Monday, April 12, 2021

Toromont Industries Ltd

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

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

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

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

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

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

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

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

The Total Return per year is shown below for years of 5 to 30 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 12.70% 25.00% 23.10% 1.89%
2010 10 12.38% 18.64% 16.82% 1.82%
2005 15 12.84% 13.86% 12.35% 1.52%
2000 20 13.34% 16.98% 15.10% 1.88%
1995 25 14.26% 17.96% 15.84% 2.12%
1990 30 14.95% 23.36% 19.53% 3.83%

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

I get a Graham Price of $41.91. The 10 year low, median, and high median Price/Graham Price Ratios are 1.34, 1.58 and 1.83. The current P/GP Ratio is 2.33 based on a stock price of $97.61. This current ratio is above the high median 10 year P/GP Ratio. This stock price testing suggests that the stock price is relatively expensive.

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

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

I get an historical median dividend yield of 1.84%. The current dividend yield is 1.27% based on dividends of $1.24 and a stock price of $97.61. The current dividend yield is 31% above the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 2.02%. The current dividend yield is 1.27% based on dividends of $1.24 and a stock price of $97.61. The current dividend yield is 37% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.38. The current P/S Ratio is 2.12 based on Revenue estimate for 2021 of $3,797M, Revenue per Share of $46.04 and a stock price of $97.61. The current ratio is 53% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. Both the dividend yield tests point to this as does the P/S Ratio test. Most of the other tests say the same thing.

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

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

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

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

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

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

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

Friday, April 9, 2021

Alaris Equity Partners Income Trust

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

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

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

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

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

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

The Total Return per year is shown below for years of 5 to 13 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -5.86% -0.73% -8.45% 7.72%
2010 10 2.15% 13.41% 2.64% 10.77%
2007 13 1.37% 12.59% 3.23% 9.36%

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

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

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

I get a 10 year median Price/Cash Flow per Share Ratio of 14.86. The current P/CF Ratio is 8.73 based on Cash Flow per Share estimate for 2021 of $1.86, Cash Flow of $72.5M and a stock price of $16.23. The current ratio is 41% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 7.32%. The current dividend yield is 7.64% based on dividends of $1.24 and a stock price of $16.23. The current dividend yield is 4.4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. I get a 10 year median dividend yield of 6.79%. The current dividend yield is 7.64% based on dividends of $1.24 and a stock price of $16.23. The current dividend yield is 12% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 10.28. The current P/S Ratio is 4.52 based on Revenue estimate for 2021 of $$140M, Revenue per Share of $3.59 and a stock price of $16.23. The current ratio is 56% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. Both the dividend yield tests and the P/S Ratio test is showing the stock price as cheap. All the tests are saying the same thing.

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

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

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

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

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

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

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

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

Wednesday, April 7, 2021

Sun Life Financial Inc

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

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

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

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

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

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

The Total Return per year is shown below for years of 5 to 21 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 7.82% 8.71% 5.58% 3.14%
2010 10 4.33% 10.69% 6.51% 4.18%
2005 15 5.47% 4.31% 1.29% 3.02%
2000 20 7.91% 4.46% 1.75% 2.70%
1999 21 7.52% 12.14% 7.38% 4.76%

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

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

I get a 10 year median Price/Book Value per Share Ratio of 1.41. The current P/B Ratio is 1.68 based on a stock price of $64.04. The current ratio is 19.6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

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

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

I get an historical median dividend yield of 3.91%. The current dividend yield is 3.44% based on a stock price of $64.04 and dividends of 2.20. The current yield is 12% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.95. The current P/S Ratio is 0.99 based on Revenue estimate for 2021 of $34,432M, Revenue per Share of $64.63 and a stock price of $64.04. The current ratio is 3.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median

