Wednesday, April 21, 2021

Pembina Pipelines Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is probably reasonable. Both the Dividend Payout Ratios and Debt Ratios could be improved. I have had this stock for 19 years and have make a total return of 15.67% per year. They had an earnings loss in 2020 because they wrote off some investments. See my spreadsheet on Pembina Pipelines Corp.

I own this stock of Pembina Pipelines Corp (TSX-PPL, NYSE-PBA). This is a dividend growth utility Stocks. In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock, it was an Income Trust company.

When I was updating my spreadsheet, I noticed I have done quite well with this stock over the years. I have had it for 19 years and my total return is 15.67% with 6.84% from capital gains and 8.83% from dividends. The company declared an EPS loss for 2020 because it wrote off some investments.

The dividend yields are good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 6.75%. The 5 and 10 year median dividend yields are also good at 5.19% and 5.18%. The historical median dividend yield is High (over 6%) at 7.20%. This stock used to be an income trust and this explains the high dividend yield for the historical median dividend yield.

The Dividend Payout Ratios (DPR) need to be improved. The DPR for EPS for 2020 is non-calculable because an EPS loss in 2020. The 5 year coverage is high at 158%. The DPR for EPS is expected to decline over the next few years and be around 110% in 2021. The DPR for CFPS for 2020 is 46% with 5 year coverage at 49%. This is a bit high as I prefer this to be around 40%. The DPR for 2020 for Free Cash Flow is 125% with 5 year coverage at 244%. The DPR for FCF for 2021 is expected to be better at 68%.

Debt Ratios could be improved. The Long Term Debt/Market Cap ratio for 2020 is fine at 0.62%. It has to a current one of 0.50 because of the rising stock price. The Liquidity Ratio for 2020 is 0.56 and if you add in cash flow after dividends it is still low at 1.04. If you add back the current portion of the loan it is 1.57. The Leverage and Debt/Equity Ratios for 2020 are 2.09 and 1.09.

The Total Return per year is shown below for years of 5 to 23 to the end of 2020. 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.
2015 5 7.05% 7.20% -0.03% 7.23%
2010 10 4.71% 10.93% 3.37% 7.55%
2005 15 5.92% 12.37% 4.32% 8.05%
2000 20 4.94% 16.80% 6.46% 10.34%
1997 23 6.76% 20.02% 7.30% 12.71%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.88, 18.86 and 20.84. The corresponding 10 year ratios are 23.47, 27.90 and 32.33. The corresponding historical ratios are 19.82, 22.66 and 24.95. The current P/E Ratio is 16.31 based on a stock price of $37.36 and EPS estimate for 2021 of $2.29. This P/E is low than the 10 year low median P/E and in fact lower than all the low median P/E Ratios. This stock price testing suggests that the stock price is relatively cheap.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, and 20 year periods, I find the following. For example, total return over the past 15 years is 12.37% per year, the starting P/E Ratio (the one from 15 years ago) was 24.54. From the point of view of this chart, a P/E Ratio of 16.31 would be fine.

Year Tot Return Start P/E
5 7.20% 29.56
10 10.93% 18.95
15 12.37% 24.54
20 16.80% 10.75

I get a Graham Price of $33.53. The 10 year low, median, and high median Price/Graham Price Ratios are 1.33, 1.52 and 1.70. The current P/GP Ratio is 1.11 based on a stock price of $37.36. This ratio is low than the 10 year low median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.79. The current P/B Ratio is 1.71 based on Book Value of $11,999M, Book Value per share of $21.82 and a stock price of $37.36. The current ratio is 4.3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 14.74. The current P/B Ratio is 8.36 based on Cash Flow per Share estimate for 2021 of $4.47, Cash Flow of $2,459M and a stock price of $37.36. The current ratio is 43% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 7.20%. The current dividend yield is 6.75% based on dividends $2.52 and a stock price of $37.36. The current dividend yield is 6% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This problem with this test is that the company was an income trust. Income Trusts always had very high dividend yields.

I get a 10 year median dividend yield of 5.18%. The current dividend yield is 6.75% based on dividends $2.52 and a stock price of $37.36. The current dividend yield is 30% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.93. The current P/S Ratio is 3.03 based on Revenue estimate for $6,787M, Revenue per Share of $12.34 and a stock price of $37.36. The current ratio is 3.4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is probably reasonable. The dividend yield is 30% below the 10 year median dividend yield. The P/S Ratio test shows the current ratio slightly above the 10 year median test. Most of the tests show the stock price as cheap or reasonable and below the median.

Is it a good company at a reasonable price? I think that the stock price is currently reasonable. I think it is a good company. It has lots of debt, but so do most pipeline companies. A low Liquidity Ratio is common with pipeline companies. They have not cut their dividends so Management seems to feel this is not necessary at this time. analyst below the dividend will start increasing again next year and in 2023.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (5) and Hold (8). The consensus would be a Buy. The 12 months stock price if $39.26. This implies a total return of 11.83% with 6.75% from dividends and 5.09% from capital gains. This is pretty normal for this company.

Analyst on Stock Chase think this stock is a Buy. Rajiv Nanjapla on Motley Fool says that even though this stock has gone up by 23.7%, it is still 22.7% lower than its January 2020 levels. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and lists 3 risk. A writer on Simply Wall Street does not like the fact that the company paid out in dividends more than it could afford. A writer on Simply Wall Street says the fair value for this stock is $55.86 CDN$. Sure Dividend provides an analysis of this stock last year.

Pembina Pipeline is an integrated midstream energy infrastructure company in western Canada and North Dakota, highlighted by its regional pipeline network. Its web site is here Pembina Pipelines Corp.

The last stock I wrote about was about was Barrick Gold Corp (TSX-ABX, NYSE-GOLD) ... learn more. The next stock I will write about will be Canadian Natural Resources (TSX-CNQ, NYSE-CNQ) ... learn more on Friday, April 23, 2021around 5 pm. Tomorrow on my other blog I will write about 3 REITs to Buy.... learn more on Thursday, April 22, 2021 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.

Tuesday, April 20, 2021

Barrick Gold Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. Stock price is probably reasonable. Dividends are currently increasing. Dividend Payout Ratios are good as it the Debt Ratios. Long Term investors have low total returns. See my spreadsheet on Barrick Gold Corp.

