This is a stock (TSX-TIH) I own. I bought this stock first in 2007 and some more in 2008. I have made a return on 6.6% per year with probably 2% per year being from dividends. The company has been raising their dividend each year for sometime and there is no reason to suspect that they will not do so this year also. Their Payout Ratios are reasonable.
When I look at the insider trading I find that there has been some $3.6M Insider Selling over the past year, mainly at the end of 2010 and this seems mostly to be selling of stock options. There has been no Insider Buying. Except for the CFO, insiders have more shares than stock options. The CEO owns some 2.4% of this company. Also, an investment firm owns 9.5% of this company. So, most of this information is positive or nothing to be worried about.
When I look at the Price/Earnings Ratios, I find the 5 year median low to be 11.9 and the 5 year median high to be 16. The current P/E Ratio of 16 is therefore on the high side. The P/E ratios for 2010 ranged from 17.8 to 24.6, with a trailing P/E Ratios of from 12.3 to 17. I get a current Graham Price of $26.19 and the current stock price of $30.52 is 16.6% higher. The 10 year median difference between the Graham Price and the stock price is 27.5%. So this stock price by this measure is better than average.
I get a 10 year median Price/Book Value Ratio of 2.45. The current one at 1.95 is only 80% of this P/B Ratio, so this points to a good current stock price. I get a 5 year median dividend yield of 2.1% and a current year of 2.1%, so this shows a very average type price.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. There are just as many Strong Buy as Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Buy recommendations come with a 12 month stock price of $35 and those with a Strong Buy recommendation with a 12 month stock price of $40.
A couple of analysts said that this company did very well during the last 3 months to December 2010. One analyst thought that because of the turmoil in the Middle East our oil patch will do very well, with Toromont profiting from increase in business. See an interesting article about Enerflex and Toromont at Buy Sell Adviser. Toromont has decided, again, to spin off Enerflex. See Marketwire.
I am pleased with my investment in this company and will hold on to the share I have, but I will not be buying more as I have enough of this stock.
There are two sections to this company. The Equipment Group is for Caterpillar dealerships. The Compression Group designs, engineers, fabricate and install compression systems for natural gas, fuel gas and carbon dioxide. This last group also has industrial and recreational refrigeration systems. Its web site is here TransCanada. See my spreadsheet at tih.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, March 31, 2011
Wednesday, March 30, 2011
Toromont Industries Ltd
This is a stock (TSX-TIH) I own. I bought this stock first in 2007 and some more in 2008. I have made a return on 6.6% per year with probably 2% per year being from dividends. The total return on this stock over the last 5 years has been low at around 5.8% per year. I reason I have done better is that I bought more stock at the low point in 2008. Over the past 10 years, the return has been much better at around 15% per year.
Still dividends are low and portion of the 10 year return attributable to dividends would be around 2% per year. The current dividend run around 2.1/% and the 5 year average is around 2.1%. However, the dividend growth has been good with 5 and 10 year growth rates at 14% per year. The dividend potential after 10 years at 14% growth would be around 7.8%. However, if you shave around 2% per year off this for inflation, the dividend growth potential in 10 years time would be around 6.5%.
For this stock, the 10 year growth rates are much better than the 5 year growth rates. In fact, the last couple of years have not been kind to this stock. For example, the 5 and 10 year growth rates for revenues are 4% per year and 8% per year, respectively. For cash flows and earnings, there is no 5 year growth, but the 10 year growth figures are 9% per year.
The best growth rates are in book value, and for the 5 and 10 year periods, they have grown at 15% per year. The Return on Equity has generally been good with the ROE for 2010 at 8.2% and the 5 year median ROE at 17.6%.
The last thing to talk about is debt ratios. All these ratios are fine. The Liquidity Ratio is for 2010 is 1.83 and it has a 5 year average of 2.08. The Asset/Liability Ratio is 2.14 and it has a 5 year average of 2.11. What you want to see in these ratios are ones at 1.50 or higher. The Leverage Ratio is 1.88 with a 5 year average of 2.13 and the Debt/Equity Ratio is 0.88 with a 5 year average of 1.13. With these two ratios, lower is better.
I have pleased with my investment in this company. Toromont is on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). The dividend increase last year was 6.7%. This is lower than the 5 year average and the increases have been lower over the last couple of years. I think this is sensible so that Payout Ratios remain sustainable.
There are two sections to this company. The Equipment Group is for Caterpillar dealerships. The Compression Group designs, engineers, fabricate and install compression systems for natural gas, fuel gas and carbon dioxide. This last group also has industrial and recreational refrigeration systems. Its web site is here TransCanada. See my spreadsheet at tih.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.
Still dividends are low and portion of the 10 year return attributable to dividends would be around 2% per year. The current dividend run around 2.1/% and the 5 year average is around 2.1%. However, the dividend growth has been good with 5 and 10 year growth rates at 14% per year. The dividend potential after 10 years at 14% growth would be around 7.8%. However, if you shave around 2% per year off this for inflation, the dividend growth potential in 10 years time would be around 6.5%.
For this stock, the 10 year growth rates are much better than the 5 year growth rates. In fact, the last couple of years have not been kind to this stock. For example, the 5 and 10 year growth rates for revenues are 4% per year and 8% per year, respectively. For cash flows and earnings, there is no 5 year growth, but the 10 year growth figures are 9% per year.
The best growth rates are in book value, and for the 5 and 10 year periods, they have grown at 15% per year. The Return on Equity has generally been good with the ROE for 2010 at 8.2% and the 5 year median ROE at 17.6%.
The last thing to talk about is debt ratios. All these ratios are fine. The Liquidity Ratio is for 2010 is 1.83 and it has a 5 year average of 2.08. The Asset/Liability Ratio is 2.14 and it has a 5 year average of 2.11. What you want to see in these ratios are ones at 1.50 or higher. The Leverage Ratio is 1.88 with a 5 year average of 2.13 and the Debt/Equity Ratio is 0.88 with a 5 year average of 1.13. With these two ratios, lower is better.
I have pleased with my investment in this company. Toromont is on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). The dividend increase last year was 6.7%. This is lower than the 5 year average and the increases have been lower over the last couple of years. I think this is sensible so that Payout Ratios remain sustainable.
There are two sections to this company. The Equipment Group is for Caterpillar dealerships. The Compression Group designs, engineers, fabricate and install compression systems for natural gas, fuel gas and carbon dioxide. This last group also has industrial and recreational refrigeration systems. Its web site is here TransCanada. See my spreadsheet at tih.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, March 29, 2011
TransCanada Corp 2
I first bought this stock (TSX-TRP) in 2000. I bought more shares of this company in 2006 and my total return to date is 11.5% per year. Approximately 5% of this return would be in dividend income. The growth potential of dividends for this company at a 5% increase would be 7% after 10 years. The current dividend yield is 4.3%.
When I look at Insider Trading, I find net Insider Selling at $25M. Insider buying is so minor that it is not worthwhile to report. All the selling seems to be of stock options. This company’s insiders, except for Directors, have more options than shares. However, this selling is less than .1% of the market value of this stock. This company has just raised their dividend by 5%. It is a cautious move and it still lowers the the expected payout ratios from earnings to 73% from 89% and payout from cash flow to 33% from 36%. It shows the management of this company has faith in the future earnings of this TransCanada.
My spreadsheet gives me an 5 year median low Price/Earnings Ratio of 14 and a 5 year median high P/E of 18. I get a current P/E ratio of 17 based on 2011 expected earnings. For 2011, I get a Graham Price of $35.03 and this is 11% lower than the current stock price of $38.90. Over the past 5 years, the average stock price has been 14% above its applicable Graham Price. (See my site for information on calculating Graham Price.) The P/E Ratio shows a higher than average stock price and the Graham Price comparison show a lower than average stock price.
When I look at the Price/Book Value Ratios, I get a 10 year average of 1.96 and a current one of 1.62. The current P/B Ratio is 83% lower than the 10 year average. This shows a relatively good price. The current yield is 4.3% and the 5 year average is 4%. So this shows a better than average price. All this shows a relatively average price and this is probably the best you can hope when buying a stock.
When I look at analysts recommendations, I find lots of Strong Buy, a few Buy and then fewer Hold recommendations. The consensus recommendations would be a Strong Buy. (See my site for information on analyst ratings.) Analysts saying the stock is a Buy, give a 12 months stock price around $42.25. One analyst recommended buying this company for income and said it was North America’s premier pipeline company.
A number of analysts pointed out that the company has shown very solid results in the 4th quarter for 2010. Another acknowledged that this company has had recent bumpy ride, but feel the company’s future is bright. At Option Matters blogger Richard Croft talks about opportunities for TransCanada. Analysts with Strong Buy recommendations talk about this company being a big blue chip utility and a core holding. An analyst with a Buy recommendation feared there might be some dilution in this stock because of future capital spending. An analyst with a Hold recommendation liked other stocks, like Enbridge (TSX-ENB) and Inter Pipeline (TSX-IPL) better and because he thought TransCanada was expensive at the moment.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at Insider Trading, I find net Insider Selling at $25M. Insider buying is so minor that it is not worthwhile to report. All the selling seems to be of stock options. This company’s insiders, except for Directors, have more options than shares. However, this selling is less than .1% of the market value of this stock. This company has just raised their dividend by 5%. It is a cautious move and it still lowers the the expected payout ratios from earnings to 73% from 89% and payout from cash flow to 33% from 36%. It shows the management of this company has faith in the future earnings of this TransCanada.
My spreadsheet gives me an 5 year median low Price/Earnings Ratio of 14 and a 5 year median high P/E of 18. I get a current P/E ratio of 17 based on 2011 expected earnings. For 2011, I get a Graham Price of $35.03 and this is 11% lower than the current stock price of $38.90. Over the past 5 years, the average stock price has been 14% above its applicable Graham Price. (See my site for information on calculating Graham Price.) The P/E Ratio shows a higher than average stock price and the Graham Price comparison show a lower than average stock price.
When I look at the Price/Book Value Ratios, I get a 10 year average of 1.96 and a current one of 1.62. The current P/B Ratio is 83% lower than the 10 year average. This shows a relatively good price. The current yield is 4.3% and the 5 year average is 4%. So this shows a better than average price. All this shows a relatively average price and this is probably the best you can hope when buying a stock.
When I look at analysts recommendations, I find lots of Strong Buy, a few Buy and then fewer Hold recommendations. The consensus recommendations would be a Strong Buy. (See my site for information on analyst ratings.) Analysts saying the stock is a Buy, give a 12 months stock price around $42.25. One analyst recommended buying this company for income and said it was North America’s premier pipeline company.
A number of analysts pointed out that the company has shown very solid results in the 4th quarter for 2010. Another acknowledged that this company has had recent bumpy ride, but feel the company’s future is bright. At Option Matters blogger Richard Croft talks about opportunities for TransCanada. Analysts with Strong Buy recommendations talk about this company being a big blue chip utility and a core holding. An analyst with a Buy recommendation feared there might be some dilution in this stock because of future capital spending. An analyst with a Hold recommendation liked other stocks, like Enbridge (TSX-ENB) and Inter Pipeline (TSX-IPL) better and because he thought TransCanada was expensive at the moment.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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, March 28, 2011
TransCanada Corp
I first bought this stock (TSX-TRP) in 2000, after they lowered their dividends because of restructuring. They upset a lot of investors and the stock price plummeted. On these shares, I have made a return of 18.6% per year. About 6.4% of that return is dividend income. I bought more shares of this company in 2006 and my total return to date is 11.5% per year. Approximately 5% of this return would be in dividend income.
My total return on the stock I bought in 2006 would be around 7% per year, with approximately 4% of this return in dividend income. As you can see from this, the total return has not been great over the past few years. In fact, Revenue, Earnings and Cash Flow having been declining over the past couple of years (2009 and 2010). However, analysts expect all these items to be much better for the financial year ending in 2011.
Because of the recent declines in revenue, the 5 and 10 year growth figures are poor with revenue per share growth being negative for the last 5 years and at just 3% per year for the last 10 years. The earnings per share have likewise been poor with negative growth for the last 5 years and at just 2% per year for the last 10 year.
The cash flow per share has been better. The 5 year growth is at 5.2% per year. The only reason that the 10 year growth rate is negative is because the cash flow 10 years ago was higher than usual. Without this higher than usual cash flow 10 years ago, the growth would be in the 6% range. The growth in book value is fine with the 5 and 10 year growth at 8% per year.
