Friday, February 16, 2018

IGM Financial Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. This stock is showing up as cheap. If you think it is a good company it is time to buy. It has not done well in the immediate past but this seems to be changing. If you do buy you will get a very good dividend (5.56% current yield) while you wait for the stock to recover. See my spreadsheet on IGM Financial Inc.

I do not own this stock of IGM Financial (TSX-IGM, OTC-IGIFF) but my son does. I am following this stock because I used to own this stock. The stock was on Mike Higgs' list of dividend growth stocks and on the other Dividend lists at that time.

This company certainly has not been doing well lately. There has only been one dividend increase in the last 5 years. The dividend Payout Ratio for 2017 is the highest at 90% than it has ever been. However, the 5 year coverage is much lower at 75% and DPR is expected to go to 67% in 2018. This long slow recovery from the last recession has been very hard on financials.

This stock used to have good dividend growth. However, dividend growth has suffered after 2008. Over the past 5 and 10 years, dividend growth has been low. Five out of the past 10 years have had no dividend increases and 4 out of the past 5 years have had no any increases. The growth in dividends over the past 5 and 10 years is at 0.9% and 2.4% per year.

Dividend growth over longer periods is better. Dividends have grown by 6.6%, 10.6%, 12.8% and 12.2% per year over the past 5, 10, 15, 20, 25 and 27 years. Analysts expect that the company will again start to raise dividends this year. If this happened it would be a good sign that the company believed it was recovering.

Dividend yields are quite high with current yields at 5.56%. Dividend yield medians over the past 5 and 10 years are higher than historical ones. The median dividend yield over the past 5 and10 years is 5.35% and 5.14%. This historical median dividend yield is more moderate at 3.42%.

Not much money has been made by shareholders over the past 5 and 10 years. The total returns over the past 5 and 10 years are 6.38% and 3.25% per year. The portion of the total return attributed to dividends is 5.19% and 4.49% per year over these periods. Over the past 5 years the portion of the total return attributed to capital gain is 1.20% per year. Over the past 10 years there has been a capital loss of 1.20% per year.

For those shareholders who have held this stock for longer periods, the return is mostly much better. The total return over the past 15, 20, 25 and 27 years is 9.04%, 7.82%, 13.62% and 16.97% per year. The portion of the total return over these periods attributable to dividends is 5.45%, 4.42%, 5.63% and 6.75%. The portion of this total return attributable to capital gains is 3.59%, 3.40%, 7.98% and 10.22%. If you hold stocks over the very long term there is bound to be different levels of returns over different periods.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.84, 16.22 and 18.20. The corresponding 10 year ratios are 12.13, 14.52 and 16.85. The corresponding historical ratios are 13.70, 17.58 and 18.25. These are fairly consistent. The current P/E Ratio is 12.07 based on a stock price of $40.45 and 2018 EPS estimate of $3.35. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $38.26. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.26 and 1.41. The current P/GP Ratio is 1.06 based on a stock price of $40.45. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 2.44. The current P/B Ratio is 2.08 based on Book Value of $4,675M, Book Value per Share of $19.43 and a stock price of $40.45. The current P/B Ratio is some 15% below the 10 year median ratios. This stock price testing suggests that the stock price is reasonable and below the median.

The historical dividend yield is 3.42%. The current dividend yield is 5.56% based on dividends of $2.25 and a stock price of $40.45. The current dividend yield is some 63% above the historical one. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.02. The current P/S Ratio is 2.93 based on 2018 Revenue estimate of $3,317M, Revenue per Share of $13.78 and a stock price of $40.45. The current P/S Ratio is some 27% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Strong Buy (1), Buy (6), Hold (1) and Underperform (1). The consensus would be a Buy. The 12 month stock price is $47.00. This implies a total return of 21.76% with 16.19% from capital gains and 5.56% from dividends.

In this press release on Cision IGM talks about their fourth quarterly results and the fact that they were taking a onetime charge again the net earnings. Stan Pace on Stock News Times talks about recent analyst's recommendations on this stock. Cole Patterson likes this stock as a dividend stock on Simply Wall Street. The yield is currently high, but the dividends have only increased by 2.4% over the past 10 years because 4 of the past 5 years have had no dividend increase. See what analysts are saying about this stock on Stock Chase. They worry about it selling high fees Mutual Funds and the effect of the new government regulations.

IGM Financial Inc. is a financial services company. It is engaged in the distribution, management and administration of its investment funds. In addition, it also offers mortgage banking and servicing activities. Its web site is here IGM Financial Inc.

The last stock I wrote about was about was Manulife Financial Corp. (TSX-MFC, NYSE-MFC)... learn more. The next stock I will write about will be Emera Inc. (TSX-EMA, OTC-EMRA)... learn more on Monday, February 19, 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, February 14, 2018

Manulife Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Different stock price testing are showing different results, but stock price is probably cheap to reasonable. See my spreadsheet on Manulife Financial Corp.

I own this stock of Manulife Financial Corp. (TSX-MFC, NYSE-MFC). This stock is some 2.6% of my portfolio. I had been hoping for a better return but so far I have had this stock for almost 13 years and have made 2.74% total return per year. This consists of 0.33% per year in capital gains and 2.41% per year in dividends.

Certainly analysts think that this stock is going do much better going forward. However, this stock has not done well in the past. I have held this stock for over 12 years and have a total return of 2.7% per year. This is really not good. I certainly hope that this is going to change for me.

