I had read an article in 1997 about buying small cap stocks. It said you should buy a basket of them, of at least 5 stocks. If 2 of the 5 when successful you then would be a winner. I will talk about one of these stocks today, but tomorrow and the following days, I will talk generally about my adventures in small caps.
I made several purchases of the stock over a few months between July and December of 1997. My purchase prices ranged from $.86 to $2.00. My total return since then is a loss of 21.16 per year or a 96.5% capital loss. This is, of course, a “green” investment.
This stock actually peaked in 1999. It initially fell some 87% in 2000, and ultimately fell over 99%. In 2008 this stock went through a 20 to 1 consolidation. This is never a good sign. However, in 2009 it turned a profit, the first one for a very long time. However, in 2011, this company again lost money.
One good thing to talk about on this stock is that it has been growing its revenue. Revenues over the past 10 years have grown at the rate of 33% per year. Revenue per share, over the past 10 years, has grown at 15% per year. I, unfortunately, cannot say the same thing about revenue growth over the past 5 years. Revenues made a peaked in 2008 that they have yet to match.
Shares prices, over the past 5 years are up some 5%. This is the last of any growth. There has been none for EPS, Cash Flow or Book Value. The company made no earnings for the financial year ending in June 2011. The most positive thing to say for cash flow is that it is usually a positive figure. The Operational Profit Margin (CF/Revenue) Ratio is rather low, with the latest ratio at just 5.2%. The 5 year median OPM is 6.5%.
Debt ratios are ok for this stock. The current Liquidity Ratio is at 1.06. The current Asset/Liability is much better at 1.80. The current Leverage and Debt/Equity Ratios are ok at 2.25 and 1.25
I cannot find any analysts that follow this stock. The most positive thing that I see is that more than 66% of the company is owned by insiders. I did not sell this because of the low value. It is also interesting to track such a company and see how it ends up. You do have a tendency to keep track of companies you invest in. I will retain the shares I have for now and see what happens.
There is an article on this company in a magazine called Biomass. There is no date on this article, but it is given a date of 27 Feb 2009 by Google.
The Company’s core business is the regularly scheduled collection of non-hazardous liquid organic residuals. It collects, processes and recycles these wastes. Its web site is here Organic Resource. See my spreadsheet at ori.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, October 31, 2011
Friday, October 28, 2011
Ballard Power Systems Inc
I do not own this stock (TSX-BLD), but I used to and I still follow it. I bought it because I liked its story of using fuel cells. This for me was a great story of us giving us the ability to go green. Seemed like a good thing to invest in. I do believe we have to stop using oil at some point. Using oil is one way that we pollute our environment and we have to look after our environment.
No matter what you might think about global warming/global change or whatever they are calling it now, we certainly can do more to protect our environment. Of course, the argument is not really about global warming/global change, since this is always happening. Also the world has gotten warmer since the little ice age (world has been warming since approximately 1850). The argument is about whether or not we are causing this, especially with CO2. The way I see it is that mankind likes to think that he is in charge. This is what I have doubts about, i.e. that mankind is really in charge.
Getting back to the stock I want to talk about, I do not think that any one can argue that the world would be better off if we could get off of our oil dependency (I am concerned about the fact that a lot of my utilities are oil pipelines, but that is another story).
It seems like a great idea at the time that is, investing in green energy. Make money while I help save the planet. However, it did not turn out that way. I think it is important to look investments that do not do so well as well as those that do. The first kind can be a cautionary tale.
I bought this stock in 1997 and sold it in 2006 and lost some 5.31% per year or 37.6% over 9 years. This stock hit a high of $194.00 per share in 2000. I bought at $17.34 and sold at $10.82. There was also a 3 to 1 share split in 1998. This stock is worth $1.40 a share today.
The company has had few years where it has any earnings, and none of positive cash flow, as far as I can see. Since 2002, the book value has gone down steadily. However, Revenue per share has been growing and over the past 5 and 10 years, it has grown around 10% per year. Total revenue however has not grown as well. The 10 year growth of Revenue over the past 5 and 10 years is 4% and 9%.
No one expects this stock to earn anything or have any cash flow over the next two years. However, sales are expected to grow. It is interesting that the company had revenue of $65M in 2010, it is expected to have $86M then $109M in revenue over this year and next, but it is not expected to make any money or have positive cash flow.
Over the past year there has been some minor insider buying and insider selling. Lots of insiders hold options. Some 74 Institutions hold around 13% of the shares of this company. Over the past 3 months there has been minor (less than 1%) selling of shares by institutions.
In the past there were a number of sell recommendations on this stock. The basic comment was that this company does not seem to be able to make any money. However, recently the shares have been upgraded and there are some Strong Buy and Buy recommendations, along with some Hold recommendations. The consensus recommendation is a Buy. Buy recommendations come with a 12 month stock price of $2.48.
You have to wonder about buying this stock. It does not seem to be able to make any money. No one expects it to make any money this year or next, but they do expect the share price to move up from current $1.40 to $2.48, a 77% run up?
Ballard Power Systems designs and manufactures clean energy hydrogen fuel cells. Better energy, delivered through our focused fuel cell innovations, offers the Power to Change end-user applications, while also improving the environment. Its web site is here Ballard. See my spreadsheet at bld.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.
No matter what you might think about global warming/global change or whatever they are calling it now, we certainly can do more to protect our environment. Of course, the argument is not really about global warming/global change, since this is always happening. Also the world has gotten warmer since the little ice age (world has been warming since approximately 1850). The argument is about whether or not we are causing this, especially with CO2. The way I see it is that mankind likes to think that he is in charge. This is what I have doubts about, i.e. that mankind is really in charge.
Getting back to the stock I want to talk about, I do not think that any one can argue that the world would be better off if we could get off of our oil dependency (I am concerned about the fact that a lot of my utilities are oil pipelines, but that is another story).
It seems like a great idea at the time that is, investing in green energy. Make money while I help save the planet. However, it did not turn out that way. I think it is important to look investments that do not do so well as well as those that do. The first kind can be a cautionary tale.
I bought this stock in 1997 and sold it in 2006 and lost some 5.31% per year or 37.6% over 9 years. This stock hit a high of $194.00 per share in 2000. I bought at $17.34 and sold at $10.82. There was also a 3 to 1 share split in 1998. This stock is worth $1.40 a share today.
The company has had few years where it has any earnings, and none of positive cash flow, as far as I can see. Since 2002, the book value has gone down steadily. However, Revenue per share has been growing and over the past 5 and 10 years, it has grown around 10% per year. Total revenue however has not grown as well. The 10 year growth of Revenue over the past 5 and 10 years is 4% and 9%.
No one expects this stock to earn anything or have any cash flow over the next two years. However, sales are expected to grow. It is interesting that the company had revenue of $65M in 2010, it is expected to have $86M then $109M in revenue over this year and next, but it is not expected to make any money or have positive cash flow.
Over the past year there has been some minor insider buying and insider selling. Lots of insiders hold options. Some 74 Institutions hold around 13% of the shares of this company. Over the past 3 months there has been minor (less than 1%) selling of shares by institutions.
In the past there were a number of sell recommendations on this stock. The basic comment was that this company does not seem to be able to make any money. However, recently the shares have been upgraded and there are some Strong Buy and Buy recommendations, along with some Hold recommendations. The consensus recommendation is a Buy. Buy recommendations come with a 12 month stock price of $2.48.
You have to wonder about buying this stock. It does not seem to be able to make any money. No one expects it to make any money this year or next, but they do expect the share price to move up from current $1.40 to $2.48, a 77% run up?
Ballard Power Systems designs and manufactures clean energy hydrogen fuel cells. Better energy, delivered through our focused fuel cell innovations, offers the Power to Change end-user applications, while also improving the environment. Its web site is here Ballard. See my spreadsheet at bld.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, October 27, 2011
Evertz Technologies 2
I now own this stock (TSX-ET). I got idea to investigate this stock from a G&M Article. See G&M. As I mentioned at the end of blog of yesterday, I did buy some of this stock yesterday.
A couple of things stand out. One is that there is lots of insider ownership. Over 73% of this company is owned by insiders (there is two big insider owners). There has been some insiders buying and insider selling, but of very limited amounts. Institutions (some 20) own another 5%. This means that there is not much to trade and it probably makes the company a bit illiquid. Over the past 3 months, institutions have marginally increased their shares in this company. The other thing that stands out is that the company is doing a lot of buying back of company shares.
The stock had a recent low of $11.21 in mid-October and it has been climbing ever since and it is up almost 20% to date. The stock is also up more than 5% just today. I have a 5 year low median Price/Earnings of 13.01 and a 5 year high median P/E of 19.62. For today’s price of $13.34, the P/E is on the low side at 13.75.
I get a Graham Price of $10.43. The stock price of $13.34 is some 28% higher. However, on a relative basis the average difference between the Graham price and the stock price is the stock price being 50% higher. I get a 5 year Price/Book Value Ratio of 4.60 (which I must admit is a bit high). However, the current one of 2.67 is fine. On a relative basis, the current P/B Ratio is lower than the 5 year average by just over 60%, which shows a relatively good stock price.
The current dividend yield of 3.6% is higher than the 5 year median yield of 1.96. However, they have been increasing the dividend quite rapidly and the latest was a 20% increase. (The median dividend increase is 22% per year.) By all these measures the current stock price looks reasonable. How long this will be is hard to determine. However, I would think that the price could go to $20 before the stock would be considered to be a bit pricey.
When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (There is nothing unusual here.) This is not a well followed stock, but the blog Canadian Dividend Stock has a recent write up on this stock. He feels that the company has good growth potential, but will not have long term stability. (Personally, I think you have to keep an eye on tech stocks, you can make money on them, but their situation can change fast.)
Blogger Tech Vibes has a different opinion. He thinks that Evertz is undervalued and we should buy it because it has a good financial history. He thinks investors looking for long term profitability in a stock should look at this one, as well as 3 other Canadian Tech stocks.
Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz . See my spreadsheet at et.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
A couple of things stand out. One is that there is lots of insider ownership. Over 73% of this company is owned by insiders (there is two big insider owners). There has been some insiders buying and insider selling, but of very limited amounts. Institutions (some 20) own another 5%. This means that there is not much to trade and it probably makes the company a bit illiquid. Over the past 3 months, institutions have marginally increased their shares in this company. The other thing that stands out is that the company is doing a lot of buying back of company shares.
The stock had a recent low of $11.21 in mid-October and it has been climbing ever since and it is up almost 20% to date. The stock is also up more than 5% just today. I have a 5 year low median Price/Earnings of 13.01 and a 5 year high median P/E of 19.62. For today’s price of $13.34, the P/E is on the low side at 13.75.
I get a Graham Price of $10.43. The stock price of $13.34 is some 28% higher. However, on a relative basis the average difference between the Graham price and the stock price is the stock price being 50% higher. I get a 5 year Price/Book Value Ratio of 4.60 (which I must admit is a bit high). However, the current one of 2.67 is fine. On a relative basis, the current P/B Ratio is lower than the 5 year average by just over 60%, which shows a relatively good stock price.
The current dividend yield of 3.6% is higher than the 5 year median yield of 1.96. However, they have been increasing the dividend quite rapidly and the latest was a 20% increase. (The median dividend increase is 22% per year.) By all these measures the current stock price looks reasonable. How long this will be is hard to determine. However, I would think that the price could go to $20 before the stock would be considered to be a bit pricey.
When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (There is nothing unusual here.) This is not a well followed stock, but the blog Canadian Dividend Stock has a recent write up on this stock. He feels that the company has good growth potential, but will not have long term stability. (Personally, I think you have to keep an eye on tech stocks, you can make money on them, but their situation can change fast.)
Blogger Tech Vibes has a different opinion. He thinks that Evertz is undervalued and we should buy it because it has a good financial history. He thinks investors looking for long term profitability in a stock should look at this one, as well as 3 other Canadian Tech stocks.
Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz . See my spreadsheet at et.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, October 26, 2011
Evertz Technologies
I do not own this stock (TSX-ET). I got idea to investigate this stock from a G&M Article. See G&M. It looked like something I might want to try out.
I did a spreadsheet on this stock and it does look good. The only thing is that the stock has not been listed for very long and I only have 5 years of data on it. The stock has a very nice dividend with a yield of 3.75%. The last dividend increase was for 20%. However, because of a dividend raise in the last financial year too, the dividends are up almost 28% year over year.
The Dividend Payout Ratios are good at expected rates for this year at 47% for earnings and 44% for cash flow. They are a bit higher than last years of 35% and 36%, respectively. (See my site for information on Dividend Payout Ratios). What is also important for a dividend paying small company is debt ratios and these are also very good on this stock. The company really has no debt.
The current Liquidity Ratio is 10.85 with a 5 year median of 6.76. The Asset/Liability Ratio is 10.85 with a 5 year median Ratio of 6.86. These ratios started off quite low in 2005 and 2006, but have been very good since 2007. Leverage and Debt/Equity Ratios are also good with current ratios at 1.11 and 0.11. The 5 year median ratios are 1.18 and 0.17, respectively.
The growth for Revenues, Earnings, Cash Flow and Book Value are all very good on this stock. Over the past 5 years, the revenue per share has increased by 14.4% per year. The EPS has increased at the rate of 12% per year. The Cash Flow has increased by 12% per year and the book value by 110% per year.
The stock price had peaked on this stock in 2008 and has not made it back to this peak yet. However, if you had invested in this stock over the past 5 years, you probably would have made a very decent 9% per year total return. As the dividends have increased very fast from a lower yield, over the past 5 years the portion of the total return attributable to dividends would probably be under 2%.