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

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

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

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

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

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

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

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

Monday, April 5, 2021

Goodfellow Inc

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

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

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

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

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

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

The Total Return per year is shown below for years of 5 to 29 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -5.25% -1.51% -4.05% 2.55%
2010 10 0.00% -0.91% -3.86% 2.96%
2005 15 -2.67% 1.28% -2.66% 3.94%
2000 20 3.38% 10.31% 2.87% 7.44%
1995 25 9.06% 15.10% 5.78% 9.32%
1991 29 8.84% 11.16% 4.66% 6.50%

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

I get a Graham Price of $22.65. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.59 and 0.65. The current P/GP Ratio of 0.46 based on a stock price of $10.42. The current ratio is below the low median 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

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

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

I get an historical median dividend yield of 3.55%. The current dividend yield is 5.76% based on a stock price of $10.42 and dividends of $0.60. The current dividend yield is 62% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

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

The 10 year median Price/Sales (Revenue) Ratio is 0.15. The Current P/S Ratio is 0.20 based on Revenue of the last 12 months of $454M, Revenue per Share of $53.03 and a stock price of $ 10.42. The current Ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably cheap. The dividend yield testing says that and this is the only test based on the future (dividends to be paid this year). Most of the testing is using last 12 months data as there are no analyst giving estimates. The management obviously feels good about the future because they restarted the dividends in 2019 and then increased them in 2020 and 2021. The P/S Ratio testing says the stock is expensive because it is using last 12 month’s revenue. The rest of the testing is a mix of cheap, expensive, and reasonable.

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

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

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

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

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

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

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

Friday, April 2, 2021

Melcor Developments Inc

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

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

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

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

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

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

The Total Return per year is shown below for years of 5 to 30 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -10.74% -4.50% -8.34% 3.84%
2010 10 -0.29% -0.44% -4.45% 4.01%
2005 15 5.61% 2.53% -1.52% 4.05%
2000 20 8.22% 16.61% 8.26% 8.35%
1995 25 10.20% 22.41% 9.30% 13.11%
1990 30 12.47% 16.50% 8.14% 8.36%

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

I get a Graham Price of $26.19. The 10 year low, median, and high median Price/Graham Price Ratios are 0.37, 0.45 and 0.50. The current P/GP Ratio is 0.46 based on a stock price of $11.96. The current ratio of 0.46 is between the median and high median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 0.53. The current P/B Ratio is 0.37 based on a Book Value of $1,077M, Book Value per Share of $32.43 and a stock price of $11.96. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 13.24. The current P/CF Ratio is 7.48 based on last 12 months Cash Flow of $53.1M, Cash Flow per Share of $1.60 and a stock price of $11.96. The current ratio is 43% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 2.90%. The current dividend yield is 3.34% based on dividends of $0.40 and a stock price of $11.96. The current dividend yield is 15% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 3.23%. The current dividend yield is 3.34% based on dividends of $0.40 and a stock price of $11.96. The current dividend yield is 4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.94. The current P/S Ratio is 1.45 based on Revenue estimate for 2021 of $274M, Revenue per Share of $8.25 and a stock price of $11.96. The current ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. The dividend yield tests just say the stock is relatively reasonable and below the median, but the company has both increased and decreased dividends lately. So, the dividend yield tests are not the best tests currently. The P/S Ratio test says the stock price is cheap. The P/B Ratio says the same thing. Other tests have different results.

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

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

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

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

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

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

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

Wednesday, March 31, 2021

BCE Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Telecom. Stock price is reasonable and below the median. Dividend Payout Ratios could be improved. The dividend yield is good, with low dividend growth. I have done well with this stock over the years. See my spreadsheet on BCE Inc.

I own this stock of BCE Inc (TSX-BCE, NYSE-BCE). I bought this stock in 1982 and have held it ever since. Since I bought it both Nortel and Bell Aliant were spin off. The problem with BCE's spinning off part of the company was that I ended up with an odd number of shares. It is annoying.

When I was updating my spreadsheet, I noticed that I have done well in this stock. My total return to the end of February 2021 is 10.02% for this stock that I first bought in 1982, but have only been tracking in Quicken since 1987. When I calculate my total return, I have to consider both Bell Aliant and Nortel which were both spun off by this company.