Dividends were cut by around 48% in 2009. They were then flat for 4 years before the company started to increase them again. The last increase was in 2017 and it was for 10.8%. However, dividends are still not back to the old amount and are some 12% lower still.

The thing is that they are increasing their dividends again and have been doing so since 2014. In looking at dividend growth, the growth is down a bit over the past 10 years but is up for durations of 5, 15 and 18 years. Over the past 10 years dividends are down by 0.7% per year. However, looking at the past 5, 15 and 18 years dividend growth is up by 9.5%, 6.5% and 8.2% per year.

They can currently afford their dividends. The Dividend Payout Ratio for 2017 is a bit high at 84%, but the 5 year coverage is 49% and in 2018 the DPR is expected to be lower again at 31%. The DPR for CFPS for 2017 is 10% with 5 year coverage of 9.1%. This is also good.

The long term total returns are rather mixed. I expect this improve in the future when price goes higher again. For people holding this stock for 10 years, they would have a total loss of 2.27% per year with a capital loss of 4.27% per year and dividends 2% per year. The best total return is the last 5 year where total return is at 17.92% per year. The 10 year return includes capital gains of 17.18% per year and dividends of 3.73% per year.

For the total return of over the past 15 years, this is low with a much better total return over 18 years since this stock was demutualized. The 15 and 18 year total returns are 6.07% and 9.77% per year. The portion that is attributed to capital gains is 2.92% and 5.97% per year. The portion that is attributed to dividends is 3.15% and 3.80% per year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.82, 13.78 and 17.74. The corresponding 10 year ratios are 11.42, 13.78 and 20.30. The historical ones are 11.52, 14.34 and 16.35. These are all fairly close. The current P/E Ratio is 9.57 based on a stock price of $25.08 and 2018 EPS estimate of $2.62. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $33.37. The 10 year low, median and high median Price/Graham Price Ratios are 0.74, 1.01 and 1.16. The current P/GP Ratio is 0.79 based on a stock price of $25.08. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.16. The current P/B Ratio is 1.33 based on Book Value of $37,436M, Book Value per Share of $18.89 and a stock price of $25.08. The current P/B Ratio is some 14.3% higher than the 10 year median. This stock price testing suggests that the stock price is relatively reasonable, but above the median. However, a P/B Ratio under 1.50 on an absolute basis says a stock is relatively cheap.

I get a historical median dividend yield of 2.69%. The current Dividend yield is 3.51% based on dividends of $0.88 and a stock price of $25.08. The current dividend yield is some 30% higher than the historical median. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.77. The current P/S Ratio is 0.88 based on 2018 Revenue of $56,801M, Revenue per Share of $28.66 and a stock price of $25.08. The current P/S Ratio is some 13% higher than the 10 year median. This stock price testing suggests that the stock price is reasonable but above the median.

When I look at analysts' recommendations I find Strong Buy (3), Buy (8), Hold (3) and Underperform (1). So these are all over the place. The consensus would be a Buy. The 12 month stock price target is $31.00. This implies a total return 26.87% with 23.60% from capital gains and 3.27% from dividends based on a current stock price of $25.08.

There is a news item on Cision talking about MFC issuing preferred shares to pay off outstanding debentures. MFC just announced on Cision a dividend increase for 2018 of 7.3%. Jacob Donnelly on Motley Fool shows that he does not know the difference between general and life insurance. They are totally different businesses. They See what analysts are saying about this stock on Stock Chase. They have mixed views on this company and on Life Insurance companies.

Manulife Financial Corp together with its subsidiaries provides individual life insurance and individual and group long-term care insurance services. Its business segments are Asia Division, Canadian Division, U.S. Division, and Corporate and Other. Its web site is here Manulife Financial Corp.

The last stock I wrote about was about was ARC Resources Ltd. (TSX-ARX, OTC-AETUF)... learn more. The next stock I will write about will be IGM Financial (TSX-IGM, OTC-IGIFF)... learn more on Friday, February 16, 2018 around 5 pm. Tomorrow on my other blog I will write about Good Quality Stocks.... learn more on Thursday, February 15, 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, February 12, 2018

ARC Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Energy. It would appear that the stock price is relatively cheap. However, I would think there is a lot of risk in this stock and I do not see the dividend as being safe as they cannot afford what they are paying. Insiders are buying. See my spreadsheet on ARC Resources Ltd.

I do not own this stock of ARC Resources Ltd. (TSX-ARX, OTC-AETUF). When TFSA first came out, this stock was recommended for this account as it was an income trust at that point and most of the distributions were taxable. This stock is no longer an income trust and the distributions are now dividends and taxed as normal Canadian dividends.

Dividends have been reducing and not much capital gains have been made on this stock, but nevertheless, long term investors have made money in the dividends that they did receive. Investors of 15 and 20 years have total returns of 15% and 17% per year. This is interesting. But it happened because the company was an income trust with high dividends. This situation is unlikely to reoccur.

Dividends have only declined over the past 5 to 21 years. Dividends have declined by 12.9%, 12.9%, 6.2%, 4.2% and 4.6% per year over the past 5, 10, 15, 20 and 21 years. They cannot afford their dividends. The Dividend Payout Ratio for 2017 was good at 54%. However, the 5 year coverage is 186% and DPR is expected to be above 100% over the next few years. The DPR for CFPS is good. For 2017 it was 29% with 5 year coverage at 40%.

