Wednesday, March 22, 2017

AltaGas Ltd

Sound bite for Twitter and StockTwits is: Dividend growth utility. This stock seems to be testing as cheap to reasonable on some basis. The utility also has some vulnerability where liquidity, DRP and declining Revenue per Share is concerned. See my spreadsheet on AltaGas Ltd.

I own this stock of AltaGas Ltd (TSX-ALA, OTC-ATGFF). When I bought this stock in 2009 it was on many dividend growth stock lists. In 2009, I saw that this stock also had good growth in Revenues, Earnings, Dividends, and Stock Prices over the last 5 and 10 years. The stock had a fairly strong balance sheet. I took a small position in this stock, and planned to wait and see how things go with this stock before buying more. I bought more in 2010 and 2012.

So how have I done? Now I have been invested in the company for almost 8 years. I have made a total return per year of 13.17% with 5.78% per year from capital gains and 7.39% per year from dividends. So some 54% of my total return is dividends and 46% of my total return is capital gains.

The dividend yield has always been good on this stock. This used to be an income trust company so they will probably never again hit the high historical yields. They changed from an income trust in 2010 and that is more than 5 years ago. The current dividend is 6.78% based on dividends of $2.10 and a stock price of $30.98. I expect dividends to be more than 4% going forward. The 5 year median dividend yield is 4.47%.

Analysts seem to feel that the dividends will continue to increase even though the Dividend Payout Ratio against EPS is high. For 2016 it is 204% and for the last 5 years it is 192%. No one seems to expect that this will get much better soon. This is because many analysts still look at DPR using AFFO. For 2016 the DPR for AFFO was 68% and it is expected to be similar in 2017 and 2018.

For this stock the outstanding shares have been increasing by 13% and 12% per year over the past 5 and 10 years. Therefore to really check on growth you have to look at per share values. It does make a difference. For example Revenue growth over the past 5 and 10 years is at 7% and 4.9% per year. If you look at Revenue per Share, this has declined over the past 5 and 10 years by 5.6% and 5.9% per year.

The utility has third vulnerability in the low Liquidity Ratio. This ratio for 2016 is 0.74. If ratio is less than 1.00 it means that the current assets cannot cover the current liabilities. If you add in cash flow after dividends it is just up to 0.86. If you add back in the current portion of the long term debt the ratio is 1.21. Again if you add in cash flow after dividends it is up to 1.40. The preferred value for this ratio is 1.50 or above. Not only do covering current liabilities depend on current cash flow it depends on the current portion of the long term debt being rolled over.

The other debt ratios are fine. The Debt Ratio is 1.83. The preferred ratio is 1.50 and above. The Debt/Market Cap Ratio is 0.60. This ratio is just worrying if it approaches 1.00. The Leverage and Debt/Equity Ratios are 2.21 and 1.21.

The 5 year low, median and high median Price/Earnings per Share Ratios are 28.32, 31.83 and 35.33. The corresponding 10 year values are 21.99, 25.98 and 29.56. The historical ones are 13.02, 15.83 and 18.70. To me the reasonable ones are the historical ones. The current P/E Ratio is 29.50 based on a stock price of $30.98 and 2017 EPS estimate of $1.05. Compared to the 10 year and historical ratios, this one is relatively high and shows a relatively expensive stock price. Using P/E Ratios may not be the best method of determining stock price reasonability for this company.

I get a Graham price of 22.56. The 10 year low, median and high median Price/Graham Price Ratios are 1.28, 1.46 and 1.62. The current P/GP Ratio is 1.37 based on a stock price of $30.98. 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 1.91. The current P/B Ratio is 1.44 based on Book Value per Share of $21.54 and a stock price of $30.98. The current P/B Ratio is some 25% lower than the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

For dividend yield testing, the only one we can use is the 5 year one of 4.47%. This is because this stock used to be an income trust company until 2011. The current dividend yield is 6.78% based on dividends of $2.10 and a stock price of $30.98. The current dividend yield is some 51% above the 5 year dividend yield. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy and Hold recommendations. There are more Hold recommendations than Buy Recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $35.52. This implies a total return of 21.43% with 6.78% from dividends and 14.65% from capital gains.

Kay Ng of Motley Fool feels that you can trust AltaGas Ltd.'s high dividend. An report from Market Wired on BOE Report gives an outline of the fourth quarterly results for this company. See what analysts are saying about this stock on Stock Chase. The views are rather mixed.

AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas Ltd.

The last stock I wrote about was about was TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more . The next stock I will write about will be Melcor Developments Inc. (TSX-MRD, OTC-MODVF)... learn more on Friday, March 24, 2017 around 5 pm. Tomorrow on my other blog I will write about Have Banks Learned Nothing... learn more on Thursday, March 23, 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.

Monday, March 20, 2017

TransCanada Corp

Sound bite for Twitter and StockTwits is: Dividend growth utility. Testing the stock price says that it is reasonable and above the median to expensive. See my spreadsheet on TransCanada Corp.

I own this stock of TransCanada Corp (TSX-TRP, NYSE-TRP). I bought the stock in 2000 at an opportune time. The company had been cutting their dividend payments in order to re-organize and get the company into shape for long term profitability. This company's stock fell hard because of this. People who depend on dividends for their income can be an unforgiving lot and can get really upset at company when a trusted company cuts dividends.

They cut the dividend in 1999 and it was able to surpass the old dividend high by 2005. If you hold companies for the longer term like I do, this can happen to one of your stocks. To sell you stock at such a time may not be your best options. However, every situation must be properly analyzed to determine the appropriate course of action.

