Today, I will continue with my review of this stock (TSX-TCL.A). It is one that I follow, but I do not own it. I have not blogged about this stock before. It is fairly well followed company that is into print media. They have a financial year end of October 31st of each year. They have a fairly good record of increasing their dividends.
I looked at the insider trading report. What I find is a minor amount of insider buying and no insider selling. What we do know is that the company raised their dividend 12.5% in 2010. This was after no dividend increases occurring in 2009. This is a positive sign from management that they feel positive about the future.
For this stock, I get a 5 year median Low P/E of 11.5 and a 5 year median high P/E of 13.52. The current P/E I get is just 8.5. My any standard a P/E of 8.5 is low and here it is relatively low also. Sites that use the last 12 months earnings for current P/E get an even lower one of 7.9. I get a Graham Price of $26.75 and a current stock price of $16.07. The stock price is some 40% lower than the Graham price. This is points to a low stock price. The low average difference between the Graham Price and the stock price is -7.5%.
When I look at the Price/Book Value Ratio, I find that the current one of 1.04 is some 67% lower than the 10 year average of 1.56. The last thing to look at is the Dividend yield. At 2.3%, it is a bit higher than the 5 year average of 2.2%. This is the only measure that does not show a very low stock price.
When I look at analysts’ recommendations, I find that they are Strong Buy, Buy and Hold. I find no other, and most of the recommendations are either a Buy or a Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) This company is in print media and a lot of analysts do not like this business.
Even some analysts with Buy recommendations remark on the lack of revenue growth. They remark that earnings have improved only because of cost containment. Analysts with the Hold recommendations feel that the print media business is being cannibalized by the internet. They feel that print media is a tough business and that investment in this area will not longer be a good long term investment.
I must admit, this is not the sort of business I am interested in for a long term investment. Sometimes companies are cheap for a good reason.
Transcontinental, one of Canada's top media groups, is the largest printer in Canada and Mexico and the fourth-largest in North America. In addition to commercial printing, it operates 150 websites and is a leading publisher of consumer magazines, French-language educational resources and community newspapers in Quebec and the Atlantic provinces. Its web site is here Transcontinental. See my spreadsheet at tcl.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 for stocks followed and investment notes. Follow me on twitter.
Friday, December 31, 2010
Thursday, December 30, 2010
Goodfellow and Pareto
I had a bit of money to invest, so I bought some Goodfellow Inc and a bit more Pareto Corp. I had no Goodfellow Inc before yesterday. I have tracked this stock for some time and it is has been pushed by the Investment Reporter for some time. It is in a rather old industry, being heavily involved with wood.
However, considering that we still use steam to turn turbines to make electricity, even when we use nuclear power, I think that man is great at improving things. Real change is sometime that seems to occur very seldom. I therefore have few problems with buying into an old type industrial for a long term investment.
As I have said in the past, the best you can usually do in a purchases is pay a reasonable price for your stock. I looked at a couple other stocks, specially, Reitmans (TSX-RET.A) and Emera (TSX-EMA), which I have recently read about as good dividend paying stocks to buy currently. However, both these stocks seem to be relatively expensive.
This stock does always tend to be on the cheap side. Also, it is encouraging that they gave out a special dividend last year. However, I tend to look at special dividends as the management saying they have some money now for dividends, but they do not make the increase permanent, because they are not absolutely sure it can be maintained. Current, the dividend rate is at 5% and the 5 year average is 5%, so this points to an average price.
The stock price of $12 for yesterday is about 48% lower than my Graham price, which is $23.03. However, this stock is generally below the Graham price. The Price/Book Value at 0.90 is some 96% of the 10 year average of 0.93. This stock is often sold below the book value, but it is also a good sign that it is lower than average. The P/E is at just 6.9. The P/E on this stock is also generally low with a 5 year median low of 5.4 and a 5 year median high of 9.2. Of course, the whole point is that I am paying a reasonable price for this stock.
When I look at the insider trading report, I find that there is a bit of insider buying and a bit more of insider selling. However, these amounts are so small that they tell us nothing. More of interest is the special dividend mentioned above. One good thing that I see is that the company is expanding aboard, rather than just doing business in US and Canada. (Note this company is also sold over the counter in the US, with a symbol of GFELF.) One problem is that the 1st quarter financial reports for 2011, dated November 30th, 2010 came in weaker than the equivalent 1st quarter of 2010, dated November 30th, 2009.
If you are considering this company, please note that the dividends have gone down as well as up. Over the long term, they seem to go up just fine. Over the short term, they have gone both up and down. They have also given out special dividends.
Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. It is about 60% owned by insiders. Its web site is here Goodfellow. See my spreadsheet at gdl.htm.
There is not much to say about Pareto. I do not own much of this, so its share price is very low at about $2.35 currently. It is a fast moving coming and it is therefore difficult to tell if I am paying a reasonable price or not. Although the current yield is good at 5.1%, it is lower than the average so far, which is at 6 %. The current price is at $2.35 and it is above the Graham price of $1.69 by 40%. (This is rather normal for growth stock. The average high is running at 68% above the Graham Price.)
There has been a bit of insider buying, but not enough to tell us anything. However, the company raised their dividends twice in 2010 and this translates into a 100% increase in dividends. For the 3rd quarter, revenue and net earnings have increased. The earnings per share are down a bit, because more shares have been issued. The one important thing that is down for the 3d quarter is cash flow.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising, In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
I next have to decide what to invest with my new $5,000 deposit to the Tax Free Savings Account (TFSA) in January. The last two years I have bought Shoppers Drug Mart (TSX-SC) and Pareto Corp (TSX-PTO). I was again using Pareto as filler to sop up little money that remained after buying Shoppers. Ironically, my TFSA is only doing well because of the Pareto purchase, not because of my main purchase in Shoppers.
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 for stocks followed and investment notes. Follow me on twitter
However, considering that we still use steam to turn turbines to make electricity, even when we use nuclear power, I think that man is great at improving things. Real change is sometime that seems to occur very seldom. I therefore have few problems with buying into an old type industrial for a long term investment.
As I have said in the past, the best you can usually do in a purchases is pay a reasonable price for your stock. I looked at a couple other stocks, specially, Reitmans (TSX-RET.A) and Emera (TSX-EMA), which I have recently read about as good dividend paying stocks to buy currently. However, both these stocks seem to be relatively expensive.
This stock does always tend to be on the cheap side. Also, it is encouraging that they gave out a special dividend last year. However, I tend to look at special dividends as the management saying they have some money now for dividends, but they do not make the increase permanent, because they are not absolutely sure it can be maintained. Current, the dividend rate is at 5% and the 5 year average is 5%, so this points to an average price.
The stock price of $12 for yesterday is about 48% lower than my Graham price, which is $23.03. However, this stock is generally below the Graham price. The Price/Book Value at 0.90 is some 96% of the 10 year average of 0.93. This stock is often sold below the book value, but it is also a good sign that it is lower than average. The P/E is at just 6.9. The P/E on this stock is also generally low with a 5 year median low of 5.4 and a 5 year median high of 9.2. Of course, the whole point is that I am paying a reasonable price for this stock.
When I look at the insider trading report, I find that there is a bit of insider buying and a bit more of insider selling. However, these amounts are so small that they tell us nothing. More of interest is the special dividend mentioned above. One good thing that I see is that the company is expanding aboard, rather than just doing business in US and Canada. (Note this company is also sold over the counter in the US, with a symbol of GFELF.) One problem is that the 1st quarter financial reports for 2011, dated November 30th, 2010 came in weaker than the equivalent 1st quarter of 2010, dated November 30th, 2009.
If you are considering this company, please note that the dividends have gone down as well as up. Over the long term, they seem to go up just fine. Over the short term, they have gone both up and down. They have also given out special dividends.
Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. It is about 60% owned by insiders. Its web site is here Goodfellow. See my spreadsheet at gdl.htm.
There is not much to say about Pareto. I do not own much of this, so its share price is very low at about $2.35 currently. It is a fast moving coming and it is therefore difficult to tell if I am paying a reasonable price or not. Although the current yield is good at 5.1%, it is lower than the average so far, which is at 6 %. The current price is at $2.35 and it is above the Graham price of $1.69 by 40%. (This is rather normal for growth stock. The average high is running at 68% above the Graham Price.)
There has been a bit of insider buying, but not enough to tell us anything. However, the company raised their dividends twice in 2010 and this translates into a 100% increase in dividends. For the 3rd quarter, revenue and net earnings have increased. The earnings per share are down a bit, because more shares have been issued. The one important thing that is down for the 3d quarter is cash flow.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising, In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.htm.
I next have to decide what to invest with my new $5,000 deposit to the Tax Free Savings Account (TFSA) in January. The last two years I have bought Shoppers Drug Mart (TSX-SC) and Pareto Corp (TSX-PTO). I was again using Pareto as filler to sop up little money that remained after buying Shoppers. Ironically, my TFSA is only doing well because of the Pareto purchase, not because of my main purchase in Shoppers.
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 for stocks followed and investment notes. Follow me on twitter
Wednesday, December 29, 2010
Transcontinental Inc
This is a stock (TSX-TCL.A) that I follow, but for which I have yet to blog about. It is fairly well followed company that is into print media. They have a financial year end of October 31st of each year. They on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). They have a fairly good record of increasing their dividends.
The 5 year average dividend yield of just over 2% is not a bad rate and the yield has been steadily increasing from under 1% to the current one of 2.2%. The recent dividend increase in 2010 was 12.5% and this is a healthy increase after no dividend increases in 2009. The 5 and 10 year growth rate for dividends is 10.8% and 13% per year, respectively. Considering the current 2.2% dividend yield, the dividend potential on this stock would be 3.7% dividend yield in 5 years and a 6.2% dividend yield in 10 years on money invested today if they kept to the average 5 year increase of 10.8% per year.
If you had held this stock for the last 10 years, you would have made a total return of around 7% with about 1.8% of that return in dividends. Considering that most industrial and retail stocks get hit hard during recessions, this is good return. Unfortunately, if you had held this stock for just the last 5 years, your total return would be in negative territory, with a loss of around 4% per year, with an average dividend of around 1.6%. This stock is still not back to the highs it achieved in 2004 and 2007.
I think that the 10 year total return on this stock is what you should look at. This would mean that you could make good money on this stock over the long term. In the short term, you are going to have such problems as recessions. The Leverage (Asset/Book Value) is rather average at around 2.15. The Liquidity Ratio has been low because of high Accounts Payable. This ratio has a 5 year average of 0.91. The latest one is better at 1.42. The Asset/Liability Ratio has always been better with a 5 year average of 1.89 and a current one of 1.93.
The revenue has grown over the past 5 and 10 years run around 1% and 2% per year, respectively. This is because of a fall revenue in 2009 and 2010 and they should start to do better next year. The growth in Cash Flow is ok running at about 6% per year. The growth in Book Value is better over the last 10 years, with a growth rate of over 9% per year compared to the last 5 years at a growth rate of 4.5% per year.
The Return on Equity is mixed. The 5 year average is just 6% because of low ROE for 2008 and 2009. However, the ROE was much better for 2010 at 13.4%. However, no one expects that this company will have great year in 2011, but this is expected to improve in 2012.
Tomorrow, I will talk about what the analysts’ says about this stock and what my spreadsheets say about its current stock price.
Transcontinental, one of Canada's top media groups, is the largest printer in Canada and Mexico and the fourth-largest in North America. In addition to commercial printing, it operates 150 websites and is a leading publisher of consumer magazines, French-language educational resources and community newspapers in Quebec and the Atlantic provinces. Its web site is here Transcontinental. See my spreadsheet at tcl.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 for stocks followed and investment notes. Follow me on twitter.
The 5 year average dividend yield of just over 2% is not a bad rate and the yield has been steadily increasing from under 1% to the current one of 2.2%. The recent dividend increase in 2010 was 12.5% and this is a healthy increase after no dividend increases in 2009. The 5 and 10 year growth rate for dividends is 10.8% and 13% per year, respectively. Considering the current 2.2% dividend yield, the dividend potential on this stock would be 3.7% dividend yield in 5 years and a 6.2% dividend yield in 10 years on money invested today if they kept to the average 5 year increase of 10.8% per year.