When looking at debt ratios, I find that the Liquidity Ratio is low, but it has a tendency to be low on this type of company. The Liquidity Ratio for 2010 is 0.57. The Asset/Liability Ratio is much better at 1.62. The Leverage Ratio at 2.79 and the Debt/Equity Ratio of 1.72 are both fine. The Return on Equity for 2010 is ok at 7.3% and the 5 year average is better at 10.5%.
I am happy with my investment in this company. They are on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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.
My total return on the stock I bought in 2006 would be around 7% per year, with approximately 4% of this return in dividend income. As you can see from this, the total return has not been great over the past few years. In fact, Revenue, Earnings and Cash Flow having been declining over the past couple of years (2009 and 2010). However, analysts expect all these items to be much better for the financial year ending in 2011.
Because of the recent declines in revenue, the 5 and 10 year growth figures are poor with revenue per share growth being negative for the last 5 years and at just 3% per year for the last 10 years. The earnings per share have likewise been poor with negative growth for the last 5 years and at just 2% per year for the last 10 year.
The cash flow per share has been better. The 5 year growth is at 5.2% per year. The only reason that the 10 year growth rate is negative is because the cash flow 10 years ago was higher than usual. Without this higher than usual cash flow 10 years ago, the growth would be in the 6% range. The growth in book value is fine with the 5 and 10 year growth at 8% per year.
When looking at debt ratios, I find that the Liquidity Ratio is low, but it has a tendency to be low on this type of company. The Liquidity Ratio for 2010 is 0.57. The Asset/Liability Ratio is much better at 1.62. The Leverage Ratio at 2.79 and the Debt/Equity Ratio of 1.72 are both fine. The Return on Equity for 2010 is ok at 7.3% and the 5 year average is better at 10.5%.
I am happy with my investment in this company. They are on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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, March 25, 2011
RioCan Real Estate 2
I first bought this stock (TSX-REI.UN) for my RRSP account in January 1998 then I bought some for my Trading account in April 2000 and some more in January 2002. In June 2006, and in December 2010, I bought this stock for the Locked-in Pension account. I have made a total return on this stock of 17.1% per year.
When I look at Insider Trading, I find $10m of Insider Selling and $.5M of Insider Buying for a net Insider Selling of $9.5M. Insider selling seems to be of options and some gifting. Insiders’ own some shares, but have far more options than shares. The number of shares owned by insiders really hasn’t changed at all over the past year. No insider owns a significant number of shares.
The 5 year median low Price/Earnings Ratio is 21.1 and the 5 year median high P/E Ratio is 31.5. The current P/E Ratio of 18.1 is relatively low, but not low on an absolute basis. I get a Graham Price of $15.62. The current stock price of $23.69 is 52% above this. On average, the stock price has been some 40% above the Graham Price. On average, the high stock prices have been some 62% above the Graham Price. So this shows a relatively big difference, but not an extreme one for this stock.
I get a 5 and 10 year average Price/Book Value Ratio of 2.55 and 2.20, respectively. The current P/B Ratio at 2.86 is some 12% higher than the 5 year average and 30% higher than the 10 year average. This is unsurprising, as the Book Value has not grown over the past 5 and 10 years. The current yield is 5.83%. The 5 year average yield is 6.9%. The 5 year average low yield is 5.75%. So this points to a higher than average price, but not quite to a relatively high stock price.
When I look at the Price/Funds from Operation Ratio, I get a current one of 15.59, a 5 year average of 14.20 and a 5 year average high of 16.83. Here again, it shows that the current price is higher than average, but not quite to a relatively high price.
When I looked at analysts recommendations, I find Strong Buy, Buy and Hold. The consensus is probably a Buy. There are, however, lots of Hold recommendations. (See my site for information on analyst ratings.)
It would seem that analysts with a Hold rating feel that this stock is overpriced. A number of analysts, no matter what their recommendations, feel that this company has excellent manager. They also feel that the company will benefit from Target coming to Canada. The advantages to REITs are the high tax efficient yield and the ability of the REITS to grow distributions, at minimum, in line with inflation.
I have done very well in this stock. The stock I bought in 1998 is giving me a current 13% yield on my original money and stock I bought in 2000, some 11 years ago, is giving me a current return on my original investment of 17.2%. This stock has a Beta of .742 (according to the Globe and Mail). This means that the stock is less volatile that the market (TSX). I feel that this stock has given me a nice income over the years and has also given me some portfolio diversification.
I know that this stock had a rough year in 2009, but overall, I am pleased with my investment.
For a blog entry talking about this company and Target see Iewy News. For a blog talking about this stock in connection with technical analysis see Trade Online.ca.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. This stock is rated STA-2M by DBRS. Its web site is here RioCan. See my spreadsheet at rei.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at Insider Trading, I find $10m of Insider Selling and $.5M of Insider Buying for a net Insider Selling of $9.5M. Insider selling seems to be of options and some gifting. Insiders’ own some shares, but have far more options than shares. The number of shares owned by insiders really hasn’t changed at all over the past year. No insider owns a significant number of shares.
The 5 year median low Price/Earnings Ratio is 21.1 and the 5 year median high P/E Ratio is 31.5. The current P/E Ratio of 18.1 is relatively low, but not low on an absolute basis. I get a Graham Price of $15.62. The current stock price of $23.69 is 52% above this. On average, the stock price has been some 40% above the Graham Price. On average, the high stock prices have been some 62% above the Graham Price. So this shows a relatively big difference, but not an extreme one for this stock.
I get a 5 and 10 year average Price/Book Value Ratio of 2.55 and 2.20, respectively. The current P/B Ratio at 2.86 is some 12% higher than the 5 year average and 30% higher than the 10 year average. This is unsurprising, as the Book Value has not grown over the past 5 and 10 years. The current yield is 5.83%. The 5 year average yield is 6.9%. The 5 year average low yield is 5.75%. So this points to a higher than average price, but not quite to a relatively high stock price.
When I look at the Price/Funds from Operation Ratio, I get a current one of 15.59, a 5 year average of 14.20 and a 5 year average high of 16.83. Here again, it shows that the current price is higher than average, but not quite to a relatively high price.
When I looked at analysts recommendations, I find Strong Buy, Buy and Hold. The consensus is probably a Buy. There are, however, lots of Hold recommendations. (See my site for information on analyst ratings.)
It would seem that analysts with a Hold rating feel that this stock is overpriced. A number of analysts, no matter what their recommendations, feel that this company has excellent manager. They also feel that the company will benefit from Target coming to Canada. The advantages to REITs are the high tax efficient yield and the ability of the REITS to grow distributions, at minimum, in line with inflation.
I have done very well in this stock. The stock I bought in 1998 is giving me a current 13% yield on my original money and stock I bought in 2000, some 11 years ago, is giving me a current return on my original investment of 17.2%. This stock has a Beta of .742 (according to the Globe and Mail). This means that the stock is less volatile that the market (TSX). I feel that this stock has given me a nice income over the years and has also given me some portfolio diversification.
I know that this stock had a rough year in 2009, but overall, I am pleased with my investment.
For a blog entry talking about this company and Target see Iewy News. For a blog talking about this stock in connection with technical analysis see Trade Online.ca.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. This stock is rated STA-2M by DBRS. Its web site is here RioCan. See my spreadsheet at rei.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, March 24, 2011
RioCan Real Estate
I first bought this stock (TSX-REI.UN) for my RRSP account in January 1998 then I bought some for my Trading account in April 2000 and some more in January 2002. In June 2006, and in December 2010, I bought this stock for the Locked-in Pension account. I have made a total return on this stock of 17.1% per year. Probably 7 to 8% of my total return is in distributions.
A potential problem with this stock in my Trading Account is that part of the yearly distributions is considered return of capital. This return of capital is subtracted from your Adjusted Cost Basis (ACB) each year. Once your ACB is at zero, you have to include any further return of capital in your capital gain calculations. The result is that you would have to pay capital gain tax on return of capital distributions when your ACB gets to zero. Currently, on any return of capital distribution, I pay no tax at all. I do not really feel this is a problem, so I will continue to hold some of this stock in my Trading Account.
RioCan says its purpose is to deliver to its unitholders stable and reliable cash distributions that will increase over the long term. They had been criticized for keeping their payout ratios high. Their 5 year average payout ratio against Funds from Operations (FFO) is 96% compared to CDN REIT’s (REF.UN) 61%. However, this payout ratio has been declining, as they have not raised their distributions since the last part of 2008. The FFO Payout Ratio is expected to be 91% in 2011 and 87% in 2012 if there is no change in distributions.
The 5 year growth in distributions is at 1.6% compared to 5 year growth in inflation of 1.8%. The 10 year growth in distributions is better at 2.6% compared to 10 year growth in inflation of 2%. Their last increase in distributions in 2008 was at 2.2%. Most of their increases just prior to 2008 were around this value. Total Return is better for the last 10 years than for the last 5.
Total Return has grown, over the past 5 and 10 years at the rate of 6% and 18.5% per year, respectively. The problem is that the stock price has really not changed over the past 5 years and the total return is all distributions.
For this company, 10 year growth is generally better than the 5 year growth. There is one exception and that is for earnings. The 5 and 10 year earnings growth for this company is at 12.4% per year and 2.8% per year, respectively. The book value has not grown at all over the past 5 and 10 years.
Revenue per share and cash flow per share have not grown much. Revenue per share has grown over the past 5 and 10 years at the rate of 1.9% and 4.9% per year, respectively. Cash Flow from Operations per share has grown at the 1.2% and 4.1% per year, respectively.
Debt Ratios are ok on this stock. The Liquidity Ratio is at 1.65 with a 5 year average of 2.30. The Asset/Liability Ratio is 1.47, with a 5 year average of 1.49. For both this ratios, you would want them at 1.50 or better. The Leverage Ratio is 3.19 (which is a little high), with a better 10 year average of 2.72. The problem is that this ratio has been increasing lately. The Debt/Equity Ratio is better at 2.17, with a 10 year average of 1.72. It has also been increasing. The problem is the lack of growth in book value.
The financial year ending in December 2010 was a good one for this stock. Return on Equity was good for 2010 at 14.1%. This is better than the 5 year average of 9.9%. Revenue per share grew at the rate of 9%; earnings grew 149%; and cash flow by 26%. Book Value in 2010 grew at the rate of 8% after a number of years of negative growth.
I plan to hold onto the shares I own in this company. I will probably not buy anymore as I have enough.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. This stock is rated STA-2M by DBRS. Its web site is here RioCan. See my spreadsheet at rei.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 potential problem with this stock in my Trading Account is that part of the yearly distributions is considered return of capital. This return of capital is subtracted from your Adjusted Cost Basis (ACB) each year. Once your ACB is at zero, you have to include any further return of capital in your capital gain calculations. The result is that you would have to pay capital gain tax on return of capital distributions when your ACB gets to zero. Currently, on any return of capital distribution, I pay no tax at all. I do not really feel this is a problem, so I will continue to hold some of this stock in my Trading Account.
RioCan says its purpose is to deliver to its unitholders stable and reliable cash distributions that will increase over the long term. They had been criticized for keeping their payout ratios high. Their 5 year average payout ratio against Funds from Operations (FFO) is 96% compared to CDN REIT’s (REF.UN) 61%. However, this payout ratio has been declining, as they have not raised their distributions since the last part of 2008. The FFO Payout Ratio is expected to be 91% in 2011 and 87% in 2012 if there is no change in distributions.
The 5 year growth in distributions is at 1.6% compared to 5 year growth in inflation of 1.8%. The 10 year growth in distributions is better at 2.6% compared to 10 year growth in inflation of 2%. Their last increase in distributions in 2008 was at 2.2%. Most of their increases just prior to 2008 were around this value. Total Return is better for the last 10 years than for the last 5.
Total Return has grown, over the past 5 and 10 years at the rate of 6% and 18.5% per year, respectively. The problem is that the stock price has really not changed over the past 5 years and the total return is all distributions.
For this company, 10 year growth is generally better than the 5 year growth. There is one exception and that is for earnings. The 5 and 10 year earnings growth for this company is at 12.4% per year and 2.8% per year, respectively. The book value has not grown at all over the past 5 and 10 years.
Revenue per share and cash flow per share have not grown much. Revenue per share has grown over the past 5 and 10 years at the rate of 1.9% and 4.9% per year, respectively. Cash Flow from Operations per share has grown at the 1.2% and 4.1% per year, respectively.
