First Capital Realty

I do not own this stock (TSX-FCR). I was asked to take a look at this Real Estate stock, so I am. First of all, most Real Estate stocks are having a hard time. It would be ideal for the dividend increases to at least keep up with inflation. Some are not, including this stock which over the last 5 years has not.

The 5 year growth in dividends is just 1.03% per year. Inflation is currently running around 2% per year. (Long Term inflation tends to be around 3 %.) The reason for this is that there has been no distribution increases since 2008. The 10 year growth in dividends is better at 3.63% per year.

Since Real Estate stocks tend to growth their number of shares outstanding, the values as a shareholder you want to be concerned with is always values per shares. One of the problems I see with this stock is lack of growth in Revenue. The 5 year growth is 4.8% per year. However, the 10 year growth is a negative 6.7% per year. That is revenue is less now than 10 years ago.

The thing with this stock is that it was doing well until 1999 when it lost money. It also had negative earnings in 2000. The stock was severely punished. This is the reason the 10 year total return is at 19.7% per year. The distribution portion of this stock was some 9.2%. The 5 year grow is not as good at 6.7% per year, with distribution contributing 5.7% per year.

Another problem with the stock is that Funds from Operations (FFO) is down slightly over the past 10 years. Over the past 5 years, it is up by 1.6% per year. The thing is that distributions have grown from 61% of FFO to an expected 83% for this year.

Although only 1999 and 2000 had negative earnings, earnings have only gone down over the last 5 and 10 years, by 3.6 and 9.6% per year, respectively. Cash flow is up over the past 5 years at 4.5% per year, but it is down by 6.9% per year over the past 10 years. They only had one year of negative cash flow in 2000. Although, for Real Estate stock, FFO rather than earnings are looked at, cash flow does count.

Book Value has gone down over the past 5 and 10 years. However, this should improve with the new account rules of IFRS. Another thing that might improve, for all Real Estate, stock is earnings. However, the Return on Equity for this stock has been very low with a 5 year ROE of just 3.6%. (Do not forget that this is relatively low for a Real Estate company. It will improve under the new accounting rules, but it will also improve for all other Real Estate companies.)

In comparison, Canadian Real Estate has a 5 year median ROE of 12.9% and RioCan Real Estate has a 5 year median ROE of 9.9%. The ROE on this stock ranges from 3.2% to 7.7% over the past 10 years. Canadian Real Estate ranges from 7.7% to 12.9% over the past 10 years. RioCan range ranges from 6.1% to 14.1% over the past 10 years.

As far as debt ratios go, the Asset/Liability Ratio has often been low with a 5 year median ratio of just 1.42. However, the latest one is better at 1.61. Leverage and Debt/Equity Ratios have been a bit high, but are at probably normal Real Estate stock levels currently at 2.65 and 1.65.

The insider trading report shows some $3M of insider selling and minor insider buying. All insiders but directors have lots more stock options than shares. I cannot find any information on institutions holding this stock, so they probably do not.

The current Price/FFO Ratio is 18. The 10 year median low P/FFO is 10 and the high is 14, so this price looks a bit high. Current distribution yield is 4.63% and the 5 year median is 5.45%, a distribution some 15% higher. So by this measure the price is on the high side.

The Price/Book Value Ratio is currently at 1.38 and this is 80% lower than the 10 year median P/B Ratio of 1.73. This ratio points to a good price, but Book Value has increased significantly (81%) due to new account rules, so not a fair measurement. I cannot really compare stock price to Graham Price as it looks like this will change substantially with new calculations of the EPS under the new accounting rules.

When I look at analysts’ recommendations I find Strong Buy, Buy and Hold recommendations with the Buy being the consensus recommendation. One buy recommendation comes with a 12 month stock price of $20. Another has a 12 month stock price of $18. One Analyst says he is cautious on shopping centers because retail sales remain soft, but does own shares in First Capital Realty Inc.

The site Canadian Dividend Stock mentions this company as a top Canadian REIT.

I am not personally interested in this stock as I already have RIOCAN and Canadian Real Estate Investment Trust REITs.

Because of the New Year’s holidays, my next blog entry will be Tuesday, January 3rd, 2012.

First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighborhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty. See my spreadsheet at fcr.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.

All the Bank Stocks That I Track

For all the Canadian bank 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 Bank of Montreal would be the symbol of “BMO.TO”.

For a dividend paying stock portfolio, you might want to buy safer Utilities and financial stocks first. See my site for information on setting up a portfolio. Also, Industrial stocks cover a wide field of endeavors. One definition is “in stock market vernacular, general, catch-all category including firms producing or distributing goods and services that are not classified as utility, consumer, or financial companies”.

Bank of Montreal (TSX-BMO, NYSE-BMO). The 5 year median dividend yield is 4.85%. This is the highest 5 year median yield of all the Canadian banks. This is the only one of the big 5 not to increased dividends this year. The DPRs, especially for Cash Flow are expected to be much more reasonable in 2012. Stock is selling at a relatively good price. For my blog entries dated December 2011, click here or here.

Royal Bank (TSX-RY, NYSE-RY). The 5 year median dividend yield is 3.92%. They restarted dividend increases in 2011 with an 8% increase. DPRs seem good. Stock price is relatively good also. For my blog entries dated December 2011, click here or here.

TD Bank (TSX-TD, NYSE-TD). The 5 year median dividend yield is 3.67%. They restarted dividend increases this year and did two increases. Total increase in Dividends for 2011 is 11.5%. DPRs are fine. Stock price is relatively low for this stock. For my blog entries dated December 2011, click here or here.

Bank of Nova Scotia (TSX-BNS, NYSE-BNS). The 5 year median dividend yield is 3.9%. They raised the dividends this year by 6.1%. DPRs are fine. Stock is also relatively cheap. For my blog entries dated December 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.

Bank of Nova Scotia 2

I do not own this stock (TSX-BNS), but I have been following it for some time. This bank also only had dividends increases on hold for 2009 and 2010. They increased their dividends by 6.1% this year. This is one of the lowest increases for this bank that they have had for some time. The 5 and 10 year dividend growth is 6.45% and 12.7% per year, respectively.

As for all Canadian Banks, the insider trading report shows lots of insider selling. The gross insider selling is $28.9M and the net is $27.9M. Insider selling is by CEO, officers and directors. They seem mostly to be selling stock options. There is some insider buying by directors of just over $1M. There are 504 institutions that own some 65% of this stock. Over the past 3 months there has been buying and selling and they have increased their shares by a modest 1.3%.

I get a 5 year low median Price/Earnings Ratio of 11.4 and a high median P/E Ratios of 14.2. (Note that the 10 year median P/E ratios are virtually the same.) The current P/E Ratio of 10.78 is therefore a low one and that suggests a low stock price.

I get a Graham Price of 52.66. The current stock price of $50.97 is 3% lower. The 10 year median low difference between the Graham Price and Stock price is the stock price being the same. So the stock price being lower than the Graham Price suggests a low stock price also.

I get a 10 year median Price/Book Value Ratio of 2.40 and a current one of 1.96. The current one is 80% of the 10 year median and would suggest a low stock price also. The current dividend yield is 4.08% and the 5 year median dividend yield is 3.92%, some 4.2% lower. This also suggests a low stock price. (Note that the 10 year median high dividend yield at 3.71% is lower than the current yield also.)

