Monday, November 18, 2019

PFB Corp

Sound bite for Twitter and StockTwits is: Dividend Group Industrial. Stock price is probably reasonable if a bit high. Debt Ratios are good as are DPR ratios. They have given out special dividends a number of times in the past and did one recently. See my spreadsheet on PFB Corp.

I do not own this stock of PFB Corp (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.

When I was updating my spreadsheet, I noticed that the company’s results are better than expected. Revenue estimate for 2018 was $122M and it came in at 128M. EPS estimate for 2018 was $0.84 and EPS came in at $0.92. They also did a special dividend of $1.00 because of good results in the third quarter. Current dividend is $0.36 per year.

The dividends are moderate (2 to 4% range) with the current dividend yield at 3.23% and with 5, 10, and historical median dividend yields at 3.30%, 3.94% and 3.09%. The dividend increases are low (Under8%). See the chart below. Dividend started in 1997.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 was 35% with 5 year coverage at 48%. The CPR for CFPS for 2018 was 18% with 5 year coverage also at 18%. As nearest as I can see the Free Cash Flow coverage of dividends is at 27% in 2018.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2018 is 0.13. The Liquidity Ratio is 2.36 with 5 year median ratio at 2.45. The Debt Ratio for 2018 is 2.76 with 5 year median at 2.76 also. The Leverage and Debt/Equity Ratios for 2018 are 1.57 and 0.57 with 5 year median ratios at 1.54 and 0.54.

The Total Return per year is shown below for years of 5 to 24 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 5.92% 18.69% 14.39% 4.29%
2008 10 2.92% 17.30% 10.44% 6.86%
2003 15 5.18% 9.00% 4.30% 4.70%
1998 20 5.99% 11.59% 3.98% 7.61%
1994 24 5.70% 13.67% 6.01% 7.66%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.13, 13.06 and 15.00. The 10 year corresponding ratios are 10.68, 12.79 and 14.89. The corresponding historical ratios are 9.09, 11.43 and 14.89. The current P/E Ratio is 10.11 based on a stock price of $10.92 and 2019 EPS estimate of $1.08. This stock price testing suggests that the stock price is relatively cheap.

The start P/E for 5 year growth of 14.39% was 4.96, for 10 year growth of 10.44% was 32.00, for 15 year growth of 4.30% was 12.96, for 20 year growth of 3.98% was 7.77 and for 24 years of growth of 6.01% was 8.67. I do not think that this sheds any light on a good starting P/E. There seems to be no correlation between start P/E and capital gain.

I get a Graham Price of $14.71. The 10 year low, median, and high median Price/Graham Price Ratios are 0.65, 0.77 and 0.95. The current P/GP ratio is 0.74 based on a stock price of $10.92. 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 0.93. The current P/B Ratio is 1.23 based on a Book Value of $59.6M, Book Value per Share of $8.90 and a stock price of $11.15. The current ratio is some 31% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 3.09%. The current dividend yield is 3.30% based on dividends of $0.36 and a stock price of $10.92. The current ratio is 6.7% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 3.94%. The current dividend yield of 3.30% is 16% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. Some people use a 10 year dividend yield rather than an historical one.

The 10 year median Price/Sales (Revenue) Ratio is 0.50. The current P/S Ratio is 0.55 based on 2019 Revenue estimate of $133M and a stock price of $10.92. The current ratio is 9.8% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is probably reasonable but on the high side. The P/S Ratio testing is showing this stock as reasonable but above median and so is the 10 year median dividend yield test. The P/B Ratio test is showing the stock price as expensive, however, a P/B Ratio of 1.23 is considered to be a low P/B Ratio.

Is it a good company at a reasonable price? I think that this company has been done well by its shareholders. Their use of special dividends show that they want to reward their shareholders, but they do want to keep the current dividends at a low percentage of the current EPS. I would certainly consider buying this company.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (1). The consensus would be a strong buy, but there are few analysts following this stock. The 12 month stock price consensus is $14.17. This implies a total return of 33.06% with 29.76% from capital gains and 3.30% from dividends based on a current stock price of $10.92.

There are no comments on Stock Chase for this company. This is probably because it is a small company and not well followed. A writer Simply Wall Street talks about Frank Baker selling shares, but he is no longer a director of this company. A writer Simply Wall Street says PFB P/E Ratio at 12.98 is lower than the industry it is in. Company announces on Newswire the third quarterly results and a special dividend payment.

PFB Corp is Canadian based firm which is in the business of delivering products and solutions in the areas of manufacturing insulating building products made from expanded polystyrene materials. The company is operating into two business segments based on geographical location namely, Canada where it produces expanded polystyrene (EPS) products and structural insulating panels; and United States of America segment which includes production and sales of EPS, building systems, and structures, design services, and installations. Its web site is here PFB Corp.

The last stock I wrote about was about was IBI Group Inc (TSX-IBG, OTC-IBIBF) ... learn more. The next stock I will write about will be Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more on Wednesday, November 20, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Money Talks.... learn more on Tuesday, November 21, 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, November 15, 2019

IBI Group Inc

Sound bite for Twitter and StockTwits is: Industrial Services Stock. The stock price is probably reasonable. Dividends were suspended in 2013. This s a turn-around situation. There is insider buying. See my spreadsheet on IBI Group Inc.

I do not own this stock of IBI Group Inc (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.

When I was updating my spreadsheet, I noticed that they were an income trust and as such had good dividends in the past. They became a corporation in 2011, but could not afford dividends after a couple of years of earning losses so they were suspended in 2014.

The 5 year growth is so good because the stock hit a low point exactly 5 years ago. After a couple of years of good gains, the stock price dropped in 2018, but so far this year it is up 25%. I noticed also that there is insider buying of 0.12% of market cap. This is high as expected buying would be at 0.01%. CEO and Chairman have been buying.

This company suspended their dividends in 2013. They have not made any statements that I can find about when they will restart them. This stock could take off when and if they restart dividends.

