Wednesday, November 22, 2017

IBI Group Inc.

Sound bite for Twitter and StockTwits is: Infrastructure stock. What this stock has going for it at the moment is momentum and lots of insider buying. These two probably count more at the current time that any stock price testing. Because of recent 3 years of earnings losses, none of my tests are going to show the current price as good. The time to buy good companies is when they are down. This might just apply here. See my spreadsheet on IBI Group Inc.

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

What I noticed is a lot of insider buying. The last 3 years has seen net insider buying at 0.11%, 0.01% and 0.6%. Generally you see net insider selling at around 0.01%, so in comparison, the net insider buying is strong for this company. It would seem that insiders feel that the company has a great future.

This stock hit a high around 2012 and has not really done well since then. Revenue recovered a bit in 2016 and EPS is expected to recover this year. For the years 2012 to 2014 inclusive, there were earning losses. The company suspended its dividend in 2014 and has not yet said when this might be reinstated. No analyst seems to see it being reinstated in the near future.

The 5 year low, median and high Price/Earnings per Share Ratios are -0.07, -0.09 and -10.21. These are, of course, not of much use. The corresponding 10 year values are 6.20, 10.04 and 13.88. The corresponding historical or 13 year values are 6.53, 9.98 and 13.43. P/E Ratios tend to be low when a company has had a number of years of earning losses. The current P/E Ratio is 18.51 based on based on a stock price of $7.96 and EPS 2017 estimate of $0.43. This stock price testing shows that the stock price is relatively expensive.

Since we are near the end year, it is probably a good idea to look at the P/E Ratio for 2018. Based on a stock price of $7.96 and 2018 EPS estimate, the P/E Ratio moves down a bit to 15.02. This stock price testing shows that the stock price is relatively expensive.

I get a Graham Price of $2.67. The 10 year low, median and high median Price/Graham Price Ratios are 0.69, 0.99 and 1.27. The current P/GP Ratio is 2.98 based on a stock price of $7.96. When EPS is depressed you would expect that this test could not be past. This stock price testing shows that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.38. The current P/B Ratio is 10.77 based on Book Value of $23.04M, BVPS of $0.74 and a stock price of $7.96. The current P/B Ratio is some 678% higher than the 10 year median P/B Ratio. This stock price testing shows that the stock price is relatively expensive.

There are a couple of things to mention here. When a company is having earning losses, the Book Value generally goes down. This has happened here. The other thing is that the book value was negative for the years of 2013 to 2015 inclusive. The book value only turned positive again in 2016. The Book Value has declined by 43% and 26% per year over the past 5 and 10 years. So it is not surprising that the P/B Ratio today is quite high.

The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.69 a value some 30% higher. The current P/S Ratio is based on 2017 Revenue estimate of $362M, Revenue per Share of $13.85 and a stock price of $7.96. This stock price testing shows that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy (3) and Hold (1) recommendations. The 12 month stock price is $9.13. The 12 month stock price is $9.13. This implies a total return of 14.70 based on a stock price of $7.96. All the return would be from capital gains.

Mmahotstuff on Money Making Articles talk about recent ratings for this company. On Buckeye Business Review we get some technical analysts on this stock.. See what analysts are saying about this company on Stock Chase. They mostly like it.

IBI Group Inc. is an international, multi-disciplinary provider of a range of professional services focused on the physical development of cities. The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development. Its web site is here IBI Group Inc.

The last stock I wrote about was about was Johnson and Johnson (NYSE-JNJ)... learn more. The next stock I will write about will PFB Corp. (TSX-PFB, OTC-PFBOF)... learn more on Friday, November 24, 2017 around 5 pm. Tomorrow on my other blog I will write about Being an Investor... learn more on Thursday, November 23, 2017 around 5 pm.

Also, on my book blog I have put a review of the book Reflections on the Revolution in Europe by Christopher Caldwell 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.

Monday, November 20, 2017

Johnson and Johnson

First I would like to say that I have today sold my shares in Barclay's PLC (NYSE: BCS) and Bombardier Inc. Class B (TSX:-BBD.B, OTC-BDRBF). None of the European banks are doing well and Barclay's has not since 2008 recession. Bombardier has not recovered from the 2000 recession. With the money from Bombardier I bought some more Canadian Utility (TSX-CU, OTC-CDUAF). Looking at a dividend yield test, the Canadian Utility stock is reasonably priced.

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. On all tests but the dividend yield test this stock seems to be relatively expensive. The dividend yield test suggests that the price is reasonable and below the median. If you use the 5 and 10 year median dividend yields, the price also seems relatively expensive. See my spreadsheet on Johnson and Johnson.

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

It took me 5 tries to get the annual statement for 2016. I do not know why they have to make this difficult. They put out lots of information and lots of filings with SEC, but I wanted annual statements. They could make that clear where they are and once you get the statements I had to do a search for the Balance Sheet to find the annual statements.

This stock is considered a dividend king having increased it dividends for about the last 55 years. According to my spreadsheet, dividends have grown by 6.96% and 8.03% per year over the past 5 and 10 years. Longer term growth is better with growth at 10.33% and 11.12% per year over the past 15 and 10 years. This means that the total growth in dividends over the past 5, 10, 15 and 10 years is 40%, 116%, 296% and 641%. So growth is low to good.

The dividend yield is moderate with current dividend yield at 2.43% and the historical median at 2.22%. The 5 and 10 year median yield is a bit higher at 2.99% and 3.06%. With growth and yield after 5, 10 or 15 years, yield would be 4.93%, 5.17% and 6.21%. Also because of dividends after 5, 10 or 15 years, 21.9%, 39.3% or 59.2% of the stock price would have been covered by dividends.

The debt ratios are generally good. The Liquidity Ratio for 2016 is 2.47 with 5 year median of 2.20. The Debt Ratio for 2016 is 1.99 with 5 year median of 2.14. The Leverage and Debt/Equity Ratios for 2016 were 2.01 and 1.01 with 5 year median of 1.88 and 0.88, respectively.