I own this stock of Barrick Gold Corp (TSX-ABX, NYSE-GOLD). This is a big gold mining company that I have followed for years. It was on some dividend growth lists at different times and covered by the Investment Reporter. It is a resource stock, so it is probably not a long term hold.

When I was updating my spreadsheet, I noticed my total return is low at 8.40% with 7.27% from capital gains and 1.13% from dividends for this stock I have had for 8 years. I have not invested much into this stock and I do not expect much. I invested a bit for diversification purposes. I have some 30 years of data on this stock. The revenue peaked in 2012 at $14,547M and it has not yet got back to this peak. Revenue for 2020 was $12,595M. Also, if you look at the charts below you will see that total return has not been very good for long term investors.

The dividend yields are low with dividend growth is recently good. The current dividend yield is low (below 2%) at 1.63%. The 5, 10 and historical dividend yields are also low at 1.01%, 1.27% and 1.07%. The dividends have increased a lot in the past few years after 4 years of dividend declines. The dividends were increase by 55% in 2020. The 5 year dividend growth is 17.23% per year. However, the 10 year growth is negative at 3.4%.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 is 24% with 5 year coverage at 21%. The DPR for CFPS for 2020 is 8% with 5 year coverage at 5%. The DPR for Free Cash Flow for 2020 is 16% with 5 yar coverage at 20%. Sites seem to agree on FCF.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio is currently good at just 0.13. It has varied in the past. The Liquidity Ratio is good at 3.67 and has always been good. The Debt Ratio is also good at 3.14. The Leverage and Debt/Equity Ratios are good at 1.99 and 0.63.

The Total Return per year is shown below for years of 5 to 34 to the end of 2020 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.
2015 5 15.28% 24.41% 23.15% 1.26%
2010 10 -1.05% -5.09% -5.87% 0.78%
2005 15 2.92% 0.39% -0.74% 1.13%
2000 20 0.73% 2.10% 0.82% 1.28%
1995 25 3.58% 0.13% -0.86% 0.99%
1990 30 7.13% 4.27% 2.79% 1.48%
1986 3 10.90% 10.24% 7.30% 2.94%

The Total Return per year is shown below for years of 5 to 34 to the end of 2020 in US$. 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.
2015 5 17.23% 26.58% 25.29% 1.30%
2010 10 -3.44% -7.38% -8.13% 0.75%
2005 15 2.31% -0.11% -1.34% 1.23%
2000 20 1.73% 3.20% 1.66% 1.54%
1995 25 3.87% 0.50% -0.59% 1.08%
1990 30 7.06% 3.93% 2.49% 1.44%
1986 34 10.97% 10.50% 7.60% 2.90%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.24, 14.31 and 17.37. The corresponding 10 year ratios are 2.01, 2.42 and 2.83. The corresponding historical ratios are 16.93, 25.34 and 29.62. The current P/E Ratio is 17.09 based on a stock price of $27.65 and EPS estimate for 2021 of $1.62 ($1.29 US$). The 10 year ratios are very low because of 5 years of EPS losses, so I am using the 5 year P/E Ratios. The current P/E Ratio is between the median and high median 5 year P/E Ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.

I get a Graham Price of $24.42. The 10 year low, median, and high median Price/Graham Price Ratios are 0.80, 0.99 and 1.33. The current P/GP Ratio is 1.13 based on a stock price of $27.65. The current P/GP Ratio is between the median and high median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 1.68 based on a stock price of $22.06, Book Value of $23,341M and a Book Value per Share of $13.13. The current ratio is 9.29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result using CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.74. The current P/CF Ratio is 7.23 based on Cash Flow per Share estimate for 2021 of $3.04 and a stock price of $22.06. The current ratio is 6.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result using CDN$.

I get an historical median dividend yield of 0.95%. The current dividend yield is 1.63% based on a stock price of $27.65 and dividends of $0.45. The current dividend yield is 72% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.

I get a 10 year median dividend yield of 1.26%. The current dividend yield is 1.63% based on a stock price of $27.65 and dividends of $0.45. The current dividend yield is 30% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 2.34. The current P/S Ratio is 3.15 based on Revenue estimate for 2021 of $12,471M, Revenue per Share of $7.01 and a stock price of $22.06. The current ratio is 35% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$, but you will get a similar result using CDN$.

Results of stock price testing is that the stock price is? The dividend yield tests say it is cheap, but this is not confirmed by the P/S Ratio testing which says the stock is expensive. The stock price is probably reasonable. Most of the test support a reasonable stock price.

Is it a good company at a reasonable price? This is a gold company, so you would buy it for diversification. It would also be high risk and not for everyone. I find that having a gold company, I pay for attention to the price of gold.

When I look at analysts’ recommendations, I find recommendations of Strong Buy (11), Buy (9), Hold (3) and Underperform (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $36.65 ($29.22 US$). This implies a total return of 34.20% with 1.63% from dividends and 32.56% from capital gains based on a stock price of $27.65 (22.09 US$).

The last two recommendations on Stock Chase are a Sell and a Buy. Andrew Walker on Motley Fool thinks you should buy this company if you like the long term gold story. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list 3 risks. Trefis Team and Great Speculations are contributors to an interesting Forbes article on this company. A writer on Simply Wall Street analyses the company’s debt and doesn’t think that Barrick’s use of debt is risky. Vladimir Zernov on FXEmpire thinks the price is reasonable when P/E Ratio is less than 15.

Based in Toronto, Barrick Gold is one of the world's largest gold producers, operating mines in North America, South America, Australia, and Africa. Its web site is here Barrick Gold Corp.

The last stock I wrote about was about was Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF) ... learn more. The next stock I will write about will be Pembina Pipelines Corp (TSX-PPL, NYSE-PBA) ... learn more on Wednesday, April 21, 2021 around 5 pm. Today on my other blog I will write about "The 1970s Never Ended".... learn more on Tuesday, April 20, 2021 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, April 16, 2021

Leon's Furniture Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably reasonable. This company is on the small size. Both the Dividend Payout Ratios are Debt Ratios are fine. It has mostly done a total return of above 8% per year. See my spreadsheet on Leon's Furniture Ltd.

I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.