If you had held this stock for the last 10 years, you would have made a total return of around 7% with about 1.8% of that return in dividends. Considering that most industrial and retail stocks get hit hard during recessions, this is good return. Unfortunately, if you had held this stock for just the last 5 years, your total return would be in negative territory, with a loss of around 4% per year, with an average dividend of around 1.6%. This stock is still not back to the highs it achieved in 2004 and 2007.
I think that the 10 year total return on this stock is what you should look at. This would mean that you could make good money on this stock over the long term. In the short term, you are going to have such problems as recessions. The Leverage (Asset/Book Value) is rather average at around 2.15. The Liquidity Ratio has been low because of high Accounts Payable. This ratio has a 5 year average of 0.91. The latest one is better at 1.42. The Asset/Liability Ratio has always been better with a 5 year average of 1.89 and a current one of 1.93.
The revenue has grown over the past 5 and 10 years run around 1% and 2% per year, respectively. This is because of a fall revenue in 2009 and 2010 and they should start to do better next year. The growth in Cash Flow is ok running at about 6% per year. The growth in Book Value is better over the last 10 years, with a growth rate of over 9% per year compared to the last 5 years at a growth rate of 4.5% per year.
The Return on Equity is mixed. The 5 year average is just 6% because of low ROE for 2008 and 2009. However, the ROE was much better for 2010 at 13.4%. However, no one expects that this company will have great year in 2011, but this is expected to improve in 2012.
Tomorrow, I will talk about what the analysts’ says about this stock and what my spreadsheets say about its current stock price.
Transcontinental, one of Canada's top media groups, is the largest printer in Canada and Mexico and the fourth-largest in North America. In addition to commercial printing, it operates 150 websites and is a leading publisher of consumer magazines, French-language educational resources and community newspapers in Quebec and the Atlantic provinces. Its web site is here Transcontinental. See my spreadsheet at tcl.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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, December 28, 2010
Telus Corp 2
This is a stock (TSX-T) that I track, but do not own. This stock is in the Telecommunications section of the stock market, which I think is a rather risky area. This is a competitive and fast moving technological sector now and I think that it is currently quite risky. I have very little of my portfolio in this sector. I think you can do as well, with less risk, in other retail areas.
When I look at the insider trading report, I find a bit of insider selling and a bit more of insider buying. However, there is so little going on, we learn nothing. The only thing that says anything about how management feels about this company is the rise in dividends by 5.3% mid-way through 2010. This shows that that feel the company will make enough in cash flows and earnings to pay the new dividends.
My spreadsheet shows that the 5 year low median Price/Earnings Ratios is 13.6 and the 5 year high median P/E Ratio is 17.5. The current P/E that I get is 14.4 so this shows a reasonable stock price. Sites that use the last 12 months earnings get a higher P/E of 15.3, and this also shows a reasonable stock price. I get a Graham Price of $43.07, so a current stock price of $46.69 is just 8.4% higher. This points to an average stock price.
The 10 year average Price/Book Value Ratio is 1.76 and the current P/B Ratio is 1.84. The current P/B Ratio is about 5% higher. This shows a higher than average price. The last thing to look at is the dividend yield. I get a current one of 4.3%. This is better than the 5 year average of 3.4%. The dividend yield has been better in the past, but it is better than the average one, so this points to a good current price. All this just says is that the stock price is probably a reasonable one.
When I look at what the analysts’ recommendations are, I find Strong Buy, Buy, Hold and Underperform. The larges number of recommendations falls into the Hold and Buy places. The consensus is probably a Hold. (See my site for information on analyst ratings.) The difference in the 12 month stock price between Hold and Buy is not large, with the Hold going for $48 and the Buy going for $52.
Analysts that give this stock a Hold recommendation say they like BCE (TSX-BCE) and Rogers (TSX-RCI.B) better. Some are concerned about the quality of the earnings. Some are concerned about the cash flow and debt levels. (The current Asset/Book Value Ratio or Leverage Ratio at 2.58 is a normal level.) Analysts that say to buy this stock feel that the dividends yield is good and there will be future dividend increases. They also think that this stock is recovering nicely.
I already own some BCE stock, so I am not currently interested in this stock.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus. See my spreadsheet at tel.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 for stocks followed and investment notes. Follow me on twitter.
When I look at the insider trading report, I find a bit of insider selling and a bit more of insider buying. However, there is so little going on, we learn nothing. The only thing that says anything about how management feels about this company is the rise in dividends by 5.3% mid-way through 2010. This shows that that feel the company will make enough in cash flows and earnings to pay the new dividends.
My spreadsheet shows that the 5 year low median Price/Earnings Ratios is 13.6 and the 5 year high median P/E Ratio is 17.5. The current P/E that I get is 14.4 so this shows a reasonable stock price. Sites that use the last 12 months earnings get a higher P/E of 15.3, and this also shows a reasonable stock price. I get a Graham Price of $43.07, so a current stock price of $46.69 is just 8.4% higher. This points to an average stock price.
The 10 year average Price/Book Value Ratio is 1.76 and the current P/B Ratio is 1.84. The current P/B Ratio is about 5% higher. This shows a higher than average price. The last thing to look at is the dividend yield. I get a current one of 4.3%. This is better than the 5 year average of 3.4%. The dividend yield has been better in the past, but it is better than the average one, so this points to a good current price. All this just says is that the stock price is probably a reasonable one.
When I look at what the analysts’ recommendations are, I find Strong Buy, Buy, Hold and Underperform. The larges number of recommendations falls into the Hold and Buy places. The consensus is probably a Hold. (See my site for information on analyst ratings.) The difference in the 12 month stock price between Hold and Buy is not large, with the Hold going for $48 and the Buy going for $52.
Analysts that give this stock a Hold recommendation say they like BCE (TSX-BCE) and Rogers (TSX-RCI.B) better. Some are concerned about the quality of the earnings. Some are concerned about the cash flow and debt levels. (The current Asset/Book Value Ratio or Leverage Ratio at 2.58 is a normal level.) Analysts that say to buy this stock feel that the dividends yield is good and there will be future dividend increases. They also think that this stock is recovering nicely.
I already own some BCE stock, so I am not currently interested in this stock.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus. See my spreadsheet at tel.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 for stocks followed and investment notes. Follow me on twitter.
Monday, December 27, 2010
Telus Corp
This is a stock (TSX-T) that I track, but do not own. This stock is in the Telecommunications section of the stock market, which I think is a rather risky area. Companies, like Bell used to be considered to be Widows and Orphan stocks, but not any more. This is a competitive and fast moving technological sector now and I think that it is currently quite risky. I have very little of my portfolio in this sector. I think you can do as well, with less risk, in other retail areas.
This stock has mixed record when it comes to dividends. The 5 and 10 year growth in dividend is 26% and 1% per year, respectively. This is because this stock had a rough ride in the last recession. I have only tracked the dividends for the last 15 years and they went up nice to 2001. In that year, the dividends went from $1.40 per share to $1.20 per share. They decreased again in 2002 to $.60 per share. They remained at $.60 for several years then start to rise again in 2005 (to $.80 per share).
All the telecommunications companies that I follow reduced or kept their dividend level in the last recession, but this one had the biggest drop in dividends at just under 60%. I follow BCE (TSX-BCE), Manitoba Telecom (TSX-BMT), and Bell Aliant (TSX-BA.UN), as well as Telus Corp (TSX-T).
In Total Returns, you would not have made much in this stock over the 5 or 10 years to the end of financial year 2009. The total return would be about 3%, with 3 to 4% of the total return consisting of dividends. Even with the recent rise in stock price by 37% since the end of 2009, the 5 and 10 year total returns to date, would be around 3%, with dividends making up 3 to 3.5% of the return. This means that the stock price has gone nowhere in both these time periods.
The best 5 and 10 year growth is in earnings, with growth of 15% and 8% per year, respectively. However, this is not as important as growth in revenue and cash flow. The better one is grow in revenue per share, with the 5 and 10 years being at 7% and 2% per year, respectively. The best that can be said for growth in cash flow and book value was that there was some.
When we look at Liquidity and Asset/Liability ratios, we find that the Liquidity Ratios are low coming in at 0.36 and the A/L Ratio much better at 1.71. The reason that the Liquidity Ratio is so low is that the Accounts Payable and Accrued Liabilities are quite high. If the Liquidity ratio is not at least at 1.00, it means that the current assets cannot cover the current liabilities. The one clear good thing is the Return on Equity. The 5 year average ROE is 14.7%. The ROE for the 3rd quarter of 2010 is a little lower, but still good at 13.4%.
So, have there been any recent improvements in this company? First, the Revenue per Share for the first 3 quarters of 2010 is about the same as last year. Earnings are expected to be up 3.5% this year (2010) and 12% net year (2011). However, cash flow is expected to come in lower in 2010 than in 2009 and still not be at the 2009 level in 2011. Book value is up almost 7% for the 3rd quarter of 2010, compared to 2009. Telus raised their dividends some 5.3% in the second part of 2010, so this is good. As, I had already mentioned, the stock price is up some 37% since the end of last year.
So it would seem that 2010 would be an OK, but not great year for this company. I must admit that I am not keen on companies in the telecommunications area as I think there will be lots of technological and regulatory changes in the future. Also, I think that costs for cell phones, internet etc is very high currently. Tomorrow, I will look at what the analysts are saying about this stock.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus. See my spreadsheet at tel.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 for stocks followed and investment notes. Follow me on twitter.
This stock has mixed record when it comes to dividends. The 5 and 10 year growth in dividend is 26% and 1% per year, respectively. This is because this stock had a rough ride in the last recession. I have only tracked the dividends for the last 15 years and they went up nice to 2001. In that year, the dividends went from $1.40 per share to $1.20 per share. They decreased again in 2002 to $.60 per share. They remained at $.60 for several years then start to rise again in 2005 (to $.80 per share).
All the telecommunications companies that I follow reduced or kept their dividend level in the last recession, but this one had the biggest drop in dividends at just under 60%. I follow BCE (TSX-BCE), Manitoba Telecom (TSX-BMT), and Bell Aliant (TSX-BA.UN), as well as Telus Corp (TSX-T).
In Total Returns, you would not have made much in this stock over the 5 or 10 years to the end of financial year 2009. The total return would be about 3%, with 3 to 4% of the total return consisting of dividends. Even with the recent rise in stock price by 37% since the end of 2009, the 5 and 10 year total returns to date, would be around 3%, with dividends making up 3 to 3.5% of the return. This means that the stock price has gone nowhere in both these time periods.
The best 5 and 10 year growth is in earnings, with growth of 15% and 8% per year, respectively. However, this is not as important as growth in revenue and cash flow. The better one is grow in revenue per share, with the 5 and 10 years being at 7% and 2% per year, respectively. The best that can be said for growth in cash flow and book value was that there was some.
When we look at Liquidity and Asset/Liability ratios, we find that the Liquidity Ratios are low coming in at 0.36 and the A/L Ratio much better at 1.71. The reason that the Liquidity Ratio is so low is that the Accounts Payable and Accrued Liabilities are quite high. If the Liquidity ratio is not at least at 1.00, it means that the current assets cannot cover the current liabilities. The one clear good thing is the Return on Equity. The 5 year average ROE is 14.7%. The ROE for the 3rd quarter of 2010 is a little lower, but still good at 13.4%.
So, have there been any recent improvements in this company? First, the Revenue per Share for the first 3 quarters of 2010 is about the same as last year. Earnings are expected to be up 3.5% this year (2010) and 12% net year (2011). However, cash flow is expected to come in lower in 2010 than in 2009 and still not be at the 2009 level in 2011. Book value is up almost 7% for the 3rd quarter of 2010, compared to 2009. Telus raised their dividends some 5.3% in the second part of 2010, so this is good. As, I had already mentioned, the stock price is up some 37% since the end of last year.
So it would seem that 2010 would be an OK, but not great year for this company. I must admit that I am not keen on companies in the telecommunications area as I think there will be lots of technological and regulatory changes in the future. Also, I think that costs for cell phones, internet etc is very high currently. Tomorrow, I will look at what the analysts are saying about this stock.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus. See my spreadsheet at tel.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 for stocks followed and investment notes. Follow me on twitter.