Their long term debt went up some 61% and some 10B. From their statements it seems they might have spent it on Property, Plant and Equipment of $3B and buying back Shares of $8.9B. However, long Term Debt/ Market Cap Ratio is only 0.08, a very low value. I do not really like to see companies borrowing money to buy back shares.

The Return on Equity for 2016 was 23.5% with 5 year median of 21.7%. I have data back to 1988 and ROE has been above 10% each year. The ROE on Comprehensive Income is a bit lower with the ROE for 2016 at 21% and the 5 year median at 18.2%. Since comprehensive income has been published (2006), it has been above 10%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.12, 17.45 and 19.41. The corresponding 10 year ratios are 15.66, 17.36 and 18.99. The historical ones are 16.15, 18.18 and 20.06. The current P/E Ratio is 23.15 based on a stock price of $138 and 2017 EPS estimate of $5.96. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $60.54. The 10 year low, median and high median Price/Graham Price Ratios are 1.41, 1.58 and 1.80. The current P/GP Ratio is 2.28 based on a stock price of $138.00. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 3.71. The current P/B Ratio is 5.05 based on Book Value of $73,979M, BVPS of $27.33 and a stock price of $138.00. The current P/B Ratio is some 36% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 2.22%. The current dividend yield is 2.43% based on dividends of $3.36 and a stock price of $380.00. The current dividend yield is some 9.7% above the historical yield. This stock price testing suggests that the stock price is relatively reasonable and above the median.

However, if you look at the 5 and 10 year median dividend yield, they are both higher than the current yield. The 5 year median dividend yield is 2.99% a value 19% higher than the current yield. The 10 year median dividend yield is even higher at 3.06% and 20% higher than current yield. In this case the stock price looks relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 2.90. The current P/S Ratio is 4.51, a value some 69% higher. The current P/S Ratio is based on 2017 Revenue estimate of $76,324, Revenue per Share of $28.20 and a stock price of $380.00. This stock price testing suggests that the stock price is relatively expensive.

When I look at analyst's recommendations I find that they cover all of them from Strong Buy (6), Buy (5), Hold (8), Underperform (1) and Sell (2). The 12 month consensus stock price is $144.90. This implies a total return of 7.43% with 5.00% from capital gains and 2.43% from dividends.

The problem with being in health care is that you can be sued. JNJ has outstanding suits on the use of Talc Powder according to Eric Sagonowsky at Fierce Pharama. With anything I have read there is no or little risk of cancer from Talc, but a jury may see that differently and JNJ is being suited. JNJ has set up a Digital Beauty QuickFire Challenge according to Beth Snyder Bulik at Fierce Pharma. Tatum Peregrin on the Ledger Gazette talk about some recent activities of institutions on buying and selling this stock. According to my records last year 2291 Institutions owned 65.19% of the shares of this company and today 3065 Institutions own 67.84% of the shares. See what analysts are saying about this company on Stock Chase. Mostly they like the company.

Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here Johnson and Johnson.

The last stock I wrote about was about was Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more. The next stock I will write about will be IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more on Wednesday, November 22, 2017 around 5 pm. Tomorrow on my other blog I will write about Hillsdale Investment Management... learn more on Tuesday, November 21, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, November 17, 2017

Cenovus Energy Inc.

Sound bite for Twitter and StockTwits is: Dividend paying Resource. Price is relatively cheap to relatively reasonable. There is lots of insider buying. See my spreadsheet on Cenovus Energy Inc.

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

One thing I noticed doing the spreadsheet is that there is Net Insider Buying of 0.04%. This is a lot as you would expect this to be around 0.01%. Purchases were made by CEO, CFO, other officers and Directors. They also changed the Chairman and the CEO recently.

The other thing is that their debt increased 103% because they acquired assets from ConocoPhillips including ConocoPhillips' 50% interest in the FCCL Partnership, the oil sands venture which was jointly owned with and operated by Cenovus, as well as the majority of ConocoPhillips' Deep Basin conventional assets in Alberta and British Columbia.

Because a lot of people mention the debt load of this company, I thought I should look at that. The Long Term Debt/Market Cap Ratio at the end of the third quarter is 0.82. This is high, but not too high. The Liquidity Ratio is very good at 2.55 for 2016 and is current lower at 1.41. I like to see this ratio at 1.50 or higher. The Debt Ratio is 1.85 for 2016 with a current one at 1.84. The Leverage and Debt/Equity Ratios for 2016 are 2.18 and 1.08 and are currently at 2.19 and 1.19. So these are also fine. I do not find the debt load troubling.

Dividends have gone up, down and stayed the same over the year. Dividends are down by 25.7% and 1.2% per year over the past 5 and 10 years. There have been big increases in the past, like the increases in 2007 and 2008 of 69.60% and 147.75%. They have also been big decreases like in 2016 of 76.54%.

Although people who have had this stock for say 5, 10 or 15 years are not making much in the way of yield which is 0.57%, 0.67% and 1.89%. However, those same people would have had 9.41%, 25.46% and 81.57% of their stock's price paid for by dividends.

The low, median and high median Price/Earnings per Share Ratios are 21.23, 27.54 and 34.12. The corresponding 10 year ratios are 19.19, 23.25 and 27.17. The historical ratios are 14.76, 17.47 and 20.17. The current expansion in stock price is partially based on higher P/E Ratios. The current P/E Ratios is 4.76 based on a stock price of $12.86 and 2017 EPS estimate of $2.70. This is not as unrealistic as it might first seem as the EPS for the 12 month period ending in the third quarter is 2.73.

However, the EPS for 2017 is high because of accounting done around the acquisition of assets from ConocoPhillips. So if you take out the special earnings due to this purchase the EPS for the 12 month to the end of the third quarter, you have EPS of $0.35. Using this EPS, the current P/E Ratio is 36.74. By this measure the stock is relatively expensive. However, I do wonder about using this method for determining relatively value of the current stock price.