The return on equity for this stock has also been very good. The ROE for the last financial year is 20.8% and for the last 12 months a bit lower at 20.2%. The 5 year median ROE is 20.8%.
I decided to try out this stock and purchased a couple of hundred shares today. I also sold Enerflex Ltd. (TSX-EFX) that I got from a distribution by Toromont Industries. I had not wanted this company and it seemed like a good time to sell. The price I got was a bit below the ACB of the stock, but this is a low market and I got Evertz at a good price. I also bought some Ag Growth International (TSX-AFN) at a good price.
Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is ere Evertz. See my spreadsheet at et.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 did a spreadsheet on this stock and it does look good. The only thing is that the stock has not been listed for very long and I only have 5 years of data on it. The stock has a very nice dividend with a yield of 3.75%. The last dividend increase was for 20%. However, because of a dividend raise in the last financial year too, the dividends are up almost 28% year over year.
The Dividend Payout Ratios are good at expected rates for this year at 47% for earnings and 44% for cash flow. They are a bit higher than last years of 35% and 36%, respectively. (See my site for information on Dividend Payout Ratios). What is also important for a dividend paying small company is debt ratios and these are also very good on this stock. The company really has no debt.
The current Liquidity Ratio is 10.85 with a 5 year median of 6.76. The Asset/Liability Ratio is 10.85 with a 5 year median Ratio of 6.86. These ratios started off quite low in 2005 and 2006, but have been very good since 2007. Leverage and Debt/Equity Ratios are also good with current ratios at 1.11 and 0.11. The 5 year median ratios are 1.18 and 0.17, respectively.
The growth for Revenues, Earnings, Cash Flow and Book Value are all very good on this stock. Over the past 5 years, the revenue per share has increased by 14.4% per year. The EPS has increased at the rate of 12% per year. The Cash Flow has increased by 12% per year and the book value by 110% per year.
The stock price had peaked on this stock in 2008 and has not made it back to this peak yet. However, if you had invested in this stock over the past 5 years, you probably would have made a very decent 9% per year total return. As the dividends have increased very fast from a lower yield, over the past 5 years the portion of the total return attributable to dividends would probably be under 2%.
The return on equity for this stock has also been very good. The ROE for the last financial year is 20.8% and for the last 12 months a bit lower at 20.2%. The 5 year median ROE is 20.8%.
I decided to try out this stock and purchased a couple of hundred shares today. I also sold Enerflex Ltd. (TSX-EFX) that I got from a distribution by Toromont Industries. I had not wanted this company and it seemed like a good time to sell. The price I got was a bit below the ACB of the stock, but this is a low market and I got Evertz at a good price. I also bought some Ag Growth International (TSX-AFN) at a good price.
Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is ere Evertz. See my spreadsheet at et.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, October 25, 2011
Dividend Increase, Third Quarter 2
Today, I am updating my spreadsheet on dividends. For all my stocks, I have shown in the “11” (for 2011) column, if a company has actually increased their dividend yet for their current financial year ending in December 2011. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2011. I have also added columns of “Div” and “12” for any of my stocks that have financial years not ending in December 2011 and they are therefore into their 2012 financial year.
For the second quarter of 2011, I had 7 companies increase their dividends. I will cover the remaining 4 today. You can use your mouse to highlight a line in my htm documents.
Davis & Henderson (TSX-DH) down, then up
Royal Bank (TSX-RY)
Saputo Inc. (TSX-SAP)
Alimentation Couche Tard (TSX-ATD.A)
The first company to talk about is Davis & Henderson. I first bought this company in 2009. It was an income trust at that time and it duly converted to a corporation and cut it dividends by almost 35%. Now in the third quarter, it has raised its dividend 3.3%. This is not a great rise, but it is probably more than inflation.
I bought more of this company in 2010 and 2011 and my total return is 10.75% per year. This stock currently has a great yield of 7.38%. Recently, analysts have upped expect CF for 2011 and 2011, downgraded the EPS for 2011, but upped it for 2012. The Dividend Payout Ratios for Earnings and CF are probably a little high for 2011 at estimates of 64% and 54%, but the company hasn’t got much debt.
For my last full blog entries on this stock in May 2011, click here or here.
For Royal Bank, the dividend raise for the third quarter of this year is the first one since 2008. I guess the increase of 8% is fine, but it is lower than past rises, which were about twice this. The expected DPR for 2011 are 47% for both earnings and cash flow. Estimates have recently changed with Earnings going up and cash flow going down for 2011. I have been invested in the Royal Bank since 1995 and my total return is 18% per year.
For my last full blog entries on this stock in December 2010, click here or here.
The next stock to talk about is Saputo. This is a retail stock with a low dividend yield (currently at 1.8%) and a usually high dividend increase. This recent dividend increase of 18.8% is good. I bought this stock in 2006 and 2007 and my total return is 18.7% per year. Probably only 2% is dividends. This stock has low DPRs, probably because it needs money for growth. It also has good debt ratios.
For my last full blog entries on this stock in July 2011, click here or here.
The last stock to talk about is Alimentation Couche Tard. This is another retail stock. It has extremely low dividend yields (less than1%), but very low DPRs and ok debt ratios. The recent dividend increases was 25% with the total increase in dividends for their financial year ending in 2012 at 39%, as this company increased their dividend in the middle of their last financial year also (that is two dividends ago).
I have bought stock in this company in 2004, 2006 and 2007 and have made a total return of 11.3% per year. Less than 1% would be attributable to dividends. For my last full blog entries on this stock in August 2011, click here or here.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
For the second quarter of 2011, I had 7 companies increase their dividends. I will cover the remaining 4 today. You can use your mouse to highlight a line in my htm documents.
Davis & Henderson (TSX-DH) down, then up
Royal Bank (TSX-RY)
Saputo Inc. (TSX-SAP)
Alimentation Couche Tard (TSX-ATD.A)
The first company to talk about is Davis & Henderson. I first bought this company in 2009. It was an income trust at that time and it duly converted to a corporation and cut it dividends by almost 35%. Now in the third quarter, it has raised its dividend 3.3%. This is not a great rise, but it is probably more than inflation.
I bought more of this company in 2010 and 2011 and my total return is 10.75% per year. This stock currently has a great yield of 7.38%. Recently, analysts have upped expect CF for 2011 and 2011, downgraded the EPS for 2011, but upped it for 2012. The Dividend Payout Ratios for Earnings and CF are probably a little high for 2011 at estimates of 64% and 54%, but the company hasn’t got much debt.
For my last full blog entries on this stock in May 2011, click here or here.
For Royal Bank, the dividend raise for the third quarter of this year is the first one since 2008. I guess the increase of 8% is fine, but it is lower than past rises, which were about twice this. The expected DPR for 2011 are 47% for both earnings and cash flow. Estimates have recently changed with Earnings going up and cash flow going down for 2011. I have been invested in the Royal Bank since 1995 and my total return is 18% per year.
For my last full blog entries on this stock in December 2010, click here or here.
The next stock to talk about is Saputo. This is a retail stock with a low dividend yield (currently at 1.8%) and a usually high dividend increase. This recent dividend increase of 18.8% is good. I bought this stock in 2006 and 2007 and my total return is 18.7% per year. Probably only 2% is dividends. This stock has low DPRs, probably because it needs money for growth. It also has good debt ratios.
For my last full blog entries on this stock in July 2011, click here or here.
The last stock to talk about is Alimentation Couche Tard. This is another retail stock. It has extremely low dividend yields (less than1%), but very low DPRs and ok debt ratios. The recent dividend increases was 25% with the total increase in dividends for their financial year ending in 2012 at 39%, as this company increased their dividend in the middle of their last financial year also (that is two dividends ago).
I have bought stock in this company in 2004, 2006 and 2007 and have made a total return of 11.3% per year. Less than 1% would be attributable to dividends. For my last full blog entries on this stock in August 2011, click here or here.
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, October 24, 2011
Dividend Increase, Third Quarter
From questions on Reasonable Stock Price, I would suggest that you never invest in the Stock Market (Bond Market too) any money you will need in the next 5 years. Also, you should plan on a 5 year period to take money out of a stock portfolio. Over a 5 year period, you can take money out when the market is relatively high. In a stock market, you only really know where the market is, relatively.
I know that it is not always possible to plan. Life happens. But if you can delay cashing out stocks you might be better off. Fall is generally the worse time to take money out of a stock portfolio. January is better and between March and May even better. The stock market has a seasonality to it. There is no logical reason for this, but it happens on a pretty consistent basis. Knowing this may help in making plans to take money from a stock portfolio.
Today, I am updating my spreadsheet on dividends. For all my stocks, I have shown in the “11” (for 2011) column, if a company has actually increased their dividend yet for their current financial year ending in December 2011. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2011. I have also added columns of “Div” and “12” for any of my stocks that have financial years not ending in December 2011 and they are therefore into their 2012 financial year.
For the third quarter of 2011, I had 7 companies increase their dividends. In my spreadsheet, these increases are highlighted in blue. The first 3 I will talk about today. I will cover the remaining 4 tomorrow. You can use your mouse to highlight a line in my htm documents. The first three I want to talk about today, have raised their dividends for a second time this year. These stocks are:
BCE (TSX-BCE);
Computer Modelling Group Ltd (TSX-CMG)
Russel Metals (TSX-RUS)
The first stock to talk about is BCE. They raised their dividends by 7.7% in the first quarter of this year. For the third quarter of this year, they have again raised their dividend, this time by 5.1%.
I do have this stock recorded on Quicken and can calculate an IRR, but the problem is that they spun off Nortel in 2000 when the market price on this stock was very high. They also spun off Bell Aliant in 2006. Taking all these stocks in account, I have a total return of 10.24% per year since I have tracked this stock from 1987.
I had initially bought this stock in 1982, but I have only tracked it on quicken since that 1987. If I look at all these stocks for the past 10 years, I have lost 1.4% per year. If I track this stock for 9 years, without Nortel, I have made a return of 7.47% per year. If I look at this stock for the last 9 years without Bell Aliant, I get a total return of 7.59% per year. My spreadsheet for this stock shows similar total return. The dividend has provided just over 3% of this total return.
For my last full blog entries on this stock in April 2011, click here or here.
The next stock is Computer Modelling Group Ltd. This is a small dividend paying company. Because it is small and is basically a Tech company, it would be consider a riskier than average stock. This is not the first time that this stock has raised their dividend more than once in a year. The first dividend increase was in the first quarter of this year and the increase was for 5%. The second increase was the third quarter of this year and the increase was for 4.8%.
Because the dividend was raised 3 times last year, the real increase in dividend payments between last year and this year is 13%. This company is basically paying out all its excess earnings in dividends. They often pay special dividends too. This year was no different with a $.10 special dividend payment.
I bought this stock first in 2008 and have made a total return of some 39% per year on the stock. For my last full blog entries on this stock in June 2011, click here or here.
The last stock to talk about today is Russel Metals. This stock increased their dividends in first quarter also, with an increase of 10%. The second increase was for 9.1%. The overall increase in dividends for this year is 15%. Also, because the 2nd dividend increase occurred in the third quarter, the dividends for next year would be some 4.35% higher than the dividends for this year.
However, Russell Metal is not like the other two companies I have been talking about. They have decreased as well as increased their dividends over the past 10 years. This is because of the business they are in as this company does metal distribution and processing North America.
Since I have bought this stock, I have lost 6.35% per year in capital. I have been making some 4.8% per year on dividends. My loss per year is 1.55%. However, I expect to earn decent money on this stock over the long term.
I bought this stock in 2007 and in 2009, so I have not had it for long. For my last full blog entries on this stock in June 2011, click here or here.
Tomorrow, I will talk about the other stocks I own which had dividend increases in the third quarter. They are:
Davis & Henderson (TSX-DH) down, then up
Royal Bank (TSX-RY)
Saputo Inc. (TSX-SAP)
Alimentation Couche Tard (TSX-ATD.A)
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 know that it is not always possible to plan. Life happens. But if you can delay cashing out stocks you might be better off. Fall is generally the worse time to take money out of a stock portfolio. January is better and between March and May even better. The stock market has a seasonality to it. There is no logical reason for this, but it happens on a pretty consistent basis. Knowing this may help in making plans to take money from a stock portfolio.
Today, I am updating my spreadsheet on dividends. For all my stocks, I have shown in the “11” (for 2011) column, if a company has actually increased their dividend yet for their current financial year ending in December 2011. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2011. I have also added columns of “Div” and “12” for any of my stocks that have financial years not ending in December 2011 and they are therefore into their 2012 financial year.
For the third quarter of 2011, I had 7 companies increase their dividends. In my spreadsheet, these increases are highlighted in blue. The first 3 I will talk about today. I will cover the remaining 4 tomorrow. You can use your mouse to highlight a line in my htm documents. The first three I want to talk about today, have raised their dividends for a second time this year. These stocks are:
BCE (TSX-BCE);
Computer Modelling Group Ltd (TSX-CMG)
Russel Metals (TSX-RUS)
The first stock to talk about is BCE. They raised their dividends by 7.7% in the first quarter of this year. For the third quarter of this year, they have again raised their dividend, this time by 5.1%.
I do have this stock recorded on Quicken and can calculate an IRR, but the problem is that they spun off Nortel in 2000 when the market price on this stock was very high. They also spun off Bell Aliant in 2006. Taking all these stocks in account, I have a total return of 10.24% per year since I have tracked this stock from 1987.
