I do not own this stock (TSX-ATP, NYSE-AT). I used to think that power companies were a good idea. However, I would not want this one. It is not making any money and it is paying a lot in distributions. Not a good idea in my books. This was an Income Trust (TSX-ATP.UN), but on November 17, 2009 this company changed to a traditional common share structure.
The insider trading report shows no insider buying and no insider selling. There is not much information in the report because if insiders do not buy or sell shares, no information is collected on them. The CEO has shares worth some $4M and one officer has shares worth around $1M. There does not seem to be any options, but there are Deferred Share Units.
There are some 172 institutions that hold 35% of the outstanding shares. Over the past 3 months they have increased their shares by 4.3%. This is a positive. However, institutions do tend to buy shares that are on the stock exchange, especially those in an index. This stock is part of the S&P/TSX Capped Utilities Index. According to a recent article in the Globe and Mail Caisse de dépôt et placement du Québec owns 19% of the outstanding shares.
First of all I cannot do a Price/Earnings Ratio test as EPS has been negative. I have the same problem with the Graham No. I cannot calculate one when the EPS is negative.
The 10 year Price/Book Value per Share Ratio is 2.79. The current P/B Ratio is 2.07. That means that the current ratio is 74% of the 10 year ratio and suggests the stock price is relatively low.
The 5 year median dividend yield is 9.68% and the current dividend yield is almost 20% lower at 7.82. The dividend yield test says that the stock price is relatively high.
When you have mixed results on these tests, you should go with the dividend yield test unless you have specific reasons not too. The dividend yields are very high. Often they are very high because people are worried about the ability of the company to pay dividends. The lower dividend yield might indicate that people are feeling better about this stock, or maybe just less badly about it.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The most recommendations are in the Hold category and the consensus recommendation would be a Hold. The 12 month stock price consensus is $14.27. This implies a total return of 4.89%, with 7.82% coming from dividends and a capital loss of 2.93%.
I notice that analysts talk about EBITDA and AFFO on this stock. (These acronyms mean "Earnings before Interest, Tax, Depreciation and Amortization" and "Adjusted Funds from Operations".) This is nice, but I never think that it is a substitute for earnings. Sorry, but I am rather old fashion when it comes to stocks, I like my stocks to earn money.
An article at windfair talks about an Atlantic Power Corp investment in a wind power project. The website Top Stock Picks also talks about purchases of this company.
One hold recommendation thought that the stock was fairly valued (that is the stock is valued current at what it is worth). One analyst who said not to buy said that the high payout rate (92% of AFFO) means no dividend increases and perhaps the high yield is not sustainable either. Another analyst thought there might be better power companies to buy. I cannot find any positive comments on this company, so I do not know why we have a Buy recommendation.
I could not buy this stock and sleep at night. I would be worried about it having financial problems and going belly up. It seems to be playing its finances close to the edge. Yield is high, debt ratios are not great and it cannot seem to be able to make a profit.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power. See my spreadsheet at atp.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, September 28, 2012
Thursday, September 27, 2012
Atlantic Power Corp
I do not own this stock (TSX-ATP, NYSE-AT). I used to think that power companies were a good idea. However, I would not want this one. It is not making any money and it is paying a lot in distributions. Not a good idea in my books. This was an Income Trust (TSX-ATP.UN). On November 17, 2009 this company changed from an Income Participating Security (IPS) to a traditional common share structure.
This company reports in US$, but pays out dividends in CDN$. The company also reports using US GAAP rules. All this add complexity to looking at this company.
Dividends are good coming in at 7.82%. However, since most years had an earnings loss, we really have no Dividend Payout Ratio for Earnings. They have cash flow and the 5 year DPRs for Cash Flow at 85% does not look so bad at first glance, however, the DPR for the financial year ending in December 2011 was 218%. The DPR using the last 6 months of cash flow to the end of June 2012 is 126%.
Because this used to be an income trust, analysts are still reporting distributable income. The 5 year median DPR for DI is at $85%. Not too bad. However, the DPR for DI was 98% for the financial year ending in 2011 and is expected to be 103% this year.
All the bad news on this company has not stopped it from earnings a profit for investors. The 5 and 8 year total return has been at 13.9% and 12.51% per year, respectively. The portion attributable to dividends is 8.74% and 7.72% per year, respectively. The capital gain is 5.16% and 4.79% per year, respectively. As you can see, most of the return was in the distributions paid.
The number of outstanding shares has increased a lot over the past 5 and 7 years with the increase at 13% and 17% per year, respectively. Therefore we see that the revenue increased at 0.6% and 44% per year over the past 5 and 7 years, but the revenue per share has declined by 11% per year over the past 5 years and increased at 23% per year over the past 7 years.
I cannot get an earnings (or EPS) growth on this company as it has only had one profitable year since the company went public in 2004. The EPS is expected to be negative this year and next year.
Cash Flow per share has always been positive. However, the cash flow per share is down some 11.7% per year over the past 5 years. It is up by 19.8% over the past 7 years. Book value per share has increased nicely, at 26% and 17% per year over the past 5 and 7 years. (However, the book value per share is down some 29% in the most recent financials of June 2012.)
Revenue, earnings, cash flow and book value seem to bounce around a lot. For example, revenue from 2007 to 2011 is $306.2, $334.2, $228.3, $195.3, $284.90. Earnings from 2007 to 2011 are ($2.43), $1.67, ($0.30), ($0.06), ($0.50).
We can forget about Return on Equity. There have been no positive earnings and so we have no ROE figures.
The debt ratios were just ok maybe for the financial year ending in December 2011. The Liquidity Ratio was 1.04. The 5 year median Liquidity Ratio is 1.93, so this has come down a lot. The current Liquidity Ratio is 0.39. This means that current assets cannot cover the current liabilities. If you take out the current portion of the long term debt, the ratio gets better at 1.05. However, this current portion of the long term debt has not been taken care of, but is expected to be some time in late 2012 by tax equity funding. (This is all very complex stuff.)
Often companies with low Liquidity Ratios can make up for these low ratios with strong cash flow. However, since the company is paying more than the cash flow in dividends, this is not happening for this company.
The Debt Ratio is also low. It is currently at 1.42. It is best if this ratio was 1.50 or higher. At the end of the December 2011 financial year it was 1.52.
The current Leverage and Debt/Equity Ratios are a bit too high at 4.25 and 3.00 for the financial period ending in June 2012. They were better and fine at the end of 2011 at 2.86 and 1.88, respectively.
I guess that the real question is "Will this company ever become a real company?" It has revenue, but it cannot seem to earn a profit. It has positive cash flow, but cannot cover it distributions. It also has assets, but almost 30% of the assets are intangible assets and goodwill.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power. See my spreadsheet at atp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
This company reports in US$, but pays out dividends in CDN$. The company also reports using US GAAP rules. All this add complexity to looking at this company.
Dividends are good coming in at 7.82%. However, since most years had an earnings loss, we really have no Dividend Payout Ratio for Earnings. They have cash flow and the 5 year DPRs for Cash Flow at 85% does not look so bad at first glance, however, the DPR for the financial year ending in December 2011 was 218%. The DPR using the last 6 months of cash flow to the end of June 2012 is 126%.
Because this used to be an income trust, analysts are still reporting distributable income. The 5 year median DPR for DI is at $85%. Not too bad. However, the DPR for DI was 98% for the financial year ending in 2011 and is expected to be 103% this year.
All the bad news on this company has not stopped it from earnings a profit for investors. The 5 and 8 year total return has been at 13.9% and 12.51% per year, respectively. The portion attributable to dividends is 8.74% and 7.72% per year, respectively. The capital gain is 5.16% and 4.79% per year, respectively. As you can see, most of the return was in the distributions paid.
The number of outstanding shares has increased a lot over the past 5 and 7 years with the increase at 13% and 17% per year, respectively. Therefore we see that the revenue increased at 0.6% and 44% per year over the past 5 and 7 years, but the revenue per share has declined by 11% per year over the past 5 years and increased at 23% per year over the past 7 years.
I cannot get an earnings (or EPS) growth on this company as it has only had one profitable year since the company went public in 2004. The EPS is expected to be negative this year and next year.
Cash Flow per share has always been positive. However, the cash flow per share is down some 11.7% per year over the past 5 years. It is up by 19.8% over the past 7 years. Book value per share has increased nicely, at 26% and 17% per year over the past 5 and 7 years. (However, the book value per share is down some 29% in the most recent financials of June 2012.)
Revenue, earnings, cash flow and book value seem to bounce around a lot. For example, revenue from 2007 to 2011 is $306.2, $334.2, $228.3, $195.3, $284.90. Earnings from 2007 to 2011 are ($2.43), $1.67, ($0.30), ($0.06), ($0.50).
We can forget about Return on Equity. There have been no positive earnings and so we have no ROE figures.
The debt ratios were just ok maybe for the financial year ending in December 2011. The Liquidity Ratio was 1.04. The 5 year median Liquidity Ratio is 1.93, so this has come down a lot. The current Liquidity Ratio is 0.39. This means that current assets cannot cover the current liabilities. If you take out the current portion of the long term debt, the ratio gets better at 1.05. However, this current portion of the long term debt has not been taken care of, but is expected to be some time in late 2012 by tax equity funding. (This is all very complex stuff.)
Often companies with low Liquidity Ratios can make up for these low ratios with strong cash flow. However, since the company is paying more than the cash flow in dividends, this is not happening for this company.
The Debt Ratio is also low. It is currently at 1.42. It is best if this ratio was 1.50 or higher. At the end of the December 2011 financial year it was 1.52.
The current Leverage and Debt/Equity Ratios are a bit too high at 4.25 and 3.00 for the financial period ending in June 2012. They were better and fine at the end of 2011 at 2.86 and 1.88, respectively.
I guess that the real question is "Will this company ever become a real company?" It has revenue, but it cannot seem to earn a profit. It has positive cash flow, but cannot cover it distributions. It also has assets, but almost 30% of the assets are intangible assets and goodwill.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power. See my spreadsheet at atp.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, September 26, 2012
Gluskin Sheff & Associates Inc 2
On my other blog I am today writing about The Dividend Guy's new ebook....continue....
I do not own shares in this company (TSX-GS). I started to follow this company after I read an article by Jennifer Dowty in 2010 about stocks that pay not only dividends, but special dividends too.
There is two classes of shares, Multiple Voting shares and Subordinate voting shares. The ones sold on the TSX, are, of course, the subordinate voting shares. Insiders have a mix of both, but they do have the multi-voting shares. So insiders have control of this company. Interestingly, there is insider buying and no insider selling on the insider trading report. Insider buying is at $0.3M.
The company has options as well as Restricted Share Units and Restricted Share Units, which are option like vehicles. It is only the CEO and officers who have multi-voting shares. If the multi-voting shares are valued at the TSX stock price, then they are worth $186M. Insiders have a lot invested in this company.
There are some 30 institutions holding some 27% of the outstanding stock. Over the past 3 months they have decreased their shares by less than 1%, so this does not tell us much.
The 5 year low, median and high median Price/Earnings Ratios are 11.35, 17.27 and 22.76. The current P/E Ratio is 12.72. This low P/E Ratio would suggest a relatively low current stock price, based on a stock price of $14.75 and a June 2013 EPS of $1.16. A P/E Ratio of 12.72 is a reasonable one on an absolute basis.
I get a Graham Number of $8.16. The 10 year low, median and high median Price/GP Ratios are 1.57, 2.12 and 3.23. The current P/GP Ratio is 1.80 based on a stock price of $14.75. This relatively low P/GP Ratio would suggest a relatively low stock price.
The 10 year Price/Book Value Ratio is 8.50. The current P/B Ratio is 5.79 a ratio that is only 68% of the 10 year median ratio. This relatively low P/B Ratio suggests a relatively low stock price. (However, a P/B Ratio of 5.79 is not a low ratio on an absolute basis.
The current dividend yield is 4.75% and the 5 year median dividend yield is just 2.74%. The current dividend yield is some 73% higher than the 5 year dividend yield and suggests a relatively low stock price. Also, a dividend yield of 4.75% is a good dividend yield.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $17.60. This implies a total return of 24.07% with 19.32% coming from capital gain and 4.75% coming from dividends.
One analyst with a Buy recommendation felt that this company has a solid balance sheet and an attractive dividend policy. I agree that it does have a solid balance sheet and dividends are good. However, earnings will have to pick up for this dividend policy to continue and the company has not yet proven that it can do that. The analysts I looked at certainly feel that earnings will pick up.
One analyst with a strong buy recommendation says he still believes in this company. However, he did mention that Assets under Management has been falling. (There was a 6% decrease in AUM in the financial year ending in June 2012. However, AUM has been basically flat over the past 5 years.)
A couple of analysts have mentioned that you paid around a 5% dividend to wait for better times. (If you include the special dividend for 2012, the dividend yield is just over 5%.) And an interesting article by David Rosenberg of Gluskin Sheff says that he thinks analyst estimates of earnings this year are too optimistic. See article in the Pragmatic Capitalist blog.
There is no doubt that there are a number of very smart people running this company. I think that money can usually be made from investment companies. However, these are tough times for investment companies and I would like to see some improvement in both earnings and assets under management before I would be interested.