When I was updating my spreadsheet, I noticed that I am doing better in this stock than I had for a couple of years. My total return to date is 8.59% with 5.69% from capital gains and 2.90% from dividends. In 2020 my total return was 4.64% and 2019 was 5.26%. I bought it at the wrong time as I bought in 2006. In 2008 we had a recession and a very long recovery. This affected this company. However, when I bought, I could not have known that there would be such a recession in 2008.

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4%) range at 2.88%. The 5, 10 and historical median dividend yields are also moderate at 2.95%, 2.82% and 2.17%. The dividend increases have been low with increases at 7% per year over the past 5 years. The last dividend increase was in 2021 and it was for 14.3%. Dividend growth has varied a lot over the years.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2020 for EPS was 28% with 5 year coverage at 36%. Analysts expect the DPR for EPS for 2021 to be 54% then declining to 34% in 2022. The DPR for 2020 for CFPS was 19% with 5 year coverage at 30%. Analysts expect the DPR for CFPS to be around 34% in 2021. The DPR for 2020 for Free Cash Flow was 9.3% with 5 year coverage at 17%. Analysts expect the DPR for FCF for 2021 to be 44%, then falling to 23% in 2021.

Debt Ratios are fine. The Long Term Debt Market Cash is low at 0.06. the Liquidity Ratio for 2020 is 1.20. If you add in Cash Flow after dividends, the ratio becomes 1.77. The Debt Ratio for 2020 is 1.72. The Leverage and Debt/Equity Ratios for 2020 are 2.38 and 1.38.

The Total Return per year is shown below for years of 5 to 32 to the end of 2020. 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.
2015 5 6.96% 11.16% 7.94% 3.22%
2010 10 5.76% 6.04% 3.38% 2.66%
2005 15 7.11% 8.90% 5.65% 3.26%
2000 20 9.00% 10.88% 7.36% 3.52%
1995 25 10.15% 12.07% 8.09% 3.98%
1990 30 9.43% 12.18% 8.51% 3.67%
1988 32 8.82% 12.17% 8.58% 3.59%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.01, 12.67 and 14.32. The corresponding 10 year ratios are 13.43, 12.67 and 16.83. The corresponding historical ratios are 12.15, 14.56 and 16.28. The current P/E Ratio is 12.83 based on a stock price of $22.20 and EPS estimate for 2021 of $1.73. The current P/E Ratio is between the median and high median 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, 20, 25, and 30 year periods, I find he following. For example, total return over the past 15 years is 8.90% per year, the starting P/E Ratio (the one from 15 years ago) was 13.87. From the point of view of this chart, a P/E Ratio of 12.83 would be fine. The one year of low total return of 6.04% was for the past 10 years and the start P/E was 17.01.

Year Tot Return Start P/E
5 11.16% 14.52
10 6.04% 17.01
15 8.90% 13.87
20 10.88% 11.27
25 12.07% 14.04
30 12.18% 11.30

I get a Graham Price of $22.42. The 10 year low, median, and high median Price/Graham Price Ratios are 0.97, 1.10 and 1.24. The current P/GP Ratio is 0.99 based on a stock price of $22.20. The current ratio is below the median ratio of 1.10. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.81. The current P/B Ratio is 1.72 based on a stock price of $22.20, Book Value of $1,016M and Book Value per Share of $12.92. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of $7.98. The current P/CF Ratio is 8.07 based on a stock price of $22.20, Cash Flow per Share estimate for 2021 of $2.75 and Cash Flow of $216M. The current ratio is 1% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. Since it is only 1% above, it is close to the median.

I get an historical median dividend yield of 2.08%. The current dividend yield is 2.88% based on dividends of $0.64 and a stock price of $22.20. The current dividend yield is 39% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 2.82%. The current dividend yield is 2.88% based on dividends of $0.64 and a stock price of $22.20. The current dividend yield is 2% above the historical median 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 0.57. The current P/S Ratio is 0.73 based on a stock price of $22.20, Revenue estimate for 2021 of $1,388M, and Revenue per Share of $30.36. The current ratio is 29% 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. I know a number of people that like the 10 year median dividend yield test compared to the historical median yield test. Revenue has not grown much since the 2008 recession, especially in the last 5 years. Most tests, except for the P/S Ratio test is showing the stock price as reasonable. However, caution is probably called for as it is a consumer stock and it is a small cap company because its Market Cap is under $2B at $1.7B. However, in Canada, sometimes a Mid-Cap size company is considered to be from $1.5B to $5B.

Is it a good company at a reasonable price? The price is probably reasonable. I still like this company and I expect to continue to hold my shares. I do not expect a total return of more than 8% per year, which is a reasonable amount. It has a reasonable Return on Equity with a 5 year average of 12.8% per year and the debt ratios are fine.

When I look at analysts’ recommendations, I find a Hold (1) Recommendation. The Consensus would be a Hold. The 12 month stock price consensus is $23.00. This implies a total return of $9.04% with 6.16% from capital gains and 2.88% from dividends.

The last analyst’s recommendation in January 2021 on Stock Chase said this stock was their top pick. Aditya Raghunath on Motley Fool called this stock a long-term investment option. The Executive Summary on Simply Wall Street gave this stock 4 stars out of 5 and list 2 risks. A writer on Simply Wall Street feels the company’s debt use is not risky.

Leon's Furniture Ltd is a Canada-based retailer that operates in two main segments, both involved in the sale of home furnishing, mattresses, appliances, and electronics. Leon's segment includes the 86 physical stores nationwide and the leons.ca website. The Brick segment includes The Brick, The Brick Mattress, and the Brick Outlet stores, as well as the website thebrick.com. Its web site is here Leon's Furniture Ltd.

The last stock I wrote about was about was Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more. The next stock I will write about will be Barrick Gold Corp (TSX-ABX, NYSE-GOLD) ... learn more on Tuesday, April 20, 2021 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, April 14, 2021

Supremex Inc

Sound bite for Twitter and StockTwits is: Small Materials Company. The stock price is cheap. The company has suspended their dividends. They have been inconsistent with dividends. A director and the chairman are buying shares. The Goodwill Intangible/Market Cap Ratio is far to high at 1.30 for 2020. See my spreadsheet on Supremex Inc.

I own this stock of Supremex Inc (TSX-SXP, OTC-SUMXF). I read about it in Money Sense article of 15 Stocks to help investors ride market swings by Michael Pe of Mar 4, 2018. They were an envelope company, but are diversifying into packaging. I investigated this stock for buying for my TFSA.