For the stock I bought 2000, some 16 years ago, I am earning a dividend yield of 20.32% on my original purchase price. That is because I bought my initial stock very cheap. For the two stock purchases I made in 2006 some 10 years ago, I am making a dividend yield of 7.36% and 7.40% on my original purchase price. It pays to buy good companies when they take a big hit.

The stock has good dividends. The current dividend yield is 4.17% based on dividends of $2.50 and a stock price of $59.98. The 5 year median dividend yield is 3.54%, the 10 year median dividend yield is 4.06% and the historical median dividend yield is 4.28%.

I must admit that I have some concerns about the low EPS and high Dividend Payout Ratios of late. The dividend paid in 2016 was $2.26 and EPS was just $0.16. For 2016 there was good will and other asset impairment charges and loss on the sale of assets. This occurred also in 2015. Analysts do not expect the same in 2017. For 2016 the company says that what they really earned was $2.78 per share and that the DPR for this was 81%.

No analyst seems to expect a dividend cut. In fact they think that dividends will go up again in 2018 and 2019. The dividend growth has been low with the dividend growth over the past 5 and 10 years at 6.37% and 5.85% per year. However, the last dividend increase was higher than it has been for quite some time at 10.6%. This would suggest that the company also expects growth in earnings in the near future.

The debt ratios are fine, but nothing to write home about. The best one is the Long Term Debt /Market Cap Ratio which is 2016 was 0.76. You get concerned with it is closing on 1.00. So this is fine at present. The Liquidity Ratio is 1.05. This means that the current assets can (just) over the current liabilities. If you added in cash flow after dividends, it is a better 1.46. The Debt Ratio is 1.42. I prefer these last two to be at 1.50 or above. The Leverage and Debt/Equity Ratios are 3.39 and 2.39. These are a little high.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.25, 22.10 and 24.95. The 10 year ratios are 17.46, 19.10 and 20.74. The historical ones are 12.30, 14.04 and 16.02. It would seem that the price gain has included a rise in P/E Ratio. The current P/E Ratio is 19.99 based on a stock price of $59.98 and 2017 EPS estimate of $3.00. This stock price testing suggests that the current stock price is relatively expensive historically but more relatively reasonable in current market.

I get a Graham Price of $39.81. The 10 year low, median and high median Price/Graham Price Ratios are 1.19, 1.29 and 1.39. The current P/GP Ratio is 1.51 based on a stock price of $59.98. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value of 2.00. The current P/B Ratio is 2.56 based on BVPS of $23.48 and a stock price of $59.98. The current ratio is some 28% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 4.17%. The historical median dividend yield is 4.28%. The current yield is some 2.6% below the historical median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority is Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price consensus is $68.44. This implies a total return of $18.27% with 14.10% from capital gains and 4.17% from dividends based on a current price of $59.98.

Matthew DiLallo of Motley Fool is impressed by the company's yearly dividend growth over the past 17 years. A news article by the Canadian Press on the Calgary Herald talks about the company selling more pipelines to TC Pipe Lines an affiliated limited partnership. It would seem that this company is reorganizing again. See what analysts are saying about this company on Stock Chase.

TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada Corp.

The last stock I wrote about was about was TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more . The next stock I will write about will be AltaGas Ltd (TSX-ALA, OTC-ATGFF)... learn more on Wednesday, March 22, 2017 around 5 pm. Tomorrow on my other blog I will write about Turning to Religion... learn more on March 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.

Friday, March 17, 2017

TransAlta Corp

Sound bite for Twitter and StockTwits is: Utility with issues. On a number of stock price tests this stock is show as relatively cheap. However, make no mistake, this company would be of a higher risk that most utility stocks. Most utility stocks are regarded as safe stocks to buy. This would not be considered a safe stock to buy. See my spreadsheet on TransAlta Corp.

I own this stock of TransAlta Corp. (TSX-TA, NSYE-TAC). I bought this stock in 1987. It was a utility stock and utility stocks were considered to be good investments. I sold some in 2000 as the stock price was below what I had paid for it. I bought some more in February 2009 because it was relatively cheap and it seemed to be recovering. I sold more in August 2012 as this company was doing poorly again.

This stock is not the disaster you might think it is with my buy and hold tendencies. I have made a total return of 6.09% per year on this stock. This is all dividends as the stock is worth less than what I paid for it in 1987. On the other hand dividends have paid 163% of the cost of my stock. This is, of course, not great, but neither is it that bad.

This utility was never much of a dividend growth company. It is even less of one now having cut their dividends by some 78% starting in 2014. The dividends have declined today over the past 5 and 10 years by 23.7% and 11.3%.

Hopefully this is the end of dividend cuts. The dividends seem now to be more affordable. The Dividend Payout Ratio for EPS for 2016 is 73 % and for 2017 it is expected to be 59%. I notice there is a lot of difference in the estimate for 2019. The problem with estimates given today for 2019 is that the further out the estimates the fewer analysts there are giving estimates. The DPR for CFPS for 2016 is 13% and is expected to be around 5% in 2017. By this it would seem that the current dividend level will be fine going forward.

When I was at the last Money Show in Toronto, one of the speakers said of TransAlta that they have been destroying shareholders value for the last 20 years. That was rather harsh. However, when I look at my spreadsheet, I do see an awful lot of red. A bright point is that Comprehensive Income has been increasing by 64% and 16% over the past 5 and 10 years. The reason that the 5 year growth is so good is because 5 years ago was a really bad year for Comprehensive Income. A counter point for this is that if you look at 5 year running averages for the past 5 years, Comprehensive Income is down by 28.6% per year. This means that the last 5 years of comprehensive Income is lower than the 5 years previous (or years 6 to 10). Unfortunately, Comprehensive Income hit a peak in 2014 and has been declining since then.