The Globe & Mail has an interesting article about this company called Gluskin Sheff can't break out of industry rut. They cannot grow their Assets under Management. This paper also has another interesting article talking about insider trading . It said some insiders were selling, but the Chief investment officer William Webb was buying.
Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff. See my spreadsheet at gs.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 shares in this company (TSX-GS). I started to follow this company after I read an article by Jennifer Dowty in 2010 about stocks that pay not only dividends, but special dividends too.
There is two classes of shares, Multiple Voting shares and Subordinate voting shares. The ones sold on the TSX, are, of course, the subordinate voting shares. Insiders have a mix of both, but they do have the multi-voting shares. So insiders have control of this company. Interestingly, there is insider buying and no insider selling on the insider trading report. Insider buying is at $0.3M.
The company has options as well as Restricted Share Units and Restricted Share Units, which are option like vehicles. It is only the CEO and officers who have multi-voting shares. If the multi-voting shares are valued at the TSX stock price, then they are worth $186M. Insiders have a lot invested in this company.
There are some 30 institutions holding some 27% of the outstanding stock. Over the past 3 months they have decreased their shares by less than 1%, so this does not tell us much.
The 5 year low, median and high median Price/Earnings Ratios are 11.35, 17.27 and 22.76. The current P/E Ratio is 12.72. This low P/E Ratio would suggest a relatively low current stock price, based on a stock price of $14.75 and a June 2013 EPS of $1.16. A P/E Ratio of 12.72 is a reasonable one on an absolute basis.
I get a Graham Number of $8.16. The 10 year low, median and high median Price/GP Ratios are 1.57, 2.12 and 3.23. The current P/GP Ratio is 1.80 based on a stock price of $14.75. This relatively low P/GP Ratio would suggest a relatively low stock price.
The 10 year Price/Book Value Ratio is 8.50. The current P/B Ratio is 5.79 a ratio that is only 68% of the 10 year median ratio. This relatively low P/B Ratio suggests a relatively low stock price. (However, a P/B Ratio of 5.79 is not a low ratio on an absolute basis.
The current dividend yield is 4.75% and the 5 year median dividend yield is just 2.74%. The current dividend yield is some 73% higher than the 5 year dividend yield and suggests a relatively low stock price. Also, a dividend yield of 4.75% is a good dividend yield.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $17.60. This implies a total return of 24.07% with 19.32% coming from capital gain and 4.75% coming from dividends.
One analyst with a Buy recommendation felt that this company has a solid balance sheet and an attractive dividend policy. I agree that it does have a solid balance sheet and dividends are good. However, earnings will have to pick up for this dividend policy to continue and the company has not yet proven that it can do that. The analysts I looked at certainly feel that earnings will pick up.
One analyst with a strong buy recommendation says he still believes in this company. However, he did mention that Assets under Management has been falling. (There was a 6% decrease in AUM in the financial year ending in June 2012. However, AUM has been basically flat over the past 5 years.)
A couple of analysts have mentioned that you paid around a 5% dividend to wait for better times. (If you include the special dividend for 2012, the dividend yield is just over 5%.) And an interesting article by David Rosenberg of Gluskin Sheff says that he thinks analyst estimates of earnings this year are too optimistic. See article in the Pragmatic Capitalist blog.
There is no doubt that there are a number of very smart people running this company. I think that money can usually be made from investment companies. However, these are tough times for investment companies and I would like to see some improvement in both earnings and assets under management before I would be interested.
The Globe & Mail has an interesting article about this company called Gluskin Sheff can't break out of industry rut. They cannot grow their Assets under Management. This paper also has another interesting article talking about insider trading . It said some insiders were selling, but the Chief investment officer William Webb was buying.
Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff. See my spreadsheet at gs.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, September 25, 2012
Gluskin Sheff & Associates Inc
I do not own shares in this company (TSX-GS). I started to follow this company after I read an article by Jennifer Dowty in 2010 about stocks that pay not only dividends, but special dividends too. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer currently works for Manulife.
Let's start with dividends on this stock. They have been giving out regular quarterly dividends, plus a special dividend each year. The special dividend given out in October 2012 was lower it has ever been at $0.06 per shares. (Special dividend was $0.80 for the past 2 years.) Last year was not a good year for this stock. The Dividend Payout Ratios were high for earnings at 237%. (Earnings hit a low for the financial year ending in June 2012.)
The DPRs for earnings is expected to be lower this year at 65.5%. The DPRs for cash flow was also high for the financial year ending in June 2012. The 5 year median DPRs are 102% and 85.5% for earnings and cash flow, respectively. The DPR for earnings has been often over 100%.
This stock has only been public since 2006 and so I do not have much data to judge this company. They started dividends in 2007. Dividends have been quite strong for this company with the 5 year dividend growth at 15%. The most recent dividend increases was for 7.7%.
The total return is down by 6.79% per year over the past 5 years and up by 0.8% over the past 7 years. The portion of the total return attributable to dividends would be 5.95% and 5.48% per year over the past 5 and 7 years. Capital loss would be 12.73% and 4.68% per year over the past 5 and 7 years.
The growth on this stock really peaked in 2006 and 2007 and then went downhill to the end of financial year of June 2012. Analysts expect this company to have a much better year with the financial year ending in June 2013.
The company issued shares in 2005 and 2006. Since then the shares outstanding have gone down marginally per year. Revenue decline per year over the past 5 year is 14.63% per year and Revenue per Share decline is at 14.43% per year.
Some analyst gave different EPS for the financial year ending in June 2012 to compensate for unusual expenses. This is not consistent over sites with some giving an EPS of $0.68 and some $0.75. (It depends on what different analysts think is usual.) However, both these adjusted EPS are still down from EPS for year ending June 2010 of $1.69. Over the past 5 years EPS has decline by 25% per year. Cash Flow over the past 5 years has decline by 19.6% per year. However, book value per share over the past 5 year has remained flat.
The Return on Equity on this stock is outstanding with the ROE for the financial year ending in June 2012 at 23.7% and with a 5 year median ROE of 43.8%. The ROE based on comprehensive income is the same.
All the debt ratios are quite good, which is what to expect when insiders own a significant portion of the outstanding shares. The current Liquidity Ratio is 3.85. The current Debt Ratio is 3.47. The Current Leverage and Debt/Equity Ratios are 1.40 and 0.40.
It is hard to know if this stock has turned the corner and will actually do better this year. Analysts seem to think that starting in the 2nd quarter of this year, which ends December 2012, earnings and revenue will pick up. They have not done so yet, so I would be cautious. Analysts estimates are just that, estimates and they can be very wrong.
The dividend is good at 4.75%, but will they start to earn money again?
Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff. See my spreadsheet at gs.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.
Let's start with dividends on this stock. They have been giving out regular quarterly dividends, plus a special dividend each year. The special dividend given out in October 2012 was lower it has ever been at $0.06 per shares. (Special dividend was $0.80 for the past 2 years.) Last year was not a good year for this stock. The Dividend Payout Ratios were high for earnings at 237%. (Earnings hit a low for the financial year ending in June 2012.)
The DPRs for earnings is expected to be lower this year at 65.5%. The DPRs for cash flow was also high for the financial year ending in June 2012. The 5 year median DPRs are 102% and 85.5% for earnings and cash flow, respectively. The DPR for earnings has been often over 100%.
This stock has only been public since 2006 and so I do not have much data to judge this company. They started dividends in 2007. Dividends have been quite strong for this company with the 5 year dividend growth at 15%. The most recent dividend increases was for 7.7%.
The total return is down by 6.79% per year over the past 5 years and up by 0.8% over the past 7 years. The portion of the total return attributable to dividends would be 5.95% and 5.48% per year over the past 5 and 7 years. Capital loss would be 12.73% and 4.68% per year over the past 5 and 7 years.
The growth on this stock really peaked in 2006 and 2007 and then went downhill to the end of financial year of June 2012. Analysts expect this company to have a much better year with the financial year ending in June 2013.
The company issued shares in 2005 and 2006. Since then the shares outstanding have gone down marginally per year. Revenue decline per year over the past 5 year is 14.63% per year and Revenue per Share decline is at 14.43% per year.
Some analyst gave different EPS for the financial year ending in June 2012 to compensate for unusual expenses. This is not consistent over sites with some giving an EPS of $0.68 and some $0.75. (It depends on what different analysts think is usual.) However, both these adjusted EPS are still down from EPS for year ending June 2010 of $1.69. Over the past 5 years EPS has decline by 25% per year. Cash Flow over the past 5 years has decline by 19.6% per year. However, book value per share over the past 5 year has remained flat.
The Return on Equity on this stock is outstanding with the ROE for the financial year ending in June 2012 at 23.7% and with a 5 year median ROE of 43.8%. The ROE based on comprehensive income is the same.
All the debt ratios are quite good, which is what to expect when insiders own a significant portion of the outstanding shares. The current Liquidity Ratio is 3.85. The current Debt Ratio is 3.47. The Current Leverage and Debt/Equity Ratios are 1.40 and 0.40.
It is hard to know if this stock has turned the corner and will actually do better this year. Analysts seem to think that starting in the 2nd quarter of this year, which ends December 2012, earnings and revenue will pick up. They have not done so yet, so I would be cautious. Analysts estimates are just that, estimates and they can be very wrong.
The dividend is good at 4.75%, but will they start to earn money again?
Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff. See my spreadsheet at gs.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, September 24, 2012
Johnson and Johnson 2
On my other blog I am today writing about Research Information Sites. I am doing this blog entry due to a question on what are some of the sites I get my information from...continue...
I do not own this stock (TSX-JNJ). This is one of the very few US stocks that I follow. I held it for a short time, buying it in June 2005 and selling in June 2006. I did not think that I would ever make much, if any money on this stock. I had a loss of 16.82% on this stock.
As far as I can see on insider trading, over the past 6 months there was some $24.6M of insider buying and some $23.9M of insider selling. Insiders have options. They seem to have issued in 2012 some 9.5M options shares worth $660M. There are a number of insiders who own shares in this company worth in the millions of dollars. For example, the CEO has some 0.4M shares currently worth around $28M.
There seems to be around 2,358 institutional holders who own some 68% of this company's outstanding shares. Over the past 3 months they have increased their shares by 3.4%. This is a positive.
The 5 year low, median and high median Price/Earnings Ratios are 12.11, 13.90 and 15.69. The current P/E Ratio is 19.69 based on stock price of $69.25 and 2012 earnings of $3.52. This would suggest that the stock price is a little high.
If you look at Adjusted EPS and the current P/E, you get a current one of 13.69 with 5 year low, median and high median P/E based on Adjusted EPS at 12.16, 13.96 and 15.76. This suggests a reasonable price. However, I cannot duplicate how the company comes up with the Adjusted EPS and at the very least they seemed to have changed the way it is calculated over the years. I would be a bit shy on depending on this. Sites seem to be using the Adjusted EPS as the EPS. They are not the same.
I get a current Graham price of $41.75. The 10 year low, median and high median Price/Graham Price Ratios are 1.71, 1.85 and 1.99. The current P/GP Ratio of 1.66 would suggest that the current stock price is relatively low.
I get a 10 year Price/Book Value Ratio of 4.64 and a current P/B Ratio of 3.15. The current P/B Ratio is only 68% of the 10 year ratio and this suggests that the current stock price is relatively low.
I get a 5 year median dividend yield of 3.43% and a current dividend yield of 3.52%. The current one is higher than the 5 year median by around 2.7%. This current dividend yield being a bit higher than the 5 year median suggests a relatively reasonable current stock price.
My stock price tests gives rather mixed results. In that case, I would suggest that the dividend yield tests might prove the most important and that suggests a relatively reasonable current stock price.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendations would be a Buy. (See my site for information on analyst ratings.) The 12 months stock price target is $73.50. This suggests a 12 month total return of 9.66%, with 3.52% from dividends and 6.14% from capital gains.
If you like technical analyses look at Trader Robotics. JNJ is the second stock he analysis in this video.
Even analyst with Buy recommendations do not seem to be very enthusiastic about this stock. They are looking for returns of 8 to 9%. One analyst says that the stock has underperformed the market. Another one remarks that dividends should continue to increase.
The blogger, Seeking Alpha, has an interesting 4 part report on this stock. The first part gives an overview of this company. The second part talks about existing products. The third part talks about the company's drug pipeline and the fourth part analysis the company's financial statements.
The Dividend Monk has also produced a recent posting on this stock. He calls for cautious optimism at $68 a share. See his analysis on this stock.
This stock probably has a reasonable stock price on a reasonably safe stock. You might probably make more on it that what you can earn at current interest rates.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
I do not own this stock (TSX-JNJ). This is one of the very few US stocks that I follow. I held it for a short time, buying it in June 2005 and selling in June 2006. I did not think that I would ever make much, if any money on this stock. I had a loss of 16.82% on this stock.
As far as I can see on insider trading, over the past 6 months there was some $24.6M of insider buying and some $23.9M of insider selling. Insiders have options. They seem to have issued in 2012 some 9.5M options shares worth $660M. There are a number of insiders who own shares in this company worth in the millions of dollars. For example, the CEO has some 0.4M shares currently worth around $28M.