Even though they cannot cover their dividends, no analysts are suggesting that they will but cut dividends again. They have been declining because this company used to be an income trust and as such had quite high dividends. The historical median dividend yield is still very high at 10.21%. Dividends will never again reach the heights that they did prior to 2011 when this company changed from an income to a corporation.

The total returns over the past 15, 20 and 21 years are 15.05%, 16.82% and 13.04% per year. The portion of this total returns attributed to capital gains are 1.33%, 1.81% and 0.66% per year over these periods. The portion attributed to dividends is 13.72%, 15.00%, and 12.38% per year over these periods.

The 5 year low, median and high median Price/Earnings per Share Ratios are 20.36, 24.06 and 27.76. The corresponding 10 year ratios are 19.80, 23.40 and 27.00. The historical ratios are 11.68, 13.51 and 15.47. It would appear that the stock price has not fallen as fast as the EPS over the last while. The current P/E Ratio is 27.41 based on a stock price of $12.61 and 2018 EPS estimate of $0.46. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham price of $10.36. The 10 year low median and high median Price/Graham Price Ratios are 1.32, 1.62 and 1.87. The current P/GP Ratio is 1.22. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 2.13. The current P/B Ratio is 1.21 based on Book Value of $3,669M, Book Value per Share of $10.38 and a stock price of $12.61. The current P/B Ratio is some 43% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

Because this company used to be an income trust, it will never again hit the dividend yield highs of the past. Since it has been a corporation, the dividend yield median is 4.52%. The current dividend yield is 4.76% based on dividends of $0.60 and stock price of $12.61. The current dividends yield is some 5.3% lower than the median dividend yield since 2011. By this measure, the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 5.03. The Current P/S Ratio is 3.31 based on 2018 Revenue estimate of $1,348M, Revenue per Share of $3.81 and a stock price of $12.61. The current P/S Ratio is some 34% below the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts’ recommendations I find Strong Buy (1), Buy (13) and Hold (4) recommendations. The consensus would be a Buy. The 12 month stock price is 18.66. This implies a total return of 52.74% with 47.98% from capital gains and 4.76% from dividends.

Chris Newton on Energetic City talks about this company replacing their reserves. Cole Patterson on Simply Wall Street talks about insiders buying. Net insider buyer over the past year is at 0.04%. This is high. Louis Casey on BZ Weekly talks about recent analyst’s recommendations. See what analysts are saying about this stock on Stock Chase. Analysts mostly think that this is a good company.

ARC Resources Ltd is and oil and gas company. It is engaged in the acquisition, exploration and development of petroleum and gas properties. Its web site is here ARC Resources Ltd.

The last stock I wrote about was about was Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more. The next stock I will write about will be Manulife Financial Corp. (TSX-MFC, NYSE-MFC)... learn more on Wednesday, February 14, 2018 around 5 pm. Tomorrow on my other blog I will write about Investing is a Marathon.... learn more on Tuesday, February 13, 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.

Friday, February 9, 2018

Absolute Software Corporation

Sound bite for Twitter and StockTwits is: Dividend growth tech. A lot of stock price testing cannot be done due to earnings losses and a negative book value. What I can do shows that the stock is reasonable in a P/S Ratio test. Currently the dividend is not in danger because even though the book value is negative, the company does have lots of cash. Current cash is some 14.5% of the stock price. See my spreadsheet on Absolute Software Corporation .

I do not own this stock of Absolute Software Corporation (TSX-ABT, OTC-ALSWF). The Motley Fool published an article by Matt DiLallo in December 2014 called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade. I got this stock from this list.

The problem I see with this stock is that the book value is negative. They really should not be paying out a dividend with a negative book value. Although I must admit the company has lots of cash. At the end of June 2017 the cash was equal to 13.8% of the stock's price. Over the past 5 year the median percentage of cash covering the stock price was 13%. This is relatively quite high.

Dividend yields are moderate to good with dividend growth moderate. The current dividend yield is 4.62% with the median dividend yield at 3.58%. The dividend growth has been 12.5% per year over the past 4 years. Dividends were only started in 2013.

The stock has only been around since 2000. So I have total return for durations of 5, 10, 15 and 17 years. Total return is mixed with those buying this stock 10 years ago taking a loss, but other durations are fine. The total return for durations of 5, 15 and 17 years are 10.72%, 29.92% and 18.91% per year with capital gain at 6.17%, 27.49% and 17.25% per year and dividends at4.55%, 2.43% and 1.66% per year. (Note dividends are only included in last 4 years.)

For investor who has had this stock for 10 years, they have suffered a loss because of a big spike up in stock price in 2007. So for them there is a total negative return of 7.92% per year, with capital loss at 9.34% per year and dividends at 1.42% per year.

You cannot do any Price/Earnings per Share Ratio testing on this stock. Since they had so many years with earnings losses, most P/E Ratios are negative. The current P/E Ratio is 279.89 based on a stock price of $6.93 CDN$ and 2018 EPS estimate of $0.025 CDN$ ($.02 US$). The P/E Ratio for 2019 is not quite so bad at 55.98 and it reaches a moderate 15.99 in 2020 as earnings estimates for 2019 and 2020 are $0.26 CDN$ ($0.12 US$) and $0.48 CDN$ ($35 US$).

I can do no testing using the Graham Price because with this stock either the earnings are negative or the book value is negative. With either of these negative, Graham Price cannot be calculated. I cannot do any Price/Book Value Ratio testing when the Book Value is negative.