The dividend yields are good with dividend growth low. The dividend yields are good (5% to 6% ranges) with the current dividend yield at 6.16%. The 5, 10 and historical dividend yields are also good at 5.29%, 5.17% and 5.14% respectively. The dividend growth is low (under 8%) with a 5 year increase of 5.08% per year. The last increase was for 5.1% and it was in 2021.

The Dividend Payout Ratios (DPR) could be improved. The DPR for EPS was 119% in 2020 with a 5 year coverage of 95%. The DPR for CFPS for 2020 was 32% with 5 year coverage at also 32%. The DPR for Free Cash Flow was 89% with 5 year coverage at 79%. Some site agree sometimes on what FCF is.

Debt Ratios are fine. The Long Term Debt/Market Cap ratio for 2021 is fine at 0.49. They can pay off the long term debt in 3 years with cash flow and that is also fine. The Liquidity Ratio for 2021 is 0.69 and that is low. If you add in cash flow after dividends it is 1.27 and still low as I like this to be at least 1.50. The Debt Ratio is good at 1.54. The Leverage and Debt/Equity Ratios are 2.84 and 1.84 and these are also fine.

The Total Return per year is shown below for years of 5 to 38 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 5.08% 5.88% 0.36% 5.52%
2010 10 6.62% 10.50% 4.41% 6.08%
2005 15 6.28% 10.04% 4.60% 5.44%
2000 20 5.17% 5.77% 1.79% 3.99%
1995 25 8.60% 8.98% 3.91% 5.06%
1990 30 7.37% 9.25% 3.87% 5.38%
1985 35 6.60% 8.05% 3.15% 4.90%
1982 38 6.50% 13.27% 4.92% 8.34%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.41, 17.95 and 19.48. The corresponding 10 year ratios are 16.21, 17.65 and 19.19. The corresponding historical ratios are 15.28, 17.51 and 18.14. The current P/E Ratio is 18.34 based on a stock price of $56.85 and EPS estimate for 2021 of $3.10. The current P/E Ratio is between the median and high median ratios of 17.65 and 19.19. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $36.19. The 10 year low, median, and high median Price/Graham Price Ratios are 1.46, 1.63 and 1.77. The current P/GP Ratio is 1.57 based on a stock price of $56.85. The current ratio is between low median and median ratios of 1.46 and 1.63. 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 3.13. The current P/B Ratio is 3.03 based on a stock price of $56.85, Book Value of $16,986M and Book Value per Share of $18.78. The current ratio is 3% below the 10 year median ratio of 3.13. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.76. The current P/CF Ratio is 6.53 based on Cash Flow per Share estimate for 20201 of $8.70, Cash Flow of $7,868M and a stock price of $56.85. The current ratio is 3% below the 10 year median ratio of 6.76. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 5.14%. The current dividend yield is 6.16% based on dividends of $3.50 and a stock price of $56.85. The current dividend yield is 20% above the historical median dividend yield of $5.14%. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 5.17%. The current dividend yield is 6.16% based on dividends of $3.50 and a stock price of $56.85. The current dividend yield is 19% above the historical median dividend yield of $5.14%. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.18. The current P/S Ratio is 2.17 based on a stock price of $56.85, Revenue estimate for 2021 of $23,362M, and Revenue per Share of $26.15. The current P/S Ratio is .3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. Both the Dividend Yield tests say the stock price is cheap, but this is not confirmed by the P/S Ratio test that says it is reasonable and below the median.

Is it a good company at a reasonable price? I own this stock and I intend to keep it. I have made a reasonable return over the 33 years I have held this stock (10.02% total return per year). It is a dividend growth stock. For most of the years noted above, total return has been 8% and above. The stock price would be reasonable and below the median.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (9) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $60.32. This implies a total return of 12.26% with 6.10% from capital gains and 6.16% from dividends.

