In January 2009, when I was looking for a small cap dividend paying stock, this is one of the stocks I analyzed. I reviewed this stock last in June of 2009 and I am again looking at it to see how it is fairing. The reason I did not invest in this stock was because it wasn’t earning money. Reviewing what analysts are saying now about it, they do not expect this company to have positive earnings until this year. 2010 is expected to have negative earnings again.
The most interesting thing I find about this stock is that there is insider buying (about $1.6M) and no insider selling. This is the same as when I last reviewed this stock. The CEO and CFO both have more options that shares, but this is not true of other insiders and of the directors. A lot of insiders have a healthy number of shares (that is in the 100,000 plus range) in this company. There are three larger investors that own around 36% of the shares. This is certainly a plus for this company.
Certainly, the company has not done well over the past 5 years. This includes cutting out the dividends in 2009. No one seems to have made any money in this stock over the past 5 years. Over the past 5 years, revenues, earnings, book value, cash flow, and total return are all down. The bright spot is the Asset/Liability Ratio, which has fallen since the end of 2009, but still at a health 2.10. The Liquidity Ratio used to also be very good, with a 5 year average of 2.98. However, the current one is just 1.07. This is because the company is running down its cash. Where you want to see both these ratios is at 1.50. The Leverage Ratio is also getting worse. The 5 year average is good at 1.63, but the latest ratio is at 1.91. This ratio is not that high, but worrisome that it is climbing.
However, the 10 year growth statistics are much better than the 5 year one. Those who have held the stock for 10 years have done well with total returns in the range of 10 to 14%. The recession seems to have been hard on this company, but this is because they sell information to the oil and gas industries. Cash Flow, Revenue and Book Value are up over the past 10 years. Although the revenue per share is flat because of the increase in the number of shares outstanding for this company.
Because the company is not making any money, we cannot judge this stock by the Price/Earnings Ratio. However, if the company earnings $.04 per share in 2011, it puts the P/E ratio at 54.8. This is a high ratio. I get a Graham price based on $.04 earnings in 2011 of $1.15. The Graham Price was higher in 2005 at $2.36. The 10 year average is $1.87. These are both lower than the current stock price of 2.19. This stock has had a recent run in price as it was just $1.70 at the beginning of the year.
The Price/Book Value is currently at 1.49. This is some 30% above the 10 year average of 1.15, but only 7% higher than the 5 year average of 1.39. Since this stock no longer has a dividend and I do not know when it will again, you can not judge the stock by dividend yield.
When I look at analysts recommendations, I find a couple of Strong Buy recommendations and one Hold recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) There are only a few analysts following this stock. The analysts with the Strong Buy recommendations feel this stock is very undervalued. Here is a recent article about this stock.
Pulse Data Inc. is a provider of 2D and 3D seismic library data and is based in Calgary, Alberta. Pulse owns the second-largest licensable seismic data library in western Canada. Pulse’s 2D and 3D seismic data library extends over the Western Canada Sedimentary Basin, plus selected areas of the U.S. Rocky Mountains region and northern Canada, with a particular focus on active exploration areas. Its web site is here Pulse Seismic. See my spreadsheet at psd.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, January 31, 2011
Friday, January 28, 2011
Is Dividend Investing Dead?
I have been investing since the 1970’s and on a regular basis; some analyst/market observer will tell you dividend investing is dead. In fact, the way I heard about dividend investing was reading such an article. I did not know until that time that people invested that way. To me, it sounded like a good idea. In the 1970’s I was just feeling my way as far as investing went.
When I talked to people who invested, they all seemed to be going for the big score. None of these people seemed to have made any money at this, let alone really making a big score. Of course, some would make talk about making 500% or 1000% return on some investment, but they still had no real money. Either they blew what they earned on the next big investment score, or their investment was so small that they really didn’t earn much money. I figured that there must be a better way.
Dividend investing is simply when you buy stocks for their dividend payments. You hope that over time both the stock price and the dividend payments would increase. I must admit that this is how I made enough money to stop working. It is especially my investment in large dividend paying banks and utilities where I have made the most money.
Of course, the total value of my portfolio has varied greatly, but not so my dividend income. My dividend income has generally just gone up. Recessions are a problem when with investing. My dividend income increases overall slow down. Some companies cut their dividends, some leave them level and some increase them. Recession affect different companies differently. Also, different sorts of recession affect companies differently too.
There has been two recent recession with bear markets. The first affect tech and industrial companies the worse. The last one affected financial companies the worst. In both these recessions, my stock portfolio value has tanked, but my dividends have not. Since I live off my dividends, these recessions have not really affected me much. It is hard to see the value of my assets go down, but my dividend income has increased both times.
My total income has gone down a couple of times. The first time it went down some 15% in 2002, as I sold off my remaining bonds to buy dividend paying stock. Stocks generally have a lower yield than bonds. It took just over 2 years for my income to recover from this. The second time my total income went down it was in 2008 and the decline was 3.4%. I was earning less in interest on my MMFs. I have enough in MMFs plus ING Account and expected dividend income to fund my spending for the next 5 years. This is so I am never in a position where I have to sell an investment at an inopportune time. This second time it took just 6 months for my income to recover.
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 talked to people who invested, they all seemed to be going for the big score. None of these people seemed to have made any money at this, let alone really making a big score. Of course, some would make talk about making 500% or 1000% return on some investment, but they still had no real money. Either they blew what they earned on the next big investment score, or their investment was so small that they really didn’t earn much money. I figured that there must be a better way.
Dividend investing is simply when you buy stocks for their dividend payments. You hope that over time both the stock price and the dividend payments would increase. I must admit that this is how I made enough money to stop working. It is especially my investment in large dividend paying banks and utilities where I have made the most money.
Of course, the total value of my portfolio has varied greatly, but not so my dividend income. My dividend income has generally just gone up. Recessions are a problem when with investing. My dividend income increases overall slow down. Some companies cut their dividends, some leave them level and some increase them. Recession affect different companies differently. Also, different sorts of recession affect companies differently too.
There has been two recent recession with bear markets. The first affect tech and industrial companies the worse. The last one affected financial companies the worst. In both these recessions, my stock portfolio value has tanked, but my dividends have not. Since I live off my dividends, these recessions have not really affected me much. It is hard to see the value of my assets go down, but my dividend income has increased both times.
My total income has gone down a couple of times. The first time it went down some 15% in 2002, as I sold off my remaining bonds to buy dividend paying stock. Stocks generally have a lower yield than bonds. It took just over 2 years for my income to recover from this. The second time my total income went down it was in 2008 and the decline was 3.4%. I was earning less in interest on my MMFs. I have enough in MMFs plus ING Account and expected dividend income to fund my spending for the next 5 years. This is so I am never in a position where I have to sell an investment at an inopportune time. This second time it took just 6 months for my income to recover.
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, January 27, 2011
TMX Group 2
This is a stock (TSX-X) that I follow but do not own. It is classified as a financial stock and I already have too much in the financial area with my bank and insurance holdings. This stock was created when the Toronto Stock Exchange went public in 2002. What I want to look at today is what my spreadsheet says about the current price and what the Analysts say about this stock.
However, first I want to see what the Insider Trading report says. The thing that stands out is that, except for the directors, insiders have more stock options than shares. This is not what I like to see, but it is very common. There has been a small bit of insider selling over the past year, but it is insignificant. There has been no insider buying.
There are two indications of confidence of the insiders in this company. The first thing is that the stock options that have recently been issued have been kept. The other thing is that the dividends were increased in 2010. The increase was for just over 5%. This is lower than the 5 year average of 11%. However, this is the first increase in 3 years.
When I look at the Price/Earnings Ratios, I find that they are high. The 5 year median low P/E Ratio is 18 and the 5 year median high P/E Ratio is 25. The current P/E Ratio of 12.5 is therefore low on a relative basis. Sites that use the last 12 months earnings in their P/E Ratio calculations get a much higher P/E ratio of 23. They give a forward P/E Ratios closer to mine at 12.3.
I get a current Graham Price of $27.75. The stock price of $38.35 is 38% higher than the Graham Price. The low stock price is, on average, 126% above the Graham Price. This is because there was a huge difference between the stock price and the Graham Price between 2004 and 2007. As I have said before, the stock price of TMX fell in 2008 and has not yet recovered.
When I look at the Price/Book Value Ratio, I get a 10 year average of 10.09. This is a very high ratio. The current one at 3.29 is only 30% of the 10 year average. This shows that the stock price is relatively cheap. However, a P/B Ratio of 3.29 is not a low one.
The last thing to look at is the Dividend Yield. The current yield of 4.2% is good and it is higher than the 5 year average of 3.9%. The other thing to note is that the average 5 year payout ratio based on earnings is 73% and the average 5 year payout ratio based on cash flow is 49%. It is expected at the current dividend rate that the payout ratio based on earnings will be 53% and the payout ratio based on cash flow will be 48%. It is hard to say if there is much room for increased dividends in 2011.
When I look at analysts’ recommendations, I get the full range. There are Strong Buy, Buy, Hold, Underperform and Sell recommendations for this stock. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
Some analysts are worried that competition could limit TMX’s growth in the future. The best anyone says is that the stock is fairly valued. Some mention the fact that it has good free cash flow and future dividends and dividend increases will not be a problem for this stock. TMX also stands to make money every time one of the Unit Trust companies converts to a corporation. They get a fee for each change. There should be lots of this in 2011.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is here TMX. See my spreadsheet at x.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, first I want to see what the Insider Trading report says. The thing that stands out is that, except for the directors, insiders have more stock options than shares. This is not what I like to see, but it is very common. There has been a small bit of insider selling over the past year, but it is insignificant. There has been no insider buying.
There are two indications of confidence of the insiders in this company. The first thing is that the stock options that have recently been issued have been kept. The other thing is that the dividends were increased in 2010. The increase was for just over 5%. This is lower than the 5 year average of 11%. However, this is the first increase in 3 years.
When I look at the Price/Earnings Ratios, I find that they are high. The 5 year median low P/E Ratio is 18 and the 5 year median high P/E Ratio is 25. The current P/E Ratio of 12.5 is therefore low on a relative basis. Sites that use the last 12 months earnings in their P/E Ratio calculations get a much higher P/E ratio of 23. They give a forward P/E Ratios closer to mine at 12.3.
I get a current Graham Price of $27.75. The stock price of $38.35 is 38% higher than the Graham Price. The low stock price is, on average, 126% above the Graham Price. This is because there was a huge difference between the stock price and the Graham Price between 2004 and 2007. As I have said before, the stock price of TMX fell in 2008 and has not yet recovered.
When I look at the Price/Book Value Ratio, I get a 10 year average of 10.09. This is a very high ratio. The current one at 3.29 is only 30% of the 10 year average. This shows that the stock price is relatively cheap. However, a P/B Ratio of 3.29 is not a low one.
The last thing to look at is the Dividend Yield. The current yield of 4.2% is good and it is higher than the 5 year average of 3.9%. The other thing to note is that the average 5 year payout ratio based on earnings is 73% and the average 5 year payout ratio based on cash flow is 49%. It is expected at the current dividend rate that the payout ratio based on earnings will be 53% and the payout ratio based on cash flow will be 48%. It is hard to say if there is much room for increased dividends in 2011.
When I look at analysts’ recommendations, I get the full range. There are Strong Buy, Buy, Hold, Underperform and Sell recommendations for this stock. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
Some analysts are worried that competition could limit TMX’s growth in the future. The best anyone says is that the stock is fairly valued. Some mention the fact that it has good free cash flow and future dividends and dividend increases will not be a problem for this stock. TMX also stands to make money every time one of the Unit Trust companies converts to a corporation. They get a fee for each change. There should be lots of this in 2011.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is here TMX. See my spreadsheet at x.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, January 26, 2011
TMX Group
This is a stock (TSX-X) that I follow but do not own. It is classified as a financial stock and I already have too much in the financial area with my bank and insurance holdings. This stock was created when the Toronto Stock Exchange went public in 2002.
This stock started off with very good dividend increases. The 5 and 7 year growth in dividends is 11% and 23% per year, respectively. However, the average increase during the first few years of dividend payments was 55%. In 2007, the increase was only 15% and then from 2007 to 2009 inclusive, there was no change. There was an increase in the later part of 2010 of just over 5%.
The current yield is good at 4.2%. The reason the yield is so good is that the stock price fell over 50% in 2008 and has not yet recovered. As far as total returns go, I have 5 and 8 years of them as this stock only was issued in 2002. If you had purchased this stock 5 years ago, your return would be nil or very low (under 2% per year), with about 3.5% to 4% per year of the return being dividends. No matter how you look at this stock, the price has not done well over the past 5 years.
