Tuesday, January 12, 2010

Shaw Communications Inc

I am doing a review on Shaw Communications (TSX-SJR.B) today, as I follow this stock and I have not yet reviewed it. The August 2009 report is also in. This stock is on the dividend lists that I follow of Dividend Achievers at www.indxis.com/DividendAchievers.html and Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).

Most of the growth figures for this stock over the past 5 and 10 years are very good. The good ones are Revenues, Earnings, Dividends, Total Return, and Cash Flow. There are a couple of things I like to say on growth figures. The Total Returns for the last 10 years is just 6.2% per year and this is rather low. The 5 year average Total Returns is much better at 16.5% per year.

The one set of growth figures that is not good is that for Book Value. The growth in book value for the last 5 and 10 years are just 1.5% and 1.6% per year. The Book Value is theoretically, the value of the company if it ceased to exits and the assets were sold off. That is the Book Value is the break-up value of the company. It is not that this company has no assets, but the value of the company’s assets is being depreciated each year. The company, however, does continue to make money from their assets each year.

The other thing that I do not like about this company is that the Liquidity Ratio and the Asset/Liability Ratios are low. The Liquidity Ratio is currently at 0.55 and the 5 year average is just 0.48. This means that the current assets cannot cover the current liability. The Asset/Liability Ratio is better at 1.37. The Total Assets can cover the Total Liabilities. However, I would prefer these ratios to be higher. They are best around 1.50.

I have never bought this stock. I know that a lot of analysts follow it and a lot of analyst like this stock very much. By and large, this company is looked upon as a very well run company. Tomorrow, I will talk about what the analysts say about the current price for this company.

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Its web site is www.shaw.ca. See my spreadsheet at www.spbrunner.com/stocks/sjr.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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