Debt Ratios are ok on this stock. The Liquidity Ratio is at 1.65 with a 5 year average of 2.30. The Asset/Liability Ratio is 1.47, with a 5 year average of 1.49. For both this ratios, you would want them at 1.50 or better. The Leverage Ratio is 3.19 (which is a little high), with a better 10 year average of 2.72. The problem is that this ratio has been increasing lately. The Debt/Equity Ratio is better at 2.17, with a 10 year average of 1.72. It has also been increasing. The problem is the lack of growth in book value.
The financial year ending in December 2010 was a good one for this stock. Return on Equity was good for 2010 at 14.1%. This is better than the 5 year average of 9.9%. Revenue per share grew at the rate of 9%; earnings grew 149%; and cash flow by 26%. Book Value in 2010 grew at the rate of 8% after a number of years of negative growth.
I plan to hold onto the shares I own in this company. I will probably not buy anymore as I have enough.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. This stock is rated STA-2M by DBRS. Its web site is here RioCan. See my spreadsheet at rei.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, March 23, 2011
Canadian Real Estate Investment Trust 2
I bought this stock (TSX-REF.UN) in September 2006. I have made a total return of 10.1% per year on this stock. I estimate that the dividend portion of my total yearly return would be between 5% and 5.5%. I feel that this stock has been a decent investment for me and has provided me with some good income and a good rate of return.
When I look at the Insider Trading report, I find that there has been a bit of Insider Selling and a bit of Insider Buying. There is a net to insider selling. All the buying seems to be by the directors under the company’s stock buying plan. All the selling was by the CFO. This company has recently raised their income by 2.2%, which for this company is a good increase. The other thing to note is that insiders do own shares, but no one has any stock options.
I get a 5 year median low Price/Earnings Ratio of 17.7 and a 5 year median high P/E Ratio of 24.6. I get a current P/E of 26.7. This is because analysts that are quoting next year’s earnings think that it will be significantly lower than for 2010. The P/E based on last year earnings is just 13. However, the Price/Cash Flow Ratio average is 13 and the current P/CF is 14. These ratios are much closer. Looking at Price/Funds from Operations Ratio, I get a current one of 13.7 and with a 5 year average high of 14.5 and a 5 year average low of 10.5. These other ratios do not look as bad as the current P/E ratio does.
Since the Graham Price is based on estimated earnings for 2011, it is way below the current stock price of $32.28 by 74%, as it is only $18.59. The 10 year average Price/Book Value Ratio is 2.04 and the 5 year P/B Ratio is 2.54. The current P/B Ratio of 2.54 is the same as the 5 year average, but below the 10 year average by 25%. Because this is an Income Trust, Book Values grow slowly.
When looking at the yield, the current one of 4.4% is below the 5 year average of 5%. Please note that some people think that the only stock price comparison you should use is the yield. By this measure, the stock price is a bit high. Also, note that the 10 year average high yield is 6% and the 5 year average low yield is 4.2%.
I did not look at the debt ratios yesterday and I will cover this today. The debt ratios are all fine. The Liquidity Ratio tends to bob around quite a bit, but all values are rather small. The Asset/Debt ratios are good with a current one of 1.65 and a 5 year average of 1.52. The Leverage Ratio is 2.56 and the Debt/Equity Ratio is 1.55. Both these are fine.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. There are lots of Strong Buys and Holds. The consensus is probably a Buy. (See my site for information on analyst ratings.) The 12 month target for Hold is $34 and the 12 month target for a buy is $35.75. Analysts talk about this company having good occupancy rates.
One analyst says that this company has good properties and it is well managed. Another analyst mentions its low payout ratio compared to cash flow. This Payout Ratio is currently at 61% and the 5 year average is just 68%. It also has a low Payout Ratio compared to the FFO and this is running at around 61%. One analyst is rating this a Hold because he thinks it is a little pricey at the moment.
As I said yesterday, I have been pleased with my investment in this company and I will continue to hold the shares that I own.
I have one final remark. I know that the past couple of weeks have been part exciting and part harrowing, what with the problems in Libya (and the rest of the Middle East) and Japan. I have been though such weeks before and I am not worried about my investments because in the long term they will be just fine. I certainly hope that the people of the Middle East will be able to get the sort of governments they desire. I also pray for all those in Japan and I hope their problems are over soon.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. This stock is rated STA-3M by DBRS. Its web site is here CDN Real Estate. See my spreadsheet at ref.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 there has been a bit of Insider Selling and a bit of Insider Buying. There is a net to insider selling. All the buying seems to be by the directors under the company’s stock buying plan. All the selling was by the CFO. This company has recently raised their income by 2.2%, which for this company is a good increase. The other thing to note is that insiders do own shares, but no one has any stock options.
I get a 5 year median low Price/Earnings Ratio of 17.7 and a 5 year median high P/E Ratio of 24.6. I get a current P/E of 26.7. This is because analysts that are quoting next year’s earnings think that it will be significantly lower than for 2010. The P/E based on last year earnings is just 13. However, the Price/Cash Flow Ratio average is 13 and the current P/CF is 14. These ratios are much closer. Looking at Price/Funds from Operations Ratio, I get a current one of 13.7 and with a 5 year average high of 14.5 and a 5 year average low of 10.5. These other ratios do not look as bad as the current P/E ratio does.
Since the Graham Price is based on estimated earnings for 2011, it is way below the current stock price of $32.28 by 74%, as it is only $18.59. The 10 year average Price/Book Value Ratio is 2.04 and the 5 year P/B Ratio is 2.54. The current P/B Ratio of 2.54 is the same as the 5 year average, but below the 10 year average by 25%. Because this is an Income Trust, Book Values grow slowly.
When looking at the yield, the current one of 4.4% is below the 5 year average of 5%. Please note that some people think that the only stock price comparison you should use is the yield. By this measure, the stock price is a bit high. Also, note that the 10 year average high yield is 6% and the 5 year average low yield is 4.2%.
I did not look at the debt ratios yesterday and I will cover this today. The debt ratios are all fine. The Liquidity Ratio tends to bob around quite a bit, but all values are rather small. The Asset/Debt ratios are good with a current one of 1.65 and a 5 year average of 1.52. The Leverage Ratio is 2.56 and the Debt/Equity Ratio is 1.55. Both these are fine.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. There are lots of Strong Buys and Holds. The consensus is probably a Buy. (See my site for information on analyst ratings.) The 12 month target for Hold is $34 and the 12 month target for a buy is $35.75. Analysts talk about this company having good occupancy rates.
One analyst says that this company has good properties and it is well managed. Another analyst mentions its low payout ratio compared to cash flow. This Payout Ratio is currently at 61% and the 5 year average is just 68%. It also has a low Payout Ratio compared to the FFO and this is running at around 61%. One analyst is rating this a Hold because he thinks it is a little pricey at the moment.
As I said yesterday, I have been pleased with my investment in this company and I will continue to hold the shares that I own.
I have one final remark. I know that the past couple of weeks have been part exciting and part harrowing, what with the problems in Libya (and the rest of the Middle East) and Japan. I have been though such weeks before and I am not worried about my investments because in the long term they will be just fine. I certainly hope that the people of the Middle East will be able to get the sort of governments they desire. I also pray for all those in Japan and I hope their problems are over soon.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. This stock is rated STA-3M by DBRS. Its web site is here CDN Real Estate. See my spreadsheet at ref.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, March 22, 2011
Canadian Real Estate Investment Trust
I bought this stock (TSX-REF.UN) in September 2006. I have made a total return of 10.1% per year on this stock. I estimate that the dividend portion of my total yearly return would be between 5% and 5.5%. This company is on one of the dividend lists that I follow of Dividend Achievers .
They have raised their dividend each year since 2002. The growth in distributions for the last 5 and 10 years is 1.90% and 1.77% each year, respectively. According to the Bank of Canada, core inflation has grown over the last 5 and 10 years at the rate of 1.78% and 1.87% per year, respectively. Also, Total Inflation has grown over the last 5 and 10 years at the rate of 1.78% and 1.97% per year, respectively. So from this you can see that distributions have done slightly better than inflation over the past 5 years and slightly worse than inflation over the past 10 years.
The current distribution yield is 4.4% and the 5 year average is 5%. This is a Real Estate Investment Trust type of company and what you can expect from it is a good yield, but your increases will be about the rate of inflation. In my portfolio, I have this type of stock, plus stock with lower yields, but higher rates of increases. Overall, my growth in dividends is above the rate of inflation, or even background inflation. Note that long term background inflation is considered to be at the rate of 3% per year.
When you look at growth figures for this company, the worse is for Book Value. Over the past 5 and 10 years, the book value has grown at the rate of 3.7% and 2% per year, respectively. This is rather typical for an Income Trust company. Do not forget that in the calculation of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO), the replacements for the older Distributable Income, you include depreciation and amortization expenses.
The amount available for distribution has grown over the past 5 and 10 years at the rate of 10.4% and 6.8% per year, respectively. However, the way to calculate this value has been changing. Earnings have been growing well, with the growth over the past 5 and 10 years at 19% and 7.6% per year, respectively. Total Return has grown over the past 5 and 10 years at the rate of 12% and 18.5% per year, respectively.
Revenue growth per share is rather low having only grown, over the past 5 and 10 years at the rate of 3% and 3.8% per year, respectively. Cash Flow from Operations is better over the past 5 and 10 years, growing at the rate of 10% and 9.6% per year, respectively.
Overall, I am pleased with my investment in this company. Tomorrow, I will talk about what the analysts say about this company and what my spreadsheet says about its current stock price.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. This stock is rated STA-3M by DBRS. Its web site is here CDN Real Estate . See my spreadsheet at ref.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.
They have raised their dividend each year since 2002. The growth in distributions for the last 5 and 10 years is 1.90% and 1.77% each year, respectively. According to the Bank of Canada, core inflation has grown over the last 5 and 10 years at the rate of 1.78% and 1.87% per year, respectively. Also, Total Inflation has grown over the last 5 and 10 years at the rate of 1.78% and 1.97% per year, respectively. So from this you can see that distributions have done slightly better than inflation over the past 5 years and slightly worse than inflation over the past 10 years.
The current distribution yield is 4.4% and the 5 year average is 5%. This is a Real Estate Investment Trust type of company and what you can expect from it is a good yield, but your increases will be about the rate of inflation. In my portfolio, I have this type of stock, plus stock with lower yields, but higher rates of increases. Overall, my growth in dividends is above the rate of inflation, or even background inflation. Note that long term background inflation is considered to be at the rate of 3% per year.
When you look at growth figures for this company, the worse is for Book Value. Over the past 5 and 10 years, the book value has grown at the rate of 3.7% and 2% per year, respectively. This is rather typical for an Income Trust company. Do not forget that in the calculation of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO), the replacements for the older Distributable Income, you include depreciation and amortization expenses.
The amount available for distribution has grown over the past 5 and 10 years at the rate of 10.4% and 6.8% per year, respectively. However, the way to calculate this value has been changing. Earnings have been growing well, with the growth over the past 5 and 10 years at 19% and 7.6% per year, respectively. Total Return has grown over the past 5 and 10 years at the rate of 12% and 18.5% per year, respectively.
Revenue growth per share is rather low having only grown, over the past 5 and 10 years at the rate of 3% and 3.8% per year, respectively. Cash Flow from Operations is better over the past 5 and 10 years, growing at the rate of 10% and 9.6% per year, respectively.
Overall, I am pleased with my investment in this company. Tomorrow, I will talk about what the analysts say about this company and what my spreadsheet says about its current stock price.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. This stock is rated STA-3M by DBRS. Its web site is here CDN Real Estate . See my spreadsheet at ref.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, March 21, 2011
Canadian Pacific Railway 3
I bought this stock (TSX-CP) in October 2006. I have made a total return on this stock of 5.8%. Just over 2% of the total annual return would be due to dividends. This stock is on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
In looking at the Insider Trading Report, there is minimal insider buying and insider selling. All insiders, including directors have more stock options than shares. Dividends were raised in 2010, so this shows that the management has confidence in the ability of the company to earn a profit in the next while.
I get a 5 year low median Price/Earnings Ratio of 9.9 and a 5 year high median P/E Ratio of 15.8. My current P/E Ratio of 14.1 is closer to the high rather than the low P/E Ratio. I get a current Graham Price of $53.55. The current stock price of $63.03 is some 17.7% higher. The average high 10 year difference between the Graham Price and the stock price is 14%. So this shows a rather high current stock price.
I get a 10 year average Price/Book Value Ratio of 1.71. The current P/B Ratio is 2.21, which is some 30% higher. So this also points to a rather high stock price. The only measure to show a reasonable stock price is the yield. The current yield is 1.71% and the 5 year average is 1.67%. These yields are very close.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Sell. There is only one Sell recommendation, but there are lots of Hold recommendations. The consensus recommendation would be a Buy. This is common when you get both Strong Buy and Hold recommendations on a stock. (See my site for information on analyst ratings.)