When I look at analysts’ recommendations, I find them all. I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are either Buy or Hold. The consensus recommendation would be a Buy. With the Buy commendations come 12 months stock prices between $55 and $68, a rather big range. One Hold says that all Canadian Banks are fully valued.

I think that this is a good Canadian Bank. They also have exposure to the Caribbean and Central America which other Canadian Banks do not. The only reason I do not consider buying this stock is that I also have too much Canadian Bank stock.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin.

This is a pretty dull report. All our banks are priced relatively low. I cannot imagine a completely recovery until the EU solves their problems. No one knows when this will occur.

The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is here Bank of Nova Scotia. See my spreadsheet at bns.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

Be back on December 28, 2011

This is just a note to say that my next post will be on Wednesday, December 28th, 2011.

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.

Bank of Nova Scotia

I do not own this stock (TSX-BNS), but I have been following it for some time. This bank also only had dividends increases on hold for 2009 and 2010. They increased their dividends by 6.1% this year. This is one of the lowest increases for this bank that they have had for some time. The 5 and 10 year dividend growth is 6.45% and 12.7% per year, respectively.

As far as Dividend Payout Ratios goes, their 5 year median DPRs are 50% for earnings and 35% for Cash Flow. Their 10 year median DPRs are lower at 44% and 36%. Their DPRs for 2011 were 44% and 35% and therefore closer to the 10 year median. Their DPRs peaked in 2008 and have been coming down since. (See my site for information on Dividend Payout Ratios).

If you had held this stock over the past 5 and 10 years, you would have had a total return of 4.7% and 13.5% per year. Dividend portion of this return would have been 3.7% and 4.4%. The portion of this return attributable to dividends would be 80% and 32% respectively.

Revenues have been growing over the past 5 and 10 years at around 1.6%. This is low, but revenue growth for all Canadian banks has been low. Earnings have been growing over the past 5 and 10 years at 5.4% and 8.6% per year, respectively.

Cash Flow has been growing at 10.8% and 5.9% per year over the past 5 and 10 years. Book Value has been growing at 8.8% and 7.4%. Concerning the trouble this last recession has caused our banks, this is not bad.

The Return on Equity has always been good for this bank. The ROE for 2011 was 17.5% and the 5 year median was 17.1%. The ROE based on Comprehensive Income is a bit lower, but not significantly lower. The ROE for Comprehensive Income for 2011 was 16.2. However the 5 year median ROE based on Comprehensive Income is lower at 13.6. All these ROE are in the desirable 10 to 15% range.

The Asset/Liability Ratio is low at 1.06, but within typical range for a bank. The Leverage and Debt/Equity Ratios are a bit high at 20.27 and 19.10, but lower than the 10 year medians of 22.11 and 20.89. They are also pretty typical for a bank.

The basic reason I do not own this bank is that I have enough bank stock. I think it is better to own some, but not all, our banks. You can over diversify

I have made transfers from my RRSP accounts for this year. I therefore had a bit of money to invest and so bought some more shares in Ag Growth International (TSX-AFN) today. This is a stock I already own.

The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is here Bank of Nova Scotia. See my spreadsheet at bns.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

TD Bank 2

I own this stock of Toronto-Dominion Bank (TSX-TD, NYSE-TD). This is the most recent bank for me to buy. I bought some for my Locked-in RRSP in 2000 and then sold some of this in May 2009 (at a profit). I also bought some for my RRSP account in June 2009. I have made a return of 13.4% total return on this stock. Of this total return some 3.3% is dividend return. My dividends comprise 24% of my total return.

When I look at insider trading, I find a net of insider selling for $30.7M and insider selling at $32.2M. All the insider selling is by officers of the company. It would seem that officers of TD are not retaining their options. The bit of insider buying of $1.4M is all by directors of the company. Some 596 institutions own 69% of this company. Over the past 3 months there has been buying and selling and institutions have marginally increased, by 1.3%. their holdings in this stock.

The 5 year median low Price/Earnings Ratio is 11.00 and the 5 year median high P/E Ratios is 15.09. The current stock price of $73.40 has a P/E ratio of 10.40, which is on the relatively low side. I get a Graham Price of $73.40. The current stock price is some 16% lower. The low difference between the Graham Price and stock price is the stock price being 4% lower. By this measure also, the stock price is low.

I get a 10 year median Price/Book Value Ratio of 1.98. The current P/B Ratio of 1.52 is 77% lower. This also shows a low stock price. The current dividend yield of 3.71% is higher than the 5 year median dividend yield of 3.67%. The higher current dividend yield shows a relatively good stock price.

When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Sell. The consensus recommendation would be a Buy. One Hold recommendation was worried about Canadian Bank stock volatility over the short term. Another one mentioned worries about the European situation. One Buy mentioned that TD raised their dividends twice this year. Another said he like the current dividend yield.

One Buy recommendation came with a 12 months stock price of $80. Another Buy recommendation has a 12 months stock price of $87. A couple of Buy recommendations mentioned the acquisition of Chrysler Financial Corp. They thought this was an excellent buy for TD Bank.

As I said yesterday, I currently plan to hold on to my shares in this bank. However, once Canadian Banks fully recover from the latest recession, I may have too much in this sector and may have to sell some bank stocks. At that time I will decide what to sell. I will probably do the selling from my RRSP accounts, so this probably means I will sell TD or Royal Bank.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin.

The TD is a bank with full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.

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.

TD Bank

I own this stock (TSX-TD, NYSE-TD). This is the most recent bank for me to buy. I bought some for my Locked-in RRSP in 2000 and then sold some of this in May 2009 (at a profit). I also bought some for my RRSP account in June 2009. I have made a return of 13.4% total return on this stock. Of this total return some 3.3% is dividend return. My dividends comprise 24% of my total return.

I have not done as well on this bank stock as on BMO and Royal because I have not had it as long. Also, I have done much better in the RRSP account with a total return of 23%. For my Locked-in RRSP my return is only 9.2%. The 2008 bear market has hit our banks hard and they have yet to fully recover. I will probably sell some bank stock when they do as I will have too much of my portfolio in bank stocks when they fully recover.

For TD Bank, the dividends were just not increased in 2009 and 2010. They were increased in 2011 twice. The first increase was for 8.2% and the second one for 3% with total increase at 11.5% for the year. The growth in dividends over the past 5 and 10 years is 8% and 9%. The 5 year median Dividend Payout Ratios are 49% for earnings and 31% for CF. They were lower in 2011 and are expected to be lower again in 2012.

Total return over the past 5 and 10 years on this stock is 6.4% and 11.3% per year respectively. The portion attributable to dividends is 3.5% and 3.6%. The portion of the total return attributable to dividends over the past 5 and 10 years is 54% and 32%, respectively.

The best growth rates for this stock is in book value, which over the past 5 and 10 years has grown at 12.5% and 9.8% per year, respectively. The worse is probably revenue, which has not grown over the past 5 and 10 years. Earnings have grown 0% over the past 5 years, and 12.1% per year, over the past 10 years. Cash Flow has grown at 8.7% and 3.4% per year over the past 5 and 10 years.