Debt Ratios are fine. Note that this company had a negative Book Value (and Debt Ratio below 1.00) back in 2015 and they have been building the Book Value again. The Long Term Debt/Market Cap Ratio for 2018 is fine at 0.55. The Liquidity Ratio is very good at 2.49 with 5 year median at 2.11. The Debt Ratio is low at 1.20 with 5 year median at 1.08. The Leverage and Debt/Equity Ratios are quite high at 5.91 and 4.91 in 2018.

The Total Return per year is shown below for years of 5 to 14 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% 37.72% 37.72% 0.00%
2008 10 0.00% -3.11% -9.64% 6.52%
2003 14 0.00% 4.53% -6.55% 11.08%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.93, 11.79 and 16.65. The corresponding 10 year ratios are 9.09, 12.70 and 16.30. The corresponding 10 year ratios are 6.93, 10.11 and 14.33. The current P/E Ratio 14.92 based on a stock price of $5.82 and 2019 EPS estimate of $0.39. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $3.20. The 10 year low, median, and high median Price/Graham Price Ratios are 0.80, 1.11 and 1.61. The current P/GP Ratio is 1.82 based on a stock price of $5.82. 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 1.40. The current P/B Ratio is 5.00 based on a Book Value of $36M, Book Value per share 1.16 and a stock price of $5.82. The current P/B Ratio is 257% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I cannot do an historical median dividend yield test as the dividends are currently suspended.

The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.48 based on 2019 Revenue estimate of $377M, Revenue per Share of $12.07 and a stock price of $5.82. The current ratio is 8.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. The best test is the P/S Ratio test. It is showing the stock price as reasonable and below the median. The problem with the P/GP Ratio test and the P/B Ratio test is that the company had recently a negative book value.

Is it a good company at a reasonable price? I still think that this is a company worth tracking. I only track companies I am interested in. The stock price is probably reasonable. However, the company has had some difficulties and therefore is of a high risk.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (3). The consensus would be a Buy. The 12 month stock price consensus is $7.75. This implies a total return of 33.16% all from capital gains based on a stock price of $5.82.

See what analysts are saying on Stock Chase. One analyst called it a turn-around situation. A writer on Simply Wall Street says that the beta value for this stock is 1.00 which means that it is as volatile as the broader market. A message of the company posted on Yahoo talks about their investment in SWTCH. The announcement by IBI Group to suspend dividends. A writer on Simply Wall Street talks about the great gains the company has recently made.

IBI Group Inc is a Canada based engineering services provider. The company plans, designs, implements, as well as offer other consulting services and software development for its intelligence, buildings, and infrastructure business streams. Its web site is here IBI Group Inc.

The last stock I wrote about was about Johnson and Johnson (NYSE-JNJ) ... learn more. The next stock I will write about will be PFB Corp (TSX-PFB, OTC-PFBOF) ... learn more on Monday, November 18, 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.

Wednesday, November 13, 2019

Johnson and Johnson

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price maybe be a bit on the expensive side. The DPR for EPS is relatively high. See my spreadsheet on Johnson and Johnson.

I do not own this stock of Johnson and Johnson (NYSE-JNJ). As Canadians, we are told we should be buying US stocks for our portfolio. It is often recommended that we have at least 25% of our portfolio in US stocks. I have never followed this, although I have tried dipping into the US market, but I have never made any money there. I bought some of this stock in June 2005 and realized a year later, in June of 2006 that it was going nowhere for me and sold. I lost almost 17% of my investment. When I bought in 2005, all the analysts were saying that it was a good buy at that time.

When I was updating my spreadsheet, I noticed that EPS estimates have gone down. Last year the EPS for 2019 and 2020 were $8.37 and $8.37. Now the estimates are for these years are $6.47 and $7.41.

Dividend yield are moderate (2 to 4% range). The current dividend is 2.90% with 5, 10 and historical dividend median yields at 2.82%, 3.06% and 2.28%. The current growth in dividends is in the low range (less than 8%) current, but it has been higher in the past. See the charts below. Because this is a US stock, look at the US$ chart.

The Dividend Payout Ratios maybe a bit high for this sort of company. The DPR for 2018 for EPS is 63% with 5 year coverage at 68%. The historical median DPR for EPS is 39%. The DPR for CFPS for 2018 is 42% with 5 year coverage at 47%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is very low at just 0.08. The Liquidity Ratio is fine at 1.50 with 5 year median at 2.17. The Debt Ratio is good at 1.64 with 5 year median at 1.99. The Leverage and Debt/Equity Ratios are fine at 2.56 and 1.56 with 5 year median at 2.01 and 1.01.

The Total Return per year is shown below for years of 5 to 30 to the end of 2018 in CDN$. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 11.88% 15.88% 12.56% 3.31%
2008 10 8.19% 11.98% 9.16% 2.81%
2003 15 9.75% 9.21% 6.82% 2.39%
1998 20 9.77% 7.07% 5.14% 1.93%
1993 25 11.25% 13.53% 10.37% 3.15%
1988 30 12.56% 15.51% 11.82% 3.69%


The Total Return per year is shown below for years of 5 to 30 to the end of 2018 in US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 6.45% 10.08% 7.10% 2.98%
2008 10 7.03% 11.13% 7.98% 3.14%
2003 15 9.36% 9.18% 6.44% 2.74%
1998 20 10.45% 8.07% 5.78% 2.29%
1993 25 11.14% 13.58% 10.26% 3.32%
1988 30 11.94% 14.75% 11.21% 3.54%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.56, 18.65 and 21.15. The corresponding 10 year ratios are 16.13, 17.72 and 19.44. The corresponding historical median ratio are 16.52, 18.65 and 21.15. The current P/E 20.28 based on a stock price of $131.22 and 2019 EPS estimate of $6.47. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $56.42. The 10 year low, median, and high median Price/Graham Price Ratios are 1.47, 1.64 and 1.84. The current P/GP Ratio is 2.33 based on a stock price of $131.22. 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 3.49. The current P/B Ratio is 6.00 based on a Book Value of $58,210M, Book Value per Share of $21.86 and a stock price of $131.22. The current ratio is 72% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.28%. The current dividend yield is 2.90% based on $3.75 and a stock price of $131.22. The current yield is 27% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 3.06%. The current dividend yield at 2.90% is 5% lower than the 10 year median 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 is 3.47. The current P/S Ratio is 4.25 based on 2019 Revenue estimate of $82.218M, Revenue per Share of $30.88 and a stock price of $131.22. The current ratio is 22% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably a bit on the expensive side. The best test is again the P/S Ratio test and this shows that the stock price is expensive. This test shows expensive when the current ratio is 20% or more above the 10 year median ratio. So, the stock price is not high above this level. The only test that shows the stock price is relatively cheap is the dividend yield one. The problem here is the DPR for EPS currently at 63% is relatively high compared to its historical median of 39%.