The debt ratios are rather mediocre. (They are interestingly enough better than Enbridge which I just reviewed.) The Liquidity Ratio for 2016 is 1.28. At least the current assets cover current liabilities. If you add in cash flow after dividends the ratio becomes 1.82.

The Debt Ratio is 1.47 and it has a 5 year median of 1.58. I like to see this ratio at 1.50. The Leverage and Debt/Equity Ratios are 3.13 and 2.13 respectively with 5 year median at 2.74 and 1.74. (These are also better than Enbridge was.)

The 5 year median Price/Earnings per Share Ratios are not valid because of recently EPS losses. The 10 year low, median and high median P/E Ratios are 15.19, 17.56 and 20.26. The historical P/E Ratios are 14.85, 16.45 and 21.19. The current P/E Ratio is 26.67. This stock price testing suggests that the stock price is relatively expensive. I wonder how valid this test is because of recent EPS losses.

I get a current Graham Price of $5.47. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.30 and 1.51. The current P/GP Ratio is 1.32 based on a stock price of $7.20. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.73. The current P/B Ratio is 1.46 based on BVPS of $4.92 and a stock price of $7.20. The current P/B Ratio is some 15.5% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. On an absolute basis, a P/B Ratio under 1.50 suggests that the stock price is cheap.

Because of declining dividends, I think that the dividend yield test would not show us anything valid.

I have statistics on AFFO for the past 6 years. The 5 year low, median and high median Price/AFFO Ratios are 5.16, 10.28 and 15.40. The current P/AFFO Ratio is 6.05. This is some 41% below the 5 year median P/AFFO Ratio. This would suggest that the stock price is cheap to reasonable. It is certainly below the median.

The 10 year P/S Ratio is 1.72. The current ratio is 0.88 based on Revenue estimate of $2,468M for 2017 or Revenue per Share of $8.59. The current ratio is some 51% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Cash Flow per Share Ratio is 5.78. The current P/CF Ratio is 2.39. The current P/CF Ratio is based on 2017 CFPS estimate of $3.01. The current P/CF Ratio is some 58.6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold and Underperform Recommendations. However, the vast majority is a Hold and the consensus recommendation would be a Hold. The 12 month stock price if $7.73. This implies a total return of 9.58% with 7.36% from capital gains and 2.22% from dividends.

Nelson Smith of Motley Fool thinks this stock is cheap and a great current buy. Basically he says that the stock is price at the value of its investment in TransAlta Renewables and you are getting the rest of the company for free. Andrew Walker of Motley Fool talks about the fact that TransAlta has made a deal with the current Alberta Government and this is good news.. Jamie Williams on Daily Quint says that Zacks Investment Research upgraded shares of TransAlta Corporation from a Sell rating to a Buy rating. See what analysts are saying about this stock on Stock Chase. Mostly they do not care for it.

TransAlta Corp. is Canada's largest investor-owned, unregulated power generation and energy-marketing company. The company owns and operates power plants in North America and Australia. Its web site is here TransAlta Corp.

The last stock I wrote about was about was Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more . The next stock I will write about will be TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more on Monday, March 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.

Wednesday, March 15, 2017

Enbridge Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Stock. On some basis this stock may look expensive, but dividend yield and P/S Ratio testing suggests that it is cheap to reasonable. High debt ratios can give it some vulnerability in bad times. See my spreadsheet on Enbridge Inc.

I own this stock of Enbridge Inc. (TSX-ENB, NYSE-ENB). I first bought this stock in 2005 and then bought more in 2008 and 2009. This stock was on the Dividend Achievers, the Dividend Aristocrats list and also on Mike Higgs' list of Canadian Dividend Growth stocks. Enbridge is considered to be a low risk stock.

This stock has done well for me. My total return is 15.21% with 12.05% in capital gains and 3.16% in dividends. Dividends have paid for 56% of the cost of my stock. On the share I bought in 2005, I am earning a dividend yield of 12.98% on my original purchase amount. My dividends have increased 13.1% per year. For the stock I bought in 2008, I am earning 11.55% on my original purchase amount and these dividends have increased by 14.8% per year.

The dividend yield is moderate to good. The current dividend yield is 4.29% based on a stock price of $54.38 and dividends of $2.33. This 5 year median dividend yield is 2.86%. The 10 year median dividend yield is 3.26% and the historical dividend yield is 3.49%. The dividend growth is moderate. The 5 and 10 year dividend growth is at 16.7% and 13.9% per year. They seemed to have increased their dividend every year since 1996.

Outstanding Shares have been increasing by 3.8% and 3.3% per year over the past 5 and 10 years. So when looking at growth, you should look at per share values. It can make a difference. For example, the Revenue has been growth in by 12.2% and 12.5% per year over the past 5 and 10 years. The Revenue per Share has grown over the past 5 and 10 years at 8.1% and 8.9% per year.

Their debt is quite high. The Liquidity Ratio for 2016 is 0.65. This means that current assets cannot cover current liability. If you add in cash flow after dividends and take off the current portion of the long term debt, this ratio only goes to 1.31. This is still a rather low ratio as the preferred ratio is 1.50 or higher. Covering current liabilities depends on cash flow and that the current portion of the long term debt is handled.