When I was updating my spreadsheet, I noticed I have lost money on this stock. I have had it for 2 years and my total return of a loss of 9.49% with a capital loss of 13.39% and dividends of 3.90%. I see that a director and the Chairman are buying stocks. The other thing is that Intangibles/Market Cap Ratio for 2020 is 0.43 going to 0.39 currently. The Goodwill/Market Cap Ratio for 2020 is 0.87 going down to 0.78 currently. This gives a total for Intangibles Goodwill/Market Cap for 2020 at 1.30 for 2020 and going down to 1.17 currently. These values are too high.

The dividend has recently been suspended and dividends have gone down as well as up. Over the past 14 years, dividends were increased 7 times and decreased 4 times and rest of the time flat. The company started out as an income trust. Income Trusts have had a hard time adjusting their dividends after becoming corporations. I expect that the company will restart dividends in the future, but it is unknown at this time when.

The Dividend Payout Ratios (DPR) too high before the dividend cut in 2020. The DPR for 2020 was 49% with 5 year coverage at 86%. The DPR for CFPS for 2020 was 15% with 5 year coverage at 26%. The DPR for Free Cash Flow for 2020 was 11% with 5 year coverage at 40%.

Debt Ratios are fine, but it would be better if Long Term Debt was lower. The Long Term Debt/Market Ratio for 2020 was quite high at 0.93 but has moved down to 0.84 with the increase in market value. The Liquidity Ratio for 2020 was 1.65. The Debt Ratio for 2020 was 1.73. The Leverage and Debt/Equity Ratios for 2020 were 2.36 and 1.36.

The Total Return per year is shown below for years of 5 to 14 to the end of 2020. 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.
2015 5 -8.25% -10.09% -16.38% 6.29%
2010 10 -2.05% 6.14% -1.65% 7.79%
2006 14 -14.42% -2.42% -9.67% 7.25%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.15, 10.55 and 11.62. The corresponding 10 year ratios are 4.95, 7.10 and 9.47. The corresponding historical ratios are 5.29, 7.49 and 9.69. The current P/E Ratio is 4.96 based on a stock price of $2.33 and EPS estimate for 2021 of $0.47. The current ratio is just above the low median 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $5.48. The 10 year low, median, and high median Price/Graham Price Ratios are 0.49, 0.68 and 0.86. The current P/GP Ratio is 0.43 based on a stock price of $2.33. The current ratio is below the low median 10 year P/GP Ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.21. The current P/B Ratio is 0.82 based on a book Value of $78.96M, Book Value per Share of $2.84 and a stock price of $2.33. The current ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.94. The current P/CF Ratio is 1.75 based on last 12 month Cash Flow of $37M, Cash Flow per Share of $1.33 and a stock price of $2.33. The current ratio is 56% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do the dividend yield test because the dividend has been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 0.48. The current P/S Ratio is 0.30 based on Revenue estimate for 2021 of $215.5M, Revenue per Share of $7.74 and a stock price of $2.33. The current ratio is 37% 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. Dividend yield tests cannot be done because dividend is suspended. The P/S Ratio test shows that the stock is relatively cheap as does the P/B Ratio test. I know that the P/E Ratio test does not say it is cheap, but the P/E Ratio are really low. A P/E Ratio test below 10.00 is showing a cheap price.

Is it a good company at a reasonable price? I still have hope for this company. I understand the risks as it is a small company that has gotten into problems. I will continue to hold my shares. The stock is cheap.

When I look at analysts’ recommendations, I find only one recommendation of Buy. The Consensus would be a buy. The 12 month stock price consensus is $3.50. This implies a total return of $50.21%, all from capital gains.

There are only old entries on Stock Chase and this stock is not well covered. There is also nothing recent on Motley Fool. The executive summary on Simply Wall Street list 4 risks and gives this stock 3 stars out of 5. A writer on Simply Wall Street looks at this company’s debt. A writer on Simply Wall Street says this company is cheap, but wonders about its growth prospects.

Supremex Inc is engaged in manufacturer and marketer of a broad range of custom envelopes and packaging products. The company operates in two business segments that are Manufacturing and Sale of Envelopes, and the manufacturing and sale of paper-based packaging solutions and specialty products. Its web site is here Supremex Inc.

The last stock I wrote about was about was Toromont Industries Ltd (TSX-TIH, OTC-TMTNF) ... learn more. The next stock I will write about will be Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF) ... learn more on Friday, April 16, 2021 around 5 pm. Tomorrow on my other blog I will write about Long Live Debtism.... learn more on Thursday, April 15, 2021around 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, April 12, 2021

Toromont Industries Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Currently the stock price is relatively expensive. I own this stock, but I do not sell stock simply because they are overpriced. This company has seen a lot of great performance in the past. DPRs are good. Debt Ratio are good. See my spreadsheet on Toromont Industries Ltd.

I own this stock of Toromont Industries Ltd (TSX-TIH, OTC-TMTNF). This is one of the stocks I bought after selling Loblaws in 2008. This was a stock on Mike Higgs' Canadian Dividend Growth Stock list. I bought more in 2008 after selling Onex and AGF Management.

One of the things I look at, using past data, is dividend yield on original investments after 5 to 30 years. I am also looking at how much of the stock cost is covered by dividends after 5 to 30 years. In the chart below I show the numbers for this stock. For example, if you bought this stock 10 years ago at the median price, you would have a current yield on your original investment of 6.68% and 43% of your original cost would have now been paid by dividends.

Years Yield Cost Cov.
5 3.46% 14.25%
10 6.68% 43.32%
15 8.57% 67.88%
20 19.53% 167.87%
25 39.01% 348.74%
30 268.14% 2435.02%

When I was updating my spreadsheet, I noticed I have done very well with this stock. I have had it for some 13 years and I have a total return of 14.62% per year with 12.27% in Capital Gains and 2.35% in dividends. For the stock I bought 13 years ago I am earnings 6.17% on my original investment.