There is some flexibility in calculating the Graham Price. People use the formula in a number of ways. You just need to be consistent for one stock. For this stock I am using the last 3 years of EPS in the formula. I get a Graham Price of $11.32. The 10 year low, median and high median Price/Graham Price Ratios are 0.94., 1.12 and 1.37. The current P/GP Ratio is 1.14 based on a stock price of $12.86. This stock price testing suggests that the stock price is relatively reasonable and just above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.13. The current P/B Ratio is 0.81 based on a stock price of $12.86, Book Value of $19,433M and Book Value per Share of $15.81. The current P/B Ratio is some 62% lower than the 10 year median. This stock price testing suggests that the stock price is relatively cheap. Also, the ratio is less than 1.00. This says that the stock is selling below book value and this also is saying that the stock is relatively cheap.

I get an historical dividend yield of 1.45%. The current dividend yield is 1.56% based on dividends of $0.20 and a stock price of $12.86. The current dividend is lower than the historical one by 7.3%. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform Recommendations. Most are either a Buy or a Hold. The consensus recommendations would then be a Buy. The 12 month stock price is $14.82. This implies a total return of 16.80% based on a current price of $12.86 with 15.24% from capital gains and 1.56% from dividends.

Joey Frenette of Motley Fool currently likes this stock. Clarence Martin on Highlight Press talks about some institutional buyers of this stock. Jeff Lewis in an article in the Globe and Mail talks about recent sale of assets by this company. See what analysts are saying about this company on Stock Chase. Their views are mixed.

Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus Energy Inc.

The last stock I wrote about was about was Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more. The next stock I will write about will be Johnson and Johnson (NYSE-JNJ)... learn more on Monday, November 20, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, November 15, 2017

Keyera Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price seems to be relatively reasonable this year where I found it relatively expensive last year. I still think that the ratios are relatively high for a utility stock. I would like to see them get their Dividend Payout Ratios in line with EPS which they are going to have to do in the future. See my spreadsheet on Keyera Corp.

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

Because the growth of outstanding shares, you need to look at per share growth to determine growth for this company. The outstanding shares have grown at 5.3% and 4.3% per year over the past 5 and 10 years. This can make a difference. The growth in Revenue for the last 5 and 10 years is a decline of 0.5% per year and growth of 6.25% per year. The Revenue per Shares has declined by 5.5% over the past 5 years and increase by 1.9% per year over the past 10 years.

Revenue growth is interesting because the 5 year running averages is much better than shown in other growth. For example, the Revenue growth using 5 year running averages is 8.9% and 10% per year over the past 5 and 8 years. For Revenue per share it is 4.1% and 5.7% over the past 5 and 8 years using 5 year running averages. In this case the 5 year running averages are higher because revenue has decline the past 2 years.

Dividends are paid month and the yield is good at 4.60% based on dividends of $1.68 and a stock price of $36.55. The dividends have grown by 10% and 7.9% per year over the past 5 and 10 years. So dividend increases are moderate. The last dividend increase was for 5.7% and it occurred in this calendar year.

The company used to be an income trust and as such used Distributable Cash to determine what dividends to pay. They became a corporation in 2010. The have continued to increase their dividends as a corporation and see the current dividends as sustainable. Analysts see further increases in dividends.

Using EPS, the payout ratios are too high, with the Dividend Payout Ratio for 2016 at 129% and 5 year coverage of 114%. They are also too high when viewed from the standpoint of CFPS. Here the DPR is 47% with 5 year coverage at 50%. (Generally, it is felt that DPR for CFPS should be no higher than 40%.) If you look at Distributable Cash (DC), the payout is 60% for 2016 with 5 year coverage at 58%. This is a good ratio for DPR for DC.

The Liquidity for this stock is low with a ratio for 2016 of 1.09 and a 5 year median of 1.15. If you add in cash flow after dividends it rises to 1.33. I would prefer to see this at 1.50. The other debt ratios are fine. The Leverage and Debt/Equity Ratios for 2016 are 2.69 and 1.69 with 5 year medians at 2.81 and 1.81. Utilities tend to have heavy debt loads.

The Return on Equity has been above 10% each year of the past 10 years. The ROE for 2016 is 11.8% with a 5 year median of 14.7%. The ROE on comprehensive income is the same as for net income. This is good.

The 5 year low, median and high median Price/Earnings per Share Ratios are 26.36, 30.28 and 35.59. The 10 year values are 22.41, 27.59 and 32.07. The historical ones are 18.79, 22.58 and 26.37. The rise in stock price has been accompanied by a rise in the P/E Ratios. The current P/E Ratio is 25.03 based on a stock price of $36.55 and 2017 EPS estimate of $1.46. This stock price testing suggests that the stock price is relatively reasonable and around the median. I find the P/E Ratios rather high for a utility stock.

I get a Graham Price of $18.57. The 10 year low, median and high median Price/Graham Price Ratios are 1.91, 2.23 and 2.56. The current P/GP Ratio is 1.97 based on a stock price of $36.55. This stock price testing suggests that the stock price is relatively reasonable and below the median. I find the P/GP Ratios rather high for a utility stock.

The 10 year median Price/Book Value per Share Ratio is 3.86. The current P/B Ratio is 3.48 based on a stock price of $36.55, Book Value of $1,949M and Book Value per Share of $10.49. The current P/B Ratio is some 9.9% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. Here again I think that the P/B Ratios are high for a utility stock.

The historical median dividend yield is 5.39%. However, income trust stocks tend to have much higher dividend yields than corporations. The median dividend yield since 2010 is 4% and this is some 14.9% lower than the current dividend yield of 4.60%. The current dividend yield is based on dividends of $1.68 and a stock price of $36.55. This stock price testing would suggest that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold. The vast majority is a Buy and the consensus would be a Buy recommendation. The 12 month consensus stock price is $43.64. This implies a total return of 23.99% with 4.60% from dividends and 19.40% from capital gains. Last year analysts' expected strong growth in stock price also, but the 2016 stock price was similar to that of 2014 and 2015 and so far this year the stock price has declined around 9.7%.