Analysts like this stock on Stock Chase. Either it is a buy or a top pick. Rajiv Nanjapla on Motley Fool lists this stock as one of that is currently safe to buy. The executive summary on Simply Wall Street give this stock 3 stars out of 5 and list three risks. A writer on Simply Wall Street points out that BCE’s dividend is not well covered by EPS. The Blogger Dividend Earner did a review of this stock in January of this year.

BCE is both a wireless and Internet service provider, offering wireless, broadband, television, and landline phone services in Canada. It is one of the big three national wireless carriers, with its roughly 10 million customers constituting about 30% of the market. Additionally, BCE has a media segment, which holds television, radio, and digital media assets. Its web site is here BCE Inc.

The last stock I wrote about was about was AltaGas Ltd (TSX-ALA, OTC-ATGFF) ... learn more. The next stock I will write about will be Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more on Friday, April 2, 2021 around 5 pm. Tomorrow on my other blog I will write about Value and Growth Investing .... learn more on Thursday, April 1, 2021 around 5 pm.

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

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

Monday, March 29, 2021

AltaGas Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is relatively cheap. This is again a dividend growth stock. I have not done well with this stock with a total return of just 6.9% per year, but I expect that in the future it will hit the 8% total return that I like. Analysts expect the DPRs to improve. 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.

When I was updating my spreadsheet, I noticed I have not done very well with this stock. I have had it for nearly 12 years and my total return is 6.90% per year with a capital loss of 1.39% per year and dividends of 8.29% per year. The problem is the shares I bought in 2012 are at a price higher than today’s price. The company got into some problems in 2017 and the stock price fell.

The dividend yields are moderate with dividend growth as restarted. The current dividend yield is moderate (2% to 4% ranges) at 4.70%. The 5, 10 and historical dividend yields are good (5% to 6% ranges) at 6.41%, 5.29% and 6.09%. The dividends fell over 50% in 2019. In 2021, they increased the dividends by 4%. This company used to be an income trust. They transition for old income trust companies into corporations have been tough. The problem being that income trust could pay out more in dividends than corporations can. A lot of companies have had a hard time adjusting. I have data for 20 years and they increased the dividend 15 times and decreased them 3 times.

The Dividend Payout Ratios (DPR) are expected to improve. The DPR for EPS for 2020 was 55% with 5 year coverage at 240%. Analysts expect the DPRs to improve, especially the 5 year coverage one. The DPR for CFPS for 2020 was 27% with 5 year coverage at 58%. The DPR for Free Cash Flow cannot be calculated for 2020 and for 5 year coverage because of negative FCF. Analysts expect FCF to turn positive this year.

Debt Ratios could be improved. Debt is high. The Long Term Debt/Market Cap Ratio is too high at 1.46. It is low currently at 1.28 because of increase in Market Cap. The Liquidity Ratio is for 2020 is 0.96. If you add in Cash Flow after dividends, it is only 1.15 and if you add back the current portion of the debt it is still low at 1.34. The Debt Ratio is fine at 1.55. The Leverage and Debt/Equity Ratios for 2020 is 2.81 and 1.81 and they are fine.

The Total Return per year is shown below for years of 5 to 21 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -12.46% -3.13% -9.54% 6.41%
2010 10 -5.39% 6.34% -1.47% 7.81%
2005 15 -4.24% 4.73% -2.64% 7.37%
2000 20 10.26% 21.95% 6.56% 15.39%
1999 21 10.25% 17.81% 5.57% 12.24%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 5.51, 9.24 and 12.97. The corresponding 10 year ratios are 24.24, 28.48 and 32.71. The corresponding historical ratios are 12.13, 15.22 and 18.41. The current P/E Ratio is 13.56 based on based on a stock price of $21.29 and EPS estimate for 2021 of $1.57. The current P/E Ratio is below the 10 year low ratio of 24.24. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $26.89. The 10 year low, median, and high median Price/Graham Price Ratios are 1.33, 1.62 and 1.86. The current P/GP Ratio is 0.79 based on a stock price of $21.29. This ratio is below the 10 year low median ratio of 1.33. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.71. The current P/B Ratio is 1.04 based on a stock price of $21.29, Book Value of $5,722M, and Book Value per Share of 20.47. The current ratio is 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 11.30. The current P/CF Ratio is 5.72 based on a stock price of $21.29, Cash Flow per Share estimate for 2021 of $3.72 and Cash Flow of $1,040M. The current ratio is 49% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 6.09%. The current dividend yield is 4.70% based on dividends of $1.00 and a stock price of $21.29. The current dividend yield is 23% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that this company used to be an income trust, which can pay higher dividends than a corporation and the dividends were cut by 56% in 2019.