Is it a good company at a reasonable price? This certainly a good Dividend Growth Stock. The company has a long history of increasing their dividends. I have 30 years of data and they increased the dividend each of those years. A problem is that entry price is important and the current stock price seems a bit on the expensive side.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (4) and Hold (9). The consensus would be a Buy. The 12 month stock price consensus is $149.37. This implies a total return of 16.73% that includes 13.83% from capital gains and 2.90% from dividends based on a current stock price of $131.22.

See what analysts are saying on Stock Chase. Some think the law suits are a problem and others think not. Timothy Green on Motley Fool says further testing of JNJ’s baby powder showed no asbestos . Berkeley Lovelace on CNBC talks about JNJ third quarterly earnings. A writer on Simply Wall Street says that this is a good dividend stock. A writer on Simply Wall Street says the stock is undervalued.

Johnson & Johnson is engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The Company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Its web site is here Johnson and Johnson.

The last stock I wrote about was about was Cenovus Energy Inc. (TSX-CVE, NYSE-CVE) ... learn more. The next stock I will write about will be IBI Group Inc (TSX-IBG, OTC-IBIBF) ... learn more on Friday, November 15, 2019 around 5 pm. Tomorrow on my other blog I will write about Frontiers North and Polar Bears.... learn more on Thursday, November 14, 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, November 11, 2019

Cenovus Energy Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Energy. The stock price would seem to be cheap. The management thinks the future s promising with a 25% increase in their dividends. Outstanding shares are increasing rapidly. See my spreadsheet on Cenovus Energy Inc.

I do not own this stock of Cenovus Energy Inc (TSX-CVE, NYSE-CVE). This is another stock that was talked about at the 2010 Money Show in Toronto. There were those who liked oil companies and they mentioned both Suncor Energy Inc. (TSX-SU) and Cenovus Energy Inc. (TSX-CVE). This company was split off from EnCana (TSX-ECA) in 2009. My spreadsheet reflects this split. I was also following Alberta Energy Co. (TSX-AEC) into EnCana.

When I was updating my spreadsheet, I noticed that it has not done well for shareholders lately with cutting of dividends and drop in stock price so that shareholders that have held this stock for the past 5 and 10 years have lots. However, near the end of 2019 they have raised the dividend by 25%. This would signal that management expects the company to do better in the near future.

The other thing I noticed is that the outstanding shares have been increasing rapidly with increase of 10.2% and 5.1% per year over the past 5 and 10 years. This greatly affects per share values. For examples, Revenue over the past 5 years is down only 2.7% per year, but Revenue per Share is down by 11.7% per year. The growth in Book Value in the past 10 years is 28%. However, Book Value per Share is down by 22% over the same period.

Talk about dividends yields and growth. This is an energy company, so the dividends have both gone up and down over the years. See the chart below. Dividend yields are Low (less than 2%) to moderate (2% to 4% ranges). The current yield is 2.06% with 5, 10 and historical yields at 1.71%, 2.66% and 1.45%.

The Dividend Payout Ratios are too high for EPS, but they do have good coverage for CFPS and FCF. I cannot calculate the current DPR for EPS as the EPS is negative for 2018. However, the 5 year coverage is 128%. The DPR for CFPS for 2018 is 18% with 5 year coverage at 20%. According to the Wall Street Journal the Free Cash Flow for 2018 is $832M with dividends at $2.45M giving a coverage of 30%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is 0.72. The Liquidity Ratio is 1.23 for 2018 with 5 year median at 1.42. If you add in Cash Flow after dividends, the Ratio for 2018 is 1.99. The Debt Ratio is 1.99 with 5 year median at 1.92. The Leverage and Debt/Equity Ratios for 2018 are 2.01 and 1.01 with 5 year median at 2.22 and 1.22.

The Total Return per year is shown 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -27.05% -18.35% -20.59% 2.24%
2008 10 -14.43% -6.27% -10.04% 3.77%
2003 15 3.16% 3.37% -1.73% 5.09%
1998 20 5.70% 8.28% 2.88% 5.40%
1993 25 5.10% 9.78% 4.69% 5.09%
1992 26 4.90% 10.11% 5.03% 5.08%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.95, 4.83 and 6.71. The corresponding 10 year ratios are 19.19, 23.25 and 27.17. The corresponding historical ratios are 13.06, 16.17 and 19.53. The current P/E Ratios is 5.94 based on a stock price of $12.11 and 2019 EPS estimate of $2.04. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $26.38. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.47 and 1.70. The current P/GP Ratio is 0.46 based on a stock price of $12.11. 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 2.05. The current P/B Ratio is 0.80 based on a Book Value of $18,624M, Book Value per Share of $6.61 and a stock price of $12.11. The current ratio is 61% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.45%. The current dividend yield is 2.06% based on dividends of $0.25 and a stock price of $12.11. The current dividend yield is some 42% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

If we look at the 10 year median dividend yield of 2.66%, this testing is quite different. In this case the current dividend yield is 22.3% below the 10 year dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.30. The current P/S Ratio is 0.72 based on 2019 Revenue estimate of $20,596M, Revenue per Share of $16.76 and a stock price of $12.11. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. The best test is the P/S Ratio test and this is showing the stock price is relatively cheap. The dividend yield test is not good because of the variability of the dividend over the years. I find no fault in the P/B Ratio nor the P/GP Ratio testing and both these show the stock price is relatively cheap.