There seems to be around 2,358 institutional holders who own some 68% of this company's outstanding shares. Over the past 3 months they have increased their shares by 3.4%. This is a positive.
The 5 year low, median and high median Price/Earnings Ratios are 12.11, 13.90 and 15.69. The current P/E Ratio is 19.69 based on stock price of $69.25 and 2012 earnings of $3.52. This would suggest that the stock price is a little high.
If you look at Adjusted EPS and the current P/E, you get a current one of 13.69 with 5 year low, median and high median P/E based on Adjusted EPS at 12.16, 13.96 and 15.76. This suggests a reasonable price. However, I cannot duplicate how the company comes up with the Adjusted EPS and at the very least they seemed to have changed the way it is calculated over the years. I would be a bit shy on depending on this. Sites seem to be using the Adjusted EPS as the EPS. They are not the same.
I get a current Graham price of $41.75. The 10 year low, median and high median Price/Graham Price Ratios are 1.71, 1.85 and 1.99. The current P/GP Ratio of 1.66 would suggest that the current stock price is relatively low.
I get a 10 year Price/Book Value Ratio of 4.64 and a current P/B Ratio of 3.15. The current P/B Ratio is only 68% of the 10 year ratio and this suggests that the current stock price is relatively low.
I get a 5 year median dividend yield of 3.43% and a current dividend yield of 3.52%. The current one is higher than the 5 year median by around 2.7%. This current dividend yield being a bit higher than the 5 year median suggests a relatively reasonable current stock price.
My stock price tests gives rather mixed results. In that case, I would suggest that the dividend yield tests might prove the most important and that suggests a relatively reasonable current stock price.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendations would be a Buy. (See my site for information on analyst ratings.) The 12 months stock price target is $73.50. This suggests a 12 month total return of 9.66%, with 3.52% from dividends and 6.14% from capital gains.
If you like technical analyses look at Trader Robotics. JNJ is the second stock he analysis in this video.
Even analyst with Buy recommendations do not seem to be very enthusiastic about this stock. They are looking for returns of 8 to 9%. One analyst says that the stock has underperformed the market. Another one remarks that dividends should continue to increase.
The blogger, Seeking Alpha, has an interesting 4 part report on this stock. The first part gives an overview of this company. The second part talks about existing products. The third part talks about the company's drug pipeline and the fourth part analysis the company's financial statements.
The Dividend Monk has also produced a recent posting on this stock. He calls for cautious optimism at $68 a share. See his analysis on this stock.
This stock probably has a reasonable stock price on a reasonably safe stock. You might probably make more on it that what you can earn at current interest rates.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Friday, September 21, 2012
Johnson and Johnson
I do not own this stock (TSX-JNJ). This is one of the very few US stocks that I follow. I held it for a short time, buying it in June 2005 and selling in June 2006. I did not think that I would ever make much, if any money on this stock. I had a loss of 16.82% on this stock.
The last 5 year period where a Canadian made some good money on this stock is the 5 year period to 2002 where the total return was 14.26% per year. Between then and the end of 2011, the only 5 year period where a Canadian has made some money on this stock is 2008 when a total return of 4.69% per year was made. Every other 5 year period a Canadian would have had a loss or made very little. For example the total return for 5 year periods ending in 2004, 2009 and 2011 the 3.77% per year, 0.06% per year and 0.06% per year.
The total return for the last 5 and 10 years to the end of 2011 was a gain of 0.06% per year and loss of 1.34% per year, respectively. The dividend portion of the total return over the past 5 and 10 years was 2.81% and 2.13% per year. The capital loss was at 2.74% and 3.47% per year.
Since all values on this stock is in US currency, I think the only way to start to value this stock as a Canadian is what you would have earned being invested in this stock. Your actual returns would probably have varied from what is on my spreadsheet depending on what exchange rates were used and if you had this stock in a Canadian currency account or a US currency account.
Of course, the next thing you want to know about a stock is how well it is doing in its home currency. Let's start with total return. In US$, the total return over the past 5 and 10 years would be 2.79% and 3.30% per year. Dividends would account for 2.93% and 2.38% per year over this period. You would have had a capital loss over the past 5 years of 0.15% and a capital gain over the past 10 years of 0.92%.
Now on to dividends, a subject I like to talk about. In US currency terms, dividends have increased over the past 5 and 10 years at 9.11% and 12.39% per year, respectively. (However dividend increases have not been so good for Canadian stock holders with 5 and 10 year increases at 6.27% and 7.5%. This would also depend on what currency exchange rates that are used if you held the stock.)
They have marginally increased their outstanding shares over the past 5 and 10 years at the rate of 1.14% and 1.13% per year. They have been issuing stock options each year (which increases outstanding shares) and buying back shares (which decreases outstanding shares).
Revenue growth over the past 5 and 10 years is 4.05% and 7.02% per year, respectively. Revenue per Share growth over the past 5 and 10 years is at 5.25% and 8.24% per year. The difference, of course, is accounted for by the change in outstanding shares.
Earnings per Share have gone done over the past 5 years by 1.32% per year. EPS has increased over the past 10 years at 6.61%. Analysts expect 2012 to be a very good year with EPS at a mean of $5.06. However, the last 12 months EPS is $3.14 and this is lower than for 2011 with EPS at $3.49, so I do not expect this to be the real EPS. Just to make things confusing some sites, as is JNJ, are using an Adjusted Earnings figure and the Adjusted EPS seems to be what some analysts are quoting. (Also, I cannot seem to replicate how they get this Adjusted EPS.)
The Cash Flow per Share growth is also low, with 5 and 10 year growth at 0.19% and 6.75% per year. The only good growth is for Book Value per Share, which over the past 5 and 10 years grew at 8.98% and 10.12% per year. Generally when the comprehensive income is substantially lower than the net income, you wonder how good the quality of the net income is.
The Return on Equity seems to be where this company has excelled. The ROE for the end of 2011 was in the very good range of 16% to 20% at 16.6%. The 5 year median ROE is better at 24.2% for the year ending in 2011. This is one of the few US companies I have seen to give out the Comprehensive Income. The ROE on comprehensive income for the year ending in 2011 was 13.3%. Not as good as the ROE on net income.
The current Liquidity Ratio is good at 1.75. The current Debt Ratio is also quite good at 2.09. Also both the current Leverage and Debt/Equity Ratios are good at 1.92 and 0.92.
This stock has currently a decent dividend, and decent dividend growth. As far as total returns go, it has not done so well and even worse for Canadian investors.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The last 5 year period where a Canadian made some good money on this stock is the 5 year period to 2002 where the total return was 14.26% per year. Between then and the end of 2011, the only 5 year period where a Canadian has made some money on this stock is 2008 when a total return of 4.69% per year was made. Every other 5 year period a Canadian would have had a loss or made very little. For example the total return for 5 year periods ending in 2004, 2009 and 2011 the 3.77% per year, 0.06% per year and 0.06% per year.
The total return for the last 5 and 10 years to the end of 2011 was a gain of 0.06% per year and loss of 1.34% per year, respectively. The dividend portion of the total return over the past 5 and 10 years was 2.81% and 2.13% per year. The capital loss was at 2.74% and 3.47% per year.
Since all values on this stock is in US currency, I think the only way to start to value this stock as a Canadian is what you would have earned being invested in this stock. Your actual returns would probably have varied from what is on my spreadsheet depending on what exchange rates were used and if you had this stock in a Canadian currency account or a US currency account.
Of course, the next thing you want to know about a stock is how well it is doing in its home currency. Let's start with total return. In US$, the total return over the past 5 and 10 years would be 2.79% and 3.30% per year. Dividends would account for 2.93% and 2.38% per year over this period. You would have had a capital loss over the past 5 years of 0.15% and a capital gain over the past 10 years of 0.92%.
Now on to dividends, a subject I like to talk about. In US currency terms, dividends have increased over the past 5 and 10 years at 9.11% and 12.39% per year, respectively. (However dividend increases have not been so good for Canadian stock holders with 5 and 10 year increases at 6.27% and 7.5%. This would also depend on what currency exchange rates that are used if you held the stock.)
They have marginally increased their outstanding shares over the past 5 and 10 years at the rate of 1.14% and 1.13% per year. They have been issuing stock options each year (which increases outstanding shares) and buying back shares (which decreases outstanding shares).
Revenue growth over the past 5 and 10 years is 4.05% and 7.02% per year, respectively. Revenue per Share growth over the past 5 and 10 years is at 5.25% and 8.24% per year. The difference, of course, is accounted for by the change in outstanding shares.
Earnings per Share have gone done over the past 5 years by 1.32% per year. EPS has increased over the past 10 years at 6.61%. Analysts expect 2012 to be a very good year with EPS at a mean of $5.06. However, the last 12 months EPS is $3.14 and this is lower than for 2011 with EPS at $3.49, so I do not expect this to be the real EPS. Just to make things confusing some sites, as is JNJ, are using an Adjusted Earnings figure and the Adjusted EPS seems to be what some analysts are quoting. (Also, I cannot seem to replicate how they get this Adjusted EPS.)
The Cash Flow per Share growth is also low, with 5 and 10 year growth at 0.19% and 6.75% per year. The only good growth is for Book Value per Share, which over the past 5 and 10 years grew at 8.98% and 10.12% per year. Generally when the comprehensive income is substantially lower than the net income, you wonder how good the quality of the net income is.
The Return on Equity seems to be where this company has excelled. The ROE for the end of 2011 was in the very good range of 16% to 20% at 16.6%. The 5 year median ROE is better at 24.2% for the year ending in 2011. This is one of the few US companies I have seen to give out the Comprehensive Income. The ROE on comprehensive income for the year ending in 2011 was 13.3%. Not as good as the ROE on net income.
The current Liquidity Ratio is good at 1.75. The current Debt Ratio is also quite good at 2.09. Also both the current Leverage and Debt/Equity Ratios are good at 1.92 and 0.92.
This stock has currently a decent dividend, and decent dividend growth. As far as total returns go, it has not done so well and even worse for Canadian investors.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Thursday, September 20, 2012
Canadian Natural Resources 2
I now own this stock of Canadian Natural Resources (TSX-CNQ) as I just bought 100 shares this morning. This is a stock on a number of dividend lists as it has a good record of dividend increases. It raises the dividend each year and over the past 5 and 10 years the growth in dividend is 19% and 21.5% per year.
When I look at insider trading I find a huge amount of insider selling at $94.9M. There is some insider buying at $5.5M, but the net insider selling is at $89.4M. Some $50M of the insider selling is by directors and it would appear that a lot of this is by Allan Markin who resigned in April of this year.
When I looked at this stock in July 2011, I noted that Markin had 12.9M shares currently worth some $411M. It would seem that he has only sold around 1.7M shares since then. If he is selling off shares, then he has a long way to go to sell all his shares. We will no longer know when he does this as he ceased to be an insider in April 2012. Allan Markin decided to resign without notice on Monday, April 2nd, 2012 as chairman of Canadian Natural Resources Ltd. after 23 years. See notice in Calgary Herald. He seemed to have sold a lot of his shares at the same time.
There is some $11.8M of insider selling by the CEO. It would seem that he is cashing in options. He still has some $63.6M in options. He owns around $65M in shares in this company. The CFO also seems to be cashing in options with insider selling at $4M. He has $22.5M in shares in this company and $24.8M in options. The remaining insider selling is by officers at $28.7M. Officer purchases total $4.5M in shares. Insiders get an awful lot of options. The company says that stock options outstanding are equal to around 6% of the outstanding shares. This company is worth some $34.8B.
There are some 415 Institutions holding some 644.8M shares. This was as at June 30th, 2012. I cannot find information on recent buying or selling by institutional owners on this company.
The 5 year low, median and high median Price/Earnings Ratios are 12.04, 16.38 and 20.71. The current P/E ratio is 18.08 based on a stock price of $31.82 and 2012 earnings of 1.76. This would suggest the stock price is a bit high, but still reasonable.
I get a current Graham price of $29.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.81, 1.18 and 1.50. The current P/GP Ratio is 1.08. This would suggest a reasonable stock price.
I get a 10 year Price/Book Value ratio of 2.00 and a current P/B Ratio of 1.46. This current Ratio is 73% of the 10 year ratio and would suggest a very good stock price.
The 5 year median dividend yield is 0.73%. The current dividend yield is 1.32%. This current yield is 80% higher than the 5 year median dividend yield and suggests a very good stock price.
My stock price test give mixed results. When this happens, it is best to go with the results from the P/B Ratio and dividend yield, unless there are specific reasons not to do so. In this case, I would go with these tests and judge the stock price to be very good.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. Most of the recommendations fall in the Strong Buy and Buy categories. The consensus recommendation would be a Buy. The 12 month consensus stock price is $40.80. This implies a total return over the next 12 months of 29.54%, with 1.32% from dividends and 28.22% from capital gains.
One analyst with a hold recommendation does not see much growth in the share price over the next 12 months. It says the average forward P/E is 11 and the estimate for earnings for 2013 would produce a P/E of 11. (I get a forward P/E of 11.74. However, earning estimates are notorious for being wrong. I am also buying for the long term and not what the stock price will be next year.)