The Debt Ratio is also a bit low at 1.42 where the preferred ratio would be 1.50 or higher. The Leverage and Debt/Equity Ratios are rather high at 3.39 and 2.39 respectively. The Debt/Market Cap Ratio is currently at 0.68 which is not bad, but the one for 2015 was 0.99. You worry when this ratio near 1.00.

The 5 year low, median and high median Price/Earnings per share Ratios are 33.47, 38.48 and 43.82. The 10 year ratios are 19.52, 22.71 and 25.90. The historical P/E Ratios are 15.00, 16.79 and 20.37. I find only the historical ratios as being realistic for a utility stock. The current P/E Ratio is 22.95 based on a stock price of $54.38 and 2017 EPS estimate of $2.37. In consideration where this ratio has been this would seem a rather reasonable P/E Ratio, but it is rather on the high side for a Utility stock. You also got to wonder how good this test is for this stock.

I get a Graham price of $32.14. The 10 year low, median and high median Price/Graham Price Ratios are 1.51, 1.82 and 2.13. These are rather high ratios for a Utility stock. The current P/GP Ratio is 1.69. It looks relatively reasonable, but I think it is too high for a utility stock.

I get a 10 year median Price/Book Value per Share Ratio of 2.95. This is also rather high with for a utility stock. The historical median P/B Ratio is 2.56. The current P/B Ratio is 2.81. It is some 9.5% above the historical median ratio. This testing would suggest that the stock price is relatively reasonable but above the median.

Interestingly the dividend yield is higher now that it has been for quite a while. The current dividend yield is 4.29%. The historical median dividend yield low at 3.49%. The current yield is some 23% higher than the historical dividend yield. This testing suggests that the stock is relatively cheap.

The 10 year median P/S Ratio is 1.36. The current P/S Ratio is 1.17, a value some 14% lower. The current P/S Ratio is based on 2017 Revenue estimate of $43674M or $46.31 per share. This stock price testing suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price is $63.67. This implies a total return of 21.37% with 4.29% from dividends and 17.08% from capital gains based on a current price of $54.38.

Nelson Smith of Motley Fool thinks this is a good stock to grow your TFSA. Jesse Snyder on Financial Post says that the CEO of Enbridge says that pipeline companies need to get better at communicating with local communities. Stephanie Haddix on Energy Index says Enbridge's Relative Strength Index of 43.65 indicates the stock is not yet over sold or over bought. See what analysts are saying about this stock on Stock Chase. Mostly they think it is a safe investment.

Enbridge is focused on three core businesses of crude oil and liquids pipelines, natural gas pipelines, and natural gas distribution. They operate in Canada and US. Its web site is here Enbridge Inc.

The last stock I wrote about was about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more . The next stock I will write about will be TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more on Friday, March 17, 2017 around 5 pm. Tomorrow on my other blog I will write about Million Dollar Journey... learn more on Thursday, March 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.

Monday, March 13, 2017

Richelieu Hardware Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth stock. I think that the stock price is too high currently, but it will not always be so. When it has a relatively better price it would be a good long term buy. See my spreadsheet on Richelieu Hardware Ltd.

I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2007 because it was recommend by the Investment Reporter. It was for my Pension Account. I did sell this in 2015 because of the low dividend when I started to withdrawal money from this account. In 2009, I bought this stock for my trading account and I still have it in this account.

Taking both purchases into consideration, I have a total return of 20.5% per year. With the purchase for the Trading account, I have a total return of 22.9%. The portion of this return attributable to capital gains is 21.3% and to Dividends is 1.6%. The dividends over the past 8 years have covered 21% of my purchase price.

This company could now be considered to be a dividend growth company. They have not increased the dividends every year since they started dividends in 2000. However, they have increased the dividends most years. The dividend yield is low. The current dividend is 0.84%. The 5 year median dividend yield is 1.16%, the 10 year median dividend yield is 1.34% and the historical median dividend yield is 1.16%. I would not buy it below a yield of 1%

The dividend growth is moderate. Dividends have growth by 7.8% and 10.3% per year over the past 5 and 10 years. For the stock I bought in 2009, I have earning a dividend yield of 3.7% on my original stock price. This is over an 8 year period. When I bought this stock it had a yield of 1.74%. My dividends grew at just over 9% per year since 2009.

If you bought this stock today at a yield of 0.84% in 5 or 10 years you only be getting a yield of 1.18% or 1.65%. This is based on dividends growing at 7% per year. I used 7% because it is close to the 5 year growth and during last two years dividends have only increased by 6.6% and 6.4% per year. If you start at a very low yield, like under 1% that you do not have much yield after 5 or 10 years. That is why I would not buy a stock with a yield under 1%.

The last thing to mention about dividends is the Dividend Payout Ratios. They are low. The DPR for EPS for 2016 is 19.9%. The 5 year one to 2016 is 21.2%. The DPR for CFPS is 16.8% and the 5 years to 2016 is 17.8%. All are quite low.

The other good thing with this company is the good debt ratios. The Liquidity Ratio for 2016 is 4.42 and the 5 year median ratio is also 4.42. The Debt Ratio is 5.54 with a 5 year median of 5.51. The Leverage and Debt/Equity Ratios for 2016 are 1.22 and 0.22 with 5 year medians also at 1.22 and 0.22 respectively.

