Fort Chicago Energy 2

Yesterday I looked at Fort Chicago Energy (TSX-FCE.UN) and put up a spreadsheet on this stock. Today, I will look at what people are saying about this stock and if it is a good buy. First, I must say that, even though this stock is rated as a low risk, all stocks are currently risky. We are in a bear market and a liquidity crisis. Most companies need credit to function on a daily basis and this can be a problem in a liquidity crisis.

Analysts are putting ratings on this stock from a Strong Buy, to a Buy, to a Hold, with the average being a buy. (See my site for information on analyst ratings.) This next thing I looked at was insider buy and selling. There is a lot of insider buying, especially since the stock price went below $11. There was one recent sell by a director, but the problem with insider selling; the insider could be selling for lots of reason. However, insiders only buy for one reason and that is because they have faith in the stock. There is also a lot more insiders’ buying.

No one expects this stock to do better in year ending in December 2008, than it did for the year ending December 2007, and some expect it will do worse in December 2008. One positive thing is that the distributions are higher in 2008 than for 2007. A few other things to note is that the P/E at present is less than 11 and this is lower than the 5 year average of 17; the current yield is 14% compared to the 5 year average of just under 8%; the Current Asset/Current Liability Ratio as of September 2008 is 92 compared to 61 at the end of December 2007; the Accrual Ratio is now negative at “-1.9% “; and the Graham Price at $9.40 is higher than the current price of $7.10.

The Globe gives this stock a 3 stars rating out of a possible 5 stars. The S&P stability rating is SR-2 and the Dominion Bond Rating is STA-2L (low). These stability ratings are from 1 to 7, where 1 is the highest rating. Most of the pipelines and utilities have stability ratings in the 2 range, with a few with ratings 3 and above. None have a rating higher than 2.

So, in closing, there are high distributions to be made from this stock and possible capital gains in the future. As I point out at the beginning, we are in a time of economic problems and therefore, all stocks are risky. However, if you have money to invest, you might want to gently start investing again.

Fort Chicago owns and operates energy infrastructure assets across North America with three principal businesses of Pipeline Transportation, natural gas liquids and power. The company operates in Canada and US. Its web site is www.fortchicago.com. See my spreadsheet at www.spbrunner.com/stocks/fce.htm. I will reload my spreadsheet with information from the latest quarterly report.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Fort Chicago Energy

If any money is to be made while our stock market is in the doldrums, it is with dividend paying stock. Our biggest dividend payers are, of course, our income trust stock. Since, I like pipelines; I decided to review the income trust stocks that are pipelines to see if there is anything good there. Also, please note that with high dividend rates come higher risks.

The first pipeline I looked at was Fort Chicago Energy (TSX-FCE.UN). There is a lot to like with this stock, but first I will talk about what I do not like. For the 4 years prior to December 2007 annual report, the Revenues only increased by some 3.2%. This is low. Also, the annual statements prior to 2003 make it impossible to determine the Revenues, as they seem to use some sort of income figure, rather than a Revenue figure.

The Accrual Ratio is high at 7.8% and the Book Value has not increased. I should note that when most of the cash flow is paid out as distributions, book value would suffer. Also, the Current Asset/Current Liability Ratio is low at .61. This means the current assets cannot cover the current liabilities. The Asset/Liability Ratio of 1.27 is better, but not great.

Now I will consider the positive things for this stock. The yield on this stock is high at present, and according to Globe Investor site, it is over 10%. As with all unit trust stock, the distributions are not considered dividends and mostly the income from this trust seems to be taxable. Up until the last annual report of December 2007, the distributions have been increasing quite nicely, as has the earnings, closing price and cash flow. The Return on Equity (ROE) is good at 9.9% running average over the last 5 years and 11.4% for 2007.

I will look at what the analyst say about this stock tomorrow, and then I will return to do entries in this blog in the new year on January 5, 2009.

Fort Chicago owns and operates energy infrastructure assets across North America with three principal businesses of Pipeline Transportation, natural gas liquids and power. The company operates in Canada and US. Its web site is www.fortchicago.com. See my spreadsheet at www.spbrunner.com/stocks/fce.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Molson Coors Canada 2

First note that due to the holidays, I will not be publishing again this week. I will put up a blog on Monday and Tuesday of next week. Merry Christmas.

I did a spreadsheet on this stock (TSX-TPX.B) yesterday. Today I will look to see what analysts are saying about this stock currently. Looking at the charts, this stock has done much better than the TSX over the past year, past 3 years and the past 4 years. Charts do not go further back on this stock. Looking at the American version of this stock (TAP-NSE), this stock has done much better than the S&P500 over any term.

Looking at what the analysts say TAP is much better covered than TPX.B. However, there are a lot of Buy ratings on this stock. Most people expect that this company will increase their earnings for 2008. This company has already raised their dividend by 25% this year, in US$. The stock price has come up slightly, since the end of last year for the US stock, and by over 9% for the Canadian Stock. However, the raise in the Canadian price is due mostly to the value of our currency, which has gone down since the end of last year.

Looking at the spreadsheets, the net income seems low for September 2008 third quarter, so I wonder about the earnings being higher this year. Other than that, nothing has changed. The Asset/Liability Ratios are the same, which are fairly good. The Accrual Ratio is still very high and this is not good.

Good buying indicators are the Graham Price being still above the current price, the P/E ratio is at 14.6 and this is lower than the 5 year average of 22.6, and the Dividend Yield is at 1.76% and this is higher than the 5 year average of 1.38%. These factors all point the current price being a good one.

Molson Coors Canada is a brewery company. Brands include Coors Light, Blue Moon, Keystone Light, Carling, Rickard’s and Creemore Springs. Its web site is www.molsoncoors.com. See my spreadsheet at www.spbrunner.com/stocks/tpx.htm. I am reloading my spreadsheet for the September 3rd quarter.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Molson Coors Canada

I did a spreadsheet on this stock (TSX-TPX.A) as it has recently been recommended and generally, beer companies make good money. However, since Molson was taken over by Coors, problems of investing in this company would be currency exchange. That is the company can be making money, but because of the differences in exchange rates between US and Canadian currency, you can lose money, or not do well.

It appears that those who held Molson stock before the buyout by Coors, would have done very well to the last anniversary date of December 2007. The 5 year return on this stock would be, in CDN $, 20.26% per year and dividends would have increased 10.7% per year. However, if you had had Coors instead, then using the US/CDN Exchange rate, the 5 year return would be 1.7% per year and the dividends would have gone down slightly by .5% per year.

The problem is that in 2002, the currency exchange rate was 1.5796 and in 2007, it was 0.9881. If you look at the stock prices today, they have risen by 9.4% in Canadian prices since December 2007, but in US prices, they have risen by 1.5% only. This is because the US/CDN Exchange rate is at 1.2225 today.

If you look at this stock from a US$ point of view, the Revenue, the Dividends, the Price and the Book Value have all increased nicely. The growth in Earnings per Share (EPS) is ok. The problems I see are the low growth in the Cash Flow of only 2.6% per year and the current high Accrual Ratio of 8.24%.

Tomorrow I will look at what analyst are currently saying about this stock. This spreadsheet took a long time to do, as I had started it last week. It is always difficult when you have a company being bought out to figure how stockholders would do. It is valid to look at it from both the view point of ex-Molson stockholders and view point of Canadians investing in the ex-Coors company.