Return on Equity has still been good over the past few years. The ROE at the end of 2011 was 13.1%. The 5 year median ROE was 12.7%. Both ROEs are quite good. The ROE using Comprehensive Income is a bit lower at 12.5 at the end of 2011 and this has a 5 year median of 12.9%. This is also in the good range of 10% to 15%.

The Asset/Liability Ratio at 1.07 is typical for a bank. The Leverage and Debt/Equity Ratios at 15.79 and 14.72 are better than the other banks and better than the 10 year median ratios of 20.29 and 19.27.

I am pleased with my investment in TD bank and will hold on to it for now. However, I expect that when the banks fully recover I might want to sell some bank stock. However, stocks in the financial service industry make up just 24% of my portfolio. Its portion would have to be over 30% before I would consider selling any. My insurance company investment would also have to recover.

The TD is a bank with full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.

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.

Royal Bank 2

I own this stock (TSX-RY, NYSE-RY). I bought this bank in October 1995. To date, I have made a return of 17.9% per year. Of this total return 5.56% per year is attributed to dividends. So some 31% of my return is accounted for by dividends. On my original investment, I am making a return of 29.75%.

I think that it is important to know how much return is from dividend income. This is an important part of my total return. Without the dividends, my returns would be substantially lower. For this stock 31% of my return is in Dividend income. For Bank of Montreal, it was 44%.

The insider selling at Royal Bank is not quite as bad as at BMO, but almost. Here there is some insider selling of $19.8M and net insider selling at $19.2M. There is modest insider buying by directors. The CEO has insider selling of $13.4M. There is also insider selling by the CFO, officers and directors. It would seem that they are not keeping stock options. CEO, CFO and officers all have lots more stock options than shares.

There are some 524 institutions that hold 54% of the shares of this bank. There has been buying and selling by these institutions over the past 3 months with them marginally (i.e. less than 1%) increasing their holdings.

The 5 year median low Price/Earnings Ratios is 11.68 and the 5 year median high ratio is 18.04. The current one of 10.5 would therefore show a rather low relative stock price. It is also a rather low absolute stock price. I get a Graham price of $51.58. This is 5.7% higher than the current stock price of $48.62. The 10 year low difference between the Graham Price and the stock price is the stock price being some 4% higher. By this measure, the stock price is also relatively low.

I get a 10 year median Price/Book Value Ratio of 2.34 and a current P/B Ratio of 1.90 which is 81% of the median P/B ratio. By this measure the stock price is also relatively low. I get a 5 year median dividend yield of 3.92% and a current yield of 4.44%. This shows a relatively low current stock price. So does the 10 year median high dividend yield, which is just 3.65%.

When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. By and large, the biggest number of recommendations is Hold. The consensus recommendation would be a Hold. Analysts with Buy recommendations talk about its cheap price. Those with Hold recommendations talk that this and other Canadian Banks, are relatively high compared to worldwide banks. They think that Canadian banks stock prices will not improve in the near future.

I, of course, will hold on to the shares I own. I own too much in Canadian banks to buy anymore at this time.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin.

Royal Bank of Canada and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here Royal Bank. See my spreadsheet at ry.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

Royal Bank

First, I want to say I was wrong about one thing on the Bank of Montreal. That was what return my stock was earning after 29 years. On Thursday I had said that on my original stock price, I am making a 19.3% return on Dividends. I had forgotten the split in stock in 2001, so what I am making on my original stock price is a 39% return on dividends.

My return per year at 16% per year was correct as I have used Quicken to determine this and Quicken took the split into account. I had originally bought this stock in 1983 and then using my dividends and extra money in the stock reinvestment plan (DRIP) added to my shares until August 1987. My purchase price is what I paid from 1983 to 1987 divided by the number of shares at that time and then the 2001 split.

Next, on to the Royal Bank (TSX-RY, NYSE-RY), a stock I also own and the one I want to talk about today. I bought this bank in October 1995. To date, I have made a return of 17.9% per year. Of this total return 5.56% is attributed to dividends. So some 31% of my return is accounted for by dividends. On my original investment, I am making a return of 29.75%.

Over the past 5 and 10 years, the returns have not been as good. The 5 and 10 year total returns on this stock are 3.2% and 11.9% per year. Of this return around 4% is attributed to dividends. Do not forget that banks have been hit hard by the latest bear market and dividend increases have been below the normal. I expect that our Canadian banks will recover, but it may take some time.

The best growth rates for this stock are dividends. Over the past 5 and 10 years dividends have grown at the rate of 8.9% and 11.7% per year, respectively. Dividends were not increased between 2008 and 2010. When they were finally increased in2011, the increase was for 8%. The 5 year median Dividend Payout Ratios for earnings and cash flow were 60% and 25%. They were bit higher in 2011 and are expected to be a bit lower in 2012 than the 5 year median ratios.

The next best growth rates are for Book Value, which over the past 5 and 10 years has grown by 9.3% and 7.9% per year respectively. Revenues have only grown at 3.4% and 4.8% per year over past 5 and 10 years. Cash flow has only grown at 0% and 4.8% per year over the past 5 and 10 years. Earnings have gone down by 2% per year over the past 5 years and have grown at the rate of 6% per year over the past 10 years.

Return on Equity has always been quite good. The ROE for the financial year ending in October 2011 was 13.2%. The 5 year median ROE is better at 15.3%.

I do not look at the Liquidity Ratio for banks as it does not really apply. The Asset/Liability Ratio is low at 1.06, but this is typical for a bank. The Leverage and Debt/Equity Ratios might appear high at 20.37 and 19.24, but these are also typical for a bank. They are also better than the 10 year medians of 24.48 and 23.44, respectively.

I have done very well with this stock over the long term and expect that this will continue. Over the short term, this bank, as all our banks, is not growing much. However, it was a good indicator that this bank restarted dividend increases in 2011.

Royal Bank of Canada and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here Royal Bank. See my spreadsheet at ry.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

Bank of Montreal 2

I own this stock (TSX-BMO). This was the first bank stock that I bought. I bought it back in 1983. I have only been tracking it on Quicken since 1987. Since I have been tracking it, I have made a total return of 16% per year. Of this return, my dividends payments were 7.5% per year.

When I look at insider trading, I find no insider buying and lots of lots of insider selling. The CFO has sold $19M and then there is $21M by officers, for a grand total of $40M of insider selling. It would seem that insiders are not keeping their stock options. Some 504 institutions own around 57% of the shares of BMO. There has been buying and selling by institutions over the past 3 months. They have increased their shares in this company by 8.4% over the past 3 months.

I get 5 year median low Price/Earnings Ratio of 10.52 and 5 year median high P/E Ratio of 16.87. I get a current P/E Ratio of 10 on a stock price of $56.66. By this measure the current stock price is low. It looks even better over a longer period as the 10 year low P/E Ratio is 11.06.

I get a current Graham Price of $70.89. The current stock price of $56.66 is 25% lower. The 10 year low difference between the Graham Price and stock price is the stock price being 9.6% lower. By this measure the stock price is low.

I get a 10 year Price/Book Value Ratio of 1.75. The current P/B Ratio is 1.43, which is 73% low the than 10 year median P/B Ratio and shows a low current stock price. The last stock price tests is for Dividend yield. I get a current yield of 4.94% and a 5 year median dividend yield of 4.85%. This shows a low stock price. Also, the 10 year median high yield is 4.23%, even lower than the 5 year median.