The dividend yields are low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.27%. The 5 year and historical median dividend yields are also low at 1.62% and 1.82%. The 10 year median dividend yield is moderate (2% to 4% ranges) at 2.02%. The dividend growth is moderate (8% to 14% growth) at 12.7% per year for the past 5 years. The most recent dividend increase was in 2020 and it was for 14.8%.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS is 39% with 5 year coverage at 33%. The DPR for CFPS is 24% with 5 year coverage at 21%. The DPR for Free Cash Flow is 32% with 5 year coverage at 30%. Site disagree on FCF.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.09. This is very low and good. The Liquidity Ratio for 2020 is 2.36 and the Debt Ratio for 2020 is 2.03. These are also good as anything over 1.50 is good. The Leverage and Debt/Equity Ratios are low and good at 1.97 and 0.97.

The Total Return per year is shown below for years of 5 to 30 to the end of 2020. 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.
2015 5 12.70% 25.00% 23.10% 1.89%
2010 10 12.38% 18.64% 16.82% 1.82%
2005 15 12.84% 13.86% 12.35% 1.52%
2000 20 13.34% 16.98% 15.10% 1.88%
1995 25 14.26% 17.96% 15.84% 2.12%
1990 30 14.95% 23.36% 19.53% 3.83%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.98, 19.41 and 22.24. The corresponding 10 year ratios are 14.46, 17.47 and 20.10. The corresponding 10 year ratios are 13.04, 15.14 and 18.58. The current P/E Ratio is 25.75 based on a stock price of $97.61 and EPS estimate for 2021 of $3.79. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $41.91. The 10 year low, median, and high median Price/Graham Price Ratios are 1.34, 1.58 and 1.83. The current P/GP Ratio is 2.33 based on a stock price of $97.61. This current ratio is above the high median 10 year P/GP Ratio. 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 3.42. The current P/B Ratio is 4.74 based on a stock price of $97.61, Book Value of $1,699M, and Book Value per Share of $20.60. The current ratio is 39% above the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 15.16. The current P/CF Ratio is 16.69 based on Cash Flow per Share estimate for 2021 of $5.85, Cash Flow of $482M and a stock price of $97.61. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 1.84%. The current dividend yield is 1.27% based on dividends of $1.24 and a stock price of $97.61. The current dividend yield is 31% above 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 2.02%. The current dividend yield is 1.27% based on dividends of $1.24 and a stock price of $97.61. The current dividend yield is 37% above 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 1.38. The current P/S Ratio is 2.12 based on Revenue estimate for 2021 of $3,797M, Revenue per Share of $46.04 and a stock price of $97.61. The current ratio is 53% 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. Both the dividend yield tests point to this as does the P/S Ratio test. Most of the other tests say the same thing.

Is it a good company at a reasonable price? I think the current price is too high. However, I own this stock and I have no intention of selling. Stocks go from being over price to under priced all the time. I am a long term investor, so I might do some buying when my stocks are underpriced, but I do not sell because they are overpriced.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (3) recommendations. The consensus recommendation is a Buy. The 12 month stock price consensus is $101.22. This implies a total return of 4.97% with 3.70% from capital gains and 1.27% from dividends.

Analysts on Stock Chase like this stock. The last entry for February 2021 says it is a buy at $90.85. Adam Othman thinks you should buy this stock on Motley Fool for its strong steady growth. Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and one risk factor. A writer on Simply Wall Street likes that this company is reinvesting heavily in its business. The blogger Hardbacon talks about the 20 best Canadian companies to invest in for 2021 and this list includes this stock.

Toromont Industries Ltd is a Canadian industrial company. The company operates two business segments: Equipment Group and CIMCO. The larger segment by revenue, Equipment Group includes a Caterpillar dealership and rental operation of construction equipment. CIMCO offers solutions for the design, engineering, fabrication, and installation of industrial and recreational refrigeration systems. The company operates primarily in Canada and derives a smaller portion of sales from the United States of America. Its web site is here Toromont Industries Ltd.

The last stock I wrote about was about was Alaris Equity Partners Income Trust (TSX-AD, OTC-ALARF) .... learn more. The next stock I will write about will be Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more on Wednesday, April 14, 2021 around 5 pm. Tomorrow on my other blog I will write about Morgan Housel.... learn more on Tuesday, April 13, 2021 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, April 9, 2021

Alaris Equity Partners Income Trust

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price is relatively cheap. It is risky. Most of the return is in dividends or distributions. This income will no longer be tax as dividends but other sorts of income. It is probably best in a registered account. See my spreadsheet on Alaris Equity Partners Income Trust.

I own this stock of Alaris Equity Partners Income Trust (TSX-AD.UN). This is a stock that Dividends in Hand Blogger has bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest.

When I was updating my spreadsheet, I noticed there was insider buying by the CEO, CFO and Chairman among others. I have not done well on this stock with a total return of just 2.42% per year. They had trouble in 2020 and cut the dividends. With the change to a income trust, the dividends will no longer be taxed as dividends but be classified as either Trust income, capital gain, return of capital, eligible dividend, or a combination thereof.

The dividend yields are high with dividend growth being restarted. The current dividend yield is high (7% and over) at 7.64%. The 5 and historical median dividend yields are high at 7.77% and 7.32%. the 10 year median dividend yield is good (5% and 6%) at 6.79%. The company changed the dividend payments from monthly to quarterly in 2020. They also raised the quarterly dividend in 2020. They also changed from a corporation to an income trust in 2020. They seem committed to providing a growing dividend.

The Dividend Payout Ratios (DPR) need to be improved and this is expected. The DPR for EPS for 2020 is 205% with 5 year coverage at 144%. The DPR for EPS is expected to drop to 64% in 2021. The DPR for CFPS for 2020 is 45% with 5 year coverage at 64%. The DPR or CFPS is expected to remain high in 2020 at 67%. The DPR for Free Cash Flow for 2020 is 84% with 5 year coverage at 82%. The FCF is expect to be negative this year and very low in 2022, so this is not going to improve anytime soon.

Debt Ratios are all good. The Long Term Debt/Market Cap Ratio for 2020 is good at 0.39. The Liquidity Ratio for 2020 is 1.98. The Debt Ratio for 2020 is 2.72. The Leverage and Debt/Equity Ratios for 2020 are 1.58 and 0.58.