The company has announced their third quarterly results on Cision. Casey Hall on Simply Wall Street says that this stock is trading at a discount to its intrinsic value. He discounts future cash flows to come to this conclusion. In the math he uses analysts' estimates going 5 years out. One problem I see is that analyst estimates tend to be historically off the mark and the further out, the more wrong they tend to be. It is an interesting exercise. Nicole Wilson on the Ledger Gazette talks about some recent slight decreases in analysts' target prices. See what analysts are saying about this stock on Stock Chase. Their views vary.

Keyera provides essential services and products to oil and gas producers in western Canada, and markets related natural gas liquids (NGLs) throughout North America. Its web site is here Keyera Corp.

The last stock I wrote about was about was Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more. The next stock I will write about will be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more on Friday, November 17, 2017 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 - Gordon Pape... learn more on Thursday, November 16, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, November 13, 2017

Dollarama Inc.

Sound bite for Twitter and StockTwits is: Negative Book Value. I think the price on this stock is stupid. The Price/Graham Price Ratio is 26.12 a rather ludicrous number. The book value is negative. The dividend yield is so low you got to wonder if this should be called a dividend paying stock. Risk is high with high debt and negative book value. A recession or wrong movement and this company could be in trouble. It is currently profitable, but insiders are selling. See my spreadsheet on Dollarama Inc.

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

What I noticed on updating the spreadsheet is that they went into debt in order to buy back over 7.4M shares. They also spend all their earnings on buying back shares. They have been buying back shares since2014 but this is only the second year it has severely affected the book value. Because of this the Book Value has declined from $740.5M of 2015 to $466.9M of 2016 and now $100.3M of 2017. In the second quarter of 2017 it has hit a negative value of $59.4M.

Book Value is has declined by 32% and 4% per year over the past 5 and 10 years. Decline in the last two years was at -33 % and 77%. More shares were bought in the first two quarters of 2017. This left the Book Value at a negative value of $59.4M and a decline of 160%. The Book Value is the theoretical breakup value of a company. I personally do not like companies with negative book values.

Declining shares tend to make the growth in EPS or any per share value look better than it really is. Net Income has gone up by 20.8% per year or 157% over the past 5 years. EPS has gone up by 26.4% per year or 223%.

A declining Book Value can make the Return on Equity look better than what it is. It is bad when you have a high ROE and declining book value. The ROE for 2016 is 39.9%. This is very much inflated by declining Book Value. Too high ROE can be a sign of problems with a company.

Another thing to point out is that the Rossy family that started this company is selling off shares. When I look at this stock last year, Neil George Rossy, the CEO has 2.529M shares, now he has 1.08M shares. He used to own some 2.2% of the company and now is holds 1%. Lawrence Rossy, the chairman last year had 11.1M Shares and now he has 7.12M shares. He used to own 9.8% of the company and now he owns 6.3%. Insider selling last year and this year is at 0.08%. This is high. You expect it to be around 0.1% or lower.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.58, 24.96 and 36.15. The 8 year corresponding ratios are 15.94, 20.01 and 24.07. The current ratio is 33.42 based on a stock price of $145.39 and 2017 EPS estimate of $.35. This stock price testing suggests that the stock price is relatively expensive. This is a consumer stock and P/E Ratios are too high.

Problem is that you cannot calculate a Graham Number when the book value is negative. The closes I can get is a value of $5.57 using the latest positive Book Value of$35.6M and Book Value per Share of $0.32. The 10 year low, median and high median Price/Graham Price Ratios are 1.70, 2.13 and 2.57. These are very high for a consumer stock. The current P/GP 26.12 based on a stock price of $145.39. This stock price testing suggests that the stock price is relatively expensive.

I cannot test the stock price using the book value because the book value is negative.

The historical dividend yield is 0.61%. The current dividend yield is 0.30% a value some 50% lower. The current dividend yield is based on dividends of $0.44 and a stock price of $145.39. This stock price testing suggests that the stock price is relatively expensive.

The 8 year Price/Sales (Revenue) Ratio is 2.16. The current P/S Ratio is 4.97 based on a stock price of $145.39, 2017 Sales estimate of $3288M and Sales per Share of $29.27. The current ratio is some 130% higher than the 8 year ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold. Most are a Buy and the consensus would be a Buy. The 12 month stock price is $146.93. This implies a total return of $1.36% with 1.06% from capital gains and 0.30% from dividends.

Prajakta Dhopade at Maclean's Magazine talks about competition from Japan for Dollarama. Ryan Goldsman on Motley Fool says stock is so profitable it is scary. David Jagielski on Motley Fool is more cautious. See what analysts are saying on Stock Chase. They mostly say it is pricey.

Dollarama is a major player in the value retail industry. Headquartered in Montreal, Dollarama owns and operates over 1,000 stores across all ten Canadian provinces. All stores are corporately owned and operated. Its web site is here Dollarama Inc.

The last stock I wrote about was about was Encana Corp. (TSX-ECA, NYSE-ECA)... learn more. The next stock I will write about will be Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more on Wednesday, November 15, 2017 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 - Ryan Modesto... learn more on Tuesday, November 14, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, November 10, 2017

Encana Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Resource. All my stock price testing suggests that the stock price is relatively expensive. The stock hit a low in 2016 and is up by 253% so far from that low. The market tends to go up prior to a company's rebound. Has it already gone up too much? Analysts certainly do not seem any huge stock gain from the current price. See my spreadsheet on Encana Corp.

I do not own this stock of Encana Corp. (TSX-ECA, NYSE-ECA). I have owned this stock before as Alberta Energy Co. I do not tend to hold on to resource stocks for the long term.

The thing you notice is that they are paying dividends that they cannot cover with Earnings. I just have never considered resource stocks to be good long term dividend stocks. Yields can be low and dividends can be adjusted up and down depending on resource prices.