Friday, December 24, 2010
Inter Pipeline Fund 2
This is a stock (TSX- IPL.UN) that I follow, but I do not own. This company is a limited partnership and they do not plan to convert to a corporation. However, they will become a taxable entity after January 2011. Their distributions will also become dividends and they will qualify for the dividend tax credit.
When I looked at the Insider Trading report, there was no action. Probably, this is because insiders do not seem to have any units. They have Deferred Unit rights, as part of their compensation. The insiders seem to be selling these off. The company has just raised their dividends by 6.6%, so this shows some confidence in the company.
From the spreadsheet, I see that the current Price/Earnings Ratio is 16.8. The 5 year median low P/E Ratio is 10 and the 5 year median high P/E Ratio is 16. A P/E Ratio of 16 is not particularly high, but it seems to be relatively high for this stock. I get a current Graham Price of $10.38 and a stock price of $15.27. The stock price is 47% higher than the Graham Price. The high percentage difference between the stock price and the Graham Price over the past 10 years is 22%. So, again, on a relative basis, the stock price is high. It is also way about the Graham price.
In looking at the Price/Book Value Ratio, I get a current one of 2.90 and a 10 year average of 1.43. The current one is more than 2 times the 10 year average. I get a current yield of 6.3% and a 5 year average yield of 9%. By these two ratios, it would seem like the current stock price is high.
When I look at the analysts’ recommendations, I see Strong Buy, Buy, Hold and Sell recommendations. I see no Underperform recommendations. Most of the recommendations are Buy and Hold. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
The analysts with the Hold recommendations give a 12 month stock price that is less than the current price. Most are around $14.00. Analysts’ like the company’s management and many think it is a good long term investment. A lot of analysts have been warning that income trust company’s dividend yield’s will come down because price will move up to put the yields closer to 4%.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. Its web site is here Inter Pipeline. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
When I looked at the Insider Trading report, there was no action. Probably, this is because insiders do not seem to have any units. They have Deferred Unit rights, as part of their compensation. The insiders seem to be selling these off. The company has just raised their dividends by 6.6%, so this shows some confidence in the company.
From the spreadsheet, I see that the current Price/Earnings Ratio is 16.8. The 5 year median low P/E Ratio is 10 and the 5 year median high P/E Ratio is 16. A P/E Ratio of 16 is not particularly high, but it seems to be relatively high for this stock. I get a current Graham Price of $10.38 and a stock price of $15.27. The stock price is 47% higher than the Graham Price. The high percentage difference between the stock price and the Graham Price over the past 10 years is 22%. So, again, on a relative basis, the stock price is high. It is also way about the Graham price.
In looking at the Price/Book Value Ratio, I get a current one of 2.90 and a 10 year average of 1.43. The current one is more than 2 times the 10 year average. I get a current yield of 6.3% and a 5 year average yield of 9%. By these two ratios, it would seem like the current stock price is high.
When I look at the analysts’ recommendations, I see Strong Buy, Buy, Hold and Sell recommendations. I see no Underperform recommendations. Most of the recommendations are Buy and Hold. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
The analysts with the Hold recommendations give a 12 month stock price that is less than the current price. Most are around $14.00. Analysts’ like the company’s management and many think it is a good long term investment. A lot of analysts have been warning that income trust company’s dividend yield’s will come down because price will move up to put the yields closer to 4%.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. Its web site is here Inter Pipeline. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Thursday, December 23, 2010
Inter Pipeline Fund
This is a stock (TSX- IPL.UN) that I follow, but I do not own. I last reviewed this in March of 2009. This company is a limited partnership and they do not plan to convert to a corporation. However, they will become a taxable entity after January 2011. Their distributions will also become dividends and they will qualify for the dividend tax credit.
The company has started to increase their dividends in the later part of 2009, after they remained flat for a few years. However, I feel that are paying a high portion of their cash flow in distributions. The payout ratio is expected to be around 70% over 2010 and 2011. However, this is less than the 5 year average of 74%. The increase in distributions over the past 5 and 10 years has been around the long term rate of inflation. Long term inflation is around 3% and the 5 and 10 year distribution growth has been at 3% and 2.8% per year, respectively.
If you inveted in this stock, a high proportion of your return will be in distributions. Over the past 5 years, the stock price has only grown around 2 to 3%, but the total return is around 11%. Over the past 10 years, the stock has grown much better, but you still had a high rate of total return from distributions. That is 10 to 11% of your total return was from distributions.
Most of the growth figures for this company are good. The only one that is not is the growth in book value. The 5 and 10 year growth figures are -3% per year and -4% per year, respectively. The problem is that the book value took a big hit in 2007 when the company loss money and it has been recovering, but very, very slowly.
Mostly the 5 year growth rates are not as good as the 10 year growth rates. This is to be expected because of the recent recession from which we have not fully recovered. For example, the growth in earnings for the last 5 and 10 years is at 5% and 20% per year, respectively. The growth in revenues for the last 5 and 10 years is 6% and 13% per year, respectively.
The liquidity ratio for this company is low at 0.39. This means that the current assets cannot cover their current liabilities. However, the reason for this is the current portion of their long term debt. They do have credit facilities in place to handle this. Their 5 year average Liquidity Ratio is 0.91. Their Asset/Liability ratio is much better at 1.43, with a 5 year average of 1.69. I would like to see the A/L Ratio at 1.50, but it is not unusual for pipelines to have a lot of debt. The Leverage Ratio (Assets/Book Value) is a bit high at 2.84, but not unreasonable so.
The Return on Equity for this stock is quite good, with a 5 year average of 9.5% and 11.9% for the financial year ending in December 2009. The ROE for this first 9 months of 2010 is even better at 17.5%. The Accrual Ratio is quite low as it is under 1%. The other good thing is that the Operating Cash Flow is much higher than the earnings.
Tomorrow I will look at what the analysts are saying about this stock and what my spreadsheet is saying about the current stock price.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not a income trust. Its web site is here Inter Pipeline. See my spreadsheet at ipl.htm.
I had a bit extra money after doing my annual RRSP withdrawal. With this money, I bought some more Canadian Tire stock. This is a stock I already own and it is at a reasonable price.
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 for stocks followed and investment notes. Follow me on twitter.
The company has started to increase their dividends in the later part of 2009, after they remained flat for a few years. However, I feel that are paying a high portion of their cash flow in distributions. The payout ratio is expected to be around 70% over 2010 and 2011. However, this is less than the 5 year average of 74%. The increase in distributions over the past 5 and 10 years has been around the long term rate of inflation. Long term inflation is around 3% and the 5 and 10 year distribution growth has been at 3% and 2.8% per year, respectively.
If you inveted in this stock, a high proportion of your return will be in distributions. Over the past 5 years, the stock price has only grown around 2 to 3%, but the total return is around 11%. Over the past 10 years, the stock has grown much better, but you still had a high rate of total return from distributions. That is 10 to 11% of your total return was from distributions.
Most of the growth figures for this company are good. The only one that is not is the growth in book value. The 5 and 10 year growth figures are -3% per year and -4% per year, respectively. The problem is that the book value took a big hit in 2007 when the company loss money and it has been recovering, but very, very slowly.
Mostly the 5 year growth rates are not as good as the 10 year growth rates. This is to be expected because of the recent recession from which we have not fully recovered. For example, the growth in earnings for the last 5 and 10 years is at 5% and 20% per year, respectively. The growth in revenues for the last 5 and 10 years is 6% and 13% per year, respectively.
The liquidity ratio for this company is low at 0.39. This means that the current assets cannot cover their current liabilities. However, the reason for this is the current portion of their long term debt. They do have credit facilities in place to handle this. Their 5 year average Liquidity Ratio is 0.91. Their Asset/Liability ratio is much better at 1.43, with a 5 year average of 1.69. I would like to see the A/L Ratio at 1.50, but it is not unusual for pipelines to have a lot of debt. The Leverage Ratio (Assets/Book Value) is a bit high at 2.84, but not unreasonable so.
The Return on Equity for this stock is quite good, with a 5 year average of 9.5% and 11.9% for the financial year ending in December 2009. The ROE for this first 9 months of 2010 is even better at 17.5%. The Accrual Ratio is quite low as it is under 1%. The other good thing is that the Operating Cash Flow is much higher than the earnings.
Tomorrow I will look at what the analysts are saying about this stock and what my spreadsheet is saying about the current stock price.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not a income trust. Its web site is here Inter Pipeline. See my spreadsheet at ipl.htm.
I had a bit extra money after doing my annual RRSP withdrawal. With this money, I bought some more Canadian Tire stock. This is a stock I already own and it is at a reasonable price.
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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, December 22, 2010
Gennum Corp 2
I had held this stock (TSX-GND) for more than 5 years between 1998 and 2006 and I sold it because I felt it was going nowhere. I did make a profit, but only of 5.5% per year. I did not think it would break out of its current band anytime soon, so I sold half my stock and the stock only when lower, so I sold the rest. But it is good to look at a number of different stocks, some doing badly and some doing well to be able to properly judge stocks.
The interesting thing about this stock is that there is net buying by insiders. In the insider trading report, I find net buying at $1M, with buying at $1.1M. Most of the buying is by the CEO. Selling is by some officers of the company. However, for this company, all insiders with the exception of the directors have more stock options than shares.
The 5 year median low P/E is 20 and the 5 year median high P/E is 37. Except for the last few years, the P/E has been high as this was considered to be a growth stock. In 2008, when it last made a profit, the P/E had a low of 4 and a high of 13. I get a current one of 12.7. The current P/E is a good one and shows a relatively good stock price. Until 2008, the Graham Price was always a lot lower than the stock price. Currently, the stock price at $7.04 is 6% below the Graham Price of $7.48.
The 10 year average Price/Book Value ratio is 3.54 and the current one is 1.56. The current one is only 45% of the 10 year average. The current dividend yield of 2% is a good one for this stock. Until 2008, the dividend yield was closer to 1%. This is because the stock price fell in 2008 and it is just now recovering.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. There are not that many analysts following this stock, so no recommendation dominates. However, the consensus recommendation would be a hold. (See my site for information on analyst ratings.)
Analysts talk about the recent run up in stock price and therefore do not expect much over the next year. The 12 month stock price is given as $7.50 to $8.00. Analysts seem to think Gennum is well managed and that it is positioned to grow its business for the next few years. There have been some recent recommendation changes from Buy to Hold because of the recent run up in price. I am not interested in buying this company at the present time, but I will continue to track it.
Gennum Corporation designs innovative semiconductor solutions and intellectual property (IP) cores to serve the rising global demand for high-speed data transmission products in the broadcast, networking, storage and telecommunications markets. They sell in North America, Europe and Asia Pacific. Its web site is here Gennum. See my spreadsheet at gnd.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 for stocks followed and investment notes. Follow me on twitter.
The interesting thing about this stock is that there is net buying by insiders. In the insider trading report, I find net buying at $1M, with buying at $1.1M. Most of the buying is by the CEO. Selling is by some officers of the company. However, for this company, all insiders with the exception of the directors have more stock options than shares.
The 5 year median low P/E is 20 and the 5 year median high P/E is 37. Except for the last few years, the P/E has been high as this was considered to be a growth stock. In 2008, when it last made a profit, the P/E had a low of 4 and a high of 13. I get a current one of 12.7. The current P/E is a good one and shows a relatively good stock price. Until 2008, the Graham Price was always a lot lower than the stock price. Currently, the stock price at $7.04 is 6% below the Graham Price of $7.48.
The 10 year average Price/Book Value ratio is 3.54 and the current one is 1.56. The current one is only 45% of the 10 year average. The current dividend yield of 2% is a good one for this stock. Until 2008, the dividend yield was closer to 1%. This is because the stock price fell in 2008 and it is just now recovering.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. There are not that many analysts following this stock, so no recommendation dominates. However, the consensus recommendation would be a hold. (See my site for information on analyst ratings.)
Analysts talk about the recent run up in stock price and therefore do not expect much over the next year. The 12 month stock price is given as $7.50 to $8.00. Analysts seem to think Gennum is well managed and that it is positioned to grow its business for the next few years. There have been some recent recommendation changes from Buy to Hold because of the recent run up in price. I am not interested in buying this company at the present time, but I will continue to track it.