The Total Return per year is shown below for years of 5 to 13 to the end of 2020. 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.
2015 5 -5.86% -0.73% -8.45% 7.72%
2010 10 2.15% 13.41% 2.64% 10.77%
2007 13 1.37% 12.59% 3.23% 9.36%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.16, 19.86 and 22.80. The corresponding 10 year ratios are 14.12, 19.53 and23.01. The corresponding historical ratios are 11.71, 17.48 and 21.90. The current P/E Ratio is 8.37 based a stock price of $16.23 and EPS estimate for 2021 of $1.94. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $26.02. The 10 year low, median, and high median Price/Graham Price Ratios are 0.85, 1.08 and 1.45. The current P/GP Ratio is 0.62 based on a stock price of $16.23. The current is below the low median 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.32. The current P/B Ratio is 1.05 based on a Book Value of $605M, Book Value per Share of $15.51 and a stock price of $16.23. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 14.86. The current P/CF Ratio is 8.73 based on Cash Flow per Share estimate for 2021 of $1.86, Cash Flow of $72.5M and a stock price of $16.23. The current ratio is 41% 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 7.32%. The current dividend yield is 7.64% based on dividends of $1.24 and a stock price of $16.23. The current dividend yield is 4.4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. I get a 10 year median dividend yield of 6.79%. The current dividend yield is 7.64% based on dividends of $1.24 and a stock price of $16.23. The current dividend yield is 12% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 10.28. The current P/S Ratio is 4.52 based on Revenue estimate for 2021 of $$140M, Revenue per Share of $3.59 and a stock price of $16.23. The current ratio is 56% 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. Both the dividend yield tests and the P/S Ratio test is showing the stock price as cheap. All the tests are saying the same thing.

Is it a good company at a reasonable price? First the stock price is reasonable, even cheap. Unfortunately, it is cheap for a reason. They were paying out more in dividends than they were earning and they were also hurt by the pandemic. However, the new format of it as an income trust should bring some benefits. However, the distributions will no longer be taxed as dividends but distributions from the Trust will be classified as either trust income, capital gain, return of capital, eligible dividend, or a combination thereof. This stock will be better held in a registered account. I have mine in a TFSA account.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus would be $20.38. This implies a total return of 33.21% with 25.57% from capital gains and 7.64% from dividends based on a current stock price of $16.23.

Analyst on Stock Chase thinks this company is best held in a registered account. Daniel Da Costa on Motley Fool thinks this company should be avoid until after the pandemic. The Executive Summary on Simply Wall Street gives this stock 4 stars out of 5 and lists 3 risks. A writer on Simply Wall Street wonders about the dividend. The blogger Dividend Earner recently reviewed this stock. He would not buy this stock.

Alaris Equity Partners Income Trust is an open ended trust. The company invests in lower middle market companies in North America through non-control, preferred equity investments. Its web site is here Alaris Equity Partners Income Trust.

The last stock I wrote about was about was Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more. The next stock I will write about will be Toromont Industries Ltd (TSX-TIH, OTC-TMTNF) ... learn more on Monday, April 12, 2020 around 5 pm.

Also, on my book blog I have put a review of the book Machine Platform Crowd: Harnessing Our Digital Future by Andrew McAfee and Erik Brynjolfsson 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 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, April 7, 2021

Sun Life Financial Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. The stock price is reasonable, but on the high side of reasonable. There is insider buy and CFO and Chairman. Insurance companies will do better when interest again start to rise. See my spreadsheet on Sun Life Financial Inc.

I own this stock of Sun Life Financial Inc (TSX-SLF, NYSE-SLF). I first bought this stock in 2000 when it was first demutualized. It was very cheap. I bought more in 2001, 2003 and 2006. This stock was on Mike Higgs' Canadian Dividend Growth stock list and on the other dividend lists that I followed.

When I was updating my spreadsheet, I noticed my stock is not making the 8% I would like to see, but it is close and Insurance companies have had a hard time to very low interest rates. It will to do better when interest rates go up. My total return is 7.55% with 4.12% from capital gains and 3.43% from dividends. I have had this stock for almost 21 years. On my original investment I am making a dividend yield of 16%. There has been insider buying over the past year by CFO, some officers and Chairman.

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.44%. The 5, 10 and historical dividend yield are also moderate at 3.86%, 3.91% and 3.64%. The dividend growth over the past 5 years is low (below 8%) 7.8% per year. The dividends were increased twice in 2019 by 10%, but there has been no increase since then.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2020 is 54% with 5 year coverage at 47%. The DPR for CFPS is 18% with 5 year coverage at 30%. However, the DPR for CFPS excluding Working Capital is negative, so non-calculable, but the 5 year coverage is fine at 48% if a little high. The DPR for Free Cash Flow is 19% with 5 year coverage at 33%.

Debt Ratios are fine. Because this is a financial company, I am looking at Debt/Covering Assets Ratio. This company’s ratio is 0.84. You know that they have enough covering Assets for their Long Term Debt if this ratio is less than 1.00. I get a Liquidity Ratio of 1.94 for 2020, but this ratio is not of much importance for financials. The Debt Ratio for 2020 is 1.09 and this is fine for financials.

The Total Return per year is shown below for years of 5 to 21 to the end of 2020. 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.
2015 5 7.82% 8.71% 5.58% 3.14%
2010 10 4.33% 10.69% 6.51% 4.18%
2005 15 5.47% 4.31% 1.29% 3.02%
2000 20 7.91% 4.46% 1.75% 2.70%
1999 21 7.52% 12.14% 7.38% 4.76%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.12, 12.04 and 13.69. The corresponding 10 year ratios are 10.30, 11.98 and 13.67. The corresponding historical ratios are 11.75, 13.43 and 15.09. The current P/E Ratio is 11.18 based on a stock price of $64.04 and EPS estimate for 2021 of $5.73. The current ratio is between the low and median 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $70.01. The 10 year low, median, and high median Price/Graham Price Ratios are 0.76, 087 and 1.03. The current P/GP Ratio is 0.91 based on a stock price of 64.04. The current ratio is between the median and high median 10 year P/GP ratios. 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 1.41. The current P/B Ratio is 1.68 based on a stock price of $64.04. The current ratio is 19.6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 9.97. The current P/CF Ratio is 8.31 based on Cash Flow per Share estimate for 2021 of $7.71 and a stock price of $64.04. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.64%. The current dividend yield is 3.44% based on a stock price of $64.04 and dividends of 2.20. The current yield is 5.6% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 3.91%. The current dividend yield is 3.44% based on a stock price of $64.04 and dividends of 2.20. The current yield is 12% below the historical dividend 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 0.95. The current P/S Ratio is 0.99 based on Revenue estimate for 2021 of $34,432M, Revenue per Share of $64.63 and a stock price of $64.04. The current ratio is 3.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median

Results of stock price testing is that the stock price is probably reasonable. Most of the testing is pointing to a reasonable price of above or below the median. The dividend yield tests and the P/S Ratio test is pointing to a reasonable price, but above the median. So, some caution is advised.

