is 0.26. This seems also due to the acquisition of Jean Coutu Group. The Liquidity Ratio for 2018 are acceptable at 1.17 but if you add in cash flow after dividends it is 1.52. The corresponding 5 year medians are 1.11 and 1.52. The Debt Ratio is good at 2.07 with 5 year median at 1.97. The Leverage and Debt/Equity Ratios are good at 1.93 and 0.93.

The Total Return per year is show below for years of 5 to 26 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Years Div. Gth Tot Ret Cap Gain Div.
5 16.91% 18.74% 16.96% 1.78%
10 15.71% 15.98% 14.40% 1.58%
15 14.82% 14.76% 13.27% 1.48%
20 16.32% 16.00% 14.44% 1.56%
25 20.31% 18.77% 16.97% 1.80%
26 18.78% 17.05% 1.73%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.29, 15.50 and 18.32. The corresponding 10 year ratios are 10.38, 11.64 and 13.02. The historical ones are 10.01, 11.62 and 14.58. The current P/E Ratio 14.98 based on current stock price of $47.34 and 2019 EPS of 3.16. This stock price is probably reasonable, but maybe a bit high.

I get a Graham Price of $39.57. The 10 year low, median, and high median Price/Graham Price Ratios are 0.88, 0.98 and 1.09. The current P/GP Ratio is 1.20 based on a current stock price of $47.34. 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 2.13 based on a stock price of $47.34, Book Value of $5,643M and Book Value per Share of $22.02. The current P/B Ratio is 4% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 1.45% and a 5 year median of 1.46%. The current yield is 1.52% based on a stock price of $47.34 and dividends of $0.72. The current yield is 4.9% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.51. The current P/S Ratio is 0.73 based on 2019 Revenue estimate of $16,599M, Revenue per Share of $64.78 and a stock price of $47.34. The current P/S Ratio is some 43% above the current ratio. This stock price testing suggests that the stock price is relatively expensive.

The testing is a mixed bag. My favourite test on yield says that the stock price is relatively reasonable. But interestingly the P/S Ratio test show the company to be expensive. This cannot be ignored. If you look at the last three years of Revenue estimates to Revenue, it is a mixed bag with the estimates of 2016 right on and the ones for 2015 and 2017 off the mark.

In the chart below shows the estimates for Revenue and the results. In 2015 the 2016 Revenue estimate was $12,578M. The revenue came in at 12,788M. In 2016 the 2017 estimate was $13,175M and Revenue came in at $13,175M. In 2017 the 2018 estimate was $14,531M and Revenues came in at $13,383.

Year Revenue Revenue Revenue
2016-2018 $12,788 $13,175 $13,383
Year Estimates Estimates Estimates
2018-2020 $14,531 $16,697 $16,964
2017-2019 $13,175 $13,658 $13,696
2016-2018 $12,578 $12,991 $13,171
Year Estimate Revenue Difference
2017 $14,531 $13,383 -7.90%
2016 $13,175 $13,175 0.00%
2015 $12,578 $12,788 1.67%


When I look at analysts’ recommendations, I find Buy (5) and Hold (7) recommendations. The consensus would be a Hold. The 12 month stock price is $47.23. This implies a total return of 1.29% with a capital loss of 0.23% and dividends of 1.52% based on a current stock price of $47.34.

Kevin Zeng on Simply Wall Street says this company is slightly undervalued. Edwin Gilmore on Bharata Press says there is a consensus of Buy for this stock from seven brokerages. Olga on Thorold News says shorted shares decreased by 1.89% to 0.36% of outstanding shares. Demetris Afxentiou on Motley Fool thinks this is a good defensive stock. See what analysts are saying about this company on Stock Chase. Most analysts like the stock, but some do not. Some consider it a defensive stock.

As a retailer, franchisor, distributor, and manufacturer, Metro Inc operates or services a network of more than 600 food stores under several banners including Metro, Metro Plus, Super C and Food Basics, as well as of more than 650 drugstores primarily under the Jean Coutu, Brunet, Metro Pharmacy and Drug Basics banners. Its web site is here Metro Inc.