Is it a good company at a reasonable price? Well the stock price would seem to be quite cheap. As to a good company, it is in the energy business which is a very risky business. I have very little in any resource area. I generally do not think that they are good long term buys. You might be able to make money on this stock as the stock price will probably rise. Just be aware that you are taking on a risky company and industry.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (10, Hold (6) and Sell (1). The consensus is a Buy. The 12 month stock price consensus is $14.96. This implies a total return of 25.60% with 23.53% from capital gains and 2.06% from dividends.

See what analysts are saying on Stock Chase. Some think energy companies will come back. Brian Pacampara on Motley Fool thinks it’s a great opportunity to buy this stock. A writer on Simply Wall Street says a fair value is $11.70 CDN$, so the current price is fair. Andrew Walker on Motley Fool says the worse for the company is over and it is currently an interesting pick. An article from Reuters on London Free Press talks about this company posting a better than expected profit.

Cenovus Energy is an integrated oil company, focused on creating value through the development of its oil sands assets. The company also engages in production of conventional crude oil, natural gas liquids, and natural gas in Alberta, Canada, with refining operations in the U.S. Its web site is here Cenovus Energy Inc.

The last stock I wrote about was about was Keyera Corp (TSX-KEY, OTC-KEYUF) ... learn more. The next stock I will write about will be Johnson and Johnson (NYSE-JNJ) ... learn more on Wednesday, November 13, 2019 around 5 pm. Tomorrow on my other blog I will write about Steinberg Wealth Management .... learn more on Tuesday, November 12, 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, November 8, 2019

Keyera Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is probably reasonable. As an old income trust company, they still need to get their DPR under control. Outstanding shares are going to quickly. See my spreadsheet on Keyera Corp.

I do not own this stock of Keyera Corp (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited.

When I was updating my spreadsheet, I noticed that earnings are rising much faster than Revenue per Share. Revenue growth over the past 5 and 10 years is at 6.4% and 7.5% per year. However, Revenue per Share growth was at 0.5% and 2.1% per year. The growth in earnings for the past 5 and 10 years is 15.2% and 3.8% per year. The Revenue per Share is low because of increasing outstanding shares. Shares have been increasing by 5.6% and 5.3% per year over the past 5 and 10 years.

The dividend yields are moderate (2% to 4% ranges) to good (5% and above). The current dividend is 5.95% with 5, 10 and historical median dividend yields at 4.00%, 4.37% and 5.08%. The most recent growth in dividends is moderate (8% to 14%) with growth for the past 5 years at 9% per year.

The Dividend Payout Ratios are too high. The DPR for 2018 is 90.5% with 5 year coverage at 104.3%. The DPR for CFPS is 51% with 5 year coverage at 48%. This used to be an income trust. A lot of the past income trust companies are having a hard time getting their DPR down to a good value. The company converted to a corporation in 2010 and the DPR is getting better gradually. According to Morningstar the Free Cash Flow for 2018 is negative.

Debt Ratios are fine but the Liquidity Ratio is a low. The Long Term Debt/Market Cap Ratio for 2018 is 0.39. The Liquidity Ratio for 2018 is 1.00 with 5 year median at 1.09. If you add in cash flow after dividends, the ratio becomes 1.33 for 2018 with a 5 year median of 1.59. The Debt Ratio is good at 1.67 with 5 year median at 1.59. The Leverage and Debt/Equity Ratios for 2018 are 2.48 and 1.48 with 5 year medians at 2.81 and 1.81.

The Total Return per year is shown below for years of 5 to 16 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 8.96% 0.93% -4.19% 5.12%
2008 10 7.56% 20.32% 11.34% 8.98%
2003 15 13.07% 18.58% 9.92% 8.66%
2002 16 19.76% 10.80% 8.96%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.26, 29.21 and 35.35. The corresponding 10 year ratios. The corresponding 10 year ratios are 22.41, 25.70 and 28.77. The corresponding historical median ratios are 18.79, 22.58 and 26.37. The current P/E Ratio is 13.79 based on a stock price of $32.26 and 2019 EPS estimate of $2.34. This stock price testing suggests that the stock price is relatively cheap.

The 5 year capital gain is a negative 4.19% per year had a starting P/E Ratio of 34.19. The 10 year capital gain was 11.34% per year had a starting P/E of 6.73. The 15 year capital gain 9.92% per year had a starting P/E 16.45. So, a P/E starting ratio of 13.79 is not bad.

I get a Graham Price of $26.62. The 10 year low, median, and high median Price/Graham Price Ratios are 1.77, 2.11 and 2.47. The current P/GP Ratio is 1.21 based on a stock price of $32.26. 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 3.86. The current P/B Ratio is 2.40 based on a Book Value of $2,882M, Book Value per Share of $13.46 and a stock price of $32.26. The current ratio is 38% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 5.08%. The current dividend yield is 5.95% based on dividends of $1.92 and a stock price of $32.26. The current yield is 17% 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 dividend yield is 4.37%. The current dividend yield is 5.95%. The current yield is 36% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. On the other hand, the most recent dividend increase was 6.7% which is lower than the 5 year growth of 8.96% per year. Dividend increases generally depend on the confidence management has in the future and they are pull back.

The 10 year median Price/Sales (Revenue) Ratio is 1.43. The current P/S Ratio is 1.79 based on 2019 Revenue estimate of $3,867M, Revenue per Share of $18.06 and a stock price of $32.26. The current ratio is 25% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio cannot be ignored. Analysts are projecting a decline in Revenue of 13.6%. At the end of the second quarter the Revenue is down by 8%, so the projection seems reasonable. The P/S Ratio test says that the stock price is expensive because the current ratio is more than 20% above the 10 year ratio.

Is it a good company at a reasonable price? The is a good dividend growth company. The shareholders did not make much money over the past 5 years, because 5 years ago the stock price got too high. The stock price is probably reasonable.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (9) and Hold (2). The consensus is a Buy. The 12 month stock price consensus is $40.21. This implies a total return of 30.60% with 24.64% from capital gains and 5.95% from dividends based on a stock price of $32.26.

See what analysts are saying on Stock Chase. Most analysts think it is a buy. Christopher Liew on Motley Fool thinks this is a good dividend stock. A writer on Simply Wall Street thinks this company’s P/E Ratio is too high.. A writer on Simply Wall Street talks about the lack of return for this stock over the past 5 years. The company talks about their third quarterly results on Newswire.