One analyst with a buy recommendation says that this stock is undervalued. Another analysts with a buy recommendation said that this company is the broadest and widest diversified oil/gas play. A number of analysts say that it is a well-managed company.
Seeking Alpha made an interesting remark about pipelines and Canadian Oil patch companies. There just may be problems with future pipeline capacity. He also thinks this company is undervalued .
Daily Political talks about why Zacks has a hold rating on this stock. The blogger Invistock talk about this company being a buy. This stock is a top pick for David Winters of Wintergreen Advisers.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources. See my spreadsheet at cnq.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 huge amount of insider selling at $94.9M. There is some insider buying at $5.5M, but the net insider selling is at $89.4M. Some $50M of the insider selling is by directors and it would appear that a lot of this is by Allan Markin who resigned in April of this year.
When I looked at this stock in July 2011, I noted that Markin had 12.9M shares currently worth some $411M. It would seem that he has only sold around 1.7M shares since then. If he is selling off shares, then he has a long way to go to sell all his shares. We will no longer know when he does this as he ceased to be an insider in April 2012. Allan Markin decided to resign without notice on Monday, April 2nd, 2012 as chairman of Canadian Natural Resources Ltd. after 23 years. See notice in Calgary Herald. He seemed to have sold a lot of his shares at the same time.
There is some $11.8M of insider selling by the CEO. It would seem that he is cashing in options. He still has some $63.6M in options. He owns around $65M in shares in this company. The CFO also seems to be cashing in options with insider selling at $4M. He has $22.5M in shares in this company and $24.8M in options. The remaining insider selling is by officers at $28.7M. Officer purchases total $4.5M in shares. Insiders get an awful lot of options. The company says that stock options outstanding are equal to around 6% of the outstanding shares. This company is worth some $34.8B.
There are some 415 Institutions holding some 644.8M shares. This was as at June 30th, 2012. I cannot find information on recent buying or selling by institutional owners on this company.
The 5 year low, median and high median Price/Earnings Ratios are 12.04, 16.38 and 20.71. The current P/E ratio is 18.08 based on a stock price of $31.82 and 2012 earnings of 1.76. This would suggest the stock price is a bit high, but still reasonable.
I get a current Graham price of $29.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.81, 1.18 and 1.50. The current P/GP Ratio is 1.08. This would suggest a reasonable stock price.
I get a 10 year Price/Book Value ratio of 2.00 and a current P/B Ratio of 1.46. This current Ratio is 73% of the 10 year ratio and would suggest a very good stock price.
The 5 year median dividend yield is 0.73%. The current dividend yield is 1.32%. This current yield is 80% higher than the 5 year median dividend yield and suggests a very good stock price.
My stock price test give mixed results. When this happens, it is best to go with the results from the P/B Ratio and dividend yield, unless there are specific reasons not to do so. In this case, I would go with these tests and judge the stock price to be very good.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. Most of the recommendations fall in the Strong Buy and Buy categories. The consensus recommendation would be a Buy. The 12 month consensus stock price is $40.80. This implies a total return over the next 12 months of 29.54%, with 1.32% from dividends and 28.22% from capital gains.
One analyst with a hold recommendation does not see much growth in the share price over the next 12 months. It says the average forward P/E is 11 and the estimate for earnings for 2013 would produce a P/E of 11. (I get a forward P/E of 11.74. However, earning estimates are notorious for being wrong. I am also buying for the long term and not what the stock price will be next year.)
One analyst with a buy recommendation says that this stock is undervalued. Another analysts with a buy recommendation said that this company is the broadest and widest diversified oil/gas play. A number of analysts say that it is a well-managed company.
Seeking Alpha made an interesting remark about pipelines and Canadian Oil patch companies. There just may be problems with future pipeline capacity. He also thinks this company is undervalued .
Daily Political talks about why Zacks has a hold rating on this stock. The blogger Invistock talk about this company being a buy. This stock is a top pick for David Winters of Wintergreen Advisers.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources. See my spreadsheet at cnq.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, September 19, 2012
Canadian Natural Resources
On my other blog I am today writing about Conrad Black...continue...
I do not own this stock of Canadian Natural Resources (TSX-CNQ). This is a stock on a number of dividend lists as it has a good record of dividend increases. It raises the dividend each year and over the past 5 and 10 years the growth in dividend is 19% and 21.5% per year.
The dividends may increase quickly, but the dividend yield is quite low. The 5 year median dividend yield is 0.73%. The 10 year median dividend yield is 0.75%. The current dividend yield is 1.31%. The dividend yield in the past has been to 1.33%, but not higher. The 10 year median dividend high is 1.08%.
The Dividend Payout Ratios are very low with the 5 year DPR for earnings at 14% and the 5 year DPR for cash flow at 3.92%. The DPRs for 2012 are expected to be 24% for earnings and 8% for cash flow.
This is an oil and gas exploration company and therefore its profits are tied to the price of oil and gas. However, it is done well for its shareholders over the past 5 and 10 years. The total returns over the past 5 and 10 years are 4.91% and 24.31%. The portion of this return from dividend would be 0.72% and 1.25% per year, respectively. The capital gain portion of this total return is 4.19% and 23.06% per year, respectively. The portion of the return that is from dividend is 14.73% and 5.14% over the past 5 and 10 years.
This is an oil and gas company that does not have a fluctuating dividend depending on the price of oil and gas, but rather increases the dividends as they can. They pay out a very low portion of their income and cash flow. What this means is that after 10 or 15 years you could be earnings a very good return on your initial investment.
Because the dividend yield is currently relatively high for this stock, you could, after 10 years be earnings 7.5% on your purchase price of the stock today. After 15 years, you could be 12% return on your purchase price of the stock today.
Over the past 5 and 10 years the number of shares outstanding has increased slightly by 0.38% and 1.24% per year. They have been buying back shares and have also issued shares under stock options.
Revenues over the past 5 and 10 years have grown at the rate of 5.9% and 15.8% per year, respectively. The Revenue per Share has grown at the rate of 5.5% and 14.5% per year. (There is a difference because of the increase in outstanding shares over the past 5 and 10 years.)
The cash flow per share has grown at the rate of 4.9% and 11.1% per year over the past 5 and 10 years. The book value per share has grown at the rate of 16% and 18% per year.
The Return on Equity is in the good 10 to 15% range at11.5% per year the financial year of 2011. The 5 year median ROE is also 11.5% per year. The ROE based on comprehensive income is also good for 2011 with a rate of 11.6%. However, the 5 year median ROE based on comprehensive income is also 11.6%.
The current Liquidity Ratio is just 0.55. This means that the current assets cannot cover the current liabilities. However, this company has a strong cash flow and if you include cash flow after dividends, the ratio for the end of 2011 was 2.14. The 5 year median ratio including cash flow after dividends is 2.58.
The current Debt Ratio is quite good at 2.01. The 5 year median is 1.68. The current Leverage and Debt/Equity Ratios are fine at 1.99 and 0.99. These have 10 year median ratios of 2.48 and 1.48.
This is considered to be a core stock for a number of investors and for good reasons. It may have low dividend, but the dividend increases are very good. You would buy it for diversification.
It would also be a good stock for someone just starting to invest. Resource stocks are riskier stock, but the young can take the risk as they have a long time for investing and realizing a good return no matter what the current economic climate is like. Also, the initial low dividends mean low taxes if you are employed. After a long while, it will produce great income on your initial investment.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources. See my spreadsheet at cnq.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 of Canadian Natural Resources (TSX-CNQ). This is a stock on a number of dividend lists as it has a good record of dividend increases. It raises the dividend each year and over the past 5 and 10 years the growth in dividend is 19% and 21.5% per year.
The dividends may increase quickly, but the dividend yield is quite low. The 5 year median dividend yield is 0.73%. The 10 year median dividend yield is 0.75%. The current dividend yield is 1.31%. The dividend yield in the past has been to 1.33%, but not higher. The 10 year median dividend high is 1.08%.
The Dividend Payout Ratios are very low with the 5 year DPR for earnings at 14% and the 5 year DPR for cash flow at 3.92%. The DPRs for 2012 are expected to be 24% for earnings and 8% for cash flow.
This is an oil and gas exploration company and therefore its profits are tied to the price of oil and gas. However, it is done well for its shareholders over the past 5 and 10 years. The total returns over the past 5 and 10 years are 4.91% and 24.31%. The portion of this return from dividend would be 0.72% and 1.25% per year, respectively. The capital gain portion of this total return is 4.19% and 23.06% per year, respectively. The portion of the return that is from dividend is 14.73% and 5.14% over the past 5 and 10 years.
This is an oil and gas company that does not have a fluctuating dividend depending on the price of oil and gas, but rather increases the dividends as they can. They pay out a very low portion of their income and cash flow. What this means is that after 10 or 15 years you could be earnings a very good return on your initial investment.
Because the dividend yield is currently relatively high for this stock, you could, after 10 years be earnings 7.5% on your purchase price of the stock today. After 15 years, you could be 12% return on your purchase price of the stock today.
Over the past 5 and 10 years the number of shares outstanding has increased slightly by 0.38% and 1.24% per year. They have been buying back shares and have also issued shares under stock options.
Revenues over the past 5 and 10 years have grown at the rate of 5.9% and 15.8% per year, respectively. The Revenue per Share has grown at the rate of 5.5% and 14.5% per year. (There is a difference because of the increase in outstanding shares over the past 5 and 10 years.)
The cash flow per share has grown at the rate of 4.9% and 11.1% per year over the past 5 and 10 years. The book value per share has grown at the rate of 16% and 18% per year.
The Return on Equity is in the good 10 to 15% range at11.5% per year the financial year of 2011. The 5 year median ROE is also 11.5% per year. The ROE based on comprehensive income is also good for 2011 with a rate of 11.6%. However, the 5 year median ROE based on comprehensive income is also 11.6%.
The current Liquidity Ratio is just 0.55. This means that the current assets cannot cover the current liabilities. However, this company has a strong cash flow and if you include cash flow after dividends, the ratio for the end of 2011 was 2.14. The 5 year median ratio including cash flow after dividends is 2.58.
The current Debt Ratio is quite good at 2.01. The 5 year median is 1.68. The current Leverage and Debt/Equity Ratios are fine at 1.99 and 0.99. These have 10 year median ratios of 2.48 and 1.48.
This is considered to be a core stock for a number of investors and for good reasons. It may have low dividend, but the dividend increases are very good. You would buy it for diversification.
It would also be a good stock for someone just starting to invest. Resource stocks are riskier stock, but the young can take the risk as they have a long time for investing and realizing a good return no matter what the current economic climate is like. Also, the initial low dividends mean low taxes if you are employed. After a long while, it will produce great income on your initial investment.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources. See my spreadsheet at cnq.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, September 18, 2012
IBI Group Inc 2
I do not own this stock (TSX-IBG). This company used to be Partnership (TDX-IBG.UN), but changed to a corporation structure in January 2011 and decreased the distributions or dividends by 30% at the same time. This company only went public in 2004.
When I look at the insider trading report I find a small amount of Insider buying, mostly by the CEO. There is no insider selling. Net insider buying is $0.768M. This company seems now to give out options, but does have some Rights Deferred Units outstanding. Insiders seem to own more than 75% of outstanding shares.
There are some 9 institutions that own around 6% of the outstanding shares. Over the past 3 month they have increased their shares by 59% and this is a positive.
The 5 year low, median and high median Price/Earnings Ratios for this company is 11.26, 13.61 and 15.95. The current P/E is 9.83 based on 2012 earnings of $0.98 and stock price of $9.63. This would suggest that the stock price is relatively cheap.
I get a current Graham Number of $14.33 and the 10 year low, median and high median Price/Graham Price Ratios are 0.67, 0.88 and 1.11. Based on a stock price of $9.63, the current P/GP Ratio is 0.67. This low P/GP ratio suggests that the stock price is relatively good to cheap.
I get a 10 year Price/Book Value Ratio of 1.33 and a current one of 1.03. The current one is 78% of the 10 year ratio and this suggests that the current stock price is relatively cheap.
I get a 5 year median dividend yield of 9.17 and a current dividend yield of 11.46%. The current one is 25% higher than the 5 year median dividend yield and this suggests a relatively cheap stock price.
When I look at analysts' recommendations, I find that they are all over the place with recommendations of Strong Buy, Buy, Hold, Underperform and Sell. However, most are in the Buy category and the consensus recommendation would be a buy.
12 month stock price consensus is $12.30. The consensus 12 month stock price suggests a total return of 39.19% with 11.46% from dividends and 27.73% from capital gain.
There is an interesting article on a building designed by IBI group in Architecture Week. An article on Arch Daily talks about a building designed by IBI group at Cornell School Of Ecology. Another article at Manchester Evening News talks about IBI group buying a British firm.
I think that the price on this stock is very good. I think that it is a very good and well thought of company. However, I do have a concern about the high Dividend Payout Ratios and because of this I would treat this company with caution. High Dividend Payout Ratios shows that this company is a risky investment.