The last stock I wrote about was about was Element Fleet Management Corp (TSX- ENF, OTC-ELEEF) ... learn more. The next stock I will write about will be Bank of Montreal (TSX-BMO, NYSE-BMO) ... learn more on Friday, January 4, 2019 around 5 pm. Today on my other blog I will write about Dividend Stocks January 2018.... learn more. Tomorrow on my other blog I will write about Something to Buy January 2019.... learn more.

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.

Also, on my book blog I have put a review of the book The Spy and The Traitor by Ben Macintyre learn more...

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, December 31, 2018

Element Fleet Management Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. This stock is considered to be a Financial Services stock. It also seems to be cheap. There is quite of bit of insider buying. Debt Ratios are not where I would like them to be. See my spreadsheet on Element Fleet Management Corp.

I do not own this stock of Element Fleet Management Corp (TSX-EFN, OTC-ELEEF). I was looking for stocks to follow and I found this stock in 100 best Dividend Stocks Money Sense for 2018.

When I was updating my spreadsheet, I noticed that the debt ratios were not good. See remarks below. The Comprehensive Income (which is really more important than the Net Income was low in 2016 and negative in 2017. This is not good. It is expected that there will be an earning loss this year and the third quarterly reports points that way. Problem for 2018 is that they will have to write off a big loan due them. Problem in 2017 was the writing off of two investments.

It is hard to say where they are going with dividends. They only started dividends in 2016 and so far, they have gone both up and down. The dividend yield is currently moderate at 2.59%. Dividends started quite low, but with all the changes, they are still up some 22% per year since starting.

The Dividend Payout Ratio for EPS for 2017 was 86%. Since they are not expected to earn anything this year, they will not be covering their dividends. In 2019 the DPR for EPS is expected to be around 33%. The total dividends paid exceed the total earnings, but only because the separation of ECN Capital Corp was considered to be a dividend. The DPR for CFPS is at 9.38% in 2017. This is a good ratio.

The Long Term Debt/Market Cap Ratio is very high in 2017 at 3.66 and even higher at 5.69 currently. This is a real problem over 1.00 (because the market is valuing it lower than what they think the company is worth via the stock price.) Some analysts think that anything over 0.50 is too high. The Liquidity Ratio has varied and not always over 1.50, but the one for 2017 was 1.51 with 5 year median at 1.56, but the current one is just 0.98. (Which means that the current assets cannot cover current debts.)

The debt ratio has varied and is often below 1.50 with the one for 2017 at 1.27 and the current one at 1.25. The Leverage and Debt/Equity Ratio for 2017 are high at 5.74 and 4.52. The current ones are higher at 6.32 and 5.07

The Total Return per year is show below for years of 5 to 6 to the end of 2017. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

The dividends are so high because the separation of ECN Capital Corp was considered to be a dividend. By the way, if shareholders had kept their ECN shares (TSX-ECN), they are currently worth $3.43 per share. The dividend, as far as I can tell from the financial statements was worth $3.73.

Years Div. Gth Tot Ret Cap Gain Div.
5 21.64% 14.79% 6.55% 8.24%
6 20.03% 12.54% 7.49%


The total returns to date are a lot different. Over the past 5 years, shareholders would have lost money. They would be ahead if they had the stock for 6 years instead.

Years Div. Gth Tot Ret Cap Gain Div.
5 21.64% -4.83% -12.40% 7.58%
6 9.25% 0.28% 8.97%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.11, 28.89 and 34.67. The corresponding 6 year ratios are 9.72, 11.61 and 13.50. The current P/E Ratio cannot be calculated because the 2018 EPS estimate is a loss. The P/E Ratio for 2019 is 12.64 based on a current stock price of $6.95 and 2019 EPS estimate of $0.55. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $6.89. The 6 year low, median, and high median Price/Graham Price Ratios are 1.12, 1.43 and 1.71. The current P/GP Ratio is 1.01 based on a stock price of $6.95. This stock price testing suggests that the stock price is relatively cheap.

I get a 6 year median Price/Book Value per Share Ratio of 1.18. The current P/B Ratio is 0.95 based on a Book Value of $2,772M, Book Value per Share of $7.28 and a stock price of $6.95. The current ratio is some 19% below the 6 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median and almost cheap.