Keyera operates as a midstream energy business in western Canada. Its primary operations consist of gathering, processing, and fractionation of natural gas in western Canada; storage and transportation of crude oil and natural gas byproducts; and marketing of natural gas liquids. Its web site is here Keyera Corp.

The last stock I wrote about was about was Dollarama Inc. (TSX-DOL, OTC-DLMAF) ... learn more. The next stock I will write about will be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE) ... learn more on November 11, 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.

Wednesday, November 6, 2019

Dollarama Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably expensive. The book value is negative, the dividends are very low and there is insider selling with the company borrowing money to buy back shares. This means lots of risk. The return, so far, has been good. See my spreadsheet on Dollarama Inc .

I do not own this stock of Dollarama Inc (TSX-DOL, OTC-DLMAF). I belong to an investment club and this was a stock I volunteered to look at. I had, of course, heard of this stock before and people have mentioned that it is doing very well for shareholders.

When I was updating my spreadsheet, I noticed they do not make things easy for analysis. They have a changing financial year data and kept changing the date of dividends within each year. They still have a shareholder deficit and yet they are still buying back shares. A shareholder deficit means that the breakup value of the company is negative.

There is lots of insider selling. The Net Insider Selling is 0.86% of market cap. This figure you expect to be around 0.01%. The CEO since last year has sold over 7M shares. The chairman has also sold some shares.

Dividend yields are in the low range (less than 2%). They are all below 1%, with the current yield at 0.38%, and the 5 and 7 year median yields at 0.44% and 0.46%. The dividend growth rate is moderate (under 15%) at 12% and 14.7% per year over the past 5 and 7 years. I generally do not buy stock with dividends under 1%. It takes too long to make a decent yield in dividends even a good (15% and above) rate of growth.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 17% with 5 year coverage at 12.5%. The DPR for CFPS for 2018 is 13% with 5 year coverage at 10%.

Debt Ratios are awful. I am especially referring to the Debt Ratio. I would not buy a company with a negative book value. The Long Term Debt/Market Cap Ratio for 2018 a low at 0.17. The Liquidity Ratio for 2018 is 2.46. However, last year it was 0.76 and currently it is 1.18. So, this can fluctuate a lot. The Debt Ratio for 2018 is 0.90. This means that the assets cannot cover the liabilities. Leverage and Debt/Equity Ratios are not calculable because of the negative book value.

The Total Return per year is shown below for years of 5 to 10 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 12.15% 27.01% 26.25% 2.88%
2008 10 14.70% 17.89% 17.17% 2.15%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.13, 25.31, and 31.11. The corresponding 10 year ratios are 17.65, 22.23 and 26.77. The corresponding historical ratios are 17.65, 22.23 and 26.77. The current P/E Ratio is 25.56 based on a stock price of $46.00 and 2019 EPS estimate of $1.80. This stock price testing suggests that the stock price is relatively reasonable but above the median the median.

I get a Graham Price of $3.43. However, this is fudged because of the negative Book Value. It is really no calculable. The 10 year low, median, and high median Price/Graham Price Ratios are 2.15, 2.70 and 3.26. The current P/GP Ratio is 13.41 based on a stock price of $46.00. 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 3.66. The current P/B Ratio is negative 136.54 based on a Book Value of negative $106M, Book Value per Share of negative $0.34 and a stock price of $46.00. The current ratio is some 3827% below 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 0.46%. The current dividend yield is 0.68% based on dividends of $0.18 and a stock price of $46.00. The current yield is 16.8% below the historical median yield. This stock price testing suggests that the stock price is relatively reasonable but above the median the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.67. The current P/S Ratio is 3.81 based on 2019 Revenue estimate of $3,804M, Revenue per Share of $12.09 and a stock price of $46.00. The current ratio is 42.6% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. The only tests really worth anything are the P/S Ratio and Dividend yield. I find the P/E Ratios rather high for a consumer stock, but I must admit this is not a favourite test of mine. Both the P/GP Ratio and P/B Ratios are nonsense as the Book Value is negative.

Is it a good company at a reasonable price? There is lots I do not like about this company. This starts with the negative book value. This means that the breakup value of the company is less than zero. I do not like very low dividend yields. You might as well not have dividends when they are lower than 1%. They are borrowing money to buy back shares while giving out stock options. There is currently lots of insider selling. I also think that the stock price is too high.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (8). The consensus would be a Buy. The 12 month stock price consensus is $50.92. This implies a total return of $11.08% with 0.38% from dividends and 10.70% from capital gains.

See what analysts are saying on Stock Chase. They like the stock but feel the price is high. Daniel Da Costa on Motley Fool says if you value investing, getting passive income with compounding and growth stock investing, then look to this stock. A writer on Simply Wall Street says he is not concerned about insider selling. A writer on Simply Wall Street says this is a stock than has gone zoom. Ambrogio Visconti on Global Legal Chronicle talks about Dollarama buying 50.1% interest in Latin American value retailer Dollarcity. Ploutos Investing on Seeking Alpha talks about this stock.

Dollarama Inc is a Canada-based company principally engaged in operating discount retail stores. The company's stores are throughout Canada, generally located in convenient locations, such as metropolitan areas, midsize cities, and small towns. All the stores are owned and operated by the company. Its web site is here Dollarama Inc.

The last stock I wrote about was about was Encana Corp (TSX-ECA, NYSE-ECA) ... learn more. The next stock I will write about will be Keyera Corp (TSX-KEY, OTC-KEYUF) ... learn more on November 8, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy November 2019.... learn more on November 7, 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, November 4, 2019

Encana Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Energy. It is currently cheap. They are moving to the US and changing their name. Getting funding and getting product to market is a problem currently in Canada. Debt Ratios are not good after the third quarter of 2019.See my spreadsheet on Encana Corp.

I do not own this stock of Encana Corp (TSX-ECA, NYSE-ECA) but I used to. I had held this stock previously as Alberta Energy Company from April 2000 until August 2002 and made some 18% total returns per year. I had EnCana Corp from February 2006 to November 2009 and made a 9.54% per year total return. I sold this stock in 2009 because I only had 100 shares and the stock was going to split into two companies. I would have ended up with small investment in two companies.