So, by all my tests the current stock price is low. Of course, you have to be careful when stock prices are low. They can be low for a reason. When looking at analysts’ recommendations, I find them all over the place with recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The consensus recommendation would be a hold.

Analysts feel that the dividend is safe. This is the only bank not to raise their dividend after the most recent crisis of 2008. One analyst expects this to change within 6 to 9 months. I do not think that anyone expects BMO to do well in the near term, but they do expect it to do better in the long term.

Well, we know what Desjardins thinks of BMO. See G&M article called Desjardins downgrades Bank of Montreal.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin. This bank, along with Royal Bank is cutting jobs, but both are cutting less than 1% of workforce. See the Financial Post.

Analysts that feel it is a buy feel the dividend is safe and BMO is a buy for the long term. Analysts that say it is not a buy feel that it could go lower and there is too much risk in buying this stock, especially in the short term. Personally, I will not be selling my stock in this company. I feel that it will come back and provide reasonable future returns.

BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here Canada Bread. See my spreadsheet at bmo.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

Bank of Montreal

I own this stock (TSX-BMO). This was the first bank stock that I bought. I bought it back in 1983. I have only been tracking it on Quicken since 1987. Since I have been tracking it, I have made a total return of 16% per year. Of this return, my dividends payments were 7.5% per year. On my original stock price, I am making a 19.3% return on Dividends.

The Bank of Montreal has not raised their dividends since 2008. They seem to be the last of the banks to delay dividend increases. I see no news on when they might raise the dividends. They used to have a very good record of dividend increases. The 10 year growth in dividends is still not bad, but the 5 year one is low because of no recent dividend increases. The 5 and 10 year growth in dividends is 4.4% and 9.6% per year, respectively.

The Dividend Payout Ratio for earnings in 2011 was 53%. However, traditionally the DPR for earnings has been in the 30% and 40% range. Since the DPR for earnings is expected to be around 37% next year, maybe there is hope for a dividend raise soon. On the other hand, the problems in Europe are bound to affect us, so maybe not.

Over the past 5 years there has been minimal growth in both revenues and earnings. The 5 year growth for both these items is around 1% per year. The 10 year growth in earnings at around 7% per year is in the ok range. However, the 10 year growth in revenue is also in the 1% per year range and therefore a very low range.

There has not been much increase in cash flow for this bank either. However, cash flow for banks tends to be all over the place and it often hard to tell if there is any cash flow growth. The 5 and 10 year growth in book value is ok, but a bit low at 6% and 7% per year, over the past 5 and 10 years.

The Return on Equity is good for 2011 at 13%. The 5 year median ROE is also 13%. The ROE has always been quite good for BMO.

The last thing to talk about is the debt ratios. The Liquidity Ratio is meaningless for banks, so I do not track this. The Asset/Liability Ratio for BMO is low at 1.06, but this is in the normal range for banks. The Leverage and Debt/Equity Ratios might seem high at 18.9 and 17.79, but these are rather normal for banks. All these ratios are lower than the 5 year median ratios. The 5 year median Ratio for the A/L Ratio is 1.05. The 5 year median Leverage and Debt/Equity Ratios were at 22.27 and 21.23.

This bank does not seem to be doing as good as other banks are currently. If I were buying a bank today, I probably would not buy this one. I would probably go for Bank of Nova Scotia instead. I also own Royal Bank and TD bank.

BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here Canada Bread. See my spreadsheet at bmo.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

All the Real Estate Stocks That I Track

I want to talk about the Real Estate stocks I track. For all the stock I follow, I have shown the link to my blog entries. I know that I said I would not do this sort of entry again, but some people do like them.

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 Brookfield Asset Mgt the symbol would be “BAMa.TO”.

For a dividend paying stock portfolio, you might want to buy Real Estate stocks after you buy safer Utilities and financial stocks and then after less safer Consumer and Industrial stocks. See my site for information on setting up a portfolio.

The Real Estate stocks that I follow are:
Brookfield Asset Mgt BAM.A
Brookfield Properties Corp BPO
Calloway Real Estate Inv Trust CWT.UN
Canadian Real Estate REF.UN

FirstService Corp FSV and FirstService Corp 7% PF FSV.PR.U
H & R Real Estate Inv Trust HR.UN
Melcor Dev MRD
MI Developments MIM.A
RIOCAN REIT REI.UN

Brookfield Asset Mgt. (TSX-BAM.A). The 5 year median dividend yield is low at 1.89% and the DPRs are correspondingly low. The 5 year growth in dividend is just 11.2%. Dividends are inconsistent for Canadian investors as they are paid in US$. Also, this company has not raised their dividends since 2009. For my blog entries dated August 2011, click here or here.

Brookfield Properties Corp. (TSX-BPO). The 5 year median dividend yield is 3.57% and the DPRs are at a manageable level. The 5 year growth in dividend is just 2.3% which would be about or just north of inflation rate. Dividends are inconsistent for Canadian investors as they are paid in US$. Also, this company has not raised their dividends since 2008. For my blog entries dated August 2011, click here or here.

Calloway Real Estate Investment Trust. (TSX-CWT.UN). The 5 year median dividend yield is 6.96% and the DPRs are much too high, but are coming down. This investment Trust is payout some 93% of distributable income in distributions. The 5 year growth in dividend is just 2.47% which would be just north of inflation rate. This company has not raised their dividends since 2008. For my blog entries dated December 2011, click here or here.

Canadian Real Estate. (TSX-REF.UN). The 5 year median dividend yield is 4.96% and the DPRs are a bit high but fine. This investment Trust is paying out some 61% of distributable income in distributions. The 5 year growth in dividend is just 1.9% which would be just at or slightly below the inflation rate. They have been increasing their dividends to just over 2% over the past 2 years. I own units in this REIT. For my blog entries dated March 2011, click here or here.

First Service Corp. (TSX-FSV). This stock does not pay a dividend, but the company did issue Preferred Shares to stockholders in 2008. Because Preferred Shares were issued, there would not be dividend increases. Also, dividends were paid in US$, so would fluctuate for CDN shareholders. Total growth over past 5 years was 7%, including Preferred Shares. For my blog entries dated December 2011, click here or here.

H & R Real Estate Investment Trust (TSX-HR.UN). The 5 year median dividend yield is 6% and the DPRs were high but are coming down. They decreased their dividends by 50% in 2009. This investment Trust is paying out some 65% of distributable income in distributions currently and has a dividend yield of 4.27%. They have been increasing their dividends lately, but they are not yet back to 2008 level. For my blog entries dated December 2011, click here or here.

Melcor Development (TSX-MRD). This stock has a 5 year median Dividend yield of 2.78% and they paid out a low portion in DPRs. I have owned this stock since 2008 and I have made a total return of 7.8% per year. For my blog entries dated April 2011, click here or here.

MI Developments (TSX-MIM.A). I used to own this stock. I bought it in 2004 and 2006 and sold it in 2009. My total return was a negative 22% per year. This was a Frank Stronach company. Their DPRs were rather high, as the company was not making any money, but yield was generally around only 1.5%. For my blog entries dated February 2011, click here or here.