I get an historical median dividend yield of 1.55% (with historical only covering some two years). The current yield is 2.59%. The current yield is some 67% above the short historical one. This stock price testing suggests that the stock price is relatively cheap.

The 6 year median Price/Sales (Revenue) Ratio is 8.71. The current P/S Ratio is 3.03 based on 2018 Revenue estimate of $873, Revenue per Share of $2.29 and a stock price of $6.95. The current P/S Ratio is some 65% below the 6 year median. This stock price testing suggests that the stock price is relatively cheap.

On an absolute basis a P/E Ratio of 12.64 is a reasonable one. Generally, a very good P/B Ratio is 1.50. when it is below 1.00, the stock is selling for less than the theoretical broke up value of the company and so points to a very good price. Most testing is showing as cheap or almost cheap. It would seem that this stock is selling at a good price.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (8), Hold (1) and Underperform (1). The consensus would be a buy. The 12 month stock price is $9.09. This implies a total return of 33.38%, with 30.79% from capital gains and 2.59% from dividends based on a current stock price of $6.95.

Cole Patterson on Simply Wall Street talks about insider buying. Steven Smith on Modern Readers talks about director insider buying shares in the company. David Jagielski |on Motley Fool thinks this might be a good stock to buy, but it has been inconsistent. See what analysts are saying about this stock on Stock Chase. Their head office is in Toronto, but apparently most of their business is in the US.

Element Fleet Management is a leading global fleet management company, providing world-class management services and financing for commercial vehicle and equipment fleets. Element's suite of fleet management services spans the total fleet lifecycle, from acquisition and financing to program management and remarketing – helping customers optimize performance and improve productivity. Its web site is here Element Fleet Management Corp.

The last stock I wrote about was about was write Bird Construction Inc. (TSX-BDT, OTC- BIRDF)... learn more. The next stock I will write about will be Metro Inc (TSX-MRU, OTC-MTRAF) ... learn more on Wednesday, January 2, 2019 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, December 28, 2018

Bird Construction Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. It would seem that the stock price is relatively cheap. This company would be vulnerable in bad times because of debt ratios. There is lots of insider buying. 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.

When I was updating my spreadsheet, I noticed that the Balance Sheet has not strengthen for the end of 2017. Both the Liquidity Ratio and Debt Ratios are lower than what I would like at 1.17 and 1.28 in 2017. In 2016 these ratios were 1.19 and 1.25. For the third quarter of 2018 the ratios were 1.16 and 1.26. I prefer the to be at 1.50 or higher. There was insider buy and no insider selling for the past 12 months. Net insider Buying was 0.27. This is high as it is generally in the 0.01% to 0.02% range.

They talked about the need for a strong balance sheet and adequate working capital as reasons to lower the dividend in 2018. There is a always a trade off between a company paying dividends and keeping enough money for working capital. Without a strong balance sheet and enough working capital a company cannot grow.

Dividend yields are in the good range. The current dividend yield is 7.43%. The 5, 10 and historical median dividend yields are 5.71%, 5.70% and 6.01%. Dividend growth was good until 2013 then it became flat and in 2017 the dividends were decreased almost 50%.

The dividends were probably decreased because they could not afford them. The Dividend Payout Ratio was over 100% since 2013. For 2017 in which dividends were decreased, the DPR was 156% with 5 year coverage at 84%. The 5 year coverage was also over 100% in 2015 and 2016. The DPR for CFPS has been a little high with the one for 2017 at 60% with 5 year coverage at 36%.

The Long Term Debt/Market Cap Ratio for 2017 is 0.03 and is therefore good and low. The Liquidity Ratio has always been low and this is a vulnerability. The Debt Ratio for 2017 is 1.28. This is low and a vulnerability. Adding in cash flow after dividends does not help as the ratios is even lower at 1.13. I prefer both these ratios to be at 1.50 or higher for safety sake. Leverage and Debt/Equity Ratios are a little too high at 4.54 and 3.54 respectively.

The Total Return per year is show below for years of 5 to 20 to the end of 2017. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Years Div Gth Tot Ret Cap Gain Div
5 -9.81% 0.62% -5.17% 5.79%
10 0.85% 3.35% -2.20% 5.55%
15 10.05% 34.34% 13.31% 21.02%
20 8.68% 49.87% 22.33% 27.54%


If you look at Total Return to Date, the most recent of 5 and 10 years have changed. Shares are down by some 48% this year.