On this stock the dividend yields are very low at currently just 0.48%. I generally do not like to buy a stock with a yield under 1%. Also if you look at dividend growth, dividends are down by 40% and 12% per year over the past 5 and 10 years. This would not be classified as dividend growth stocks, which are the stocks that I favour.

When I look at my spreadsheet all I see is red. Revenue, Earnings, Dividends, Stock Price, Cash Flow, Book Value all are declining over the past 5 and 10 years. Analysts expect this year to be much better than recently past years. For example, analysts expect Revenue to be up some 42% in 2017. This is reasonable as the third quarter shows that the 12 month Revenue to the end of the third quarter is up by 40% over 2016.

The 5 year low, median and high median Price/Earnings per Share Ratios make no sense because the last two years have been earning losses years. The 10 year low, median and high median Price/Earnings per Share Ratios are 6.68, 9.05 and 11.43. They might be reasonable. The corresponding historical P/E Ratios are 10.18, 12.01 and 15.43. This is over a period of 25 years. The current P/E Ratio is 17.75 based on a current stock price of $16.04 CDN$ and 2017 EPS estimate of $0.90 CDN$ (or $0.90 US$). This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $13.61 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.75, 1.00 and 1.35. The current P/GP Ratio is 1.18 based on a stock price of $16.04 CDN$. This stock price testing suggests that the stock price is relative reasonable, but above the median.

I get a 10 years Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 1.76 a values some 30% higher. The current P/B ratio is based on Book Value of $8,866 CDN$, Book Value per Share of $9.11 CDN$ and a stock price of $16.04 CDN$. This stock price testing suggests that the stock price is relatively expensive. Note that Book Value has had no growth recently and it has dropped by 18% and 5% per year over the past 5 and 10 years.

The historical dividend yield is 1.45% CDN$. The current dividend yield is 0.48% based on dividends of $0.08 CND$ ($0.06 US$) and a stock price of $16.04 CDN$ ($12.60 US$). The current dividend is some 84% below the historical median yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Sales (Revenue) Ratio of 2.20. The current P/S Ratio is 2.96 based on Revenue of $5.277 CDN$ ($4,146 US$), Revenue per Share of $5.42 CDN$ ($4.26 US$) and a stock price of $16.04 CDN$ ($12.60 US$). The current P/S Ratio is some 34% higher than 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 Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month stock price is $13.19 US or $16.79 CDN$. This implies a total return of 5.15% with 4.67% from capital gains and 0.48% from dividends based on a current stock price of $16.04 CDN$ ($12.60 US$).

Encana Corp released over Globe News Wire information about their third quarterly results. David Jagielski on Motley Fool suggests that Encana represents a stable investment in the Oil and Gas industry. Stephen Andrade on Weekly Hub talks about recent analysts ratings on this stock. See what analysts have to say about this stock on Stock Chase. They do not seem to like it much.

Encana Corporation is an energy producer that is focused on developing its multi-basin portfolio of natural gas, oil and natural gas liquids (NGLs) producing plays. The Company's operations also include the marketing of natural gas, oil and NGLs. Its web site is here Encana Corp.

The last stock I wrote about was about was CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more. The next stock I will write about will be Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more on Monday, November 13, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, November 8, 2017

CCL Industries Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. This stock has had a great run up in price. No matter how I looked at the price in testing, it is showing up as relatively expensive. Not only has the stock price risen, but the P/E Ratios has also gone up. See my spreadsheet on CCL Industries Inc.

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

One thing that I noticed when updating the spreadsheet was the increase in Long Term Debt and Goodwill and Intangible items. They have been buying companies lately and this would account for the increases. The latest Debt/Market Cap Ratio and GW and Intangible/Market Cap Ratio are at 0.24 and 0.25. These are good ratios so there is no problem.

Whenever I see fast rises in either item, I like to know the reason for the fast rises. Long Term debt is up by 52 % and 59% over the past 2 years and is up by another 64% for the first two quarters of 2017. Goodwill and Intangibles are up by 47% and 45% over the past 2 years and it up by another 61% for the first two quarters of 2017.

Dividends used to be in a moderate range of 2%, but especially lately they have been low and currently they are very low. The current dividend is below 1% at 0.79%. The 5, 10 and historical median dividend yields are 1.07%, 1.68% and 2.10%. They certainly can afford their dividend. The Dividend Payout Ratio for 2016 is 20.5% with 5 year coverage of 20.7%. The DPR for CFPS for 2016 is 9.5% with 5 year coverage of 9%.

The dividend growth has been good for this stock. The dividends are up by 23.4% and 16.6% per year over the past 5 and 10 years. If you had bought and held this stock for 5, 10 or 15 years, your current dividend yield would be 6.16%, 7.02%, or 13.11%.

This stock has been on a tear since 2011. The stock price is up some 756% since then. The stock is up some 50.15% and 24.7 % per year over the past 5 and 10 years. The portion of this total return attributable to capital gains is 48.59% and 23.68%. The portion of this total return attributable to dividends is 1.57% and 1.03%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.03, 20.65 and 27.26. The 10 year corresponding ratios are 13.31, 17.57 and 21.28. The historical ones are 9.39, 14.13 and 16.91. The current P/E Ratio is 23.31 based on a stock price of $58.50 and EPS 2017 estimate of $2.51. This stock price testing suggests that the stock price is relatively reasonable but above the median to relatively expensive.

While the stock price has been rising, so have the P/E Ratios. However, the stock price has gone up a lot faster. The stock price to the end of 2016 is up over the past 5 and 10 years by 756% and 830%. The P/E Ratio has grown by 119% and 122% over the past 5 and 10 years.