I get a historical median dividend yield of 3.58%. Mind you there is not much in historical here as dividends only started in 2013. The current dividend yield is 4.62% based on dividends of $0.32 CDN$ and a stock price of $6.93 CDN$. The current dividend yield is some 28% above the historical median dividend yield. This testing would imply that the stock price is relatively cheap.

This company reports in US dollars. The 10 year median Price/Sales (Revenue) Ratio is 2.85 US$. The current P/S Ratio is 2.40 U$ based on 2018 Revenue of $94.5 US$, Revenue per Share of $2.37 US$ and a stock price of $5.68 US$. The current P/S Ratio is some 15.8% lower than the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is probably the best test for this stock.

When I look at analysts' recommendations I find Strong Buy (1), Buy (1) and Hold (7). The consensus would be a Hold. The 12 month stock price consensus is $6.32 US$ or $7.03 CDN$. This implies a total return of 14.52% with 12.90% from capital gains and 4.62% from dividends.

Staff Writer at Akron Register correctly shows that the Book to Market Value is negative. Stefani Robinson on True Blue Tribune talks about some recent analysts ratings. See what analysts are saying about this stock on Stock Chase. One analyst said it was a short term pick.

Absolute Software Corp provides endpoint security and data risk management solutions for commercial, healthcare, education and government customers, tablets and smartphones. Its web site is here Absolute Software Corporation.

The last stock I wrote about was about was Canadian National Railway (TSX-CNR, NYSE-CNI)... learn more. The next stock I will write about will be ARC Resources Ltd. (TSX-ARX, OTC-AETUF)... learn more on Monday, February 12, 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, February 7, 2018

Canadian National Railway

Sound bite for Twitter and StockTwits is: Dividend growth Industrial. Stock price would have to come down to around $80.00 (a18% drop) to pass all stock price testing test but the P/B Ratio test. To pass that test the price needs to go to around $74.00 (a24% drop). On a lot of measures this stock is currently too high. See my spreadsheet on Canadian National Railway.

This stock is cheap by the dividend yield as there has been nice dividend growth lately. Seldom do companies put up dividends higher than they can afford in the future. With dividend yield testing you are looking at current data. However, the P/B Ratio at 4.35 is high. Also the Dividend Payout Ratio of 34.5% expected for 2018 is higher than it has ever been. But it is still lower than the median for industrial stocks. It is rather unclear if this stock price is too high or not.

I own this stock of Canadian National Railway (TSX-CNR, NYSE-CNI). In 2005 I was look for good companies to buy at a reasonable price. This stock met by criteria. This is a dividend growth company with a good record of dividend increases. I brought some more in 2009.

I have done quite well with this stock. I have had it for just over 12 years and I have made a total return of 16.85% per year with 14.93% per year from capital gains and 1.92% per year from dividends. My dividends have covered 50% of the cost of my stock. For the stock I bought in 2005, I am making a yield of 10.1% on my original cost. For the stock I bought in 2009, I am making a yield of 8.2% on my original cost.

Dividends yields are low and the dividend growth is good. I consider under2% to be a low yield and growth over 15% to be a good growth. The current dividend is 1.87%; the historical median dividend yield is 1.57% with the 5 and 10 year median dividend yield at 1.61% and 1.78%.

I have dividend growth for the past 5, 10, 15, 20 and 21 years. They are all above 15% except for the 10 year period and it is close. The dividend growth for the past5, 10, 15, 20 and 21 years are 17.08%, 14.66%, 17.69%, 16.59% and 16.51% per year. This is a compounded rate of growth.

This stock has had good long term total returns. The total returns for the past 5, 10, 15, 20 and 21 years are 20.01%, 17.91%, 18.26%, 17.55% and 17.87% per year. The portion of this total return attributable to capital gains is 18.07%, 16.08%, 16.42%, 15.84% and 16.21% per year. The portion of this total return attributable to dividends is 1.93%, 1.83%, 1.84%, 1.71%, and 1.75% per year.

A person who bought this stock when it went public would have earned a total return of 17.87% per year. They would probably be earning a yield on their original investment of 27.4% and their dividends would have covered their cost by 193%. It would have been a very good investment.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.78, 17.28 and 19.90. The corresponding 10 year ratios are 12.32, 13.62 and 15.18. The historical ratios are 11.87, 13.62 and 14.99. The current P/E Ratio is 18.46 based on a stock price of $97.48 and a 2018 EPS estimate of $5.28. This stock price testing suggests that the stock price might be on the high side and relatively expensive.

I get a Graham price of $51.62. The 10 year low, median and high median Price/Graham Price Ratios are 1.32, 1.51 and 1.66. The current P/GP Ratio is 1.89 based on a stock price of $97.48. 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 3.33. The current P/B Ratio is 4.35 based on Book Value of $16,656M, Book Value per Share of $22.43 and a stock price of $97.48. A P/B Ratio of 4.35 is a high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.57%. The current dividend yield is 1.87% based on dividends of $1.82 and a stock price of $97.48. This current dividend yield is some 18.9% higher than the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and bellow the median.

I get a 10 year median Price/Sales (Revenue) Ratio of 4.34. The current P/S Ratio is 5.28 based on 2018 Revenue of $13,712M, Revenue per Share of $18.46 and a stock price of $97.48. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy (1), Buy (9) and Hold (13). The consensus would be a Hold. The 12 month stock price is $106.08. This implies a total return of $10.69% with 8.82% from capital gains and 1.87% from dividends.