Years Div Gth Tot Ret Cap Gain Div
5 -9.81% -10.45% -16.96% 6.52%
10 0.85% 8.13% -2.36% 10.49%
15 10.05% 27.38% 5.90% 21.48%
20 8.68% 47.92% 15.58% 32.33%
21 49.65% 17.42% 32.22%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 18.39, 23.42 and 28.45. The corresponding 10 year ratios are 13.01, 15.64 and 18.27. The corresponding historical median ratios are 7.12, 10.03 and 11.38. The current P/E Ratio is negative 131.25. This is no help in testing. The P/E Ratio for 2019, which is close is 8.90 based on a stock price of $5.25 and 2019 EPS estimate of $0.59. This stock price testing suggests that the stock price is relatively cheap to reasonable and below the median.

I get a Graham Price of $4.38. The 10 year low, median, and high median Price/Graham Price Ratios are 1.18, 1.44 and 1.69. The current P/GP Ratio is 1.20 based on a stock price of $5.25. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.97. The current P/B Ratio is 1.67 based on Book Value of $134M, Book Value per Share of $3.15 and a stock price of $5.25. The current ratio is some 44% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 6.01%. The current dividend yield is 7.43% based on dividends of $0.39 and a stock price of $5.25. The current yield is some 24% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.40. The current P/S Ratio is 0.16 based on 2018 Revenue of $1,374M Revenue per Share of 32.32 and a stock price of $5.25. The current ratio is some 60% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

The P/E Ratios are increasing because the stock price is going up faster than earnings. On an absolute basis both the 2019 P/E Ratio of 8.90 and the current P/B Ratio of 1.67 shows a cheap stock. All the stock price testing but the Graham Price show that the stock price is relatively cheap. I am assuming that the stock price is relatively cheap.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (2) recommendations. The consensus would be a Strong Buy. The 12 month stock price is $9.63. This implies a total return of 90.86% with 83.43% from capital gains and 7.43% from Dividends based on a current stock price of $5.25.

Gerald Huddleston on Simply Wall Street talks about ownership of the shares of this company. Lester Strauss on Simply Wall Street talks about this company’s Beta. Ryan Goldsman on Motley Fool thinks that the dividends are giving the company a current headwind . See what analysts are saying about this company on Stock Chase. One analyst thinks that the worse might be over for them.

Bird Construction Inc operates as a contractor in construction market. It also provides pre-construction services, building information modeling and involves in public-private partnership projects. The company focuses on commercial, institutional, retail, tenant, residential, industrial, mining, water, wastewater, energy, and civil sectors. It operates its business in Canada. The industrial market sector generates a majority of the revenues of the company. Its web site is here Bird Construction Inc.

The last stock I wrote about was about was Richards Packaging Income Fund (TSX-RPI.UN, OTC- RPKIF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX- ENF, OTC-ELEEF) ... learn more on Monday, December 31, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures

Wednesday, December 26, 2018

Richards Packaging Income Fund

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. This is a stock that I decided to start following. My testing is showing that the stock price is relatively expensive currently. Also, there is a lot of insider selling. Now may not be a good time to buy this stock. See my spreadsheet on Richards Packaging Income Fund .

I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment club suggested this stock.

When I was updating my spreadsheet, I noticed the company has a complicated structure. There is a Board of Directors for Richards Packaging and a Board of Trustees for Richards Packaging Income Fund. It would also appear that some people have special voting shares. There is also a lot of insider selling over the past year. Net Insider selling is at 8% where normal is around 0.01% to 0.02%.

Because of the odd set up of their Balance Sheet, I missed that the Exchangeable Shares could be current or non-current liabilities and so had to go back when I had finished the spreadsheet to fix this section. This sort of thing really annoys me. Also, I am not exactly clear on the company’s set up. There appears to a Board of Directors and a Board of Trustees. Another odd thing is that, at least for Canadians, the distributions are all taxed as Return of Capital.