If you purchased the stock at a reasonable price within the first couple of years of its existence, you would have made between 15% and 25% per year return. 7% to 9% of this return would have been in dividends. The problem again with this stock is that it peaked in 2007/8 and has never fully recovered.
However, it is not entirely the company’s fault about the total return on this stock. What TMX has done is steadily increased its revenue, cash flow and book value quite nicely over this time period. For example, the revenue has increased over the past 5 and 10 years by 16% and 12.5% per share per year, respectively. The company has been in business before it went public, so I have, for some statistics, figures going back at least 10 years.
Where the growth has not been good is for earnings. I have earnings growth for the last 5 and 9 years. I am using 9 years because the earnings in 1999 were negative. Over the past 9 years, growth was just 2.4% per year. However, 2000 could have just been a very good year after a very bad year. But, even the 5 year growth in earnings at 7% is not that good, but is acceptable.
The Return on Equity is quite good and has always been quite good. For the financial year ending December 2009, the ROE is 18% and for the last 12 months, it is a bit better at 19%. The caution here is that the Leverage Ratio (Asset/Book Value) is quite high with 5 year average of 6.75. This ratio has come down a lot lately and is currently at a more reasonable, but still a bit high, value of 3.83. This company has a lot of debt.
The Liquidity Ratio at the end of 2009 was 1.10 and the current one is even lower at 1.00. At 1.00 is means that the current assets and current liability are the same. The Asset/Liability Ratio is currently at 1.36 and has a 5 year average of 1.41. What you want is for the Liquidity Ratio and the A/L Ratio to be at least 1.50.
Tomorrow, I will look at what my spreadsheet tell about the current stock price and also what analysts say about this stock.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is here TMX. See my spreadsheet at x.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 started off with very good dividend increases. The 5 and 7 year growth in dividends is 11% and 23% per year, respectively. However, the average increase during the first few years of dividend payments was 55%. In 2007, the increase was only 15% and then from 2007 to 2009 inclusive, there was no change. There was an increase in the later part of 2010 of just over 5%.
The current yield is good at 4.2%. The reason the yield is so good is that the stock price fell over 50% in 2008 and has not yet recovered. As far as total returns go, I have 5 and 8 years of them as this stock only was issued in 2002. If you had purchased this stock 5 years ago, your return would be nil or very low (under 2% per year), with about 3.5% to 4% per year of the return being dividends. No matter how you look at this stock, the price has not done well over the past 5 years.
If you purchased the stock at a reasonable price within the first couple of years of its existence, you would have made between 15% and 25% per year return. 7% to 9% of this return would have been in dividends. The problem again with this stock is that it peaked in 2007/8 and has never fully recovered.
However, it is not entirely the company’s fault about the total return on this stock. What TMX has done is steadily increased its revenue, cash flow and book value quite nicely over this time period. For example, the revenue has increased over the past 5 and 10 years by 16% and 12.5% per share per year, respectively. The company has been in business before it went public, so I have, for some statistics, figures going back at least 10 years.
Where the growth has not been good is for earnings. I have earnings growth for the last 5 and 9 years. I am using 9 years because the earnings in 1999 were negative. Over the past 9 years, growth was just 2.4% per year. However, 2000 could have just been a very good year after a very bad year. But, even the 5 year growth in earnings at 7% is not that good, but is acceptable.
The Return on Equity is quite good and has always been quite good. For the financial year ending December 2009, the ROE is 18% and for the last 12 months, it is a bit better at 19%. The caution here is that the Leverage Ratio (Asset/Book Value) is quite high with 5 year average of 6.75. This ratio has come down a lot lately and is currently at a more reasonable, but still a bit high, value of 3.83. This company has a lot of debt.
The Liquidity Ratio at the end of 2009 was 1.10 and the current one is even lower at 1.00. At 1.00 is means that the current assets and current liability are the same. The Asset/Liability Ratio is currently at 1.36 and has a 5 year average of 1.41. What you want is for the Liquidity Ratio and the A/L Ratio to be at least 1.50.
Tomorrow, I will look at what my spreadsheet tell about the current stock price and also what analysts say about this stock.
TMX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TMX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in Canada. TMX Group has its headquarters in Toronto and maintains offices in Montreal, Calgary and Vancouver. Its web site is here TMX. See my spreadsheet at x.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, January 25, 2011
Teck Resources Ltd 2
I have followed this stock (TSX-TCK.B) for sometime. I was looking at it in November 2008 and I thought that the price was getting rather silly. So I bought 100 shares and sold then when the price picked up in May 2009. I made just over $1,200. This was lots of fun. For a little amount of money, I got to play the market.
When I look at the Insider Trading report, I find there is some $36.9M of insider selling and about $24,000 of Insider Buying. The buying occurred last June when the stock price was just below $35. Most of the selling has occurred during the recent rise in the price of this stock. And, everyone is selling, including CEO, CFO, Officers and Directors. Considering this company has a worth of $36B, the selling is a very small percentage of the company’s total worth.
A good thing to say about this company is that they restarted the dividend payments in 2010 and then proceeded to raise the dividend 50%. The dividends are not back, to where they were, but this is a good start and shows that the company has faith in near future earnings. The other thing to mention is that the number of shares increased in 2008 by 10% to purchase Fording Coal. They were again raised by 21% in 2009 to raise some cash.
Is the current price of its stock good? I get a price of $59.60. First, the stock recently made an all time high at $61.79 and has since then fall back a bit. When I look at the Price/Earnings Ratio, I find it has been rather low on this stock. The 5 year median low is just 5 and the 5 year median high is 14. The 5 year median price is just 8. A P/E of 10 or below is considered a low P/E. The current P/E is 11 and this is close, but under the 5 year high.
I get a Graham Price of $57.44. The current stock price is just 3.8% above this. The average difference between the Graham Price and the stock price is 9.7%. So, by this measure, the stock price is not bad. I get a Price/Book Value Ratio of 2.30 and a 10 year average P/B Ratio of 1.61. By this measure, the current ratio is 40% above the 10 year average and so points to a high price. The last thing to look at is the dividend yield. The current dividend yield is just 1%. The 5 year average is higher at 2.3%. So, by this measure, the stock price is also high.
When I look at analysts recommendations, I find lots of Strong Buy, Buy and Hold recommendations. I also find 1 sell recommendation. The consensus would be a Buy. (See my site for information on analyst ratings.) A contrarian might look at all the Strong Buy and Buy recommendations and think this might not be a good time to buy, as a consensus opinion is often wrong.
Analysts that give a hold recommendation mostly mention the recent run up in stock price. They feel that it should pull back some more to be at a good price. Some feel it will pull back some more because of profit taking (it did recently make an all time high). Even analysts that give this a Strong Buy recommendation say that the risk is high on this stock (it is mining after all). A lot of analysts feel it is a high quality Canadian mining company that will do well in the long term.
If you want to buy a high quality Canadian mining company, this would certainly be a good one to have. There is an entry on Wikipedia for this company, see Teck Resources.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck. See my spreadsheet at tck.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at the Insider Trading report, I find there is some $36.9M of insider selling and about $24,000 of Insider Buying. The buying occurred last June when the stock price was just below $35. Most of the selling has occurred during the recent rise in the price of this stock. And, everyone is selling, including CEO, CFO, Officers and Directors. Considering this company has a worth of $36B, the selling is a very small percentage of the company’s total worth.
A good thing to say about this company is that they restarted the dividend payments in 2010 and then proceeded to raise the dividend 50%. The dividends are not back, to where they were, but this is a good start and shows that the company has faith in near future earnings. The other thing to mention is that the number of shares increased in 2008 by 10% to purchase Fording Coal. They were again raised by 21% in 2009 to raise some cash.
Is the current price of its stock good? I get a price of $59.60. First, the stock recently made an all time high at $61.79 and has since then fall back a bit. When I look at the Price/Earnings Ratio, I find it has been rather low on this stock. The 5 year median low is just 5 and the 5 year median high is 14. The 5 year median price is just 8. A P/E of 10 or below is considered a low P/E. The current P/E is 11 and this is close, but under the 5 year high.
I get a Graham Price of $57.44. The current stock price is just 3.8% above this. The average difference between the Graham Price and the stock price is 9.7%. So, by this measure, the stock price is not bad. I get a Price/Book Value Ratio of 2.30 and a 10 year average P/B Ratio of 1.61. By this measure, the current ratio is 40% above the 10 year average and so points to a high price. The last thing to look at is the dividend yield. The current dividend yield is just 1%. The 5 year average is higher at 2.3%. So, by this measure, the stock price is also high.
When I look at analysts recommendations, I find lots of Strong Buy, Buy and Hold recommendations. I also find 1 sell recommendation. The consensus would be a Buy. (See my site for information on analyst ratings.) A contrarian might look at all the Strong Buy and Buy recommendations and think this might not be a good time to buy, as a consensus opinion is often wrong.
Analysts that give a hold recommendation mostly mention the recent run up in stock price. They feel that it should pull back some more to be at a good price. Some feel it will pull back some more because of profit taking (it did recently make an all time high). Even analysts that give this a Strong Buy recommendation say that the risk is high on this stock (it is mining after all). A lot of analysts feel it is a high quality Canadian mining company that will do well in the long term.
If you want to buy a high quality Canadian mining company, this would certainly be a good one to have. There is an entry on Wikipedia for this company, see Teck Resources.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck. See my spreadsheet at tck.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Monday, January 24, 2011
Teck Resources Ltd
I have followed this stock (TSX-TCK.B) for sometime. I was looking at it in November 2008 and I thought that the price was getting rather silly. So I bought 100 shares and sold then when the price picked up in May 2009. I made just over $1,200. This was lots of fun. Generally, I do not buy mining stock, as you have to keep an eye on them all the time. With my portfolio, I could ignore it for 6 months and nothing will happen. I do follow some mining stock because they are a big part of the TSX.
The shares of this company bottom at around $3.93 in December of 2008. No dividends were paid in 2009, but the stock did start to recover in 2009 and hit $39.80 by year end. Today, the stock price is up again, higher than it has ever been at $59.60. Dividends were reinstated, and then increased in 2010.
The company had short term debt problems with their take over of Fording Coal. For this, they got hammered in the market. Unfortunately, they bought Fording Coal at the wrong time. When they started to take over Fording Coal they could not have foreseen their future problems, but they did do the takeover at a market top.
The dividend payments are, at $.60 a year are below those paid in 2008 of $1.00 per share. But, also please note that since this is a mining company, dividends could possibly fluctuate in the future. This company has not paid out a high percentage of its earnings or cash flow.
Teck Resources has had good growth over the past 5 and 10 years, with the 10 year figures usually much better than the 5 year figures. Revenues per share have grown over the past 5 and 10 years at the rate of 9% and 16% per year, respectively. Cash flow, net of non-cash items, has grown at the rate of 6% and 22% per year per share over the past 5 and 10 years, respectively. The only growth figures where the 5 year growth was better than the 10 year growth was in book value. Book Value has grown at the rate of 25% and 12% per share per year, over the past 5 and 10 years, respectively.
The Liquidity Ratio has usually been very good for this stock. It is currently at 2.19 and has a 5 year average of 2.43. The only year this fell alarmingly low was in 2008 and it ended up at 0.44 that year. The Asset/Liability Ratio is currently at 2.18 and has a 5 year average of 2.04. Even in 2008, this ratio was good at 1.54. For these ratios, you want one of at least 1.50. A ratio of 1.50 says that the assets are one and one half times the liabilities.
I guess the last thing to cover today is the Return on Equity. The ROE has been quite good since 2004 and the ROE at the end of 2009 was 12.6% with a 5 year average of 17.9%. The ROE to September 2010 is also good 12.3%. Tomorrow, I will look at what my spreadsheet ratios say about the current price and what analysts have to say about this stock.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck. See my spreadsheet at tck.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The shares of this company bottom at around $3.93 in December of 2008. No dividends were paid in 2009, but the stock did start to recover in 2009 and hit $39.80 by year end. Today, the stock price is up again, higher than it has ever been at $59.60. Dividends were reinstated, and then increased in 2010.
The company had short term debt problems with their take over of Fording Coal. For this, they got hammered in the market. Unfortunately, they bought Fording Coal at the wrong time. When they started to take over Fording Coal they could not have foreseen their future problems, but they did do the takeover at a market top.
The dividend payments are, at $.60 a year are below those paid in 2008 of $1.00 per share. But, also please note that since this is a mining company, dividends could possibly fluctuate in the future. This company has not paid out a high percentage of its earnings or cash flow.
Teck Resources has had good growth over the past 5 and 10 years, with the 10 year figures usually much better than the 5 year figures. Revenues per share have grown over the past 5 and 10 years at the rate of 9% and 16% per year, respectively. Cash flow, net of non-cash items, has grown at the rate of 6% and 22% per year per share over the past 5 and 10 years, respectively. The only growth figures where the 5 year growth was better than the 10 year growth was in book value. Book Value has grown at the rate of 25% and 12% per share per year, over the past 5 and 10 years, respectively.