As you can see, I do not look on oil companies as a long term buy. Also, please note that my spreadsheet following this company starts with Alberta Energy Company and follows this company into the formation of EnCana in 2002. It was in 2002 EnCana was formed with the merger of AEC and PanCanadian Energy Corporation. Company split into EnCana Corp and Cenovus Energy Inc in 2009, Oil with Cenovus and gas with EnCana.

When I was updating my spreadsheet, I noticed that the company intends to domicile in the US and change the company name to Ovintiv Inc. There will also be at that time a consolidation of stock on a 1 to 5 basis. See the News Release. Well what do we expect. Canada is not open to development of our resources. For oil and gas, we cannot get pipelines built.

For this stock, long term shareholders have a stock where the current price is below that of 15 years ago and barely higher than it was 20 years ago. For shareholders with this stock for 20 years have only made a profit because of dividends.

After debt declining for a number of years, the debt has gone up in 2019. Debt to the end of the third quarter is up by 90%. This debt ratios are not good at the end of the third quarter, with Long Term Debt/Market Cap at 1.30. Also, the Liquidity Ratio was deteriorated to 0.82 from 1.35 at the end of 2018. This is caused by an increase in Accounts payable and accrued liabilities.

Talk about dividends yields and growth. Dividend are paid in US$. The dividend yields are low (below 2%). The current dividend yield is 1.68%, with 5, 10 and historical yields are 0.75%, 2.72% and 1.45%. Yields are gone up and down over time. As this is an energy company, dividends have both gone up and down and have sometimes been flat. There has not be much growth over the years. See chart below.

The Dividend Payout Ratios are too high for EPS but ok for CFPS. The DPR for EPS for 2018 was 5.4%. I cannot calculate the 5 year coverage as they paid out more than they earned over the past 5 years. The DPR for CFPS is much better 2.7% for 2018 with 5 year coverage at 7.6%. The dividends paid are 50% of Free Cash Flow.

Debt Ratios have some problems concerting liquidity and Long Term Debt/Market Cap Ratio. Debt has been going down for a number of years, but for the third quarter 2019 it is up 90%. The Long Term Debt/Market Ratio for 2018 was 0.67, but it is now 1.30. Debt Ratio is good in 2018 at 1.94 and is only down to 1.87 currently. Leverage and Debt/Equity Ratios are fine at 2.06 and 1.06 in 2018 and current at 2.15 and 1.15.

The Total Return per year is shown below for years of 5 to 26 to the end of 2018 in CDN$. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -35.13% -15.04% -16.30% 1.26%
2008 10 -22.22% -9.74% -12.32% 2.59%
2003 15 -3.20% 0.96% -3.40% 4.36%
1998 20 0.78% 6.62% 1.56% 5.06%
1993 25 1.16% 8.59% 3.62% 4.97%
1992 26 1.12% 8.99% 4.00% 4.99%


The Total Return per year is shown below for years of 5 to 26 to the end of 2018 in US$. I do not have as much US$ data as I do CDN$ data.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -38.28% -19.26% -20.37% 1.11%
2008 10 -23.05% -10.22% -13.25% 3.04%
2003 15 -3.54% -4.28% -7.91% 3.64%
2002 17 1.40% -1.57% -4.44% 2.86%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.55, 3.78 and 5.02. The corresponding 10 year ratios are 6.71, 9.65 and 12.58. The corresponding historical ratios are 10.05, 12.01 and 15.43. there has been 3 earnings losses and therefore negative ratios in the past 7 years. This accounts for some of the low ratios. The current P/E Ratio is 14.37 based on a stock price of $5.86 and EPS of $0.41 ($0.31 US$). This stock price testing suggests that the stock price is relatively reasonable and probably above the median. This is in CDN$.

I get a Graham Price of $9.60. The 10 year low, median, and high median Price/Graham Price Ratios are 0.68, 0.99 and 1.34. The current P/GP Ratio is 0.61 based on a stock price of $5.86. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.39. The current P/B Ratio is 0.58 based on Book Value of $9, 921M, Book Value per Share of $7.64 and a stock price $4.41. The current ratio is some 58% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You would get a similar result in CDN$.

I get an historical median dividend yield of 1.45%. The current dividend yield is 1.68% based on Dividends of $0.10 ($0.08 US$) and a stock price of $5.86. The current dividend yield is 16% above the historical median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Some people use the 10 year median dividend yield for this test which is 2.27% US$. The current dividend yield is 1.70% based on Dividends of $0.08 and a stock price of $4.41. The current yield is 25% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You would get a similar result in CDN$. Problem is they have been cutting the dividends lately.

The 10 year median Price/Sales (Revenue) Ratio is 2.31. The current P/S Ratio 0.81 based on 2019 Revenue estimate of $7,075M, Revenue per Share of $5.45 and a stock price of $4.41. The current ratio is 65% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You would get a similar result in CDN$.

Results of stock price testing is that the stock price is relatively cheap. The best tests are the P/S Ratio, the P/B Ratio, and the P/GP Ratio tests. All these tests say the stock price is relatively cheap. The problem with the P/E Ratio is the recent negative ratio because of earnings losses. The problem with the dividend yield tests is recent dividend cuts, but also the past history of big increases and decreases.

Is it a good company at a reasonable price? This company is a resource company and so is a high risk. It is certainly cheap. Some wonder about the recent purchase of Newfield Exploration. See notice of this here. I personally limit my investment in resources because these stocks are volatile and currently in Canada, they cannot get their product to market.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (11), Hold (10) and Sell (2). The consensus would be a Buy. The 12 months stock price is $9.38 ($7.13 US$). This implies a total return of 61.77% with 60.08% from capital gains and 1.68% from dividends based on a stock price of $5.86.

See what analysts are saying on Stock Chase. They agree that it is cheap, but risky. Brian Pacampara on Motley Fool says stock is cheap but more research is needed. A writer on Simply Wall Street says the stock is cheap based on fundamentals. A writer on Simply Wall Street thinks the stock is mispriced and a buy opportunity. Kevin Orland on Financial Post talks about the company moving to US and change its name to Ovintiv Inc.