I had initially bought this stock in 1982, but I have only tracked it on quicken since that 1987. If I look at all these stocks for the past 10 years, I have lost 1.4% per year. If I track this stock for 9 years, without Nortel, I have made a return of 7.47% per year. If I look at this stock for the last 9 years without Bell Aliant, I get a total return of 7.59% per year. My spreadsheet for this stock shows similar total return. The dividend has provided just over 3% of this total return.
For my last full blog entries on this stock in April 2011, click here or here.
The next stock is Computer Modelling Group Ltd. This is a small dividend paying company. Because it is small and is basically a Tech company, it would be consider a riskier than average stock. This is not the first time that this stock has raised their dividend more than once in a year. The first dividend increase was in the first quarter of this year and the increase was for 5%. The second increase was the third quarter of this year and the increase was for 4.8%.
Because the dividend was raised 3 times last year, the real increase in dividend payments between last year and this year is 13%. This company is basically paying out all its excess earnings in dividends. They often pay special dividends too. This year was no different with a $.10 special dividend payment.
I bought this stock first in 2008 and have made a total return of some 39% per year on the stock. For my last full blog entries on this stock in June 2011, click here or here.
The last stock to talk about today is Russel Metals. This stock increased their dividends in first quarter also, with an increase of 10%. The second increase was for 9.1%. The overall increase in dividends for this year is 15%. Also, because the 2nd dividend increase occurred in the third quarter, the dividends for next year would be some 4.35% higher than the dividends for this year.
However, Russell Metal is not like the other two companies I have been talking about. They have decreased as well as increased their dividends over the past 10 years. This is because of the business they are in as this company does metal distribution and processing North America.
Since I have bought this stock, I have lost 6.35% per year in capital. I have been making some 4.8% per year on dividends. My loss per year is 1.55%. However, I expect to earn decent money on this stock over the long term.
I bought this stock in 2007 and in 2009, so I have not had it for long. For my last full blog entries on this stock in June 2011, click here or here.
Tomorrow, I will talk about the other stocks I own which had dividend increases in the third quarter. They are:
Davis & Henderson (TSX-DH) down, then up
Royal Bank (TSX-RY)
Saputo Inc. (TSX-SAP)
Alimentation Couche Tard (TSX-ATD.A)
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, October 21, 2011
Reasonable Stock Price
The first rule of investing is “do not invest in things you do not understand”. For dividend paying companies this could translate into do not invest in a company where you do not understand how they make their money.
In regards to Dividend Payout Ratios, do not invest if a company cannot afford their dividends. I am not talking about one losing quarter or year, I am talking about when a company time and time again has dividend payouts it cannot afford, or continues to pay dividends when it appears that they can no longer afford to pay at the current rate or even pay any. Pay special attention to DPR in references to Cash Flow.
Another mistake investors make is to look only at portfolio value. You should be looking at cash flow. It is only cash flow that you can spend.
Of course, the thing I want to talk about today is paying a reasonable price for a stock, and hence the title of this article. You are lucky if you pay a really low price for a stock, but although this is very nice, it is not what is always possible. However, I do suggest that if you cannot pay a reasonable price, you should forgo buying a stock and for a more reasonably priced one.
What I look at to determine is a stock price is reasonable is Price/Earnings Ratio, Graham Price, Dividend Yield and Price/Book Value Ratio. You have to look at relative as well as absolute price. I personally think that relative ratios are more important than absolute ratios. I consider absolute ratios only when the relative ratios are way out of line. Other people use different tests than I do, but I am comfortable with the method I have.
Looking at the P/E Ratio to determine if a stock is at a good price is one of the most common things that investors do. Looking at a 5 and 10 year median P/E Ratio can give you a good idea what is considered to be a relatively high or low current stock price. A reasonable P/E ratio can vary by stock, the sort of company a stock is or type of market we are in.
A particular stock may have a premium or higher P/E Ratio than others in its particular industry. This would be because investors think a stock is a “best in class” stock. An example of this would be Enbridge (TSX-ENB), which some analysts have suggested it should have a higher P/E than other pipeline companies. Tech stocks often have higher P/E Ratios than other companies. Our current market is quite low currently, but some companies and sectors are harder hit than others.
To see yesterday’s P/E Ratio and Dividend yield for the TSX index, go to TSX Money, click on TSX Market Activity and then “Indices & Constituents”. Reuters is also an interesting site as it gives, not only a stocks P/E Ratio, but also the current P/E Ratio for the Industry and Sector a stock is in. See Reuters. For Canadian Stocks, put “TO” after stock symbol, so Emera (TSX-EMA) would be EMA.TO. (Please note that Reuters is very much American market orientated.)
I have already talked about P/E Ratios. See my site for information on Price/Earnings Ratio. As I understand Price/Earnings Ratios, 10 and below is consider low, 15 – 20 is considered normal and 25 or 30 is considered high. This is just a rule of thumb. I generally compare a stock’s current P/E Ratios, using earning estimates for the year with the 5 and 10 year median P/E Ratio of a stock. I like a stock to be around the median P/E Ratio and this I think would show a reasonable price.
The Graham Price is named after Benjamin Graham who is famous for writing book called “The Intelligent Investor”. I have also written about this subject before see my site for more information on the Graham price. Here again, what I like to see, for a reasonable stock price is the current difference between the stock price and Graham Price to be close to the median difference. So, if the 10 year median difference between the stock price and the Graham Price is 5% and there is a 1% current difference, the stock price would be reasonable. On an absolute basis, you would want a stock price at or around the Graham Price.
The next test I use is the P/B Ratio. I look at the 10 year median P/B Ratio and compare it to the current P/B Ratio. Ideally, you would want to see the current P/B Ratio around the same as the current P/B Ratio which would point to a reasonable stock price. A good or cheap stock price would be if the current P/B Ratio is 80% of the 10 year median P/B Ratio. On an absolute basis, a current P/B Ratio of 1.00 shows a very good stock price as it means that the stock price is equal to the book value of the company.
The last thing that I look at is the Dividend Yield. Dividend yield depends on the philosophy of a company. Some like to and can give out good dividends. The problem if the dividend is too high is that the company will have no money to expand. However, if the company is a mature company, it may have no need for expansion money and can distribute most of the cash it earns.
Personally, I like to see a company’s dividend yield that is higher than the 5 year median dividend yield and this would point to a reasonable current stock price. A very good stock price would be when the dividend yield is higher than the 10 year median high dividend yield.
A couple of points I look to make here. I also like companies that increase their dividends consistently (but not necessarily yearly) more than the rate of inflation. (Background inflation tends to be at 3% per year; so basically, I want a company with 5 and 10 year dividend growth at 3%, at the least.) However, if a company is paying out a dividend yield of less than 1%, I would question if the company is really a dividend paying company. On the other hand, if the yield is too high, you would have to wonder if the dividend is sustainable.
Before you buy a stock, you need to check out Dividend Payout Ratios. Analysts talk about DPR for Earnings at 60% and below and DPR for Free Cash Flow at 80% and below and 40% or lower for Cash Flow. The best companies have cash flows that are higher than earnings. I have talked about DPRs before, see my site for more information on Dividend Payout Ratios.
Another thing you might want to consider is the company’s debt rations. I have also talked about this before. See my site for further information on Debt Ratios.
Another thing that I should point out is that the current P/E Ratio and the current Graham price use the earnings estimates for this year in their calculations. The Dividend yield and the P/B Ratio use no estimates.
I do not wait around for a stock I like to get to a reasonable price. If I want to buy, I will buy something else. There is always something at a reasonable price.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
In regards to Dividend Payout Ratios, do not invest if a company cannot afford their dividends. I am not talking about one losing quarter or year, I am talking about when a company time and time again has dividend payouts it cannot afford, or continues to pay dividends when it appears that they can no longer afford to pay at the current rate or even pay any. Pay special attention to DPR in references to Cash Flow.
Another mistake investors make is to look only at portfolio value. You should be looking at cash flow. It is only cash flow that you can spend.
Of course, the thing I want to talk about today is paying a reasonable price for a stock, and hence the title of this article. You are lucky if you pay a really low price for a stock, but although this is very nice, it is not what is always possible. However, I do suggest that if you cannot pay a reasonable price, you should forgo buying a stock and for a more reasonably priced one.
What I look at to determine is a stock price is reasonable is Price/Earnings Ratio, Graham Price, Dividend Yield and Price/Book Value Ratio. You have to look at relative as well as absolute price. I personally think that relative ratios are more important than absolute ratios. I consider absolute ratios only when the relative ratios are way out of line. Other people use different tests than I do, but I am comfortable with the method I have.
Looking at the P/E Ratio to determine if a stock is at a good price is one of the most common things that investors do. Looking at a 5 and 10 year median P/E Ratio can give you a good idea what is considered to be a relatively high or low current stock price. A reasonable P/E ratio can vary by stock, the sort of company a stock is or type of market we are in.
A particular stock may have a premium or higher P/E Ratio than others in its particular industry. This would be because investors think a stock is a “best in class” stock. An example of this would be Enbridge (TSX-ENB), which some analysts have suggested it should have a higher P/E than other pipeline companies. Tech stocks often have higher P/E Ratios than other companies. Our current market is quite low currently, but some companies and sectors are harder hit than others.
To see yesterday’s P/E Ratio and Dividend yield for the TSX index, go to TSX Money, click on TSX Market Activity and then “Indices & Constituents”. Reuters is also an interesting site as it gives, not only a stocks P/E Ratio, but also the current P/E Ratio for the Industry and Sector a stock is in. See Reuters. For Canadian Stocks, put “TO” after stock symbol, so Emera (TSX-EMA) would be EMA.TO. (Please note that Reuters is very much American market orientated.)
I have already talked about P/E Ratios. See my site for information on Price/Earnings Ratio. As I understand Price/Earnings Ratios, 10 and below is consider low, 15 – 20 is considered normal and 25 or 30 is considered high. This is just a rule of thumb. I generally compare a stock’s current P/E Ratios, using earning estimates for the year with the 5 and 10 year median P/E Ratio of a stock. I like a stock to be around the median P/E Ratio and this I think would show a reasonable price.
The Graham Price is named after Benjamin Graham who is famous for writing book called “The Intelligent Investor”. I have also written about this subject before see my site for more information on the Graham price. Here again, what I like to see, for a reasonable stock price is the current difference between the stock price and Graham Price to be close to the median difference. So, if the 10 year median difference between the stock price and the Graham Price is 5% and there is a 1% current difference, the stock price would be reasonable. On an absolute basis, you would want a stock price at or around the Graham Price.
The next test I use is the P/B Ratio. I look at the 10 year median P/B Ratio and compare it to the current P/B Ratio. Ideally, you would want to see the current P/B Ratio around the same as the current P/B Ratio which would point to a reasonable stock price. A good or cheap stock price would be if the current P/B Ratio is 80% of the 10 year median P/B Ratio. On an absolute basis, a current P/B Ratio of 1.00 shows a very good stock price as it means that the stock price is equal to the book value of the company.
The last thing that I look at is the Dividend Yield. Dividend yield depends on the philosophy of a company. Some like to and can give out good dividends. The problem if the dividend is too high is that the company will have no money to expand. However, if the company is a mature company, it may have no need for expansion money and can distribute most of the cash it earns.
Personally, I like to see a company’s dividend yield that is higher than the 5 year median dividend yield and this would point to a reasonable current stock price. A very good stock price would be when the dividend yield is higher than the 10 year median high dividend yield.
A couple of points I look to make here. I also like companies that increase their dividends consistently (but not necessarily yearly) more than the rate of inflation. (Background inflation tends to be at 3% per year; so basically, I want a company with 5 and 10 year dividend growth at 3%, at the least.) However, if a company is paying out a dividend yield of less than 1%, I would question if the company is really a dividend paying company. On the other hand, if the yield is too high, you would have to wonder if the dividend is sustainable.
Before you buy a stock, you need to check out Dividend Payout Ratios. Analysts talk about DPR for Earnings at 60% and below and DPR for Free Cash Flow at 80% and below and 40% or lower for Cash Flow. The best companies have cash flows that are higher than earnings. I have talked about DPRs before, see my site for more information on Dividend Payout Ratios.
Another thing you might want to consider is the company’s debt rations. I have also talked about this before. See my site for further information on Debt Ratios.
Another thing that I should point out is that the current P/E Ratio and the current Graham price use the earnings estimates for this year in their calculations. The Dividend yield and the P/B Ratio use no estimates.
I do not wait around for a stock I like to get to a reasonable price. If I want to buy, I will buy something else. There is always something at a reasonable price.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, October 20, 2011
Oil and Gas Companies
I guess the question is, are oil and gas companies good long term investments, especially for investors that want dividend income? There seems to be two types of companies. Ones like Suncor Energy (TSX-SU) that pays very low (around ½ of 1%) but increasing dividends. You would make most of your money from Capital Gain. Then there are ones like Canadian Oil Sands (TSX-COS) that give you very good dividends, a a large part of what you get in returns is dividends. However, for these company, dividends will fluctuate with price of oil and gas.
The following are the companies in the oil and gas industry that I follow. For all the stock I follow, I have shown the link to my blog entries. The first blog entry should help you answer the questions of whether or not you might like to invest in the stock.
The 2nd blog entry deals with its current price, but you can compare the past median values to current ones to see if you would want to invest in it today. For example, you can compare current P/E Ratios from financial sites to the median P/E Ratios given in my blog. The G&M and Reuter can both give you current ratios. For Reuter, use TO after the stock symbol to find stock listings for Canadian companies. For AltaGas would be the symbol of “ALA.TO”.