Gennum Corporation designs innovative semiconductor solutions and intellectual property (IP) cores to serve the rising global demand for high-speed data transmission products in the broadcast, networking, storage and telecommunications markets. They sell in North America, Europe and Asia Pacific. Its web site is here Gennum. See my spreadsheet at gnd.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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, December 21, 2010
Gennum Corp
I had held this stock (TSX-GND) for about 8 years between 1998 and 2006. I sold it because I thought it was going nowhere. I did make a profit, but only of 5.5% per year. I did not think it would break out of its current band anytime soon, so I sold half of my shares. The stock price only went lower, so I sold the rest. I only made some money as I bought it at the low point in the band and sold half at the high point in the band. The second half of the sale was towards the low end of the band. Since then, the stock has not done well, and it has been hit hard by the latest recession.
If you look at a stock charts, you can see that this stock hit a peak in 1999 and the same peak in 2000. Since the stock pass $10 in 1998, it was in a $10 to $20 band until it broke the bottom band of $10 in 2008. Since that time, it has been in another band that runs just below $4 to just above $8. Since September, it has been around $7.00, so the price has just flattened out. No matter how you slice or dice this stock, no one would have made money on this stock in the last 5 or 10 years.
The other figures on the spreadsheet do not show anything any better. For example, the revenues under this company have had their ups and downs over the past 10 years, but have gone nowhere. Although in the first 9 months of 2010, the revenues are on par with those of the first 9 months of 2008. 2008 saw their best revenues yet. When you look at earnings, the figures are not much better. The expected earnings for 2010, will be little better than those 5 or 10 years ago. However, the earnings have also had their ups and downs over the past 10 year.
When you look at dividend growth, there has been some overall, but the last dividend increase was in 2006 and the one before that was in 2001. The current dividend yield of 2% is not bad, but the dividend yield has generally been below 2% and it has usually been below 1%. In other words, you will not make much in dividends on this stock.
It is expected that the cash flow will be positive in 2010. This is an improvement over 2009. However, the cash flow is not expected to be much above what it has achieved in the past. The book value growth has also been a bit mediocre. Over the past 5 years, it has grown at around 5% per year. The 10 year growth is better at around 8% per year. This last growth rate is decent.
Tomorrow, I will look at what the analysts say about this stock. One more thing to mention is that, since 2008, this company has reported in US$. This does complicate things for Canadian investors, but companies do this when the majority of their business is not Canadian.
Gennum Corporation designs innovative semiconductor solutions and intellectual property (IP) cores to serve the rising global demand for high-speed data transmission products in the broadcast, networking, storage and telecommunications markets. They sell in North America, Europe and Asia Pacific. Its web site is here Gennum. See my spreadsheet at gnd.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 for stocks followed and investment notes. Follow me on twitter.
If you look at a stock charts, you can see that this stock hit a peak in 1999 and the same peak in 2000. Since the stock pass $10 in 1998, it was in a $10 to $20 band until it broke the bottom band of $10 in 2008. Since that time, it has been in another band that runs just below $4 to just above $8. Since September, it has been around $7.00, so the price has just flattened out. No matter how you slice or dice this stock, no one would have made money on this stock in the last 5 or 10 years.
The other figures on the spreadsheet do not show anything any better. For example, the revenues under this company have had their ups and downs over the past 10 years, but have gone nowhere. Although in the first 9 months of 2010, the revenues are on par with those of the first 9 months of 2008. 2008 saw their best revenues yet. When you look at earnings, the figures are not much better. The expected earnings for 2010, will be little better than those 5 or 10 years ago. However, the earnings have also had their ups and downs over the past 10 year.
When you look at dividend growth, there has been some overall, but the last dividend increase was in 2006 and the one before that was in 2001. The current dividend yield of 2% is not bad, but the dividend yield has generally been below 2% and it has usually been below 1%. In other words, you will not make much in dividends on this stock.
It is expected that the cash flow will be positive in 2010. This is an improvement over 2009. However, the cash flow is not expected to be much above what it has achieved in the past. The book value growth has also been a bit mediocre. Over the past 5 years, it has grown at around 5% per year. The 10 year growth is better at around 8% per year. This last growth rate is decent.
Tomorrow, I will look at what the analysts say about this stock. One more thing to mention is that, since 2008, this company has reported in US$. This does complicate things for Canadian investors, but companies do this when the majority of their business is not Canadian.
Gennum Corporation designs innovative semiconductor solutions and intellectual property (IP) cores to serve the rising global demand for high-speed data transmission products in the broadcast, networking, storage and telecommunications markets. They sell in North America, Europe and Asia Pacific. Its web site is here Gennum. See my spreadsheet at gnd.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 for stocks followed and investment notes. Follow me on twitter.
Monday, December 20, 2010
Royal Bank 2
This is a bank (TSX-RY) that I own. I bought this bank in 1995 and I have done well with it. On my original investment in 1995, I am receiving a yield of 27.5% in dividends. On this stock, I have made a return of 19.3% per year since I bought it in 1995. 3.5-4% of this return would be in dividend income. In 1995, I was getting a dividend each year of $.15 a share (there was a stock split in 2006). Today, the dividend is at $2.00 a share.
As with the other banks, there are massive amounts of insider selling in the insider trading reports. All the insiders, but the directors have far more stock options than shares and they are not keeping them. There is net insider selling of $44.1M, with selling at $46.5M. There is some insider buying, but extremely little compared with insider selling.
The 5 year median low P/E ratio is 11.8 and the 5 year median high P/E ratio is 17.1. I get a current P/E ratio of 12.1 based on earnings estimates for the year ending October 2011. Sites that base their current P/E on the last 12 months earnings get a higher P/E Ratio of 14.7. I think that the current P/E ratio is reasonable. When I look at the Graham price, I get a current one of $47.98. The stock price of $51.57 is just 7.5% higher. The average low Graham price versus the stock price is -3% and the average high Graham price versus the stock price is 34%. So the difference is towards the low end of this range.
I get a 10 year average Price/Book Value ratio of 2.50 and a current one of 2.15. This current one is 86% of the 10 year average and this also points to a reasonable price. The last thing for me to look at is the dividend yield. The dividend yield at 3.9% is just above the 5 year average of 3.7%. This stock also has a 10 year average high yield of 4.1% and a 10 year average low of 2.9%. The current yield is closer to the 10 year high, and this points also to a reasonable price.
When I look at analysts’ recommendations, they cover all types of Strong Buy, Buy, Hold, Underperform and Sell. There are very few analysts’ recommendations in the Underperform or Sell recommendations. Most of the recommendations are in the Hold position. The consensus is probably a Hold, but just on the edge of the Buy/Hold position. (See my site for information on analyst ratings.)
The 12 month price for those with a Hold position, give one of around $56 and those with a Buy around $62. A number of analysts’ with Hold recommendations pointed to the latest financial results being a disappointment. Some feel that the bank has great upside potential and little downside potential going forward. Others point to the great dividend yields that this bank (and all Canadian Banks) have currently.
I will continue to hold the shares I have in this bank. I will not be buying more bank stock as I have enough already.
The Royal Bank of Canada 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 here Royal Bank. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
As with the other banks, there are massive amounts of insider selling in the insider trading reports. All the insiders, but the directors have far more stock options than shares and they are not keeping them. There is net insider selling of $44.1M, with selling at $46.5M. There is some insider buying, but extremely little compared with insider selling.
The 5 year median low P/E ratio is 11.8 and the 5 year median high P/E ratio is 17.1. I get a current P/E ratio of 12.1 based on earnings estimates for the year ending October 2011. Sites that base their current P/E on the last 12 months earnings get a higher P/E Ratio of 14.7. I think that the current P/E ratio is reasonable. When I look at the Graham price, I get a current one of $47.98. The stock price of $51.57 is just 7.5% higher. The average low Graham price versus the stock price is -3% and the average high Graham price versus the stock price is 34%. So the difference is towards the low end of this range.
I get a 10 year average Price/Book Value ratio of 2.50 and a current one of 2.15. This current one is 86% of the 10 year average and this also points to a reasonable price. The last thing for me to look at is the dividend yield. The dividend yield at 3.9% is just above the 5 year average of 3.7%. This stock also has a 10 year average high yield of 4.1% and a 10 year average low of 2.9%. The current yield is closer to the 10 year high, and this points also to a reasonable price.
When I look at analysts’ recommendations, they cover all types of Strong Buy, Buy, Hold, Underperform and Sell. There are very few analysts’ recommendations in the Underperform or Sell recommendations. Most of the recommendations are in the Hold position. The consensus is probably a Hold, but just on the edge of the Buy/Hold position. (See my site for information on analyst ratings.)
The 12 month price for those with a Hold position, give one of around $56 and those with a Buy around $62. A number of analysts’ with Hold recommendations pointed to the latest financial results being a disappointment. Some feel that the bank has great upside potential and little downside potential going forward. Others point to the great dividend yields that this bank (and all Canadian Banks) have currently.
I will continue to hold the shares I have in this bank. I will not be buying more bank stock as I have enough already.
The Royal Bank of Canada 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 here Royal Bank. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Friday, December 17, 2010
Royal Bank
This is a bank (TSX-RY) that I own. I bought this bank in 1995 and I have done well with it. On my original investment in 1995, I am receiving a yield of 27.5% in dividends. The dividend increases have been good on this stock. The 5 and 10 year dividend growth comes in at 11.2% per year and 13.4% per year respectively. Dividends have not been raised on this stock for over 3 years. This is what has happened with all Canadian Banks.
This bank has done quite well in a lot of areas. The worse growth is probably in earnings where the 5 and 10 year growth figures are 6% per year and 7% per year, respectively. One of the best is the growth in total returns. The 5 and 10 year growth figures are 11% per year and 12% per year, respectively. Around 4% of the total return under this stock is in dividends.
The payout ratio for earnings peaked in 2009 at some 72% and has since fallen quite sharply to a more reasonable ratio. This ratio is expected to be in the mid 40s this year. The payout ratio for cash flow has always been reasonable with a 5 year average of 35%. The Return on Equity is also doing well; with the ROE for the financial year ending October 2010 at 15.3% and the 5 year average ROE at 16.6%.
The Asset/Liability Ratio is at 1.06 and this stock has a 5 year average A/L Ratio of 1.05. This is a pretty typical one for Canadian Banks. On a final note, the Book Value has grown nicely over the years, with a 5 and 10 year growth rate of 12% per year and 9.6% per year, respectively.
This is the last bank I will write about. Of the big five banks, I only follow BMO, TD, Royal and Bank of Nova Scotia. I do not follow CIBC.
The Royal Bank of Canada 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 here Royal Bank. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
This bank has done quite well in a lot of areas. The worse growth is probably in earnings where the 5 and 10 year growth figures are 6% per year and 7% per year, respectively. One of the best is the growth in total returns. The 5 and 10 year growth figures are 11% per year and 12% per year, respectively. Around 4% of the total return under this stock is in dividends.
The payout ratio for earnings peaked in 2009 at some 72% and has since fallen quite sharply to a more reasonable ratio. This ratio is expected to be in the mid 40s this year. The payout ratio for cash flow has always been reasonable with a 5 year average of 35%. The Return on Equity is also doing well; with the ROE for the financial year ending October 2010 at 15.3% and the 5 year average ROE at 16.6%.
The Asset/Liability Ratio is at 1.06 and this stock has a 5 year average A/L Ratio of 1.05. This is a pretty typical one for Canadian Banks. On a final note, the Book Value has grown nicely over the years, with a 5 and 10 year growth rate of 12% per year and 9.6% per year, respectively.
This is the last bank I will write about. Of the big five banks, I only follow BMO, TD, Royal and Bank of Nova Scotia. I do not follow CIBC.
The Royal Bank of Canada 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 here Royal Bank. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Thursday, December 16, 2010
Bank of Montreal 2
I have had BMO (TSX-BMO) since 1983 that is for approximately 27 years. I have only tracked my stock in Quicken from 1987 (23 years) and since then I have made a total return of 16.3% per year on this stock. Over the past 10 years, I have made a respectable total return of 9.7% on this stock.
Any long term total return per year of over 8% is good. The last few years have not been kind to stocks or the banks and to come out of the last 10 year period with a 9.7% total per year return is very good. I know that people talk about consistently making 20% per year return in the market, but this is not possible. There was years when this stock did much better than the last 10 years for me to get a total return of 16.3% per year over 23 years. This is the beauty of long term investing. I have had good capital gains and good dividends over the years from this stock.