The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology). IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership). Its web site is here IBI Group. See my spreadsheet at ibg.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
When I look at the insider trading report I find a small amount of Insider buying, mostly by the CEO. There is no insider selling. Net insider buying is $0.768M. This company seems now to give out options, but does have some Rights Deferred Units outstanding. Insiders seem to own more than 75% of outstanding shares.
There are some 9 institutions that own around 6% of the outstanding shares. Over the past 3 month they have increased their shares by 59% and this is a positive.
The 5 year low, median and high median Price/Earnings Ratios for this company is 11.26, 13.61 and 15.95. The current P/E is 9.83 based on 2012 earnings of $0.98 and stock price of $9.63. This would suggest that the stock price is relatively cheap.
I get a current Graham Number of $14.33 and the 10 year low, median and high median Price/Graham Price Ratios are 0.67, 0.88 and 1.11. Based on a stock price of $9.63, the current P/GP Ratio is 0.67. This low P/GP ratio suggests that the stock price is relatively good to cheap.
I get a 10 year Price/Book Value Ratio of 1.33 and a current one of 1.03. The current one is 78% of the 10 year ratio and this suggests that the current stock price is relatively cheap.
I get a 5 year median dividend yield of 9.17 and a current dividend yield of 11.46%. The current one is 25% higher than the 5 year median dividend yield and this suggests a relatively cheap stock price.
When I look at analysts' recommendations, I find that they are all over the place with recommendations of Strong Buy, Buy, Hold, Underperform and Sell. However, most are in the Buy category and the consensus recommendation would be a buy.
12 month stock price consensus is $12.30. The consensus 12 month stock price suggests a total return of 39.19% with 11.46% from dividends and 27.73% from capital gain.
There is an interesting article on a building designed by IBI group in Architecture Week. An article on Arch Daily talks about a building designed by IBI group at Cornell School Of Ecology. Another article at Manchester Evening News talks about IBI group buying a British firm.
I think that the price on this stock is very good. I think that it is a very good and well thought of company. However, I do have a concern about the high Dividend Payout Ratios and because of this I would treat this company with caution. High Dividend Payout Ratios shows that this company is a risky investment.
The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology). IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership). Its web site is here IBI Group. See my spreadsheet at ibg.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, September 17, 2012
IBI Group Inc
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. The blogger I am talking about has a number of "How To" posts that will be helpful to Novice Investors. Today I am blogging about the Passive Income Earner Blog continue...
I do not own this stock IBI Group (TSX-IBG). This company used to be a partnership called IBI Income Fund (TSX-IBG.UN), but changed to a corporation structure in January 2011 and decreased the distributions or dividends by 30% at the same time. This company only went public in 2004 and had a history of making distribution increases. However, since the dividends were reset in early 2011 there has been no hint of an increase.
The 5 year median Dividend Payout Ratios are 144% for earnings and 66% for cash flow. (I am using Cash Flow excluding non-cash items because these items greatly affect cash flow for this company.) The DPRs for earnings in 2012 and 2013 is expected to be 113% and 91%. I think that for this company to raise dividends that the DPRs have to be more reasonable that the present ones.
Shareholders have done well over that past 5 and 7 years with the total return on this stock at 13.47% and 13.63% per year, respectively. Most of this return is in dividends as dividend income was at 11.72% and 11.32% per year, respectively. Capital gains are low at 1.76% and 2.31% per year, over past 5 and 7 years. Dividends made up 87% and 83% of the total return.
Shares outstanding have increased at the rate of 9% and 15% per year over the past 5 and 7 years. Some of this was for acquisitions and some to pay down debt. There is also a big increase for 2012 whereby shares are increasing by 27%. Most was used to pay off debt and has resulted in very good and high debt ratios.
Growth in Revenues looks good at 17% and 22.5% per year for the past 5 and 6 years. However, Revenue per share is a lot lower because of the issuance of new shares. The growth in Revenue per Share is 7.6% and 4.5% per year over the past 5 and 6 years.
Earnings per Share have not been great for this company since 2008. This is not surprising considering the business they are in. On G&M it is listed as business services, but they are in the infrastructure industry. EPS is down by 11.8% and 1% per year over the past 5 and 6 years. However, earnings have been positive every year since 2005 (2004 had negative earnings). Analysts are probably right that EPS is going up as net income for last 12 months is higher than that for 2011.
I am only going to talk about the cash flow excluding non-cash items. This is because non-cash items are generally large for this company. Some analysts feel it is best to us cash flow excluding non-cash items or working capital when using cash flow from operations. The cash flow has always been positive, but the cash flow hit a peak in 2008 and has not yet recovered. Cash Flow has declined by 9% and 7.4% per year over the past 5 and 6 years. However, cash flow per share for the last 12 months is down by 15% from that for 2011. This is not a good sign.
Book Value has also been declining with declines of 2.7% and 0.8% per year over the past 5 and 7 years. Book value at the end of the 2nd quarter is up 16% and this is good.
Return on Equity for the end of 2011 was in the good range of 10% to 15% at 12.2%. The 5 year median ROE is also 12.2%. ROE on comprehensive income for 2011 was 12.7 and has a 5 year median of 12.4%. The closeness of the ROE on net income and comprehensive income shows that quality of earnings is probably good.
The current LiquidityRatio is very high at 3.90 and quite a bit higher than the 5 year median of 1.82 (which is also good.) The current Debt Ratio has gone from good to very good because of recent debt repayments. The current Debt Ratio is 1.80. The one for 2010 was for 1.53. The money from recently issued shares were used to pay down debt.
A lot of outstanding shares are owned by insiders (more than 75%). There are also Class B partnership units than can be changed to shares on a 1 to 1 basis and if this was done it would increase shares by 23% (according to financial statements). However, the stock seems to be liquid enough for trading purposes.
Most of the total return has been in dividends and dividend yield is very high at 11.46%. However, Dividend Payout Ratios are too high. Company is making money and has high and very good debt ratios. You have to wonder if insiders are worried about the immediate future economy or are they saving collecting money for acquisitions?
The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology). IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership). Its web site is here IBI Group. See my spreadsheet at ibg.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 IBI Group (TSX-IBG). This company used to be a partnership called IBI Income Fund (TSX-IBG.UN), but changed to a corporation structure in January 2011 and decreased the distributions or dividends by 30% at the same time. This company only went public in 2004 and had a history of making distribution increases. However, since the dividends were reset in early 2011 there has been no hint of an increase.
The 5 year median Dividend Payout Ratios are 144% for earnings and 66% for cash flow. (I am using Cash Flow excluding non-cash items because these items greatly affect cash flow for this company.) The DPRs for earnings in 2012 and 2013 is expected to be 113% and 91%. I think that for this company to raise dividends that the DPRs have to be more reasonable that the present ones.
Shareholders have done well over that past 5 and 7 years with the total return on this stock at 13.47% and 13.63% per year, respectively. Most of this return is in dividends as dividend income was at 11.72% and 11.32% per year, respectively. Capital gains are low at 1.76% and 2.31% per year, over past 5 and 7 years. Dividends made up 87% and 83% of the total return.
Shares outstanding have increased at the rate of 9% and 15% per year over the past 5 and 7 years. Some of this was for acquisitions and some to pay down debt. There is also a big increase for 2012 whereby shares are increasing by 27%. Most was used to pay off debt and has resulted in very good and high debt ratios.
Growth in Revenues looks good at 17% and 22.5% per year for the past 5 and 6 years. However, Revenue per share is a lot lower because of the issuance of new shares. The growth in Revenue per Share is 7.6% and 4.5% per year over the past 5 and 6 years.
Earnings per Share have not been great for this company since 2008. This is not surprising considering the business they are in. On G&M it is listed as business services, but they are in the infrastructure industry. EPS is down by 11.8% and 1% per year over the past 5 and 6 years. However, earnings have been positive every year since 2005 (2004 had negative earnings). Analysts are probably right that EPS is going up as net income for last 12 months is higher than that for 2011.
I am only going to talk about the cash flow excluding non-cash items. This is because non-cash items are generally large for this company. Some analysts feel it is best to us cash flow excluding non-cash items or working capital when using cash flow from operations. The cash flow has always been positive, but the cash flow hit a peak in 2008 and has not yet recovered. Cash Flow has declined by 9% and 7.4% per year over the past 5 and 6 years. However, cash flow per share for the last 12 months is down by 15% from that for 2011. This is not a good sign.
Book Value has also been declining with declines of 2.7% and 0.8% per year over the past 5 and 7 years. Book value at the end of the 2nd quarter is up 16% and this is good.
Return on Equity for the end of 2011 was in the good range of 10% to 15% at 12.2%. The 5 year median ROE is also 12.2%. ROE on comprehensive income for 2011 was 12.7 and has a 5 year median of 12.4%. The closeness of the ROE on net income and comprehensive income shows that quality of earnings is probably good.
The current LiquidityRatio is very high at 3.90 and quite a bit higher than the 5 year median of 1.82 (which is also good.) The current Debt Ratio has gone from good to very good because of recent debt repayments. The current Debt Ratio is 1.80. The one for 2010 was for 1.53. The money from recently issued shares were used to pay down debt.
A lot of outstanding shares are owned by insiders (more than 75%). There are also Class B partnership units than can be changed to shares on a 1 to 1 basis and if this was done it would increase shares by 23% (according to financial statements). However, the stock seems to be liquid enough for trading purposes.
Most of the total return has been in dividends and dividend yield is very high at 11.46%. However, Dividend Payout Ratios are too high. Company is making money and has high and very good debt ratios. You have to wonder if insiders are worried about the immediate future economy or are they saving collecting money for acquisitions?
The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology). IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership). Its web site is here IBI Group. See my spreadsheet at ibg.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, September 14, 2012
IGM Financial Inc 2
I do not own this stock (TSX-IGM), but I used to. I held this stock from 2006 to 2011. I made 3.1% per year. Of this total return, 4.2% came from dividends. I had a capital loss of 1.1% per year. I sold because I wanted to rationalize my portfolio. This company is part of Power Financial (TSX-PWF), which I also hold. I sold what I had in this company to buy more Power Financial.
The insider trading report shows a tiny bit of insider buying and no insider selling. This company not only has options, but Senior Executive Share Units, Executive Performance Share Units, and Deferred Share Units. Most insiders have lots more options and options like things than shares. For example, the Co-CEO's have options worth $18.8M and $14.4M, and shares worth $1.1M and $8.6M.
The company has been buying back shares for cancellation. They seem to be buying back slightly more shares than were issued for options. So shares outstanding have been treading down wards slightly at a rate of less than 1% per year. Paul Desmarais owns approximately 62% of the outstanding shares.
There are 181 institutions that own around 16% of the outstanding shares. Over the past 3 months they have bought and sold shares. They have slightly increased their shares, but there were 3 more sellers than there were buyers.
The 5 year low, median and high median Price/Earnings Ratios are 11.87, 14.80 and 17.01. The current P/E Ratio is 13.51 on 2012 earnings estimate of $2.89 and stock price of $39.03. This would suggest that the current stock price is relatively reasonable.
I get a current Graham Price of $33.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.20, 1.37 and 1.62. The current P/GP Ratio is 1.17 and this would suggest that the current stock price is relatively good.
I get a 10 year Price/Book Value Ratio of 2.86 and the current P/B Ratio is 2.29. The current is 80% of the 10 year median ratio and this suggests that the current stock price of $39.03 is a relatively good one.
The 5 year median dividend yield is 5.02% and the current dividend yield is 9.8% higher at 5.51%. This suggests that the current stock price is relatively good. Note that the dividend yield has been treading up lately and the 10 year median dividend yield is quite a bit lower at 3.52%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform. The consensus recommendation is a Hold. The 12 month consensus stock price is $41.20. This implies a 13.28% total return over the next 12 months with 5.51% from dividends and 7.77% from capital gains.
No one thinks that the earnings for 2012 will be as high as those for 2011. The first two quarters seem to bear this out. Earnings for the first two quarters of 2012 are down by 12.5% from the first two quarters of 2011. However, 2011 was a very good year. What is expected in 2012 is higher than earnings in 2010 by 4.7%. Not a big increase, but an increase none the less. Also, 2009 was the low year for earnings and what is expected in 2012 is some 36% above 2009 earnings.
One analyst said that he preferred Power Corp (TSX-POW) or Power Financial (TSX-PWF) as a way to gain exposure to IGM. Both these companies have P/E's of around 10 compared to IGM's P/E of 13.51. Some analysts do not like to mutual fund industry in Canada. They feel that the fees are too high and people are becoming aware of this.
One analyst thought the company was being beaten up because it is in the mutual fund business, but thought the company was rock solid and safe. IGM has just reduced their fees. See Globe and Mail article.
The Loonie Bin Blog has an interesting post on this company. See his site. He has some good reasons for preferring this stock to Power Financial (TSX-PWF). Also, the Jags Report site talks about recent changes to analysts' recommendations for this company.
I still think that this is a great company. I just did not want to hold both Power Financial and this company in my portfolio and I decided to go with Power Financial, which I have had for a longer period of time. There are pros and cons for both these companies and I think that they are both good investments.
This is a premier mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial. See my spreadsheet at igm.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The insider trading report shows a tiny bit of insider buying and no insider selling. This company not only has options, but Senior Executive Share Units, Executive Performance Share Units, and Deferred Share Units. Most insiders have lots more options and options like things than shares. For example, the Co-CEO's have options worth $18.8M and $14.4M, and shares worth $1.1M and $8.6M.