AltaGas Ltd (TSX-ALA). This company was an income trust. Dividend yield is good, and after the decrease on change to corporation, the company expects the dividends to be stable or increase. DPRs are high, especially for EPS, but are coming down. Growth is good over the past 10 years, but not past 5 years. For my blog entries dated April 2011, click here or here.
ARC Resources Ltd. (TSX-ARX). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil and gas. DPRs are high for EPS, but are coming down. Neither 5 nor 10 year growth is good for revenue, earnings or cash flow. For my blog entries dated September 2011, click here or here.
Canadian Natural Resources (TSX-CNQ). Dividend yield is very low, but grows. Like Suncor, the dividends are so low, I wonder about calling it a dividend paying stock. DPRs are very low. Growth is better for 10 years than 5 years, but both shows growth. Also, like Suncor, there has been an awful lot of insider selling over past year. For my blog entries dated July 2011, click here or here.
Canadian Oil Sands Trust (TSX-COS). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil. DPRs are currently good. Good growth over last 10 years, but not such much for last 5 years. For my blog entries dated blog dated Oct 2011, click here or here.
Cenovus Energy Inc (TSX-CVE). Dividend yield is not bad and it has grown over past 5 and 10 years. The DPR is fine. Revenues have been growing, but EPS and cash flow have not. However, there has been not negative EPS or Cash Flows. For my blog entries dated October 2011, click here or here.
EnCana Corp (TSX-ECA). Dividend yield is good, but it has fluctuated. But dividends have also grown over past 5 and 10 years. The DPR is mostly fine; however, the DPR for EPS will be high over the next couple of years because earnings are expected to be low. DPR for cash for is just fine. There has been some growth, especially over the past 10 years. For my blog entries dated October 2011, click here or here.
Ensign Energy Services (TSX-ESI). This is an oil and gas servicing company. Dividend yield is decent and is growing very well. The DPR is good. There has been growth over the past 10 years, but not much over the past 5 years. For my blog entries dated October 2011, click here or here.
Husky Energy (TSX-HSE). Dividend yield quite good and is growing, although it also does fluctuate with the price of oil. The DPR is fine. Revenues have been growing over the past 5 and 10 years. However earnings and cash flow have grown over the past 10 years, not over the past 5 years. For my blog entries dated July 2011, click here or here.
Keyera Corp (TSX-KEY), This company was an income trust. Dividends are good and they have been increasing. DPR is currently fine, but the one for earnings have been rather high in the past. Revenue, earnings and cash flow have all been growing. For my blog entries dated August 2011, click here or here
Penn West Petroleum (TSX-PWT. Dividends are good on this company, but they have fluctuated a great deal. DPR is quite high looking at from an EPS standpoint; however they are improving greatly from a cash flow standpoint. There hasn't been much growth over past 5 and 10 years for revenues, earnings or cash flow. However, there was only one year of negative EPS and none for cash flow. They have an awful lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.
Suncor Energy (TSX-SU). Not really a dividend paying company has the dividend yield is usually below 1%. The good thing about the dividend is that it does not fluctuate with the price of oil. DPR is at a great low level for both EPS and cash flow. There has been good growth in revenues and earnings, but not for cash flow. However, there are no years of negative cash flows. This company had a lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.
The site Canadian Oil Stock.ca talks about some of these oil and gas stocks.
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 following are the companies in the oil and gas industry that I follow. For all the stock I follow, I have shown the link to my blog entries. The first blog entry should help you answer the questions of whether or not you might like to invest in the stock.
The 2nd blog entry deals with its current price, but you can compare the past median values to current ones to see if you would want to invest in it today. For example, you can compare current P/E Ratios from financial sites to the median P/E Ratios given in my blog. The G&M and Reuter can both give you current ratios. For Reuter, use TO after the stock symbol to find stock listings for Canadian companies. For AltaGas would be the symbol of “ALA.TO”.
AltaGas Ltd (TSX-ALA). This company was an income trust. Dividend yield is good, and after the decrease on change to corporation, the company expects the dividends to be stable or increase. DPRs are high, especially for EPS, but are coming down. Growth is good over the past 10 years, but not past 5 years. For my blog entries dated April 2011, click here or here.
ARC Resources Ltd. (TSX-ARX). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil and gas. DPRs are high for EPS, but are coming down. Neither 5 nor 10 year growth is good for revenue, earnings or cash flow. For my blog entries dated September 2011, click here or here.
Canadian Natural Resources (TSX-CNQ). Dividend yield is very low, but grows. Like Suncor, the dividends are so low, I wonder about calling it a dividend paying stock. DPRs are very low. Growth is better for 10 years than 5 years, but both shows growth. Also, like Suncor, there has been an awful lot of insider selling over past year. For my blog entries dated July 2011, click here or here.
Canadian Oil Sands Trust (TSX-COS). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil. DPRs are currently good. Good growth over last 10 years, but not such much for last 5 years. For my blog entries dated blog dated Oct 2011, click here or here.
Cenovus Energy Inc (TSX-CVE). Dividend yield is not bad and it has grown over past 5 and 10 years. The DPR is fine. Revenues have been growing, but EPS and cash flow have not. However, there has been not negative EPS or Cash Flows. For my blog entries dated October 2011, click here or here.
EnCana Corp (TSX-ECA). Dividend yield is good, but it has fluctuated. But dividends have also grown over past 5 and 10 years. The DPR is mostly fine; however, the DPR for EPS will be high over the next couple of years because earnings are expected to be low. DPR for cash for is just fine. There has been some growth, especially over the past 10 years. For my blog entries dated October 2011, click here or here.
Ensign Energy Services (TSX-ESI). This is an oil and gas servicing company. Dividend yield is decent and is growing very well. The DPR is good. There has been growth over the past 10 years, but not much over the past 5 years. For my blog entries dated October 2011, click here or here.
Husky Energy (TSX-HSE). Dividend yield quite good and is growing, although it also does fluctuate with the price of oil. The DPR is fine. Revenues have been growing over the past 5 and 10 years. However earnings and cash flow have grown over the past 10 years, not over the past 5 years. For my blog entries dated July 2011, click here or here.
Keyera Corp (TSX-KEY), This company was an income trust. Dividends are good and they have been increasing. DPR is currently fine, but the one for earnings have been rather high in the past. Revenue, earnings and cash flow have all been growing. For my blog entries dated August 2011, click here or here
Penn West Petroleum (TSX-PWT. Dividends are good on this company, but they have fluctuated a great deal. DPR is quite high looking at from an EPS standpoint; however they are improving greatly from a cash flow standpoint. There hasn't been much growth over past 5 and 10 years for revenues, earnings or cash flow. However, there was only one year of negative EPS and none for cash flow. They have an awful lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.
Suncor Energy (TSX-SU). Not really a dividend paying company has the dividend yield is usually below 1%. The good thing about the dividend is that it does not fluctuate with the price of oil. DPR is at a great low level for both EPS and cash flow. There has been good growth in revenues and earnings, but not for cash flow. However, there are no years of negative cash flows. This company had a lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.
The site Canadian Oil Stock.ca talks about some of these oil and gas stocks.
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, October 19, 2011
Suncor Energy 2
I do not own this stock (TSX-SU). This stock has a current dividend yield of 1.47%, which is quite high for this stock. The 5 year median dividend yield is much lower at .65% and the 10 year median dividend yield is even lower at .4%. This is a stock that raises it dividend each year, at least lately, but has a very low yield.
When I look at insider trading, I find insider selling of $55.5M and net insider selling at $54.5M. An awful lot of insiders CEO, CFO, Officers and other officers of the company have lots and lots of options. The insider selling occurred mostly when the stock was peaking in the early part of 2011 and it seems to be the selling of stock options. This company is currently worth about $47B, so insider selling is worth way less than 1% of the market cap of this company at .12%.
According to Reuters, the CEO, Richard George got just over 1.5M shares in options compensation that is worth some $115M. See Reuters page on this stock. Some 808 institutions own 69% of the stock of this company. Over the past 3 months they have increased their investment in this company marginally. (See my site for information on Insider Trading.)
The 10 year low median Price/Earnings Ratio is 19.82 and the 10 year high P/E Ratio is 29.99. The current P/E Ratio at 10.07 is relatively low. It is also a low absolute P/E Ratio. This suggests a rather low stock price.
I get a Graham price of $39.72. The current stock price of $30.22 is some 24% lower. The Graham Price and low stock price median difference over the past 10 years is a stock price 19% above the Graham Price. This difference points to a current good stock price. Also, it is good to see a stock price below the Graham Price.
I get a 10 year median Price/Book Value Ratio of 2.00 and a current P/B Ratio of 1.29. The current P/B ratio is some 65% below the 10 year median ratio. This difference also points to a good current stock price. I get a current dividend yield of 1.46% and a 5 year median dividend yield of .65%. This is a rather high dividend yield for this stock as the yield is usually less than ½ of 1%.
When the stock price is very low like this one is, you must look for a reason. It could be that the stock is out of favor for a good reason. However, in this case, it is probably that this stock market is over all low.
When I look for analysts’ recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. Even the analysts who gave this a Hold recommendation think it is a good stock, they just do not think that this company or any oil company will revive in the near term. Analysts’ are calling the stock deeply discounted, very cheap and beaten up. Quite a number of analysts think this company is a good buy. Although a number of Hold recommendations feel that it is not the right time now to buy this stock.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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 insider selling of $55.5M and net insider selling at $54.5M. An awful lot of insiders CEO, CFO, Officers and other officers of the company have lots and lots of options. The insider selling occurred mostly when the stock was peaking in the early part of 2011 and it seems to be the selling of stock options. This company is currently worth about $47B, so insider selling is worth way less than 1% of the market cap of this company at .12%.
According to Reuters, the CEO, Richard George got just over 1.5M shares in options compensation that is worth some $115M. See Reuters page on this stock. Some 808 institutions own 69% of the stock of this company. Over the past 3 months they have increased their investment in this company marginally. (See my site for information on Insider Trading.)
The 10 year low median Price/Earnings Ratio is 19.82 and the 10 year high P/E Ratio is 29.99. The current P/E Ratio at 10.07 is relatively low. It is also a low absolute P/E Ratio. This suggests a rather low stock price.
I get a Graham price of $39.72. The current stock price of $30.22 is some 24% lower. The Graham Price and low stock price median difference over the past 10 years is a stock price 19% above the Graham Price. This difference points to a current good stock price. Also, it is good to see a stock price below the Graham Price.
I get a 10 year median Price/Book Value Ratio of 2.00 and a current P/B Ratio of 1.29. The current P/B ratio is some 65% below the 10 year median ratio. This difference also points to a good current stock price. I get a current dividend yield of 1.46% and a 5 year median dividend yield of .65%. This is a rather high dividend yield for this stock as the yield is usually less than ½ of 1%.
When the stock price is very low like this one is, you must look for a reason. It could be that the stock is out of favor for a good reason. However, in this case, it is probably that this stock market is over all low.
When I look for analysts’ recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. Even the analysts who gave this a Hold recommendation think it is a good stock, they just do not think that this company or any oil company will revive in the near term. Analysts’ are calling the stock deeply discounted, very cheap and beaten up. Quite a number of analysts think this company is a good buy. Although a number of Hold recommendations feel that it is not the right time now to buy this stock.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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, October 18, 2011
Suncor Energy
I do not own this stock (TSX-SU). This stock has a current dividend yield of 1.47%, which is quite high for this stock. The 5 year median dividend yield is much lower at .65% and the 10 year median dividend yield is even lower at .4%. This is a stock that raises it dividend each year, at least lately, but has a very low yield. It is only on one of the dividend lists I follow of Dividend Achievers (see resources).
Over the past 5 and 10 years, the dividend growth has been at 31% and 20% per year, respectively. However, the portion of the total return that is attributable to dividends would only be around .6% (that is slightly higher than ½ of 1%). The Dividend Payout Ratios are correspondingly low. The 5 year median DPR for earnings is 12% and for cash flow is 3%. The expected DPR for 2011 is 14% for earnings and 7.4% for Cash Flow. Both are quite low. (See my site for information on Dividend Payout Ratios).
The total return on this stock is not bad because if you had held it for 10 years, you have made a return of around 10% per year, plus dividends. If you had held it for the past 5 years, you would only have made a return of around 1%, plus dividends. However, dividend income is so low that you are really only getting capital gain in investing in this stock. To my mind, any stock that gives a dividend under 1% is not a dividend paying stock.
For this stock, I am following it from Petro-Canada (TSX-PCA) into Suncor Energy (TSX-SU). Petro-Canada and Suncor merged in August of 2009. Petro-Canada was considered to be 40% of the merged company. In the new merged company, PCA shareholders got 1.28 shares for each of their old shares.
As far as revenue goes, Suncor’s revenue has grown, but the portion of the revenue attributed to PCA has dropped considerably. As a merged company, revenue has not grown at all. Also, as a merged company Cash Flow has also not grown.
But, growth has been good for earnings and book value. Over the past 5 and 10 years, EPS has grown at 16% per year. Over the past 5 and 10 years, book value has grown at 10% and 13% respectively. The Return on Equity for 2010 is ok at 9.7%, but the 5 year median is better at 16.7%. The 12 months ROE ending in the 2nd Quarter of June 2011 is also better at 10.4%.
The debt ratios are fine for this company. The current Liquidity Ratio at 1.27 is a little low. The current Asset/Liability Ratio is great at 2.13. Both the Leverage Debt/Equity Ratios are fine, currently at 1.88 and 0.88 respectively.