Molson Coors Canada is a brewery company. Brands include Coors Light, Blue Moon, Keystone Light, Carling, Rickard’s and Creemore Springs. Its web site is www.molsoncoors.com. See my spreadsheet at www.spbrunner.com/stocks/tpx.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Year End and What I Am Doing

I have just done my RRSP withdrawal for the year. Since I am not yet 71, I do not need to convert my RRSP to a RRIF yet. However, I want to take money from it for a few reasons. I do not wish to deplete my trading account by only using that account to live on. When I stopped working, I had 50% of my money in unregistered accounts and 50% in RRSP accounts. These percentages were thrown out when I opened a Locked-In RRSP for pension money I received when I stopped working. Today, I still have this 50-50 ratio, but my original RRSP account is only 30% of the total money I have.

I am taking out my RRSP money in December because when you take out registered money, you have to pay a percentage as withholding tax to the government. My withholding tax percentage is 30%. If I do the withdrawal earlier, I would have to pay this money to the government earlier and miss out on what I can earn on this money.

I used last year’s income tax package to try to calculate what my taxes will be for 2008. When I made my RRSP withdrawal, I try to pay a withholding tax approximately equal, less a few hundred dollars, to what my taxes will be for 2008. If I do not do this, the tax I would have to pay in April 2009 will be over the threshold for quarterly taxes. Our government set things up so that you pay taxes in the year they are due. That is they want you to pay 2008 taxes in 2008. They will not let you delay taxes until April of the following year and have a big tax liability.

The other thing to talk about is charity. I have been putting more and more of my charity money into Kiva. However, there are still lots of problems in Toronto when I live. So I also gave money this year to the Salvation Army. Until I found Kiva, charity money seemed only to be band aid on any poverty problem. None of the charity money I gave seemed to really help. With Kiva, you really feel that your money is actually helping people escape from poverty. However, I could not just ignore our own poor. So I also gave money to the Salvation Army, who I think does the most for the poor in Toronto.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Risk by Dan Gardner

The full title of this book is Risk, The Science and Politics of Fear. It is a very interesting book. We are, in the Western World at least, the longest living, the wealthiest and we live in the safest or most peaceful societies in human history, and yet we are more fearful than past generations. Dan Gardner worries about how our fearfulness will affect our children.

In Canadian surveys, it has been found that half the population thinks that a risk-free world is possible. Also, the majority of the population thinks that our government should completely protect them from risk in their daily lives. No one, or no government, or no government agency can guarantee zero risk. Things can be made safer, but zero risk is impossible. I find it absolutely irrational that people expect to live risk free.

One of the things Dan Gardner talks about, of which I found interesting, is that of surveys of basic cultural world views. Anthropology wise, we can be slotted into one of four world views. These world views are individualist, egalitarian, hierarchist, and communitarian. Dan Gardner also mentions that there is a strong correlation between risk perception and world views.

A hierarchist is someone who believes that people should have defined places in society and respect authority. An egalitarian is someone who believes in the equality of all people, especially in political, economic, or social life. An individualist is someone who believes the answer to problems is more freedom that is, you let people determine their own choices and things will come right. A communitarian is someone who believes in placing the interests of the community above the interests of the individual.

I have some of the characteristics of a communitarian in that I believe that people should live up to their social and civic responsibilities and should not merely focus on what they are entitled to, however, I must admit that I am individualist at heart as I believe that people are responsible for what they do and for their own lives. I also certainly believe in individual freedom. However, I also feel that there must be some balance between the rights of communities and the rights of individuals.

Dan Gardner has his own site at www.dangardner.ca/. For a review of this book, see www.speakers.ca/gardner_dan.aspxl. At the web site http://www.prospect-magazine.co.uk/article_details.php?id=9600 you will find information on Mary Douglas who is an anthropologist involved in world view and risk perception.

My other book reviews are on my site at www.spbrunner.com/books.html. Also on my site is information on where to find this book on Amazon.com. 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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

RRIF’s and Current Bear Market

Why would anyone call the current government’s changes for RRIF’s withdrawals this year as too little to late? You should never be in a position with your RRIF that you are required to sell investments into a Bear Market. Even if you held money in bonds, you are not safe from having to sell at an inopportune time. Most people do not realize that the bond market is much more volatile than the stock market.

What you need to do is insure that you have cash, or near cash, in your current RRIF to meet your withdrawals for the next 3 to 5 years. What I mean by near cash is things like a Money Market Fund (MMF). Say you have a variety of dividend paying stocks in your account and you expect to earn $100 in dividends this year (and I am using a $100 amount just to make this simple). If your stocks are like mine and increase their dividends, you can count on your total dividends increasing at about 5% per year. So this year you will earn $100 dividend income, next year $105, year 3 $110.25, year 4 $115.76 and year 5 $121.55. This gives you some $552.56 dividends over the next 5 years. ($100.00 times 1.05 = $105.00, $150.00 times 1.05 = $110.25, $110.25 times 1.05 = $115.73, $115.73 times 1.05 = $121.55)

Further, say you need to withdraw $120 from this account every year and you use an inflation rate of 3% (which is our general background inflation rate). That means you need to withdraw from the account $120 this year, next year you will need to take out $123.60, in year 3 $127.31, in year 4 $131.13 and in year 5 $135.06. This is a total withdrawal of $637.10 and it is more than you earned by $84.53. This means that you should have an extra $84.53 in cash in your account at the beginning of this 5 year period. ($120.00 times 1.05 = $123.60, $123.60 times 1.05 = $127.31, $127.31 times 1.05 = $131.13, $131.13 times 1.05 = $137.06).

Our government is very bad on making information easy to find on what you have to withdraw in connection with RRIFs. I found a site called www.taxtips.ca/calculators/rrifcalc.htm that gives a RRIF calculator and also gives the factors used to determine what you have to withdraw from your account. Use the factor times the value in your account to determine the minimum required withdrawal. Say, you are 76 years old and the factor is .0799, this means that you have to take out 7.99% from your account based on the year end figures of the previous year. If you account held $200,000, you would need to take out $15,980 from your RRIF account.

The government site information on RRIF withdrawals is www.cra-arc.gc.ca/E/pub/tp/ic78-18r6/ic78-18r6-e.html. There is also information on RRSP and RRIFs at Canadian Tax Strategies at www.geocities.com/quotes_00_2000/taxes.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Inter Pipeline Fund 2

I said yesterday that I would see what analysts are saying about this stock (TSX-IPL.UN)today. All the analysts I reviewed seems to feel that the earnings for 2008 will be higher than 2006, the last year a profit was made. Some expect 2009 to be lower than 2008 and some expect they will be the same. Analysts are giving this stock, ratings from Strong Buy to Hold, with the average rating being Buy. I also note that there is insider selling on this stock, but there does not seem to be any insider buying.

Looking at the charts, this stock has done better than the TSX and the Energy Trust Index for the year to date and 1 year periods. For the 5 year period, it has done as well as the Energy Trust Index, but not done as well as the TSX. For the 10 year period, it has done almost as well as the TSX, but both this stock and the TSX has done worse than the Energy Trust Index.

I notice that the Globe has given this stock a 3 start rating and Pembina Pipelines (TSX-PIF.UN) a 5 star rating. Also, the stability ratings on this stock are SR3 and STA-3M. I notice that other pipelines have stability ratings in the 2 range, with Pembina having ratings of SR2 and STA-2L. These ratings are on a 1 to 7 scale, with 1 being the highest stability level.