The company has been buying back shares for cancellation. They seem to be buying back slightly more shares than were issued for options. So shares outstanding have been treading down wards slightly at a rate of less than 1% per year. Paul Desmarais owns approximately 62% of the outstanding shares.
There are 181 institutions that own around 16% of the outstanding shares. Over the past 3 months they have bought and sold shares. They have slightly increased their shares, but there were 3 more sellers than there were buyers.
The 5 year low, median and high median Price/Earnings Ratios are 11.87, 14.80 and 17.01. The current P/E Ratio is 13.51 on 2012 earnings estimate of $2.89 and stock price of $39.03. This would suggest that the current stock price is relatively reasonable.
I get a current Graham Price of $33.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.20, 1.37 and 1.62. The current P/GP Ratio is 1.17 and this would suggest that the current stock price is relatively good.
I get a 10 year Price/Book Value Ratio of 2.86 and the current P/B Ratio is 2.29. The current is 80% of the 10 year median ratio and this suggests that the current stock price of $39.03 is a relatively good one.
The 5 year median dividend yield is 5.02% and the current dividend yield is 9.8% higher at 5.51%. This suggests that the current stock price is relatively good. Note that the dividend yield has been treading up lately and the 10 year median dividend yield is quite a bit lower at 3.52%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform. The consensus recommendation is a Hold. The 12 month consensus stock price is $41.20. This implies a 13.28% total return over the next 12 months with 5.51% from dividends and 7.77% from capital gains.
No one thinks that the earnings for 2012 will be as high as those for 2011. The first two quarters seem to bear this out. Earnings for the first two quarters of 2012 are down by 12.5% from the first two quarters of 2011. However, 2011 was a very good year. What is expected in 2012 is higher than earnings in 2010 by 4.7%. Not a big increase, but an increase none the less. Also, 2009 was the low year for earnings and what is expected in 2012 is some 36% above 2009 earnings.
One analyst said that he preferred Power Corp (TSX-POW) or Power Financial (TSX-PWF) as a way to gain exposure to IGM. Both these companies have P/E's of around 10 compared to IGM's P/E of 13.51. Some analysts do not like to mutual fund industry in Canada. They feel that the fees are too high and people are becoming aware of this.
One analyst thought the company was being beaten up because it is in the mutual fund business, but thought the company was rock solid and safe. IGM has just reduced their fees. See Globe and Mail article.
The Loonie Bin Blog has an interesting post on this company. See his site. He has some good reasons for preferring this stock to Power Financial (TSX-PWF). Also, the Jags Report site talks about recent changes to analysts' recommendations for this company.
I still think that this is a great company. I just did not want to hold both Power Financial and this company in my portfolio and I decided to go with Power Financial, which I have had for a longer period of time. There are pros and cons for both these companies and I think that they are both good investments.
This is a premier mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial. See my spreadsheet at igm.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, September 13, 2012
IGM Financial Inc
I do not own this stock (TSX-IGM), but I used to. I held this stock from 2006 to 2011. I made 3.1% per year. Of this total return, 4.2% came from dividends. I had a capital loss of 1.1% per year. I sold because I wanted to rationalize my portfolio. This company is part of Power Financial (TSX-PWF), which I also hold. I sold what I had in this company to buy more Power Financial.
I did my sell and buy just after both IGM and Power Financial had a drop in price. Stock prices are relative. If you do a sell and buy in a low market you may sell at a low price, but you also buy at a low price. This is often better in absolute terms.
Over the past 5 years this stock has not performed well for stockowners. However, the 10 year return is quite good. So, over the past 5 and 10 years this stock’s total return was 2.16% and 10.37% per year. The dividend portion of this return was 4.22% and 4.63% per year, respectively. There was a capital gains loss over the past 5 years of 2.07% per year. There was a capital gain over the past 10 years of 5.74% per year. Over the past 10 years the dividends were 44% of the total return.
Dividend increases over the past 5 and 10 years are good at 6.47% per year and 11.14% per year, respectively. As the economy has slowed down, dividend increases have also slowed down. The last dividend increase, which occurred in 2011, was just 4.9%. This increase was after 2 years of no increases.
The 5 year median Dividend Payout Ratios are 72% and 69% for earnings and cash flow. The 10 year median DPRs are 54% and 63% for earnings and cash flow. These DPR peaked in 2008 and 2009 and have treaded down a bit. However, the DPR for earnings is expected to rise a bit this your to 74%. This will have to be moderated down a bit over the next few years.
Over the past 5 and 10 years the outstanding shares for this stock has decreased slightly (less than 1% per year). The company is buying back shares at a slightly higher rate than it is issuing for stock options. Because of the decreasing shares, this makes the per share value look better. For example, Revenue has increased by 1% and 4.4% per year over the past 5 and 10 years. Revenue per share has increased by 1.6% and 4.6% per year over the past 5 and 10 years.
The Earnings per Share have been a bit better in growth with the EPS growing at the rate of 3.7% and 10% per year over the past 5 and 10 years. Cash Flow per share has grown about the same with CFPS growth at 3.7 and 9.9% per year over the past 5 and 10 years. Book Value per share has grown at the rate of 3.2% and 6.7% per year over the past 5 and 10 years.
EPS did not meet analysts’ expectation in the 2nd quarter of June 2012 and EPS estimates have been treading downward. The 12 month stock price consensus has also been treading downward.
The Return on Equity at the end of 2011 was 21% with the 5 year median value at 17.7%. These are both great values. However, the ROE for last 12 months earnings is a bit lower at 19.7%. This is still a good figure, but it is lower.
Lately the ROE based on comprehensive income is around 80% lower than the ROE based on net income. At the end of 2011 the ROE based on comprehensive income was 16.8%. The ROE based comprehensive income over the past 12 months is 15.6%. The comparable figures on a year to date bases for net income and comprehensive income are 17.1% and 16.3%. The ROE on net income is down some more, but ROE on comprehensive income is up a bit.
The good range for ROE is 10% to 15%. So in fact the ROE is good, just not as good as in past years.
The current Liquidity Ratio is 2.80. This is expected for this sort of company as they do not have that much in the way of current assets or current liabilities. They also have quite a strong cash flow. The current Debt Ratio is 1.63, which is also a good. The current Leverage and Debt/Equity Ratios are moderate at 2.68 and 1.65.
This company is in a current tough business of mutual fund and wealth management. I think that it has always been a good company and it is currently paying a very good 5.5% dividend. However, all is not well with the world economy and I would expect that dividend increases will be lower in the future. (I think that this would be true for a lot of stock companies.)
I think that the return on this company will continue to be modest.
This is a premier mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial. See my spreadsheet at igm.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 my sell and buy just after both IGM and Power Financial had a drop in price. Stock prices are relative. If you do a sell and buy in a low market you may sell at a low price, but you also buy at a low price. This is often better in absolute terms.
Over the past 5 years this stock has not performed well for stockowners. However, the 10 year return is quite good. So, over the past 5 and 10 years this stock’s total return was 2.16% and 10.37% per year. The dividend portion of this return was 4.22% and 4.63% per year, respectively. There was a capital gains loss over the past 5 years of 2.07% per year. There was a capital gain over the past 10 years of 5.74% per year. Over the past 10 years the dividends were 44% of the total return.
Dividend increases over the past 5 and 10 years are good at 6.47% per year and 11.14% per year, respectively. As the economy has slowed down, dividend increases have also slowed down. The last dividend increase, which occurred in 2011, was just 4.9%. This increase was after 2 years of no increases.
The 5 year median Dividend Payout Ratios are 72% and 69% for earnings and cash flow. The 10 year median DPRs are 54% and 63% for earnings and cash flow. These DPR peaked in 2008 and 2009 and have treaded down a bit. However, the DPR for earnings is expected to rise a bit this your to 74%. This will have to be moderated down a bit over the next few years.
Over the past 5 and 10 years the outstanding shares for this stock has decreased slightly (less than 1% per year). The company is buying back shares at a slightly higher rate than it is issuing for stock options. Because of the decreasing shares, this makes the per share value look better. For example, Revenue has increased by 1% and 4.4% per year over the past 5 and 10 years. Revenue per share has increased by 1.6% and 4.6% per year over the past 5 and 10 years.
The Earnings per Share have been a bit better in growth with the EPS growing at the rate of 3.7% and 10% per year over the past 5 and 10 years. Cash Flow per share has grown about the same with CFPS growth at 3.7 and 9.9% per year over the past 5 and 10 years. Book Value per share has grown at the rate of 3.2% and 6.7% per year over the past 5 and 10 years.
EPS did not meet analysts’ expectation in the 2nd quarter of June 2012 and EPS estimates have been treading downward. The 12 month stock price consensus has also been treading downward.
The Return on Equity at the end of 2011 was 21% with the 5 year median value at 17.7%. These are both great values. However, the ROE for last 12 months earnings is a bit lower at 19.7%. This is still a good figure, but it is lower.
Lately the ROE based on comprehensive income is around 80% lower than the ROE based on net income. At the end of 2011 the ROE based on comprehensive income was 16.8%. The ROE based comprehensive income over the past 12 months is 15.6%. The comparable figures on a year to date bases for net income and comprehensive income are 17.1% and 16.3%. The ROE on net income is down some more, but ROE on comprehensive income is up a bit.
The good range for ROE is 10% to 15%. So in fact the ROE is good, just not as good as in past years.
The current Liquidity Ratio is 2.80. This is expected for this sort of company as they do not have that much in the way of current assets or current liabilities. They also have quite a strong cash flow. The current Debt Ratio is 1.63, which is also a good. The current Leverage and Debt/Equity Ratios are moderate at 2.68 and 1.65.
This company is in a current tough business of mutual fund and wealth management. I think that it has always been a good company and it is currently paying a very good 5.5% dividend. However, all is not well with the world economy and I would expect that dividend increases will be lower in the future. (I think that this would be true for a lot of stock companies.)
I think that the return on this company will continue to be modest.
This is a premier mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial. See my spreadsheet at igm.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, September 12, 2012
Bell Aliant Inc.
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. The blogger I am talking about today disagrees and have given me a number of books he thinks will be helpful to Novice Investors. Today I am blogging about the My Own Advisor Blog continue...
I do not own this stock of Bell Aliant Inc. (TSX-BA), but I used too as I got some shares from BCE. Problem is with BCE whenever they do anything like issuing shares when spinning off a stock, they issue shares in odd lots. When BCE distributed Bell Aliant shares in 2006 they gave you 0.0725 trust units of BA and also 0.915 shares of BCE.
Other companies manage to do shares issues and splits and all sorts of things without everybody ending up with odd lots of shares. The exchange was quite complex, as you could not end up with partial shares. In any event in 2008, I sold all the BA shares. I sold at a loss as I sold them below the ACB (adjusted cost bases) of my shares.
I am suspending my reviews of this stock. Last year I did not review it because the accounting seemed confusing to me. The problem is that if you just analyzing the account for BA fund, I do not think gives you a true picture of what it is you have when you buy BA stock.
Yes, I know, I like to get figures from the annual statements and just slot them into my spreadsheets. However, that does not mean that I do not think about what it is I am doing. Not all company's account records co-operate. I often have to so extra things and I do if I think it is worth it. Now I am addressing the real problem. I do not think that BA is worth the trouble.
You cannot get a satisfactory picture of the BA stock by just analyzing the accounting records for BA Aliant Inc. The annual statements for this company also give you annual statements for Bell Aliant Regional Communications Inc. This helps. However, I do not think you get the full picture from these accounts either. And, you cannot really mix and match accounting from two sets of books.
I do not think that the answer to the question of "What sort of company do I own when I buy BA stock?" is an easy one. I cannot see me buying this stock at a future date. I follow other stocks when I do not have or will not be buying, but they are all easier to analyze.
And, this is what it comes down to. I do not think that I can bet a good fix on the values and statistics of this company and I do not think that this stock is worth the trouble to properly answer the question "What sort of company do I own when I buy BA stock?", at least not for me.
Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Its web site is here Bell Aliant.
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 of Bell Aliant Inc. (TSX-BA), but I used too as I got some shares from BCE. Problem is with BCE whenever they do anything like issuing shares when spinning off a stock, they issue shares in odd lots. When BCE distributed Bell Aliant shares in 2006 they gave you 0.0725 trust units of BA and also 0.915 shares of BCE.
Other companies manage to do shares issues and splits and all sorts of things without everybody ending up with odd lots of shares. The exchange was quite complex, as you could not end up with partial shares. In any event in 2008, I sold all the BA shares. I sold at a loss as I sold them below the ACB (adjusted cost bases) of my shares.
I am suspending my reviews of this stock. Last year I did not review it because the accounting seemed confusing to me. The problem is that if you just analyzing the account for BA fund, I do not think gives you a true picture of what it is you have when you buy BA stock.
Yes, I know, I like to get figures from the annual statements and just slot them into my spreadsheets. However, that does not mean that I do not think about what it is I am doing. Not all company's account records co-operate. I often have to so extra things and I do if I think it is worth it. Now I am addressing the real problem. I do not think that BA is worth the trouble.