One analyst thought that for the financial year ending in December 2010, CP delivered a solid performance, with revenue increasing across all lines of business. Another analyst thinks that exports are increasing in Canada due to Asian appetite for our resources. He feels that both CPR and CNR will benefit from this. One analyst states that CPR will benefit from increased fertilizer sales because one of the things CPR ships is fertilizer. Another feels that CPR is reducing its costs and that therefore there will be more upside in stock. I do not know why there is one sell recommendation.
Here is one bloggers analysis of this stock which recommends a Hold at Stock Pick Bloggers. Also, here is a slightly older report recommending a Hold from Daily Markets.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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.
In looking at the Insider Trading Report, there is minimal insider buying and insider selling. All insiders, including directors have more stock options than shares. Dividends were raised in 2010, so this shows that the management has confidence in the ability of the company to earn a profit in the next while.
I get a 5 year low median Price/Earnings Ratio of 9.9 and a 5 year high median P/E Ratio of 15.8. My current P/E Ratio of 14.1 is closer to the high rather than the low P/E Ratio. I get a current Graham Price of $53.55. The current stock price of $63.03 is some 17.7% higher. The average high 10 year difference between the Graham Price and the stock price is 14%. So this shows a rather high current stock price.
I get a 10 year average Price/Book Value Ratio of 1.71. The current P/B Ratio is 2.21, which is some 30% higher. So this also points to a rather high stock price. The only measure to show a reasonable stock price is the yield. The current yield is 1.71% and the 5 year average is 1.67%. These yields are very close.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Sell. There is only one Sell recommendation, but there are lots of Hold recommendations. The consensus recommendation would be a Buy. This is common when you get both Strong Buy and Hold recommendations on a stock. (See my site for information on analyst ratings.)
One analyst thought that for the financial year ending in December 2010, CP delivered a solid performance, with revenue increasing across all lines of business. Another analyst thinks that exports are increasing in Canada due to Asian appetite for our resources. He feels that both CPR and CNR will benefit from this. One analyst states that CPR will benefit from increased fertilizer sales because one of the things CPR ships is fertilizer. Another feels that CPR is reducing its costs and that therefore there will be more upside in stock. I do not know why there is one sell recommendation.
Here is one bloggers analysis of this stock which recommends a Hold at Stock Pick Bloggers. Also, here is a slightly older report recommending a Hold from Daily Markets.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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, March 18, 2011
Canadian Pacific Railway 2
I bought this stock (TSX-CP) in October 2006. I had wanted some more railway stock and I thought that Canadian National Railway (TSX-CN) was too pricey. I have made a total return on this stock of 5.8%. If I had bought some more CNR, I would have had a total return of 13% in this same time period. It was probably not my best decision to buy CP. I had owned CP previously between 1987 and 1999 and my total return on the stock in this period was 5.4%.
The dividend growth has been ok over the past 5 years at 12% per year. I do not have a growth figure for 10 years, as this stock was a spin off from Canadian Pacific Limited in 2001. However, 8 year growth of dividends is a respectable 9.3%. Total return on this stock has been around 17% and 13% per year over the past 5 and 10 years. About 2% of this total return is due to dividends.
Where growth has not been good is for revenues, earnings, cash flow and book value. The earnings growth has probably been the best, where the 5 and 10 year growth figures are 2.6% and 9.7% per year, respectively. Because we are coming out a recession a lot of companies do not have good growth over the past 5 years, but you would hope that the 10 year growth is decent.
Revenue growth per share over the past 5 and 10 years is 1.5% and 2.5% per year, respectively. No matter how you look at cash flow growth, it is negative. It is negative for 5 and 10 year periods and for cash flow excluding changes in working capital. For book value, there is no growth over the past 5 years and the growth for the 10 year period is just 2.6% per year. I also dealt with changes in account for book value in my post of yesterday.
The Return on Equity has been good for this stock. The ROE for the financial year ending in December 2010 was 11.8%. The 5 year average ROE is 12.8%. However, the Accrual Ratios is a bit high at 5.7%. The problem is that the Net Income is higher than the Cash Flow from Operations. What you want to see is the Cash Flow from Operations higher than the Net Income.
The last thing to talk about is debt ratios. The Liquidity Ratio is 0.93. Part of the reason is the inclusion of the current portion of long term debt. Without this inclusion, the Liquidity Ratio is still a bit low at 1.19. The company has a history of low Liquidity Ratios. The Leverage Ratio is 2.83 and the Debt/Equity Ratio at 1.83 are both fine.
On Monday, I will talk about what my spreadsheet says about the current price and what the analysts say about this stock.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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 dividend growth has been ok over the past 5 years at 12% per year. I do not have a growth figure for 10 years, as this stock was a spin off from Canadian Pacific Limited in 2001. However, 8 year growth of dividends is a respectable 9.3%. Total return on this stock has been around 17% and 13% per year over the past 5 and 10 years. About 2% of this total return is due to dividends.
Where growth has not been good is for revenues, earnings, cash flow and book value. The earnings growth has probably been the best, where the 5 and 10 year growth figures are 2.6% and 9.7% per year, respectively. Because we are coming out a recession a lot of companies do not have good growth over the past 5 years, but you would hope that the 10 year growth is decent.
Revenue growth per share over the past 5 and 10 years is 1.5% and 2.5% per year, respectively. No matter how you look at cash flow growth, it is negative. It is negative for 5 and 10 year periods and for cash flow excluding changes in working capital. For book value, there is no growth over the past 5 years and the growth for the 10 year period is just 2.6% per year. I also dealt with changes in account for book value in my post of yesterday.
The Return on Equity has been good for this stock. The ROE for the financial year ending in December 2010 was 11.8%. The 5 year average ROE is 12.8%. However, the Accrual Ratios is a bit high at 5.7%. The problem is that the Net Income is higher than the Cash Flow from Operations. What you want to see is the Cash Flow from Operations higher than the Net Income.
The last thing to talk about is debt ratios. The Liquidity Ratio is 0.93. Part of the reason is the inclusion of the current portion of long term debt. Without this inclusion, the Liquidity Ratio is still a bit low at 1.19. The company has a history of low Liquidity Ratios. The Leverage Ratio is 2.83 and the Debt/Equity Ratio at 1.83 are both fine.
On Monday, I will talk about what my spreadsheet says about the current price and what the analysts say about this stock.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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, March 17, 2011
Canadian Pacific Railway
The first thing to discuss is the recent account rule changes. The FASB (Financial Accounting Standards Board) and such board to various countries together with the IASB (International Accounting Standards Board) make changes on how companies can do their financial statements. Often with these changes, companies also restate previous results. Sometimes these can be substantial. For this company, their book value under new rules decreased by almost 30%.
Book Value is theoretically the break up value of the company or the shareholders’ net value in the company. It is an important measure of the company’s progress to look at the growth in book value. However, this is really only in theory as companies in financial difficulties usually lose their shareholders’ value if they are going bankrupt. So at the point of bankruptcy this value does not seem to matter much. Hopefully, you are out of a stock before this happens. However, it is an important measure of the value of the company to the shareholders.
New accounting rules can affect a number of my measurements as I use accounting values on my spreadsheets. These changes will not stop me from using these values, but it is important to understand, that they are not absolute as they can change and some times change a lot with new accounting rules. Looking at various values like book value, revenue, earnings etc can give you an idea of where a company is going and where it is currently. This is, of course, to give a feel for where the company was and is going. It is never meant to be absolute. Accounting is often more art than science.
In investing, it is handy to have a feel for the past and present, but you also want to look at the future too. Analyst’s reports and news items are a good place to look about what the company may do in the future. I also look at analysts’ recommendations. I look at the range of recommendations as well as the consensus recommendation. Most consensus recommendations are a Buy and a few are a Hold. You seldom get other consensus recommendations, but they do happen.
Another place to look for what is in the company’s future is the annual statement. Look at parts that cover such things as management discussion and analysis. Look for messages from the President and other executives.
Of course, none of this stuff is absolute. That is why you want to diversify your portfolio. It is also, why you do not let any one stock get to be a too big of percentage of your portfolio. My limit is 10%. I have sold off good companies, like SNC-Lavalin because it grew so much. It grew to a higher percentage of my portfolio than I was comfortable. SNC-Lavalin is still a great company and I still have a good investment in it, but I still cannot afford to have too much in it because it could really damage my portfolio is anything happens to it.
I should also mention that I seldom change past accounting figures. I know that sites that give you accounting values change past ones when they are restated. The Globe and Mail site comes to mind in this. See CP Financials. My approach is almost never to change values because of restatements in financial statements. Although, I must admit that when I do a new spreadsheet, I use financial statements to do two years at a time.
My goal is for the spreadsheets to provide me with a good idea on how the company is doing. Besides, there are no absolutes in life. I also wonder if investing may be more art than science. I remember being at a party and a man I know well talked about his new investment. I had an investment in that company also, which I sold. What was my reasoning for this? Whatever company he invested in, it seemed to have difficulties after he invested in it.
Tomorrow, I will talk about what my spreadsheets says about this company.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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.
Book Value is theoretically the break up value of the company or the shareholders’ net value in the company. It is an important measure of the company’s progress to look at the growth in book value. However, this is really only in theory as companies in financial difficulties usually lose their shareholders’ value if they are going bankrupt. So at the point of bankruptcy this value does not seem to matter much. Hopefully, you are out of a stock before this happens. However, it is an important measure of the value of the company to the shareholders.
New accounting rules can affect a number of my measurements as I use accounting values on my spreadsheets. These changes will not stop me from using these values, but it is important to understand, that they are not absolute as they can change and some times change a lot with new accounting rules. Looking at various values like book value, revenue, earnings etc can give you an idea of where a company is going and where it is currently. This is, of course, to give a feel for where the company was and is going. It is never meant to be absolute. Accounting is often more art than science.
In investing, it is handy to have a feel for the past and present, but you also want to look at the future too. Analyst’s reports and news items are a good place to look about what the company may do in the future. I also look at analysts’ recommendations. I look at the range of recommendations as well as the consensus recommendation. Most consensus recommendations are a Buy and a few are a Hold. You seldom get other consensus recommendations, but they do happen.
Another place to look for what is in the company’s future is the annual statement. Look at parts that cover such things as management discussion and analysis. Look for messages from the President and other executives.
Of course, none of this stuff is absolute. That is why you want to diversify your portfolio. It is also, why you do not let any one stock get to be a too big of percentage of your portfolio. My limit is 10%. I have sold off good companies, like SNC-Lavalin because it grew so much. It grew to a higher percentage of my portfolio than I was comfortable. SNC-Lavalin is still a great company and I still have a good investment in it, but I still cannot afford to have too much in it because it could really damage my portfolio is anything happens to it.
I should also mention that I seldom change past accounting figures. I know that sites that give you accounting values change past ones when they are restated. The Globe and Mail site comes to mind in this. See CP Financials. My approach is almost never to change values because of restatements in financial statements. Although, I must admit that when I do a new spreadsheet, I use financial statements to do two years at a time.
My goal is for the spreadsheets to provide me with a good idea on how the company is doing. Besides, there are no absolutes in life. I also wonder if investing may be more art than science. I remember being at a party and a man I know well talked about his new investment. I had an investment in that company also, which I sold. What was my reasoning for this? Whatever company he invested in, it seemed to have difficulties after he invested in it.
Tomorrow, I will talk about what my spreadsheets says about this company.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.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, March 16, 2011
Algonquin Power & Utilities Corp 2
I recently read a report on this stock (TSX-AQN) saying it will do much better in the future and that Emera is interested in buying shares in this company after the company completes its buy of two New Hampshire power utilities. Emera is a stock I own and follow.
When I look at insider trading, I find a net of insider buying, but insider selling and insider buy are both very small and inconsequential. However, the company has announced an 8% increase to their dividends for the second dividend payable in 2011. This is a good indication of the confidence of management. This company has a relatively low payout ratio from cash flow relative to its peers.
For this stock, I have a 5 year median low Price/Earnings Ratio of 17.8 and a 5 year median high P/E Ratio of 24.1. I get a current P/E ratio of 21.3. The current P/E Ratio is about the 5 year median average P/E Ratio. For the Graham price, I get a current one of $4.35. The current stock price of $4.91 is some 8% higher. On average, the difference between the Graham Price and Stock Price has been 8%. So this points to a current average stock price.