The positive things I see with the latest quarterly report is that the payout ratio will be about 65% in 2008 compared to the 5 year average of 98%; the yield will be about 12% and greater than the 5 year average of 8.5%; the P/E is about 8.5 and lower than the 5 year average of 17.5 and the P/Cash Flow ratio is 5.3 and lower than the 5 year average of 11.5.

The negative things I see are that the Current Asset/Current Liability Ratio is .71 and the Asset/Liability Ratio is 1.37. These are low and this is not good at a time when credit is hard to come by. In the best of times, you would like to see these ratio at 1.50. Also, the Accrual Ratio is even higher in this quarterly report at 13.32. Anything over 5 for this ratio is high.

They have four lines of business: Conventional Oil Pipelines, Oil sands transportation, NGL extraction and Bulk liquid storage. Inter Pipelines have four petroleum pipeline systems in Alberta and Saskatchewan, transporting approximately 20% of western Canada’s conventional oil production. They have Canada’s largest oil sands gathering business. They are Canada’s largest ethane production business, processing over 40% of all natural gas exported from the province of Alberta. They do bulk liquid storage of petroleum and petrochemical in Europe and they are the largest independent storage provider in the United Kingdom. Its web site is www.interpipelinefund.com. See my spreadsheet at www.spbrunner.com/stocks/ipl.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Inter Pipeline Fund

I did a spreadsheet on this pipeline stock (TSX-IPL.UN) because I was asked about it, but had no information on it. The Earnings per Share (EPS) have grown strongly on this stock until this year when they had a net income loss. My current spreadsheet covers this stock until the last annual statement, which was December 2007.

First, I will talk about the good things about this stock. For the 5 and 10 years to December 2007, the revenues increased 30% and 46% per year respectively. For the last 5 and 10 years, the Dividend was increased 4.3% and 11.6% per year respectively. For any unit trust, a good increase is a rate above background inflation, which runs about 3 %. The closing price for the last 5 and 10 years has increased by 19.4% and 6.8% per year respectively. The cash flow for the last 5 and 10 years has increased by 8% and 28% per year respectively. These are all respectable figures.

Now for the negatives things I find on this stock. Last year they had income loss. However, everyone expects this company will earn money in 2009. The book value of this stock has negative growth of -6.14% and -6.44% for the last 5 and 10 years respectively. Being a unit trust, which payouts most of the money they earn, you do not expect much book value growth, but you expect some. The Accrual Ratio, without the Financial Cash Flow is high at 9.5%, but it is a negative 2.2%, when you include in the Financial Cash Flow. Also, the Return on Equity (ROE) has never been good, except for 2006, when it was 10.9%. Otherwise, it has been very low.

I will look at what stock analysts are saying about this stock tomorrow.

This fund has four lines of business: conventional oil pipelines, oil sands transportation, NGL extraction and bulk liquid storage. Inter Pipelines have four petroleum pipeline systems in Alberta and Saskatchewan, transporting approximately 20% of western Canada’s conventional oil production. They have Canada’s largest oil sands gathering business. They are Canada’s largest ethane production business, processing over 40% of all natural gas exported from the province of Alberta. They do bulk liquid storage of petroleum and petrochemical in Europe and they are the largest independent storage provider in the United Kingdom. Its web site is www.interpipelinefund.com. See my spreadsheet at www.spbrunner.com/stocks/ipl.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Canadian Bank Stocks

I have reloaded my index to the stock that I have talked about and this is available on my web site at www.spbrunner.com/stocks/indexport.htm. I have highlighted in blue the stocks for which I have recently updated this index report. I have the banks grouped together so that you can easily compare them on a number of measurements. All the measurements are on a 5 year average basis.

By looking at these stocks together in this way, it is plain that the Bank of Montreal has not done as well in the last 5 years as the other 3 banks I have reviewed. It is only on ROE (Return of Equity) and Dividend Growth measurements that it has done about as well as the other banks. The Bank of Montreal has done particularly badly in the Revenue Growth measurement, as it has not grown its Revenue for the last 3 years and this is worrisome. If a company cannot grow Revenue, then eventually, it will not grow in the other measurements either. The Royal Bank has not got a good 5 year growth in Revenue, but this is because the Revenue shrunk in 2008. This is not necessarily a bad thing, if this does not persist.

By putting up a number of measurements on this index, you will be able to decide what stock you might want to investigate further for investment purposes, as you will be able to easily compare stocks. It is especially helpful to compare stocks with the Sub-Index and/or risk categories. If you want, you can copy the index htm document into a spreadsheet, to sort it in other ways.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Royal Bank 2

I reviewed this bank (TSX-RY) yesterday as far as my spreadsheet for the October 2008 annual statement goes. The Royal Bank is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).

When looking at what analyst say on this stock, it would appear that most expect the Earnings per Share (EPS) to go up in 2009, and be higher than that earned in 2007 and 2008. Looking at ratings, they range from Strong Buy to Hold, with the average rating being a Buy. (See my site for information on analyst ratings.)

Looking at the charts, this stock has done better than the TSX and the Financial Sub-Index in the periods of year-to-date, 1, 3 and 5 years. If you go to 10 years, it has done as well as the Financial Sub-Index and better than the TSX. Looking at problems, the Return on Equity (ROE) at 11.8% is lower than the 5 year average of 17.7%, although, this would be expected in a bear market.

Things on the spreadsheet that points to this stock being a current good buy is that the dividend yield is about 5.7% and this is higher than the 5 year average of 3.3%; the P/E for 2009 is about 8%, and this is lower than the 5 year average of 14.5%. The Accrual Ratio is negative, and this is good, but it is not low enough to signal a buy. As I said yesterday, I have done very well by this stock as I have made a return of 19.5% per year on this stock since I bought it in 1995.

This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm. I have reloaded by spreadsheet.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Royal Bank

I am reviewing this bank today as its annual statement for 2008 has been published. The Royal Bank (TSX-RY) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). This bank has done much better than the Bank of Montreal and about the same as the Bank of Nova Scotia and slightly worse than the TD bank. I reviewed these banks this week and last week.

The revenue on this bank has been increasing over the last 5 and 10 years, both when looked at as absolute revenue increase and revenue per share, but not as well as I would like. The 5 year increase is just 4%, but this is mainly due to the decrease in earnings this year. The Earnings per Share (EPS) is also increasing, and the growth for the last 5 and 10 years is 9% and 9.7% per year, respectively and this is not bad.

The one thing that I really like is the increase in dividends over the last 5 and 10 years. The dividend growth for the last 5 and 10 years is 16% and 18% per year, respectively. However, this bank did not increase their dividends at all this year. I will get more dividends for 2008 as it the dividend was increase in October of 2007. I do not know when the dividend will be increased again.

I have held this bank since 1995, and I have made a return of 19.5% per year on this stock. This is because I have held it so long. The 5 and 10 year return on this stock, using the closing price and dividends paid are 8.3% and 13.5% per year respectively. These returns are not bad. Also, the increase in book value for the last 5 and 10 years is a very respectable 9.8% and 9.3% per year, respectively.

This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

TD Bank 2

I want to review today what people on saying about this stock (TSX-TD). For this bank, the EPS was lower than expected because of write-offs. Some analysts, for 2008, are quoting an EPS prior to the write-offs and some are quoting the final EPS as per the annual statements. This is why you will see different EPS for 2008, depending on a site and the analyst quoted.