You cannot get a satisfactory picture of the BA stock by just analyzing the accounting records for BA Aliant Inc. The annual statements for this company also give you annual statements for Bell Aliant Regional Communications Inc. This helps. However, I do not think you get the full picture from these accounts either. And, you cannot really mix and match accounting from two sets of books.
I do not think that the answer to the question of "What sort of company do I own when I buy BA stock?" is an easy one. I cannot see me buying this stock at a future date. I follow other stocks when I do not have or will not be buying, but they are all easier to analyze.
And, this is what it comes down to. I do not think that I can bet a good fix on the values and statistics of this company and I do not think that this stock is worth the trouble to properly answer the question "What sort of company do I own when I buy BA stock?", at least not for me.
Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Its web site is here Bell Aliant.
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, September 11, 2012
PFB Corp 2
I do not own this stock of PFB Corp (TSX-PFB). I have in the past bought the Investment Reporter newsletter. I have not bought it for a number of years now, but I still follow some of the stocks that were in this newsletter when I bought this report and this was one of their stocks. The website of MPL Communications who publish this newsletter is here.
When I look at insider trading report, I find little happening. There is a tiny amount of insider buying and no insider selling. Reuters says that there is 1 institution that holds 6.71% of the outstanding stock. It also says that an institution another sold off their position over the past three months. This sold position was for 2.3% of what institutions held 3 months ago. That is that there was a decline of 2.3% of what institutions held in this stock. See Reuters.
The 5 year low, median and high median Price/Earnings Ratios are 12.08, 14.79 and 17.50. The current P/E Ratio is 12.33 based on last 12 months earnings $.58 and stock price of $7.15. (I can find no estimates for this stock.) This suggests that the stock price is reasonable.
I get a Graham Price of $9.23. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.91 and 1.06. The current P/GP Ratio is 0.77. This suggests that the stock price is reasonable.
I get a 10 year Price/Book Value Ratio of 1.20. The current P/B Ratio is 1.09 and it is some 91% of the 10 year Ratio. This ratio also suggests that the current stock price is reasonable.
The current dividend yield is 3.36%. The 5 year median is 3.98%. The current one is some 16% higher than the 5 year median dividend yield. This dividend yield suggests a reasonable stock price. (Also note that the 10 year median dividend yield is lower than the 5 year dividend yield by some 28%. This is a fairly big difference. The current dividend yield is some 17% higher than the 10 year median dividend yield. The 10 year median dividend yield is 4.08%.)
All the tests show that the stock price is a reasonable one. It is always great to get a low price, but generally we should accept a reasonable one as potentially best we might get.
There are no analysts giving estimates on this stock and also no analysts that are giving recommendations. I originally got this company from Investment Reporter of MPL communications. They say this stock remains a buy for long-term gains and attractive dividends. See their site
There is an interesting article on this company in Forbes saying that PFB is integrating NOVA's Performance Styrenics business in time for Green Housing market upturn.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB Corp. See my spreadsheet at pfb.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 report, I find little happening. There is a tiny amount of insider buying and no insider selling. Reuters says that there is 1 institution that holds 6.71% of the outstanding stock. It also says that an institution another sold off their position over the past three months. This sold position was for 2.3% of what institutions held 3 months ago. That is that there was a decline of 2.3% of what institutions held in this stock. See Reuters.
The 5 year low, median and high median Price/Earnings Ratios are 12.08, 14.79 and 17.50. The current P/E Ratio is 12.33 based on last 12 months earnings $.58 and stock price of $7.15. (I can find no estimates for this stock.) This suggests that the stock price is reasonable.
I get a Graham Price of $9.23. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.91 and 1.06. The current P/GP Ratio is 0.77. This suggests that the stock price is reasonable.
I get a 10 year Price/Book Value Ratio of 1.20. The current P/B Ratio is 1.09 and it is some 91% of the 10 year Ratio. This ratio also suggests that the current stock price is reasonable.
The current dividend yield is 3.36%. The 5 year median is 3.98%. The current one is some 16% higher than the 5 year median dividend yield. This dividend yield suggests a reasonable stock price. (Also note that the 10 year median dividend yield is lower than the 5 year dividend yield by some 28%. This is a fairly big difference. The current dividend yield is some 17% higher than the 10 year median dividend yield. The 10 year median dividend yield is 4.08%.)
All the tests show that the stock price is a reasonable one. It is always great to get a low price, but generally we should accept a reasonable one as potentially best we might get.
There are no analysts giving estimates on this stock and also no analysts that are giving recommendations. I originally got this company from Investment Reporter of MPL communications. They say this stock remains a buy for long-term gains and attractive dividends. See their site
There is an interesting article on this company in Forbes saying that PFB is integrating NOVA's Performance Styrenics business in time for Green Housing market upturn.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB Corp. See my spreadsheet at pfb.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, September 10, 2012
PFB Corp
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. One of the bloggers I follow is "The Dividend Ninja" continue...
I do not own this stock of PFB Corp (TSX-PFB). I have in the past bought the Investment Reporter newsletter. I have not bought it for a number of years now, but I still follow some of the stocks that were in this newsletter when I bought this report and this was one of their stocks. The website of MPL Communications who publish this newsletter is here.
This is a manufacturing company that gives their shareholders dividends and special dividends as they can afford to do so. The dividends have been increased in the past. The one thing that stands out is that there have been no special dividends or dividend increases in the last 5 years. The company had quite a bad year in 2008 and has since been digging its way forward.
The company provides a good dividend. The current dividend is 3.4%. The 5 year median dividend is a bit higher at 3.98% and the 10 year median lower at 2.85%. The 5 and 10 year dividend growth is at 0% and 4.8% per year, respectively.
The Dividend Payout Ratios are fine with the 5 year median for earnings at 51% and for cash flow at 26%. If their earnings continue to improve, the company may again do special dividends or a dividend raise. However, we are in uncertain times and we may be going into another recessions, which would cause problems for this company.
Total return has not been great over the past 5 years. Total return is a negative 6.48% per year. Dividends were at 3.1% per year, with the capital loss at 9.59% per year. The 10 year total return is better with this at 8.88% per year. The dividend portion was 5.2% per year with capital gain at 3.68% per year. Dividends made up 59% of the total return over the past 10 years.
The number of outstanding shares has marginally increased over the past 5 and 10 years at the rate of 0.2% and 1.8% per year, respectively. One problem of shareholders is that this stock is fairly illiquid. Insiders and 10% holders probably own more than 75% of the outstanding stock. However, this might change with the all share deal for PFB to acquire NOVA's Performance Styrenics business.
Revenues have grown over the past 5 and 10 years, but growth is rather slow. The growth was 2.7% and 8.3% per year, respectively. The Revenue per Share growth is lower, as outstanding shares have increased. The growth is at 2.5% and 6.3% per year over past 5 and 10 years.
The earnings sagged after 2008 and have not yet recovered. This is way earnings growth is not there and earnings have declined at the rate of 9.9% and 2.9% per year over the past 5 and 10 years. The story with the cash flow is a bit better, but CFPS is still in declined, with the decline at 7.2% and 0.6% per year over the past 5 and 10 years.
Revenues grew 36% in 2011, so this was a much better year for the company. CFPS did not grown in 2011, but earnings did at a rate of 67%. Also I should point out that this company has not had any year of negative earnings and only one year of negative cash flow over the past 10 years.
The growth in book value per share is modest with the 5 and 10 year growth at 3.2% and 4.1% per year over the past 5 and 10 years.
The Return on Equity has not been great lately. The ROE for the financial year ending in December 2011 was 7.2%. The 5 year median ROE is also 7.2%. The ROE based on comprehensive income is in line with the ROE on net income. The ROE for the end of 2011 on comprehensive income is 7.1% and the 5 year ROE is 7.1% also. (The ROE on comprehensive income confirms the quality of the net income.)
The current Liquidity Ratio is 1.66. The 5 year median Liquidity Ratio is even better at 2.22. The current Debt Ratio is 2.83 and this has a 5 year median ratio even higher at 3.39. The current Leverage and Debt/Equity Ratios are 1.55 and 0.55. The 5 year median values are 1.41 and 0.41. They have taken on some debt lately, but all their debt ratios are quite good. This is common with companies that have large insider ownership.
This is a solid company with a decent dividend. It is risky because it would be a cyclical stock in manufacturer connected to residential and commercial construction. It is also rather illiquid. You might buy it for diversification purposes.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB Corp. See my spreadsheet at pfb.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 of PFB Corp (TSX-PFB). I have in the past bought the Investment Reporter newsletter. I have not bought it for a number of years now, but I still follow some of the stocks that were in this newsletter when I bought this report and this was one of their stocks. The website of MPL Communications who publish this newsletter is here.
This is a manufacturing company that gives their shareholders dividends and special dividends as they can afford to do so. The dividends have been increased in the past. The one thing that stands out is that there have been no special dividends or dividend increases in the last 5 years. The company had quite a bad year in 2008 and has since been digging its way forward.
The company provides a good dividend. The current dividend is 3.4%. The 5 year median dividend is a bit higher at 3.98% and the 10 year median lower at 2.85%. The 5 and 10 year dividend growth is at 0% and 4.8% per year, respectively.
The Dividend Payout Ratios are fine with the 5 year median for earnings at 51% and for cash flow at 26%. If their earnings continue to improve, the company may again do special dividends or a dividend raise. However, we are in uncertain times and we may be going into another recessions, which would cause problems for this company.
Total return has not been great over the past 5 years. Total return is a negative 6.48% per year. Dividends were at 3.1% per year, with the capital loss at 9.59% per year. The 10 year total return is better with this at 8.88% per year. The dividend portion was 5.2% per year with capital gain at 3.68% per year. Dividends made up 59% of the total return over the past 10 years.
The number of outstanding shares has marginally increased over the past 5 and 10 years at the rate of 0.2% and 1.8% per year, respectively. One problem of shareholders is that this stock is fairly illiquid. Insiders and 10% holders probably own more than 75% of the outstanding stock. However, this might change with the all share deal for PFB to acquire NOVA's Performance Styrenics business.
Revenues have grown over the past 5 and 10 years, but growth is rather slow. The growth was 2.7% and 8.3% per year, respectively. The Revenue per Share growth is lower, as outstanding shares have increased. The growth is at 2.5% and 6.3% per year over past 5 and 10 years.
The earnings sagged after 2008 and have not yet recovered. This is way earnings growth is not there and earnings have declined at the rate of 9.9% and 2.9% per year over the past 5 and 10 years. The story with the cash flow is a bit better, but CFPS is still in declined, with the decline at 7.2% and 0.6% per year over the past 5 and 10 years.
Revenues grew 36% in 2011, so this was a much better year for the company. CFPS did not grown in 2011, but earnings did at a rate of 67%. Also I should point out that this company has not had any year of negative earnings and only one year of negative cash flow over the past 10 years.
The growth in book value per share is modest with the 5 and 10 year growth at 3.2% and 4.1% per year over the past 5 and 10 years.
The Return on Equity has not been great lately. The ROE for the financial year ending in December 2011 was 7.2%. The 5 year median ROE is also 7.2%. The ROE based on comprehensive income is in line with the ROE on net income. The ROE for the end of 2011 on comprehensive income is 7.1% and the 5 year ROE is 7.1% also. (The ROE on comprehensive income confirms the quality of the net income.)
The current Liquidity Ratio is 1.66. The 5 year median Liquidity Ratio is even better at 2.22. The current Debt Ratio is 2.83 and this has a 5 year median ratio even higher at 3.39. The current Leverage and Debt/Equity Ratios are 1.55 and 0.55. The 5 year median values are 1.41 and 0.41. They have taken on some debt lately, but all their debt ratios are quite good. This is common with companies that have large insider ownership.
This is a solid company with a decent dividend. It is risky because it would be a cyclical stock in manufacturer connected to residential and commercial construction. It is also rather illiquid. You might buy it for diversification purposes.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB Corp. See my spreadsheet at pfb.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, September 7, 2012
Coast Wholesale Appliances Inc 2
I do not own this stock Coast Wholesale Appliances Inc. (TSX-CWA). This is a small cap dividend paying stock I picked up from Rise of a Millionaire blog. See second paragraph of of this entry of August 18, 2012 and see second last paragraph of this entry dated April 29, 2012. I decided to explore this stock further. So what did I find?
Over the past year there has been a minimal amount of insider buying and insider selling accounting to insider trading reports. There are no stock options. Insider owns some shares, but not a lot. The CEO has around $40,000 of shares and an officer holds shares worth around $500,000.
The only institutional owner I can find is CWAL Investments Ltd. (formerly Coast Wholesale Appliances Ltd.) This company owns around 37% of the outstanding stock in this company. As far as I can see the CFO and one Director of this CWAL Investments Ltd is the same as for this company. It would seem that there is more insider ownership than might first appear. However, I find it disconcerting that it is very difficult to find out much information on CWAL Investments Ltd.
The 5 year low, median and high median Price/Earnings Ratios are 6.54, 8.31 and 10.18. These are low P/E Ratios absolutely, but this is also a thinly traded small cap so these ratios are not surprising. I get a current P/E Ratio of 9.83 on a stock price of $3.54 and 2012 earnings of $0.36. This shows the stock price is towards the high of its range.