I get a Graham Price of $24.96. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 1.00 and 1.19. The current P/GP Ratio is 2.34 based on a stock price of $58.50. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.46. The current P/B Ratio is 5.30 a value some 263% higher. A P/B Ratio of 1.46 is relatively low, but one of 5.30 is relatively high. The current P/B Ratio is based on a Book Value of $1,941M, Book Value per Share of $11.03 and a stock price of $58.50. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 2.10%. The current dividend yield is 0.79% based on dividends of $0.46 and a stock price of $58.50. The current dividend yield is some 63% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 1.07%. The current dividend yield at 0.79% is some 27% lower. So no matter how you look at testing the stock price via dividend yield, the stock price is show up as relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.95. The current P/S Ratio is 2.13 based on 2017 Revenue estimate of $4,826M, Revenue per Share Ratio of 27.43 and a stock price of $58.50. The current P/S Ratio is some 124% higher than 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 Buy (6) and Hold (3). The consensus would be a Buy. The 12 month stock price is $70.63. This implies a total return of 21.52% with 0.79% from dividends and 20.74% from capital gains based on a stock price of $58.50.

There is a Press Release on Market Wired about this company's third quarterly results today. Brent Freeman on Simply Wall Street uses expected cash flow and says the stock is slightly undervalued. See what analysts are saying about this tock on Stock Chase. There are mixed views.

A global specialty packaging pioneer, CCL is the largest label company in the world and provides innovative solutions to the Home & Personal Care, Premium Food & Beverage, Healthcare & Specialty, Automotive & Durables and Consumer markets worldwide. The Company is divided into three reporting segments: CCL Label, CCL Container and its consumer arm, Avery. Its web site is here CCL Industries Inc.

The last stock I wrote about was about was Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. The next stock I will write about will be Encana Corp. (TSX-ECA, NYSE-ECA)... learn more on Friday, November 10, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy, November 2017... learn more on Thursday, November 09, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, November 6, 2017

Brookfield Asset Management Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. This stock seems to be overpriced. It does not matter if I use US$ or CDN$ as ratios are the same no matter what the currency used. In any test you either use CDN$ or US$. See my spreadsheet on Brookfield Asset Management Inc.

I do not own this stock of Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM). I used to own an earlier version of this stock as Hees International, then Edper Group and then EdperBrascan back in 1987 to 1999. This firm has a complicate structure. They have a management team and a board of directors, but also Managing Partners and Managing Directors.

What I noticed in updating my spreadsheet is that the EPS swings all over the place. The 5 and 10 year growth in EPS is EPS down by 4.3% and up by 2.0% per year. This looks bad. However, if you use the 5 year running averages you have growth of 13.6% and 9.6% per year. With this you are comparing the average for the 5 year period ending in 2016 with the 5 year periods ending in 2011 and 2006.

If earnings are volatile, it is better to look at 5 year running averages to get a sense if EPS are growing or not. This is in US$ terms. In this case, I feel that EPS are growing nicely and the 5 year running periods are a better judge of this growth.

The growth in CFPS is a bit different. The 5 growth is better than the 5 year running average 5 year growth. The CFPS has grown by 29.3% per year over the past 5 years. However, if you look at the 5 year growth using 5 year running average, the growth is at 9% per year. This is in US$ terms. In this case, the 5 year running average is a better indicator of growth and growth seems to be around 9% per year.

Shares have not increased much over the past 5 and 10 years. They are up by less than 1% per year over the past 5 and 10 years.

Has the stock made money for its Shareholders? The total return over the past 5 and 10 years to the end of 2016 is at 22.22% and 7.94% per year. The portion of this total return attributable to dividends is 3.39% and 2.07% per year. The portion of this total return attributable to capital gain is 18.83% and 5.87% per year.

If you had held this stock for the past 5, 10 or 15 years your dividend yield on your purchase price if you purchased the stock at a median price would be 3.32%, 2.67% or 16.46%. If you had held this stock for the past 5, 10 or 15 years your dividends would have paid for 21.15%, 26.75% or 192.72% of your purchase price if you purchased the stock at a median price.


The 5 year low, median and high median Price/Earnings per Share Ratios are 12.61, 14.02 and 15.44. The 10 year corresponding values are 12.69, 15.24 and 16.98. The historical ones are 11.14, 13.24 and 15.18. The current P/E Ratio is 92.66 based on a stock price of $53.22 CDN$ (41.70 US$) and 2017 EPS estimate of $0.57 CDN$ ($0.45 US$). This is because everyone expects EPS to be very low this year, dropping some 72% from 2016. This stock price testing suggests that the stock that the stock is relatively expensive.

Seems analysts do not expect the company to make much this year. EPS are expected to be better in 2018 but that only moves the P/E Ratio to 38.97. If you use the 12 month EPS to the end of the second period, which is $1.65 CDN$ you get a P/E of 32.32. The thing is that using the P/E Ratio to judge current price will not always give a clear picture.

I get a Graham Price of $19.60 CDN$. The 10 year low median and high median Price/Graham Price Ratios are 0.81, 0.91 and 1.02. The current P/GP Ratio is 2.72 based on a stock price of $53.22 CDN$. This stock price testing suggests that the stock that the stock is relatively expensive. The Graham Price also has the EPS estimate in its formula.

The 10 year median Price/Book Value per Share Ratio is 1.34 CDN$. The current P/B Ratio is 1.79 a value some 34% higher. The current P/B Ratio is based on a stock price of $53.22, Book Value of $28,501M, and BVPS of $29.73 CDN$. This stock price testing suggests that the stock that the stock is relatively expensive.

The current dividend yield is 1.34%. The historical median dividend yield is $2.48% US$. The current dividend yield is some 46% lower than the historical median. The current dividend yield is based on dividends of $0.56 US$ and a stock price of $41.70 US$. This stock price testing suggests that the stock that the stock is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.20 US$. The current ratio is 1.53 US$ based on 2017 Revenue estimate of $26,064 US$, Revenue per Share of $27.19 US$ and a stock price of $41.70 US$. The current P/S Ratio is some 28% higher than the 10 year median ratio. This stock price testing suggests that the stock is relatively expensive.