Jacob Donnelly of Motley Fool likes this stock. Ross Marowits, The Canadian Press in an article on CTV News talks about the company rising dividends by 10% as it expects double digit earnings growth over the next 5 years. Nasdaq Journal Staff on Nasdaq Journal says that the PEG is 1.59 on this stock which means that the stock is overbought (or relatively high). See what analysts are saying about this stock on Stock Chase. They like to stock, but most also mentioned NAFTA. However, if the NAFTA discussion fail analyst think that this would only be a short term set back.

Canadian National Railway Co is engaged in the transport sector. Its primary occupation is the rail and related transportation business. Its web site is here Canadian National Railway .

The last stock I wrote about was about was Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)... learn more. The next stock I will write about will be Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more on Friday, February 9, 2018 around 5 pm. Tomorrow on my other blog I will write about Something to Buy February 2018... learn more on Thursday, February 8, 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, February 5, 2018

Exco Technologies Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Industrial stocks tend to be more volatile that other stocks, but this one is cheap to reasonable so if you can stand the volatility this would be a good dividend growth stock to own. You would buy for diversification reasons. See my spreadsheet on Exco Technologies Ltd .

I do not own this stock of Exco Technologies Ltd (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.

This stock hit a peak in July of 2015 and the stock price has been travelling south ever since. This was probably because they are in Auto Parts industry and people are worried about this industry now. Insiders were selling last year, but this year they are buying.

Dividend yields are low to moderate with good dividend increases. As the stock price has stalled and declined you get higher dividend yields. The historical median dividend yield is just 1.95% as is the 5 year median dividend yield. However, the 10 year dividend yield is in the moderate range of 2.89%, as is the current dividend yield of 3.47%.

Dividends were only started in 2003. So I have just 5, 10 and 14 Years of data for this company for dividend growth. For the last periods the dividend growth is good, and the first period the dividend growth is moderate. Dividend growth over the past 5, 10 and 14 years is at 18.09%, 17.85% and 13.92%. I consider dividend growth to be moderate between 8% and 15% growth and over 15% to be good growth.

This stock has been on the TSX since 1992. Therefore I have 5, 10, 15, 20 and 25 year data for stock growth. This stock has done well lately and did not badly over the past 25 years, but the total return over the past 15 and 20 years is low. The 5, 10, 15, 20 and 25 year total returns are at 13.51%, 12.32%, 4.10%, 4.5% and 9.36% per year.

The portion of the total return attributable to capital gains is at 10.45%, 9.91%, 2.70%, 3.43% and 8.24% over the past 5, 10, 15, 20 and 25 years. The portion of the total return attributable to dividends is 3.06%, 2.41%, 1.40%, 1.07% and .1.12%. This is an industrial stock so it can have its ups and downs.

The Dividend Payout Ratios are good. The DPR for 2017 is at 31% with 5 year coverage of 27%. The DPR for CFPS is also good with DPR for CFPS at 20% for 2017 and 5 year coverage of 18.6%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.40, 13.17 and 15.68. The corresponding 10 year P/E Ratios are 8.39, 10.21 and 12.46. The corresponding historical P/E Ratios are 9.80, 13.51 and 16.45. The current P/E Ratio is 8.60 based on a stock price of $9.80 and EPS estimate of $1.14 for 2018. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $13.58. The 10 year low, median and high median Price Graham price ratios are 063, 0.78 and 1.03. The current P/GP Ratio is 0.72 based on a stock price of $9.80. This stock price testing suggests that the price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share is 1.28. The current P/B Ratio is 1.36 based on a stock price of $9.80, Book Value of $305M and Book Value per Share of $7.19. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The historical median dividend yield is 1.95%. The current dividend yield is 3.42% a value some 78% higher. The current dividend is based on dividends of $0.34 and a stock price of $9.80. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.80. The current P/S Ratio is 0.73 based on 2018 Revenue estimate of $568M, Revenue per Share of $13.38 and a stock price of $9.80. The current P/S Ratio is some 8.6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Buy (2) and Hold (4). The 12 month stock price consensus is $11.67. The consensus would be a Hold. This implies a total return of 22.55% with 19.08% capital time gains and 3.47% from dividends with 19.08% from capital gains.

Kay Ng of Motley Fool likes this company because it is committed to rising dividends. Lenox Staff analysis show this company is a favourable light at Lenox Ledger. For example it has a low score for the Gross Margin Score which shows it has stability and growth. See what analysts are saying about this stock on Stock Chase. Mostly, the analysts like this stock.

Exco Technologies Ltd is a designer, developer and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries. Its web site is here Exco Technologies Ltd .

The last stock I wrote about was about was AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF)... learn more. The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI)... learn more on Wednesday, February 7, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2018... learn more on Tuesday, February 6, 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.

Friday, February 2, 2018

AGF Management Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. I think that this stock is cheap. However, there are risks because it is a turn-around situation. There is the possibility that this stock will never be a dividend growth stock again. However, if it can make itself a dividend growth stocks you could get a very nice capital gain from buying it while very cheap. See my spreadsheet on AGF Management Ltd.

I do not own this stock of AGF Management Ltd (TSX-AGF.B, OTC-AGFMF). I used to own this stock. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed. It has yet to recover.

They waited far too long to cut dividends. As the price got depressed the yield got higher topping out around 12.8%. The current dividend yield is high at 4.22% with the 5 year and 10 year median yield also quite high at 6.94% and 6.90%. The historical median is in the moderate rate at 2.97%.