The problem, I think with this company, is that you cannot really consider it a dividend paying stock, as the dividend yield is so low. However, having a very low dividend probably means that the dividends will not fluctuate with the price of oil, but will continue to increase. Tomorrow, I will look to see what the analysts says about this company and what my spreadsheet says about the current stock price.
The Wealthy Canadian talk about this stock in a recent blog.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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.
Over the past 5 and 10 years, the dividend growth has been at 31% and 20% per year, respectively. However, the portion of the total return that is attributable to dividends would only be around .6% (that is slightly higher than ½ of 1%). The Dividend Payout Ratios are correspondingly low. The 5 year median DPR for earnings is 12% and for cash flow is 3%. The expected DPR for 2011 is 14% for earnings and 7.4% for Cash Flow. Both are quite low. (See my site for information on Dividend Payout Ratios).
The total return on this stock is not bad because if you had held it for 10 years, you have made a return of around 10% per year, plus dividends. If you had held it for the past 5 years, you would only have made a return of around 1%, plus dividends. However, dividend income is so low that you are really only getting capital gain in investing in this stock. To my mind, any stock that gives a dividend under 1% is not a dividend paying stock.
For this stock, I am following it from Petro-Canada (TSX-PCA) into Suncor Energy (TSX-SU). Petro-Canada and Suncor merged in August of 2009. Petro-Canada was considered to be 40% of the merged company. In the new merged company, PCA shareholders got 1.28 shares for each of their old shares.
As far as revenue goes, Suncor’s revenue has grown, but the portion of the revenue attributed to PCA has dropped considerably. As a merged company, revenue has not grown at all. Also, as a merged company Cash Flow has also not grown.
But, growth has been good for earnings and book value. Over the past 5 and 10 years, EPS has grown at 16% per year. Over the past 5 and 10 years, book value has grown at 10% and 13% respectively. The Return on Equity for 2010 is ok at 9.7%, but the 5 year median is better at 16.7%. The 12 months ROE ending in the 2nd Quarter of June 2011 is also better at 10.4%.
The debt ratios are fine for this company. The current Liquidity Ratio at 1.27 is a little low. The current Asset/Liability Ratio is great at 2.13. Both the Leverage Debt/Equity Ratios are fine, currently at 1.88 and 0.88 respectively.
The problem, I think with this company, is that you cannot really consider it a dividend paying stock, as the dividend yield is so low. However, having a very low dividend probably means that the dividends will not fluctuate with the price of oil, but will continue to increase. Tomorrow, I will look to see what the analysts says about this company and what my spreadsheet says about the current stock price.
The Wealthy Canadian talk about this stock in a recent blog.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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, October 17, 2011
Ensign Energy Services 2
I do not own this stock (TSX-ESI). This company is a bit different from the other ones I have been reviewing, as they provide services to the oil and gas industry, rather than being in the oil and gas industry. They are also different from the oil and gas companies I have been lately blogging on as they have increased their dividends each year.
When I look at insider trading, I find a minimal amount of insider selling and a minimal amount of insider buy with a net insider selling of $.4M. What I see is that people have a lot of stock options. Insiders also own a lot of shares of this company. Some 35 institutions own around 35% of this company. In the past 3 months they have increased their ownership by around 7%.
I get a 10 year low median Price/Earnings Ratio of 10.96 and a 10 year high median P/E Ratio of 16.67. The corresponding 5 year low and high median P/E Ratio are 8.59 and 14.79. On a relative basis, the current P/E Ratios of 10.91 is low to reasonable. On an absolute basis, a P/E Ratio of 10.91 is low.
I get a current Graham Price of $18.05 and the current stock price of $15.16 is around 16% lower. The 10 year median low difference between the Graham Price and stock price is the stock price being 12.5% lower. On this basis the stock price is low. It is also a good thing that the stock price is below the Graham Price.
I get a 10 year median Price/Book Value Ratio of 2.41 and a current P/B Ratio of 1.46. The current P/B Ratio is just 60% of the 10 year median and this difference points to a very good current stock price.
The last thing to look at is the dividend yield, which is current at 2.51%. The 5 year median dividend yield is 1.87% and this also points to a very good current stock price. Even the 10 year median high dividend yield is lower at 1.8%.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and one Sell recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
One analyst with buy recommendations says that this stock is a good buy for long-term capital gains and raising dividends. He expects that the dividend will be raised again this year. He says that Ensign is well financed and its net-debt-to-cash-flow ratio is a safe 0.1. Another analyst believes the stock is undervalued and expects EPS to benefit as Ensign puts more of its rigs to work and increases the prices it charges.
One article says that this company might benefit from EnCana’s acquisition of Duvemay in Western Canada. There is also an article of Ensign’s acquisition of the land drilling division of Rowan Companies.
With headquarters in Calgary, Alberta, Ensign is an industry leader in the delivery of oilfield services worldwide to the oil and gas industry. They operate in North and South American, Middle East, South East Asia, Africa, Australia and New Zealand. Its web site is here Ensign. See my spreadsheet at esi.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 minimal amount of insider selling and a minimal amount of insider buy with a net insider selling of $.4M. What I see is that people have a lot of stock options. Insiders also own a lot of shares of this company. Some 35 institutions own around 35% of this company. In the past 3 months they have increased their ownership by around 7%.
I get a 10 year low median Price/Earnings Ratio of 10.96 and a 10 year high median P/E Ratio of 16.67. The corresponding 5 year low and high median P/E Ratio are 8.59 and 14.79. On a relative basis, the current P/E Ratios of 10.91 is low to reasonable. On an absolute basis, a P/E Ratio of 10.91 is low.
I get a current Graham Price of $18.05 and the current stock price of $15.16 is around 16% lower. The 10 year median low difference between the Graham Price and stock price is the stock price being 12.5% lower. On this basis the stock price is low. It is also a good thing that the stock price is below the Graham Price.
I get a 10 year median Price/Book Value Ratio of 2.41 and a current P/B Ratio of 1.46. The current P/B Ratio is just 60% of the 10 year median and this difference points to a very good current stock price.
The last thing to look at is the dividend yield, which is current at 2.51%. The 5 year median dividend yield is 1.87% and this also points to a very good current stock price. Even the 10 year median high dividend yield is lower at 1.8%.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and one Sell recommendation. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)
One analyst with buy recommendations says that this stock is a good buy for long-term capital gains and raising dividends. He expects that the dividend will be raised again this year. He says that Ensign is well financed and its net-debt-to-cash-flow ratio is a safe 0.1. Another analyst believes the stock is undervalued and expects EPS to benefit as Ensign puts more of its rigs to work and increases the prices it charges.
One article says that this company might benefit from EnCana’s acquisition of Duvemay in Western Canada. There is also an article of Ensign’s acquisition of the land drilling division of Rowan Companies.
With headquarters in Calgary, Alberta, Ensign is an industry leader in the delivery of oilfield services worldwide to the oil and gas industry. They operate in North and South American, Middle East, South East Asia, Africa, Australia and New Zealand. Its web site is here Ensign. See my spreadsheet at esi.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, October 14, 2011
Ensign Energy Services
I do not own this stock (TSX-ESI). This company is a bit different from the other ones I have been reviewing, as they provide services to the oil and gas industry, rather than being in the oil and gas industry. They are also different from the oil and gas companies I have been lately blogging on as they have increased their dividends each year. They on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices).
Their current dividend at 2.57% is higher than normal. It is normally between 1 and 2%. Dividend growth has been good over the past 5 and 10 years, growing at 15% and 16% per year, respectively. But dividend increases have really slowed down over the past few years, and the increase in 2010 was just 4.4%. This year it has been better at 6.3%.
The Dividend Payout Ratios are good. The 5 year median DPR for earnings is 20% and the cash flow is 16%. It was higher in 2010 at 45% and 20%, respectively. It is expected to be better this year at 27% and 13%, respectively.
Growth over the past 10 years has not been bad for this company. However, there has been no growth over the past 5 years. However, they do have positive earnings and cash flow. For example, the 5 and 10 year growth in earnings is a negative 6.3% and (positive) 3.5% per year, respectively. The 5 and 10 year growth in cash flow is negative 2.3% and (positive) 10.4%.
As far as total return is concerned, if you had been invested in this company over the past 5 you would not have made any money, even when dividends are included. The dividend portion of the return on this company over the past 5 and 10 years run at around 1.8% to 2% per year, so they do not add a lot.
You would have made money if you had been invested in this company over the past 10 years, probably at 7 to 9% per year. This is not bad, considering what other companies have done. The TSX growth over the past 5 and 10 years is 3.58% and 4.17%, per year, respectively.
The current debt ratios are fine. The Liquidity Ratio is a bit low at 1.22, but the Asset/Liability Ratio at 3.29 is great. Both the current Leverage and Debt/Equity Ratios are fine at 1.44 and 0.44. The company does not have much in the way of debt. (See my site for further information on Debt Ratios.)
The last thing to talk about is the Return on Equity. The ROE, to the end of 2010, is 7%. This is a little low. The 5 year median ROE is better at 14.5%. The ROE covering the 12 months ending at the 2nd Quarter of June 30, 2011, is also better at 10.2%.
On Monday, I will look at what my spreadsheet says about the current stock price. Then I will finish blogging about oil and gas stocks with a review of Suncor Energy.
With headquarters in Calgary, Alberta, Ensign is an industry leader in the delivery of oilfield services worldwide to the oil and gas industry. They operate in North and South American, Middle East, South East Asia, Africa, Australia and New Zealand. Its web site is here Ensign. See my spreadsheet at esi.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.
Their current dividend at 2.57% is higher than normal. It is normally between 1 and 2%. Dividend growth has been good over the past 5 and 10 years, growing at 15% and 16% per year, respectively. But dividend increases have really slowed down over the past few years, and the increase in 2010 was just 4.4%. This year it has been better at 6.3%.
The Dividend Payout Ratios are good. The 5 year median DPR for earnings is 20% and the cash flow is 16%. It was higher in 2010 at 45% and 20%, respectively. It is expected to be better this year at 27% and 13%, respectively.
Growth over the past 10 years has not been bad for this company. However, there has been no growth over the past 5 years. However, they do have positive earnings and cash flow. For example, the 5 and 10 year growth in earnings is a negative 6.3% and (positive) 3.5% per year, respectively. The 5 and 10 year growth in cash flow is negative 2.3% and (positive) 10.4%.
As far as total return is concerned, if you had been invested in this company over the past 5 you would not have made any money, even when dividends are included. The dividend portion of the return on this company over the past 5 and 10 years run at around 1.8% to 2% per year, so they do not add a lot.
You would have made money if you had been invested in this company over the past 10 years, probably at 7 to 9% per year. This is not bad, considering what other companies have done. The TSX growth over the past 5 and 10 years is 3.58% and 4.17%, per year, respectively.
The current debt ratios are fine. The Liquidity Ratio is a bit low at 1.22, but the Asset/Liability Ratio at 3.29 is great. Both the current Leverage and Debt/Equity Ratios are fine at 1.44 and 0.44. The company does not have much in the way of debt. (See my site for further information on Debt Ratios.)
The last thing to talk about is the Return on Equity. The ROE, to the end of 2010, is 7%. This is a little low. The 5 year median ROE is better at 14.5%. The ROE covering the 12 months ending at the 2nd Quarter of June 30, 2011, is also better at 10.2%.
On Monday, I will look at what my spreadsheet says about the current stock price. Then I will finish blogging about oil and gas stocks with a review of Suncor Energy.
With headquarters in Calgary, Alberta, Ensign is an industry leader in the delivery of oilfield services worldwide to the oil and gas industry. They operate in North and South American, Middle East, South East Asia, Africa, Australia and New Zealand. Its web site is here Ensign. See my spreadsheet at esi.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, October 13, 2011
EnCana Corp. 2
I do not own this stock (TSX-ECA). The Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009.
When I look at insider trading, I find just insider buying around $1.4M. There is no insider selling. Most of the buying has been by officers of the company, but also a bit my directors. All the buying has occurred in August and September of 2011. All insiders, except directors, have lots more options than shares. However, there are insiders that do own considerable amount of shares, like the CEO whose shares are currently worth around $1.8M. There are some 603 institutions that own some 68% of this company. Over the past 3 months they have sold off a minimal amount (less than .1%)
I get 5 year low median Price/Earnings Ratio of 8.81 and a 5 year high median P/E Ratio of 13.40. Therefore the current P/E of 41.5 is showing a very high relative share price. This is not surprising since the EPS in 2010 was $2.03 and the one for 2011 is expected to be a lot lower at $.50. (Also, for some reason some sites are saying the EPS for 2010 was $.90, not what the financial statements show $2.03. I do not know why.)
I get a current Graham Price of just $16.34. The current price of $20.75 is 27% higher. The 10 year median high difference between the Graham Price and the share price is the shares 8.8% higher. This therefore shows a rather high relative share price. But, please note that the current Graham Price is affected by the current EPS estimate.
When I look at the Price/Book Value Ratio, I get a current one of just 0.87 and a 10 year median P/B Ratio of 1.89. The current one is only some 43% of the 10 year median Ratio. This test points to a very good stock price on two points. One is that the current Ratio is so much lower than the 10 year median Ratio (so good relatively price) and also that the current stock price is lower than the Book Value.
When I look at the dividend yield, I get a current one of 3.97% and a 5 year median dividend yield of 2.46%. This would also point to a very good current stock price. Some investors feel that the dividend yield is the only ratio that counts in determining a reasonable stock price. Both this test and the P/B Ratio test do not use with estimates.