When I look at insider trading, there is some $45M of insider selling with a net insider selling of $44.1M. So there is some insider buying, just not much. Although, when has there not been a lot of insider selling at banks, or any company were the insiders have lots more stock options that shares. It is all rather discouraging, but it tells us nothing.
The 5 year median low P/E Ratio is 10.5 and the 5 year median high P/E Ratio is 16.9. So the current P/E ratio that I get on earning estimates at 11.5 is towards the low end. Sites that quote P/E Ratios based on last 12 months earnings get a higher P/E of 13. This is sort of average for this stock. I get a current Graham Price of $64.34. The current stock price of $62.07 is about 4% below the Graham Price and this is good in itself. I looked at the median difference between Graham Price and stock price over the last 10 years. This ranges from a high of 20% to a low of -7%. So, the current difference of -4% is towards the low end.
Looking at the Price/Book Value Ratio, I get a 10 year average of 1.97 and the current P/B Ratio is 1.83. The current is 93% of the 10 year average. So this shows a good current, but not great current stock price. (A great stock price is when the P/B Ratio is 80% of the 10 year average.) The only test that does not show a very reasonable current stock price is the dividend yield. The 5 year average is 5% dividend yield and the current at 4.5% is lower than this.
However, the 10 year low dividend yield is just 3.5%, so it is better than this. It is even better than the 5 year low of 4.2%. So the dividend yield shows a not unreasonable stock price also. One thing you should aim for is to ensure you do not over pay for a stock. By looking test highs, you can see if a stock is overpriced. It would be nice to buy at a relative low stock price, but this is usually not possible. The best you can often do is pay a reasonable price for a stock.
When I look at analysts’ recommendations, I find they are all over the place as I see recommendations of Strong Buy, Buy, Hold, Underperform and Sell. Most of the recommendations are a Hold. There is more Buy than Sell recommendations. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.) Analysts think that the 12 months stock price would be around $66.
Mostly analysts seem to think that Royal Bank and Bank of Nova Scotia would be better banks to purchase at this time. Some like the TD bank better than BMO. Some even mention CIBC as a present good purchase. The analysts that like this stock point to the fact that it has one of the highest bank dividend yields at 4.5%. They also think that BMO has done a good job solving the banks problems and that it has long term growth potential.
I will be holding on to what I have.
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 here BMO. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Any long term total return per year of over 8% is good. The last few years have not been kind to stocks or the banks and to come out of the last 10 year period with a 9.7% total per year return is very good. I know that people talk about consistently making 20% per year return in the market, but this is not possible. There was years when this stock did much better than the last 10 years for me to get a total return of 16.3% per year over 23 years. This is the beauty of long term investing. I have had good capital gains and good dividends over the years from this stock.
When I look at insider trading, there is some $45M of insider selling with a net insider selling of $44.1M. So there is some insider buying, just not much. Although, when has there not been a lot of insider selling at banks, or any company were the insiders have lots more stock options that shares. It is all rather discouraging, but it tells us nothing.
The 5 year median low P/E Ratio is 10.5 and the 5 year median high P/E Ratio is 16.9. So the current P/E ratio that I get on earning estimates at 11.5 is towards the low end. Sites that quote P/E Ratios based on last 12 months earnings get a higher P/E of 13. This is sort of average for this stock. I get a current Graham Price of $64.34. The current stock price of $62.07 is about 4% below the Graham Price and this is good in itself. I looked at the median difference between Graham Price and stock price over the last 10 years. This ranges from a high of 20% to a low of -7%. So, the current difference of -4% is towards the low end.
Looking at the Price/Book Value Ratio, I get a 10 year average of 1.97 and the current P/B Ratio is 1.83. The current is 93% of the 10 year average. So this shows a good current, but not great current stock price. (A great stock price is when the P/B Ratio is 80% of the 10 year average.) The only test that does not show a very reasonable current stock price is the dividend yield. The 5 year average is 5% dividend yield and the current at 4.5% is lower than this.
However, the 10 year low dividend yield is just 3.5%, so it is better than this. It is even better than the 5 year low of 4.2%. So the dividend yield shows a not unreasonable stock price also. One thing you should aim for is to ensure you do not over pay for a stock. By looking test highs, you can see if a stock is overpriced. It would be nice to buy at a relative low stock price, but this is usually not possible. The best you can often do is pay a reasonable price for a stock.
When I look at analysts’ recommendations, I find they are all over the place as I see recommendations of Strong Buy, Buy, Hold, Underperform and Sell. Most of the recommendations are a Hold. There is more Buy than Sell recommendations. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.) Analysts think that the 12 months stock price would be around $66.
Mostly analysts seem to think that Royal Bank and Bank of Nova Scotia would be better banks to purchase at this time. Some like the TD bank better than BMO. Some even mention CIBC as a present good purchase. The analysts that like this stock point to the fact that it has one of the highest bank dividend yields at 4.5%. They also think that BMO has done a good job solving the banks problems and that it has long term growth potential.
I will be holding on to what I have.
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 here BMO. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, December 15, 2010
Bank of Montreal
I have had BMO (TSX-BMO) since 1983. I have had this stock for approximately 27 years and I am making some 19% return in dividend payments each year on my initial investment. This may sounds good, but my Royal Bank stock has done much better where after owning it for some 15 years, I am making some 27.5% on my original investment. Some of this, of course, is eaten away by inflation over the years.
This bank has a good record of dividend increases. The growth in dividends over the past 5 and 10 years is at the rate of 8.6% per year and 10.8% per year, respectively. However, like all our Canadian Banks, this bank has not raised their dividend since 2008. Analysts also think that the first increases in dividends are going to come from TD Bank or Bank of Nova Scotia. No one mentions BMO as a bank to raise the dividends first.
This bank, as all Canadian Banks have suffered in this last recession. However, if you had invested in this bank 5 years ago, you would have made a 3 or 4% in total returns each year. The dividend income would have added around 4 to 4.5% per year to this total return. This means that stock price is still not, where it was 5 years ago. The total returns over the past 10 years would have been much better coming in at 10 to 12% in total returns with the dividend accounting for around 4.5% of this total return.
Most of the growth rates for this stock range from low to mediocre over the past 5 and 10 years. The growth for earnings over the past 5 and 10 years has been .5% (that is less than 1%) per year to 3.8% per year, respectively. This is not good. The best growth after dividend growth is book value growth and this has been, over the past 5 and 10 years at around 5% per year. Unfortunately, because of the lack of growth in earnings and cash flow, the payout ratios of dividends to earnings and cash flow has at times been probably too high over the past few years.
Their Asset/Liability ratios have been on average around 1.05 for the past 5 and 10 years, with the current A/L Ratio around 1.06. These ratios are rather typical for banks. The brightest spot has probably been the Return on Equity, with ROE for the financial year ending in October 2010 at 14.6% and a 5 year average ROE of 13.9%.
I have done well over the years with this bank, but other Canadian Banks have performed better. Tomorrow, I will look at what the analysts are saying about this bank.
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 here BMO. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
This bank has a good record of dividend increases. The growth in dividends over the past 5 and 10 years is at the rate of 8.6% per year and 10.8% per year, respectively. However, like all our Canadian Banks, this bank has not raised their dividend since 2008. Analysts also think that the first increases in dividends are going to come from TD Bank or Bank of Nova Scotia. No one mentions BMO as a bank to raise the dividends first.
This bank, as all Canadian Banks have suffered in this last recession. However, if you had invested in this bank 5 years ago, you would have made a 3 or 4% in total returns each year. The dividend income would have added around 4 to 4.5% per year to this total return. This means that stock price is still not, where it was 5 years ago. The total returns over the past 10 years would have been much better coming in at 10 to 12% in total returns with the dividend accounting for around 4.5% of this total return.
Most of the growth rates for this stock range from low to mediocre over the past 5 and 10 years. The growth for earnings over the past 5 and 10 years has been .5% (that is less than 1%) per year to 3.8% per year, respectively. This is not good. The best growth after dividend growth is book value growth and this has been, over the past 5 and 10 years at around 5% per year. Unfortunately, because of the lack of growth in earnings and cash flow, the payout ratios of dividends to earnings and cash flow has at times been probably too high over the past few years.
Their Asset/Liability ratios have been on average around 1.05 for the past 5 and 10 years, with the current A/L Ratio around 1.06. These ratios are rather typical for banks. The brightest spot has probably been the Return on Equity, with ROE for the financial year ending in October 2010 at 14.6% and a 5 year average ROE of 13.9%.
I have done well over the years with this bank, but other Canadian Banks have performed better. Tomorrow, I will look at what the analysts are saying about this bank.
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 here BMO. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, December 14, 2010
Reitmans (Canada) Ltd 2
Reitmans (TSX-RET.A) is a stock I follow but do not own. I was looking at this stock to buy after selling RIM. This stock has a financial year ending at the end of January of each year. I have updated my spreadsheet for January 31, 2010 financial year. I have also updated it for the 2nd quarterly reported dated July 31, 2010.
When I look at insider trading, I find that all the insider buying and insider selling is being done by officers and directors of the company. Of course, the CEO is a Reitman and this family does own half of this company. There is insider selling of $2.1M and insider buying of around $.3M giving a net selling of $1.8M. Reitmans have been buying back non-voting A shares for cancellation. The good thing I find and it expresses confidence in the company, is the raising of the dividends this year after two years of the same level of dividends.
The 5 year median low P/E Ratio is 9.7 and 5 year median high P/E Ratio is 15.6. The current P/E based on earnings estimates is 12.9, so it is a reasonable one, but not a low one. When I look at the Graham Price, I find a current one of $15.65. The stock price of $18.00 is 15% above this. The Graham Price is depressed currently because of lack of earnings increases. However, the stock price has been at or below the Graham Price during the financial year at some point most years.
When I look at the Price/Book Value Ratio, I get a current one of 2.31 and a 10 year average of 2.03. So the current P/B Ratio is about 14% above the 10 year average. The only valuation that shows a good current stock price is the dividend yield. The current yield is 4.4% and the 5 year average is 3.9%. However, the 10 year average high dividend yield at 4.8% is better than the current one. So the yield is better than average, but not better than the 10 year high.
When I look at analysts recommendations, I see Strong Buy, Buy and Hold recommendations. I can find no other. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts think the company is well managed and like the lack of debt. Others think that the retail trade is a tough business to make money in and so do not like any retail 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, R. W. & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc (Reitman family) owns 50% of this company. Its web site is here Reitmans. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
When I look at insider trading, I find that all the insider buying and insider selling is being done by officers and directors of the company. Of course, the CEO is a Reitman and this family does own half of this company. There is insider selling of $2.1M and insider buying of around $.3M giving a net selling of $1.8M. Reitmans have been buying back non-voting A shares for cancellation. The good thing I find and it expresses confidence in the company, is the raising of the dividends this year after two years of the same level of dividends.
The 5 year median low P/E Ratio is 9.7 and 5 year median high P/E Ratio is 15.6. The current P/E based on earnings estimates is 12.9, so it is a reasonable one, but not a low one. When I look at the Graham Price, I find a current one of $15.65. The stock price of $18.00 is 15% above this. The Graham Price is depressed currently because of lack of earnings increases. However, the stock price has been at or below the Graham Price during the financial year at some point most years.
When I look at the Price/Book Value Ratio, I get a current one of 2.31 and a 10 year average of 2.03. So the current P/B Ratio is about 14% above the 10 year average. The only valuation that shows a good current stock price is the dividend yield. The current yield is 4.4% and the 5 year average is 3.9%. However, the 10 year average high dividend yield at 4.8% is better than the current one. So the yield is better than average, but not better than the 10 year high.
When I look at analysts recommendations, I see Strong Buy, Buy and Hold recommendations. I can find no other. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts think the company is well managed and like the lack of debt. Others think that the retail trade is a tough business to make money in and so do not like any retail 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, R. W. & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc (Reitman family) owns 50% of this company. Its web site is here Reitmans. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Monday, December 13, 2010
Reitmans (Canada) Ltd
Reitmans (TSX-RET.A) is a stock I follow but do not own. I was looking at this stock to buy after selling RIM. However, I decided to go with other purchases. There is nothing wrong with this stock, it is just I rather buy some stock I already own, rather than get into new stock, unless I cannot help it. This stock has a financial year ending at the end of January of each year. I have updated my spreadsheet for January 31, 2010 financial year. I have also updated it for the 2nd quarterly reported dated July 31, 2010.