This stock has not been doing well for some time. I used to own it but started to sell in 2006 and sold all my shares by 2008. I made a total return of 2.08% per year all in dividends. If I had held this stock to today I would have had a loss of some 6.5% per year or some 66% of my investment.

This used to be a dividend growth stock, but has not been one since 2012. They started to cut the dividend in 2015. I have data going back some 25 years and dividends have declined over the past 5 and 10 years at the rate of 21.6% and 8.5% per year. Looking at longer term the dividends have increased over the past 15, 20 and 25 years at the low rates of 1.5%, 6.9% and 6.9% per year. Analysts do not expect any dividend increases over the next couple of year.

They are buying back shares. Shares have been declining since 2012. The shares have been declining by 2.4% and 1.3% per year over the past 5 and 10 years. This means to judge the increase or decrease in things like earnings and revenue, you need to look at Net Income and Revenue and not EPS or Revenue per Share. The Net Income has been declining by 0.15% and 11.6% per year over the past 5 and 10 years. EPS is up by 3.1% and down by 10.6% per year over the past 5 and 10 years.

The whole point here is that when shares are decreasing and investors are using EPS to judge growth they can be misled. You need to reduce the EPS growth by the same rate as decline in shares outstanding.

This used to be a great company. That is why I had shares in it in the past. The worse total return period is for the past 10 years where the total return has declined by 7.04% per year. Other years have a gain with total return for the past 5, 15, 20 and 25 years at 3.57%, 2.06%, 5.53% and 16.01% per year. In most years this is because of dividends.

For all periods but for the 25 year period, the stock price has declined. The stock price has declined over the past 5, 10, 15 and 20 years by 3.78%, 11.92%, 4.17% and 0.56% per year. For the 25 year period the stock price has increase by 6.67% per year. You can see the value of investing in dividend stocks from this.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.62, 12.67 and 16.72. The 10 year corresponding ratios are 9.54, 13.31 and 16.97. The corresponding historical ratios are 10.21, 15.43 and 18.96. It is not surprising that the historical ratios are higher because of the problems this stock has been in for the last while. The current P/E Ratio is 12.03 based on a stock price of $7.58 and 2018 EPS estimate of $0.63. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $12.96. The 10 year low, median and high median Price/Graham Price Ratios are 0.55, 0.85 and 0.99. These are all quite low. Any P/GP Ratio below 1.00 says that the stock is cheap. The current P/GP Ratio is 0.58. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Book Value per Share Ratio is 1.05. The current P/B Ratio is 0.64 based on Book Value of $937M, Book Value per Share of $11.85 and a stock price of $7.58. The current P/B Ratio is some 39% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

When this ratio is lower than 1.00 it means that the stock is selling below the book price and is very cheap. The book value is the theoretical break up price of a stock. So in theory if a stock is selling before the Book Value it is selling below the value of the company.

The historical median dividend yield is 2.97%. The current dividend yield is 4.22% based on dividends of $0.32 and a stock price of $7.58. This current dividend yield is some 42% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Buy (3) and Hold (5) recommendations. The consensus would be a Hold recommendation. The 12 month stock price consensus is $8.81 which implies a total return of 20.24% with 4.22% from dividends and 16.23% from capital gains based on a stock price of $7.58.

This article via NASDAQ on Global New Wire talks about AGF buying back shares. Financial News Staff at FLBC News talk about the P/B Ratio being very low. Will Ashworth of Motley Fool likes this stock. See what analysts think of this stock on Stock Chase. Mostly they see the company as a turn-around situation.

AGF Management Ltd is an asset management company that provides investment management for mutual funds, institutions and corporations, as well as net-worth clients. It has operations in Canada, the United States, the United Kingdom, Ireland, and Asia. Its web site is here AGF Management Ltd.

The last stock I wrote about was about was Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more. The next stock I will write about will be Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)... learn more on Monday, February 5, 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 31, 2018

Shaw Communications Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Telecom. There are risk because the company is reorganizing, however, the relatively price seems reasonable. See my spreadsheet on Shaw Communications Inc.

I do not own this stock of Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). I am following this stock because it was a stock on Investment Reporter's list, a MPL Communications Publication.

Recently this company has stopped dividend increases. The last increase was in 2016. I have dividend information back to 1990. This is not the first time for Shaw to keep dividends flat. They seem to have started out with a flat dividend, they then started to increase them in 1999 and they were flat again from 2001 to 2003. So keeping dividends flat is nothing new for the company.

The Dividend Payout Ratio has recently been higher than usual, but not that high. The DPR for 2017 is 69% with 5 year coverage of 65%. However, everyone seems to expect EPS to fall for 2018. The DPR is expected to be around 97% in 2018 before starting to drop again. However, most analysts think that the company will start to raise dividends again and some think this might happen as early as 2018.

Until 2008, the dividend yield on this stock was low. The historical low is around 0.14%. This historical high is around 4.96%. The historical median dividend yield is just 1.23%. This is very different from the current yield. The current yield is high at 4.37%, with 5 and 10 year median dividend yields at 4.23% each.

Lately the dividend growth has been low, but it was much higher in the past. The dividend growth over the past 5 year is 4.63% per year which is low. The dividend growth over the past 10 years is moderate at 9.12% per year. The dividend growth over the past 15 to 25 years is high with 15, 20 and 25 year growth at 29.34%, 23.46% and 18.37% per year.