Is it a good company at a reasonable price? I still like this company. It is a dividend growth stock and the price would appear to be reasonable, but a bit on the high side. When interest rates go up and they will eventually, this stock should do better.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (6), Hold (4), and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $68.57. This implies a total return of $10.51% with 7.07% from capital gains and $3.44% from dividends.

Analysts spend time comparing Sun Life on Stock Chase to MFC. Nicholas Dobroruka on Motley Fool thinks this is a top dividend stock to buy today. The Executive Summary on Simply Wall Street gives this stock 4 stars out of 5 and says there is one risk factor. A writer on Simply Wall Street talks about ownership of shares for this company. Tbonepearson on YouTube talks about Manulife and Sun Life. This was an interesting presentation.

Sun Life Financial is one of Canada's Big Three life insurance companies along with Great-West Lifeco and Manulife. Sun Life provides insurance, retirement, and wealth-management services to individual and corporate customers in Canada, the United States, and Asia. Its web site is here Sun Life Financial Inc.

The last stock I wrote about was about was Goodfellow Inc (TSX-GDL, OTC-GFELF) ... learn more. The next stock I will write about will be Alaris Equity Partners Income Trust (TSX-AD, OTC-ALARF) .... learn more on Friday, April 9, 2021 around 5 pm. Tomorrow on my other blog I will write about Something to Buy April 2021.... learn more on Thursday, April 08, 2021 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, April 5, 2021

Goodfellow Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably cheap. It is a small company and of higher risk. Dividends were recently restarted and they have been increased. This shows that management feels good about the future. They have no long term debt, but they do have a bank loan. See my spreadsheet on Goodfellow Inc.

I own this stock of Goodfellow Inc (TSX-GDL, OTC-GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.

When I was updating my spreadsheet, I noticed I did better this year than last year. This year I have a total return of 0.58% with a 1.52% capital loss and 2.10% from dividends. Last year I was showing an 8.83% loss, with a capital loss of 10.04% and dividend of 1.21%.

The dividend yields are good with dividend growth has been restarted. The current dividend yield is good (5% and 6% ranges) at 5.76%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.87%, 3.42% and 3.55%. The company suspended their dividends in 2017. They restarted them in 2019 and increased them 2020 and 2021. The last increase was in 2021 and the increase was for 20%.

The Dividend Payout Ratios (DPR) are fine. The Dividend Payout Ratio for EPS for 2020 is 22%. The 5 year coverage is 144%. They stopped dividend payouts because of EPS losses. The DPR for CFPS for 2020 is 10% with 5 year coverage at 18%. The DPR for Free Cash Flow for 2020 is 17% with 5 year coverage at 17% also. Sites do not agree on FCF but values are close.

Debt Ratios are fine. The company has no long term debt, but they do have a current bank loan. The Bank Loan/Market Cap Ratio is 0.50. This bank loan can be paid in 2.5 years with cash flow and that is a good number. The Liquidity Ratio for 2020 is 2.06. The Debt Ratio for 2020 is 2.25. Leverage and Debt/Equity Ratios for 2020 are 1.80 and 0.80.

The Total Return per year is shown below for years of 5 to 29 to the end of 2020. 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.
2015 5 -5.25% -1.51% -4.05% 2.55%
2010 10 0.00% -0.91% -3.86% 2.96%
2005 15 -2.67% 1.28% -2.66% 3.94%
2000 20 3.38% 10.31% 2.87% 7.44%
1995 25 9.06% 15.10% 5.78% 9.32%
1991 29 8.84% 11.16% 4.66% 6.50%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.30, 3.76, 5.22. The corresponding 10 year ratios are 12.20, 12.98 and 13.76. The corresponding historical ratios are 7.08, 8.40 and 9.50. The current P/E Ratio is 6.47 based on a stock price of $10.42 and EPS for last 12 months of $1.61. The current ratio is below the low median 10 year ratio of 12.20. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $22.65. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.59 and 0.65. The current P/GP Ratio of 0.46 based on a stock price of $10.42. The current ratio is below the low median 10 year ratio. 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 0.64. The current P/B Ratio is 0.74 based on a Book Value of $121M, Book Value per Share of $0.61 and a stock price of $10.42. The current ratio of 0.74 is 14% above the 10 year median P/B Ratio of 0.64. This stock price testing suggests that the stock price is relatively reasonable and below the median. The problem here is that the book value is declining and this is never good.

I get a 10 year median Price/Cash Flow per Share Ratio of 4.16. The current P/CF Ratio is 7.80 based on Cash Flow for the last 12 months of $11.44M, Cash Flow per Share of $1.34 and a stock price of $10.42. The current ratio is 88% 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 3.55%. The current dividend yield is 5.76% based on a stock price of $10.42 and dividends of $0.60. The current dividend yield is 62% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 3.42%. The current dividend yield is 5.76% based on a stock price of $10.42 and dividends of $0.60. The current dividend yield is 69% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.15. The Current P/S Ratio is 0.20 based on Revenue of the last 12 months of $454M, Revenue per Share of $53.03 and a stock price of $ 10.42. The current Ratio is 29% 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 cheap. The dividend yield testing says that and this is the only test based on the future (dividends to be paid this year). Most of the testing is using last 12 months data as there are no analyst giving estimates. The management obviously feels good about the future because they restarted the dividends in 2019 and then increased them in 2020 and 2021. The P/S Ratio testing says the stock is expensive because it is using last 12 month’s revenue. The rest of the testing is a mix of cheap, expensive, and reasonable.

Is it a good company at a reasonable price? The stock price is probably reasonable. This is a small company that is not well followed. It is a risky investment. But I own this company and I intend to continue to hold it.