This stock has paid dividends since it appeared on the TSX in 2004. The dividend yield is good with growth that has varied. Dividends were cut by 75% in 2009 and only 4 distributions occurred in 2009. Then distributions were flat until 2014 when the company started to raise them again. The current yield is good at 4.22%. This company used to be an income trust so the dividend yields were very high in the past and they are still relatively high.

Affordability of dividends is calculated very differently on income trust companies. Currently they are getting the Dividend Payout Ratios down to a proper level. The DPR for EPS for 2017 is 85% with 5 year coverage at 111%. For 2018 the DPR for EPS is expected to be 75% with 5 year coverage at 95%. The DPR for CFPS for 2017 is good at 35% with 5 year coverage at 35% also.

All the debt ratios currently seem fine. The Long Term Debt/Market Cap Ratio is quite low at just 0.10 in 2017. The Liquidity Ratio is a bit low in in 2017 and even lower at the end of the third quarter of 2018 with ratios of 1.43 and 1.38 respectively. The 5 year median is better at 1.73. The Debt Ratio is good at 1.92 with 5 year median at 1.95. Leverage and Debt/Equity Ratios for 2017 are 2.09 and 1.09 respectively with 5 year median at 2.05 and 1.05.

The Total Return per year is show below for years of 5 to 13 to the end of 2017. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Years Div. Gth Tot Ret Cap Gain Div.
5 10.65% 36.58% 29.56% 7.02%
10 1.51% 18.54% 12.86% 5.68%
13 5.37% 14.34% 8.42% 5.92%


The Total Return to date is not quite as good as to the end of 2017. Stock price is up marginally in 2017 by 0.42%.

Years Div. Gth Tot Ret Cap Gain Div.
5 10.65% 31.14% 24.37% 6.77%
10 1.51% 25.26% 18.16% 7.10%
13 5.37% 16.79% 10.11% 6.68%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.46, 17.92 and 20.37. The corresponding 10 year ratios are 13.69, 15.65 and 17.48. The historical ratios are 13.2, 15.53 and 17.48. The current P/E Ratio is 17.68 based on a stock price of $31.30 and last 12 months EPS of $1.77. This stock price testing suggests that the stock price is relatively reasonable to expensive.

I get a Graham Price of $18.93. The 10 year low, median, and high median Price/Graham Price Ratios are 0.86, 0.98 and 1.09. The current P/GP Ratio is 1.65 based on a stock price of $31.30. 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 1.26. The current P/B Ratio is 3.48 based on Book Value of $98M, Book Value per Share of $9.00 and a stock price of $31.30. The current ratio is some 177% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 8.67%. Since this used to be an income trust, I looked at the median dividend yield since 2011. In this case the yield is still very high at 7.31%. The current yield is 4.22% based on dividends of $1.32 and a stock price of $31.30. Testing the current dividend against the historical or the one since 2011 shows a broad spread from 51% to 42% between the testing yields and the current yields with the current yield being the much lower one. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.50. The current P/S Ratio is 1.10 based on the last 12 months of Revenue at $309M, Revenue per Share of $28.34 and a stock price of $31.30. The current P/S Ratio is 121% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts’ recommendations, I find none. There seems like there are no analysts following this stock.

On an absolute basis a P/E Ratio 17.68 shows a stock price that is probably relatively reasonable. However, all the other tests are showing that the stock price is relatively expensive. The stock price has been holding well this year with very little movement while the Canadian Index is down.

Caroline Biscotti on Essex Caller says the Piotroski F-Score is 8 and therefore shows a strong balance sheet on this stock. Mat Litalien on Motley Fool thinks that this stock will be on the Canadian Dividend Aristocrats list in 2019 but also thinks that it will not continue to rise the dividends. See what analysts are saying about this company on Stock Chase. They like the company but one analyst is worried about liquidity in trading.

The Fund owns Richards Packaging Inc. the leading packaging distributor in Canada, and third largest in North America. Richards Packaging is a full-service packaging distributor targeting small- and medium-sized North American businesses. Richards Packaging has operated since 1912 and currently serves over 14,000 regional companies from 18 locations throughout North America. Its web site is here Richards Packaging Income Fund.

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 December 28, 2018 around 5 pm. Tomorrow on my other blog I will write about Top Dividend Definitions.... learn more on December 27, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.