RIOCAN REIT (TSX-REI.UN). I own this REIT. I bought it originally in 1998 and then some more in 2000 and 2006. My total return was 16.9% per year. Their 5 year median dividend yield is 6.3%. Their DPRs were rather high, and the Payout from Distributable Income is at 90%. They have been increasing the distributions in line with inflation. For my blog entries dated March 2011, click here or here.

Today, My Own Advisor has a blog on Top Canadian REITs Tomorrow, I will start review the banks I follow.

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.

FirstService Corp 2

I do not own this stock (TSX-FSV), but I used to. I bought this in June 2002 and sold April 2010. I made a return of 3.17% per year (including preferred shares). Rather than pay a dividend, this company issued preferred shares to current shareholders. This rather complicates trying to value this company.

When I look at Insider Trading, I find some $5.6M of insider selling and minimal insider buying. The net insider selling is $4.9M. It seems to be mostly that CFO and officers are not keeping their stock options. The number of shares outstanding when down slightly. The company has repurchased shares. It seems to me that they repurchased slightly more than they issued in stock options.

Some 90 institutions own 81.3% of the outstanding shares. Over the past 3 months they both purchased and sold shares of this company. Over this period they have increased their shares by 9.7%.

To get a handle on historical Price/Earnings ratios is not straight forward. This is because the company issues not only EPS but Adjusted EPS. Analysts seem to value the Adjusted EPS and the estimates appear to be based on Adjusted EPS. In relation to Adjusted EPS, the 10 year median P/E ratios go from a high of 26 to a low of 14.8. If we go with Adjusted EPS estimates, the current P/E is 14.1, which would be a relatively low P/E Ratio.

When looking at P/E Ratios, I also follow the trailing P/E Ratios. For 2011, the trailing P/E ratio is 16.6. This is not a very high P/E ratio either.

Based on the Adjusted EPS, I get a current Graham Price of $15.64. This is some 63.6% above the current stock price of $25.58. This is about the median difference between the Graham Price and the stock price. So the stock price would be reasonable by this measure.

I get a 10 year median Price/Book Value Ratio of 3.11 and a current one of 4.26. The current on is some 37% above the 10 year median. The main reason is the lack of growth in book value. However, by this measure, the current stock price is high.

When I look at analysts’ recommendations, I get Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. One Hold recommendation comes with a stock price of $29.00, which is some 13.4% higher than the current stock price. A couple of analysts with Strong Buy recommendations said that the company is undervalued. However, they feel that this is a long term buy (to hold for at least 3 to 5 years.) For a report on this company by Raymond James see Canada Research.

This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Controlling shareholder is Jay Hennick. He has 9% holding, but has 52.5% voting control. Its web site is here First Service Corp. See my spreadsheet at fsv.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.

FirstService Corp

I do not own this stock (TSX-FSV), but I used to. I bought this in June 2002 and sold April 2010. Rather than pay a dividend, this company issued preferred shares to current shareholders. This rather complicates trying to value this company.

However, it never performed as I had expected. I bought it for capital gain and the stock did not perform. I know it got hit by the 2008 bear market, but I did not see it doing very well any time soon, so I sold. Shortly after selling the FSV shares, I also sold the preferred shares. Preferred shares are not generally the time of shares I like to hold.

Having dividends come from the preferred shares basically meant that the dividends would not rise. However, since the dividends were paid in US$, they did fluctuate for Canadian shareowners. The average dividend yield from the preferred shares for the FSV shares was around 3.4%. This is not a bad yield, but, as I said it would not increase.

As far as stock return goes, looking just at the stock price of FSV shares, they are up around 9% per year over the past 10 years. However, over the past 5 years they are down around 1.1% per year. It is much better looking at the total package, including the preferred shares distributed. Then the total return would be around 13.9%per year over the past 10 years and 7% per year over the past 5 years. Included in this total return would be dividends worth just over 1% per year over the past 10 years and 1.8% per year over the past 5 years.

This stock’s financials use US GAAP rules and the financials are given in US$. So, as for a lot of stocks reporting in US$, the growth looks much better in US$ terms than in CDN$ terms. In the area of revenue, the growth has been good. The 5 and 10 year growth in revenue per shares is 9.5% and 10.8% per year, respectively.

In other areas growth has not been so good. If you look at real Earnings per Share they are down substantially per share at 46% and 16% per year lower, respectively. However, the company and some analysts are using an Adjusted EPS value and by this measure, earnings are up.

When looking at cash flow from operations, using the net of non-cash items, the CF has only grown at 2.5% and 6% per year over the past 5 and 10 years. A lot of analysts like to exclude changes in current assets and liabilities in calculating Cash Flow from operations, no matter what the company does in their annual reports.
Otherwise, Cash Flow from operations may not properly reflect how a company is doing. The investor’s friend site gives a good overview of this subject

When looking at Book Value, you really have to look at Total Equity (that is included Preferred Shares) for this stock as the Preferred Shares were given out free to shareholders. Over the past 10 years, Book Value is up 3.6% per year. However, over the past 5 years, Book Value is down some 6.6% per year. Book Value also took a hit and is down some 9% at the end of the last quarter of September 30, 2011.

The Return on Equity is generally fine as it has a 5 year median of 13.2%. However, it was a bit low at the end of the financial year of 2010 at just 6.3%.

The Liquidity Ratio is just ok at 1.02 at the end of 2010. The current one is lower at 0.75 because of some long term debt being included. There is not much in the way of notes for the latest financials as they are just published in a release with no substantial notes. However, I have no reason to believe that FSV cannot handle their long term debt. The Asset/Liability Ratios is of for the end of the financial year of 2010 at 1.49, but the latest one is rather low at 1.26.

As far as the last two debt ratios of Leverage Ratio and Debt/Equity Ratio goes they were fine until the financial year ending in December 2008 and then they started to rise. The ones for the end of 2010 were 5.67 and 3.79. The current ones are 6.50 and 5.17. These ratios vary by industry, but seem quite high to me for this company.

I am not sorry to have sold this stock. I got a reasonable price for it and even if I still had it, it would not be worth much more than I sold it for. Tomorrow, I will talk about what my spreadsheet says about the current stock price and what analysts say about this stock.

This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Controlling shareholder is Jay Hennick. He has 9% holding, but has 52.5% voting control. Its web site is here First Service Corp. See my spreadsheet at fsv.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.

H & R Real Estate Trust 2

I do not own this stock (TSX-HR.UN). This company has also had problems with distributions recently. They cut their distributions by 50% in 2009. However, they have been raising the distributions recently.

When I look at Insider Trading, I find $5M of insider selling and $2.8M of insider buying. Insider selling is split between CFO, Officers and Directors. Insider Buying is mostly by Directors, but also some by the CEO. The CEO own shares worth around $71M. One Director has shares worth $28M. The CEO and officers have more stock options than shares. The opposite is true of CEO and Directors.

Some 44% of this stock is owned by 101 institutions. They have both bought and sold this stock over the past 3 months. Over this period they have increased their shares by just over 3%.