I get a 10 year average Price/Book Value Ratio of 1.31 and a current P/B Ratio of 1.34. The current one is only 2% higher than the 10 year average. The current dividend yield is 5.3% and the 5 year average is 9.8%. However, this stock has just lowered its dividend when changing from an income trust. Most of the other comparisons say the price is about average. When buying stock, average is probably the best we can hope for. You do not want to pay a relatively high price, and it is hard to find relatively low prices.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. There is only 1 underperform recommendations. The consensus recommendations would be a Buy. (See my site for information on analyst ratings.) Analysts feel that this company will continue to develop and that it will have stronger fundamentals and improved valuations in the future. The 12 month stock price estimate is given from $5.50 to $6.00 by analysts feeling this stock is a buy.
Analysts are saying that this company is growing as they expect it to. What I had wanted to see on this stock was some dividend increase and this stock has now done that.
Also, I note that Dividend Ninja has an article on buying Uranium Stock. See Dividend Ninja. Larry MacDonald talks about buying Japanese stock at Canadian Business. The thing is stock market investors do seem to always overreact.
APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin. See my spreadsheet at aqn.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at insider trading, I find a net of insider buying, but insider selling and insider buy are both very small and inconsequential. However, the company has announced an 8% increase to their dividends for the second dividend payable in 2011. This is a good indication of the confidence of management. This company has a relatively low payout ratio from cash flow relative to its peers.
For this stock, I have a 5 year median low Price/Earnings Ratio of 17.8 and a 5 year median high P/E Ratio of 24.1. I get a current P/E ratio of 21.3. The current P/E Ratio is about the 5 year median average P/E Ratio. For the Graham price, I get a current one of $4.35. The current stock price of $4.91 is some 8% higher. On average, the difference between the Graham Price and Stock Price has been 8%. So this points to a current average stock price.
I get a 10 year average Price/Book Value Ratio of 1.31 and a current P/B Ratio of 1.34. The current one is only 2% higher than the 10 year average. The current dividend yield is 5.3% and the 5 year average is 9.8%. However, this stock has just lowered its dividend when changing from an income trust. Most of the other comparisons say the price is about average. When buying stock, average is probably the best we can hope for. You do not want to pay a relatively high price, and it is hard to find relatively low prices.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. There is only 1 underperform recommendations. The consensus recommendations would be a Buy. (See my site for information on analyst ratings.) Analysts feel that this company will continue to develop and that it will have stronger fundamentals and improved valuations in the future. The 12 month stock price estimate is given from $5.50 to $6.00 by analysts feeling this stock is a buy.
Analysts are saying that this company is growing as they expect it to. What I had wanted to see on this stock was some dividend increase and this stock has now done that.
Also, I note that Dividend Ninja has an article on buying Uranium Stock. See Dividend Ninja. Larry MacDonald talks about buying Japanese stock at Canadian Business. The thing is stock market investors do seem to always overreact.
APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin. See my spreadsheet at aqn.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, March 15, 2011
Algonquin Power & Utilities Corp
I have a lot of my utility money in pipelines. I think that sometime in the future I may have to move this money to other utilities. I do not think that the new types of power generation are going to go away. This company (TSX-AQN) might be a good investment at some time in the future. I recently read a report on this stock saying it will do much better in the future and that Emera is interested in buying shares in this company after the company completes its buy of two New Hampshire power utilities. Emera is a stock I own and follow.
This company, at the present time, does not have a good record to making money for its shareholders. Dividends have gone down more than up and have spent most of the time being flat. They took a dive again when this company went from an income trust to a corporation. The decrease was about 73%. Before I even consider this company, I would like to see some better dividend history. However, the current dividend rate of 4.9% is good.
The company has had some growth in earnings, revenues, book value and cash flow, but not on a per share basis. It is the per share basis growth that, as an investor, I like to see. Book value has gone up, but book value per share has gone down. Over the past 5 and 10 years, book value per share has declined at the rate of 11% and 8% per year, respectively. Cash flow per share, over the past 5 and 10 years has decline by 10% and 5.5% per year over the past 5 and 10 years.
There has been an average increase in shares of 16% per year over the past 10 years. Recently, they have raised capital, convert debentures to shares and bought assets. I do not that that all this really matters if I, as a shareholder, is not better off.
In looking at debt ratios, I find that the Liquidity Ratio is low at 0.44. This means that the current assets cannot cover current liabilities. However, the current liabilities included a portion of the long term debt. The company has arrangements to cover the long term debt and without that, the Liquidity Ratio is better, but not great at 1.02. The 5 year average for the Liquidity Ratio is just 0.92. The Asset/Liability Ratio is better at 1.55 with a 5 year average of 1.62. Both the Leverage Ratio and the Debt/Equity ratios are ok at 2.18 and 1.81, respectively.
The Return on Equity for the financial year ending December 2010 was 5.6%. The 5 year average ROE is 4.4%. Over the past 10 years, shareholders would have made a return of around 4% per year, with dividends providing around 10.5%. This, of course, points to the fact that the stock price is lower now that it was 10 years ago.
Tomorrow, I will look at what the analysts say about this stock and what the spreadsheets says about the current stock price.
APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin. See my spreadsheet at aqn.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 company, at the present time, does not have a good record to making money for its shareholders. Dividends have gone down more than up and have spent most of the time being flat. They took a dive again when this company went from an income trust to a corporation. The decrease was about 73%. Before I even consider this company, I would like to see some better dividend history. However, the current dividend rate of 4.9% is good.
The company has had some growth in earnings, revenues, book value and cash flow, but not on a per share basis. It is the per share basis growth that, as an investor, I like to see. Book value has gone up, but book value per share has gone down. Over the past 5 and 10 years, book value per share has declined at the rate of 11% and 8% per year, respectively. Cash flow per share, over the past 5 and 10 years has decline by 10% and 5.5% per year over the past 5 and 10 years.
There has been an average increase in shares of 16% per year over the past 10 years. Recently, they have raised capital, convert debentures to shares and bought assets. I do not that that all this really matters if I, as a shareholder, is not better off.
In looking at debt ratios, I find that the Liquidity Ratio is low at 0.44. This means that the current assets cannot cover current liabilities. However, the current liabilities included a portion of the long term debt. The company has arrangements to cover the long term debt and without that, the Liquidity Ratio is better, but not great at 1.02. The 5 year average for the Liquidity Ratio is just 0.92. The Asset/Liability Ratio is better at 1.55 with a 5 year average of 1.62. Both the Leverage Ratio and the Debt/Equity ratios are ok at 2.18 and 1.81, respectively.
The Return on Equity for the financial year ending December 2010 was 5.6%. The 5 year average ROE is 4.4%. Over the past 10 years, shareholders would have made a return of around 4% per year, with dividends providing around 10.5%. This, of course, points to the fact that the stock price is lower now that it was 10 years ago.
Tomorrow, I will look at what the analysts say about this stock and what the spreadsheets says about the current stock price.
APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin. See my spreadsheet at aqn.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, March 14, 2011
Canadian National Railway 2
This is a company (TSX-CNR) that I have owned since July 2005. I also bought some more stock in January 2009. I have made a return of 15.6% per year on this stock. Most of this return is in capital gain, as only around 2% would be from dividends.
When I look at the Insider trading report, I find that there is a lot of insider selling ($27M) and small amount of insider buying ($1.7) over the past year. A lot of the insider selling seems to be of options by officers of the company. Except for the directors, other insiders have a lot more options that stock. A sign of insider confidence in this company is the recent dividend increase of some 20%.
I get a 5 year median low Price/Earnings Ratio of 10.9 and a 5 year median high P/E Ratio of 14.6. So, the current P/E Ratio I get of 15.4 is relatively high for this stock. I get a Graham Price of $50.92. The stock price of $72.22 is some 29.5% higher than the Graham Price. On average, the stock price is some 11% higher than the Graham Price. At the 5 year average high stock price, the stock price is some 29% higher than the Graham Price. This also shows a relatively high stock price.
I get a 10 year average Price/Book Value Ratio of 2.18 and a current P/B Ratio of 2.95. So this ratio is around 35% higher than the 10 year average. I get a 5 year average dividend yield of 1.7% and a current yield of 1.8%. So by this standard, the stock price is reasonable. Do not forget that the Graham Price and P/E Ratios are based on estimates, where the P/B Ratio and Dividend yield are not.
When I look at analyst recommendations, I find ones of Strong Buy, Buy and Hold. There are a lot of Hold recommendations, but the consensus recommendation would be a Buy because of the Strong Buy recommendations. (See my site for information on analyst ratings.)
Even the analysts with Buy recommendations state that this stock has trouble getting a higher P/E Ratio than 15. Analysts with Hold recommendations worry that the price of oil will adversely affect this company’s performance. Analysts with Hold recommendations see the company being around $73.50 in twelve months time and those with a Buy recommendation see the company with a stock price of some $85 in twelve months time.
This company has performed well for me and I will hold on to it. However, I have enough stock in railways; so I will not be buying any more in this sector. This company plays an essential role in our Canadian economy. It is also on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here CNR. See my spreadsheet at cnr.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 there is a lot of insider selling ($27M) and small amount of insider buying ($1.7) over the past year. A lot of the insider selling seems to be of options by officers of the company. Except for the directors, other insiders have a lot more options that stock. A sign of insider confidence in this company is the recent dividend increase of some 20%.
I get a 5 year median low Price/Earnings Ratio of 10.9 and a 5 year median high P/E Ratio of 14.6. So, the current P/E Ratio I get of 15.4 is relatively high for this stock. I get a Graham Price of $50.92. The stock price of $72.22 is some 29.5% higher than the Graham Price. On average, the stock price is some 11% higher than the Graham Price. At the 5 year average high stock price, the stock price is some 29% higher than the Graham Price. This also shows a relatively high stock price.
I get a 10 year average Price/Book Value Ratio of 2.18 and a current P/B Ratio of 2.95. So this ratio is around 35% higher than the 10 year average. I get a 5 year average dividend yield of 1.7% and a current yield of 1.8%. So by this standard, the stock price is reasonable. Do not forget that the Graham Price and P/E Ratios are based on estimates, where the P/B Ratio and Dividend yield are not.
When I look at analyst recommendations, I find ones of Strong Buy, Buy and Hold. There are a lot of Hold recommendations, but the consensus recommendation would be a Buy because of the Strong Buy recommendations. (See my site for information on analyst ratings.)
Even the analysts with Buy recommendations state that this stock has trouble getting a higher P/E Ratio than 15. Analysts with Hold recommendations worry that the price of oil will adversely affect this company’s performance. Analysts with Hold recommendations see the company being around $73.50 in twelve months time and those with a Buy recommendation see the company with a stock price of some $85 in twelve months time.
This company has performed well for me and I will hold on to it. However, I have enough stock in railways; so I will not be buying any more in this sector. This company plays an essential role in our Canadian economy. It is also on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here CNR. See my spreadsheet at cnr.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, March 11, 2011
Canadian National Railway
This is a company (TSX-CNR) that I have owned since July 2005. I also bought some more stock in January 2009. I have made a return of 15.6% per year on this stock. Most of this return is in capital gain, as only around 2% would be from dividends. I have stocks with difference dividend rates and different growth rates.
Often those with low dividends have higher dividend growth rates. The growth rate on dividends for this company is good. I have had this company for 6 years and I am making a return on my original investment of 3.4%. The current dividend rate is just 1.8%. This company has just raised their dividends by 20%. The dividend growth potential of this stock over the next 5 and 10 years is 3.9% and 8.3%, respectively. This calculation is assuming using the current dividend growth of 16.5% and you buy at the current stock price of $72.22.
Some of the best growth rates for this stock are the earnings and total return. The earnings over the past 5 and 10 years have grown at the rate of 10% and 11% per year, respectively. The total return has grown over the past 5 and 10 years at the rate of 9% and 18% per year, respectively.
The growth in cash flow over the last 10 years is good, but only so so, for the last 5 years. The Cash Flow growth for the last 5 and 10 year is 5.3% per year and 9% per year, respectively. The cash flow excluding working capital for the last 5 and 10 years is 3.3% and 9%. This second type of cash flow is not as good as the first, but many analysts feel that cash flow excluding working capital is the cash flow to follow.
Book Value growth is ok, but not great. The book value growth for the last 5 and 10 years is 7.3% and 7.8% per year, respectively. When you look at Return on Equity, this company has a very good one. The ROE for the financial year ending in December 2010 is 18.7% and the 5 year average is 18.9%.