The best total returns are over the longer terms of 15 to 25 years. The total return over the past 5 years is good with total return at 9.11%. This includes the dividends at 4.44% and capital gain at 4.67% per year. The 10 year total return is the lowest with 10 year total return moderate at 5.69% per year which includes dividends at 3.73% and capital gain at 1.95% per year.

The 15 year total return is at 12.77% including dividends at 3.99% and capital gain at 8.78% per year. The 20 year total return is at 14.92% with dividends at 3.47% and capital gains at 11.45% per year. The 25 year total return is 13.34% with dividends at 2.68% and capital gain at 10.66% per year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.00, 14.14 and 15.98. The corresponding 10 year ratios are 13.18, 14.83 and 17.35. The historical ratios are 14.06, 16.38 and 17.69. The current P/E Ratio is 22.23 based on a current price of $27.12 and 2018 EPS estimate of 1.22. Analysts expect the EPS to fall by some 29% from 2017 and 2018. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $17.99. The 10 year low, median and high median Price/Graham Price Ratios are 1.21, 1.32 and 1.49. The current P/GP Ratio is 1.51 based on a stock price of $27.12. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.70. The current P/B Ratio is 2.30 based on Book Value of $5,891M, Book Value per Share of $11.79 and a stock price of $27.12. The current P/B Ratio is some 15% below the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is always a good test as it does not involve estimates and it is not greatly dependent on temporary problems.

The historical dividend yield is 1.23%. The current dividend yield is 4.37% based on dividends of $1.19 and a stock price of $27.12. The current dividend yield is some 255% below this historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

Even if you compare the current dividend yield to the 5 and 10 year median yields of 4.23% the current yield is lower by 3.30%. 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 2.38. The current P/S Ratio is 2.66 a values some 12% higher based on 2018 Revenue estimate of $5,090M, Revenue per Share of $10.19 and a stock price of $27.12. This stock price testing suggests that the stock price is relatively reasonable but above the median. However, the company seems to be reorganizing and in such a situation you would expect some volatility in Revenue.

When I look at analysts' recommendations I find the recommendations all over the past. There are Buy (6), Hold (8), Underperform (1) and Sell (1) recommendations. The consensus would be a Hold. The 12 month stock price consensus is $29.20. This implies a total return of 12.04% with 7.67% from capital gains and 4.37% from dividends based on a current stock price $27.12.

This Canadian Press article in Global News talks about Shaw offering employees a buyout program and hopes 10% of the staff will take them up on it. This article via Globe News Wire talks about Shaw's announcement of an enterprise-wide initiative designed to reinvent its operating model. Demetris Afxentiou of Motley Fool thinks that this company is full of potential. See what analysts are saying about this company on Stock Chase. They have rather mixed views.

Shaw Communications Inc. is a communications and media company that offers consumers with broadband cable television, high-speed internet, home phone, telecommunications services, satellite direct-to-home services and engaging programming. Its web site is here Shaw Communications Inc.

The last stock I wrote about was about was Valener Inc. (TSX-VNR, OTC-VNRCF)... learn more. The next stock I will write about will be AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF)... learn more on Friday, February 2, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividends and Inflation.... learn more on Thursday, February 1, 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 29, 2018

Valener Inc.

Sound bite for Twitter and StockTwits is: Dividend Paying Utility. I do not think that the rather high dividend yield makes up for no dividend growth. I personally would like a lower yield and dividend growth. Most analysts talk about buying this stock for income purposes. See my spreadsheet on Valener Inc.

I do not own this stock of Valener Inc. (TSX-VNR, OTC-VNRCF). I was looking for another utility to invest in, in 2009 and I was looking possibly at another pipeline stock. This company has natural gas pipelines in Quebec. I also recognized the name of this company. In 2010 it reorganized and made a public utility stock out of 29% of what was Gas Metro. This makes the valuation of this stock very complex.

What I noticed updating my spreadsheet is that dividends have gone both up and down, but over the longer term there is no increase. I have dividend growth over the past 5, 10, 15, 20 and 24 years and only in last 5 year duration is there an increase in dividends at the rate of 2.1% per year. For the 10, 15, 20 and 24 year periods dividends have declined by 1.1%, 1%, 0.9% and 0.2% per year.

The dividend yield has always been quite high. The historical dividend high is around 10.5% and the historical dividend low is around 5%. It has an historical median yield of 7.05%. The current dividend yield is 5.67% with 5 and 10 year median dividend yields at 6.14% and 6.47%.

Surprisingly, the total return is quite reasonable. The total return over the past 5, 10, 15, 20 and 24 years is at 12.86%, 9.32%, 7.15%, 7.45% and 10.39% per year. Total return includes both dividends and capital gains. This is a compounded return rate and it is from December to December. For example, for the 10 year total returns I use the returns from December 2007 to December 2017.

I looked at what part of the total return was dividend and what part was capital gain. Turns out the most of the total return is dividend. The dividend portion of the total return for the past 5, 10, 15, 20 and 24 year is 5.67%, 5.97%, 5.93%, 6.28% and 8.08%. The capital gains portion of the total return is 7.19%, 3.35%, 1.21%, 1.17% and 2.31%.