This stock is on one of the dividend lists that I follow of Dividend Achievers . The dividend increases have been inconsistent over the past 10 years; however, there were some years of very good increases. This is why the 5 and 10 year growth in dividends is 29% per year and 25% per year respectively. The last few years the dividend increases have been lower. For the 2011 financial year, dividends were increased after one had been paid, so the total increase for the 2010 financial year was just over 8%, however, the actual increase was 11%.
If you had held this stock for the last 5 years, you would have probably made a total return of around 8% per year, with 5.5% of this return being in dividends. If you had held this stock for the last 10 years, your return would have been around 23% per year, with again about 5.5% in dividend income. The dividend growth potential is probably around 10% after 10 years. That is you could be earnings a 10% return in 10 years time from an investment in this stock today.
For the last few years, this stock has not done well in regards to revenue and earnings. However, it is expected to recover over the next two years with higher revenue and higher earnings. In the 2nd quarterly report, you can see that both revenues and earning are up over one year ago and this, of course, is a good sign.
The strong points of this stock are the great Liquidity Ratio and the Asset/Liability Ratios. The Liquidity Ratio is currently at 4.94 and the A/L Ratio is even higher at 5.79. The 5 year average for these ratios is 3.39 and 4.69 respectively. This company is prepared to weather any recession. The increase in Book Value is also very good. This has increased over the past 5 and 10 years at 9.6% and 10.4% per year, respectively.
The last thing to look at is the Return on Equity. The ROE average for the last 5 year is 18.5% with the January 2010 ROE at 13.2% and the one for the 2nd quarter of 2011 at 21.9%.
Tomorrow and I will look at what the analysts are currently saying about 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, R. W. & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc (Reitmans family) owns 50% of this company. Its web site is here Reitmans. See my spreadsheet at ret.htm.
I bought some Husky Energy with the remaining money from RIM. I first looked to purchase some more stock that I already had in the account RIM was in. I found three stocks I already owned that we at good price. I am reluctant to continually buy new stocks, as I like to keep some control over how many stocks I own.
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 for stocks followed and investment notes. Follow me on twitter.
This stock is on one of the dividend lists that I follow of Dividend Achievers . The dividend increases have been inconsistent over the past 10 years; however, there were some years of very good increases. This is why the 5 and 10 year growth in dividends is 29% per year and 25% per year respectively. The last few years the dividend increases have been lower. For the 2011 financial year, dividends were increased after one had been paid, so the total increase for the 2010 financial year was just over 8%, however, the actual increase was 11%.
If you had held this stock for the last 5 years, you would have probably made a total return of around 8% per year, with 5.5% of this return being in dividends. If you had held this stock for the last 10 years, your return would have been around 23% per year, with again about 5.5% in dividend income. The dividend growth potential is probably around 10% after 10 years. That is you could be earnings a 10% return in 10 years time from an investment in this stock today.
For the last few years, this stock has not done well in regards to revenue and earnings. However, it is expected to recover over the next two years with higher revenue and higher earnings. In the 2nd quarterly report, you can see that both revenues and earning are up over one year ago and this, of course, is a good sign.
The strong points of this stock are the great Liquidity Ratio and the Asset/Liability Ratios. The Liquidity Ratio is currently at 4.94 and the A/L Ratio is even higher at 5.79. The 5 year average for these ratios is 3.39 and 4.69 respectively. This company is prepared to weather any recession. The increase in Book Value is also very good. This has increased over the past 5 and 10 years at 9.6% and 10.4% per year, respectively.
The last thing to look at is the Return on Equity. The ROE average for the last 5 year is 18.5% with the January 2010 ROE at 13.2% and the one for the 2nd quarter of 2011 at 21.9%.
Tomorrow and I will look at what the analysts are currently saying about 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, R. W. & Co., Thyme Maternity, Addition-Elle, and Cassis. Sherlex Investments Inc (Reitmans family) owns 50% of this company. Its web site is here Reitmans. See my spreadsheet at ret.htm.
I bought some Husky Energy with the remaining money from RIM. I first looked to purchase some more stock that I already had in the account RIM was in. I found three stocks I already owned that we at good price. I am reluctant to continually buy new stocks, as I like to keep some control over how many stocks I own.
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 for stocks followed and investment notes. Follow me on twitter.
Friday, December 10, 2010
Bank of Nova Scotia 2
This is a bank (TSX-BNS) that I follow, however, I do not own of stock in this bank. I track this bank, as it is a bank that is thought a good investment. The only reason I do not own it is that I already own too much in the financial sector.
I looked at the Insider Trading reports and find that there is a lot of selling of this bank by insiders, just as there was by TD Bank. The net insider selling is $74.9M. There is not enough insider buying to even talk about. All this selling seems to be of options. The problem, of course, is that insider selling does not really tell you anything.
When I look at the Price/Earnings Ratio, I find that the 5 year median low P/E is 11.8 and the 5 year median high P/E is 14.2. I get a current P/E of 12.4, which is neither particularly low nor high. The current Graham Price I get is $47.75, so the current stock price of $55.30 is some 16% above this. The difference has been greater in the past, but also, usually sometime during the year, the stock price has been at or below the Graham Price at some point.
Looking at the Price/Book Value Ratio, I get a 10 year average of 2.40 and a current P/B ratio of 2.44. So, these ratios are about the same. The last thing is the dividend yield. I get a current one of 3.5% and a 5 year average of 4%. All these measures show a slightly high current stock price comparatively for this stock.
When I look at what the analysts’ are recommending, I see lots of Strong Buy, Buy and Hold recommendations. There is also one Underperform and one Sell recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) The 12 month target price is about $58 to $64.
Some like this bank as it has banking exposure to the Caribbean and the Far East, rather than in the US. Some analysts currently favor other banks, like the TD and BMO rather than BNS. Some analysts think that this will be the first of the big 5 banks to increase their dividends.
I will not be buying this bank for the simple reason that I already have too much exposure to the financial sector of the stock market.
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 here BNS. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
I looked at the Insider Trading reports and find that there is a lot of selling of this bank by insiders, just as there was by TD Bank. The net insider selling is $74.9M. There is not enough insider buying to even talk about. All this selling seems to be of options. The problem, of course, is that insider selling does not really tell you anything.
When I look at the Price/Earnings Ratio, I find that the 5 year median low P/E is 11.8 and the 5 year median high P/E is 14.2. I get a current P/E of 12.4, which is neither particularly low nor high. The current Graham Price I get is $47.75, so the current stock price of $55.30 is some 16% above this. The difference has been greater in the past, but also, usually sometime during the year, the stock price has been at or below the Graham Price at some point.
Looking at the Price/Book Value Ratio, I get a 10 year average of 2.40 and a current P/B ratio of 2.44. So, these ratios are about the same. The last thing is the dividend yield. I get a current one of 3.5% and a 5 year average of 4%. All these measures show a slightly high current stock price comparatively for this stock.
When I look at what the analysts’ are recommending, I see lots of Strong Buy, Buy and Hold recommendations. There is also one Underperform and one Sell recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) The 12 month target price is about $58 to $64.
Some like this bank as it has banking exposure to the Caribbean and the Far East, rather than in the US. Some analysts currently favor other banks, like the TD and BMO rather than BNS. Some analysts think that this will be the first of the big 5 banks to increase their dividends.
I will not be buying this bank for the simple reason that I already have too much exposure to the financial sector of the stock market.
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 here BNS. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Thursday, December 9, 2010
Bank of Nova Scotia
This is a bank (TSX-BNS) that I follow, however, I do not own of stock in this bank. They on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
However, they are in the same position on Dividends as the TD Bank is. They have not raised their dividends since 2008. If you look at the 5 and 10 year growth rates for dividends, they come in at 8% and 14.6% per year, respectively. So, if you have held this bank for more than 5 years, you would not have done badly as far as dividend increases go. However, if you have bought this bank since 2008, your dividends would not have changed.
As far a total returns go, the 5 year growth is much weaker than the 10 year growth. The 5 and 10 year in total return come in at 8.5% and 15% per year respectively. The portion of this total return that is in dividends is about 4% per year.
When you look at revenue growth over the past 5 and 10 years, this stock has not done well. The growth is around 5% per year over the past 5 years and this is not bad (but, not good either). The growth for the last 10 years comes in just under 2% per year and this is not good. However, they have lower revenues for the past two years and this is why the growth is so anemic. The growth in earnings could also be better. The 5 and 10 years figures are 4.4% and 8% per year, respectively. The 10 year growth is not bad, but the 5 year growth at 4.4% is rather low. The growth in Book Value is ok at just over 7% per year over the past 5 and 10 years.
The Asset/Liability Ratio for this bank is 1.05 and this is about normal for our banks. The return on equity has always been quite good for this bank, which has a 5 year average ROE of 18.4% and a ROE for the financial year ending in October 2010 of 17%.
The real thing that matter is that if you hold Canadian banks for the long term, you can do very well in both dividends and capital gains.
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 here BNS. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
However, they are in the same position on Dividends as the TD Bank is. They have not raised their dividends since 2008. If you look at the 5 and 10 year growth rates for dividends, they come in at 8% and 14.6% per year, respectively. So, if you have held this bank for more than 5 years, you would not have done badly as far as dividend increases go. However, if you have bought this bank since 2008, your dividends would not have changed.
As far a total returns go, the 5 year growth is much weaker than the 10 year growth. The 5 and 10 year in total return come in at 8.5% and 15% per year respectively. The portion of this total return that is in dividends is about 4% per year.
When you look at revenue growth over the past 5 and 10 years, this stock has not done well. The growth is around 5% per year over the past 5 years and this is not bad (but, not good either). The growth for the last 10 years comes in just under 2% per year and this is not good. However, they have lower revenues for the past two years and this is why the growth is so anemic. The growth in earnings could also be better. The 5 and 10 years figures are 4.4% and 8% per year, respectively. The 10 year growth is not bad, but the 5 year growth at 4.4% is rather low. The growth in Book Value is ok at just over 7% per year over the past 5 and 10 years.
The Asset/Liability Ratio for this bank is 1.05 and this is about normal for our banks. The return on equity has always been quite good for this bank, which has a 5 year average ROE of 18.4% and a ROE for the financial year ending in October 2010 of 17%.
The real thing that matter is that if you hold Canadian banks for the long term, you can do very well in both dividends and capital gains.
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 here BNS. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, December 8, 2010
TD Bank 2
This is a bank (TSX-TD) I own and it has published unaudited 4th quarter results. The bank results are starting to come in, so I start to review all the banks that I follow. Analysts feel that dividends on banks will be raised next year. TD says they will provide some clarity on dividends in the next several months.
In looking at the Insider Trading reports, what stands out clearly is that, typical for our banks, the insiders have far more stock options than shares, except for the directors. Over the past year, there has been $150M in insider selling and some $10M in insider buying. Mostly, insiders have been selling off their stock options, although the CEO seems to have kept some of his. The vast majority of the buying has been by directors. I guess it is a good sign that directors have been buying. Unfortunately, insider selling does not tell you very much and insider selling only amounts to about 1/4 of 1% of the market cap of the bank.
When I look at the P/E ratios, I get a 5 year median low of 10.7 and a 5 year median high of 15. The current P/E ratio of 10.9 I get is on the low side. When I look at the Graham Price, I get a current one of $83.73 and this is about 15% above the current stock price of $70.86. Before the recent recession, the stock price seldom got near the Graham Price.
For the Price/Book Value Ratio, I get a current one 1.47 and a 10 year average of 1.92. This is a sign of a good current price as the current P/B ratio is only some 77% of the 10 year average. The only place that does not show a good current price is the dividend yield. Of course, they have not raised the dividend for the last three years. The current dividend is 3.4% and the 5 year average is 3.6%.