The first debt ratio I looked at is the Liquidity Ratio and it is low at 0.83. This means that the current assets cannot cover the current debt. However, the reason it is low is that a current portion of the long term debt is included but there seems to be facilities to handle this debt. Without the current portion of the long term debt, the Liquidity ratio is 1.16. Still low, but at least the current assets can cover the current liabilities.
The next debt ratio is the Asset/Liability Ratio. This is much better at 1.80. The next ratio to look at is the Leverage Ratio and the Debt/Equity Ratio. The Leverage ratio is 2.44 and the Debt/Equity Ratio is 1.44. Neither of these ratios is particularly low, but they are not particularly high. When comparing debt ratios, you need to compare them within an industry.
On Monday, I will look to see what the analysts are saying about this stock and what my spreadsheet says about the current stock price.
Also, I have notice that the stock market has been going down lately. Do not forget that the market goes down, not because of problems; but when investors decide to worry about problems. Not only are investors emotional, they also act like a mob.
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here CNR. See my spreadsheet at cnr.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.
Often those with low dividends have higher dividend growth rates. The growth rate on dividends for this company is good. I have had this company for 6 years and I am making a return on my original investment of 3.4%. The current dividend rate is just 1.8%. This company has just raised their dividends by 20%. The dividend growth potential of this stock over the next 5 and 10 years is 3.9% and 8.3%, respectively. This calculation is assuming using the current dividend growth of 16.5% and you buy at the current stock price of $72.22.
Some of the best growth rates for this stock are the earnings and total return. The earnings over the past 5 and 10 years have grown at the rate of 10% and 11% per year, respectively. The total return has grown over the past 5 and 10 years at the rate of 9% and 18% per year, respectively.
The growth in cash flow over the last 10 years is good, but only so so, for the last 5 years. The Cash Flow growth for the last 5 and 10 year is 5.3% per year and 9% per year, respectively. The cash flow excluding working capital for the last 5 and 10 years is 3.3% and 9%. This second type of cash flow is not as good as the first, but many analysts feel that cash flow excluding working capital is the cash flow to follow.
Book Value growth is ok, but not great. The book value growth for the last 5 and 10 years is 7.3% and 7.8% per year, respectively. When you look at Return on Equity, this company has a very good one. The ROE for the financial year ending in December 2010 is 18.7% and the 5 year average is 18.9%.
The first debt ratio I looked at is the Liquidity Ratio and it is low at 0.83. This means that the current assets cannot cover the current debt. However, the reason it is low is that a current portion of the long term debt is included but there seems to be facilities to handle this debt. Without the current portion of the long term debt, the Liquidity ratio is 1.16. Still low, but at least the current assets can cover the current liabilities.
The next debt ratio is the Asset/Liability Ratio. This is much better at 1.80. The next ratio to look at is the Leverage Ratio and the Debt/Equity Ratio. The Leverage ratio is 2.44 and the Debt/Equity Ratio is 1.44. Neither of these ratios is particularly low, but they are not particularly high. When comparing debt ratios, you need to compare them within an industry.
On Monday, I will look to see what the analysts are saying about this stock and what my spreadsheet says about the current stock price.
Also, I have notice that the stock market has been going down lately. Do not forget that the market goes down, not because of problems; but when investors decide to worry about problems. Not only are investors emotional, they also act like a mob.
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here CNR. See my spreadsheet at cnr.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, March 10, 2011
Canadian Helicopters Group 2
I recently read a favorable report about this stock (TSX-CHL.A), so I decided to investigate it and see if it was indeed this company would make a good investment. I picked it up from Financial Post. The Financial Post had an article about screening for small caps.
Because this company recently converted from an income trust to a corporation, there is only insider trading information available from the beginning of this year. There has been no insider buying or insider selling in this company since the beginning of this year. Although it appears that insiders do own shares, the only really significant insider holding is by Fonds de Solidarité FTQ that owns around 25% of the outstanding shares. This insider is sponsored by Quebec Federation of Labour as a region investment tool.
The 5 year median low Price/Earnings Ratio is 4.1 and the 5 year median high P/E Ratio is 6.6 with the 5 year median average P/E Ratio being 5.8. The current P/E Ratio is 6.4 and even though this is a low P/E Ratio, it is relatively high and almost at the 5 year median high level. I get a current Graham Price of $28.45. The current stock price of $17.45 is some 39% below the Graham Price. However, on average, the difference between the Graham Price and the stock price is that the stock price is 43% lower than the Graham Price. So on a relatively basis, the stock price is high.
The 6 year average Price/Book Value Ratio is 0.97. The current P/B Ratio is 1.31. Although, here again the ratio is low, it is not low on a relative basis. The last thing to look at is the dividend yield. The current yield is 6.3% and the 5 year average is 10.9%. So, even though this yield in absolute terms is good, it is lower than the 5 year average.
When I look at analysts’ recommendations, I find only one and that one is a buy. There may only be one analyst following this stock. (See my site for information on analyst ratings.) This company is liked for its clean balance sheet and the fact it may be getting more contracts. It is considered a buy up to $16.
The price is low on an absolute basis, but not on a relative basis. But even on a relative basis, stock price is near the top, but it is not extraordinarily high. It does have very little debt, so it could weather a problem in the economy. It also has reasonable payout ratios. One commentator said it might be an interesting place to park your money.
Also, today Dividend Ninja has an interesting article on the Dividend Payout Ratio (DPR) on his site.
Also, I am asked to review specific stocks from time to time. However, there is a lot of work involved in producing a spreadsheet that is the basis of my reviews. Few requests come with a reason why I, a dividend investor, might possibly be interested in a stock. For this stock, I reviewed it because of a report that said the company was a small cap stock with a good dividend and low debt. It looked like a stock I might possibly interested in investing in at some point. I am sorry if I ignore most requests to review a stock, but, as I said, there is a lot of work involved.
Canadian Helicopters Limited is the largest helicopter transportation services company operating in Canada. Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. Its web site is here CDN Helicopters. See my spreadsheet at chl.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.
Because this company recently converted from an income trust to a corporation, there is only insider trading information available from the beginning of this year. There has been no insider buying or insider selling in this company since the beginning of this year. Although it appears that insiders do own shares, the only really significant insider holding is by Fonds de Solidarité FTQ that owns around 25% of the outstanding shares. This insider is sponsored by Quebec Federation of Labour as a region investment tool.
The 5 year median low Price/Earnings Ratio is 4.1 and the 5 year median high P/E Ratio is 6.6 with the 5 year median average P/E Ratio being 5.8. The current P/E Ratio is 6.4 and even though this is a low P/E Ratio, it is relatively high and almost at the 5 year median high level. I get a current Graham Price of $28.45. The current stock price of $17.45 is some 39% below the Graham Price. However, on average, the difference between the Graham Price and the stock price is that the stock price is 43% lower than the Graham Price. So on a relatively basis, the stock price is high.
The 6 year average Price/Book Value Ratio is 0.97. The current P/B Ratio is 1.31. Although, here again the ratio is low, it is not low on a relative basis. The last thing to look at is the dividend yield. The current yield is 6.3% and the 5 year average is 10.9%. So, even though this yield in absolute terms is good, it is lower than the 5 year average.
When I look at analysts’ recommendations, I find only one and that one is a buy. There may only be one analyst following this stock. (See my site for information on analyst ratings.) This company is liked for its clean balance sheet and the fact it may be getting more contracts. It is considered a buy up to $16.
The price is low on an absolute basis, but not on a relative basis. But even on a relative basis, stock price is near the top, but it is not extraordinarily high. It does have very little debt, so it could weather a problem in the economy. It also has reasonable payout ratios. One commentator said it might be an interesting place to park your money.
Also, today Dividend Ninja has an interesting article on the Dividend Payout Ratio (DPR) on his site.
Also, I am asked to review specific stocks from time to time. However, there is a lot of work involved in producing a spreadsheet that is the basis of my reviews. Few requests come with a reason why I, a dividend investor, might possibly be interested in a stock. For this stock, I reviewed it because of a report that said the company was a small cap stock with a good dividend and low debt. It looked like a stock I might possibly interested in investing in at some point. I am sorry if I ignore most requests to review a stock, but, as I said, there is a lot of work involved.
Canadian Helicopters Limited is the largest helicopter transportation services company operating in Canada. Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. Its web site is here CDN Helicopters. See my spreadsheet at chl.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, March 9, 2011
Canadian Helicopters Group
I recently read a favorable report about this stock (TSX-CHL.A), so I decided to investigate it and see if it was indeed this company would make a good investment. I picked it up from Financial Post. The Financial Post had an article about screening for small caps. This company has recently changed from and income trust (TSX-CHL.UN) to a corporation. The dividends or distributions seem to be holding steady.
The dividends are one reason I would currently not buy this stock. There has really only been one dividend increase (2008) of 4.5% since this company started to pay dividends as an income trust in 2005. Before that date, the company seems to have been a private one. However, the current dividend is a very healthy one at 6.3%. But, I prefer stocks that have a habit of increasing their dividends.
This company has only been public since 2005, so I only have 5 years of data on my spreadsheet. I can see why this stock was chosen, as the total return on this stock is around 20%, with 10% of this return coming from dividend income. The company also has a relatively low payout ratios averages for the last 5 years, with an Earnings Payout Ratio at 62% and a Cash Flow Payout Ratio of 43%. Low payout ratios give confidence that dividend payments can be maintained and possibly raised.
Some of the growth figures on this stock are ok, but not great. Take the growth in revenue per share, as this has only grown at the rate of 5.5% per year and 5% per year over the past 5 and 8 years. (As the company was established before it went public as an income trust in 2005, I have revenue figures back to 2002.) The growth in book value is also rather low at 6.6% per year for the last 5 years. However, it is rather typical of income trusts to have very low or even negative book value growth.
The growth in cash flow has been uneven and is at negative 11%. However, the growth in cash flow excluding working capital is at 30% per year over the past 5 years. As this stock ages, and we get more statistics, these growth figures might change for the better.
An important thing for a small cap stock to have is good debt ratios. This is the case for this stock. The Liquidity Ratio currently at 3.57 and the company has a 5 year average at 2.10. The current Asset/Liability Ratio is 4.23 with a 5 year average of 3.62. For these ratios, anything over 1.50 is very good. The Leverage Ratio is 1.68 with a 5 year average of 1.81 and a Debt/Equity Ratio of 0.40 with a 5 year average of 0.54. For the last two ratios, lower is better. Both the ratios are good.
The last thing to talk about is the Return on Equity. The financial year ending in December 2009 had a ROE of 16.7% and the 9 month financial period ending in September 2010 has a ROE of 13.7%. The 5 year average is 15.3% and this is good.
There are not many analysts following this stock, but I will talk tomorrow about analyst recommendations. I will also talk what my spreadsheet says about the stock market price.
Canadian Helicopters Limited is the largest helicopter transportation services company operating in Canada. Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. Its web site is here CDN Helicopters. See my spreadsheet at chl.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 dividends are one reason I would currently not buy this stock. There has really only been one dividend increase (2008) of 4.5% since this company started to pay dividends as an income trust in 2005. Before that date, the company seems to have been a private one. However, the current dividend is a very healthy one at 6.3%. But, I prefer stocks that have a habit of increasing their dividends.
This company has only been public since 2005, so I only have 5 years of data on my spreadsheet. I can see why this stock was chosen, as the total return on this stock is around 20%, with 10% of this return coming from dividend income. The company also has a relatively low payout ratios averages for the last 5 years, with an Earnings Payout Ratio at 62% and a Cash Flow Payout Ratio of 43%. Low payout ratios give confidence that dividend payments can be maintained and possibly raised.
Some of the growth figures on this stock are ok, but not great. Take the growth in revenue per share, as this has only grown at the rate of 5.5% per year and 5% per year over the past 5 and 8 years. (As the company was established before it went public as an income trust in 2005, I have revenue figures back to 2002.) The growth in book value is also rather low at 6.6% per year for the last 5 years. However, it is rather typical of income trusts to have very low or even negative book value growth.
The growth in cash flow has been uneven and is at negative 11%. However, the growth in cash flow excluding working capital is at 30% per year over the past 5 years. As this stock ages, and we get more statistics, these growth figures might change for the better.
An important thing for a small cap stock to have is good debt ratios. This is the case for this stock. The Liquidity Ratio currently at 3.57 and the company has a 5 year average at 2.10. The current Asset/Liability Ratio is 4.23 with a 5 year average of 3.62. For these ratios, anything over 1.50 is very good. The Leverage Ratio is 1.68 with a 5 year average of 1.81 and a Debt/Equity Ratio of 0.40 with a 5 year average of 0.54. For the last two ratios, lower is better. Both the ratios are good.
