The best thing to say about this stock is that it is a good dividend paying stock. This stock is very well though of by analysts that follow Canadian dividend paying conservative stock. Since the company has not raised their dividend as usual this past year, it will be removed from the dividend achiever type lists. However, this can happen to even the best of companies.
The first thing to mention is that there has been a bit of insider selling lately. Insider selling is always hard to read, but I doubt it means anything.
When I look at the P/E ratio on this stock, I get a ratio of 15.5. The 5 year average low is 9.4 and the 5 year average high 15.7. This P/E is close to the top end of the P/E ratio range. The sites that use the last 12 months earnings for a P/E ratio get an even higher ratio of 18. By the P/E ratio, this stock is not cheap, but a P/E of 15 is sort of a moderate ratio level. When I look at the Price/Book Value Ratio, I find that the current one of 2.22 is higher than the 10 year average by about 15%. What you like to see is the current P/BV lower than the 10 year average. However, a P/BV of 2.22 is not that high either.
When I look at the current Graham Price I find that at $13.15, it has come lower than what it was in 2008. This is mainly because the earnings are lower, but also the Book Value is expected to be lower than that of January 2009. The current stock price at $16.25 is some 24% above the Graham Price. This also points to a rather high current stock price. The final thing to look at is dividend yield and it is only here that a current low stock price is shown. The current dividend yield is 4.4% and the 5 year average is 3.1%.
There are not many analysts that follow this stock. However, what I have found are recommendations of Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
What this stock does is reward its shareholders with good dividend income. Even now, the yield is good at 4.4%. If you had bought this stock 10 years ago, you would, on average, be earning some 30% return on your original investment. (See the section of my spreadsheet on H/L (average of high and low stock price) Yield after 5 and 10 years). The dividend return on this stock is one of the best reasons to buy this stock. As I said yesterday, I do not own this stock, but if I were looking for a retail stock, I would certainly look at this stock.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc 50% (Reitman family. Its web site is www.reitmans.ca. See my spreadsheet at www.spbrunner.com/stocks/ret.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
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