When I look at what the analysts’ are saying, I find lots of Strong Buy, Buy and Hold recommendations and 1 Sell recommendation. I do not find any underperform recommendations. The consensus would be a buy recommendation. (See my site for information on analyst ratings.)
Analysts seem to think that this bank is well run. They also mention that TD will probably end up being a major player in the US. Others think that TD and Bank of Nova Scotia are the most likely banks to raise their dividends first. The stock price target over the next 12 months seems to be between $82 and $86.
This site has an interesting take on investing and it talks about the TD Bank.
I, of course, will be holding on to my TD Bank stock. I have too much in financials, so I will not be buying anymore.
They are a bank with full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.
With part of my money from RIM sale, I have bought some RIOCAN (TSX-REI.UN) stock.
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 for stocks followed and investment notes. Follow me on twitter.
In looking at the Insider Trading reports, what stands out clearly is that, typical for our banks, the insiders have far more stock options than shares, except for the directors. Over the past year, there has been $150M in insider selling and some $10M in insider buying. Mostly, insiders have been selling off their stock options, although the CEO seems to have kept some of his. The vast majority of the buying has been by directors. I guess it is a good sign that directors have been buying. Unfortunately, insider selling does not tell you very much and insider selling only amounts to about 1/4 of 1% of the market cap of the bank.
When I look at the P/E ratios, I get a 5 year median low of 10.7 and a 5 year median high of 15. The current P/E ratio of 10.9 I get is on the low side. When I look at the Graham Price, I get a current one of $83.73 and this is about 15% above the current stock price of $70.86. Before the recent recession, the stock price seldom got near the Graham Price.
For the Price/Book Value Ratio, I get a current one 1.47 and a 10 year average of 1.92. This is a sign of a good current price as the current P/B ratio is only some 77% of the 10 year average. The only place that does not show a good current price is the dividend yield. Of course, they have not raised the dividend for the last three years. The current dividend is 3.4% and the 5 year average is 3.6%.
When I look at what the analysts’ are saying, I find lots of Strong Buy, Buy and Hold recommendations and 1 Sell recommendation. I do not find any underperform recommendations. The consensus would be a buy recommendation. (See my site for information on analyst ratings.)
Analysts seem to think that this bank is well run. They also mention that TD will probably end up being a major player in the US. Others think that TD and Bank of Nova Scotia are the most likely banks to raise their dividends first. The stock price target over the next 12 months seems to be between $82 and $86.
This site has an interesting take on investing and it talks about the TD Bank.
I, of course, will be holding on to my TD Bank stock. I have too much in financials, so I will not be buying anymore.
They are a bank with full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.
With part of my money from RIM sale, I have bought some RIOCAN (TSX-REI.UN) stock.
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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, December 7, 2010
TD Bank
This is a bank (TSX-TD) I own and it has published unaudited 4th quarter results. The bank results are starting to come in, so I start to review all the banks that I follow. Analysts feel that dividends on banks will be raised next year. I cannot find that the five big banks saying much of anything on dividends. TD says they will provide some clarity on dividends in the next several months.
Until this latest recession, our banks gave very good dividend increases. If you look at the 5 and 10 year growth in dividends for TD, they are still at 9% and 10% per year respectively. In the last recession, which did not hit the banks like this one did, the dividend increases were down to 2.5% and 3.5% in 2003 and 2004. Most analysts feel that there will be increases in 2011.
For the year ending in October 2010, revenues are still down for the TD Bank, so there has not been any good growth here showing for the last 5 and 10 years to date. However, earnings have recovered this year. The growth in earnings over the past 5 and 10 years has been at 10% and 13% per year, respectively. If you had invested in this bank over the past 5 or 10 years, you would have made about 9% per year. Just over 3% of this return would have been from dividends. This is a very good return.
The other thing to mention is that TD is doing well, for a bank, as far as the Asset/Liability Ratio goes. It is running at 1.07 (well some other banks have a lower ratio at 1.04). The 5 and 10 year average of A/L Ratio is running at 1.06 for this bank.
The big surprise is that this bank is still on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). Usually, stocks are tossed off when they stop increasing their dividends.
I will be holding on to the bank stocks I have at the moment, including this one. Tomorrow, I will look and see what they analysts are saying about this bank.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.
I bought some more Davis and Henderson (TSX-DHF) with my RIM money. Stock is expected to do well in the long term, but not the short term. Dividends will be reduced next year when it because a corporation.
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 for stocks followed and investment notes. Follow me on twitter.
Until this latest recession, our banks gave very good dividend increases. If you look at the 5 and 10 year growth in dividends for TD, they are still at 9% and 10% per year respectively. In the last recession, which did not hit the banks like this one did, the dividend increases were down to 2.5% and 3.5% in 2003 and 2004. Most analysts feel that there will be increases in 2011.
For the year ending in October 2010, revenues are still down for the TD Bank, so there has not been any good growth here showing for the last 5 and 10 years to date. However, earnings have recovered this year. The growth in earnings over the past 5 and 10 years has been at 10% and 13% per year, respectively. If you had invested in this bank over the past 5 or 10 years, you would have made about 9% per year. Just over 3% of this return would have been from dividends. This is a very good return.
The other thing to mention is that TD is doing well, for a bank, as far as the Asset/Liability Ratio goes. It is running at 1.07 (well some other banks have a lower ratio at 1.04). The 5 and 10 year average of A/L Ratio is running at 1.06 for this bank.
The big surprise is that this bank is still on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). Usually, stocks are tossed off when they stop increasing their dividends.
I will be holding on to the bank stocks I have at the moment, including this one. Tomorrow, I will look and see what they analysts are saying about this bank.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.
I bought some more Davis and Henderson (TSX-DHF) with my RIM money. Stock is expected to do well in the long term, but not the short term. Dividends will be reduced next year when it because a corporation.
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 for stocks followed and investment notes. Follow me on twitter.
Monday, December 6, 2010
H&R Real Estate 2
I follow a number of REITs and this stock (TSX-HR.UN) is one that I follow. On Friday, I talked about this REIT having trouble in 2009 and decreased their distributions by 50%. As I also mentioned, they have started to increase their distributions again.
The Insider Trading report shows both a lot of Insider Buying and Insider Selling. Selling was at $6.3M and buying was at $3.4M, giving a net of $2.8M of selling. Most of the selling was by one director and most of the buying was by the CEO. Most of the buying by the CEO is very recent and after the selling by the director. You never know why people sell, but you know they must feel good about a company to buy, so the buying by the CEO is a positive. Both the CFO and other officers have move options than shares, however, the opposite is true of the CEO and directors. The recent dividend increases also show confidence in the future of the company.
When I look at the P/E ratio, I find that the 5 year median low is 11.2 and the 5 year median high is 28.5. I get a current P/E of 36.7 based on estimated earnings for 2010 and the forward P/E of 34. These P/E ratios are both quite high, on a relative and absolute basis. If you compare the price to the expected distributable income, I get a 5 year median ratio of 12.6 with a current ratio of 15.6. This current ratio, based on distributable income is not as relatively high as the P/E ratios. This would point to a more reasonable current stock price.
I get a Graham Price of $11.63 for 2010 and $12.06 for 2011. The current price is 70% higher than this year’s Graham Price and 67% higher than next year’s Graham Price. The reason for the low Graham Price is that there has virtually been no growth in the Book Value in the past 5 and 10 years. The Book Value is supposed to represent the break-up value of a company. The Book Value has gone up and down over the years, but it really has not grown. The Book Value is not exactly the same as the break-up value of a company, but I think that it is pointing out a problem.
When I look at the Price/Book Value Ratio, the current one of 1.78 is higher by 15% than the 10 year average of 1.43. This point to a current stock price that is high. The same thing is pointed out when looking at the yield. The median yield for this stock is 6.5%. The current one would be 4.5%. The current yield is way off the 10 year median high yield of 9% and it is even lower than the 10 year median low yield of 6.7%. So, this too would point to a rather high current stock price.
When I look at analysts' recommendations, I find lots of Strong Buy and Buy recommendations. There are also a few Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) I find that the Analysts are pleased about the current high occupancy rate (about 98%) for this REIT. There seems to be an expectation that the stock price will be close or at $22 in 12 month’s time.
What seems to impress the analysts is “The Bow” building they will shortly complete in Calgary for EnCana. When this is done, it is expected that there will be a good increase in distributable income as this building is turned over the EnCana. This should start happening in July 2011 and be completed in 2012. It was also the building of “The Bow” that caused trouble for this company in 2009. They were spending money building this building when vacancy rates short up due to the recession. They had a liquidity problem, but this has now been resolved.
The CEO is buying this company at close the current price of $19.84. Analysts have stated some clear and valid reasons for buying this REIT.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H&R. See my spreadsheet at hr.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 for stocks followed and investment notes. Follow me on twitter.
The Insider Trading report shows both a lot of Insider Buying and Insider Selling. Selling was at $6.3M and buying was at $3.4M, giving a net of $2.8M of selling. Most of the selling was by one director and most of the buying was by the CEO. Most of the buying by the CEO is very recent and after the selling by the director. You never know why people sell, but you know they must feel good about a company to buy, so the buying by the CEO is a positive. Both the CFO and other officers have move options than shares, however, the opposite is true of the CEO and directors. The recent dividend increases also show confidence in the future of the company.
When I look at the P/E ratio, I find that the 5 year median low is 11.2 and the 5 year median high is 28.5. I get a current P/E of 36.7 based on estimated earnings for 2010 and the forward P/E of 34. These P/E ratios are both quite high, on a relative and absolute basis. If you compare the price to the expected distributable income, I get a 5 year median ratio of 12.6 with a current ratio of 15.6. This current ratio, based on distributable income is not as relatively high as the P/E ratios. This would point to a more reasonable current stock price.
I get a Graham Price of $11.63 for 2010 and $12.06 for 2011. The current price is 70% higher than this year’s Graham Price and 67% higher than next year’s Graham Price. The reason for the low Graham Price is that there has virtually been no growth in the Book Value in the past 5 and 10 years. The Book Value is supposed to represent the break-up value of a company. The Book Value has gone up and down over the years, but it really has not grown. The Book Value is not exactly the same as the break-up value of a company, but I think that it is pointing out a problem.
When I look at the Price/Book Value Ratio, the current one of 1.78 is higher by 15% than the 10 year average of 1.43. This point to a current stock price that is high. The same thing is pointed out when looking at the yield. The median yield for this stock is 6.5%. The current one would be 4.5%. The current yield is way off the 10 year median high yield of 9% and it is even lower than the 10 year median low yield of 6.7%. So, this too would point to a rather high current stock price.
When I look at analysts' recommendations, I find lots of Strong Buy and Buy recommendations. There are also a few Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) I find that the Analysts are pleased about the current high occupancy rate (about 98%) for this REIT. There seems to be an expectation that the stock price will be close or at $22 in 12 month’s time.
What seems to impress the analysts is “The Bow” building they will shortly complete in Calgary for EnCana. When this is done, it is expected that there will be a good increase in distributable income as this building is turned over the EnCana. This should start happening in July 2011 and be completed in 2012. It was also the building of “The Bow” that caused trouble for this company in 2009. They were spending money building this building when vacancy rates short up due to the recession. They had a liquidity problem, but this has now been resolved.
The CEO is buying this company at close the current price of $19.84. Analysts have stated some clear and valid reasons for buying this REIT.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H&R. See my spreadsheet at hr.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 for stocks followed and investment notes. Follow me on twitter.
Friday, December 3, 2010
H&R Real Estate
I follow a number of REITs and this stock (TSX-HR.UN) is one that I follow. H&R Real Estate was having trouble in 2009 and decreased their dividend by 50%. However, they have since increased their dividends twice in 2010 and the dividends are up about 20% so far this year. They have also announced another 3.5% increase in the dividends to be paid in 2011. However, the dividends are still below those of 2008, which were $1.44 per share. They will be $.90 per share come 2011.
This is a REIT stock, and if you had held it for the last 10 years you would have earned approximately 14% total return, with some 7% of this return coming from distributions. With dividend increases on this stock likely to average around 3% in the future, you would probably be earning, on an investment in this stock today, just over 5% in 5 years and just over 6% in 10 years time. This is called the dividend growth potential of this stock.