When I look at analysts' recommendations I find Buy (2) and Hold (1) recommendations. There are not many analysts following this stock. The 12 month stock price consensus is $41.49.US or $52.97 CDN$. This implies a total return of 0.87% with a capital loss of 0.47% and dividends of 1.34%. This is based on a current price of $52.33 CDN$ or $41.70 US$.

There is a wide spread of stock price consensus estimates with a high of $66.37 and a low of $34.04 CDN$ or a high of$52.00 and a low of $26.67 US$. The mean of these estimates is $41.49.US or $52.97 CDN$. 6 estimates are given.

Juan de la Hoz on Seeking Alpha. One comment on this analysis was "Our problem with BAM is that it relies so much on execution brilliance but we find the human factor the toughest risk to price in. One bad appointment could lose them 100s of millions." Jacob Donnelly of Motley Fool likes this company. Daryl Painter on Simply Wall Street looks at the ownership structure for this company. Tom Metcalf and Neil Weinberg of Bloomberg on the Financial Post talks a bit about the history of this company.

Brookfield Asset Management Inc. is a global alternative asset manager. The company has more than a 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity. Brookfield offers a range of public and private investment products and services, and is co-listed on the New York, Toronto and Euronext stock exchanges. Partners Ltd owns 17%. Its web site is here Brookfield Asset Management Inc.

The last stock I wrote about was about was Molson Coors Canada (TSX-TPX.B, NYSE-TAP)... learn more. The next stock I will write about will be CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Wednesday, November 8, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks November 2017... learn more on Tuesday, November 7, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, November 3, 2017

Molson Coors Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Analysts' recommendations are rather mixed, but price might be low. Beer stocks are probably no longer growth stocks. See my spreadsheet on Molson Coors Canada.

I do not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). The US company is called Molson Coors Brewing Co. In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one of the original companies that I purchased and I did very well with it before it was bought out.

Updating the spreadsheet was frustrating. From the statements, and there were three sets, it was not obvious what to use. Web sites of 4-Tradings, Reuters and Google Finance were not helpful in all cases. They all had different EPS and none that I could find in any Molson statements. For example, 4-tradings says that the EPS for 2016 is $1.28 and Google Finance says $9.27 (which I can find and have on my spreadsheet). Reuters Stock Report says EPS $4.33 as does TD WebBroker. So I do not know where 4-Traders, Reuters or TD got their figures.

The problem is that whenever I have had problems sorting out financial statements, so do others that show such things online. I should note that I had no problems with the statements from the third quarter of 2017. The sites I checked are also in agreement although some have not yet been updated for the third quarter.

This company does declare the Canadian dividend and pay in Canadian dollars. However, the dividend is based on what is paid on the American company. For example, the dividend to be paid on in Canadian dollar for December 15, 2016 was announced by the company on November 16, 2016. See the Press Release.

In CDN$ terms dividends yields are moderate as is the dividend increases. The current dividend yield is 2.3% and the 5, 10 and historical median dividend yields are 2.37%, 2.20% and 2.13%. The dividends have growth at 11.8 and 11.4% per year over the past 5 and 10 years in CDN$. Using the year end exchange rate dividends over the past 10 years has grown by 195%. However, the actual dividends paid have grown by 239.8%. The company declares the Canadian dividends in CDN$ ahead of their payment.

However, the story is a bit different in US$ terms. Dividends yields are low to moderate and the growth is low to moderate. Dividends are paid in US$ or based on US$. The current dividend yield is 2.03% (same as the CDN rate). The 5, 10 and historical dividend yields are 2.33%, 2.27 and 1.88%. The dividends have grown by 5.8% and 9.9% per year over the past 5 and 10 years. (Differences are because of exchange rates.)

I consider dividends in the 1% range or below to be low, in the 2 to 3% range to be moderate and above 4% to be good. I consider 0 to 8% dividend growth to be low, from 8% to 15% growth to be moderate and above 15% to be good.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.70, 17.27 and 18.85. The corresponding 10 year ratios are 13.67, 16.56 and 18.54. The Historical Ratios are 13.38, 16.98 and 19.33. The current P/E Ratio is 20.27 based on a stock price of $80.87 and 2017 EPS of $3.99. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. The current CDN$ price is $103.95.

I get a Graham Price of $91.03 CDN$. The low, median and high median Price/Graham Price Ratios are 0.82, 0.92 and 1.04. The current P/GP Ratio is 1.14 based on a stock price of $103.95 CDN$. This stock price testing suggests that the stock price is relatively expensive. This testing is done using CDN$. Corresponding US price is $80.87.

I get a 10 year median Price/Book Value per Share Ratio of 1.14. The current P/B Ratio is 1.46 based on Book Value of $12,488M, BVPS of $55.35 and a stock price of $80.87. The current P/B Ratio is some 28% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is done using US$. Corresponding CDN price is $103.95.

I get a historical median Dividend yield of 1.88%. The current dividend yield of 2.03% is some 7.9% higher. The current dividend yield is based on dividends of $1.64 and a stock price of $80.87. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is done using US$. Corresponding CDN price is $103.95.

I get a 10 year median Price/Sales (Revenue) Ratio of 2.43. The current P/S Ratio is 1.64 a value some 32% lower. This current ratio is based on Revenue estimate for 2017 of $11,083M, Revenue per Share of $49.28 and a stock price of $80.87. This stock price testing suggests that the stock price is relatively cheap. This testing is done using US$. Corresponding CDN price is $103.95.

As you can see below the analysts' consensus is all over the place. Revenue is expected to jump some 127% in 2017. If you look at the 12 months ending at the end of the third quarter, the Revenue is up 119%. So the revenue estimates seems reasonable. EPS is expected to decline by 57% in 2017. If you look at the 12 months ending at the end of the third quarter, the EPS is up 13% or at $10.45. The 2017 estimate is lower at $3.99. However EPS to the end of the third quarter is $3.72. So a full year at $3.99 might be reasonable. All the sites giving EPS estimates for 2017 basically agree.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. The consensus would be a Buy. The 12 months stock price is $97.46 US$. This implies a total return of 22.60% based on a stock price of $80.87 US$. The total return consists of 20.56% in capital gains and 2.03% in dividends.