The Liquidity Ratio has usually been very good for this stock. It is currently at 2.19 and has a 5 year average of 2.43. The only year this fell alarmingly low was in 2008 and it ended up at 0.44 that year. The Asset/Liability Ratio is currently at 2.18 and has a 5 year average of 2.04. Even in 2008, this ratio was good at 1.54. For these ratios, you want one of at least 1.50. A ratio of 1.50 says that the assets are one and one half times the liabilities.
I guess the last thing to cover today is the Return on Equity. The ROE has been quite good since 2004 and the ROE at the end of 2009 was 12.6% with a 5 year average of 17.9%. The ROE to September 2010 is also good 12.3%. Tomorrow, I will look at what my spreadsheet ratios say about the current price and what analysts have to say about this stock.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck. See my spreadsheet at tck.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Friday, January 21, 2011
Metro Inc 2
This annual report is in on this stock (TSX-MRU.A) that I own. The financial year for this stock ends in September each year. I have done well with this stock, earning total return of 17.7% per year on the stock I bought in 2004. I have had this stock for 7 years and I am making a 3.9% yield on my original investment; even though the 5 year average yield is just 1.5%. The company showed faith in this company by increasing the dividends by almost 24% in the financial year ending September 2010.
When I look at the insider trading report, I find that over the past year there has been some $7.8M of insider selling. $2M of this was by the CEO and the rest by officers of the company. Everyone, but the directors have far more options than shares. The company is also buying back shares on the open market to cancel. The main problem with this is that it often just covers new options. However, I must admit that the number of shares over the past few years has been declining by 2-3% per year.
The 5 year Price/Earnings Ratio median low is 9 and 5 year P/E Ratio median high is 13.7. So, the current P/E ratio that I get of 11 shows a reasonable stock price. Sites that get a current P/E based on last 12 months earnings get one of 11.7. I get a current Graham Price of $45.05. The current stock price of $43.91 is 2.5% lower. It is always a good sign if the stock price is below the current Graham price. On average, this stock’s price is 8% higher than the Graham Price.
I get a current Price/Book Value ratio of 1.89 and a 10 year average P/B Ratio of 2.12. The current P/B Ratio is therefore some 89% of the 10 year average. The current P/B Ratio is below the 10 year average and this point also to a reasonable stock price. The last thing is the dividend yield. The current one at 1.55% is higher than the 5 year average of 1.49%. Not by much, but it is higher, so this also points to a reasonable current stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. There are just as many Hold recommendations as Buy recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts seem worried about competition from Loblaw and Sobeys and feel that this might limit the growth in earnings for Metro. The difference in a 12 month stock price between the Holds and the Buys is not much with the Holds expecting a $48 stock price and the Buys a $50 stock price.
This would be a good stock to buy for increasing dividend income and capital gain. This would be a good stock if you do not need the yield. That is if you are in the process of building your portfolio or have enough high yield stocks to balance your portfolio with a low yield stock. Metro has consistently raised their dividend every year and they are on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at the insider trading report, I find that over the past year there has been some $7.8M of insider selling. $2M of this was by the CEO and the rest by officers of the company. Everyone, but the directors have far more options than shares. The company is also buying back shares on the open market to cancel. The main problem with this is that it often just covers new options. However, I must admit that the number of shares over the past few years has been declining by 2-3% per year.
The 5 year Price/Earnings Ratio median low is 9 and 5 year P/E Ratio median high is 13.7. So, the current P/E ratio that I get of 11 shows a reasonable stock price. Sites that get a current P/E based on last 12 months earnings get one of 11.7. I get a current Graham Price of $45.05. The current stock price of $43.91 is 2.5% lower. It is always a good sign if the stock price is below the current Graham price. On average, this stock’s price is 8% higher than the Graham Price.
I get a current Price/Book Value ratio of 1.89 and a 10 year average P/B Ratio of 2.12. The current P/B Ratio is therefore some 89% of the 10 year average. The current P/B Ratio is below the 10 year average and this point also to a reasonable stock price. The last thing is the dividend yield. The current one at 1.55% is higher than the 5 year average of 1.49%. Not by much, but it is higher, so this also points to a reasonable current stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. There are just as many Hold recommendations as Buy recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts seem worried about competition from Loblaw and Sobeys and feel that this might limit the growth in earnings for Metro. The difference in a 12 month stock price between the Holds and the Buys is not much with the Holds expecting a $48 stock price and the Buys a $50 stock price.
This would be a good stock to buy for increasing dividend income and capital gain. This would be a good stock if you do not need the yield. That is if you are in the process of building your portfolio or have enough high yield stocks to balance your portfolio with a low yield stock. Metro has consistently raised their dividend every year and they are on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, January 20, 2011
Metro Inc
The annual report is in on this stock (TSX-MRU.A) that I own. I first bought this stock in 2001 for my RRSP and I bought more in 2004 for my trading account. I sold some in 2009 as it was over 10% of my portfolio and most analysts did not think it was going to do well over the next little while. I have done well with this stock, earning total return of 17.7% per year on the stock I bought in 2004 and earning a total return on the stock of my RRSP of 12.4% per year.
I sold what I held in my RRSP account and bought some TD bank instead. The other thing to note was that TD bank was paying a high dividend at just over 5% compared to less than 1.5% of Metro. However, I should also say that on my investment in 2009, just a couple of years ago, I am earning 3.9% return on my investment. The reason for this is the 23% rise in dividends in 2010. However, on a longer term of 5 years, the dividend has increased some 11% per year.
The 10 year growth in dividends is higher at 16% per year. This is because the dividend increases were very high after they started to pay dividends in 1995 until 2005. Dividend increases have been a lot lower since 2005. The other thing to note about dividends is that their portion of the total return varies from 1.5% over the past 5 years to around 2% over the past 10 years.
They haven’t yet raised the dividends for 2011, but looking at expected earnings and cash flow, their payout ratios for 2011 and 2012 are already at the average for this stock. The average and current payout ratio in regards to earnings is 17.5% (the same for both) and the average and current payout ratio in regards to cash flow is 12% and 11% respectively. You have to wonder if there is room for a significant increase for 2011 or 2012 if they want to keep the same ratios.
The growth figures for this company are generally very good. For example, earnings per share have grown over the past 5 and 10 years at the rate of 13% and 8% per year respectively. The cash flow per share has grown at the rate of 18% and 13% per year, respectively. The conclusion can only be that the company has grown nicely in the past.
The Liquidity ratio on this company tends to be a bit low. It is currently at 1.09 and has a 5 year average of 1.04. The Asset/Liability Ratio is much better at a current ratio of 2.03 and a 5 year average of 1.88. The Leverage Ratio (Asset/Book Value) at a 5 year average of 2.16 is rather average. The Return on Equity for the company is quite good; with a 5 year average ROE of 15%. The ROE for the financial year ending in September 2010 is also good at 16%.
All in all this has been a good investment for me. The reason that it became a large part of my portfolio is because it grow well and not because I purchased too much of this stock. I am pleased with my investment in this stock and I intend to hold on to the stock I currently have.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
I sold what I held in my RRSP account and bought some TD bank instead. The other thing to note was that TD bank was paying a high dividend at just over 5% compared to less than 1.5% of Metro. However, I should also say that on my investment in 2009, just a couple of years ago, I am earning 3.9% return on my investment. The reason for this is the 23% rise in dividends in 2010. However, on a longer term of 5 years, the dividend has increased some 11% per year.
The 10 year growth in dividends is higher at 16% per year. This is because the dividend increases were very high after they started to pay dividends in 1995 until 2005. Dividend increases have been a lot lower since 2005. The other thing to note about dividends is that their portion of the total return varies from 1.5% over the past 5 years to around 2% over the past 10 years.
They haven’t yet raised the dividends for 2011, but looking at expected earnings and cash flow, their payout ratios for 2011 and 2012 are already at the average for this stock. The average and current payout ratio in regards to earnings is 17.5% (the same for both) and the average and current payout ratio in regards to cash flow is 12% and 11% respectively. You have to wonder if there is room for a significant increase for 2011 or 2012 if they want to keep the same ratios.
The growth figures for this company are generally very good. For example, earnings per share have grown over the past 5 and 10 years at the rate of 13% and 8% per year respectively. The cash flow per share has grown at the rate of 18% and 13% per year, respectively. The conclusion can only be that the company has grown nicely in the past.
The Liquidity ratio on this company tends to be a bit low. It is currently at 1.09 and has a 5 year average of 1.04. The Asset/Liability Ratio is much better at a current ratio of 2.03 and a 5 year average of 1.88. The Leverage Ratio (Asset/Book Value) at a 5 year average of 2.16 is rather average. The Return on Equity for the company is quite good; with a 5 year average ROE of 15%. The ROE for the financial year ending in September 2010 is also good at 16%.
All in all this has been a good investment for me. The reason that it became a large part of my portfolio is because it grow well and not because I purchased too much of this stock. I am pleased with my investment in this stock and I intend to hold on to the stock I currently have.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Wednesday, January 19, 2011
Saving for Retirement
First, with the debate about increasing CPP or using private industry to look after increased pension, no one seems to talk about the cost. By cost, I mean fees or administration costs. We seem to get a good deal from CPP because it is not properly funded and its cost will come from taxes. I understand that CPP is better funded when compared to similar plans from other countries. Lots of countries are on a pay as you go basis for their pensions and these are all in trouble.
I have seen no where that any one looks at the amount of money going to governments compared to what is spend on taxpayers. Everyone seems to agree that government employees get higher salaries and benefits than employees of the private sector. This would lead one to believe that the administration costs of governments are quite high.
My point is that, it may be cheaper for pensioners to have increased pensions run by the private sector than by the government sector. The other thing is that the CPP fund has currently a very big foot print in our financial markets. Should we really give it an every bigger one?
The above are my thoughts on the subject of pensions. But, what I really want to talk about is saving for retirement. Stock, bonds, mutual funds, ETFs etc all cost lots of money. What you buy will determine your future. So, it might just be wise to understand what it is you are buying.
On my blog, I mainly talk about specific stock. Personally, I have learned a lot about investing by doing. I tried initially to read about how the stock market worked, but I really did not pay attention until I bought some shares. So, I read some and did some stock buying to learn. There are investing educational sites on the internet. See Investor Education Fund (IEF) site that is funded by the Ontario Securities Commission called Get Smarter About Money.
One thing that complicated my investing in stocks in the 1970’s was the rising interest rates. I had barely gotten started when I realized that I could make more money in fixed assets than in stocks. This was the late 1970’s and early 1980’s. I had started to buy Canadian Savings bonds on a monthly payment basis to cash them in, in November, to buy stocks. However, interest rates in 1978 were around 9 1/2%. This is probably better than you could make in the stock market. And, to boot, Canadian Savings bonds are almost risk free.
GICs at that time peaked 18% in the early 1980’s. You cannot make that sort of money in the stock market. GICs are also investment vehicles with almost no risk. So, for a few years I mostly bought bonds and GICs. The high interest rates came to an end. The last bond I had was a 20 year CIBC bond at 9.65% in 1994. I sold that a few years ago at a good capital gain. As it gets closer to maturity, the value of the bond would decline and be worth only the $50,000 I paid for it.
Why did I start to invest? My dream was to live off dividends from stocks and spend my time reading. I had a 30 year plan to do this, but I later realized that it was unrealistic as it called for returns in the neighborhood of 10% return per year on average. Well, you never know how life will turn out. I got my dividend income in 23 years, so I quit work. Along the way, I got interested in investing and hence my investing blog. I also worked in IT and developed an interest in computer.
So, I spend my mornings reading and my afternoons working on my computer. I do investment spreadsheets, I read stuff, I do genealogy and I keep in touch with friends and family via my computer. Life does not turn out as you expect. In the same way that life goes up and down, so does the market. So, do not get trapped into buying high and selling low. That is buying as the market is rising and selling when it is falling.
It is not so bad to buy into a rising market, just do not over pay for a stock. But, selling in a falling market can be disastrous. You will lock in any paper losses you have. If your stock falls you should ask your self before you sell – is the company going bankrupt? If not, perhaps you should reconsider selling; a lot of stock movement has to do with P/E ratios going up and down, and not the stock’s intrinsic value changing.
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 have seen no where that any one looks at the amount of money going to governments compared to what is spend on taxpayers. Everyone seems to agree that government employees get higher salaries and benefits than employees of the private sector. This would lead one to believe that the administration costs of governments are quite high.
My point is that, it may be cheaper for pensioners to have increased pensions run by the private sector than by the government sector. The other thing is that the CPP fund has currently a very big foot print in our financial markets. Should we really give it an every bigger one?