To me this would not be a stock to use to build a dividend income portfolio. When you are building such a portfolio you want to have capital gains rather than dividend income. If you buy and hold like I do, then you have little capital gain tax. With this stock because most of the return is in dividends, you would be paying lots of tax when building a portfolio and that makes no sense to me.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.75, 15.27 and 16.57. The corresponding 10 year ratios are 13.72, 15.05 and 16.23. The historical ratios are 12.59, 13.93 and 15.08. The current P/E Ratio is 17.08 based on a stock price of $22.71 and 2018 EPS estimate of $1.33. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $22.53. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 0.90 and 1.02. The current P/GP Ratio is 1.01 based on a stock price of $22.71. This stock price testing suggests that the stock price is relatively reasonable but above the median and very close to expensive.

The 10 year Price/Book Value per Share Ratio 1.11. The current P/B Ratio is 1.34 based on Book Value of $659.5M, Book Value per Share of $16.96 and a stock price of 22.71. There ratios are rather low as an ratio of 1.50 is considered still a good P/B Ratio. The current P/B Ratio is some 20.8% higher the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 7.05%. The current dividend yield is 5.11% based on a stock price of $22.71 and dividends of $1.16. The current dividend yield is some 27.6% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy (1) and Hold (5). The 12 month stock price consensus is $23.92. This implies a total return of 10.44% with 5.33% from capital gains and 5.11% from dividends based on a current stock price of $22.71.

An article on Economistan talks about recent analyst ratings on this stock. TD Bank gave it a Hold and a stock price target of $21.00. See what analysts say about this stock on Stock Chase. They remark on its good dividend yield and that it is a play on Gaz Metro.

Valener Inc .through its subsidiaries engaged in the regulated energy business in the United States and Canada. Its core business operations involve natural gas distribution in Quebec and Vermont as well as electricity distribution in Vermont. Its web site is here Valener Inc.

The last stock I wrote about was about was Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF)... learn more. The next stock I will write about will be Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more on Wednesday, January 31, 2018 around 5 pm. Tomorrow on my other blog I will write about Banks and Ratios 2.... learn more on January 30, 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.

Friday, January 26, 2018

Enghouse Systems Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. This stock looks quite expensive to me. Not only it is relatively expensive compared to its past, the past values are rather high. For example, the 10 year median P/B Ratio is high at 2.52. A good P/B Ratio is closer to 1.50. However, I must admit that tech stocks tend to have high ratios. See my spreadsheet on Enghouse Systems Ltd.

I do not own this stock of Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividend.

There is a lot of insider selling. The Net Insider Selling is at 1.40% of market cap. You expect this to be closer to the 0.01% range. Most of the selling is by the Chairman and CEO. It is the same person for both jobs. The problem, of course, is that you never know why someone is selling.

Dividends are low, but dividend growth is good. I consider low dividend yield to be under 2%. The current dividend is 1.03% with 5 and 9 year median dividend yields at 1.07% and 1.52%. I think that dividend growth over 15% is good. The dividend growth over the past 5 and 9 years is at 21% and 22% per year. Dividends have only been paid for 9 years.

This stock seems to have been listed on a stock exchange since 1995. So I have total return for 5, 10, 15, 20 and 22 years which are 30.06%, 24.71%, 18.96%, 16.85% and 15.32% per year. Total return includes both capital gains and dividends. This is showing compounded return over these years. Total return here is calculated from December to December.

The 5 year low, median and high median Price/Earnings per Share Ratios are 26.42, 29.94 and 34.22. The 10 year corresponding ratios are 17.65, 24.54 and 32.00. The historical corresponding ratios are 16.28, 20.71 and 24.42. It would appear that the recent run up in price is based on higher P/E Ratios. The current P/E Ratio is 31.14 based on a stock price of $63.53 and 2018 EPS estimate of $2.04. This stock price testing suggests that the stock price is relatively reasonable, but above the median and getting close to expensive.

I get a Graham Price of $22.83. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.49 and 1.95. The current P/GP Ratio is 2.78 based on a stock price of $63.53. 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 2.52. The current P/B Ratio is 5.60 based on Book Value of $306.40, Book Value per Share of $11.35 and a stock price of $63.53. The current P/B Ratio is some 122% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 1.52%. The current dividend yield is 1.01% based on dividends of $0.64 and a stock price of $63.53. The current dividend yield is some 34% lower than the historical one. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 2.98. The current P/S Ratio is 4.97 based on 2018 Revenue estimate of $345M, Revenue per Share of $12.78 and a stock price of $63.53. The current ratios is some 57% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find I find Buy (3) and Hold (1). The consensus recommendation would be a Buy. The 12 month stock price consensus is $69.82. This implies a total return of 1376% with 12.72% from capital gains and 1.03% from dividends based on a current stock price of $61.94.

Rex Bailey of Week Herald.talks about the Chairman and CEO of this company doing insider selling. Stock Press Contributor on Stock Press Daily says that the Williams Percent Range is -25.68. That means that the stock is neither overbought nor oversold, but it is closer to overbought. Nicole Wilson on Ledger Gazette talks about some recent analysts recommendations. See what analysts are saying about this stock on Stock Chase.

Enghouse Systems Ltd is active in the software industry in Canada. Its business involves provision of software services to a variety of end markets. The company's major product is software for the communication companies. Its web site is here Enghouse Systems Ltd.

The last stock I wrote about was about was Sylogist Ltd (TSX-SYZ, OTC-SYZLF)... learn more. The next stock I will write about will be Valener Inc. (TSX-VNR, OTC-VNRCF)... learn more on Monday, January 29, 2018 around 5 pm.

Also, on my book blog I have put a review of the book SPQR by Mary Beard 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.

See my site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.