The last thing to point out is that the outstanding shares are dropping. They are down by 1.5% and 1.8% per year over the past 5 and 10 years. So to find the real growth you have to look at Revenue, Earnings and Cash Flow rather than the per share values. This can make a difference. For example, the Revenue growth over the past 5 and 10 years is at 10% and 8.2% per year. The Revenue per Share growth over the past 5 and 10 years is at 11.7% and 10.1% per year. The growth is good in both cases, but the real growth is the Revenue growth.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 15.97, 18.88 and 21.79. The corresponding 10 year ratios are 14.03, 15.47 and 16.94. The historical ratios are 12.53, 14.62 and 16.71. Part of the growth in the stock price is due to growth in P/E Ratios. The current P/E Ratio is 22.52 based on a stock price of $27.02 and 2017 EPS estimate of $1.20. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $13.26. The 10 year low, median and high median Price/Graham Price Ratios are 1.16, 1.29 and 1.43. The current P/GP Ratio is 2.04. This stock price testing suggests that the stock price is relatively expensive.

I get a Price/Book Value per Share Ratio of 2.45. The current P/B Ratio is 3.97, a value some 62% higher. The current P/B Ratio is based on a BVPS of $6.80 and a stock price of $27.02. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 1.16%. The current dividend yield is 0.84% based on dividends of $0.23 and a stock price of $27.02. The current yield is some 28% lower than the historical yield. This stock price testing suggests that the stock price is relatively expensive.

There are only a couple of analysts following this stock. There is one Buy recommendation and one Hold recommendation. The consensus would be a Buy recommendation. The 12 months stock price consensus is $29.25. This implies a total return of 9.09% with 8.25% from capital gains and 0.84% from dividends.

This company is a distributor, importer and manufacturer of specialty hardware and complementary products. Its products are kitchen and bathroom cabinets, furniture, and window and door. It is also involved with residential and commercial woodworking industry. It has a large customer base of hardware retailers. Its web site is here Richelieu Hardware Ltd.

The staff at Searcy Sentinel has put out information from indicators on this stock. This stock has a Value Composite score of 46 which basically says that the stock is neither over nor undervalued. Joseph Solitro of Motley Fool likes this stock. See what analysts are saying about this stock on Stock Chase. They like it as a niche player.

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 Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more on Wednesday, March 15, 2017 around 5 pm. Tomorrow on my other blog I will write about Buying Bonds... learn more on Tuesday, March 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.

Friday, March 10, 2017

Goodfellow Inc.

Sound bite for Twitter and StockTwits is: High Risk Dividend Stock. My stock price testing suggests that perhaps the stock price is not currently low enough to justify the risk of owning this stock. I plan to hold on for a while longer, but it would seem that this company has not done well since the last recession. On the other hand a lot of companies have had problems since the last recession. 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. It is about 42% owned by insiders.

Investment Reporter in February 2017 says that recent drop in share price is due to much lower earnings and cash Flow. However, this largely reflects one-time items. They expect the company's earnings, cash flow and share price to recover. They say it remains a buy for long-term share price recovery and attractive dividends. It is of higher risk.

I was looking to see if I should sell this company because it is worth less than what I paid for it. My loss is at 3.19% per year. Dividend payments have covered some 14% of the cost of my stock. I have a capital loss of 19% on this stock. However, after reading the report from the Investment reporter I decided to give it another chance.

This is not a dividend growth company. At least is not that currently. Dividends are paid semi-annually and the board decides twice a year what the dividends will be. They go up as well as down. They have decline in both 2015 and 2016. We will not know what the dividends will be this year until they are declared. Over the past 5 and 10 years dividends have declined by 5.6% and 6.7% per year.

The dividend yield has always been good. The current dividend is 3.50% based on dividends of $0.30 and a stock price of $8.56. The 5 year median dividend yield is 3.46%, the 10 year median dividend yield is 3.97% and the historical dividend yield is 3.74%.

They have been cutting the dividends as the Dividend Payout Ratio was getting too high. The DPR for 5 year to 2016 is 120%. This is because they had an earnings loss in 2016. The DPR for the 5 years to 2015 is 58.9%. Dividends have not been declared for this year yet so it is hard to know what they will be.

Currently no analysts are following this stock so there are no estimates. Therefore I can do no testing using the Price/Earnings per Share Ratios. I also cannot use the latest 12 month EPS because it is negative.

I get a Graham Price of $6.33. This is a drop of 59% from the Graham Price of $15.46 for 2016. The 10 year price/Graham Price Ratios are 0.50, 0.57 and 0.70. The current Price/Graham Price Ratio is 1.35 based on a stock price of $8.56. From this testing it looks like the stock price is relatively expensive. However, the P/GP Ratio for 2016 was only 0.59 based on a stock price $9.05. It would seem perhaps that the stock price is not relatively expensive.

The 10 year Price/Book Value per Share Ratio is 0.70. It has not been over 1.00 since 2008. The current P/B Ratio is 0.66 based on BVPS of $13.01 and stock price of $8.56. The current P/B Ratio is some 6% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Generally speaking a stock is cheap if the P/B Ratio is below 1.00. This would mean that the BVPS (or the company's breakup value) is below the stock price. A P/B Ratio below 1.00 would point to a cheap price, but since it has been below 1.00 for the past 9 years, the stock's value may not be that clear.

The current dividend yield is 3.50% based on dividends of $0.30 and a stock price of $8.56. The historical median dividend yield is 3.74%. The current dividend yield is lower than the historical dividend yield by some 6.4%. This testing suggests that the stock price is relatively reasonable but above the median. Part of the reason for this results is that the dividends have been going south lately.

I found only one report and that is from Investment Reporter that feels that this stock is a Buy. They also rate it a higher risk buy.

This company talks about the fourth quarter results on Market Wired. They talks about the major loss is a result of the very difficult implementation of an Enterprise Resource Planning (ERP) system. Bill Esler on Woodwork Network about this company getting a new CEO. Robert Tattersall on the Globe and Mail looks for net-net stocks. This means stocks with a price below the Book Value per Share. This company is selling below the BVPS.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. H.Q is Delson, Quebec, just outside Montreal. Its web site is here Goodfellow Inc.