The above are my thoughts on the subject of pensions. But, what I really want to talk about is saving for retirement. Stock, bonds, mutual funds, ETFs etc all cost lots of money. What you buy will determine your future. So, it might just be wise to understand what it is you are buying.
On my blog, I mainly talk about specific stock. Personally, I have learned a lot about investing by doing. I tried initially to read about how the stock market worked, but I really did not pay attention until I bought some shares. So, I read some and did some stock buying to learn. There are investing educational sites on the internet. See Investor Education Fund (IEF) site that is funded by the Ontario Securities Commission called Get Smarter About Money.
One thing that complicated my investing in stocks in the 1970’s was the rising interest rates. I had barely gotten started when I realized that I could make more money in fixed assets than in stocks. This was the late 1970’s and early 1980’s. I had started to buy Canadian Savings bonds on a monthly payment basis to cash them in, in November, to buy stocks. However, interest rates in 1978 were around 9 1/2%. This is probably better than you could make in the stock market. And, to boot, Canadian Savings bonds are almost risk free.
GICs at that time peaked 18% in the early 1980’s. You cannot make that sort of money in the stock market. GICs are also investment vehicles with almost no risk. So, for a few years I mostly bought bonds and GICs. The high interest rates came to an end. The last bond I had was a 20 year CIBC bond at 9.65% in 1994. I sold that a few years ago at a good capital gain. As it gets closer to maturity, the value of the bond would decline and be worth only the $50,000 I paid for it.
Why did I start to invest? My dream was to live off dividends from stocks and spend my time reading. I had a 30 year plan to do this, but I later realized that it was unrealistic as it called for returns in the neighborhood of 10% return per year on average. Well, you never know how life will turn out. I got my dividend income in 23 years, so I quit work. Along the way, I got interested in investing and hence my investing blog. I also worked in IT and developed an interest in computer.
So, I spend my mornings reading and my afternoons working on my computer. I do investment spreadsheets, I read stuff, I do genealogy and I keep in touch with friends and family via my computer. Life does not turn out as you expect. In the same way that life goes up and down, so does the market. So, do not get trapped into buying high and selling low. That is buying as the market is rising and selling when it is falling.
It is not so bad to buy into a rising market, just do not over pay for a stock. But, selling in a falling market can be disastrous. You will lock in any paper losses you have. If your stock falls you should ask your self before you sell – is the company going bankrupt? If not, perhaps you should reconsider selling; a lot of stock movement has to do with P/E ratios going up and down, and not the stock’s intrinsic value changing.
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, January 18, 2011
Waterfurnaces Renewable Energy 2
This is a stock (TSX-WFI) that I follow, but I do not own. It is a utility like stock, but it is more risky that other utility stocks. People who have invested in this company have done very well. The company has been paying dividends since 2003.
When I look at the Insider Trading report, what I find is a tiny bit of insider buying and no insider selling. Insiders do not seem to have much in the way of either options or shares. On the graphics showing options and shares for officers of the company, it shows there are more shares than options (however, these are all in small amounts). What we can say that is positive is that the dividends were increase in 2010 by around 16%.
When I look at the P/E Ratios, I get a 5 year median low P/E Ratio of 16.7 and a 5 year median high P/E Ratio of 29. The current P/E Ratio I get is 17, so this is relatively low for this stock, although this is not a particularly low P/E Ratio. Sites that use the last 12 months earnings to get a P/E Ratio get one of 20.
For the Graham Price, I get one of $9.21 for 2011. The current stock price of $24.25 is some 62% higher than the Graham Price. The reason for a low Graham Price is because the growth in book value has not kept up with the growth in earnings. See my report of yesterday. I must say that the average difference between the Graham Price and the stock price is around 120%, with the low difference around 65%. So past history shows that on a relative basis, the stock price is not that high.
The problem with the low Book Value is also shown in the Price/Book Value Ratio. This is currently running at 9.14, with this company having a 10 year average P/B Ratio of 6.91. By the P/B Ratio, the stock price looks high.
The current Dividend Yield of 3.6% is above the 5 year average of 3.3%. This yield shows a current good stock price. A yield of 3.6% is a good yield for a stock. The dividend growth potential of this stock is good. If the dividends continue to increase at the current 5 year growth rate, you could be earning 5% in 5 years time, or 9.8% in 10 years time on an investment in this stock today. However, I should also point out while past history of a stock might point towards a possible future; there is no guarantee of this future. That is, your investment, might not perform this well.
This is not a big company, so there are not that many analysts that follow it. What I find is Strong Buy, Buy and Hold recommendations. The consensus is probably a Buy. (See my site for information on analyst ratings.)
There is not much in analyst reports that I can find, however, I read one that said that insiders own a good chuck of the stock. This and the following one said that insiders were buying. I could not confirm about insiders holdings in the Insider Trading document, but this report does seem incomplete. Apparently, the Head Office for this company is in Fort Wayne, Indiana. They also have an office in Toronto. This company does work in both US and Canada. It is also traded in the US via pink sheets.
I find a blog entry dated December 2010 on this company at Canadian Financial DIY. Because this is a small company, it is risky, but it just might be worth buying for future capital gains and dividend growth.
Waterfurnaces Renewable Energy Inc is a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is here WaterFurnace Inc. See my spreadsheet at wfi.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, what I find is a tiny bit of insider buying and no insider selling. Insiders do not seem to have much in the way of either options or shares. On the graphics showing options and shares for officers of the company, it shows there are more shares than options (however, these are all in small amounts). What we can say that is positive is that the dividends were increase in 2010 by around 16%.
When I look at the P/E Ratios, I get a 5 year median low P/E Ratio of 16.7 and a 5 year median high P/E Ratio of 29. The current P/E Ratio I get is 17, so this is relatively low for this stock, although this is not a particularly low P/E Ratio. Sites that use the last 12 months earnings to get a P/E Ratio get one of 20.
For the Graham Price, I get one of $9.21 for 2011. The current stock price of $24.25 is some 62% higher than the Graham Price. The reason for a low Graham Price is because the growth in book value has not kept up with the growth in earnings. See my report of yesterday. I must say that the average difference between the Graham Price and the stock price is around 120%, with the low difference around 65%. So past history shows that on a relative basis, the stock price is not that high.
The problem with the low Book Value is also shown in the Price/Book Value Ratio. This is currently running at 9.14, with this company having a 10 year average P/B Ratio of 6.91. By the P/B Ratio, the stock price looks high.
The current Dividend Yield of 3.6% is above the 5 year average of 3.3%. This yield shows a current good stock price. A yield of 3.6% is a good yield for a stock. The dividend growth potential of this stock is good. If the dividends continue to increase at the current 5 year growth rate, you could be earning 5% in 5 years time, or 9.8% in 10 years time on an investment in this stock today. However, I should also point out while past history of a stock might point towards a possible future; there is no guarantee of this future. That is, your investment, might not perform this well.
This is not a big company, so there are not that many analysts that follow it. What I find is Strong Buy, Buy and Hold recommendations. The consensus is probably a Buy. (See my site for information on analyst ratings.)
There is not much in analyst reports that I can find, however, I read one that said that insiders own a good chuck of the stock. This and the following one said that insiders were buying. I could not confirm about insiders holdings in the Insider Trading document, but this report does seem incomplete. Apparently, the Head Office for this company is in Fort Wayne, Indiana. They also have an office in Toronto. This company does work in both US and Canada. It is also traded in the US via pink sheets.
I find a blog entry dated December 2010 on this company at Canadian Financial DIY. Because this is a small company, it is risky, but it just might be worth buying for future capital gains and dividend growth.
Waterfurnaces Renewable Energy Inc is a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is here WaterFurnace Inc. See my spreadsheet at wfi.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, January 17, 2011
Waterfurnaces Renewable Energy
The full name of this company is Waterfurnaces Renewable Energy Inc. (TSX-WFI). This is a stock that I follow, but I do not own. It is a utility like stock, but it is more risky that other utility stocks. This is a stock liked by the Investment Reporter investment letter. They think it is a rather risky investment, but it is good stock to buy for capital gains and dividend income.
People who have invested in this company have done very well. This company started to pay dividends in 2003 and the dividends have increase over the past 5 and 7 years at the rate of 11% and 15% per year respectively. The dividend yield is also quite good, with a 5 year average of 3.3%. An investment in this company would have increase over the past 5 and 10 years at the rate of 17% per year and 45% per year, respectively.
The stock price has increased nicely and the amount of dividends that make up this total return would be at the rate of 4.5% and 8% per year over the past 5 and 10 years. I do not think that you will again get the great increase in total returns over the next 10 years as over the past 10 years. However, if you can afford the risk of this stock, you could make a very nice return in stock price and dividends. Please note that this is some currency risk involved. This stock reports in US dollars and the dividends are paid in US dollars.
The increase in book value has not been as good as that in the stock price. Over the past 5 and 10 years, the book value has increased at the rate of 12% per year and 5% per year. Also, the growth in earnings has been much better than the revenue growth. The Revenue growth over the past 5 and 10 years has been at the rate of 14% per year and 11% per year respectively. Compare that to the growth in earnings that has grown by 23% per year and 57% per year, respectively. Cash Flow growth is also very good.
Unlike a lot of utility companies, this company does not have much in the way of debt. The Liquidity Ratio is currently at 4.10 and this company has a 5 year average Liquidity Ratio of 3.03. The Asset/Liability Ratio is also good at a current 2.46 and a 5 year average of 2.39. The Leverage Ratio (Assets/Book Value) is also good at just 1.73. With ratios like these, it means this company could survive a recession quite nicely. And, it has survived the last one quite nicely, with the stock price remaining within a band and paying a good dividend. They even have been increasing their dividends through the last recession. The problem for Canadians is that it may not seem so, because the dividend is paid in US dollars and our dollar has been quite strong against the US dollar.
I guess the last thing to discuss today is the return on equity. The ROE has been very good. The 5 year average ROE is 48%. The ROE for the last 12 month period is at 44%. This is a great figure.
Tomorrow, I will look at what the analysts say about this stock and also what my spreadsheets say about the current stock price.
Waterfurnaces Renewable Energy Inc is a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is here WaterFurnace Inc. See my spreadsheet at wfi.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.
People who have invested in this company have done very well. This company started to pay dividends in 2003 and the dividends have increase over the past 5 and 7 years at the rate of 11% and 15% per year respectively. The dividend yield is also quite good, with a 5 year average of 3.3%. An investment in this company would have increase over the past 5 and 10 years at the rate of 17% per year and 45% per year, respectively.
The stock price has increased nicely and the amount of dividends that make up this total return would be at the rate of 4.5% and 8% per year over the past 5 and 10 years. I do not think that you will again get the great increase in total returns over the next 10 years as over the past 10 years. However, if you can afford the risk of this stock, you could make a very nice return in stock price and dividends. Please note that this is some currency risk involved. This stock reports in US dollars and the dividends are paid in US dollars.
The increase in book value has not been as good as that in the stock price. Over the past 5 and 10 years, the book value has increased at the rate of 12% per year and 5% per year. Also, the growth in earnings has been much better than the revenue growth. The Revenue growth over the past 5 and 10 years has been at the rate of 14% per year and 11% per year respectively. Compare that to the growth in earnings that has grown by 23% per year and 57% per year, respectively. Cash Flow growth is also very good.
Unlike a lot of utility companies, this company does not have much in the way of debt. The Liquidity Ratio is currently at 4.10 and this company has a 5 year average Liquidity Ratio of 3.03. The Asset/Liability Ratio is also good at a current 2.46 and a 5 year average of 2.39. The Leverage Ratio (Assets/Book Value) is also good at just 1.73. With ratios like these, it means this company could survive a recession quite nicely. And, it has survived the last one quite nicely, with the stock price remaining within a band and paying a good dividend. They even have been increasing their dividends through the last recession. The problem for Canadians is that it may not seem so, because the dividend is paid in US dollars and our dollar has been quite strong against the US dollar.
I guess the last thing to discuss today is the return on equity. The ROE has been very good. The 5 year average ROE is 48%. The ROE for the last 12 month period is at 44%. This is a great figure.
Tomorrow, I will look at what the analysts say about this stock and also what my spreadsheets say about the current stock price.
Waterfurnaces Renewable Energy Inc is a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is here WaterFurnace Inc. See my spreadsheet at wfi.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, January 14, 2011
Wi-Lan Inc 2
I bought this company (TSX-WIN) in 2000, as it was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. Today it is selling at $6.24. I would never have made any money on it even if I were still holding.
To properly discuss investing, you should look at a variety of companies, ones to invest in and ones not to. This is one that was a failed investment for me. However, what attracted me to this company in the first place might play out well in the end. There is interesting things happening, like the dividends that were just started. However, I would like to see a better cash flow to pay these dividends. I would also like to see a higher yield. I am not much interested in companies where the yield is less than 2%. (The dividend is currently at .8%, but it started out over 2%.)