Zacks on Benzinga talks about this company's share moving down 15.9% this year while the industry has moved up 25.1%. Goose Hollow Investments on Seeking Alpha thinks that this company is a Buy. Jennifer Salazar on Ledger Gazette talks about Barenberg Bank issuing a Sell Recommendation on this stock. See what analysts are saying about this company on Stock Chase.

Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors Canada.

The last stock I wrote about was about was Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more. The next stock I will write about will be Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more on November 6, 2017 around 5 pm.

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

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, November 1, 2017

Pason Systems Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. On a number of measures the stock price seems expensive. The only one that shows the stock as cheap is the dividend yield test. The company has had a hard time lately. It is probably cheap, but it would be risky. Also, the stock price is where it was in 2006. There is also insider selling. See my spreadsheet on Pason Systems Inc.

I do not own this stock of Pason Systems Inc. (TSX-PSI, OTC-PSYTF). I read a report on this stock in the Buy and Sell Advisor in September 2013. I had not heard of this dividend growth company before so I decided to investigate it.

The thing I noticed when updating my spreadsheet is that the Chairman of the Board, James Douglas Hill seems to be the only insider with a significant number of shares and he is selling off his shares. When I first looked at this company in October 2013 Mr. Hill has just over 15M shares that were around 19 % of the outstanding shares. Today he has just over 10M which are around 12% of the outstanding shares. He sold shares in 2014, 2015 and 2016 and apparently is set to sell some 1.5M more shares.

James Douglas Hill is also a significant shareholder through J. D. Hill Investments Ltd. This investment does not appear to be changing. J. D. Hill Investments Ltd owns some almost 20M shares which is some 24% of the outstanding shares.

The other thing I noticed is that this company has very good debt ratios. The Liquidity Ratio for 2016 was 8.61 with a 5 year median of 4.08. The Debt Ratio for 2016 was 8.96 with a 5 year median of 6.59. What I like to see is ratios of 1.50 and above. This is way above 1.50. The Leverage and Debt/Equity Ratios are also good at 1.13 and 0.13 for 2016 and 5 year median ratios of 1.21 and 0.21. This company has no long term debt. Good debt ratios mean that a company can weather the bad times.

The last thing I noticed is that the company has just had two rather bad years with earning losses and declining revenue. They service the oil and gas industries which have a challenging time with quite low oil and gas prices. This company has suffered because of the lack of oil and gas drilling.

They have wisely stopped dividend increases. I know that dividend investors do not generally think like I do, but I prefer companies that pay in dividends what they can afford. When they are doing poorly then they could stop increasing dividends or in some cases cut or delete them. For this company no one seems to think that they will cut dividends, but no one sees any increases anytime soon.

Dividends are moderate and the dividend growth is good. The current dividend yield is 3.75% with 5, 10 and historical median dividend yields of 3.19%, 2.44% and 2.19%. The dividend growth for the past 5 and 10 years is at 14.2% and 21.1% per year.

They cannot current cover their dividends. They have had two years of earnings losses. They 5 year cover of dividends is 207% with negative Dividend Payout Ratios in 2015 and 2016. The company is expected to have positive earnings in 2017 and 2018 should this situation should change for the better. Also this company has cash equal to $1.73 per share or 8.8% of the current stock price.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.86, 21.00 and 26.15. The 10 year ratios are 14.60, 19.90 and 25.15. The Historical ones are 13.14, 18.80 and 23.64. The current P/E Ratio is 39.37 based on a stock price of $18.11 and 2017 EPS estimates of $0.46. This stock price testing suggests that the stock is relatively expensive. However, since earnings are depressed this may not be a good measure.

I get a Graham Price of $6.69. The 10 year low, median and high median Price/Graham Price ratios are 1.37, 2.09 and 2.52. The current P/GP Ratio is 2.71 based on a stock price of $18.11. This stock price testing suggests that the stock is relatively expensive. However, since earnings are depressed this may not be a good measure.

The 10 year median Price/Book Value per Share Ratio is 3.40. The current P/B Ratio is 4.19. The current P/B Ratio is based on Book Value of $365M, BVPS of $4.32 and a stock price of $18.11. The current P/B Ratio is some 23% higher than the 10 year median P/B Ratio. This stock price testing suggests that the stock is relatively expensive. However, the Book Value cannot grow when a company is not earning money. This also may not be a good measure.

The current dividend yield is 3.75%. It is based on dividends of $0.68 and a stock price of $18.11. The historical median dividend yield is 2.19% a value some 71% lower. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.41. The current P/S Ratio is 6.20 a value some 41% higher. The current P/S Ratio is based on 2017 Revenue estimate of $247M, Revenue per Share of $2.92 and a stock price of $18.11. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. The consensus recommendations would be a hold. The 12 month stock price consensus is $20.50. This implies a total return of 16.95% with 13.20% from capital gains and 3.75% from dividends.

An MTNV Staff Contributor on Digital News and Financial Analysis looks at this stock and it ratios seem poor. Kenneth Searles on Melville Review says that the Williams Percent Range says that the stock is neither overbought nor oversold. Matthew Smith on Simply Wall Streetthinks that the stock is overpriced based on his relative valuation model but he feels it has growth potential. See what analysts are saying on Stock Chase. One has shorted this stock and has gone long of Trican Well Services.

Pason is the leading global provider of specialized data management systems for drilling rigs. Their solutions, which include data acquisition, well-site reporting, remote communications, and web-based information management, enable collaboration between the rig and the office. Its web site is here Pason Systems Inc.

The last stock I wrote about was about was North West Company (TSX-NWC, OTC-NWTUF)... learn more. The next stock I will write about will be Molson Coors Canada (TSX-TPX.B, NYSE-TAP)... learn more on Friday, November 3 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 - Keith Richards.... learn more on Thursday, November 2, 2017 around 5 pm.

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

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