The ratings on this bank are from Strong Buy, Buy and Hold, with the average being a Buy rating. The current price of $42.62 is below the Graham Price of $65.45. The P/E of 7.46 is below the five year average of 13.26. The yield 5.73% is higher than the 5 year average of 3.11%. These things are pointing to the current price being a good one for this stock.

If you look at the charts, this stock has done as well as TSX and the Financial Sub-index year to date. For the last 3 and 5 years, this stock has done as well as the TSX and slightly better than the Financial Sub-Index. For the last 10 years, it has done better than the TSX, but not better than the Financial Sub-Index. Most analysts seem to feel that this stock will do fine with their EPS. I do not see any problems with this stock going forward.

I bought this stock in 2000 and since that time, I have made a return of 6.6%. This is low for a bank, but we are currently in a bear market. I expect that on a long term basis I will do much better. The dividends make up about 4% of the returns on this stock.

They are a bank with full range of financial products and services for individuals and corporations in Canada and USA. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm. I have reloaded my spreadsheet

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

TD Bank

I am reviewing this bank today as its annual statement for 2008 has been published. The Toronto-Dominion (TSX-TD) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). This bank has done much better than the Bank of Montreal and slightly better than the Bank of Nova Scotia. I reviewed both of these banks last week.

I look at different criteria for the last 5 and 10 years prior to the Annual Statement date of October 2008. The revenue on this bank has been increasing over the last 5 and 10 years, both when looked at as absolute revenue increase and revenue per share. The Earnings per Share (EPS) is also increasing, but when considering the 5 year increase, you also have to realize that it looks so good because of the problems in earnings during the last bear market.

The one thing that I really like is the increase in dividends over the last 5 and 10 years. This bank increased it dividends, as per recent normal practice, twice this year. This is the reason to buy banks, the increasing dividend income you receive. Also, the Profit Margin and Return on Equity (ROE) is good on this bank.

The negatives I see are that the Accrual Ratio is high at 9.7% and, of course, the stock price has come down significantly. Of course, all stock prices have come down during the current bear market.

They are a bank with full range of financial products and services for individuals and corporations in Canada and USA. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Jean Coutu Group

I am reviewing this stock today as its annual statement for 2008 has been published (on March 2008) and I already have a spreadsheet on this stock (TSX-PJC.A). I was sorting through by spreadsheet list for Annual Statements expected so far in 2008 and I realized that I had missed this stock. Also, the reporting date for this stock has been changed from the end of May each year to March 1 each year. This stock is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm. It is not on the great dividend stock lists, but it has been recommended in the past by the Investment Reporter.

I had some of this stock previously. I bought it in 2000 and some more in 2004. I sold in 2007, partly to raise some cash and partly to invest in Saputo, which I liked better. I made a return on this stock of 7.4%, including dividends. It is not a bad return. This stock has been beaten down recently, but so has everything else. There are some Strong Buys and Buys on this stock, but the majority seems to be Hold rating. Some people think that the dividend is in jeopardy.

The 5 and 10 growth in dividends at 5.9% and 23% per year respectively is good, some of the 10 year indicators are good, the accrual Ratio is negative, which is good, and the 5 and 10 year growth in cash Flow at 5.9% and 10.9% per year respectively is good. However, by and large, this stock seems to be in trouble. It seems to have stalled in 2004 and it has not made much progress since. Since the economy is in trouble, I would like to see this stock revive somewhat before I would again consider it for purchase.

The Jean Coutu Group operates a network of 343 franchised drugstores in Canada located in the provinces of Québec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Santé Beauté). The Company also holds a significant interest in Rite Aid Corporation (‘‘Rite Aid’’), one of the United States’ leading drugstore chains with approximately 5,000 drugstores in 31 states and the District of Columbia. Its web site is www.jeancoutu.com. See my spreadsheet at www.spbrunner.com/stocks/pjc.htm. I have included the August 2008 second quarterly report.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Bank of Nova Scotia

I am reviewing this bank today as its annual statement for 2008 has been published. The Bank of Nova Scotia (TSX-BNS) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). As I have said previously, I do not own this bank as I have Bank of Montreal, TD Bank, and Royal Bank. This bank has done much better than the Bank of Montreal I reviewed on Monday.

A bright spot is that the 5 and 10 year average increase in dividends is 18% and 17 % per year, respectively. The book value has been increasing over the last 5 and 10 years by 9.81% and 9.37% per year, respectively and this is good. Also, the growth in closing price for this stock over the last 5 and 10 years is 8.38% and 13.51% per year respectively. Dividend income is about 4% of total annual return.

Most of the other measurements are good, but not great. The revenues have been growing well over the last few years, except for 2008, with the 5 year average at 9.46% per year. The growth in Earnings per Share for the last 5 and 20 years is 5.4 % and 8.74% per years respectively. Neither is great, but they are not awful either. Earnings are depressed and they are below what was expected.

There are some Hold Ratings and Strong Buy Ratings on this stock, but mostly, the rating is a Buy. The current P/E is 10.02, which is below the 5 year average of 13.6, which points to the stock being currently at a good buy price. The stock price is close the Graham Price, a good buy indicator. Also, the Price/Book Value Ratio of 1.84 is almost at 80% of the 10 year average of 2.24. This is another buy indicator. The October 2008 report is unremarkable, and sometimes in volatile times, unremarkable is good.

The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Metro Inc 2

I reviewed this stock yesterday because its annual statement for 2008 has been published. I want to see what others say about this stock and how well it has done since the Annual Statement for September 2008. Metro Inc (TSX-MRU.A) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). I bought this stock in 2001. Since then I have made an average annual return of 13.3% on this stock. This return includes dividends and I am using November’s month end price of $34.50 in this calculation.

The spreadsheet I did yesterday showed that Metro has done well lately. However, please note that the spreadsheets that I do as a result of annual statements just show what a stock has done in the past. A past record might point to a similar future, but there are no guarantees.

I notice that the Globe gives this stock a 5 Star Rating. This rating shows how a stock performance stacks up against its peer group. 5 Stars is the highest rating possible. This stock was at a low at the end of February 2008. This was because it was not expected that the EPS would grow for 2008. However, the EPS was up by 8.8% at the September 2008 year end.

The other problem was the lack of Revenue growth. Over the last two years, Revenue has not grown much. This can be very important in the long term, because if you cannot grow Revenue, your EPS will stop growing. What happened in September 2008 is the Operations Profit Margin (Cash Flow/Revenue) was 4.2%. This is slightly better than the 5 year average of 4.1% and better than the 10 year average of 3.9%. The basic thing is either you much grow Revenue or become more efficient to grow EPS. In the long run though, you have to grow Revenue. This would be the thing to keep an eye on concerning this stock.

As far as stock price goes, this stock has done better than the TSX or the Consumer Staples Sub-Index for all periods. There are Ratings on this stock from Strong Buy to Underperform, with the Hold Rating being the average. Note that not everyone expects the EPS to increase next year and some expect it will go down from that earned in 2008 and not recovered until 2010.

Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A&P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is www.metro.ca. See my spreadsheet at www.spbrunner.com/stocks/mru.htm. I have reloaded my spreadsheet today.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Metro Inc

I am reviewing this stock today as its annual statement for 2008 has been published. The Metro Inc (TSX-MRU.A) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). I bought this stock first in 2001 and bought more in 2004. Since then I have made an average annual return of 13.3% on this stock. This return includes dividends and I am using November’s month end price of $34.50 in this calculation

When I last reviewed this stock in June 2008, it was not doing so well in the market. I am into stocks for the long term and I do not get discouraged at slight set backs. My faith in this stock is not misplaced as it is currently doing better than the market. It also has great fundamentals.

The Last Annual Statement is dated September 27, 2008. It is mostly all good news as the 5 and 10 years to the last annual statement has seen the Revenue grow by 13 and 11% per year respectively; the Earnings per Share (EPS) grow by 9% and 15% per year, respectively; the Dividends grow by 13% and 17% per year respectively; the Closing Price grow by 12% and 14% per year, respectively; the Cash Flow grow by 14% and 13% per year respectively and the Book Value grow by 19% and 18% per year respectively.

The other positive things are that the Graham Price of $32.89 for September 2008 is not far off the closing price of $31.77; the Asset/Liability Ratio is 1.88 and the Return on Equity (ROE) is 14%. It cannot all be positive, but there are no real negatives for this stock. The Current Asset/Liability Ratio is a little low at 1.02, but at least liabilities are covered. The Accrual Ratio is in a neutral place at .7%.

Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A&P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is www.metro.ca. See my spreadsheet at www.spbrunner.com/stocks/mru.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Bank of Montreal

I am reviewing this bank today as its annual statement for 2008 has been published. The Bank of Montreal (TSX-BMO) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).

I bought this stock in 1978; however, I have only tracked this stock on Quicken since Jan 1988. Since then I have made an average annual return of 15.3% on this stock. This return includes dividends and I am using today’s price of $35.75 in this calculation. This just points out that banks are great stocks for the long term.

I have concerns about the Bank of Montreal inability to grow Revenue and Earnings per Share (EPS), but they are doing fine in growing the dividend payments over the last 5 years and not too bad with growing the Book Value. Also, the Graham Price is higher than the current price.

In the recent past, the Bank of Montreal has been raising their dividend twice a year. However, there were times in the past when they went over a year before raising the dividend. Also, from 1989 to 1992 they did not raise their dividend at all. I note that the first dividend declared for February 2009 is the same as the current dividends and they do not expect to raise the dividends in the near term. They do not statement when dividends will be raised again. Note that approximately 4% of my return on this stock is dividend income over the last 5 and 10 years.

BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Brookfield Asset Management 2

Brookfield Asset Management is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm and is on the Dividend Achievers list at www.dividendachievers.com/.

There has been a lot of insider buying lately, especially after the price of this stock dipped below $30.00 and this, of course, is a very good sign. No one expects this stock to earn as much this year as last year, but there is a big variation in what the earnings will be. The ratings on this stock go from Hold to Strong Buy, but the majority are at the Buy rating. Everyone seems to expect the stock price to be higher in 12 months.

Looking at the positives for this stock, the Dividends have been raised this year. The current P/E at 16.7 is slightly lower than the 5 year of 17. The dividend yield is at 3.5%, which is higher than the 5 year average of 1.5%. The current price of $18.53 is getting close to the Graham Price of $17.51. The Accrual Ratio is at a much better .52% than it was at the time of the last Annual Statement

A negative for this September 2008 quarter report, is that the Asset/Liability ratio is slightly lower at 1.12 than at the end 2007 where is was at 1.17 and the 5 year average of 1.18. Also, the Return on Equity (ROE) is at 10.9% compared to the 5 year average of 20.3%.

Looking at the charts, this stock has not done as well as the TSX or the Real Estate Index for periods under a year. For Periods 5 years and over, it has done better than both these indexes. For a 3 year period, it has done better than the Real Estate Index, but worse than the TSX.

This Canadian Asset Managing company invests in and operates a variety of assets for its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.htm. I have reloaded my spreadsheet to include the September 2008 quarterly report.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Brookfield Asset Management

Brookfield Asset Management is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm. Both Brookfield Properties and Brookfield Asset Management (TSX-BAM.A) are on the Dividend Achievers list at www.dividendachievers.com/. Brookfield Properties (TSX-BPO) is on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). Note that this Brookfield Properties is own 51% by Brookfield Asset Management Company.

This company seems to be a much better one than Brookfield Properties. There is the same problem with valuing this company as with Brookfield Properties, as the Financial Statement switched from reporting in CDN$ to US$. An added problem with this company is that no one had the company’s TSX stock prices prior to part way through 2004 and I had to use the US$ stock prices from the NYSE.

Even though the dividends are not growing as strongly as for Brookfield Properties, I think that this is a safer stock. I like the growth in Revenues and Cash Flow. If you cannot grow Revenues, you will not grow Cash Flow or Earnings per Share (EPS). The EPS for the last 10 years is not great, but they have done much better for the 5 year period. The 5 and 10 years to the last annual statement has seen the Revenue grow by 14% and 18% per year respectively, the Closing Price grow by 13% and 18% per year, respectively, the Cash Flow grow by 44% and 23% per year, respectively, the book value by 9% and 4% per year, respectively, and the EPS for the last 5 and 10 years have grown by 66% and 2% per year respectively.

What I find negative about this stock is that at the last Annual Statement of 2007, the Graham price was quite a bit below the Closing Price, the P/E ratio was 28, which is quite high and the Accrual Ratio was very high at 8.8%. The Asset/Liability Ratio is lower than what I would like at 1.17 and the growth in book value, as shown above, is not great.

I will take another look at this stock tomorrow to see what analyst have to say about it and also, how well this stock has done since the 2007 Annual Report.

This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

When I Stopped Working in 1999

In 1999, when I got laid off work, I knew that I had reached my investment goal, but at first, I did not think I could stop working. My salary was higher than I thought it would be and I thought I would need more income from my portfolio to retire. Also, my son was about to go to college.

I had always used spreadsheets to try to establish where I am financially, so here again; I tried to gage where I was. I used my previous tax package of 1998 to try to figure out what my taxes would be if I had no job and lived off my investments. I was very pleasantly shocked. If you do not work, you do not pay UI or CPP and if your income is mostly dividends rather than salary, taxes are a lot less.

Half of my investments were in trading accounts and half were in RRSP accounts. I realized that I should be taking money out of my RRSP accounts so as not to run down my trading accounts and keep some sort of balance between the two types. However, even doing this I found that, while there was a big gap between my gross income, before and after if I stopped working; it was a different story concerning my net income. There was no gap in my net income. In fact, I could spend a bit more.

This was the reason I felt I could stop working and therefore, I stopped looking for work. Now some 9 years later, and after two bear markets, I have more money than when I stopped working and I have lived off my investments quite nicely for these years. Hopefully the next 9 will be just as good.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Brookfield Properties 3

Brookfield Properties is on the Dividend Aristocrats list. Both Brookfield Properties and Brookfield Asset Management are on the Dividend Achievers list. Brookfield Asset Management is on Mike Higgs’ list. See the Dividend Achievers list at www.dividendachievers.com/, The Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) and Mike Higgs' list at www.dividendgrowth.org/Report.htm. I have not done a spreadsheet yet on Brookfield Asset Management.

Of the two things going for this stock, the increasing dividend and stock price, both have been hit by recent events. It would appear that the stock dividend is only increasing by US $.01, which will be more for Canadians because of the exchange rate. However, these dividends are declared in US$. Because of recent price changes, the Graham Price is down above the stock price.

