Thursday, July 30, 2009

Canadian Tire Corp 2

I am continuing my review this stock (TSX-CTC.A) today, as I have not reviewed it since I received the annual report for the end of December 2008. I bought this stock in Nov 2000 for one of my accounts. My return, including dividend is 11.6% per year.

When I look at Insider Buying and Insider Selling on this stock, I find there is $6M in selling and $5M in buying. The buying is by a variety of people, but the selling is all by two officers of the company. It is never a good sign when there is lots of selling, but there is a limited number of people selling, so they could be selling for a variety of reasons that have nothing to so with the company’s expected future performance.

When I look at the spreadsheet ratios, what I find is that the dividend yield at 1.6% is above the long term average of 1.1%, but this company has not increased their dividends this year. Usually they do the increase with the June dividend, but this has not occurred this year and I have seen no announcement yet. This is not a good sign. Between 1991 and 2004, they kept their dividend at the same amount. They started to increase their dividends with the ones payable in 2005 and since that time, they have had good growth in dividends.

In regards to the P/E ratio, the current ratio is about 13, which is the same as the 5 year low, so this is good. The Graham Price is some 17% above the current price, so this is good also. I find the other ratios I look at, the Price/Book Value and Price/Sales ratios to be low also. All these point to a relatively good current price.

When looking for analyst recommendations, I find Strong Buy, Buy and Hold. The consensus would be a Buy rating. (See my site for information on analyst ratings.) There are quite a number of analysts following this stock and there is a lot of hold recommendations. However, there are, of course, Strong Buy and Buy recommendations.

When you look at the charts and compare this stock with the TSX Index I find that over the short term, it has out-preformed the TSX. Over the long term, of 5 and 10 years, it has done as well as the TSX. I am happy with my investment in this stock and I will continue to hold what I have.

They engaged in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products. Its web site is See my spreadsheet at

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 for a list of the stocks for which I have put up spreadsheets.

No comments:

Post a Comment