The last thing to talk about is the Return on Equity. The financial year ending in December 2009 had a ROE of 16.7% and the 9 month financial period ending in September 2010 has a ROE of 13.7%. The 5 year average is 15.3% and this is good.
There are not many analysts following this stock, but I will talk tomorrow about analyst recommendations. I will also talk what my spreadsheet says about the stock market price.
Canadian Helicopters Limited is the largest helicopter transportation services company operating in Canada. Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. Its web site is here CDN Helicopters. See my spreadsheet at chl.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, March 8, 2011
Medtronic Inc 2
This is the token US health care stock (NYSE-MDT) that I follow. What I am trying to see is, would have I made any money investing in this US Stock in the past? For the few US stocks that I do follow, it does not appear I would have made any money, including making money on this one.
I do not find the US information on insider trading as good as the Canadian information. However, it is clear in this case that there is more insider buying over the past year than there was in insider selling. Also, the most recent insider trading has all been insider buying. The other promising thing is that dividends were recently raised by 9.8%.
The next thing to look at is historical Price Earnings Ratios. The 5 year median low P/E ratio is 23.5 and the 5 year median high is 28.5. These are high P/E Ratios. However, the current is rather low at 11.5. This shows a current good stock price. When I look at the Graham Price, I get a current one of $33.08. The current stock price of $38.96 is some 18% higher. However, the average 10 year difference between the low stock price and the Graham Price is 160%. The stock price has in the past been way higher than the Graham Price.
This stock has a 10 year average Price/Book Value Ratio of 6.06. The current P/B Ratio of 2.72 is 45% lower than this 10 year average. The last thing to look at is the dividend yield. The current yield is 2.3% and the 5 year average is 1.3%. So, by this measure the stock price is also low.
When I look at analysts’ recommendations, I find that there are ones in all categories of Strong Buy, Buy, Hold, Underperform and Sell. Most are in the Hold category, but there are also a lot of Strong Buy recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
Here is a review from The Money Times site. There is another review at Blogging Stocks.
Some people think that now is the time to get into US stocks since our currency is so high. We can make some money if our currency stays where it is and make a lot of money, if our currency goes down again, against the US$.
Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic. See my spreadsheet at mdt.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 do not find the US information on insider trading as good as the Canadian information. However, it is clear in this case that there is more insider buying over the past year than there was in insider selling. Also, the most recent insider trading has all been insider buying. The other promising thing is that dividends were recently raised by 9.8%.
The next thing to look at is historical Price Earnings Ratios. The 5 year median low P/E ratio is 23.5 and the 5 year median high is 28.5. These are high P/E Ratios. However, the current is rather low at 11.5. This shows a current good stock price. When I look at the Graham Price, I get a current one of $33.08. The current stock price of $38.96 is some 18% higher. However, the average 10 year difference between the low stock price and the Graham Price is 160%. The stock price has in the past been way higher than the Graham Price.
This stock has a 10 year average Price/Book Value Ratio of 6.06. The current P/B Ratio of 2.72 is 45% lower than this 10 year average. The last thing to look at is the dividend yield. The current yield is 2.3% and the 5 year average is 1.3%. So, by this measure the stock price is also low.
When I look at analysts’ recommendations, I find that there are ones in all categories of Strong Buy, Buy, Hold, Underperform and Sell. Most are in the Hold category, but there are also a lot of Strong Buy recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
Here is a review from The Money Times site. There is another review at Blogging Stocks.
Some people think that now is the time to get into US stocks since our currency is so high. We can make some money if our currency stays where it is and make a lot of money, if our currency goes down again, against the US$.
Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic. See my spreadsheet at mdt.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, March 7, 2011
Medtronic Inc
This is the token US health care stock (NYSE-MDT) that I follow. What I am trying to see is, would have I made any money investing in this US Stock in the past? For the few US stocks that I do follow, it does not appear I would have made any money, including making money on this one.
Looking at dividend increases, for US investors the 5 and 10 year growth in dividends is at the rate of 19.3% and 18% per year, respectively. For a Canadian investor, we would not have done that badly in dividend growth as the 5 and 10 year growth in dividend was 14% per year and 13% per year, respectively.
Where this stock fails for Canadians is that we would not have made any money on it over the past 5 or 10 years. Total returns would be a negative 7% per year and a negative 5% per year, respectively. The last 5 year period that a Canadian would have made any money on this stock was 2004, where the total return was 5.7% per year. For all 5 year periods since 2004, Canadians would have not made any positive returns.
Americans investing in this stock over the past 5 and 10 years would not have made any money either, but they would have lost less. The 5 and 10 year total return in US$ would be negative 2.5% and a negative 1% per year, respectively.
However, the company itself has not done badly. Revenue has increased over the past 5 and 10 years at the rate of 12% and 13% per share per year, respectively. Cash Flow has increased over the past 5 and 10 years at the rate of 8.6% and 11.5% per year, respectively. Also, Book Value has increased over the past 5 and 10 years at the rate of 9% and 13.5% per year, respectively.
The debt ratios are fine on this stock. The Liquidity Ratio is currently at 1.51 and has a 5 year average of 2.39. The Asset/Liability Ratio is 2.01 with a 5 year average of 2.12. The Leverage Ratio is currently at 1.99 with a 10 year average of 1.72. The Debt/Equity Ratio is currently at 0.99 with a 10 year average of .072.
The last thing to talk about is the Return on Equity. The ROE for the last 12 months is good at 21.3%. The 5 year average is also good at 24.4%.
Tomorrow, I will look at what the analysts say and what my spreadsheet says on this stock.
Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic. See my spreadsheet at mdt.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.
Looking at dividend increases, for US investors the 5 and 10 year growth in dividends is at the rate of 19.3% and 18% per year, respectively. For a Canadian investor, we would not have done that badly in dividend growth as the 5 and 10 year growth in dividend was 14% per year and 13% per year, respectively.
Where this stock fails for Canadians is that we would not have made any money on it over the past 5 or 10 years. Total returns would be a negative 7% per year and a negative 5% per year, respectively. The last 5 year period that a Canadian would have made any money on this stock was 2004, where the total return was 5.7% per year. For all 5 year periods since 2004, Canadians would have not made any positive returns.
Americans investing in this stock over the past 5 and 10 years would not have made any money either, but they would have lost less. The 5 and 10 year total return in US$ would be negative 2.5% and a negative 1% per year, respectively.
However, the company itself has not done badly. Revenue has increased over the past 5 and 10 years at the rate of 12% and 13% per share per year, respectively. Cash Flow has increased over the past 5 and 10 years at the rate of 8.6% and 11.5% per year, respectively. Also, Book Value has increased over the past 5 and 10 years at the rate of 9% and 13.5% per year, respectively.
The debt ratios are fine on this stock. The Liquidity Ratio is currently at 1.51 and has a 5 year average of 2.39. The Asset/Liability Ratio is 2.01 with a 5 year average of 2.12. The Leverage Ratio is currently at 1.99 with a 10 year average of 1.72. The Debt/Equity Ratio is currently at 0.99 with a 10 year average of .072.
The last thing to talk about is the Return on Equity. The ROE for the last 12 months is good at 21.3%. The 5 year average is also good at 24.4%.
Tomorrow, I will look at what the analysts say and what my spreadsheet says on this stock.
Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic. See my spreadsheet at mdt.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, March 4, 2011
TECSYS Inc 2
I came across this stock (TSX-TCS) when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. The thing with investing, you can only lose what you have invested. However, your potential gain is unlimited. But, make no mistake about such a stock, as it is risky. I have invested in this stock recently.
When I look at insider trading, I find there is a slight bit of insider buying and no insider selling. The other thing is that more than 60% of this company is owned by insiders. One of the insiders is an investment management firm (Gestion de portefeuille Natcan Inc.) that owns 15.5%. The last thing to mention is that management has just raised the dividend, for the next dividend payment by 20%. My experience has been that when insiders hold a lot of a small company, they try harder, which makes a company a better investment.
I get a 5 year median low Price/Earnings Ratio of 8 and a 5 year median high P/E Ratio of 13. I get a current P/E ratio of 17 and this is a bit high. The reason is that this company’s earnings are expected to drop by about 35% for year ending in April 2011. However, the forward P/E using expected earnings for year ending in April 2012 earnings are expected to climb and this gives a forward P/E of just 8.4.
I get a Graham Price for the years ending in April 2010 of $2.30, April 2011 of $1.84 and April 2012 of $2.60. The one for the financial ending in April 2011 is depressed because earnings are expected to be lower. The current price of $1.90 is 3.3% higher than the current Graham price. However, the current price of $1.90 is lower than the Graham price for the financial year ending in April 2012 by 27%.
When I look at the Price/Book Value Ratio, I get a current one of 1.39 and a 10 year average of 1.47. The current one is 95% lower than the 10 year average. The current dividend yield is 3.2% and the average yield over the past couple of years is 2.7%. The 3.2% dividend yield is the highest dividend yield of this company.
When I look for analysts’ recommendations, I can find only 1 and that recommendation is a Hold. So the consensus recommendation would be a Hold. (See my site for information on analyst ratings.) I do not know the reason for the Hold rating.
Comments I see on this stock says that it has currency headwinds because it is a Canadian company selling into the US. Other comments remark on the good management this company has. The latest financials for the first 3 quarters show declining revenues and earnings. The financial year end in April 2011 is expected show the same. However, things are expected to improve greatly for the financial year ending in April 2012, so I would think if you buy now, you profit from future results.
The analyst’s recommendation may just be a philosophical difference. I have no problem buying a stock now that is currently overpriced by the spreadsheet ratios, if it is not overpriced by future ratios. The problem with waiting for a better relative price is that it may never come. People could recognize the future potential of this company and drive the price up, so that on a relative basis, the stock stays overpriced.
Here is a story on this company.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS. See my spreadsheet at tcs.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at insider trading, I find there is a slight bit of insider buying and no insider selling. The other thing is that more than 60% of this company is owned by insiders. One of the insiders is an investment management firm (Gestion de portefeuille Natcan Inc.) that owns 15.5%. The last thing to mention is that management has just raised the dividend, for the next dividend payment by 20%. My experience has been that when insiders hold a lot of a small company, they try harder, which makes a company a better investment.
I get a 5 year median low Price/Earnings Ratio of 8 and a 5 year median high P/E Ratio of 13. I get a current P/E ratio of 17 and this is a bit high. The reason is that this company’s earnings are expected to drop by about 35% for year ending in April 2011. However, the forward P/E using expected earnings for year ending in April 2012 earnings are expected to climb and this gives a forward P/E of just 8.4.
I get a Graham Price for the years ending in April 2010 of $2.30, April 2011 of $1.84 and April 2012 of $2.60. The one for the financial ending in April 2011 is depressed because earnings are expected to be lower. The current price of $1.90 is 3.3% higher than the current Graham price. However, the current price of $1.90 is lower than the Graham price for the financial year ending in April 2012 by 27%.
When I look at the Price/Book Value Ratio, I get a current one of 1.39 and a 10 year average of 1.47. The current one is 95% lower than the 10 year average. The current dividend yield is 3.2% and the average yield over the past couple of years is 2.7%. The 3.2% dividend yield is the highest dividend yield of this company.
When I look for analysts’ recommendations, I can find only 1 and that recommendation is a Hold. So the consensus recommendation would be a Hold. (See my site for information on analyst ratings.) I do not know the reason for the Hold rating.
Comments I see on this stock says that it has currency headwinds because it is a Canadian company selling into the US. Other comments remark on the good management this company has. The latest financials for the first 3 quarters show declining revenues and earnings. The financial year end in April 2011 is expected show the same. However, things are expected to improve greatly for the financial year ending in April 2012, so I would think if you buy now, you profit from future results.
The analyst’s recommendation may just be a philosophical difference. I have no problem buying a stock now that is currently overpriced by the spreadsheet ratios, if it is not overpriced by future ratios. The problem with waiting for a better relative price is that it may never come. People could recognize the future potential of this company and drive the price up, so that on a relative basis, the stock stays overpriced.
Here is a story on this company.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS. See my spreadsheet at tcs.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, March 3, 2011
TECSYS Inc
I came across this stock (TSX-TCS) when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. The thing with investing, you can only lose what you have invested. However, your potential gain is unlimited. But, make no mistake about such a stock, as it is risky. I have invested in this stock recently.