The last stock I wrote about was about was Canadian Tire Corp. (TSX-CTC.A, OTC-CDNAF)... learn more . The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more on Monday, March 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.

Wednesday, March 8, 2017

Canadian Tire Corp

Sound bite for Twitter and StockTwits is: Dividend Growth stock. On a number of tests this stock seems to be relatively expensive. However, using the dividend yield test it is not. I do tend to like to dividend yield test best. I also tested it using P/S Ratio and P/CF Ratio and find for the first one it is expensive, but not for the second one. See my spreadsheet on Canadian Tire Corp.

I own this stock of Canadian Tire Corp. (TSX-CTC.A, OTC-CDNAF). In 2000 when I first bought this stock, it was on the Investment Reporter's list of conservative Canadian stocks. I bought this stock for my trading account in 2009 because I have done well with it in my Pension Account and it was a consumer stock.

A lot of Canadians shop in Canadian Tire but I wonder how many think of investing in this stock. I have done well since I first bought this stock in 2000 and also more purchases in 2009 and 2010. I also sold some in 2014 because I needed cash in my RRSP and I tend to sell stocks with the lowest yield. My total return to date is 14.23% per year with 12.69% per year attributable to capital gains and 1.54% to dividends.

Dividends on this stock are low. The current dividend yield is 1.70% based on dividends of $2.60 and a stock price of $152.62. The 5 year median dividend yield is 1.71%, the 10 year median dividend yield is 1.70% and the historical dividend yield is 1.68%.

The dividend increases are moderate at 15.9% and 13.30% per year over the past 5 and 10 years. The dividend payments have covered some 44.8% of the cost of my stock. On the original stock I bought in 2000, I am earning 11.65% on my original purchase price. For the stock I bought in 2009, I am earning a yield on my original purchase price of 5.02%.

The Dividend Payout Ratios are low. The Dividend Payout Ratio for 2016 is 24.95%. The 5 year ratio would be 23.09%. The DPR for CFPS was 10.33% for 2016 with a 5 year ratio of 11.25%.

The debt is low and the debt ratios are good. The Liquidity Ratio for 2016 is 1.85. The Debt Ratio for 2016 was 1.60. Leverage and Debt/Equity Ratios for 2016 was 2.67 and 1.67. These last two ratios are good for a retail company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.24, 13.04 and 14.84. The corresponding 10 year ratios are 10.00, 12.07 and 14.70. The corresponding historical ratios are 10.27, 13.33 and 15.66. The current P/E Ratio is 15.26 based on a stock price of $152.62 and 2017 EPS estimate of $10.00. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $125.33. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.83 and 1.04. The current P/GP Ratios is 1.22 based on a stock price of $152.62. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.28. The current P/B Ratio is 2.19 a value some 71% higher. The current P/B Ratio is based on a stock price of $152.62 and a BVPS of $69.81. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 1.70%. The historical median dividend yield is 1.68% a value some 1.4% lower. The current dividend yield is based on a stock price of $152.62 and dividends of $2.60. This stock price testing suggests that the stock price is relatively reasonable and just above the median.

The 10 year P/S Ratio is 0.56 and the current P/S Ratio at 0.80 is some 43% higher. The current P/S Ratio is based on 2017 Revenue estimate of $13.506M and Revenue per Share of $190.91. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Cash Flow per Share Ratio of 8.96. The current P/CF Ratio is 8.48 based on CFPS estimate for 2017 of $17.50 and a stock price of $152.62. The current P/CF Ratio is some 2.7% below the 10 year median P/CF Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a buy and the consensus recommendation would be a buy. The 12 month target price is $173.83. This implies a total return of 15.60% with 13.90% from capital gains and 1.70% from dividends.

Marina Strauss in the Globe and Mail talks about this company having a strong fourth quarter in 2016. Demetris Afxentiou of Motley Fool likes this stock. See what analysts are saying about this stock on Stock Chase .

Canadian Tire operates several retail businesses that offer everyday products and services through a network of over 1,700 locations across the country. The key banners that the company operates under include Canadian Tire Retail, FGL Sports, Mark's, Petroleum, Part Source, and Financial Services. Its web site is here Canadian Tire Corp.

The last stock I wrote about was about was H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF)... learn more . The next stock I will write about will be Goodfellow Inc. (TSX-GDL, OTC-GFELF)... learn more on Friday, March 10, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy March 2017... learn more on Thursday, March 9, 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.

Monday, March 6, 2017

H & R Real Estate Trust

First of all I want to say that I sold some Toronto Dominion Bank (TSX TD-NYSE-TD) to buy some Home Capital Group (TSX-HCG, OTC-HMCBF). I bought TD Bank for my RRSP account in 2009 and I have done very well with it. However, I feel I have too much of this stock and I also bank with them. Home Capital Group is selling at a good price currently.

Sound bite for Twitter and StockTwits is: Buy for Diversification. Sometimes good companies get into difficulties and returns on an investment can suffer for a while. This REIT seems to be selling at a relatively reasonable price that is around the median. See my spreadsheet on H & R Real Estate Trust.

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.

As you would expect on an REIT, the dividend yields are good. The current dividend yield is 5.99% based on a stock price of $23.05 and dividends or distributions of $1.38. The 5 year median dividend yield is 5.97% and the historical median dividend yield is 6.47%.