However, when EPS estimates are given for the next 4 years, they climb, but even the 2014 estimate is only $1.74, which is still some 15% lower than the one for 2010. It is obvious that analysts do not expect the company to make much in the way of earnings over the next while.
When I look at analysts’ recommendations, I see Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. Analysts seem to think that Natural Gas prices will be soft for a while. Therefor analysts think that this company would be dead money for a while. There is a worry that natural gas market is not growing. (You can see this thinking also in EPS estimates for the company.)
An analyst that likes this stock says that it is 2 or 3 year story. This is saying it is a long term buy. No one expects anything from natural gas at the moment or in the near future. The other thing is that no one thinks that the current dividend is in jeopardy. The estimate cash flow show that only 14 to 15% of the cash flow will be going to dividends in 2011 and 2012.
EnCana is among the largest natural gas companies in North America. They are focused on natural gas exploration and the development of resource plays. They have a diversified portfolio of assets and hold a highly competitive land and resource position in a number of North America's most promising shale and tight gas resource plays. Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2002. EnCana split into EnCana and Cenovus in 2009. Its web site is here EnCana. See my spreadsheet at eca.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 just insider buying around $1.4M. There is no insider selling. Most of the buying has been by officers of the company, but also a bit my directors. All the buying has occurred in August and September of 2011. All insiders, except directors, have lots more options than shares. However, there are insiders that do own considerable amount of shares, like the CEO whose shares are currently worth around $1.8M. There are some 603 institutions that own some 68% of this company. Over the past 3 months they have sold off a minimal amount (less than .1%)
I get 5 year low median Price/Earnings Ratio of 8.81 and a 5 year high median P/E Ratio of 13.40. Therefore the current P/E of 41.5 is showing a very high relative share price. This is not surprising since the EPS in 2010 was $2.03 and the one for 2011 is expected to be a lot lower at $.50. (Also, for some reason some sites are saying the EPS for 2010 was $.90, not what the financial statements show $2.03. I do not know why.)
I get a current Graham Price of just $16.34. The current price of $20.75 is 27% higher. The 10 year median high difference between the Graham Price and the share price is the shares 8.8% higher. This therefore shows a rather high relative share price. But, please note that the current Graham Price is affected by the current EPS estimate.
When I look at the Price/Book Value Ratio, I get a current one of just 0.87 and a 10 year median P/B Ratio of 1.89. The current one is only some 43% of the 10 year median Ratio. This test points to a very good stock price on two points. One is that the current Ratio is so much lower than the 10 year median Ratio (so good relatively price) and also that the current stock price is lower than the Book Value.
When I look at the dividend yield, I get a current one of 3.97% and a 5 year median dividend yield of 2.46%. This would also point to a very good current stock price. Some investors feel that the dividend yield is the only ratio that counts in determining a reasonable stock price. Both this test and the P/B Ratio test do not use with estimates.
However, when EPS estimates are given for the next 4 years, they climb, but even the 2014 estimate is only $1.74, which is still some 15% lower than the one for 2010. It is obvious that analysts do not expect the company to make much in the way of earnings over the next while.
When I look at analysts’ recommendations, I see Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. Analysts seem to think that Natural Gas prices will be soft for a while. Therefor analysts think that this company would be dead money for a while. There is a worry that natural gas market is not growing. (You can see this thinking also in EPS estimates for the company.)
An analyst that likes this stock says that it is 2 or 3 year story. This is saying it is a long term buy. No one expects anything from natural gas at the moment or in the near future. The other thing is that no one thinks that the current dividend is in jeopardy. The estimate cash flow show that only 14 to 15% of the cash flow will be going to dividends in 2011 and 2012.
EnCana is among the largest natural gas companies in North America. They are focused on natural gas exploration and the development of resource plays. They have a diversified portfolio of assets and hold a highly competitive land and resource position in a number of North America's most promising shale and tight gas resource plays. Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2002. EnCana split into EnCana and Cenovus in 2009. Its web site is here EnCana. See my spreadsheet at eca.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, October 12, 2011
EnCana Corp
I do not own this stock (TSX-ECA). As far as EnCana is concerned, I have bought and sold this stock twice. I had bought it in April 2000 and sold it in August 2002. I also bought it in February 2006 and sold in November 2009. I made a total return of 15% per year for the years I held this stock. Some 2% of my return was in dividends. This was a small investment and rather than have two small investments, I chose to sell before the split into Cenovus and EnCana in 2009.
I have never looked on Oil and Gas companies as long term investments. I do not look at any resource stock as a long term investment. However, what I have noticed about oil and gas companies, the companies that pay fluctuating dividends over the long term certainly payout a lot of dividend income.
The Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009. My spreadsheet is following this company from AEC to EnCana to the EnCana part of this split company. The split was to give Cenovus Energy the oil sections and EnCana to retain the gas sections of the old EnCana. Because of this, my spreadsheet might not actually reflect the past of the current EnCana company.
As far as dividends go, EnCana started off with a very low dividend yield (less than1%). Especially since 2008, dividend payout rates and dividend yields have moved much higher and they have fluctuated. Oil and Gas companies that have high dividend yields and payout ratios tend to have dividends that fluctuate, based on the price of Oil and Gas. The current dividend yield for this stock is quite good at 4%. I do not think that past growth in dividends will have any bearings on future dividend increases.
If you have been invested in the company over the past 5 and 10 years, you would have made money. The total returns for the past 5 and 10 years are around 6% and 14% per year, respectively. The dividend portion of this total return would have been around 2%.
Revenue per share has not grown well over the past 5 and 10 years. Earnings growth has been better for the past 10 year, but not the past 5. The 5 and 10 year growth in EPS is negative and 6.8% per year, respectively. The growth in both Revenues and EPS is better in US$, and this stock is reporting in US$. This company has also always positive earnings and positive cash flow.
The growth in book value has been good, with 5 and 10 year growth in book value at 16% and 12% per year respectively. The return on equity has been fairly good until 2010, when it was just 8.7%. The 5 year median ROE is better at 19%.
The current Liquidity Ratio is low at just 0.65, but this is because there is a current portion of the long term debt in with the current liabilities. However, they have debt facilities in place. The 5 year median Liquidity Ratio is better at 1.03 and this is a more typical Liquidity Ratio for this company. The Asset/Liability Ratio is good at 1.95. Both the Leverage and the Debt/Equity Ratios are fine at 2.05 and 1.05 respectively.
Tomorrow, I will look at what the analysts say about this stock and what my spreadsheet says about the current price.
EnCana is among the largest natural gas companies in North America. They are focused on natural gas exploration and the development of resource plays. They have a diversified portfolio of assets and hold a highly competitive land and resource position in a number of North America's most promising shale and tight gas resource plays. Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2002. EnCana split into EnCana and Cenovus in 2009. Its web site is here EnCana. See my spreadsheet at eca.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 have never looked on Oil and Gas companies as long term investments. I do not look at any resource stock as a long term investment. However, what I have noticed about oil and gas companies, the companies that pay fluctuating dividends over the long term certainly payout a lot of dividend income.
The Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009. My spreadsheet is following this company from AEC to EnCana to the EnCana part of this split company. The split was to give Cenovus Energy the oil sections and EnCana to retain the gas sections of the old EnCana. Because of this, my spreadsheet might not actually reflect the past of the current EnCana company.
As far as dividends go, EnCana started off with a very low dividend yield (less than1%). Especially since 2008, dividend payout rates and dividend yields have moved much higher and they have fluctuated. Oil and Gas companies that have high dividend yields and payout ratios tend to have dividends that fluctuate, based on the price of Oil and Gas. The current dividend yield for this stock is quite good at 4%. I do not think that past growth in dividends will have any bearings on future dividend increases.
If you have been invested in the company over the past 5 and 10 years, you would have made money. The total returns for the past 5 and 10 years are around 6% and 14% per year, respectively. The dividend portion of this total return would have been around 2%.
Revenue per share has not grown well over the past 5 and 10 years. Earnings growth has been better for the past 10 year, but not the past 5. The 5 and 10 year growth in EPS is negative and 6.8% per year, respectively. The growth in both Revenues and EPS is better in US$, and this stock is reporting in US$. This company has also always positive earnings and positive cash flow.
The growth in book value has been good, with 5 and 10 year growth in book value at 16% and 12% per year respectively. The return on equity has been fairly good until 2010, when it was just 8.7%. The 5 year median ROE is better at 19%.
The current Liquidity Ratio is low at just 0.65, but this is because there is a current portion of the long term debt in with the current liabilities. However, they have debt facilities in place. The 5 year median Liquidity Ratio is better at 1.03 and this is a more typical Liquidity Ratio for this company. The Asset/Liability Ratio is good at 1.95. Both the Leverage and the Debt/Equity Ratios are fine at 2.05 and 1.05 respectively.
Tomorrow, I will look at what the analysts say about this stock and what my spreadsheet says about the current price.
EnCana is among the largest natural gas companies in North America. They are focused on natural gas exploration and the development of resource plays. They have a diversified portfolio of assets and hold a highly competitive land and resource position in a number of North America's most promising shale and tight gas resource plays. Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2002. EnCana split into EnCana and Cenovus in 2009. Its web site is here EnCana. See my spreadsheet at eca.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, October 11, 2011
Cenovus Energy Inc. 2
I do not own this stock (TSX-CVE). Basically the Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009.
When I look at insider trading, I find lots of insider selling (at $15.1M) and very little insider buying leaving a net ($15M) of insider selling. Everyone, but the directors have far more stock options than shares. Still, the CEO does have shares just under 100,000 valued at $3.3M. A few of the directors also have just over 100,000 shares.
There are some 529 institutions that own some 74% of this stock. They have marginally (less than 1%) reduced their holdings over the past 3 months.
I get 5 year median low Price/Earnings Ratios 10.18 and a 5 year median high P/E Ratio of 13.84. The current P/E of 18.39 would seem to be high. However, as with lots of other values on this company, the P/E Ratios can fluctuate a great deal. In 2009 and 2010, the P/E ratios never got lower than 18.7. In the years before 2010, P/E was a lot lower.
I get a current Graham Price of $21.82. The current stock price of $33.10 is some 52% higher. The 10 year median difference between the stock price and the Graham Price is the stock price being 25% higher. Here again the Graham Price does fluctuate and over the past two years, the difference between the Graham Price and stock price never got lower than 24%.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio of 2.82 higher than the 10 year median P/B Ratio of 2.04 by almost 40%. To show a good price, you would want the current P/B Ratio lower than the 10 year median Ratio.
The last thing to look at is the dividend yield. The 5 year median dividend yield is 2.76% and the current yield is 2.42%. This also shows a relatively high current stock price. So by all my measurements, the current stock price looks a bit high. It has been quite high over the past two years, but was a lot lower prior to 2010.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. Although there are a lot of analysts following this stock and a lot of Hold recommendations, the consensus recommendation would be a buy. A couple of analysts that give this a buy or strong buy recommendation say it is at a good price for a long term investment. One that gave a Hold recommendation thought it was fully priced (that is the price is too high).
There was a recent write-up on this company in Alberta Oil Magazine.
Tomorrow, I go on to talk about EnCana Corp. I will go on to talk about Ensign Energy Services and then Suncor Energy before wrapping up this section on Oil and Gas companies.
Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus. See my spreadsheet at cve.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 lots of insider selling (at $15.1M) and very little insider buying leaving a net ($15M) of insider selling. Everyone, but the directors have far more stock options than shares. Still, the CEO does have shares just under 100,000 valued at $3.3M. A few of the directors also have just over 100,000 shares.
There are some 529 institutions that own some 74% of this stock. They have marginally (less than 1%) reduced their holdings over the past 3 months.
I get 5 year median low Price/Earnings Ratios 10.18 and a 5 year median high P/E Ratio of 13.84. The current P/E of 18.39 would seem to be high. However, as with lots of other values on this company, the P/E Ratios can fluctuate a great deal. In 2009 and 2010, the P/E ratios never got lower than 18.7. In the years before 2010, P/E was a lot lower.
I get a current Graham Price of $21.82. The current stock price of $33.10 is some 52% higher. The 10 year median difference between the stock price and the Graham Price is the stock price being 25% higher. Here again the Graham Price does fluctuate and over the past two years, the difference between the Graham Price and stock price never got lower than 24%.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio of 2.82 higher than the 10 year median P/B Ratio of 2.04 by almost 40%. To show a good price, you would want the current P/B Ratio lower than the 10 year median Ratio.
The last thing to look at is the dividend yield. The 5 year median dividend yield is 2.76% and the current yield is 2.42%. This also shows a relatively high current stock price. So by all my measurements, the current stock price looks a bit high. It has been quite high over the past two years, but was a lot lower prior to 2010.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. Although there are a lot of analysts following this stock and a lot of Hold recommendations, the consensus recommendation would be a buy. A couple of analysts that give this a buy or strong buy recommendation say it is at a good price for a long term investment. One that gave a Hold recommendation thought it was fully priced (that is the price is too high).
There was a recent write-up on this company in Alberta Oil Magazine.
Tomorrow, I go on to talk about EnCana Corp. I will go on to talk about Ensign Energy Services and then Suncor Energy before wrapping up this section on Oil and Gas companies.
Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus. See my spreadsheet at cve.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, October 7, 2011
Cenovus Energy Inc.
I do not own this stock (TSX-CVE). This stock has had a long and varied history. Basically the Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009. My spreadsheet is following this company from AEC to EnCana to Cenovus. Because of this, it may not capture what this company can or will do.