When you look at earnings for this stock, it hit a high in 2003 and drifted lower ever since. It is just this year, 2010, that the stock is expect to earn more than that of 2003. The cash flow has done better, but it has only been increasing at the average rate of 4% per year. This is not great, but it is not terrible either. The thing is that the payout ratio of the cash flow has been very high, with an average of about 90% until 2009. This ratio has moderated lately and it is expected to be about 50% for this year (2010).
Over the years, the book value has gone up and down, but its growth has essentially been about 0% for the last 5 and 10 years. This often happens in trust companies where a lot of the earnings are paid out in distributions. The problem with revenues for this company is that, although they have gone up at an ok rate, the revenues per share have not. This trust has been issuing new shares each year at an average rate of just over 12% per year for the last 10 years.
On Monday, I will talk about what the analysts are saying about this stock.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is here H&R. See my spreadsheet at hr.htm.
I sold my remaining RIM (TSX-RIM) stock today. I have made a lot of money on it and I would rather have a nice dividend paying stock now. I, of course, have to regrets buying RIM. I love tech stock.
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 for stocks followed and investment notes. Follow me on twitter.
This is a REIT stock, and if you had held it for the last 10 years you would have earned approximately 14% total return, with some 7% of this return coming from distributions. With dividend increases on this stock likely to average around 3% in the future, you would probably be earning, on an investment in this stock today, just over 5% in 5 years and just over 6% in 10 years time. This is called the dividend growth potential of this stock.
When you look at earnings for this stock, it hit a high in 2003 and drifted lower ever since. It is just this year, 2010, that the stock is expect to earn more than that of 2003. The cash flow has done better, but it has only been increasing at the average rate of 4% per year. This is not great, but it is not terrible either. The thing is that the payout ratio of the cash flow has been very high, with an average of about 90% until 2009. This ratio has moderated lately and it is expected to be about 50% for this year (2010).
Over the years, the book value has gone up and down, but its growth has essentially been about 0% for the last 5 and 10 years. This often happens in trust companies where a lot of the earnings are paid out in distributions. The problem with revenues for this company is that, although they have gone up at an ok rate, the revenues per share have not. This trust has been issuing new shares each year at an average rate of just over 12% per year for the last 10 years.
On Monday, I will talk about what the analysts are saying about this stock.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is here H&R. See my spreadsheet at hr.htm.
I sold my remaining RIM (TSX-RIM) stock today. I have made a lot of money on it and I would rather have a nice dividend paying stock now. I, of course, have to regrets buying RIM. I love tech stock.
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 for stocks followed and investment notes. Follow me on twitter.
Thursday, December 2, 2010
Valener Inc 2
This stock (TSX-VNR) used to be called Gaz Metro (TSX-GXM.UN), but it is now Valener Inc. The company has also changed to a corporation. This occurred on 1st October 2010. However, the switch to a corporation was done differently than most. The only part that becomes Valener Inc is that portion of Gaz Metro that was publically owned. The other holders of Gaz Metro were, basically, Enbridge Inc. (TSX-ENB); French utility GDF Suez; Caisse de depot pension fund; and SNC-Lavalin (TSX-SNC). On November 2nd, 2010, SNC-Lavalin agreed to sell their 10% interest to a group of Financial Institutions, and so they no longer own any share in this company.
There is no action on the Insider Trading report, no Insider Buying and no Insider Selling, mainly because this report just starts in October 2010 and does not run for a full year. Caisse de depot is known more for their political rather than financial investments. However, SNC-Lavalin and Enbridge are more astute buyers, and SNC-Lavalin just sold their shares. I own shares in Enbridge, so Valener would not be a good purchase for me.
Gaz Metro was paying out a very high percentage of the companies earnings in distributions. This is common for an income trust, but not wise for a corporation. They also have a history of paying out a high percentage of cash flow. Again this is common for an income trust, but not for a corporation. I noticed that they have lowered their distributions (or dividend) payouts, but have they lowered them enough. I also wonder about the estimates that I have picked up.
When I look at the P/E Ratios, I get a 5 year median low of 10.8 and a 5 year median high of 12.8. On sites that use last 12 months earnings to calculate the current P/E, they show a P/E of 13.5. Using the estimates I got I get a current P/E even higher at 20.3. So, the P/E is probably a bit on the high side for this stock. I get a current Graham Price of $16.52 and one for September 2010 of $16.06. The current price of $17.07 is just 3% above the current Graham Price and about 6% above the September one. Except for the last few years, this stock’s price has always been higher than the Graham price.
For the Price/Book Value Ratio, if we use the Book Value of September 2010, this ratio is 2.20, which is about 95% of the 10 year average of 2.32. This stock currently has a dividend yield of 5.9%, which is quite good. The 5 year average is 7.8%. However, this stock just reduced their dividend on change to a corporation. A lot of income trusts are doing the same. So basically, it appears that the price is neither high nor low.
When I look at analysts’ recommendations, what I find is lots and lots of Hold recommendations. There are also some Underperform and Sell recommendations. The consensus would be a Hold. (See my site for information on analyst ratings.) Mostly it seems that analysts think the price is too high as they give stock price over the next 12 months from around $15.50 to just under $17.00. Obviously, they think the stock is over priced. One analyst thought this company suitable for investors looking for long term stable income.
I will continue to follow this stock, but will not buy, as I already own Enbridge.
Valener is a company whose core business is the distribution of Natural Gas in Quebec. It is also, indirectly, the sole shareholder of the Vermont Gas System (VGS), and the Green Mountain Power Corp (GMP), the second largest electricity supplier in Vermont. Its web site is here Valener. See my spreadsheet at vnr.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 for stocks followed and investment notes. Follow me on twitter.
There is no action on the Insider Trading report, no Insider Buying and no Insider Selling, mainly because this report just starts in October 2010 and does not run for a full year. Caisse de depot is known more for their political rather than financial investments. However, SNC-Lavalin and Enbridge are more astute buyers, and SNC-Lavalin just sold their shares. I own shares in Enbridge, so Valener would not be a good purchase for me.
Gaz Metro was paying out a very high percentage of the companies earnings in distributions. This is common for an income trust, but not wise for a corporation. They also have a history of paying out a high percentage of cash flow. Again this is common for an income trust, but not for a corporation. I noticed that they have lowered their distributions (or dividend) payouts, but have they lowered them enough. I also wonder about the estimates that I have picked up.
When I look at the P/E Ratios, I get a 5 year median low of 10.8 and a 5 year median high of 12.8. On sites that use last 12 months earnings to calculate the current P/E, they show a P/E of 13.5. Using the estimates I got I get a current P/E even higher at 20.3. So, the P/E is probably a bit on the high side for this stock. I get a current Graham Price of $16.52 and one for September 2010 of $16.06. The current price of $17.07 is just 3% above the current Graham Price and about 6% above the September one. Except for the last few years, this stock’s price has always been higher than the Graham price.
For the Price/Book Value Ratio, if we use the Book Value of September 2010, this ratio is 2.20, which is about 95% of the 10 year average of 2.32. This stock currently has a dividend yield of 5.9%, which is quite good. The 5 year average is 7.8%. However, this stock just reduced their dividend on change to a corporation. A lot of income trusts are doing the same. So basically, it appears that the price is neither high nor low.
When I look at analysts’ recommendations, what I find is lots and lots of Hold recommendations. There are also some Underperform and Sell recommendations. The consensus would be a Hold. (See my site for information on analyst ratings.) Mostly it seems that analysts think the price is too high as they give stock price over the next 12 months from around $15.50 to just under $17.00. Obviously, they think the stock is over priced. One analyst thought this company suitable for investors looking for long term stable income.
I will continue to follow this stock, but will not buy, as I already own Enbridge.
Valener is a company whose core business is the distribution of Natural Gas in Quebec. It is also, indirectly, the sole shareholder of the Vermont Gas System (VGS), and the Green Mountain Power Corp (GMP), the second largest electricity supplier in Vermont. Its web site is here Valener. See my spreadsheet at vnr.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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, December 1, 2010
Valener Inc
This stock used to be called Gaz Metro (TSX-GXM.UN), but it is now Valener Inc (TSX-VNR). The company has also changed to a corporation. This occurred on 1st October 2010. This stock has a financial year that end on 30th of September of each year. So the financial statements for 2010 (that is 30 September 2010) are in.
It is hard to figure out what past information to compare with the current information. Gaz Metro was owned only 29% by the public and Valener Inc is to hold the public shares. The other 71% was owned by gas distributors and Caisse de dépôt et placement du Québec.
The company certainly does not have a great recent record with dividends. This company first shocked the market in 2006 when it lowered its distributions. This company was supposed to be a very stable, very conservative stock. Since it originally reduced their dividends in 2006, they reduced them also in 2007 and then kept them flat.
With the change to a corporation, dividends are being reduced again. A lot of partnerships and income trusts changing to corporations have reduced their dividends. This is true. However, the reduced dividend is coming in at $1.00 per share and this company is only expected to earn $.84 to $.85 per share over the next few years. Estimates for cash flow are also low. Certainly, this is stock is currently not a great dividend paying stock.
If anyone made any money on this stock, it would only be over the past 10 years. The thing is that the stock peaked in 2005 and it has yet to recover. It is not just the current recession where this stock has been losing money for shareholders. The total return over the past 10 years has basically been all dividends. Less than 1% of the total return over the past 10 years is from capital gain. 99% of the total return has been from dividends. I must admit that income trusts generally paid out most of their earnings in distributions, so this structure of the total return is not surprising.
The only place where this stock seems to have done well in the past 5 and 10 years is on Return of Equity. The 5 year average ROE is 16% and for the financial year ending September 2010, the ROE was 19%. None of this seems to have helped the shareholders as the Book Value has hardly changed over this time. (However, this has been true of many income trusts also.) Now Valener Inc says that the Book Value for its shareholders is $589,000, which would imply that the book value has doubled for the public shareholders. This does not seem plausible for me.
Tomorrow, I will review what the analysts currently think about this stock.
Valener is a company whose core business is the distribution of Natural Gas in Quebec. It is also, indirectly, the sole shareholder of the Vermont Gas System (VGS), and the Green Mountain Power Corp (GMP), the second largest electricity supplier in Vermont. Its web site is here Valener. See my spreadsheet at vnr.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 for stocks followed and investment notes. Follow me on twitter.
It is hard to figure out what past information to compare with the current information. Gaz Metro was owned only 29% by the public and Valener Inc is to hold the public shares. The other 71% was owned by gas distributors and Caisse de dépôt et placement du Québec.
The company certainly does not have a great recent record with dividends. This company first shocked the market in 2006 when it lowered its distributions. This company was supposed to be a very stable, very conservative stock. Since it originally reduced their dividends in 2006, they reduced them also in 2007 and then kept them flat.
With the change to a corporation, dividends are being reduced again. A lot of partnerships and income trusts changing to corporations have reduced their dividends. This is true. However, the reduced dividend is coming in at $1.00 per share and this company is only expected to earn $.84 to $.85 per share over the next few years. Estimates for cash flow are also low. Certainly, this is stock is currently not a great dividend paying stock.
If anyone made any money on this stock, it would only be over the past 10 years. The thing is that the stock peaked in 2005 and it has yet to recover. It is not just the current recession where this stock has been losing money for shareholders. The total return over the past 10 years has basically been all dividends. Less than 1% of the total return over the past 10 years is from capital gain. 99% of the total return has been from dividends. I must admit that income trusts generally paid out most of their earnings in distributions, so this structure of the total return is not surprising.
The only place where this stock seems to have done well in the past 5 and 10 years is on Return of Equity. The 5 year average ROE is 16% and for the financial year ending September 2010, the ROE was 19%. None of this seems to have helped the shareholders as the Book Value has hardly changed over this time. (However, this has been true of many income trusts also.) Now Valener Inc says that the Book Value for its shareholders is $589,000, which would imply that the book value has doubled for the public shareholders. This does not seem plausible for me.
Tomorrow, I will review what the analysts currently think about this stock.
Valener is a company whose core business is the distribution of Natural Gas in Quebec. It is also, indirectly, the sole shareholder of the Vermont Gas System (VGS), and the Green Mountain Power Corp (GMP), the second largest electricity supplier in Vermont. Its web site is here Valener. See my spreadsheet at vnr.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 for stocks followed and investment notes. Follow me on twitter.
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