When I looked at the insider trading report, I wondered about how insider feel amount this company. There is some $5.4M of insider selling over the past year. I note that the CEO (Jim Skippen) and CFO (Shaun McEwan) are listed as officers of the company and not as CEO and CFO. They seem to be doing some, but not all of the selling, especially of stock options. You never know why insiders sell, and there has been a lot lately due to the recession. However, this would discourage me from buying these shares. There has been some insider buying, but not enough to even talk about compared to the selling.
So, what does my spreadsheet say about the current stock price? First, the Price/Earnings Ratio is currently at 21. The 5 year median low P/E is 6 and the 5 year median high P/E is 22. So the current one at 20 is high and 20 is also rather a high absolute P/E ratio. Sites that use a P/E based on the last 12 months earnings have no P/E Ratio, as there has been no earnings in the last 12 months.
I get a Graham Price of $3.86. The current stock price is $6.25. So, the current stock price is almost 40% higher than the Graham price. I would also like to say that the stock price has risen sharply this year, and since the end of last year, it is up almost 200%. The stock price has spent most of its time before 2006 far below the Graham Price. I cannot calculate a Graham Price prior to 2006 as there was no positive earnings prior to 2006.
When I look at the Price/Book Value ratio, I get a 10 year average of 3.17 and a current one of 2.90. The current one is lower than the average by almost 10%. A great stock price would have the current one lower than the average by 20%, but this points to a not bad stock price.
I guess we can look at the dividend yield on this, but since dividends were just started, it is hard to tell anything from this. The yield at the start of dividend payments was just over 2%. They are now about .8%. This is because of the sharp price increase. Wi-Lan has not made any indication whether or not they intend to raise dividends in the future.
When I look at the analysts’ recommendations, all I find are Strong Buy and Buy recommendations. The consensus would be a Strong Buy. (See my site for information on analyst ratings.) It is an intellectual patent company. They have just won big time with their settlement with Intel. This hit today, and the stock, today, went up 10%. Whether or not it is a good time to buy, or if that time has now past is hard to tell. However, their future business is all about collecting money from their patents.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, Wi-Lan’s inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here Wi-Lan. See my spreadsheet at win.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.
To properly discuss investing, you should look at a variety of companies, ones to invest in and ones not to. This is one that was a failed investment for me. However, what attracted me to this company in the first place might play out well in the end. There is interesting things happening, like the dividends that were just started. However, I would like to see a better cash flow to pay these dividends. I would also like to see a higher yield. I am not much interested in companies where the yield is less than 2%. (The dividend is currently at .8%, but it started out over 2%.)
When I looked at the insider trading report, I wondered about how insider feel amount this company. There is some $5.4M of insider selling over the past year. I note that the CEO (Jim Skippen) and CFO (Shaun McEwan) are listed as officers of the company and not as CEO and CFO. They seem to be doing some, but not all of the selling, especially of stock options. You never know why insiders sell, and there has been a lot lately due to the recession. However, this would discourage me from buying these shares. There has been some insider buying, but not enough to even talk about compared to the selling.
So, what does my spreadsheet say about the current stock price? First, the Price/Earnings Ratio is currently at 21. The 5 year median low P/E is 6 and the 5 year median high P/E is 22. So the current one at 20 is high and 20 is also rather a high absolute P/E ratio. Sites that use a P/E based on the last 12 months earnings have no P/E Ratio, as there has been no earnings in the last 12 months.
I get a Graham Price of $3.86. The current stock price is $6.25. So, the current stock price is almost 40% higher than the Graham price. I would also like to say that the stock price has risen sharply this year, and since the end of last year, it is up almost 200%. The stock price has spent most of its time before 2006 far below the Graham Price. I cannot calculate a Graham Price prior to 2006 as there was no positive earnings prior to 2006.
When I look at the Price/Book Value ratio, I get a 10 year average of 3.17 and a current one of 2.90. The current one is lower than the average by almost 10%. A great stock price would have the current one lower than the average by 20%, but this points to a not bad stock price.
I guess we can look at the dividend yield on this, but since dividends were just started, it is hard to tell anything from this. The yield at the start of dividend payments was just over 2%. They are now about .8%. This is because of the sharp price increase. Wi-Lan has not made any indication whether or not they intend to raise dividends in the future.
When I look at the analysts’ recommendations, all I find are Strong Buy and Buy recommendations. The consensus would be a Strong Buy. (See my site for information on analyst ratings.) It is an intellectual patent company. They have just won big time with their settlement with Intel. This hit today, and the stock, today, went up 10%. Whether or not it is a good time to buy, or if that time has now past is hard to tell. However, their future business is all about collecting money from their patents.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, Wi-Lan’s inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here Wi-Lan. See my spreadsheet at win.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, January 13, 2011
Wi-Lan Inc
I bought this company (TSX-WIN) in 2000, as it was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. Today it is selling at $6.24. I would never have made any money on it even if I were still holding. The other thing is that they completely refocused their company, or completely changed it to earn money on their patents.
A couple of interesting things have happened concerning this company. First is that it started to pay a dividend in the last 2 quarters of 2009. However, the dividend yield is very low at less than 1%. They have been earning money over the last couple of years as far as earnings per share go, but there is not much in the way of cash flow. To pay dividends you need cash flow. Things may be turning up for this company, as they seem to be winning patent court cases or getting settlements with patent licenses. They are certainly trying to earn money.
If you look at revenue, it is increasing. The growth for the last 5 and 10 years is 7% and 20% per year, respectively. However, if you look at revenue per share it is a very different story. The growth for revenue per share over the past 5 and 10 years is -11% and 2% per year respectively. The problem is the increase in the number of shares outstanding. This has been increasing at a rate of 18% per year for the last 10 years.
The return on equity for this company is low. The ROE was negative at the end of 2008 financial year and it is again negative for the last 12 months. However, most analysts seem to feel that the company will end this financial year with some earnings. The 5 year average ROE is just over 2%. At the end of 2009, the ROE was also low at just 4.3%.
One good thing is that this company does not have much in the way of debt. The Liquidity ratio is 9.49 with a 5 year average of 13.82. The Asset/Liability Ratio is 24.17 with a 5 year average of 14.23. What is considered a good Liquidity Ratio or A/L Ratio is 1.50. So both of these ratios are way over being good.
A bright spot is also the increase in book value. This growth in book value per share over the past 5 and 10 years is 20% and 11% per year, respectively. Between last year and this year there has been an almost 200% increase in stock price. You have to wonder if the stock price is getting rather too high. Tomorrow, I will look to see what the analysts are saying about this stock.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, Wi-Lan’s inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here Wi-Lan. See my spreadsheet at win.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.
A couple of interesting things have happened concerning this company. First is that it started to pay a dividend in the last 2 quarters of 2009. However, the dividend yield is very low at less than 1%. They have been earning money over the last couple of years as far as earnings per share go, but there is not much in the way of cash flow. To pay dividends you need cash flow. Things may be turning up for this company, as they seem to be winning patent court cases or getting settlements with patent licenses. They are certainly trying to earn money.
If you look at revenue, it is increasing. The growth for the last 5 and 10 years is 7% and 20% per year, respectively. However, if you look at revenue per share it is a very different story. The growth for revenue per share over the past 5 and 10 years is -11% and 2% per year respectively. The problem is the increase in the number of shares outstanding. This has been increasing at a rate of 18% per year for the last 10 years.
The return on equity for this company is low. The ROE was negative at the end of 2008 financial year and it is again negative for the last 12 months. However, most analysts seem to feel that the company will end this financial year with some earnings. The 5 year average ROE is just over 2%. At the end of 2009, the ROE was also low at just 4.3%.
One good thing is that this company does not have much in the way of debt. The Liquidity ratio is 9.49 with a 5 year average of 13.82. The Asset/Liability Ratio is 24.17 with a 5 year average of 14.23. What is considered a good Liquidity Ratio or A/L Ratio is 1.50. So both of these ratios are way over being good.
A bright spot is also the increase in book value. This growth in book value per share over the past 5 and 10 years is 20% and 11% per year, respectively. Between last year and this year there has been an almost 200% increase in stock price. You have to wonder if the stock price is getting rather too high. Tomorrow, I will look to see what the analysts are saying about this stock.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, Wi-Lan’s inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here Wi-Lan. See my spreadsheet at win.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, January 12, 2011
Enbridge Income Fund 2
This is a stock (TSX-ENF) that I follow, but do not own. I have Enbridge Inc (TSX-ENB) and you would not buy both because Enbridge Inc owns about 40% of the shares of this company. Enbridge Income Fund has just changed to a corporation and has changed its symbol from ENF.UN to ENF. The name has also changed from Enbridge Income Fund Holdings to Enbridge Income Fund.
I looked at the Insider Trading report. Because this stock just changed name and symbol, the insider trading reporting only covers the stock since this change. There has been no insider selling or insider buying since the beginning of the year. However, from looking at stuff on the internet, it looks like there was some insider buying in December. I guess a positive note is that they will maintain the current dividend.
The dividend growth potential of this stock is very good. If they increase future dividends as in the past, a current purchase will get you 8% and 10% yield on a current investment in 5 and 10 years time. However, I really wonder they can keep up the current increases at the past rate of 4.8% per year dividend increases. I worry because they are paying out too high a percentage of the earnings in dividends.
The 5 year median low P/E Ratio is 16 and the 5 year median high P/E is 24. I get a current P/E ratio of 33 based on expected earnings for 2011. Sites that base the P/E on the last 12 months earnings get an even higher one of 54. This would point to quite a high relative current stock price.
The latest stock price I got is $17.60. I get a Graham Price of $8.38 for 2011. Usually the Graham Price for Unit Trusts tends to be low because of lack of increase in book value. However, this stock has reasonable increases in the book value until this year. As of the last quarterly report, the book value dropped some 15%. The current stock price is 110% of the Graham Price. The 7 year median high difference between the stock price and the Graham Price is 66%. So, on a relative basis this points to a high current stock price. Also, 110% difference between the stock price and the Graham Price is the highest this difference has ever been.
The 7 year average Price/Book Value Ratio is 1.53. The current P/B Ratio is 3.07. This also points to a high current relative stock price. The reason the P/B Ratio is so high is because of the recent drop in the Book Value by 15%.
Even the dividend yield does not show a good relative current stock price. The current dividend yield is 6.6% and the 5 year average is 8.7%. So reviewing all the ratios that I look at, the stock price does seem high. So, the next thing to look at is what the analysts are saying.
What the analysts’ recommendation I can find on this stock is Hold, Underperform and Sell. This is all I can find. There are a few analysts, but not a lot following this stock. The consensus recommendation would be an Underperform. (See my site for information on analyst ratings.)
The comments that I find is that the Analysts’ like the Bakken Pipeline Expansion Program and feel it is good for future cash flow for Enbridge Income Fund. However, it is felt that the stock price is too high and taking profits by selling off this stock or some of it would be a current wise move.
The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Owners: Just over 40% of the shares are owned by Enbridge Inc. Its web site is here Enbridge Income Fund . See my spreadsheet at enf.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 report. Because this stock just changed name and symbol, the insider trading reporting only covers the stock since this change. There has been no insider selling or insider buying since the beginning of the year. However, from looking at stuff on the internet, it looks like there was some insider buying in December. I guess a positive note is that they will maintain the current dividend.
The dividend growth potential of this stock is very good. If they increase future dividends as in the past, a current purchase will get you 8% and 10% yield on a current investment in 5 and 10 years time. However, I really wonder they can keep up the current increases at the past rate of 4.8% per year dividend increases. I worry because they are paying out too high a percentage of the earnings in dividends.
The 5 year median low P/E Ratio is 16 and the 5 year median high P/E is 24. I get a current P/E ratio of 33 based on expected earnings for 2011. Sites that base the P/E on the last 12 months earnings get an even higher one of 54. This would point to quite a high relative current stock price.
The latest stock price I got is $17.60. I get a Graham Price of $8.38 for 2011. Usually the Graham Price for Unit Trusts tends to be low because of lack of increase in book value. However, this stock has reasonable increases in the book value until this year. As of the last quarterly report, the book value dropped some 15%. The current stock price is 110% of the Graham Price. The 7 year median high difference between the stock price and the Graham Price is 66%. So, on a relative basis this points to a high current stock price. Also, 110% difference between the stock price and the Graham Price is the highest this difference has ever been.
The 7 year average Price/Book Value Ratio is 1.53. The current P/B Ratio is 3.07. This also points to a high current relative stock price. The reason the P/B Ratio is so high is because of the recent drop in the Book Value by 15%.