I get an historical median dividend yield of 5.29%. The current dividend yield is 4.70% based on dividends of $1.00 and a stock price of $21.29. The current dividend yield is 11% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. The problem with this test is that this company cut the dividends by 56% in 2019.

The 10 year median Price/Sales (Revenue) Ratio is 2.17. The current P/S Ratio is 1.17 based on a stock price of $21.29, Revenue estimate for 2021 of $5,773M and Revenue per Share of $20.66. The current ratio is 46% below the 10 year median ratio 2.17. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. Unfortunately, there are problems with dividend yield tests and so these are not really usable. The P/S Ratio test shows the stock price as relatively cheap as does all the other tests.

Is it a good company at a reasonable price? I own this stock and I plan to keep it even though it has recently gone through a few tough years. It is repositioning itself as a dividend growth stock with a dividend increase in 2021. They plan to continue to increase their dividends. So, currently I think it is a good company at a reasonable price.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (8) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $23.33. This implies a total return of 14.28% based on a stock price of $21.29.

Analysts on Stock Chase have quite varying views on this stock, but most are positive. Ambrose O'Callaghan on Motley Fool thinks this is a buy and hold stock for Millennials. Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list 4 risks. A writer on Simply Wall Street thinks this stock is trading at a fair price, so there is not much current room for the stock price to grow. The company gives an update on its future on Newswire.

AltaGas Ltd owns and operates a diversified basket of energy infrastructure businesses. Business is conducted through four segments: Midstream, power, utilities and corporate. Revenue is derived from customers in both Canada and the United States, with United States customers contributing the most. Its web site is here AltaGas Ltd.

The last stock I wrote about was about was TC Energy Corp (TSX-TRP, NYSE-TRP) ... learn more. The next stock I will write about will be BCE Inc (TSX-BCE, NYSE-BCE) ... learn more on Wednesday, March 31, 2021 around 5 pm. Tomorrow on my other blog I will write about Preferred Shares.... learn more on March 30, 2021 around 5 pm.

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

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

Friday, March 26, 2021

TC Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is reasonable and it may even be on the cheap side. I have done well with this stock. DPR could stand improvement. Debt Ratios could also stand to be improved. See my spreadsheet on TC Energy Corp.

I own this stock of TC Energy Corp (TSX-TRP, NYSE-TRP). When I bought this stock, it was on Mike Higgs' Canadian Dividend Growth Stock list and the other dividend lists that I followed.

When I was updating my spreadsheet, I noticed that I have done well on this stock, but not as well as last year. My total return February 2021 is 9.56% per year. However, this time last year I had a total return of 11.28% per year. I also bought this stock over a few years, so some of the pieces are doing as well as others. However, it just points to the fact it is good to buy a stock over time rather than all at one time.

The dividend yields are currently good with dividend growth moving lower. The current dividend is good (5% and 6% ranges) at 5.78%. The 5, 10 and historical median dividend yield are lower and moderate (2% to 4% ranges) at 4.94%, 4.10% and 4.30%. The last dividend increase was low (under 8%) at 7.41% in 2021. The last 5 years the dividend increases were at 9.3% per year, but this is the highest they have ever been as in other years, the dividend increases were all under 8% per year.