When I look at analysts’ recommendations, I find only a Strong Buy (1). The consensus would be a Strong Buy. There seems to be only one analyst following this stock. There is no target stock price.

There is nothing on Stock Chase or Motley Fool for this stock. The Executive Summary on Simply Wall Street lists two risks and gives the stock 4 stars out of 5. A writer on Simply Wall Street talks about this company’s dividend. A writer on Simply Wall Street thinks the CEO of this company is paid better than the median.

Goodfellow Inc is engaged in remanufacturers and distributors of lumber products and hardwood flooring products. It is engaged in the wholesale distribution of wood products, and remanufacturing, distribution, and brokerage of lumber. Its web site is here Goodfellow Inc.

The last stock I wrote about was about was Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more. The next stock I will write about will be Sun Life Financial Inc (TSX-SLF, NYSE-SLF) ... learn more on Wednesday, April 07, 2021 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks April 2021.... learn more on Tuesday, April 06, 2021 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, April 2, 2021

Melcor Developments Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. Or, sort of dividend growth. The stock price seems to be on the cheap side. It has not done well lately, and there are risks. There is insider buying. See my spreadsheet on Melcor Developments Inc.

I own this stock of Melcor Developments Inc (TSX-MRD, OTC-MODVF). This was one of the stocks on Mike Higgs' list of good dividend growth stocks. So, I looked into it and bought it. I bought this stock first in 2008 and then some more in 2009. It is a little followed real estate company from Western Canada.

When I was updating my spreadsheet, I noticed there was a lot of insider buying in the past year. Insider buying was at 0.29% of outstanding shares. You would expect it closer to 0.01%. Insider bought shares at just above $6.00 up to $10.90. I have not done well in this stock. My total return after some 13 years is only 4.28% with a capital loss of 0.67% and dividends at 4.95%.

The dividend yields are moderate with dividend growth variable. The current dividend is moderate (2% to 4% ranges) at 3.34%. The 5, 10 and historical dividend yields are also moderate at 3.63%, 3.23% and 2.90%. I have data on this company going back 30 years and they have raised the dividend 20 times and decreased it 5 times with the rest of the years with a flat dividend. The dividend was decreased by 38% in 2019 and 2020. It was increased 25% in 2021.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 is 100% with 5 year coverage at 42%. The DPR for 2021 is expected to be 43%. The DPR for CFPS for 2020 is 22% with 5 year coverage at 31%. The DPR for Free Cash Flow for 2020 was 19% with 5 year coverage at 40%.

Debt Ratios are fine. This is a real estate company, so I am looking at Debt/Assets coverage and for 2020 it is 0.46. This shows that assets adequately cover their debt. The Liquidity Ratio for 2020 is 3.34. The Debt Ratio is 2.17. The Leverage and Debt/Equity Ratios for 2020 are 1.86 and 0.86 respectively.

The Total Return per year is shown below for years of 5 to 30 to the end of 2020. 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.
2015 5 -10.74% -4.50% -8.34% 3.84%
2010 10 -0.29% -0.44% -4.45% 4.01%
2005 15 5.61% 2.53% -1.52% 4.05%
2000 20 8.22% 16.61% 8.26% 8.35%
1995 25 10.20% 22.41% 9.30% 13.11%
1990 30 12.47% 16.50% 8.14% 8.36%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.31, 13.42 and 14.69. The corresponding 10 year ratios are 6.40, 7.51 and 8.69. The corresponding historical ratios are 6.31, 7.32 and 8.43. The current P/E Ratio is 12.72 based on a stock price of $11.96 and EPS estimate for 2021 of $0.94. This stock price testing suggests that the stock price is relatively expensive. However, a 12.72 ratio is not an expensive ratio and fits will with the 5 year P/E Ratios.

I get a Graham Price of $26.19. The 10 year low, median, and high median Price/Graham Price Ratios are 0.37, 0.45 and 0.50. The current P/GP Ratio is 0.46 based on a stock price of $11.96. The current ratio of 0.46 is between the median and high median ratios. 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 0.53. The current P/B Ratio is 0.37 based on a Book Value of $1,077M, Book Value per Share of $32.43 and a stock price of $11.96. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 13.24. The current P/CF Ratio is 7.48 based on last 12 months Cash Flow of $53.1M, Cash Flow per Share of $1.60 and a stock price of $11.96. The current ratio is 43% 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 2.90%. The current dividend yield is 3.34% based on dividends of $0.40 and a stock price of $11.96. The current dividend yield is 15% above the historical median 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 3.23%. The current dividend yield is 3.34% based on dividends of $0.40 and a stock price of $11.96. The current dividend yield is 4% above the historical median 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 1.94. The current P/S Ratio is 1.45 based on Revenue estimate for 2021 of $274M, Revenue per Share of $8.25 and a stock price of $11.96. The current ratio is 25% 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 dividend yield tests just say the stock is relatively reasonable and below the median, but the company has both increased and decreased dividends lately. So, the dividend yield tests are not the best tests currently. The P/S Ratio test says the stock price is cheap. The P/B Ratio says the same thing. Other tests have different results.

Is it a good company at a reasonable price? I own this stock and I intend to continue to hold it. I have not done well with this stock, but it is from Alberta and they have lots of current problems, so I do not mind being patient. I think it is a good company at a reasonable price, but investing in this company is not for everyone. There are risks involved.

When I look at analysts’ recommendations, I find Hold (1) recommendation. The consensus would be a Hold. The 12 month stock price consensus is $12.50. This implies a total return of $7.86% with 4.52% from capital gains and 3.34% from dividends based on a current stock price of $11.96.

This stock is not well followed by analysts and the last entry on Stock Chase was in 2016. Nikhil Kumar on Motley Fool is very positive about this company’s future. The Executive Summary on Simply Wall Street gives this stock 2 stars out of 5 and list 5 risks. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Simply Wall Street talks about the company’s dividend.

Melcor Developments Ltd is a real estate development and asset management company. It develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centers and golf courses. They are an Alberta company operating in of Canada and US. Its web site is here Melcor Developments Inc.

The last stock I wrote about was about was BCE Inc (TSX-BCE, NYSE-BCE) ... learn more. The next stock I will write about will be Goodfellow Inc (TSX-GDL, OTC-GFELF) ... learn more on Monday, April 5, 2021 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.