I will use the current Price/Adjusted Funds from Operations Ratio to look at a stock price ratio. This is because the Earnings per Share are expected to be very low in 2011 and the EPS has bounced around a lot lately. The current Price/AFFO is 15.33. The 5 year median high and low P/AFFO Ratios are 16.99 and 12.12, respectively. This would place the current P/AFFO Ratio above a median 5 year P/AFFO Ratio and just below the 5 year high P/AFFO Ratio.

The Graham Price is affect by the current estimate EPS and therefore is quite low. If we use last year’s Graham Price of $17.16, the current stock price of $23.15 is some 35% higher. The high 10 year median difference between the Graham Price and Stock Price is the Stock Price being 28% higher. So by this measure, the stock price is high.

The 10 year median Price/Book Value Ratio is 1.57. The current P/B Ratio is 1.71 and 9% higher than the median P/B Ratio. This would also suggest a relatively high current stock price.

The current dividend yield is 4.5% and the 5 year median dividend yield is 6%. This also shows a relatively high stock price. It is only in 2009 and 2010 that the dividend yield approached anywhere close to such a low one. The lowest point in dividend yield in 2009 was 4.5% and in 2010 was 3.8%. This certainly points to a relatively high stock price.

When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. I found a Buy recommendation with a 12 month stock price of $27. As I mentioned yesterday, some analysts are clearly worried about the Bow building in Calgary. However, a lot of analysts are not.

A number expect that distribution increases will continue. The price seems relatively high, but it was higher in 2006 and 2007. Another Buy recommendation came with a 12 months stock price of $24.60. That would also be a good return with a 6% gain in stock price and a 4.5% dividend yield, you are looking at around 10% return.

One of the features of REITs is the generally high Payout Ratios. High Payout Ratios are not bad per se. However, you want to have some assurance they are sustainable if you want to invest in a company with high Payout Ratios. The other thing is growth. If you have high Payout Ratios it is probably impossible to fund growth internally. The other options are debt and issuing new shares. You can only take on so much debt. As far as I can see, both this company and Calloway have been funding growth with new shares.

They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H&R. See my spreadsheet at hr.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

H & R Real Estate Trust

First, I would like to point out that My Own Advisor Blogger is giving away a book called Millionaire Teacher for free. This is his 3rd blog on this subject. See his blog called My Favourite Takeaways – Millionaire Teacher and FREE book giveaway Part 3.

Also, the Dividend Ninja has book to give away. See Kylie Ofiu Book Review and Giveaway. Book is called 365 Ways to Make Money.

Now, I want to talk about the stock of H&R Real Estate (TSX-HR.UN) today. I do not own this stock. This is another REIT or Real Estate company that I follow. This company has also had problems with distributions recently. They cut their distributions by 50% in 2009. However, they have been raising the distributions recently. They were up just over 9% in 2010 and are up by just over 23% in 2011. So far, unit holders will get just over 8% more distribution in 2012.

Because of the decrease in distributions in 2009 there was no growth in distributions between 2000 and 2010. In fact, distributions over this period were down by 3.4% per year. Over the previous 5 they were down by 9.6% per year. However, looking at distributions between 2001 and 2011, they are not as bad as they down only by 1.8% per year. Over the past 5 years ending in 2011, they are down by 6% per year. Dividend still would have to increase by 37% to get back to their peak of 2008.

I know that it is hard to have distributions cut, but you do not want a REIT to provide distributions that they cannot afford. REITs provide good distribution yields and low growth. I you plan to live off of dividends and distributions from stock, you would want to invest in other sectors before investing in REITs. For more information on this subject, see my site for information on setting up a portfolio.

This REIT is also growing by issuing more units. The increase in units outstanding is at 10 year median of 9.7% per year. Because of this, things like Revenue are increasing faster than Revenue per Share. Revenue growth over the past 5 and 10 years is at 4.8% and 14.7% per year, respectively. Revenue per Share growth over the past 5 and 10 years is 0% and 2.8% per year, respectively.

With things like revenue, you want a company to be growing both Total Revenue and Revenue per Share. Revenue per Share can be growing faster than Total Revenue if a company is buying back shares. You want to look carefully at companies that cannot growth both Total Revenue and Revenue per Share over a long period of time, to find out the reason for it.

For this stock, Total Return has not been bad. Over the past 5 and 10 years, if you owned this stock, Total Return would be at the rate of 4% and 13.5% per year. Distributions would account for 5.6% and 8.5% per year, respectively. That is the capital return over the past 5 year is negative.

The growth in Cash Flow is marginal over the past 5 and 10 years at .4% and 3.9% per year. Book Value has not increased. Return on Equity was better for the financial year of 2010 at 10.7% that it has been for some time. The 5 year median was just 5.9%. The expected ROE for 2011 is quite low at just 2.1%.

The next thing to discuss is Debt Ratios. The Asset/Liabilities Ratio is borderline. What I like to see is a ratio of 1.50. The one for this stock is 1.49. This ratio is ok. The current Leverage and Debt/Equity Ratios are also ok at 3.19 and 2.13.

As with all REITs, this one can provide dividend investors some very good income. This REIT has a lower Payout Ratio as far as Distributable Income is concerned with a current one around 64% and a higher 5 year median of 87%. The Payout Ratio from Cash Flow has a 5 year median of 86.7%, which is somewhat high, but the one for 2010 was 47% and this year is expected to be 37%.

They had some problems with building Calgary's Bow tower. See an article on this at G&M. This article was first published in April 2009 and was last updated in November 2010. There is another article on this dated April 2009 at Canada East. Some analysts are still worried about this tower.

They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H&R. See my spreadsheet at hr.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

Calloway Real Estate Investment Trust 2

I do not own this stock (TSX-CWT.UN). This is one of a few REITs and Real Estate companies that I follow. Like a lot of Real Estate companies, the company has problem raising their distributions lately. They have not increased them since 2008.

When I look at insider trading I find a bit of insider buying and some insider selling. The insider buying is at $.37M and the net buying is at $.28M. Most of the insider buying is by a Director. All the insider selling is by the CEO. Also some 78 institutions own 34% of the shares of this company. There has been some buying and selling over the past 3 months and they have marginally reduced their ownership.

Most analysts give estimates for FFO, not EPS. Looking at Price/FFO, I have a 5 year median 15.28 and a 5 year median low of 11.68. The current Price/FFO is 16.28, which suggests that the stock price is rather high. One problem I am finding with this stock is that the quarterly reports for this year do not give an EPS. Sites that do give this information do not have the same information. So this is quite confusing. The other problem with the EPS is that it tends to jump around a lot.

The lack of EPS hampers the calculation for the Graham Price. I am using the highest previous Graham Price as sites seem to imply that earnings will be up sharply this year. So with a Graham Price of $17.97, the current stock price of $26.97 is some 50% higher. This is very close to the median difference between the Graham Price and the Stock price, where the stock price is 48% higher than the Graham price.

I get a 10 year median Price/Book Value Ratio of 1.51 and a current P/B Ratio of 1.53. This ratio points to the stock price being close to a median relative price. The last thing to look at is the dividend yield. The current dividend yield is 5.74% and the 5 year median is 6.96%. Even the 9 year median low dividend yield is higher at 6.14%. This would suggest that the current stock price is relatively high. So it seems that none of my tests show this stock at a good relative price. Two show it relatively high and two show it at a relatively median price.