The Dividend Payout Ratios (DPR) need improving. The DPR for EPS for 2020 is 67% with 5 year coverage at 82%. The DPR for EPS has been rather too high since 2015 and is now moving lower. The DPR for CFPS for 2020 is 48% with 5 year coverage also at 48%. This is high also as I prefer this ratio to be 40% or less. For this stock I also have an DPR for an Adjusted EPS and the ratio is 76% with 5 year coverage at 75%. The DPR for Adjusted Funds from Operations (AFFO) for 2020 is 41% with 5 year coverage at 44%. The DPR for Free Cash Flow cannot be calculated for either 2020 or for the last 5 years as FCF has been negative. Also, sites do not agree on FCF, they do agree it has been negative.

Debt Ratios are acceptable, but not good. Long Term Debt/Market Cap Ratio for 2020 is 0.70. The Asset/Current Liabilities Ratio is 8.37, so this is good coverage. The Long Term Debt can be paid off in 4.9 years with cash flow. 3 years is better, but this is ok. The Liquidity Ratio is very low at 0.43. If we add in cash after dividends and the current portion of the long term debt, it becomes 1.07. There is coverage, but no safety margin. The Debt Ratio for 2020 is 1.49. I like the last two ratios to be 1.50 and above. The Leverage and Debt/Equity Ratios for 2020 are 3.03 and 2.03 and so ok.

The Total Return per year is shown below for years of 5 to 32 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 9.28% 8.36% 2.75% 5.61%
2010 10 7.24% 8.17% 3.14% 5.03%
2005 15 6.60% 6.70% 2.33% 4.38%
2000 20 7.14% 11.78% 5.95% 5.84%
1995 25 4.65% 9.10% 4.14% 4.96%
1990 30 5.23% 8.48% 3.78% 4.70%
1988 32 4.94% 9.30% 4.23% 5.07%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.34, 13.95 and 16.48. The corresponding 10 year ratios are 17.07, 18.37 and 19.66. The corresponding historical ratios are 12.30, 13.95 and 16.03. The current P/E Ratio is 14.72 based on $58.72 and EPS estimate for 2021 of $4.09. The current ratio of 14.72 is below the 10 year low median ratio of 17.07. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $51.83. The 10 year low, median, and high median Price/Graham Price Ratios are 1.23, 1.38 and 1.46. The current P/GP Ratio is 1.16 based on a stock price of $58.72. The current ratio of 1.16 is lower than the 10 year low median ratio of 1.23. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 2.11. The current P/B Ratio is 2.06 based on a Book Value of $27,445M, Book Value per Share of $29.19 and a stock price of $58.72. The current ratio of 2.06 is 2.3% below the 10 year median ratio of 2.11. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 8.62. The current P/CF Ratio is 8.11 based on Cash Flow per Share estimate for 2021 of $7.42, Cash Flow of $6,975M and a stock price of $58.72. The current ratio of 8.11 is 5.8% below the 10 year median ratio of 8.62. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 4.30%. The current dividend yield is 5.78% based on a stock price of $58.72 and dividends of $3.48. The current dividend yield of 5.78% is 34% above the historical median dividend yield of 4.30%. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 4.10%. The current dividend yield is 5.78% based on a stock price of $58.72 and dividends of $3.48. The current dividend yield of 5.78% is 41% above the 10 year median dividend yield of 4.10%. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 3.80. The current P/S Ratio is 4.00 based on Revenue estimate for 2021 of $14,149, Revenue per Share of $15.05 and a stock price of $58.72. The current ratio of 4.00 is 5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is probably reasonable and maybe cheap. The dividend yield tests are showing the stock price as cheap, but the P/S Ratio test does not confirm that and suggests that the stock price is reasonable and a bit above the median.

Is it a good company at a reasonable price? I own this stock and I plan to continue to hold it. I think that it is still a long term investment. It is a dividend growth stock. I also think that the stock price is reasonable at this time.

When I look at analysts’ recommendations, I find Strong Buy (7), Buy (11) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $68.32. This implies a total return of 19.27% with 13.49% from capital gains and 5.78% from dividends based on a current stock price of $60.20.