EnCana Corporation is one of the world's largest independent natural gas producers and gas storage operators. Its web site is here Encana Corp.

The last stock I wrote about was about was CCL Industries Inc (TSX-CCL.B, OTC-CCDBF) ... learn more. The next stock I will write about will be Dollarama Inc. (TSX-DOL, OTC-DLMAF) ... learn more on Wednesday, November 06, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks November 2019.... learn more on November 05, 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, November 1, 2019

CCL Industries Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. The stock price is probably still expensive. It has done well lately, but also seems to be slowing down. At least the current dividend yield is above 1%. See my spreadsheet on CCL Industries Inc.

I do not own this stock of CCL Industries Inc (TSX-CCL.B, OTC-CCDBF). In 2009 I read a favorable report on this stock of which I had also heard before. This is also a dividend paying stock and in 2009 it was on Dividend Achievers list.

When I was updating my spreadsheet, I noticed that the company had a 2018 EPS estimate of $2.87, but the EPS for 2018 came in at $2.61. The estimates for 2019 and 2020 have been lowered. The old ones were $3.25 and $3.52 and the new ones are $2.77 and $3.14. This company has done well for their shareholders especially lately.

Dividend yields are low (below 1%) or barely moderate (2% to 4% ranges). The current dividend is 1.24%. The 5, 10 and historical yields are 0.89%, 1.20% and 2.09%. The current yields are better than when I looked at this stock last year with current yield under 1% at 0.91%.

The dividend growth is good. The dividend growth used to be moderate (8% to 14% ranges), but lately has been in the good range (15% and above). The growth for the last 5 years, per year, is 24.8%. The last increase was this year and was for 30.8%.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 was 20% with 5 year coverage at 19%. The DPR for EPS for 2018 was 9% with 5 year coverage also at 9%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 was good at 0.27. The Liquidity Ratio for 2018 is fine at 1.58 with a 5 year median at 1.42. The Debt Ratio is good at 1.61 with a 5 year median also at 1.61. The Leverage and Debt/Equity Ratios for 2018 is 2.63 and 1.63. The 5 year median ratios are 2.20 and 1.20.

The Total Return per year is shown below for years of 5 to 31 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 24.77% 27.32% 25.87% 1.45%
2008 10 16.59% 27.56% 25.91% 1.65%
2003 15 14.09% 20.31% 18.94% 1.37%
1998 20 11.79% 15.24% 14.15% 1.10%
1993 25 9.32% 14.86% 13.58% 1.28%
1988 30 8.27% 12.19% 11.06% 1.13%
1987 31 13.47% 12.04% 1.43%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.77, 22.16 and 25.86. The corresponding 10 year ratios are 14.31, 19.62 and 23.79. The corresponding historical ratios are 11.69, 14.34 and 19.64. The current P/E Ratio is 19.78 based on a stock price of $54.78 and 2019 EPS estimate of $2.77. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $31.05. The 10 year low, median, and high median Price/Graham Price Ratios are 1.05, 1.46 and 1.88. The current P/GP Ratio is 1.76 based on a stock price of $54.78. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.56. The current P/B Ratio is 3.54 based on Book Value of $2,749M, Book Value per Share of $12.41 and a stock price of $54.78. The current ratio is 38% 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 2.09%. The current yield is 1.24% based on dividends of $0.68 and a stock price of $54.78. The current dividend yield is 41% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 1.20%. The current yield is 1.24% based on dividends of $0.68 and a stock price of $54.78. The current dividend yield is 4% below 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 1.28. The current P/S Ratio is 1.79 based on 2019 Revenue estimate of $5,444M, Revenue per Share of $30.63 and a stock price of $54.78. The current ratio is 40% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. Most of my testing is show the stock price as relatively above the median or expensive. The P/S Ratio, the historical dividend yield, and the P/B Ratio tests all show this. At least the dividend yield is over 1% at 1.24%.

Is it a good company at a reasonable price? This stock has certainly done well for shareholder, especially lately. A few analysts think that it is slowing down. Judging by the second quarterly results, this seems so. For the 12 months ending at the end of the second quarter compared to 2018, Revenue is up just 4% and EPS 1.2%. The 5 year growth in Revenue was 22% per year and the 5 year growth in EPS is 34% per year to the end of 2018. So, the analysts seem to be right. It is not as overpriced as it was last year, but price is still high.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price is $68.69. This implies a total return of $26.63% with 1.24% from dividends and 23.39% from capital gains.

See what analysts are saying on Stock Chase. They like the company but some have concerns. Chen Liu on Motley Fool likes this company for its worldwide dominance and strong financials. A writer on Simply Wall Street thinks this stock is a smart choice for dividend investors. A writer on Simply Wall Street thinks the ROCE for this company is good . Staff at Market Exclusive talks about CIBC lowering its target price on this stock.

CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments which include The CCL segment, which generates the majority of revenue, sells pressure sensitive and extruded film materials used for labels on consumer packaging, healthcare, automotive, and consumer durable products. Its web site is here CCL Industries Inc.

The last stock I wrote about was about was Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM) ... learn more. The next stock I will write about will be Encana Corp (TSX-ECA, NYSE-ECA) ... learn more on Monday, November 4, 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.

Wednesday, October 30, 2019

Brookfield Asset Management Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Stock price is probably cheap to reasonable. Stock price testing is showing the stock price from cheap to expensive. A negative is the lower increase for 2019 in dividends at 6.67% than for the last 5 years at 8.81% per year. The company has a complex structure. See my spreadsheet on Brookfield Asset Management Inc.

I do not own this stock of Brookfield Asset Management Inc (TSX-BAM.A, NYSE-BAM). I used to own an earlier version of this stock as Hees International, then Edper Group and then EdperBrascan back in 1987 to 1999. I bought this stock as Hees International in 1987 and more in 1988, 1989 and 1990. At first dividends were semi-annual and there was some good dividend increases. There was a much lower dividend increase in 1991. Between 1991 and when I sold in 1999 there was no dividend increases. The stock was going nowhere at that time, so I sold. There have been a lot of name changes and amalgamations since I had this stock.