When I look at analyst recommendations, I find a few Strong Buy, a few Buy and lots of Hold recommendations. The consensus recommendation would be a hold. I can only find comments from analysts that feel this is a buy and they are say the same thing. They call this REIT the “Wal-Mart’ REIT, because of its strategic relationship with Wal-Mart. They think that it can only make money for its shareholders.

A Hold recommendation gives the 12 month stock price at $27.53. This is only 2% higher than the current stock price of $26.97. Another Hold recommendation gives a 12 months stock price of $28 and this is 3.8% higher than the current price. A 3.8% increase is not bad considering the dividend yield of 5.74%. This would give a Total return of 9.5%. A return of 8% or above is good for a REIT stock.

There is an interesting article about REITs by Moody’s Investment Service. This article is a bit hard to read because it is all squished up, but it is worthwhile. Another blogger Dividend Boy has also recently written about this stock.

Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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.

Calloway Real Estate Investment Trust

I do not own this stock (TSX-CWT.UN). This is one of a few REITs and Real Estate companies that I follow. Like a lot of Real Estate companies, the company has problem raising their distributions lately. They have not increased them since 2008. Well, at least it did not lower it distribution.

They are paying out a high percentage from their Funds from Operations (FFO). Last year it was 94%, but it is expected to be lower this year at 92%. (Using Distributable Income, I have a 5 year median payout ratio of 93%. However, how Distributable Income has been calculated has been changing, although mostly people are now using FFO and sometime AFFO (Adjusted Funds from Operations), currently.)

I have a 5 year distribution growth rate of 2.5% and a 7 year distributions growth rate of 4%. Note that REITS tend to payout all that they can in distributions. This leaves little room for growth. The desirable growth in distributions for REITS is at, or slightly better than the rate of inflation. However, distribution yield tends to be good. This REIT has a 5 year median distribution yield of 7%. Current yield is lower, at 5.7%.

The total returns on this stock has been quite good, considering that we have not yet come out of the recent recession. I think that any company producing a 5 year total return is probably doing ok. For this company, if you had held the stock for 5 years, your total return would be around 6% per year, with 6.5% per year of that coming from distributions. (That means there was negative capital gain.)

This company has grown tremendously over the past 10 years. The total return over the past 10 years is 50% per year, with 19% per year of this total from distributions. However, you should not expect such growth in the future. Growth really slowed down when this stock started to pay out distributions in 2002. Since then, the stock has only produced total returns of around 16.5% with 7.9% of that from distributions.

The other thing to mention about this stock is the rapid growth of equity units. This stock has a 10 year median growth in equity units of 22.7% per year. This shows up in things like revenue. Revenues have growth over the past 5 and 10 years at the rate of 20% and 81% per year. However, Revenue per Share has, over the past 5 and 10 years only grown at the rate of 8% and 4.6% per year.

Distributable income per share has grown at the rate of 2.4% and 9.5% per year over the past 5 and 7 years at the rate of 2.4% and 4% per year. (This is similar to the distribution growth rates.) EPS have negative growth, but they have had no years of EPS loses. Over the past 5 and 10 years, cash flow per share has grown at 0% and 7% per year.

Also Book Value per share has grown over the past years at 20.5% per year. However, Book Value per share has declined over the past 5 years by 2% per year. (Note this often happens on REIT stocks, because they pay out in distributions more than they earn.)

For this stock, debt ratios are fine. The current Asset/Liability Ratio at 1.73 is good. The current Leverage and Debt/Equity Ratios are ok at 2.81 and 1.62 respectively.

Return on Equity has always been rather low for this stock. The 5 year median ROE is just 1.6%. The ROE for the financial year ending in 2010 was only .7%.

This company is also currently in the process of issuing more shares to raise money by issuing more shares. This is how this company seems to be growing, by issuing new shares. As a shareholder, the only growth rates you should be interested in are that per share, because this is what affects you as a shareholder. This stock has not done badly in providing income for its shareholders. Tomorrow, I will discuss what the analysts currently say about this stock and what my spreadsheet says about the current price.

Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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.

Goodfellow Inc. 2

I own this stock (TSX-GDL). I bought some at the end of 2010 and more in February 2011. I have not held this stock very long and I have lost some 34% of the value of my shares. I do believe I will do much better in the long term.

When I look at insider trading I find some selling ($.44M) by one of the Goodfellow family members. Insiders went from owning just over 60% of the company to owning 59.4% of this. Not much of a change. Also, there are two institutional owners that own some 12% of this company. Over the past 3 months they have neither sold nor bought any stock.

The 5 year low median Price/Earnings Ratio is just 5.81 and the 5 year high median P/E Ratio is 14.21. The current P/E Ratio at 8.16 is below the 5 year median P/E. However, it is a bit higher than the 10 year median P/E Ratio. This stock has generally had quite low P/E Ratios.

I get a Graham Price of $17.42 and the current stock price of $8.16 is some 53% lower. The median difference between the Graham Price and stock price is the stock price at 45.4% lower. So the current price is better than median. However, both the P/E and Graham Price are based on earnings estimates and these can be unreliable.

When looking at the book value, a couple of things are notable. First of all the Price/Book Value Ratio is just 0.60%. That means that the stock price is lower than the book value and this usually shows a good stock price. However, the 10 year median P/B Ratio is just 0.90, so generally speaking the stock price has been lower than the stock price.

The last thing to look at is the dividend yield. The current yield is just 2.45%. The stock has a 5 year median of 5.38%. The main reason for this is that they have been lowering the dividends since 2011 because of lack of earnings. They are being prudent. I do not think this stock will improve until dividends start moving up again. The company will probably not do this until they are sure of better earnings.

Why this stock has been so generally cheap probably has to do with it being a small cap with insiders owning a substantial portion of the stock. I could find no analyst following this stock.

The following report is a little old, being written in 2009. However, it is hard to find much on this company. See Jonathon Goldberg. There is another article dated in 2009 on this stock. This is one from The Canadian Benjamin Grahamblogger. People seemed to have lost interest in this stock as it hasn’t done much recently. I would think the recession will have to go before this will come back.

There is also mention of this stock in a Globe and Mail Number Cruncher article. See the Safe and cheap: Graham would have approved article. I should say something about number cruncher type articles. They might point out good stocks, but you really need to research companies beyond what these filters show. Sometimes, numbers can be deceiving.

I am certainly holding on to the shares I have bought, but mind you, I have not invested much in this company. I think that it will take a while to recover. The problem is no one knows when the current recession will be over. It is a balance sheet recession and therefore, historically, will take some time.

One thing this stock has going for it is, one of the insider owner is Stephen Arnold Jarislowsky. This man is a legendary investor. See Wikipedia entry.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. H.Q is Delson, Québec, just outside Montreal.
It is about 60% owned by insiders. Its web site is here Goodfellow Inc.. See my spreadsheet at gdl.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.

Goodfellow Inc.

First of all my two articles reviewing the Industrial stocks I follow was unpopular (by number of people reading these entries), so I will stop doing such reviews. Also, I will start reviewing the bank stocks I follow after the audited statements are published, which should not be too long from now.