Even the dividend yield does not show a good relative current stock price. The current dividend yield is 6.6% and the 5 year average is 8.7%. So reviewing all the ratios that I look at, the stock price does seem high. So, the next thing to look at is what the analysts are saying.
What the analysts’ recommendation I can find on this stock is Hold, Underperform and Sell. This is all I can find. There are a few analysts, but not a lot following this stock. The consensus recommendation would be an Underperform. (See my site for information on analyst ratings.)
The comments that I find is that the Analysts’ like the Bakken Pipeline Expansion Program and feel it is good for future cash flow for Enbridge Income Fund. However, it is felt that the stock price is too high and taking profits by selling off this stock or some of it would be a current wise move.
The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Owners: Just over 40% of the shares are owned by Enbridge Inc. Its web site is here Enbridge Income Fund . See my spreadsheet at enf.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, January 11, 2011
Enbridge Income Fund
This is a stock (TSX-ENF) that I follow, but do not own. When I bought into Enbridge, I liked Enbridge Inc (TSX-ENB) better than this fund. You would not buy both because Enbridge Inc owns about 40% of the shares of this company. Enbridge Income Fund has just changed to a corporation and has changed its symbol from ENF.UN to ENF. The name has also changed from Enbridge Income Fund Holdings to Enbridge Income Fund.
This stock has given its investors some very good dividend income. The part of the total return from dividends is around 6.5% to 7.5% on a long term basis. The total return is around 10 to 11%, so stock increase is a nice 4%. This is good for utilities. The thing that would concern me is payout ratios. The payout ratio for distributable income was good at around 40%; however, this stock is now a corporation.
As a corporation, one looks at payout ratios for earnings and cash flow. I find that the payout ratio on earnings to be especially high. The payout ratio for cash flow is a more moderate 41% over the past 5 years, but is expected to go higher over the next two years. A connected thing I do not like is the reduction in book value for the 9 months ending in September 2010. The deficient has grown and pushed the book value down 15%. The company has announced that they will continue the current distributions as dividends, but payable quarterly rather than monthly.
When I look at growth, the growth in revenue, cash flow and earnings has been ok. We do not have many years to work with as this fund was only established in 2003. For example, the revenues have grown around 5.6% per year and the earnings have grown about 4.8% per year over the past 5 years. And, since we are coming out of a recession, this growth is not bad. Also, according the analysts’ expected earnings for 2010, the earnings growth for the last 5 years should be changing to around 8.5% at the end of 2010. This is a good figure. But earnings have not come in yet for 2010, so this is not assured.
When I look at the Liquidity ratio, it is low at 0.75 currently. The 5 year average is just 0.59. The main reason is that the current portion of the long term debt is included. There has been no indication that the company will have any problems with this debt. The other thing is the Asset/Liability Ratio is also low at 1.12. Assets do cover liabilities, but not by a good margin. The final thing to remark on in this vain is the Leverage Ratio also high at 6.85. Utilities tend to have lots of debt and this company is no exception.
In connection with the Return on Equity, this company seems to have a rather low one. For the year, ending in 2009 it was just 5.4% and the one for the last 12 months ending in September 2010, it is a bit better, but it is only 5.9%. The ROE has been a bit better in the past, but it has never been great.
It is interesting that analysts covering this stock seem to think that 2010 will be a better year than 2011 and are giving lower estimates in earnings and cash flow for 2011 than they are for 2010.
The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Owners: Just over 40% of the shares are owned by Enbridge Inc. Its web site is here Enbridge Income Fund . See my spreadsheet at enf.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 given its investors some very good dividend income. The part of the total return from dividends is around 6.5% to 7.5% on a long term basis. The total return is around 10 to 11%, so stock increase is a nice 4%. This is good for utilities. The thing that would concern me is payout ratios. The payout ratio for distributable income was good at around 40%; however, this stock is now a corporation.
As a corporation, one looks at payout ratios for earnings and cash flow. I find that the payout ratio on earnings to be especially high. The payout ratio for cash flow is a more moderate 41% over the past 5 years, but is expected to go higher over the next two years. A connected thing I do not like is the reduction in book value for the 9 months ending in September 2010. The deficient has grown and pushed the book value down 15%. The company has announced that they will continue the current distributions as dividends, but payable quarterly rather than monthly.
When I look at growth, the growth in revenue, cash flow and earnings has been ok. We do not have many years to work with as this fund was only established in 2003. For example, the revenues have grown around 5.6% per year and the earnings have grown about 4.8% per year over the past 5 years. And, since we are coming out of a recession, this growth is not bad. Also, according the analysts’ expected earnings for 2010, the earnings growth for the last 5 years should be changing to around 8.5% at the end of 2010. This is a good figure. But earnings have not come in yet for 2010, so this is not assured.
When I look at the Liquidity ratio, it is low at 0.75 currently. The 5 year average is just 0.59. The main reason is that the current portion of the long term debt is included. There has been no indication that the company will have any problems with this debt. The other thing is the Asset/Liability Ratio is also low at 1.12. Assets do cover liabilities, but not by a good margin. The final thing to remark on in this vain is the Leverage Ratio also high at 6.85. Utilities tend to have lots of debt and this company is no exception.
In connection with the Return on Equity, this company seems to have a rather low one. For the year, ending in 2009 it was just 5.4% and the one for the last 12 months ending in September 2010, it is a bit better, but it is only 5.9%. The ROE has been a bit better in the past, but it has never been great.
It is interesting that analysts covering this stock seem to think that 2010 will be a better year than 2011 and are giving lower estimates in earnings and cash flow for 2011 than they are for 2010.
The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Owners: Just over 40% of the shares are owned by Enbridge Inc. Its web site is here Enbridge Income Fund . See my spreadsheet at enf.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, January 10, 2011
State of My Dividends 2010 2
I have updated my spreadsheet on my stocks for stock I own and dividend increases for 2010, see dividends. I own 45 stocks; and of these 23 increased their dividends, 16 kept the dividends at the same level, 3 lower their dividends and 3 have no dividends. I am continuing my blog about my dividends of 2010 today.
The first company to talk about is the utility company Transalta Corp (TSX-TA) which has not got a great record of increasing dividends. Currently, the earnings do not cover their dividends (but cash flow does). If you look at earnings estimates, it is not expect that the earnings will be greater than the dividends until 2012. However, the dividend rate on this stock is in the 4 to 5% range. I have been invested in this company since 1987 and I have made an average return of around 8% per year with over 5% per year from dividends. It is a solid, but unexciting investment.
My other utility company with no increase in distributions is Fort Chicago Energy Partners (TSX-FCE.UN). This company just changed from a Partnership to a corporation. The name has changed to Versesen Inc (TSX-VSN). They plan on keeping the dividend level for 2011, but may or may not decrease it in 2012. It should be noted that lots of income trusts and partnerships going to corporations has decreased distributions.
Canadian Tire (TSX-CTC.A) is a stock that has not been in much favor with analysts at any time, but I have done well with it earning a total return of 12% per year since buying it in 2000. It has never been consistent in raising its dividends. However, it just announced a 31% increase in dividends for 2011. The last year it raised their dividend was 2008.
I also have RioCan (TSX-REI.UN) a real estate trust that did not increase dividends this year. They are also inconsistent in rising dividends and over the long term tend to raise them in line with background inflation (3%). I bought this in 1998, 2000 and recently in 2006. I have made a return of around 16% per year. About half my return is in dividends.
The next to mention is Husky Energy (TSX-HSE). This is an energy company and although you can make good dividends from an energy company, dividends do tend to fluctuate. I am getting less dividends in 2010 because of a dividend decrease in 2009. I have not got much invested, nor have I made any money yet on this stock, but I expect to.
The next 3 companies are Industrials. Two of them kept their dividends flat in 2010 after reducing their dividends in 2009. The first one to discuss is Russell Metals (TSX-RUS) which reduced their dividends in 2009 by 45% and kept the dividends flat in 2010. A lot of analysts still like this stock and feel that the current dividend level is well supported by cash flow.
The next one is IESI-BFC Ltd (TSX-BIN), which is into waste disposal. This company was once a Unit Trust and they decreased their dividends in 2009. Many analysts think it is well run and that they will start to increase their dividends again in the future.
The last to talk about is Bombardier Inc. (TSX-BBD.B) I have only done very well on this stock because I bought it before the stock market bubble that send all sorts of stocks very high in 2000. I bought this stock in 1987. I did not think that it would get hurt so badly in the last recession. Although, I must admit that the Bombardier family have been working their butts off to ensure the survival and thriving of this company.
There is one last thing I would like to mention. If I were starting off my investments today, I would invest in the Tax Free Savings Account rather than an RRSP account. I did not have a choice when I started to invest. However, what ending up happening was that I invested in RRSP accounts and got tax deductions at a lower tax level than when I am now taking money from my RRSP. This is not what was supposed to happen.
Tomorrow, I will again talk about individual stocks, starting with Enbridge Income Fund Holdings.
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 first company to talk about is the utility company Transalta Corp (TSX-TA) which has not got a great record of increasing dividends. Currently, the earnings do not cover their dividends (but cash flow does). If you look at earnings estimates, it is not expect that the earnings will be greater than the dividends until 2012. However, the dividend rate on this stock is in the 4 to 5% range. I have been invested in this company since 1987 and I have made an average return of around 8% per year with over 5% per year from dividends. It is a solid, but unexciting investment.
My other utility company with no increase in distributions is Fort Chicago Energy Partners (TSX-FCE.UN). This company just changed from a Partnership to a corporation. The name has changed to Versesen Inc (TSX-VSN). They plan on keeping the dividend level for 2011, but may or may not decrease it in 2012. It should be noted that lots of income trusts and partnerships going to corporations has decreased distributions.
Canadian Tire (TSX-CTC.A) is a stock that has not been in much favor with analysts at any time, but I have done well with it earning a total return of 12% per year since buying it in 2000. It has never been consistent in raising its dividends. However, it just announced a 31% increase in dividends for 2011. The last year it raised their dividend was 2008.
I also have RioCan (TSX-REI.UN) a real estate trust that did not increase dividends this year. They are also inconsistent in rising dividends and over the long term tend to raise them in line with background inflation (3%). I bought this in 1998, 2000 and recently in 2006. I have made a return of around 16% per year. About half my return is in dividends.
The next to mention is Husky Energy (TSX-HSE). This is an energy company and although you can make good dividends from an energy company, dividends do tend to fluctuate. I am getting less dividends in 2010 because of a dividend decrease in 2009. I have not got much invested, nor have I made any money yet on this stock, but I expect to.
The next 3 companies are Industrials. Two of them kept their dividends flat in 2010 after reducing their dividends in 2009. The first one to discuss is Russell Metals (TSX-RUS) which reduced their dividends in 2009 by 45% and kept the dividends flat in 2010. A lot of analysts still like this stock and feel that the current dividend level is well supported by cash flow.
The next one is IESI-BFC Ltd (TSX-BIN), which is into waste disposal. This company was once a Unit Trust and they decreased their dividends in 2009. Many analysts think it is well run and that they will start to increase their dividends again in the future.
The last to talk about is Bombardier Inc. (TSX-BBD.B) I have only done very well on this stock because I bought it before the stock market bubble that send all sorts of stocks very high in 2000. I bought this stock in 1987. I did not think that it would get hurt so badly in the last recession. Although, I must admit that the Bombardier family have been working their butts off to ensure the survival and thriving of this company.
There is one last thing I would like to mention. If I were starting off my investments today, I would invest in the Tax Free Savings Account rather than an RRSP account. I did not have a choice when I started to invest. However, what ending up happening was that I invested in RRSP accounts and got tax deductions at a lower tax level than when I am now taking money from my RRSP. This is not what was supposed to happen.
Tomorrow, I will again talk about individual stocks, starting with Enbridge Income Fund Holdings.
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, January 7, 2011
State of My Dividends 2010
I have updated my spreadsheet on my stocks for stock I own and dividend increases for 2010, see dividends. I own 45 stocks; and of these 23 increased their dividends, 16 kept the dividends at the same level, 3 lower their dividends and 3 have no dividends. I have 4 accounts, a Trading Account, a RRSP account, a LIF (Pension money) and a Tax Free Savings Account. Some stocks are in more than one account, but most are not.
Of the three that have no dividends, only one Stantec (TSX-STN) is a really an investment. This is basically a fun investment. I find it interesting to investment is smallish companies that may do very well. I haven’t made any money on this company yet, but I expect to. I used to also have RIM (TSX-RIM), but sold it off as I had made quite a bit of money off it. RIM was also a fun investment.
For the other two companies, they were Pan Terra Industries Inc and Organic Resources Mgt Inc. I invested in these as part of a basket of small caps. I never made much money on small caps and the last recession killed most of my investments. The two remaining ones survived, but my investment is too small to bother selling at this point.