When I was updating my spreadsheet, I noticed that the estimates I got last year showed that Revenue and Earnings would be lower in 2018, but they went higher. The 12 month Revenue and Earnings I got by using the second quarterly results of 2018 showed increasing Revenue and Earnings. For 2017, the 12 month Revenue was $40,786M and Earnings was $1.34. Estimates for 2018 for Revenue was $34,197M and Earnings was $1.50. Revenue came in at $56,771M and earnings at $3.40. The 12 month Revenue was $51,248 and Earnings was $2.65. So, the estimates were way off, but the 12 month values to the end of the second quarter showed the right way.

I have tracked dividends on this stock for some 31 years. They started off good (5% and above), then went to moderate (2 to 5% ranges) and now are low (under 2%). The current dividend is 1.15%, with 5, 10 and historical median dividend yields at 1.46%, 1.61% and 2.01%. These yields are in US$.

Dividend growth has been low (under 8%) to Moderate (8% to 14% ranges) over the years. It has been moderate over the past 5 years at 8.8% per year. The last increase was lower at 6.7% and it was for 2019. You can see from the following charts that increases are higher but yields are lower. The company has been reporting in US$ since 2002, so it is only in the earliest 5 years that the reporting was in CDN$ for these charts.

The Dividend Payout Ratios are good. As the yields have come down and the increases have gone up, the DPR has gone down. The DPR for EPS for 2018 is 18% with 5 year coverage at 22%. The DPR for CFPS for 2018 is 9% with 5 year coverage at 11%.

Debt Ratios are all fine. The Long Term Debt/Market Cap Ratio for 2018 is good at 0.17. The Liquidity Ratio at 1.61 for 2018 is good. The Debt Ratio at 1.61 is good. Leverage and Debt/Equity Ratios at 2.64 and 1.64 are fine.

The Total Return per year is shown below for years of 5 to 31 to the end of 2018 in CDN$. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 14.37% 15.65% 13.74% 1.91%
2008 10 7.00% 18.19% 15.36% 2.83%
2003 15 10.37% 16.53% 13.48% 3.05%
1998 20 5.32% 16.97% 13.43% 3.54%
1993 25 4.23% 16.39% 12.02% 4.36%
1988 30 4.13% 11.15% 8.19% 2.97%
1987 31 4.53% 12.39% 8.83% 3.56%


The Total Return per year is shown below for years of 5 to 31 to the end of 2018 in US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 8.81% 9.89% 8.18% 1.71%
2008 10 5.84% 19.13% 15.60% 3.53%
2003 15 9.97% 16.65% 13.10% 3.55%
1998 20 5.97% 18.20% 14.08% 4.12%
1993 25 4.11% 16.28% 11.89% 4.39%
1988 30 3.67% 10.65% 7.70% 2.95%
1987 31 4.37% 12.44% 8.66% 3.78%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.61, 14.02 and 15.44. The corresponding 10 year ratios are 11.70, 12.90 and 14.86. The historical ratios are 11.14, 13.24 and 15.18. The current P/E Ratio is 27.63 based on a stock price of $72.27 and 2019 EPS estimate of $2.63 ($2.03 U$). This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a Graham Price of $76.80. The 10 year low, median, and high median Price/Graham Price Ratios are 0.77, 0.86 and 1.01. The current P/GP Ratio is 0.95 based on a stock price of $73.27. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.32. The current P/B Ratio is 0.74 based on a Book Value of $72,324M, Book Value per Share of $75.66 and a stock price of $55.67. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You get similar results in CDN$.

I get an historical median dividend yield of 2.01%. The current dividend is 1.15% based on dividends of $0.64 and a stock price of $55.67. The current yield is 42% below the historical ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You get similar results in CDN$.

However, since the long term trend is a lower yield, it is interesting to look at the 10 year median yield which is 1.61%. The current yield at 1.15% is still much lower at 29% lower. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You get similar results in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 1.13. The current P/S Ratio is 0.88 based on 2019 Revenue estimate of $60.237M, Revenue per Share of $63.02 and a stock price of $55.67. The current P/S Ratio is some 22% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You get similar results in CDN$.

Results of stock price testing is that the stock price is probably cheap to reasonable. The best test is the P/S Ratio test and it is showing here as cheap (but just over the line to cheap). The P/B Ratios testing is showing this stock as cheap. A good test generally is the dividend yield test. This is showing the stock price as expensive, but there is a downward trend to a lower yield. However, a negative is that the latest increase, which is for 2019, is lower at 6.67% than the 5 year increase per year at 8.81%.

Is it a good company at a reasonable price? A lot of people like this company and their spin offs. I must say that their set up seems quite complex and I find this a negative. However, they have delivered a fair return to their shareholders over time. The analysts’ recommendation of Strong Buy certainly conflicts with a stock price loss over the next year.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (6) and Hold (1). The consensus would be a Strong Buy. The 12 months stock price is $59.96 ($45.90 US$). This implies a total loss of 17.02% with a capital loss of 18.16% and dividends of 1.14%.

See what analysts are saying on Stock Chase. Some say it is at a record high. Reuben Gregg Brewer on Motley Fool says to buy Brookfield for growth not for its dividend. A writer on Simply Wall Street talks about institutional ownership of this company at 66%. Data on Market Stock Alerts says this stock has a Buy Signal. Kenny Obasanjo on Mitchell Messenger talks about AdvisorNet Financial Inc buying more shares in this company.

Brookfield Asset Management Inc owns and manages commercial property, power, and infrastructure assets. Its investment focus includes Real Estate, Infrastructure, Renewable Power and Private Equity. Located around the world, its assets are concentrated in the United States, Canada, Brazil, and Australia. Its web site is here Brookfield Asset Management Inc.

The last stock I wrote about was about was Molson Coors Canada (TSX-TPX.B, NYSE-TAP) ... learn more. The next stock I will write about will be CCL Industries Inc (TSX-CCL.B, OTC-CCDBF) ... learn more on Friday, November 1, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – David Rosenberg.... learn more on Thursday, October 31, 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.

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