A couple of good things is that the Accrual Ratio has turned negative (but not by much) and the Cash Flow is expected to be positive this year. There are ratings on this stock from Strong Buy to Hold, but most ratings seem to be in the Buy region. Analyst 12 month target stock price for this stock has been revised lower lately, as have their target cash flow and target EPS.

Because of recent problems, this stock and the TSX Real Estate Index is below the TSX Index for all periods from Year to Date to 10 years. Also, the Dividend Yield has gone up and the P/E has come down, as would be expected. The Asset/Liability Ratio has improved, but only from 1.17 to 1.18.

Brookfield Properties is a leading North American commercial real estate company that invests in premier-quality office properties in high-growth markets driven by financial service, government, and energy tenants. The portfolio is composed of office properties in 12 top U.S. and Canadian markets. Note that this company is own 51% by Brookfield Asset Management Company (TSX-BAM.A). IIts web site is www.brookfieldproperties.com. See my spreadsheet at www.spbrunner.com/stocks/bpo.htm. I have reloaded my spreadsheet to include the September 2008 quarterly report.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Brookfield Properties 2

I was going today to look at some stocks on the Dividend Aristocrats List that I do not have. The first one was Brookfield Properties (TSX-BPO). However, since I had no spreadsheet on this, I had to start from scratch. The spreadsheet on this stock took longer than I expected. Note that this company is own 51% by Brookfield Asset Management Company (TSX-BAM.A).

Brookfield Properties is on the Dividend Aristocrats list. Both Brookfield Properties and Brookfield Asset Management are on the Dividend Achievers list. Brookfield Asset Management is on Mike Higgs’ list. I have not done a spreadsheet yet on Brookfield Asset Management. See the Dividend Achievers list at www.dividendachievers.com/, The Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) and Mike Higgs' list at www.dividendgrowth.org/Report.htm.

The Last Annual Statement is dated 31 December 2007. First, the good news, the 5 and 10 years to the last annual statement has seen the Dividends grow by 14% and 19.8% per year respectively, and the Closing Price grow by 11.5% and 8% per year, respectively.

In the not too bad category, the 5 and 10 years to the last annual statement has seen the Revenue grow by 5.8% and 6.6% per year respectively, but this becomes worse if you look at the Revenue per Share that has grown by 4% and 3.8% per year respectively. The Return on Equity (ROE) is not bad at 7.9% and the Accrual Ratio at 2.9% at December 2007.

Now for the bits I do not like. The Earnings per Share (EPS) growth has been negative for the last 5 years and the Cash Flow from Operations has been steadily fall for the last 3 years, until in December 2007 it was negative. For December 2007, the Graham Price is $10.00 and the Stock price is $19.22. The Graham price is low because the Book Value per share is not growing. Also, the Asset/Liability ratio is low at 1.17.

This would not be my favorite stock, but I will look to see what others are saying about it tomorrow. Also, tomorrow I will look at the most recent quarterly report.

Brookfield Properties is a leading North American commercial real estate company that invests in premier-quality office properties in high-growth markets driven by financial service, government, and energy tenants. The portfolio is composed of office properties in 12 top U.S. and Canadian markets. Its web site is www.brookfieldproperties.com. See my spreadsheet at www.spbrunner.com/stocks/bpo.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Brookfield Properties

I was going today to look at some stocks on the Dividend Aristocrats List that I do not have. The first one was Brookfield Properties (TSX-BPO). However, since I had no spreadsheet on this, I had to start from scratch. This takes sometime and I have run out of time today. I will get back to this on Monday. I do not want to rush these things, as this is how you make mistakes.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Teck Cominco Ltd 2

When I looked at the price of this stock today, the first thing I thought was – this is stupid. The stock has dropped over 16% today. There was a cluster of insider sells on this stock when it reached $50 in May, but in November, there is a big cluster of insider buying. No wonder there is insider buying at these prices. I just got home from lunch; I had not realized what was going on. The insider buying is occurring in the public market, it is not connected with stock options.

From looking at analyst reports, I see that this company is expected to earn more this year than last, but the earnings have been down graded recently. Analysts seem to either have Strong Buy ratings on this stock or Hold ratings, and this would average out to a Buy rating. There are analysts that are very negative on this stock. Many feel that it will have to sell assets to repay the loan it made to buy Fording Canadian Coal Trust. This is a very bad time for anyone to need credit, since the current financial problems is basically a credit freeze-up.

The one thing that concerns me is the high Accrual Ratio of 7.92%, which is lower than it was at December 2007, which was some 28%, but it still is very high, as anything over 5% is high. Looking at the charts, this stock, because of the recent drop, has done worse than the TSX and the TSX Materials Index for any period, from year to date to 20 years. This stock is part of the TSX Materials Index. It is very obvious that the mob that is investors today, are very concerned about this stock.

Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is www.teck.com. See my spreadsheet at www.spbrunner.com/stocks/tck.htm. I have reloaded my spreadsheet with the values from the 3rd quarterly report of September 2008.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Teck Cominco Ltd

To continue the theme of looking at resource companies, I looked at Teck Cominco (TSX-TCK.B) to see how this company has done over the last 5 and 10 years. What I have found here again is that an investment in this company would have done quite well. Today, I will look at what sort of profit you would have made on a 5 or 10 year investment to the last annual statement of December 2007. Tomorrow I will look at from the stand point of a current investment.

The 5 and 10 years to the last annual statement has seen the Revenue grow by 23% and 24% per year respectively, the Closing Price grow by 46% and 14% per year, respectively, the Cash Flow grow by 41% and 18% per year, respectively and the book value by 21% and 10% per year, respectively. The Earnings per Share (EPS) for the last 5 and 8 years have grown by 118% and 43% per year respectively. I cannot give a growth for 10 years as there was a few years, 10 years ago when the EPS was negative.

Teck Cominco is also a dividend paying stock and, although the yield is in a low range of 1.6% average for both 5 and 10 years, the rate that the dividends have grown is quite health at 58% and 26% per year for the last 5 and 10 years. The Return on Equity (ROE) has also been very good, with the ROE for December 2007 being at 21%. The Current Asset/Current Liability Ratio and the Asset/Liability Ratio are both high at 2.23 and 2.32 respectively. I only real negative I see is that the Accrual Ratio for December 2007 is very high at 28.6%.

It would seem that this company has done well over the last 5 and 10 years. Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is www.teck.com. See my spreadsheet at www.spbrunner.com/stocks/tck.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Hot, Flat, and Crowded, by Thomas L. Friedman

The full title of this book is Hot, Flat, and Crowded - Why We Need A Green Revolution – And How It Can Renew America. I read Friedman because he always says interesting things. The US and indeed the world, is in deep shit, environmentally.

However, I am Canadian and as most Canadians do and what our Country does, is muddle through things. We will muddle through this environment thing. Canada never goes to extremes that the US does and we are generally quite happy about that. This book is available on Amazon; see the panel to the right side.

If you want to read a typical review on this book, see www.thomaslfriedman.com/bookshelf/hot-flat-and-crowded/ or see www.wired.com/culture/culturereviews/magazine/16-09/pl_print. or see www.guardian.co.uk/books/2008/sep/27/politics.climatechange. To read an excerpt from this book, see www.nytimes.com/2008/09/10/books/chapters/chapter-hot-flat-crowded.html. Thomas Friedmand has his own site at www.thomaslfriedman.com/.