Analysts on Stock Chase think this stock is a buy. Sneha Nahata on Motley Fool says the four best stocks to buy now are TC Energy Corp, Fortis Inc, Enbridge Corp, and Canadian Utilities. The Executive Summary on Simply Wall Street gives this stock 4 stars out of 5 and lists 2 risk factors. A writer on Simply Wall Street thinks the dividends are not well covered by EPS and Cash Flow. They also do not like the fact that the company has a negative Free Cash Flow. .

TC Energy operates as an energy infrastructure company, consisting of pipeline and power generation assets in Canada, the United States, and Mexico. Its web site is here TC Energy 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 Monday, March 29, 2021 around 5 pm.

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

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

Wednesday, March 24, 2021

TransAlta Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Utility. The stock price seems relatively expensive at present. It may become a dividend growth stock, but it has a very checkered past in regards to dividends with dividends mostly flat. They have a lot of debt. Some Debt Ratios are fine. See my spreadsheet on TransAlta Corp.

I do not 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. By September 2019, I had finally had enough and saw no hope in this stock doing better. I noticed that MPL Communications had given up hope in this stock in 2014.

When I was updating my spreadsheet, I noticed 2020 is the first year since 2010 when dividends have not been flat or declining. Dividend increase was for 6.25%. They increased the dividends again in 2021 by 5.88%. This is good news for shareholders.

I noticed that I held this stock from 1987 to 2019, some 32 years. I earned a total return of 6.12% per year with a capital loss of 2.98% per year and dividends of 9.10% per year. I just gave up on this stock in 2019 and would never buy it again. If I had held it to this year, February 2021, I would have made a capital gain of 1.24% per year. This story shows the benefit of investing in dividend paying stock, as you often make something. However, I probably held it too long, but in the beginning, it was making 7 or 8% per year and I like stocks that at least make 8% per year total return.

The dividend yields are low with dividend growth perhaps restarting. The current dividend yield is low (below 2%) at 1.61%. This stock used to have a higher yield. The 5 year median dividend yield is moderate (2% to 4% ranges) at 2.10%. The 10 and historical median dividend yields are good (5% and 6% ranges) at 5.37% and 5.51%. In 2020 they did a dividend increase and the first since 2009. The dividend increase was low (below 8%) at 6.25%. They did another dividend increase in 2021 and it was also low at 5.88%. I have data for 33 years and in that time, there has been 8 dividend increases and 4 decreases. In the remaining years, dividends were flat.

The Dividend Payout Ratios (DPR) are good and low expect for EPS. I cannot calculate the DPR for EPS for 2020 or for the last 5 years as they have paid out more in dividends than they earned in EPS. There have been a number of EPS losses over the last 5 and 10 years. They have had 6 years of EPS losses in the past 10 years. The DPR for CFPS for 2020 is 7.4% with 5 year coverage at 7.8%. I have data on Funds from Operations and the DPR for FFO for 2020 is 6.8% with 5 year coverage at 6.9%. The DPR for Adjusted Funds from Operations (AFFO) for 2020 is 12.9% with 5 year coverage at 14%. The DPR for Free Cash Flow for 2020 is 23.3% with 5 year coverage at 14.5%.

Debt Ratios are mixed and the stock market does not value the stock above the long term debt. The Long Term Debt/Market Cap Ratio for 2020 is far too high at 1.35. It means this debt is higher than the company’s market cap when it is over 1.00. The current ratio is lower at 1.17, but still too high. The Assets/Current Liability Ratio is good at 10.42. This means that assets cover current liabilities by over 10 times. The Liquidity Ratio for 2020 is 2.03. The Debt Ratio for 2020 is 1.54. The Leverage and Debt/Equity Ratios for 2020 2.84 and 1.84 respectively.