The current dividend yield at 3.2% is good rate, but considerable lower than the last small cap dividend paying tech stock that I had. They have had two dividend rises since starting dividends in dividends in 2008. They first raised the dividend 25% and the recent rise for the next dividend payment is 20%.
So the dividend growth potential is very good on this stock. If the dividend increases say at 20%, then you could be earning 7.9% in 5 years time or 20% in 10 years time on an investment in this stock today. However, be aware that this stock is thinly traded and this also adds to its risk.
This stock was part of the tech stock boom in and hit a high price of $40.50 in March 2000. This fact will affect the 10 year value for this company and the fact that they had many years with no earnings. The total return on this company is negative for the past 10 years. However, the total return over the last 5 years has been positive, but low at 5.4% per year.
As far as growth goes, the 5 and 10 year growth in revenue per share is 11.9% and 3.9% per year, respectively. Because this company had a lot of years of negative earnings, I only have earnings growth for the past 5 years and it is very good at 33.5% per year.
Growth in cash flow has the same problem, with lots of years of negative cash flow, so I only have growth for 5 years. The growth in cash flow is 27% per year. The growth in cash flow excluding working capital is much lower at only 4.5% per year. When I look at growth in book value, the 5 year growth is low, but ok at 6.3% per year. The 10 year growth is negative because this company had many negative earnings years in the past.
The next thing to look at is the debt ratios. The Liquidity Ratio is a little low at a current rate of 1.22. The 5 year average is better at 1.49. The Asset/Liability Ratio is much better at a current ratio of 2.12 and a 5 year average of 2.29. The Leverage Ratio is ok at 1.89 with a better ratio average ratio over the past 10 years of 1.65. The Debt/Equity Ratio at 0.89 is a little high for this sort of company. I would prefer it to be closer to 0.50. The 10 year average at 0.65 is better.
The last thing to look at is the Return on Equity. The ROE for the financial year ending in April 2010 is good at 12.9%. The one for the 12 months financial period ending on the third quarter at October 31, 2010 is also fine at 9.3%. The 5 year average is lower at 8.5% because of past negative earning years.
It will be interesting to watch and see how this company does in the future.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS. See my spreadsheet at tcs.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 current dividend yield at 3.2% is good rate, but considerable lower than the last small cap dividend paying tech stock that I had. They have had two dividend rises since starting dividends in dividends in 2008. They first raised the dividend 25% and the recent rise for the next dividend payment is 20%.
So the dividend growth potential is very good on this stock. If the dividend increases say at 20%, then you could be earning 7.9% in 5 years time or 20% in 10 years time on an investment in this stock today. However, be aware that this stock is thinly traded and this also adds to its risk.
This stock was part of the tech stock boom in and hit a high price of $40.50 in March 2000. This fact will affect the 10 year value for this company and the fact that they had many years with no earnings. The total return on this company is negative for the past 10 years. However, the total return over the last 5 years has been positive, but low at 5.4% per year.
As far as growth goes, the 5 and 10 year growth in revenue per share is 11.9% and 3.9% per year, respectively. Because this company had a lot of years of negative earnings, I only have earnings growth for the past 5 years and it is very good at 33.5% per year.
Growth in cash flow has the same problem, with lots of years of negative cash flow, so I only have growth for 5 years. The growth in cash flow is 27% per year. The growth in cash flow excluding working capital is much lower at only 4.5% per year. When I look at growth in book value, the 5 year growth is low, but ok at 6.3% per year. The 10 year growth is negative because this company had many negative earnings years in the past.
The next thing to look at is the debt ratios. The Liquidity Ratio is a little low at a current rate of 1.22. The 5 year average is better at 1.49. The Asset/Liability Ratio is much better at a current ratio of 2.12 and a 5 year average of 2.29. The Leverage Ratio is ok at 1.89 with a better ratio average ratio over the past 10 years of 1.65. The Debt/Equity Ratio at 0.89 is a little high for this sort of company. I would prefer it to be closer to 0.50. The 10 year average at 0.65 is better.
The last thing to look at is the Return on Equity. The ROE for the financial year ending in April 2010 is good at 12.9%. The one for the 12 months financial period ending on the third quarter at October 31, 2010 is also fine at 9.3%. The 5 year average is lower at 8.5% because of past negative earning years.
It will be interesting to watch and see how this company does in the future.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS. See my spreadsheet at tcs.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, March 2, 2011
Johnson and Johnson 2
This company (NYSE-JNJ) has reported for the financial year ending in 2010. I follow a couple of US companies although I am not invested in US stocks. We are always told we should invest outside our market, so I want to see how I would have done if I had invested in some the big, recommended US dividend paying stock.
When I look at insider trading, I find there was a lot more insider selling than insider buying. Most of the selling was in the later part of 2010. A positive is that the company raised the dividend by 10.2% in 2010. This increase is in line with the 5 year average increase of 10.6%.
This company has a 5 year median low Price/Earnings Ratio of 12.1 and a 5 year median high P/E Ratio of 15.7. The current P/E Ratio of 12.6 is toward the low end for this ratio. I get a Graham Price of $47.36 for 2011. The current stock price of $61.01 is almost 30% above the Graham Price. However, the 10 year low average difference between the Graham Price and stock price is 74%. So, on a relative basis, the stock price is low.
The 10 year average Price/Book Value Ratio for this stock is 5.06. The current Ratio at 2.96 is only 60% of the 10 year average. In this case, the stock price is relatively low again. The current yield is 3.5% and the 5 year average is 2.9%. On this basis also, the stock is relatively low. The yield of 3.5% is a good yield.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. There are an awful lot of Hold recommendations, but the Strong Buy recommendations move the consensus to a Buy recommendation. (See my site for information on analyst ratings.)
Some analysts see 2011 as a recovery year for Johnson and Johnson and so are recommending it as a Buy. Those recommending this stock as a Buy see the 12 month stock price reaching $73 and those recommending a Hold see the 12 month stock price reaching only $65. I have also noted that some Canadians are saying now is the time to buy US stocks because our currency is high. Most of the reason we have not made much in US stocks lately has to do with the rising Canadian dollar.
Story in Forbes says that Johnson & Johnson Shares Fall after Posting Nearly Flat Q4 Results for 2010.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at insider trading, I find there was a lot more insider selling than insider buying. Most of the selling was in the later part of 2010. A positive is that the company raised the dividend by 10.2% in 2010. This increase is in line with the 5 year average increase of 10.6%.
This company has a 5 year median low Price/Earnings Ratio of 12.1 and a 5 year median high P/E Ratio of 15.7. The current P/E Ratio of 12.6 is toward the low end for this ratio. I get a Graham Price of $47.36 for 2011. The current stock price of $61.01 is almost 30% above the Graham Price. However, the 10 year low average difference between the Graham Price and stock price is 74%. So, on a relative basis, the stock price is low.
The 10 year average Price/Book Value Ratio for this stock is 5.06. The current Ratio at 2.96 is only 60% of the 10 year average. In this case, the stock price is relatively low again. The current yield is 3.5% and the 5 year average is 2.9%. On this basis also, the stock is relatively low. The yield of 3.5% is a good yield.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. There are an awful lot of Hold recommendations, but the Strong Buy recommendations move the consensus to a Buy recommendation. (See my site for information on analyst ratings.)
Some analysts see 2011 as a recovery year for Johnson and Johnson and so are recommending it as a Buy. Those recommending this stock as a Buy see the 12 month stock price reaching $73 and those recommending a Hold see the 12 month stock price reaching only $65. I have also noted that some Canadians are saying now is the time to buy US stocks because our currency is high. Most of the reason we have not made much in US stocks lately has to do with the rising Canadian dollar.
Story in Forbes says that Johnson & Johnson Shares Fall after Posting Nearly Flat Q4 Results for 2010.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.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, March 1, 2011
Johnson and Johnson
This company (NYSE-JNJ) has reported on some things for the financial year ending in 2010, but I cannot find a complete set of financial statements at their site. I have picked up figures from a few other sites that I believe to be reliable. I follow a couple of US companies although I am not invested in US stocks. We are always told we should invest outside our market, so I want to see how I would have done if I had invested in some the big, recommended US dividend paying stock.
Would I have made any money over the past 5 or 10 years in this stock? The very short answer is no. The total return over the past 5 and 10 years for a Canadian would be .5% per year and -.3% per year, respectively. I also looked at the 5 year periods that end over the last 9 years, and the story does not get hopeful. It is only the 5 year period ending in December 2002 that there is any sort of good return and that is a total return of 14.5% per year.
The next best year is the 5 year period ending in December 2008 and that period had a return of 4.7% per year. The next best year is the 5 year period ending in December 2004 and that period had a return of 3.8% per year. All the other years were negative or close to 0%. I cannot image that this company would have been a good investment for a Canadian since 2008.
It would also seem that American investors did not do a lot better. I get their 5 and 10 year total return at 4% per year and 3.5% per year respectively. On this spreadsheet, I only calculate return (capital gain), total return (capital gain and dividends) and dividend growth in CDN$. When it comes to dividend growth, although the Americans have done better, we have also done quite well. The 5 and 10 year growth in dividends in US$ is 10.6% per year and 13% per year respectively. The 5 and 10 year growth in dividends in CDN$ is 7.3% per year and 8.3% per year respectively.
In US$ terms, the growth figures for this company are good, expect for growth in Revenue. The 5 and 10 year growth in revenue is 4% and 7.8% per year, respectively. The growth in revenue per share comes in slightly better at 6.7% and 8% per year, respectively. The growth in cash flow is around 9% per year and this is good. The growth in book value is at the rate of around 11% per year and this is also good.
All the debt ratios on this stock are quite good. The Liquidity Ratio is currently 2.05 and has a 5 year average of 1.73. The Asset/Liability Ratio is currently at 2.22 with a 5 year average of 2.29. For these ratios, anything above 1.50 is good. The Leverage Ratio is 1.82 with a 10 year average of 1.77 and the Debt/Equity Ratio is at 0.82 with a 10 year average of 0.77. With these two last ratios, lower is better. Also, they are ratios that you want to compare to other companies in the same industry rather across industries.
The last thing to talk about is the Return on Equity. The ROE at the end of December 2010 is 23.6% and the 5 year average is 25.9%. These both are very good.
Tomorrow, I will look at what the analysts say and what my spreadsheet says on this stock.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.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.
Would I have made any money over the past 5 or 10 years in this stock? The very short answer is no. The total return over the past 5 and 10 years for a Canadian would be .5% per year and -.3% per year, respectively. I also looked at the 5 year periods that end over the last 9 years, and the story does not get hopeful. It is only the 5 year period ending in December 2002 that there is any sort of good return and that is a total return of 14.5% per year.
The next best year is the 5 year period ending in December 2008 and that period had a return of 4.7% per year. The next best year is the 5 year period ending in December 2004 and that period had a return of 3.8% per year. All the other years were negative or close to 0%. I cannot image that this company would have been a good investment for a Canadian since 2008.
It would also seem that American investors did not do a lot better. I get their 5 and 10 year total return at 4% per year and 3.5% per year respectively. On this spreadsheet, I only calculate return (capital gain), total return (capital gain and dividends) and dividend growth in CDN$. When it comes to dividend growth, although the Americans have done better, we have also done quite well. The 5 and 10 year growth in dividends in US$ is 10.6% per year and 13% per year respectively. The 5 and 10 year growth in dividends in CDN$ is 7.3% per year and 8.3% per year respectively.
In US$ terms, the growth figures for this company are good, expect for growth in Revenue. The 5 and 10 year growth in revenue is 4% and 7.8% per year, respectively. The growth in revenue per share comes in slightly better at 6.7% and 8% per year, respectively. The growth in cash flow is around 9% per year and this is good. The growth in book value is at the rate of around 11% per year and this is also good.
All the debt ratios on this stock are quite good. The Liquidity Ratio is currently 2.05 and has a 5 year average of 1.73. The Asset/Liability Ratio is currently at 2.22 with a 5 year average of 2.29. For these ratios, anything above 1.50 is good. The Leverage Ratio is 1.82 with a 10 year average of 1.77 and the Debt/Equity Ratio is at 0.82 with a 10 year average of 0.77. With these two last ratios, lower is better. Also, they are ratios that you want to compare to other companies in the same industry rather across industries.
The last thing to talk about is the Return on Equity. The ROE at the end of December 2010 is 23.6% and the 5 year average is 25.9%. These both are very good.
Tomorrow, I will look at what the analysts say and what my spreadsheet says on this stock.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.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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