As far as the dividend are concerned there has been a rapid rise. However, in the past companies, the yield was very low, mostly less than 1%. The current dividend yield on this stock is at 2.42%, which is a decent one. At the end of 2010, the Dividend Payout Ratios were fine at 61% for earnings and 23% for cash flow. They are expected to be even lower in 2011 at 44% for earnings and 19% for cash flow. This is good sign for the dividends under this company.
If you had come into this company from AEC, you would have made money over the past 5 and 10 years. Your total return would have been around 6% and 13%, per year, respectively. The portion attributable to dividends would be around 2% per year. This is a respectable performance.
For this company, revenue and book value has gone up over the past 5 and 10 years. However, earnings and cash flow would have fluctuated. Fluctuating earnings and cash flow is rather typical for companies into oil and gas. The growth in book value for the last 5 and 10 years would be 4.5% and 6% per year, respectively.
The debt ratios on this company are fine. The current Liquidity Ratio is a bit low at 1.18. The current Asset/Liability Ratio is quite good at 1.79. The Leverage Ratio and the Debt/Equity Ratio are both fine, with current ones at 2.27 and 1.27, respectively.
The Return on Equity for the end of 2010 is at 9.9% a little low, but fine. It is the same as the 5 year median ROE of 9.9%. The ROE is has slightly higher in the past.
On Tuesday, I look at what the analysts say about this stock and also what my spreadsheet says about the current price.
Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and
Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus. See my spreadsheet at cve.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
As far as the dividend are concerned there has been a rapid rise. However, in the past companies, the yield was very low, mostly less than 1%. The current dividend yield on this stock is at 2.42%, which is a decent one. At the end of 2010, the Dividend Payout Ratios were fine at 61% for earnings and 23% for cash flow. They are expected to be even lower in 2011 at 44% for earnings and 19% for cash flow. This is good sign for the dividends under this company.
If you had come into this company from AEC, you would have made money over the past 5 and 10 years. Your total return would have been around 6% and 13%, per year, respectively. The portion attributable to dividends would be around 2% per year. This is a respectable performance.
For this company, revenue and book value has gone up over the past 5 and 10 years. However, earnings and cash flow would have fluctuated. Fluctuating earnings and cash flow is rather typical for companies into oil and gas. The growth in book value for the last 5 and 10 years would be 4.5% and 6% per year, respectively.
The debt ratios on this company are fine. The current Liquidity Ratio is a bit low at 1.18. The current Asset/Liability Ratio is quite good at 1.79. The Leverage Ratio and the Debt/Equity Ratio are both fine, with current ones at 2.27 and 1.27, respectively.
The Return on Equity for the end of 2010 is at 9.9% a little low, but fine. It is the same as the 5 year median ROE of 9.9%. The ROE is has slightly higher in the past.
On Tuesday, I look at what the analysts say about this stock and also what my spreadsheet says about the current price.
Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and
Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus. See my spreadsheet at cve.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, October 6, 2011
Penn West Petroleum 2
I do not own this stock (TSX-PWT), but I used to own it. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. I sold it as Penn West Petroleum in 2010 and I made a return of 8.47% per year. I made 11.2% per year on distributions, and lost 2.7% per year on capital gain per year. This is another oil and gas company that converted from an Income Trust.
When I look at insider trading, I find $50M of insider selling and little insider buying with a net insider selling of $49.5M. The vast majority of the selling was at the market high earlier this year. This is a lot of insider selling, but it is also a $10B company, so insider selling is less than 1% of the company.
All insiders but board members have far more stock options than shares. Insiders do have millions of dollars in stock options. It would appear that the insider selling was of stock options. Also, some 369Institutions own about 49% of the shares of the company. Over the past 3 months they have added marginally (less than 1% increase) to their holdings. (See my site for information on Insider Trading.)
I get a 5 year median Price/Earnings Ratio of 9.74 and a 5 year median high P/E Ratio of 14.38. The current P/E of 12.39 on stock price of $15.12 is close to the median P/E Ratio of 12.06. I get a Graham Price of $23.19 and the current stock price of $15.12 is some 35% lower. The median difference between the Graham Price and the low stock price is 30%. By both these measures, the stock price is reasonable.
I get a 10 year median Price/Book Value of 1.37. The current P/B Ratio of 0.77 is some 60% lower. This points to a very good current stock price because the difference between the median P/B Ratio and current P/B Ratio and also because this stock is selling below its book value.
On the only test that shows the stock price is not a relatively good price is the Dividend Yield. The current yield is 7.14% and the 5 year median Dividend Yield is higher at 10.27%. For the stock to pass this test, you would want a current yield higher than the 5 year median yield. There are a couple of points to make. The first is that corporations will not provide the high yields that income trusts provided. The second point is that 7.14% is a high yield.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. (See my site for information on analyst ratings.) One Buy recommendation comes with a 12 month stock price of $23. One analyst with Hold says that the company hasn’t done that well. Another says it is a good buy because price of oil is down, but it will recover. Another feels that it has a great land position in Western Canada.
Another blogger also talks about this stock at Wealthy Canadian.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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 $50M of insider selling and little insider buying with a net insider selling of $49.5M. The vast majority of the selling was at the market high earlier this year. This is a lot of insider selling, but it is also a $10B company, so insider selling is less than 1% of the company.
All insiders but board members have far more stock options than shares. Insiders do have millions of dollars in stock options. It would appear that the insider selling was of stock options. Also, some 369Institutions own about 49% of the shares of the company. Over the past 3 months they have added marginally (less than 1% increase) to their holdings. (See my site for information on Insider Trading.)
I get a 5 year median Price/Earnings Ratio of 9.74 and a 5 year median high P/E Ratio of 14.38. The current P/E of 12.39 on stock price of $15.12 is close to the median P/E Ratio of 12.06. I get a Graham Price of $23.19 and the current stock price of $15.12 is some 35% lower. The median difference between the Graham Price and the low stock price is 30%. By both these measures, the stock price is reasonable.
I get a 10 year median Price/Book Value of 1.37. The current P/B Ratio of 0.77 is some 60% lower. This points to a very good current stock price because the difference between the median P/B Ratio and current P/B Ratio and also because this stock is selling below its book value.
On the only test that shows the stock price is not a relatively good price is the Dividend Yield. The current yield is 7.14% and the 5 year median Dividend Yield is higher at 10.27%. For the stock to pass this test, you would want a current yield higher than the 5 year median yield. There are a couple of points to make. The first is that corporations will not provide the high yields that income trusts provided. The second point is that 7.14% is a high yield.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. (See my site for information on analyst ratings.) One Buy recommendation comes with a 12 month stock price of $23. One analyst with Hold says that the company hasn’t done that well. Another says it is a good buy because price of oil is down, but it will recover. Another feels that it has a great land position in Western Canada.
Another blogger also talks about this stock at Wealthy Canadian.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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, October 5, 2011
Penn West Petroleum
I have been asked to talk about what a reasonable stock price is. I will do that after I finish talking about my oil and gas stocks.
I do not own this stock (TSX-PWT), but I used to own it. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and stock became Ultimate Energy Fund 2006. I followed stock into NCE Petrofund and then into Petrofund Energy. Petrofund Energy merged with Penn West in July 2006 and I got .6 of a share for each share I had. My spreadsheet follows the stock from Petrofund into Penn West.
So I bought this stock as Maximum Energy Trust in 1998 and sold as Penn West Petroleum in 2010 and I made a return of 8.47% per year. I made 11.2% per year on distributions, and lost 2.7% per year on capital gain per year. This is another oil and gas company to convert from an Income Trust. They also decreased their dividends at conversion, but dividends have been going down since 2008.
The current dividend on this stock is quite good at 7.2%. As with other oil and gas companies, the dividends will fluctuate with the price of oil and gas. As an income trust, the dividends on this company were sometimes quite high. The 10 year median high dividend is 15%. However, as a corporation they will be lower as Dividend Payout Ratios based on earnings and cash flow will now be important.
The 5 year median DPR for earnings is 127% and for cash flow is 70%. However, the DPR ratios for 2011 are expected to be 74% for earnings and 28% for cash flow. As an oil and gas company, this company’s earnings have fluctuated. The company had a loss in 2009 and did not earn much in 2010. It is expected to do better in the future.
My spreadsheet and therefore my growth figures are following Petrofund into Penn West. When companies get together, you have to follow the company from somewhere. This will, of course, affect the growth figures that I have. Also, a lot of my growth figures are per share. Since under Petrofund and Penn West lots of shares were issued (I have a 10 year median increase of 32%), this tends to suppress growth figures per share. However, from my point of view, the only growth that matters is per share.
From my spreadsheet, I see no (or negative growth) for Revenue, Earnings, Dividends, and Cash Flow. For example, Revenue per Share is down 7.6% per year and 5% per year over the past 5 and 10 years. Other negative growth is worse. The best is Book Value and Book Value over the past 5 years is down 5% per year, but over the past 10 years is up 5.5% per year. This is not a good showing.
Debt ratios are ok except for Liquidity Ratio. The current Liquidity Ratio is only 0.53. When it is under 1.00, it means that current assets cannot cover current liabilities. However, they have enough cash flow after dividends to cover current liabilities. The Asset/Liability Ratio is much better, with a current ratio of 2.56. The Leverage Ratio and Debt/Equity Ratio are fine with current ratios at 1.64 and .64 respectively.
The Return on Equity is nothing to write home about neither. The ROE for the financial year ending in 2010 is just 2.8 and the 5 year median ROE is 5.5%. It has been higher in the past. They have also had positive earnings for the first 6 months of this year.
You would not have made any money if you had invested in the company 5 years ago. However, if you had invested in this company 10 years ago, you would have made a return of approximately 11 to 12% per year, but all the return would be in distributions. You would have had a capital loss.
The company has been making revenue, earnings and cash flow. Over the past 10 years, there is only one year of negative earnings. All years have positive cash flow. The problem from a growth per share stand point is that it is not growing. However, they have been paying out very good distributions.
Tomorrow, I look at what the analysts say about this stock and also what my spreadsheet say about the stock price.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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 own this stock (TSX-PWT), but I used to own it. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and stock became Ultimate Energy Fund 2006. I followed stock into NCE Petrofund and then into Petrofund Energy. Petrofund Energy merged with Penn West in July 2006 and I got .6 of a share for each share I had. My spreadsheet follows the stock from Petrofund into Penn West.
So I bought this stock as Maximum Energy Trust in 1998 and sold as Penn West Petroleum in 2010 and I made a return of 8.47% per year. I made 11.2% per year on distributions, and lost 2.7% per year on capital gain per year. This is another oil and gas company to convert from an Income Trust. They also decreased their dividends at conversion, but dividends have been going down since 2008.
The current dividend on this stock is quite good at 7.2%. As with other oil and gas companies, the dividends will fluctuate with the price of oil and gas. As an income trust, the dividends on this company were sometimes quite high. The 10 year median high dividend is 15%. However, as a corporation they will be lower as Dividend Payout Ratios based on earnings and cash flow will now be important.
The 5 year median DPR for earnings is 127% and for cash flow is 70%. However, the DPR ratios for 2011 are expected to be 74% for earnings and 28% for cash flow. As an oil and gas company, this company’s earnings have fluctuated. The company had a loss in 2009 and did not earn much in 2010. It is expected to do better in the future.
My spreadsheet and therefore my growth figures are following Petrofund into Penn West. When companies get together, you have to follow the company from somewhere. This will, of course, affect the growth figures that I have. Also, a lot of my growth figures are per share. Since under Petrofund and Penn West lots of shares were issued (I have a 10 year median increase of 32%), this tends to suppress growth figures per share. However, from my point of view, the only growth that matters is per share.
From my spreadsheet, I see no (or negative growth) for Revenue, Earnings, Dividends, and Cash Flow. For example, Revenue per Share is down 7.6% per year and 5% per year over the past 5 and 10 years. Other negative growth is worse. The best is Book Value and Book Value over the past 5 years is down 5% per year, but over the past 10 years is up 5.5% per year. This is not a good showing.
Debt ratios are ok except for Liquidity Ratio. The current Liquidity Ratio is only 0.53. When it is under 1.00, it means that current assets cannot cover current liabilities. However, they have enough cash flow after dividends to cover current liabilities. The Asset/Liability Ratio is much better, with a current ratio of 2.56. The Leverage Ratio and Debt/Equity Ratio are fine with current ratios at 1.64 and .64 respectively.
The Return on Equity is nothing to write home about neither. The ROE for the financial year ending in 2010 is just 2.8 and the 5 year median ROE is 5.5%. It has been higher in the past. They have also had positive earnings for the first 6 months of this year.
You would not have made any money if you had invested in the company 5 years ago. However, if you had invested in this company 10 years ago, you would have made a return of approximately 11 to 12% per year, but all the return would be in distributions. You would have had a capital loss.
The company has been making revenue, earnings and cash flow. Over the past 10 years, there is only one year of negative earnings. All years have positive cash flow. The problem from a growth per share stand point is that it is not growing. However, they have been paying out very good distributions.
Tomorrow, I look at what the analysts say about this stock and also what my spreadsheet say about the stock price.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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, October 4, 2011
Canadian Oil Sands 2
I notice that the Globe and Mail has said today that we are in a bear market. I thought we had been in a bear market since April, but what do I know.
I do not own this stock (TSX-COS). This stock also comes from an income trust and it switch to a corporation in 2010. At that time it declared a 60% decrease in dividends and the stock fell, but later revived. They again started to raise dividends for the May dividend payment.