The dividend growth is uneven. The dividends have grown at 6.86% and 0.17% per year over the past 5 and 10 years. They reduced their dividend by 50% in 2009 because the payout ratios were getting too high. This is the reason for the low 10 year dividend growth. Dividends are not quite back up to the 2008 distributions of $1.44 as they are currently at $1.38.

The current Dividend Payout Ratios based on AFFO is at 86.7% for 2016 with a 5 year one at 88.4%. The DPR for FFO is for 201669% with a 5 year DPR of 70.3%. Generally Dividend Payout Ratios for REITs are based on AFFO or FFO values.

Generally for REITs you look at Price/FFO Ratios rather than Price/Earnings per Share Ratios. The 5 year low, median and high median P/FFO Ratios are 11.06, 11.88 and 12.92. The corresponding 10 year values are 11.03, 12.19 and 13.43. The current P/FFO is 12.20 based on a stock price of $23.05 and FFO estimates for 2017 of $1.89. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $32.10. The 10 year Price/Graham Price Ratios are 0.66, 0.72 and 0.85. The current P/GP Ratio is 0.72 based on a stock price of 23.05. This stock price testing suggests that the stock price is reasonable and around the median.

Because all REITs had much higher yields in the past, I have been looking at the current yield compared to the 5 year median. The current yield is 5.99% and this is close to the 5 year median yield of 5.97%. The current yield is based on a stock price of $23.05 and distributions of $1.38. This stock price testing suggests that the stock price is reasonable and around the median.

Because the new accounting rules made the book value on all REITs go higher, I am using the 5 year median Price/Book Value per Share Ratio for stock testing purposes. The 5 year median is 0.94. The current P/B Ratio is 0.95 based on BVPS of $24.23 and a stock price of $23.05. This stock price testing suggests that the stock price is relatively reasonable and around the median.

This REIT has not done particularly well in term of total returns over the past 5 and 10 years. The 5 and 10 year total return is at 4.84% and 7.02% per year. For the past 5 years there is a capital loss of 0.89% per year. For the past 10 years there is a capital gain of 1.51% per year. The portion of the total return attributable to distributions is at 5.72% and 5.51% per year

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 $25.36. This implies a total return of 16.01% with 5.99% from dividends and 10.02% from capital gains.

This company announced their 2016 results on New Wire. They also talked about some sales they were doing. Daniel Jordon on Sports Perspectives talks about Royal Bank increasing their price objective. Kay Ng of Motley Fool likes this REIT for the good yield. See what analysts are saying about this stock on Stock Chase. They mostly like it.

H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate Trust.

The last stock I wrote about was about was Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC- APYRF)... learn more . The next stock I will write about will be Canadian Tire Corp. (TSX-CTC.A, OTC-CDNAF)... learn more on Wednesday, March 8, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks March 2017... learn more on Tuesday, March 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.

Friday, March 3, 2017

Allied Properties Real Estate Investment Trust

Sound bite for Twitter and StockTwits is: Buy for Diversification. The reason to buy REITs is to diversify your portfolio. This REIT seems to be priced reasonably. See my spreadsheet on Allied Properties Real Estate Investment Trust.

I do not own this stock of Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF). Since several stocks that I followed last year were deleted from the stock exchange, I was looking for other stocks to follow. I am sure that I got this from a Canadian Dividend site called Think Dividends, but I cannot find it at present.

On this REIT, the dividend yield is good. The current dividend yield is 4.29%. The 5 year median dividend yield is 4.34%. The 10 year 5.19%. The historical dividend yield is not as high as the last two REITs I reviewed because this REIT only went public in 2003. They did have much higher dividend yields at first as did other REITs.

The dividend growth is above the rate of inflation. The dividends have grown at 3% and 2.4% per year over the past 5 and 10 years. The inflation rate for the past 5 and 10 years is at 1.33% and 1.46% per year. For REITs you would expect good dividend yields and dividend growth at or over the rate of inflation. They do not raise the distributions every year, but they do growth them.

The Dividend Payout Ratios are fine. Generally for REITs you look at Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) to judge the Dividend Payout Ratios. The DPR for FFO for 2015 is 71.2% and the 5 year rate is 70.6%. The DPR for AFFO for 2015 is 87% and the 5 year rate is 84%.

What I do not like about the REITs I have so far reviewed is the lack of a viable Liquidity Ratio. No matter how I look at it I cannot get the one for this company to 1.00. I have added back in this year's portion of the long term debt and Cash Flow after dividends and still only get to 0.81. If the value is below 1.00 means that current assets cannot cover current liabilities. This can be a real problem in economic downturns. Other debt ratios are fine.

Generally for REITs, I like to look at Price/FFO Ratios rather than Price/Earnings per Share Ratios. The 5 year low, median and high median P/FFO Ratios are 14.24, 16.62 and18.22. The corresponding 10 year values are 13.92, 16.08 and 18.13. The current P/FFO Ratio is 16.06 based on FFO estimate for 2017 of $2.22 and a stock price of $35.65. This stock price testing suggests that the stock price is reasonable and around the median.

I get a Graham Price of $42.20. The 10 year low, median and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.99. The current P/GP Ratio is 0.84 based on a stock price of $35.65. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 5 year Price/Book Value per Share of 1.08. I am using the 5 year value as the change to the new accounting rules affected BV for REITs. The current P/B Ratio is 1.00 a value some 7% lower. This current P/B Ratio is based on a stock price of $35.65 and a Book Value per Share of $35.65. This stock price testing suggests that the stock price is reasonable and below the median.