The stock I want to talk about today is Goodfellow Inc. (TSX-GDL). This is a stock I own. I bought some at the end of 2010 and more in February 2011. It seemed to be a good small cap and the Investment Reporter has been pushing this stock. See their site, called Advice for Investors here.

For this stock, dividends can fluctuate, so it has a bit of a mixed record. Over the past 5 years, the dividends have gone down by 7.75% per year. However, over the past 10 years they have increased by 10%. Also, the total dividends payable in the financial year ending in August 2012 will be down by 50% from those payable in the financial year ending in August 2011. This is projected dividends, and since the company only declares the dividends as they are payable, this could change. They also have given out special dividends in the past.

The current dividend yield is just 2.25% and this is quite a bit lower than the median dividend yield on this stock, which has a 5 year median of 5.4% and a 10 year median yield of 4.1%. The reason for this is probably that the financial year ending in August 2011 was not a good year for this company. Earnings were down 76% and cash flow down 65%.

The Dividend Payout Ratio was higher in 2011 at 88% for earnings and 73% for cash flow. The 5 year median values are better at 60% for earnings and 21% for cash flow. The DPR values were probably another reason for this company to lower dividends. They are doing the prudent thing. (See my site for information on Dividend Payout Ratios).

The best growth rate for this stock is their 10 year growth in Total Return. The 10 year total return was 15% per year with some 7.4% of this return from dividends. However, if you bought this stock 5 years ago, you would have lost money or broken even as far as the total return is concerned. The portion of the 5 year total return for dividends would be around 5% per year.

The next best growth rate was for book value. The 5 and 10 year growth was 4% and 7% per year. All other growth rates are negative. This includes revenues, earnings and cash flow. However, note that here was no year with negative earnings or negative cash flow.

This company is 60% owned by insiders. The thing I have noticed with companies with lots of insider ownership is good debt ratios. This stock is not different. The current Liquidity Ratio is great at 2.49 and a 5 year median ratio also at 2.49. The Asset/Liability Ratios is even better at 3.01 with a 5 year median ratio of 2.96. The current Leverage and Debt/Equity Ratios are also very good at 1.50 and 0.50. With these debt ratios they can survive a lot of hard times.

As I have said, the financial year ending in August 2011 was not a good year for this company. The Return on Equity Ratio was just 2.6%. The 5 year median ROE was better at 9.8%. That is not that good. However, most years, this company has had ROEs of at least 10%, a much better rate.

I realized when I bought this stock that there would be future trouble. This company will not really do well until we get over this current recession thing. I do not know, as same as everyone else, when this might be. In the meantime, I will be holding on to what I have bought in this stock. It is a small cap, so my investment is small.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. H.Q is Delson, Québec, just outside Montreal.
It is about 60% owned by insiders. Its web site is here Goodfellow Inc. See my spreadsheet at gdl.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.

All the Industrial Stocks That I Track 2

First, I would like to point out that My Own Advisor Blogger is giving away a book called Millionaire Teacher for free. See his blog called My Favourite Takeaways – Millionaire Teacher and FREE book giveaway Part 2.

Next, I want to continue on with talking about the Industrial stocks I track. This is part 2 of my entry these companies. 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 Ag Growth International would be the symbol of “AFN.TO”.

For a dividend paying stock portfolio, you might want to buy Industrial stocks after you buy safer Utilities and financial stocks. See my site for information on setting up a portfolio. Also, Industrial stocks cover a wide field of endeavors. One definition is “in stock market vernacular, general, catch-all category including firms producing or distributing goods and services that are not classified as utility, consumer, or financial companies”.

Methanex Corp (TSX-MX, NASDAQ-MEOH). The 5 year median dividend yield is 2.38% and the DPRs are good. The 5 year growth in dividend is just 4.4% per year, but inflation is lower at just 2% per year. Dividends are inconsistent. For my blog entries dated November 2011, click here or here.

Mullen Group Ltd (TSX-MTL). This company changed from a Unit Trust to a corporation. They initially lowered their dividends, but since then have been again, raising them. The 5 year median dividend yield is 6.61%, but it has been moving lower. The 5 year median DPRs are high, but are currently good. For my blog entries dated November 2011, click here or here.

Organic Resource Management (TSXV-ORI). This is a small cap I have been in for some time. I have not sold as it is worth so little. They pay no dividends. For my blog entry dated October 2011, click here.

PFB Corp (TSX-PFB). This company has not raised their dividend since 2005. 5 year median dividend yield is 3.89% and their DPRs are fine. This is considered a high risk stock. For my blog entries dated February 2011, click here or here.

Progressive Waste Solutions Ltd (TSX-BIN). This is a company I own and it used to be an income trust. It reduced their dividends in 2009 and it has not raised them since. The 5 year median dividend yield is 6.6%, but current one around 2%. DPRs have been coming down and are currently good. For my blog entries dated July 2011, click here or here.

Pulse Seismic Inc. (TSX-PSD). I originally looked at this company because it was a small cap with dividends. They stopped their dividends in 2008, but have restarted them in September 2011. Current yield is 2.8%. For my blog entries dated January 2011, click here.

Russel Metals (TSX-RUS). This is a stock that I own. The dividends vary so that the 10 year growth in dividends is 17.5% per year, but the 5 year growth is 0%, per year. The 5 year median Dividend yield is 6.3%. The DPRs are moderate. For my blog entries dated June 2011, click here or here.

SNC-Lavalin (TSX-SNC). This is a stock that I own. The 5 year median dividend yield is just 1.1%. The 5 year DPRs are fairly low. The dividend growth is good with 5 year growth at 24% per year. The DPRs are moderate. For my blog entries dated July 2011, click here or here.

Stantec Inc. (TSX-STN). This is a stock that I used to own, however, I never intended to keep it. This is because it pays no dividends. Growth has been ok for the past 5 and 10 years. For my blog entries dated August 2011, click here or here.

Stella-Jones Inc. (TSX-SJ). I do not own this stock. Dividend yield is low with the 5 year median at 1.3%. DPRs are quite low. However, the dividend growth is 30% per year over the past 5 years. For my blog entries dated November 2011, click here or here.

TECSYS Inc. (TSX-TCS). I own this stock. It is a small cap stock, with a median dividend yield of 2.83%. DPRs are at a moderate level. Dividend growth is around 11% on average per year. For my blog entries dated August 2011, click here or here.

Toromont Industries Ltd (TSX-TIH). I own this stock also. Dividends yields are low with a 5 median at 1.3% and correspondingly low DPRs. Dividend growth is 14% per year. For my blog entries dated March 2011, click here or here.

Transcontinental Inc. (TSX-TCL.A). I do not own this stock. Dividends yields have a 5 median at 2.2%. The DPR for earnings is rather high, but the DPR for cash flow is quite good. Earnings have not been good lately, but cash flow is fine. Dividend growth is 14% per year. Dividends were increased between 2010 and 2011 by 40%, so it would appear that the company expects to do better in the future. I will blog again about this stock when the November 2011 financials are published. For my blog entries dated December 2010, click here or here.

Waterfurnaces Renewable Energy (TSX-WFI). I do not own this stock. Dividends yields have a 5 median at 3.3%. The DPRs are reasonable. Since dividends are paid in US$, they will fluctuate with the changes in US$ to CDN$. Dividend growth is around 11% per year. For my blog entries dated January 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.