The insider trading report shows that there has been $3.2M of insider selling with a net of insider selling at $2.7M. The selling was mostly at the top of the market for this year. (It seemed to mostly the selling of options by officers of the company.) There are 196 institutions that hold some 31% of the outstanding shares. Over the past 3 months they have sold 6.5% of their holdings.
Price/Earnings Ratio can vary a lot, but the 5 year low median P/E Ratio is 14.83 and the 5 year median P/E Ratio is 21.15. However, the 10 year median P/E Ratios are lower at 9.26 and 16.19, respectively. The current one at 8.17 is on the low side and suggests a good current stock price at $19.21.
I get a Graham Price of $21.30 and the current stock price of $19.21 is some 9.8% lower. The 10 year average low difference between the Graham Price and stock price is the stock price being 11% lower. By this measure, the stock price is good. However, both the current P/E and Graham Price use the EPS estimate for 2011.
I get a 10 year Price/Book Value Ratio of 2.98 and a current one of 2.24. The current one is 75% of the 10 year median ratio and anything less than 80% is pointing to a good stock price. I get a 5 year median dividend yield of 5.16%. The current yield is 6.25% and this also point to a good current stock price. Also, the 10 year median high dividend yield is 5.82% and the current yield also beats this. Both these test point to a current low stock price. Neither of these tests uses estimates.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. (See my site for information on analyst ratings.) The consensus would be a Hold. There are lots of Hold recommendations.
There are problems or a controversy over our oil sands. Americans call it dirty oil. A number of analysts are worried about this and give this stock a hold. One analyst mentions this also, but gives this stock a buy, but a long term buy. See an article in the National Geographic on this subject. For a review of the bad things said about our oil sands, see a paper by George Winter.
The main reason that the company cut the dividend was to pay for a big capital investment program. A number of analysts felt this was a positive move. The market only punished this stock for the dividend decrease for a short period of time.
A lot of influential people in the US, like to US President, try to sidestep the oil sands controversy. I think the problem for the Americans is that they need our oil. The Americans are a lot of things, but they are not stupid. I cannot think they will refuse our oil.
This stock, like Arc Resources, has fluctuating dividends. This is common to all stocks in the oil and gas industry that pay a decent level of dividends. Over the long term, you can make good income, but it will fluctuate and will probably be decreased when we have recessions. This stock would be considered to be risky for a dividend paying stock. However, if you can stand the dividend fluctuations, you can make good income from such stocks.
Another blogger also talks about this stock at Wealthy Canadian. This stock has also been mentioned a number of time by the Dividend Ninja. See blogs on Income Trust and Income Trust Countdown. Also, see blog entry on Dividend Payout Ratios.
Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74% interest in the Syncrude Project. Syncrude is an experienced oil sands operator, producing a high-quality crude oil for the past 30 years. With large, bitumen-rich leases located in the sweet spot of the Athabasca oil sands deposit and a fully integrated upgrading facility that produces 100% light, sweet crude oil, the quality of their Syncrude asset is very good. Its web site is here Canadian Oil Sands. See my spreadsheet at cos.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 own this stock (TSX-COS). This stock also comes from an income trust and it switch to a corporation in 2010. At that time it declared a 60% decrease in dividends and the stock fell, but later revived. They again started to raise dividends for the May dividend payment.
The insider trading report shows that there has been $3.2M of insider selling with a net of insider selling at $2.7M. The selling was mostly at the top of the market for this year. (It seemed to mostly the selling of options by officers of the company.) There are 196 institutions that hold some 31% of the outstanding shares. Over the past 3 months they have sold 6.5% of their holdings.
Price/Earnings Ratio can vary a lot, but the 5 year low median P/E Ratio is 14.83 and the 5 year median P/E Ratio is 21.15. However, the 10 year median P/E Ratios are lower at 9.26 and 16.19, respectively. The current one at 8.17 is on the low side and suggests a good current stock price at $19.21.
I get a Graham Price of $21.30 and the current stock price of $19.21 is some 9.8% lower. The 10 year average low difference between the Graham Price and stock price is the stock price being 11% lower. By this measure, the stock price is good. However, both the current P/E and Graham Price use the EPS estimate for 2011.
I get a 10 year Price/Book Value Ratio of 2.98 and a current one of 2.24. The current one is 75% of the 10 year median ratio and anything less than 80% is pointing to a good stock price. I get a 5 year median dividend yield of 5.16%. The current yield is 6.25% and this also point to a good current stock price. Also, the 10 year median high dividend yield is 5.82% and the current yield also beats this. Both these test point to a current low stock price. Neither of these tests uses estimates.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. (See my site for information on analyst ratings.) The consensus would be a Hold. There are lots of Hold recommendations.
There are problems or a controversy over our oil sands. Americans call it dirty oil. A number of analysts are worried about this and give this stock a hold. One analyst mentions this also, but gives this stock a buy, but a long term buy. See an article in the National Geographic on this subject. For a review of the bad things said about our oil sands, see a paper by George Winter.
The main reason that the company cut the dividend was to pay for a big capital investment program. A number of analysts felt this was a positive move. The market only punished this stock for the dividend decrease for a short period of time.
A lot of influential people in the US, like to US President, try to sidestep the oil sands controversy. I think the problem for the Americans is that they need our oil. The Americans are a lot of things, but they are not stupid. I cannot think they will refuse our oil.
This stock, like Arc Resources, has fluctuating dividends. This is common to all stocks in the oil and gas industry that pay a decent level of dividends. Over the long term, you can make good income, but it will fluctuate and will probably be decreased when we have recessions. This stock would be considered to be risky for a dividend paying stock. However, if you can stand the dividend fluctuations, you can make good income from such stocks.
Another blogger also talks about this stock at Wealthy Canadian. This stock has also been mentioned a number of time by the Dividend Ninja. See blogs on Income Trust and Income Trust Countdown. Also, see blog entry on Dividend Payout Ratios.
Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74% interest in the Syncrude Project. Syncrude is an experienced oil sands operator, producing a high-quality crude oil for the past 30 years. With large, bitumen-rich leases located in the sweet spot of the Athabasca oil sands deposit and a fully integrated upgrading facility that produces 100% light, sweet crude oil, the quality of their Syncrude asset is very good. Its web site is here Canadian Oil Sands. See my spreadsheet at cos.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, October 3, 2011
Canadian Oil Sands
I plan to cover all the companies in the oil and gas industry that I follow. For the ones that I have not previously made a blog entry this year, I will do so in October. For the rest I have provided links to my blog entries.
Penn West Petroleum (TSX-PWT) Oct 2011
AltaGas Ltd (TSX-ALA), blog dated April 2011, click here or here.
ARC Resources Ltd. (TSX-ARX), blog dated Sept 2011, click here or here.
Canadian Natural Resources (TSX-CNQ), blog dated July 2011, click here or here.
Canadian Oil Sands Trust (TSX-COS) Oct 2011
Cenovus Energy Inc (TSX-CVE) Oct 2011
EnCana Corp (TSX-ECA) Oct 2011
Ensign Energy Services (TSX-ESI) Oct 2011
Husky Energy (TSX-HSE), blog dated Jul 2011, click here or here.
Keyera Corp (TSX-KEY), blog dated Aug 2011, click here or here
Suncor Energy (TSX-SU) Oct 2011
Now, on to the current stock to cover, Canadian Oil Sands (TSX-COS), which I do not own. This stock also comes from an income trust and it switch to a corporation in 2010. At that time it declared a 60% decrease in dividends and the stock fell, but later revived. They again started to raise dividends for the May dividend payment.
This stock has a mixed record of dividend payments. Because a good portion of the cash flow and earnings are paid out in dividends, their dividends will fluctuate with the price of oil. The Dividend Payout Ratio for this stock is at a 5 year median of 101% for Earnings and 74% for cash flow.
However, the DPR for 2011 is expected to be lower at 47% and 27% respectively. DPR for 2011 is expected to be lower at 55% and 33% respectively. Both these rates are quite a bit lower than the 5 year median DPR. This has happened for a number of companies converting from income trusts to corporations. . (See my site for information on Dividend Payout Ratios).
Even so, investor holding this stock over the past 5 and 10 years would have made a lot of money. Dividend income would be around 8% per year. (The dividends have varied and in 2008 this company paid $3.75 in dividends.) Total return over the past 5 years would be from 8% (just dividends) to around 14%. Total return over the past 10 years would have been around 24%. As I have said before on oil and gas companies, you can make a lot in dividend income, if you are willing to put up with fluctuating dividends.
This company has had good growth in revenues over the past 5 and 10 years. The 5 and 10 year growth in Revenue per Share is 10% and 12% per year, respectively. Good growth in earnings, cash flow and book value was only true for the past 10 years. The 5 year growth in these items has been positive, but not great. For example, the 5 and 10 year growth in cash flow has been 2% and 11% per year, respectively.
The Return on Equity has generally been very good on this stock. The ROE for the end of 2011 is 22%, and the 5 year median ROE was 21%. The ROE for the last 12 months ending in June 30, 2011 was 27%.
As far as debt ratios goes, the most volatile is the Liquidity Ratio. At the end of 2010 it was 1.30. For the June 30, 2011 statements it was 2.25. It usually is above 1.00. The Asset/Liability Ratio has been very good. The current one is 2.23 and it has a 5 year median ratio of 2.33. Both the Leverage and Debt/Equity Ratio are good, with current ratios at 1.81 and 0.81 respectively.
This stock has provided good returns for investors in the past. However, since it is in the oil industry, I think it is high risk, but other might disagree. Your return, especially dividend income highly depends on the price of oil.
Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74% interest in the Syncrude Project. Syncrude is an experienced oil sands operator, producing a high-quality crude oil for the past 30 years. With large, bitumen-rich leases located in the sweet spot of the Athabasca oil sands deposit and a fully integrated upgrading facility that produces 100% light, sweet crude oil, the quality of their Syncrude asset is very good. Its web site is here Canadian Oil Sands. See my spreadsheet at cos.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.
Penn West Petroleum (TSX-PWT) Oct 2011
AltaGas Ltd (TSX-ALA), blog dated April 2011, click here or here.
ARC Resources Ltd. (TSX-ARX), blog dated Sept 2011, click here or here.
Canadian Natural Resources (TSX-CNQ), blog dated July 2011, click here or here.
Canadian Oil Sands Trust (TSX-COS) Oct 2011
Cenovus Energy Inc (TSX-CVE) Oct 2011
EnCana Corp (TSX-ECA) Oct 2011
Ensign Energy Services (TSX-ESI) Oct 2011
Husky Energy (TSX-HSE), blog dated Jul 2011, click here or here.
Keyera Corp (TSX-KEY), blog dated Aug 2011, click here or here
Suncor Energy (TSX-SU) Oct 2011
Now, on to the current stock to cover, Canadian Oil Sands (TSX-COS), which I do not own. This stock also comes from an income trust and it switch to a corporation in 2010. At that time it declared a 60% decrease in dividends and the stock fell, but later revived. They again started to raise dividends for the May dividend payment.
This stock has a mixed record of dividend payments. Because a good portion of the cash flow and earnings are paid out in dividends, their dividends will fluctuate with the price of oil. The Dividend Payout Ratio for this stock is at a 5 year median of 101% for Earnings and 74% for cash flow.
However, the DPR for 2011 is expected to be lower at 47% and 27% respectively. DPR for 2011 is expected to be lower at 55% and 33% respectively. Both these rates are quite a bit lower than the 5 year median DPR. This has happened for a number of companies converting from income trusts to corporations. . (See my site for information on Dividend Payout Ratios).
Even so, investor holding this stock over the past 5 and 10 years would have made a lot of money. Dividend income would be around 8% per year. (The dividends have varied and in 2008 this company paid $3.75 in dividends.) Total return over the past 5 years would be from 8% (just dividends) to around 14%. Total return over the past 10 years would have been around 24%. As I have said before on oil and gas companies, you can make a lot in dividend income, if you are willing to put up with fluctuating dividends.
This company has had good growth in revenues over the past 5 and 10 years. The 5 and 10 year growth in Revenue per Share is 10% and 12% per year, respectively. Good growth in earnings, cash flow and book value was only true for the past 10 years. The 5 year growth in these items has been positive, but not great. For example, the 5 and 10 year growth in cash flow has been 2% and 11% per year, respectively.
The Return on Equity has generally been very good on this stock. The ROE for the end of 2011 is 22%, and the 5 year median ROE was 21%. The ROE for the last 12 months ending in June 30, 2011 was 27%.
As far as debt ratios goes, the most volatile is the Liquidity Ratio. At the end of 2010 it was 1.30. For the June 30, 2011 statements it was 2.25. It usually is above 1.00. The Asset/Liability Ratio has been very good. The current one is 2.23 and it has a 5 year median ratio of 2.33. Both the Leverage and Debt/Equity Ratio are good, with current ratios at 1.81 and 0.81 respectively.
This stock has provided good returns for investors in the past. However, since it is in the oil industry, I think it is high risk, but other might disagree. Your return, especially dividend income highly depends on the price of oil.
Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74% interest in the Syncrude Project. Syncrude is an experienced oil sands operator, producing a high-quality crude oil for the past 30 years. With large, bitumen-rich leases located in the sweet spot of the Athabasca oil sands deposit and a fully integrated upgrading facility that produces 100% light, sweet crude oil, the quality of their Syncrude asset is very good. Its web site is here Canadian Oil Sands. See my spreadsheet at cos.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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