For this REIT, I will do the Dividend Yield testing using the 5 year median dividend yield. The 5 year median dividend yield is at 4.34% a value some 1.2% higher than the current dividend yield. The current dividend yield of 4.29% is based on distributions of $1.53 and a stock price of $35.65. This stock price testing suggests that the stock price is relatively reasonable and around the median.

When I look at analysts' recommendation, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price is $38.35. This implies a total return of 11.87% with 4.29% from dividends and 7.57% from capital gains based on a current stock price of $35.65.

Lucas Kauffman on Chaffey Breeze talks about TD Securities recently reducing their target price from $40.00 to $39.00. CIBC also lowered their target price. Kay Ng of Motley Fool likes this REIT. See what Analysts are saying about this stock on Stock Chase. Not many follow it, but the ones that do make positive comments.

Allied Properties REIT owns a portfolio of predominantly Class I office properties in Toronto, Montreal, Winnipeg, Quebec City, Ottawa, Victoria, Calgary, Edmonton, Vancouver, and Kitchener-Waterloo. Its web site is here Allied Properties Real Estate Investment Trust.

The last stock I wrote about was about was RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more . The next stock I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF)... learn more on Monday, March 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.

Wednesday, March 1, 2017

RioCan Real Estate

Sound bite for Twitter and StockTwits is: Diversification Buy. A good reason to buy REITs is for diversification. They can also provide good and increasing income. I do expect this stock to become a dividend growth stock again. What I want from the REITs is growth of distribution higher than the inflation rte. In the meantime the dividend yield of 5.28% is very good. See my spreadsheet on RioCan Real Estate.

I own this stock of RioCan Real Estate (TSX-REI.UN, OTC-RIOCF). I first bought this stock 1998 because I wanted to diversify my portfolio into REITs. It was a stock covered and recommended by MPL Communications in their Income Trust coverage. Over the years I have made several more purchases of this REIT.

I made purchases of this stock in 1998, 2000, 2002, 2010, 2011, 2013 and 2014. I have made a total return of 12.87% per year with 3.97% from capital gains and 8.90% from distributions. This is the sort of total return you should expect from a REIT. They generally have good distributions and low capital growth. Because of the way distributions are taxed, it is a stock that may be better in an RRSP, RRIF or TFSA account.

The dividend yield is currently good with very low dividend growth. The current dividend is 5.28% based on distributions of $1.41 and a stock price of $26.83%. Although the company has expressed interest in increasing the distributions, no analysts thinks this will happen before 2019.

Mostly analysts look at Dividend Payout Ratios for REITs using AFFO and FFO values. The DPR for AFFO is for 2016 at 92% with a 5 year value of 94%. The DPR for FFO for 2016 is 84% and the 5 year value is also at 84%. It is because the DPRs, and especially, the because the AFFO DPR is so high is the reason that analysts do not expect any distribution increase soon.

The distribution growth is very low. The 5 and 10 year growth is at 0.4% and 0.8% per year. This is because the distribution has been at the $1.41 since 2013.

Instead of using the Price/Earnings per Share Ratio to judge the stock price, for REITs it is probably better to use the Price/Funds from Operations Ratio. The 5 year low, median and high median P/FFO Ratios are 14.85, 15.93 and 17.87. The 10 year values are 13.53, 15.76 and 17.43. The current P/FFO Ratio is 16.27 based on a stock price of $26.68 and 2017 FFO estimate of $1.64. This is just 2% higher than the 5 year median value of 15.93. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $29.81. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 1.01 and 1.09. The current P/GP Ratio is 0.90 based on a stock price of $26.68. This stock price testing suggests that the stock price is reasonable and below the median. (See my site for information on calculating Graham Price or see blog for information on Graham Price.)

Since the new account rules affected the Book Value, I think that using the 5 year median Price/Book Value per Share Ratio for testing is the best. The 5 year median P/BV Ratio is 1.11. The current P/BV Ratio is also 1.11 based on BVPS of $24.08 and a stock price of $26.68.

REITs in the 1990's and the beginning of 2000 had much higher dividend yields than today. This historical median dividend yield is 7.48%. The 5 year median dividend yield is 5.31% a value very close to the current dividend yield of 5.28%. The 10 year median Dividend yield is 5.46% a value some 3% higher than the current dividend yield of $5.28%. This stock price testing suggests that the stock price is relatively reasonable and around or just above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy. The 12 month stock price consensus is $29.64. This implies a total return of 16.38% with 11.09% from capital gains and 5.28% from dividends.

Jacob Donnelly of Motley Fool talks how much he likes this stock. (Do not forget that if you do not get the full report, click out and then back into this page and you will get the full report.) Mark Robinson of Daily Quint talks about Royal Bank reaffirming their Outperform (Buy) recommendation of this stock with a $30.00 price objective. (See my blog for information on Analyst Ratings .) See what analysts are saying about this stock on Stock Chase. Some are quite negative.

RioCan is Canada's largest real estate investment trust exclusively focused on retail real estate. Their core strategy is to own and manage community-oriented neighbourhood shopping centers anchored by supermarkets, together with a rapidly expanding mix of new format retail centers. RioCan owns interests in 51 centers in the United States located in the Northeastern United States and Texas, managed through its offices in New Jersey and Dallas. Its web site is here RioCan Real Estate.

The last stock I wrote about was about was Canadian Real Estate Investment Trust (TSX-REF.UN, OTC- CRXIF)... learn more . The next stock I will write about will be Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC- APYRF)... learn more on Friday, March 3, 2017 around 5 pm. Tomorrow on my other blog I will write about If I knew then 3... learn more on Thursday, March 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.

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.