Treating pollution as an externality is dangerous. Past Civilizations fell because they destroyed their environment. One quote I love in this book is on page 259. “Socialism collapsed because it did not allow the market to tell the economic truth. Capitalism may collapse because it does not allow the market to tell the ecological truth. If you learn nothing else from this book besides this, you will do very well.

The other very interesting thing he quotes is Stanford climatologist Stephen Schneider. He asks, “Can democracy survive complexity?” on page 406. “It is so difficult. It is multi-scale, multidisciplinary, with large certainty in some areas and small certainty in others. It is irreversible and reversible and we won’t know how we did until it is over. We will only know forty years later. That is why climate complexity is a challenger to democracy.”

An interesting suggestion is that since the price of oil is so high and it is therefore pushing innovation, we should keep the price of oil high. If it comes down, we should have a tax that automatically comes in and keep the price high. That is if oil is $100 a barrel, and it does to $90, we should have $10 a barrel tax.

All in all, this is very good book about a current and complex problem.

Enbridge and Toromont

As I said on Friday, I finally bought some stock in this bear market. I bought Enbridge (TSX-ENB) and Toromont Industries Ltd (TSX-TIH). Enbridge is the better dividend payer and Toromont is the better value. Both these stocks are on the Dividend Achievers list at www.dividendachievers.com/ and the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) and also on Mike Higgs’ list at www.dividendgrowth.org/Report.htm. They are both considered to be dividend paying growth stocks. Enbridge is considered to be a Low risk stock and Toromont a Medium risk stock.

Both these stocks have Strong Buy ratings, Buy ratings, and Hold ratings on them. However, Toromont has more buy ratings and the net is a Strong Buy, whereas Enbridge’s net rating is a Buy. There is always diverging opinions on these ratings. The Enbridge stock is holding up well in this bear market, whereas the Toromont stock has lost some 25% of its value. For the Enbridge stock, the dividend yield hovers around 3% and currently is 3.27%, with the 5 and 10 year annual dividend increases at 10.1% and 8.8%. Meanwhile the dividend yield for Toromont is usually under 1.5% and is currently at 2.7%, with the 5 and 10 year annual dividend increases at 21.7% and 17%.

The current P/E rating for Enbridge is at 18 and this is just below the 5 year average of 18.8. The current P/E rating for Toromont is 10.7, which is quite a bit below the 5 year average of 17.7. Toromont generally does better over the longer term than Enbridge, but Enbridge is consistent performer. The price I paid for Toromont is below the Graham Price, but the price for Enbridge is above the Graham Price by some 28%.

All in all, I got Toromont at a very good price. However, Enbridge will probably do better in the coming recession than Toromont will. But, I am buying long term, so I feel I will end up better, in the long term, with both these purchases.

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 www.enbridge.com. See my spreadsheet at http://www.spbrunner.com/stocks/enb.htm. I have updated it with the figures from the September 2008 quarterly report.

Toromont Industries has two sections. The Equipment Group is for their Caterpillar dealerships. The Compression Group, designs, engineers, fabricates, installs and services natural gas compression units; and hydrocarbon and petrochemical process compression systems; and industrial and recreational refrigeration compression systems. They do business in Canada only. Its web site is www.toromont.com. See my spreadsheet at www.spbrunner.com/stocks/tih.htm. I have updated it with the figures from the September 2008 quarterly report.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Petro-Canada 2

Today I will look at this stock (TSX-PCA) from the stand point of a current investment. Insiders were selling off this stock until July 2008. Since that time there has only been insider buying. This is a good sign. Another good sign is that the dividends on this stock were raised from $.52 a share to $.80 a share. This is an increase of over 50%.

I was looking at what analysts are saying about this stock. There are some Buy ratings on this stock, but most the ratings are Hold. Perhaps this is because no one expects that Petro-Canada will earn the same EPS or Cash Flow in 2009 that are expected in 2008. In looking at the charts, this stock has done worse than the TSX Index and the TSX Energy Index in the Year to Date, 1 year, 3 Year and 5 Year periods. It is only when you go to the 10 year period that it has done better than both these indexes. If you compare this stock with Encana, you will see that Encana has done better than Petro-Canada, and also the TSX and TSX Energy Index in all these periods.

If you had held this stock over the past 5 or 10 years, you would have earned money. Currently, the price of this stock is back to where it was in 2003 and 2004, but this will not last. What I see as the negatives for this stock is the low yield, which is running usually always below 1%. The current problem I see is the Accrual Ratio is very high at 9.89%, where anything above 5% is very high. I would also like to see the Current Asset/Current Liability Ratio safely above 1.5. For the most recent quarter, it has improved from .88 to 1.44 and this, of course, is good.

The most positive things are the insider buying, the increase in dividends and with the dividend yield going up to 3%. The P/E ratio is also lower than it has been over the past 10 years.

Petro-Canada is one of Canada’s largest oil and gas company, operating in Canada and internationally. They operate in both upstream (explores and produces) and the downstream (refining and marketing) sectors of the oil and gas industry. Its web site is www.petro-canada.ca. See my spreadsheet at www.spbrunner.com/stocks/pca.htm. I am reloading my spreadsheet with the figures from the most recent quarter of September 2008.

I finally bought some stock in this bear market. I bought Enbridge (TSX-ENB) and Toromont Industries Ltd (TSX-TIH). Enbridge is the better dividend payer and Toromont is the better value. I will talk more on this on Monday.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Petro-Canada

I will like to do something different again today. I started investing in the 1970’s. This was the time that oil and gas sky rockets up in price and then a few years later fell down heavily. I had always perceived that resource investing was very risky and have done very little investing in this section. I had held some resource stock at various times, but always held them for short periods. Basically make a profit and getting out. I never held any for more than a few years.

I know that a lot of the TSX market is in resources. So, I wanted to look at some resource companies and see how well they have done over the past while. The first one I have picked to review is Petro-Canada (TSX-PCA). What I have found out that over the past 5 or 10 years, an investment in this company would have done quite well. Today, I will look at what sort of profit you would have made on a 10 or 5 year investment to the last annual statement of December 2007. Tomorrow I will look at from the stand point of a current investment.

The 5 and 10 years to the last annual statement has seen the Revenue grow by 16% and 13% per year respectively, the Earnings per Share (EPS) grow by 25% and 26% per year respectively, the Closing Price grow by 18% and 16% per year, respectively, the Cash Flow grow by 12% and 13% % per year, respectively and the book value by 18% and 13% per year, respectively. This is all very good. Petro-Canada is also a dividend paying stock and, although the yield is low at .89% and 1.1% average for 5 and 10 years, the rate that the dividends have grown is quite health at 21% and 14% per year for the last 5 and 10 years.

The Return on Equity (ROE) has also been very good, with the ROE for December 2007 being at 23%. The negatives I see for this stock is the Current Asset/Current Liability Ratio is not as high as I would like to see it, although the Asset/Liability Ratio has always been a quite health position above 1.5. I also note that the Accrual Ratio for December 2007 is very high at 12.7%.

However, by and large, if you had invested in this stock over the past 5 or 10 years, you could have done very well.