The Total Return per year is shown below for years of 5 to 33 to the end of 2020. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -25.30% 17.68% 14.52% 3.17%
2010 10 -17.59% -3.79% -7.53% 3.74%
2005 15 -11.23% -1.79% -6.24% 4.45%
2000 20 -8.55% 1.37% -4.03% 5.40%
1995 25 -6.82% 5.70% -1.64% 7.34%
1990 30 -5.72% 7.90% -0.68% 8.59%
1987 33 -5.03% 6.31% -1.19% 7.51%


The 5 year low, median, and high median Price/Earnings per Share Ratios are negative. The corresponding 10 year ratios are also negative. The corresponding historical ratios are 14.90, 15.26 and 21.19. The current P/E Ratio is negative as is the P/E Ratio for 2022. The P/E Ratio for 2023 is 48.65 based on a stock price of $11.19 and 2023 EPS estimate of $0.23. There really is much we can test on here. The P/E Ratio for 2023 is very high and this is because the EPS is quite low.

There is Adjusted Fund from Operations data for this stock. The 5 year low, median, and high median Price/AFFO Ratio per share are 3.63, 5.43 and 7.25. The corresponding 9 year ratios are 4.70, 7.15 and 8.60. The current P/AFFO Ratio is 8.61. This is just above the 9 year high median ratio of 8.60. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $4.51, but this is just a guess as there are lots of years of EPS losses. The 10 year low, median, and high median Price/Graham Price Ratios are 1.01, 1.18 and 1.37. The current P/GP Ratio is 2.48 based on a stock price of $11.19. The current ratio of 2.48 is above the 10 year high median ratio of 1.37. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.30. The current P/B Ratio is 2.22 based on a Book Value of $1,357, Book Value per Share of $5.03 and a stock price of 11.19. The current ratio is 71% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.89. The current P/CF Ratio is 4.46 based on Cash Flow per Share estimate for 2021 of $2.51, Cash Flow of $677M and a stock price of $11.19. The current ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 5.51%. The current dividend yield is 1.61% based on dividends of $0.18 and a stock price of $11.19. The current dividend yield is 71% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 5.37%. The current dividend yield is 1.61% based on dividends of $0.18 and a stock price of $11.19. The current dividend yield is 70% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.05. The current P/S Ratio is 1.48 based on Revenue estimate for 2021 of $2,034M, Revenue per Share of $7.54 and a stock price of $11.19. The current ratio is 41% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. The actual price is not that high for this stock if you look at price before 2011. However, it has had a good run lately. It went up 66% in 2019 and another 16% so far this year. Another problem is that future estimates are rather low. Analysts do not expect great things from this company in the near future. If you buy this stock, you even do not get a really good dividend yield until it fully recovers.

Is it a good company at a reasonable price? I do not regret selling this stock. If I had retained it, I would at least now have a capital gain, but of just 1.24% per year. I would have a total return of some 10% per year because of dividends, but dividends in the past. Dividend yield is a lot lower since I sold my shares and a lot lower than most of the years I held this stock.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (5), Hold (2) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $12.96. This implies a total return of 17.43% with 15.82% from capital gains and 1.61% from dividends.

Analysts on Stock Chase seem to like this stock and think it is a buy. Andrew Walker on Motley Fool thinks this stock is currently a good deal. People who bought at the low in 2016 have done very well. The executive summary on Simply Wall Street gives this company 3 stars out of 5 and list one risk item. A writer on Simply Wall Street talks about insider buying. A writer on Simply Wall Street is worried about the level of debt in this company. The company announces retirement of their CEO Dawn Farrell.

TransAlta is an independent power producer based in Alberta, Canada. The company owns more than 70 power plants in Canada, the Western United States, and Australia. TransAlta's net generating capacity is approximately 50% coal-fired and 20% natural gas-fired. The remaining 30% consists primarily of hydroelectric plants and wind energy farms. 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 TC Energy Corp (TSX-TRP, NYSE-TRP) ... learn more on Friday, March 26, 2021 around 5 pm. Tomorrow on my other blog I will write about Canadian Utilities.... learn more on Thursday, March 25, 2021 around 5 pm.

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

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