Of the three decreases in dividends, I discussed Manitoba Telecom (TSX-MBT) yesterday. Another one is Pembina. I know that everyone has talked about the dividends remaining the same at $.13 per share per month. However, the old dividend used to be $.1326 per share per month. Dropping the $.0026 is a drop of almost 2%. Did they think no one would notice? Although, I must admit, no one seems to have commented on this.
The last decrease was Alta Gas Ltd. This was planned decrease on the company moving from an Income Trust to a corporation. This is a better showing than last year where I had 7 companies that decreased their dividends.
I had four companies than did not increase their dividends in 2009 but did increase them in 2010. These were Canadian Pacific (TSX-CP), Shoppers Drug Mart (TSX-SC), Leon’s (TSX-LNF) and Richelieu Hardware (TSX-RCH). I also had two companies that increased their dividends in 2010 after lowering them in 2009. These companies were Melcor Dev (TSX-MRD) and Barclays PLC (NYSE-BCE). Barclays is my only foreign stock.
The next thing to talk about is the companies than did not increase their dividends. I have banks, like the TD (TSX-TD), Royal (TSX-RY) and BMO (TSX-BMO). None of the large banks has yet raised their dividends.
Also, other financials, like insurance companies were not into dividend rising in 2011 and I have Sun Life (TSX-SLF), Manulife Financial (TSX MFC), IGM Financial (TSX-IGM) and Power Financial (TSX_PWF) in this category. I have not seen anywhere any announcements yet on dividend rises for financials. However, a lot of analysts feel this will happen in 2011.
I also have Davis and Henderson (TSX-DHF), which is considered a financial stock. This has changed from an Income Trust to a Corporation. This company has already announced that they plan to cut the dividend from $1.84 per share to $1.20 a share for 2011. This is a 35% decrease in dividends. A lot of companies that changed to corporation have dividend decrease. This company also plans to pay dividends quarterly, not monthly in the future.
I will continue this discussion on Monday.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Of the three that have no dividends, only one Stantec (TSX-STN) is a really an investment. This is basically a fun investment. I find it interesting to investment is smallish companies that may do very well. I haven’t made any money on this company yet, but I expect to. I used to also have RIM (TSX-RIM), but sold it off as I had made quite a bit of money off it. RIM was also a fun investment.
For the other two companies, they were Pan Terra Industries Inc and Organic Resources Mgt Inc. I invested in these as part of a basket of small caps. I never made much money on small caps and the last recession killed most of my investments. The two remaining ones survived, but my investment is too small to bother selling at this point.
Of the three decreases in dividends, I discussed Manitoba Telecom (TSX-MBT) yesterday. Another one is Pembina. I know that everyone has talked about the dividends remaining the same at $.13 per share per month. However, the old dividend used to be $.1326 per share per month. Dropping the $.0026 is a drop of almost 2%. Did they think no one would notice? Although, I must admit, no one seems to have commented on this.
The last decrease was Alta Gas Ltd. This was planned decrease on the company moving from an Income Trust to a corporation. This is a better showing than last year where I had 7 companies that decreased their dividends.
I had four companies than did not increase their dividends in 2009 but did increase them in 2010. These were Canadian Pacific (TSX-CP), Shoppers Drug Mart (TSX-SC), Leon’s (TSX-LNF) and Richelieu Hardware (TSX-RCH). I also had two companies that increased their dividends in 2010 after lowering them in 2009. These companies were Melcor Dev (TSX-MRD) and Barclays PLC (NYSE-BCE). Barclays is my only foreign stock.
The next thing to talk about is the companies than did not increase their dividends. I have banks, like the TD (TSX-TD), Royal (TSX-RY) and BMO (TSX-BMO). None of the large banks has yet raised their dividends.
Also, other financials, like insurance companies were not into dividend rising in 2011 and I have Sun Life (TSX-SLF), Manulife Financial (TSX MFC), IGM Financial (TSX-IGM) and Power Financial (TSX_PWF) in this category. I have not seen anywhere any announcements yet on dividend rises for financials. However, a lot of analysts feel this will happen in 2011.
I also have Davis and Henderson (TSX-DHF), which is considered a financial stock. This has changed from an Income Trust to a Corporation. This company has already announced that they plan to cut the dividend from $1.84 per share to $1.20 a share for 2011. This is a 35% decrease in dividends. A lot of companies that changed to corporation have dividend decrease. This company also plans to pay dividends quarterly, not monthly in the future.
I will continue this discussion on Monday.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, January 6, 2011
State of My Dividends Q4 2010 2
Today, I am updating my spreadsheet on my stocks for stock I own and dividend increases for the 4th quarter of 2010, see dividends. My total dividend increases this year is quite low at just 5.3%. Low dividend increases using follow in the trail of a recession. However, because of dividend increases in the later part of 2010, my dividend income for 2011 will already be over 5% more than it was last year.
The first one to talk about today is Manitoba Telecom. This company has lowered the quarterly dividend in Oct from $.65 to $.425. This is a 35% decrease in dividends. I bought this company because of reports I read that said it was a solid company with a good yield. Things did not turn out very well. Since 2006, I have sold a third of the stock I bought. Now, 5 years later, all I can say is that I have broken even on this stock.
I am currently earning a 4.4% return (dividend yield) on my original investment. The current dividend yield on this stock is better at 6%. Analysts are divided on this stock giving it recommendations of Buy, Hold, Underperform and Sell. Vast majority are of the Hold kind. A number still feel is a good stock for an income portfolio. See my spreadsheet.
Melcor Developments Inc is in real estate. They pay dividends semi-annually. Their recent increase in dividends is a health 33%. However, this company has a habit of decreasing as well as increasing their dividends. Therefore, the increase to a semi-annual $.20 dividend is not assured. They payout what they can afford and sometimes pay out special dividends.
This has been a good investment. I have had this stock from 2008 and I have made just over 15% per year. Approximately 5% of my return is in dividends. See my spreadsheet.
Pareto Corp has raised their dividends twice this year, in April and October. The increase in dividends is at 100%, that is, they have doubled their dividend payments. For people who have had this stock for 5 or 10 years, they would have made around 15% per year. I only bought this stock in 2009 and 2010, when the stock was down, so I have earned some 135% per year. This stock has only paid dividends since 2008.
Because it is a dividend paying small cap, I have used it as a filler. That is, I have used small bits of money I had to invest by buying this company. I started to buy it when it was $.75 per share. It is now at $2.40 a share. See my spreadsheet.
Toromont Industries have raised their dividend in Oct from $.15to $.16. This is a 6.7% raise. This a lot lower than the 5 year average of 17.8% and also a bit less than the 7.1% of last year. However, we are just coming out of a recession and this probably all they can afford to do.
I bought this stock in 2007 and 2008; and I have made a return of around 6.4% per year. About 2% of my return would be dividends. I still think that this is a good stock for the long term. See my spreadsheet.
Tomorrow I will talk about how all my stocks did as far as dividends go in 2010.
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 first one to talk about today is Manitoba Telecom. This company has lowered the quarterly dividend in Oct from $.65 to $.425. This is a 35% decrease in dividends. I bought this company because of reports I read that said it was a solid company with a good yield. Things did not turn out very well. Since 2006, I have sold a third of the stock I bought. Now, 5 years later, all I can say is that I have broken even on this stock.
I am currently earning a 4.4% return (dividend yield) on my original investment. The current dividend yield on this stock is better at 6%. Analysts are divided on this stock giving it recommendations of Buy, Hold, Underperform and Sell. Vast majority are of the Hold kind. A number still feel is a good stock for an income portfolio. See my spreadsheet.
Melcor Developments Inc is in real estate. They pay dividends semi-annually. Their recent increase in dividends is a health 33%. However, this company has a habit of decreasing as well as increasing their dividends. Therefore, the increase to a semi-annual $.20 dividend is not assured. They payout what they can afford and sometimes pay out special dividends.
This has been a good investment. I have had this stock from 2008 and I have made just over 15% per year. Approximately 5% of my return is in dividends. See my spreadsheet.
Pareto Corp has raised their dividends twice this year, in April and October. The increase in dividends is at 100%, that is, they have doubled their dividend payments. For people who have had this stock for 5 or 10 years, they would have made around 15% per year. I only bought this stock in 2009 and 2010, when the stock was down, so I have earned some 135% per year. This stock has only paid dividends since 2008.
Because it is a dividend paying small cap, I have used it as a filler. That is, I have used small bits of money I had to invest by buying this company. I started to buy it when it was $.75 per share. It is now at $2.40 a share. See my spreadsheet.
Toromont Industries have raised their dividend in Oct from $.15to $.16. This is a 6.7% raise. This a lot lower than the 5 year average of 17.8% and also a bit less than the 7.1% of last year. However, we are just coming out of a recession and this probably all they can afford to do.
I bought this stock in 2007 and 2008; and I have made a return of around 6.4% per year. About 2% of my return would be dividends. I still think that this is a good stock for the long term. See my spreadsheet.
Tomorrow I will talk about how all my stocks did as far as dividends go in 2010.
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, January 5, 2011
State of My Dividends Q4 2010
Today, I am updating my spreadsheet on my stocks for stock I own and dividend increases for the 4th quarter of 2010, see dividends. My total dividend increases this year is quite low at just 5.3%. Low dividend increases using follow in the trail of a recession. However, because of dividend increases in the later part of 2010, my dividend income for 2011 will already be over 5% more than it was last year. I cannot wait to see what happens when the banks again start to increase their dividends.
For all the stocks I own, I have shown in the “10” (for 2010) column, if a company has actually increased their dividend yet for the current year of 2010. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2010.
For the last quarter of 2010, I have had 8 companies that changed their dividends (these dividends are in blue to distinguish them from changes that occurred in other quarters). Since I do dividend calculations based on the applicable company’s financial year, I have also started columns for 2011. There are changes shown 2011 because when a company increases or decreases its dividend part way through their financial year, the total dividends for the following financial year will also be affected.
The first stock to discuss is Alimentation Couche Tard (TSX-ATD.B). This stock is a retail stock and such stocks tend to do badly in a recession. However, this stock has been recovering and it stock price is now back to its highs of 2007. Also, Alimentation Couche Tard has raised their dividend twice this year, once in Mar and now again in December. This latest rise is a 25% one with the dividend going from $.04 a share to $.05 a share.
I first bought this stock in 2004 and some more in 2006 and 2007. I have made a total return on this stock of just over 11% per year. However, less than 1% of this return is in dividends as the dividend yield is very low. The average 5 year yield is just .7% and I am making only 1.4% on my investment. The dividend potential on this stock is not very high, although they do have very nice dividend increases. See my spreadsheet.
The next stock to talk about is BCE (TSX-BCE). This stock also has raised their dividends twice this year, once in April and once again in October. The April increase was for 7.4% and the second one just over 5%. This means that the dividends were raised almost 13% this year. This is a very good showing. The stock has also been recovering, but it is not yet back to highs of 2007.
On this stock 4 to 4.5% of the total return would be in dividends. This is one of the first stocks that I bought. I got some for my trading account in 1982. It is rather hard to judge how well I have done because of the splitting off of Nortel in 2000 and Bell Aliant in 2006. Needless to say, this stock has not done well over the past 10 years and was certainly languishing until the Teachers’ Pension Fund tried to buy it. See my spreadsheet.
Computer Modelling Group Ltd (TSX-CMG) has certainly been a great company for me. It is a dividend paying small cap. Computer Modelling Group Ltd has raised their dividends twice this year, once in September and now again in December. The first dividend rise was for 5.6% and the second was for 5.3% for a total rise of 11% this year. They also paid a special dividend in June. They had paid a special dividend last year too, so the total dividend this year equals the total dividend paid last year.
I first bought this stock in 2008 and then some more in 2009. I have to date, make a return on my investment of 54% per year. About 8% of my total return is in dividends. I probably will not buy any more as my current investment would probably be too large for my portfolio soon enough. See my spreadsheet.
The last stock to talk about today is Leon's Furniture Ltd (TSX-LNF). This is another rather small cap dividend paying stock. Leon’s raised dividends in Oct 2010. The dividends for this stock increased at the rate of 28.6%. However, since last year they gave out a very good special dividend, my total dividends on this stock this year is less than last year.
I first bought this stock in 2006 and I have made a return of 11.5% per year on this stock. The part of my total return in dividends is probably around 3.5%. See my spreadsheet.
I will talk about my last four stocks with dividend changes tomorrow.
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.
For all the stocks I own, I have shown in the “10” (for 2010) column, if a company has actually increased their dividend yet for the current year of 2010. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2010.