Petro-Canada is one of Canada’s largest oil and gas company, operating in Canada and internationally. They operate in both upstream (explores and produces) and the downstream (refining and marketing) sectors of the oil and gas industry. Its web site is www.petro-canada.ca. See my spreadsheet at www.spbrunner.com/stocks/pca.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Stantec Inc 2

As I said yesterday, I will review for this stock (TSX-STN), the latest quarterly report and update my spreadsheet accordingly. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. I have looked at this stock recently as there are lots of people that think it is a great stock. I bought a small amount in April of this year. It, of course, has lost money for me this year, but I think that I will benefit from it in the long term.

I notice that lots of analysts still have estimated EPS for this stock for 2008 around $1.80. However, since the September quarter there was a loss of $.66, I do not see how this can be. This best that I can see is that it will earn $1.20. However, since the September loss is due to non-cash charges, this lost does not mean too much.

The Current Asset/Current Liability Ratio is no longer a problem and it is the good range of 1.54. Anything over 1.5 is good. The Asset/Liability Ratio is still quite high (and very good) at 1.89. The current P/E is slightly below the 5 year average 19.7. If you go with what others think this stock will earn this year, the current P/E is around 12. However, the price still is not at or lowers than the Graham Price, but this may not happen.

One very good thing is that over the last 90 days there has been lots of insider buying. Stantec has also been buying back their shares and this is also a positive sign. Both their gross and net revenues are up and this is also positive. I think that this is a great company, but you should only buy if you can stand the higher risk that come with buying this stock.

Stantec Inc is a profitable Construction & Engineering company that trades on the TSX. It provides professional services in planning, engineering, architecture, interior design, landscape architecture, surveying and geomatics, environmental sciences project management and project economics for clients, from initial concept and financial feasibility, to project completion and beyond. Its web site is www.stantec.com. See my spreadsheet at www.spbrunner.com/stocks/stn.htm. I have reloaded my spreadsheet with the 3rd quarterly report figures.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Stantec Inc

I will like to do something different. I am here reviewing a stock that pays no dividends. I am reviewing this stock (TSX-STN) today, as it is one that has recently been recommended as a good buy. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. I have looked at this stock recently as there are lots that think it is a great stock. I bought a small amount in April of this year. It, of course, has lost money for me this year, but I think that I will benefit from it in the long term.

I will look today at how it has done, mainly to the last annual report of December 31, 2007. Tomorrow, I will look at the latest quarterly report and update my spreadsheet for that report. This is a growth company. The 5 years to the last annual statement has seen the Revenue grow by 17% per year, the Earnings per Share (EPS) grow by 22% per year, the closing price grow by 37% per year and the Cash Flow grow by 14% per year.

The other positive things are that Asset/Liability Ratio is very good at 2.19; the Asset/Book Value ratio is low at 1.8; and the Return on Equity (ROE) is good at 15.6%. The problems I see is that the Current Asset/Current Liability Ratio is low at 1.39 (but I noticed it was much better at the first quarterly report); the Accrual Ratio is very high at 14%; and the Graham Price at $18.08 was way off the Closing Price of $38.89. However, I must say that for growth companies, it is next to impossible to buy at or below the Graham Price, although, for the current bear market, this is probably not true.

Stantec Inc is a profitable Construction & Engineering company that trades on the TSX. It provides professional services in planning, engineering, architecture, interior design, landscape architecture, surveying and geomatics, environmental sciences project management and project economics for clients, from initial concept and financial feasibility, to project completion and beyond. It works internationally. Its web site is www.stantec.com. See my spreadsheet at www.spbrunner.com/stocks/stn.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Booms and Bust; Innovations and Risk Takers

Capitalist system works by boom and bust. It can be a very bumpy ride, but we all can win in the long term. The business cycle is not dead. I am not saying that there should be no regulation to temper the business cycle. However, you have to be careful as too much regulation can stop the economic expansion phrase of the cycle. You will not get rid of the economic contractions, but you can damage economic expansions.

Innovators and risk takers push the capitalist system. They push the economic expansions. We mostly benefit from this, but not always. This is one time when we are not benefiting much. In fact, this is why we have some of the current problems. However, if you slap down innovators and risk takers, or worse put them in jail, you discourage people from innovation and risk taking. If you do this, we can all lose. Here again, you can put a stop to economic expansions, but you will still get the economic contractions.

From what I can see, what you want to do is moderate the expansions. The higher and the steeper the stock market climbs, the lower and steeper will be its fall. So, putting in some regulations to keep the booms in check and some regulations to keep the innovations and risk taking in check, would certainly be in order. There seems to be lots we can do to kill economic expansion. Problem is, I have never heard of any economic contractions being stopped.

Business people (like CEO, CFO etc) are just people who are doing the best they can in the situations that they find themselves. I am not saying that there are no crooks; I am just saying that the majority of business people try to do the best they can. Humanity spend most of it’s time as a hunter-gather. Maybe under all our sophistication and our very complex society, we are just hunter-gathers at heart, just trying to cope with the world we have made.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Backbone Stocks

I was asked for a list of what I thought my backbone stocks were in my portfolio. I have done a spreadsheet to show them and some pertinent information on each stock. Below, I have some comments on some of these stocks.

First, I will mention Pembina. What can I say, but that I really like pipelines. I have made a great deal of dividend income from pipeline stocks over the years.

I have RIOCan. I rent, not own where I live. Having some real estate is good, although I lean towards industrial and retail rather than apartment REITS.

I have Bank of Montreal as a maybe. This is because I might get rid of some of it. If I were buying banks today, I would get Royal Bank, TD and Bank of Nova Scotia. I do not believe I would buy Bank of Montreal. I have had this bank since the 1970’s. However, it is not the same bank as it was when I bought it back then. The rest of the maybes I am just trying out.

See my spreadsheet at www.spbrunner.com/stocks/portfolio.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

Forzani Group 2

Today, I am reviewing this stock (TSX-FGL) to see if it currently is a good buy. The first thing to mention is that there has been insider buying lately. There was some selling when the stock was up over $18. However, buying started when the stock hit $13 and it has been continuing.

On the charts, if you look at this stock over the past month, it has done better than the TSX or the TSX Consumer Staples Index. If you look at the stock over year to date, 1, 3 and 5 years, it has done worse than these two indexes. It is only looking at this stock over a 10 year period when it has done better than these two indexes. The problem is that this stock has been very hard hit by the recent bear market.

No one expects this stock to earning as much this year (Jan 2009) as it did last year (Jan 2008), but improvement is expected for Jan 2010. People vary as to how much the EPS will go down this year. Both the Current Asset/Current Debt and the Asset/Debt Ratios have deteriorated in this new quarterly report. Both the Net Income and the Operational Cash Flow figures are negative for this new quarterly report.

The only recent bright spot is the insider buying. Analysts are giving this stock Strong Buy, Buy and Hold ratings, with an average of a Buy rating. As always, there are various opinions on this stock. Personally, I would like to see the next quarterly report before committing any money to this stock.

The Forzani Group is a retailer of sporting goods, offering an assortment of brand-name and private-brand products through stores under corporate and franchise banners. Their corporate banners include Sport Chek, Sport Mart, Coast Mountain Sports, National Sports, Athletes World and Hockey Experts. The franchise banners include Sports Experts, Intersport, Atmosphere, Nevada Bob’s Golf, Hockey Experts, Fitness Source, Pegasus, RnR, S3, Tech Shop and Econosports. Its web site is www.forzanigroup.com. See my spreadsheet at www.spbrunner.com/stocks/fgl.htm. I have re-uploaded my spreadsheet with the 2nd quarterly report figures.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.