For the last quarter of 2010, I have had 8 companies that changed their dividends (these dividends are in blue to distinguish them from changes that occurred in other quarters). Since I do dividend calculations based on the applicable company’s financial year, I have also started columns for 2011. There are changes shown 2011 because when a company increases or decreases its dividend part way through their financial year, the total dividends for the following financial year will also be affected.
The first stock to discuss is Alimentation Couche Tard (TSX-ATD.B). This stock is a retail stock and such stocks tend to do badly in a recession. However, this stock has been recovering and it stock price is now back to its highs of 2007. Also, Alimentation Couche Tard has raised their dividend twice this year, once in Mar and now again in December. This latest rise is a 25% one with the dividend going from $.04 a share to $.05 a share.
I first bought this stock in 2004 and some more in 2006 and 2007. I have made a total return on this stock of just over 11% per year. However, less than 1% of this return is in dividends as the dividend yield is very low. The average 5 year yield is just .7% and I am making only 1.4% on my investment. The dividend potential on this stock is not very high, although they do have very nice dividend increases. See my spreadsheet.
The next stock to talk about is BCE (TSX-BCE). This stock also has raised their dividends twice this year, once in April and once again in October. The April increase was for 7.4% and the second one just over 5%. This means that the dividends were raised almost 13% this year. This is a very good showing. The stock has also been recovering, but it is not yet back to highs of 2007.
On this stock 4 to 4.5% of the total return would be in dividends. This is one of the first stocks that I bought. I got some for my trading account in 1982. It is rather hard to judge how well I have done because of the splitting off of Nortel in 2000 and Bell Aliant in 2006. Needless to say, this stock has not done well over the past 10 years and was certainly languishing until the Teachers’ Pension Fund tried to buy it. See my spreadsheet.
Computer Modelling Group Ltd (TSX-CMG) has certainly been a great company for me. It is a dividend paying small cap. Computer Modelling Group Ltd has raised their dividends twice this year, once in September and now again in December. The first dividend rise was for 5.6% and the second was for 5.3% for a total rise of 11% this year. They also paid a special dividend in June. They had paid a special dividend last year too, so the total dividend this year equals the total dividend paid last year.
I first bought this stock in 2008 and then some more in 2009. I have to date, make a return on my investment of 54% per year. About 8% of my total return is in dividends. I probably will not buy any more as my current investment would probably be too large for my portfolio soon enough. See my spreadsheet.
The last stock to talk about today is Leon's Furniture Ltd (TSX-LNF). This is another rather small cap dividend paying stock. Leon’s raised dividends in Oct 2010. The dividends for this stock increased at the rate of 28.6%. However, since last year they gave out a very good special dividend, my total dividends on this stock this year is less than last year.
I first bought this stock in 2006 and I have made a return of 11.5% per year on this stock. The part of my total return in dividends is probably around 3.5%. See my spreadsheet.
I will talk about my last four stocks with dividend changes tomorrow.
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, January 4, 2011
Shoppers Drug Mart 2
This is the company (TSX-SC) I have bought for my Tax Free Savings Account. The stock has not done very well since I have bought it. To date, my total return, including dividends, is -9.7% per year. Just under 2% of my return is in dividends. This stock on one of the dividend lists that I follow of Dividend Aristocrats (see indices).
When I look at the insider trading reports, I find that there was an extremely minor bit of insider buying in February 2010. There has been no insider selling over the past 12 months. This is a stock where the insiders have far more stock options than shares. However, the insiders seem to be retaining their stock options. Of course, the company showed faith in future earnings by increasing the dividends in 2010.
I get a 5 year median low Price/Earnings Ratio of 16 and a 5 year median high P/E Ratio of 21.3. Because of recent trouble, this company has been having the P/E Ratios have to dropping. The current P/E ratio I get is 14.2. Sites that use the last 12 months of earnings to get a current P/E Ratio have a slightly higher one of 14.7. The P/E ratios are comparatively low for this stock. In absolute terms, the P/E Ratios are moderate.
I get a Graham Price of $34.41 so; the current stock price of $39.53 is some 15% above this price. On a relative basis, this is good for this stock. 2010 was the first year that this stock fell below the Graham Price and it was some 4% lower. The 10 year average low is 50% above the Graham price. The current dividend yield is 2.3% and the 5 year average is just 1.6%. The last thing to look at is the Price/Book Value Ratio and at 2.10, it is only some 62% of the 10 year average of 3.38.
On a lot of scores, the current price looks cheap. The problem when a stock price looks cheap is that it could be cheap for very good reasons. In the case of this stock, it has had problems with this recession and also because of the new Ontario Legislation that reset the price for generic drugs. B. C, Alberta and Quebec have also announced that they will cut the price of generic drugs, but not as severely as Ontario has. However, if a stock has short term problems that they can overcome, then getting the stock cheap can be an advantage.
When I look at analysts recommendations, I find Strong Buy, Buy, Hold and Sell recommendations. Most of the recommendations are a Hold. There is only 1 Sell that I can find. The consensus recommendations would be a Hold. (See my site for information on analyst ratings.)
Analysts with the Hold recommendations give a 12 month stock price between $40 and $41. The Analysts with the Strong Buy and Buy recommendations say that it is a long term buy. No one expect this stock to do well over the next year and say that recovering will be over the next year or 2 years. Analysts with Hold recommendations say the same thing. They all think that this company has a strong balance sheet and good management.
This is a low dividend and average to higher risk retail stock. It is not one to start a portfolio with, but could be one to purchase after you have enough in utility and financials stocks in your portfolio. The problem with retail stock is that they tend to get hit hard whenever there is a recession. You probably need a large, well diversified portfolio to consider this stock.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers . See my spreadsheet at sc.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 reports, I find that there was an extremely minor bit of insider buying in February 2010. There has been no insider selling over the past 12 months. This is a stock where the insiders have far more stock options than shares. However, the insiders seem to be retaining their stock options. Of course, the company showed faith in future earnings by increasing the dividends in 2010.
I get a 5 year median low Price/Earnings Ratio of 16 and a 5 year median high P/E Ratio of 21.3. Because of recent trouble, this company has been having the P/E Ratios have to dropping. The current P/E ratio I get is 14.2. Sites that use the last 12 months of earnings to get a current P/E Ratio have a slightly higher one of 14.7. The P/E ratios are comparatively low for this stock. In absolute terms, the P/E Ratios are moderate.
I get a Graham Price of $34.41 so; the current stock price of $39.53 is some 15% above this price. On a relative basis, this is good for this stock. 2010 was the first year that this stock fell below the Graham Price and it was some 4% lower. The 10 year average low is 50% above the Graham price. The current dividend yield is 2.3% and the 5 year average is just 1.6%. The last thing to look at is the Price/Book Value Ratio and at 2.10, it is only some 62% of the 10 year average of 3.38.
On a lot of scores, the current price looks cheap. The problem when a stock price looks cheap is that it could be cheap for very good reasons. In the case of this stock, it has had problems with this recession and also because of the new Ontario Legislation that reset the price for generic drugs. B. C, Alberta and Quebec have also announced that they will cut the price of generic drugs, but not as severely as Ontario has. However, if a stock has short term problems that they can overcome, then getting the stock cheap can be an advantage.
When I look at analysts recommendations, I find Strong Buy, Buy, Hold and Sell recommendations. Most of the recommendations are a Hold. There is only 1 Sell that I can find. The consensus recommendations would be a Hold. (See my site for information on analyst ratings.)
Analysts with the Hold recommendations give a 12 month stock price between $40 and $41. The Analysts with the Strong Buy and Buy recommendations say that it is a long term buy. No one expect this stock to do well over the next year and say that recovering will be over the next year or 2 years. Analysts with Hold recommendations say the same thing. They all think that this company has a strong balance sheet and good management.
This is a low dividend and average to higher risk retail stock. It is not one to start a portfolio with, but could be one to purchase after you have enough in utility and financials stocks in your portfolio. The problem with retail stock is that they tend to get hit hard whenever there is a recession. You probably need a large, well diversified portfolio to consider this stock.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers . See my spreadsheet at sc.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, January 3, 2011
Shoppers Drug Mart
This is the company (TSX-SC) I have bought for my Tax Free Savings Account. The stock has not done very well since I have bought it. To date, my total return, including dividends, is -9.7% per year. Just under 2% of my return is in dividends. The only reason my TFSA has done well is the small cap dividend paying companies I have bought for filler. (That is, I bought them with the small amount of money left over after my main purchase of Shoppers.) The first company I used was Matrikon, which was subsequently bought out. Currently, I have some Pareto (TSX_PTO) as a filler in this account.
People who invested in the company for a longer period of time than I have would have more of their total return in dividends because the average increase in dividends was 20% before 2009. Dividend increases have been a round 5% since 2009, with dividends actually paid in 2010 lower because the dividend increase was instituted after the first dividend payment. At the moment, I am making a 2% dividend yield on my investment. This stock currently has a 2.3% dividend yield, which is better than usual for this company.
The dividend potential of this stock is probably much lower than the 5 year average growth of 17%. I am usually conservative, but no one thinks that this stock is going to do all that well over the next 2 years. Using a dividend growth of 5%, the dividend potential on this stock is around 2.9% in 5 years time and around 3.7% in 10 years time. The dividend potential is basically, what sort of dividend yield you could be making in 5 or 10 years time on an investment today in this stock.
Except for cash flow, all the 10 year growth figures are better than the 5 year ones. The 5 and 10 years growth in revenues is 8% and 13% per year respectively. The growth in cash flow is the reverse, with the 5 and 10 year growth being at 12% and 8% per year, respectively. The only growth rates that suck is that for total return over the past 5 years and if you held this stock for 5 years at the minimum, your total return would be around 0%, including dividends. That means that you would have broken even.
The reason for the low total returns is that this company was considered a growth stock, and as such, had quite high Price/Earnings Ratios prior to 2009. However, since 2009, the P/E Ratios have come down substantially. The average low P/E Ratios before 2009 was around 20, but currently they are around 16. The current P/E Ratio is even lower at around 14. A low P/E ratio around 16 is a moderate P/E ratio, not low one.
For this stock, the Liquidity Ratio of 1.86 is very good and the 5 year average of 1.24 is ok. The Asset/Liability ratio has always been quite high. The current A/L Ratio is 2.55 and the 5 year average is 2.37. Any ratio over 1.50 is good. The Asset/Book Value or Leverage Ratio is good at a slight below average one of 1.82.
I have updated my spreadsheet with the figures I can for the financial year ending around the end of December 2010. These are in black. The financial figures that cover the 12 month period to 9 October 2010 are in purple. Tomorrow, I will talk about what the analysts say about this stock. I will also talk about what my spreadsheet says about the current stock price.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers . See my spreadsheet at sc.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.
People who invested in the company for a longer period of time than I have would have more of their total return in dividends because the average increase in dividends was 20% before 2009. Dividend increases have been a round 5% since 2009, with dividends actually paid in 2010 lower because the dividend increase was instituted after the first dividend payment. At the moment, I am making a 2% dividend yield on my investment. This stock currently has a 2.3% dividend yield, which is better than usual for this company.
The dividend potential of this stock is probably much lower than the 5 year average growth of 17%. I am usually conservative, but no one thinks that this stock is going to do all that well over the next 2 years. Using a dividend growth of 5%, the dividend potential on this stock is around 2.9% in 5 years time and around 3.7% in 10 years time. The dividend potential is basically, what sort of dividend yield you could be making in 5 or 10 years time on an investment today in this stock.
Except for cash flow, all the 10 year growth figures are better than the 5 year ones. The 5 and 10 years growth in revenues is 8% and 13% per year respectively. The growth in cash flow is the reverse, with the 5 and 10 year growth being at 12% and 8% per year, respectively. The only growth rates that suck is that for total return over the past 5 years and if you held this stock for 5 years at the minimum, your total return would be around 0%, including dividends. That means that you would have broken even.
The reason for the low total returns is that this company was considered a growth stock, and as such, had quite high Price/Earnings Ratios prior to 2009. However, since 2009, the P/E Ratios have come down substantially. The average low P/E Ratios before 2009 was around 20, but currently they are around 16. The current P/E Ratio is even lower at around 14. A low P/E ratio around 16 is a moderate P/E ratio, not low one.
For this stock, the Liquidity Ratio of 1.86 is very good and the 5 year average of 1.24 is ok. The Asset/Liability ratio has always been quite high. The current A/L Ratio is 2.55 and the 5 year average is 2.37. Any ratio over 1.50 is good. The Asset/Book Value or Leverage Ratio is good at a slight below average one of 1.82.
I have updated my spreadsheet with the figures I can for the financial year ending around the end of December 2010. These are in black. The financial figures that cover the 12 month period to 9 October 2010 are in purple. Tomorrow, I will talk about what the analysts say about this stock. I will also talk about what my spreadsheet says about the current stock price.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers . See my spreadsheet at sc.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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