I get a Graham Price $6.74 and the 10 year low, median and high median Price/Graham Price Ratios are 0.38, 0.55 and 0.64. The current P/GP Ratio is 0.52. This shows a relatively reasonable stock price. If the P/GP ratio is below 1.00, it means the stock price is below the Graham Price. Generally, the stock is considered to be underpriced, or of good value when this ratio is at or below 1.00.
I get a 10 year median Price/Book Value Ratio of 0.59. The current P/B Ratio is some 7% higher. This means that the stock price is reasonable. Also, a stock is considered to be underpriced when the P/B Ratio is below 1.00.
The 5 year median dividend yield is 13.36% and the current dividend yield is 11.86. The current yield is some 11% higher than the 5 year median yield. To show a good or cheap stock price you want the current yield below the 5 year median dividend yield. The current one is not that far off the 5 year median, so you could consider the stock price reasonable.
The results of my stock price tests are mixed. It would seem that investors have always assigned a relatively low stock price to this company. Investors seem to be consistently underwhelmed by the company. You can see this is the high dividend yield and very low P/B and P/GP Ratios. Investors have never felt good about the goodwill on the books, giving this company a market cap always less than the goodwill alone of all the assets.
When I look at analysts' recommendations I find a Hold, an Underperform and a sell. The consensus recommendation would be an Underperform recommendation. The 12 month consensus stock price is $3.68. This implies a total 12 months return of 15.81, with 11.86 from dividends and 3.95% from capital gains.
So is this stock underappreciated or are investors non-impressed for a reason. It would be nice to be able to point to some growth somewhere. Analysts are expecting some growth in sales over the next two years at 5.8% and 3%, respectively. But this is not good growth. I am afraid I see this stock as having a lot of risk, but not much potential upside.
Coast is a leading independent supplier of major household appliances and accessories. Headquartered in Vancouver, British Columbia, we sell to developers and builders of multi-family and single-family housing, designers and retail customers. Its web site is here Coast Wholesale Appliances. See my spreadsheet at cwa.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 year there has been a minimal amount of insider buying and insider selling accounting to insider trading reports. There are no stock options. Insider owns some shares, but not a lot. The CEO has around $40,000 of shares and an officer holds shares worth around $500,000.
The only institutional owner I can find is CWAL Investments Ltd. (formerly Coast Wholesale Appliances Ltd.) This company owns around 37% of the outstanding stock in this company. As far as I can see the CFO and one Director of this CWAL Investments Ltd is the same as for this company. It would seem that there is more insider ownership than might first appear. However, I find it disconcerting that it is very difficult to find out much information on CWAL Investments Ltd.
The 5 year low, median and high median Price/Earnings Ratios are 6.54, 8.31 and 10.18. These are low P/E Ratios absolutely, but this is also a thinly traded small cap so these ratios are not surprising. I get a current P/E Ratio of 9.83 on a stock price of $3.54 and 2012 earnings of $0.36. This shows the stock price is towards the high of its range.
I get a Graham Price $6.74 and the 10 year low, median and high median Price/Graham Price Ratios are 0.38, 0.55 and 0.64. The current P/GP Ratio is 0.52. This shows a relatively reasonable stock price. If the P/GP ratio is below 1.00, it means the stock price is below the Graham Price. Generally, the stock is considered to be underpriced, or of good value when this ratio is at or below 1.00.
I get a 10 year median Price/Book Value Ratio of 0.59. The current P/B Ratio is some 7% higher. This means that the stock price is reasonable. Also, a stock is considered to be underpriced when the P/B Ratio is below 1.00.
The 5 year median dividend yield is 13.36% and the current dividend yield is 11.86. The current yield is some 11% higher than the 5 year median yield. To show a good or cheap stock price you want the current yield below the 5 year median dividend yield. The current one is not that far off the 5 year median, so you could consider the stock price reasonable.
The results of my stock price tests are mixed. It would seem that investors have always assigned a relatively low stock price to this company. Investors seem to be consistently underwhelmed by the company. You can see this is the high dividend yield and very low P/B and P/GP Ratios. Investors have never felt good about the goodwill on the books, giving this company a market cap always less than the goodwill alone of all the assets.
When I look at analysts' recommendations I find a Hold, an Underperform and a sell. The consensus recommendation would be an Underperform recommendation. The 12 month consensus stock price is $3.68. This implies a total 12 months return of 15.81, with 11.86 from dividends and 3.95% from capital gains.
So is this stock underappreciated or are investors non-impressed for a reason. It would be nice to be able to point to some growth somewhere. Analysts are expecting some growth in sales over the next two years at 5.8% and 3%, respectively. But this is not good growth. I am afraid I see this stock as having a lot of risk, but not much potential upside.
Coast is a leading independent supplier of major household appliances and accessories. Headquartered in Vancouver, British Columbia, we sell to developers and builders of multi-family and single-family housing, designers and retail customers. Its web site is here Coast Wholesale Appliances. See my spreadsheet at cwa.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, September 6, 2012
Coast Wholesale Appliances Inc
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. One of the bloggers I follow is "The dividend Guy" continue...
I do not own this stock Coast Wholesale Appliances Inc. (TSX-CWA). This is a small cap dividend paying stock I picked up from Rise of a Millionaire blog. See second paragraph of of this entry of August 18, 2012 and see second last paragraph of this entry dated April 29, 2012. I decided to explore this stock further. So what did I find?
First of all I will deal with dividends. This company only went public mid-way through 2005. The dividends hit a peak in 2007 and have been travelling south ever since. The 5 year decline is 21.8%. The most recent declined occurred in 2011 where the dividends were again reduced by some 15.9%. This stock may have dividends, but if they continue to decline that may not be the case. It first appears that the dividends for 2012 is higher than 2011. However, only 10 dividends were given out in 2011 and I have an expected 12 dividends for 2012.
As far as Dividend Payout Ratios go, the 5 year median for earnings is far too high at 100.3%. The 5 year DPR for cash flow per share is not bad at 59%. The really problem is that DPR for earnings is expected to be 116% in 2012. If you look at the CFPS over the past 12 months to June 2012, you get a DPR of 60%. Both these DPRs are growing and this is not good.
The only good thing you can say about the dividends is that the yield is quite high at 11.9%. However, too high a yield can be a sign that all is not well for a stock. The thing is that dividends can be high because investors have no faith in future dividends (or a stock).
As far as total return goes, it has declined over the past 5 and 6 years. The decline is 0.97% and 2.05% per year over the past 5 and 6 years. Dividends were 13.87% and 12.29% per year over the past 5 and 6 years. This leaves the capital losses at 14.84% and 14.34% per year over the past 5 and 6 years.
Shares recently increased by just over 50% as the non-controlling interest in the company was changed into shares on the conversion of this stock from an income trust to a corporation. On such conversions, dividends are often decreased. However, dividend decreases started before the conversion. The company managed to lower DPRs in 2009 and 2009, but they went up again in 2011 and it would appear that the same will happen in 2012. This is the wrong direction for DPRs.
Because of the big increase in outstanding shares in 2011, revenues are better than revenues per share. The growth in revenues is very low with growth at 1.2% and 1.6% per year over the past 5 and 6 years. Revenue per share has declined by 7.2% and 5.5% per year over the past 5 and 6 years.
Earnings are even in a worse decline, with the decline at 19.5% and 18.1% per year over the past 5 and 6 years. Looking at Cash Flow per Shares does not give a happier story, with the declines at 19.34% and 8.38% over the past 5 and 6 years. The decline in Book Value per share is not quite as bad as BVPS only declined at 8.7% and 7.6% per year over the past 5 and 6 years.
Analysts do not expect much increase in earnings over the next couple of years. Also, there seems to be no improvement in cash flow either. For 2011 I have used the EPS value that excluding goodwill impairment. However, this only gives a very weak Return on Equity of 6.1%. Because the comprehensive income includes this goodwill impairment, you get an ROE based on comprehensive income at a negative 46.9%. The 5 year median ROE at 8% is not quite as bad, but this is a rather weak value also.
The current Liquidity Ratio is rather weak at just 1.03. The 5 year median is bang on what one would want with a value of 1.50. The Debt Ratio is quite good at 2.32 and it has an even better 5 year median value of 2.95. The current Leverage and Debt/Equity Ratio at 1.76 and 0.76 are quite good and they are a bit lower than the 5 year median values of 2.23 and 0.71.
One way of valuing a small company is to look at Gross Profit Margin. This is a financial metric we can use to assess a company's financial health by see the proportion of money left over from revenues after accounting for the cost of goods sold. Unfortunately, the Gross Profit Margin on this company is going the wrong way. In 2006 the GPM was 25.13%. In 2011 the GPM was 24.41. For the most recent quarter, the GPM was 22.54%. It is going the wrong way. However, the Operational Profit Margin Ratio (CF/Revenue) seems to be improving.
The Price/Sales Ratio is quite good at 0.25. (This means that you are getting a $1 of sales for just $.25.) This would be a bargain if the company was making money. This company is making money and it has never had a negative EPS, except when it wrote off some of its goodwill in 2011. The problem with this company is that the goodwill left on its books is still 113% of the company's market capital. Will the company need to write off any more goodwill? This is a possibility.
The ratio of the company's goodwill and its market cap is getting better, but it is still over 100%. In fact the Globe and Mail just had an article on this very subject at the end of August. The recession is not yet over and things might get worse before getting any better.
Unfortunately, this stock might get hammered more before we see any real improvements. The company has little debt, so chances are good it will survive. But for an investment in a company, you want a company to thrive, not just survive. It is producing some good statistics, but a lot are going the wrong way.
Coast is a leading independent supplier of major household appliances and accessories. Headquartered in Vancouver, British Columbia, we sell to developers and builders of multi-family and single-family housing, designers and retail customers. Its web site is here Coast Wholesale Appliances. See my spreadsheet at cwa.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 Coast Wholesale Appliances Inc. (TSX-CWA). This is a small cap dividend paying stock I picked up from Rise of a Millionaire blog. See second paragraph of of this entry of August 18, 2012 and see second last paragraph of this entry dated April 29, 2012. I decided to explore this stock further. So what did I find?
First of all I will deal with dividends. This company only went public mid-way through 2005. The dividends hit a peak in 2007 and have been travelling south ever since. The 5 year decline is 21.8%. The most recent declined occurred in 2011 where the dividends were again reduced by some 15.9%. This stock may have dividends, but if they continue to decline that may not be the case. It first appears that the dividends for 2012 is higher than 2011. However, only 10 dividends were given out in 2011 and I have an expected 12 dividends for 2012.
As far as Dividend Payout Ratios go, the 5 year median for earnings is far too high at 100.3%. The 5 year DPR for cash flow per share is not bad at 59%. The really problem is that DPR for earnings is expected to be 116% in 2012. If you look at the CFPS over the past 12 months to June 2012, you get a DPR of 60%. Both these DPRs are growing and this is not good.
The only good thing you can say about the dividends is that the yield is quite high at 11.9%. However, too high a yield can be a sign that all is not well for a stock. The thing is that dividends can be high because investors have no faith in future dividends (or a stock).
As far as total return goes, it has declined over the past 5 and 6 years. The decline is 0.97% and 2.05% per year over the past 5 and 6 years. Dividends were 13.87% and 12.29% per year over the past 5 and 6 years. This leaves the capital losses at 14.84% and 14.34% per year over the past 5 and 6 years.
Shares recently increased by just over 50% as the non-controlling interest in the company was changed into shares on the conversion of this stock from an income trust to a corporation. On such conversions, dividends are often decreased. However, dividend decreases started before the conversion. The company managed to lower DPRs in 2009 and 2009, but they went up again in 2011 and it would appear that the same will happen in 2012. This is the wrong direction for DPRs.
Because of the big increase in outstanding shares in 2011, revenues are better than revenues per share. The growth in revenues is very low with growth at 1.2% and 1.6% per year over the past 5 and 6 years. Revenue per share has declined by 7.2% and 5.5% per year over the past 5 and 6 years.
Earnings are even in a worse decline, with the decline at 19.5% and 18.1% per year over the past 5 and 6 years. Looking at Cash Flow per Shares does not give a happier story, with the declines at 19.34% and 8.38% over the past 5 and 6 years. The decline in Book Value per share is not quite as bad as BVPS only declined at 8.7% and 7.6% per year over the past 5 and 6 years.
Analysts do not expect much increase in earnings over the next couple of years. Also, there seems to be no improvement in cash flow either. For 2011 I have used the EPS value that excluding goodwill impairment. However, this only gives a very weak Return on Equity of 6.1%. Because the comprehensive income includes this goodwill impairment, you get an ROE based on comprehensive income at a negative 46.9%. The 5 year median ROE at 8% is not quite as bad, but this is a rather weak value also.
The current Liquidity Ratio is rather weak at just 1.03. The 5 year median is bang on what one would want with a value of 1.50. The Debt Ratio is quite good at 2.32 and it has an even better 5 year median value of 2.95. The current Leverage and Debt/Equity Ratio at 1.76 and 0.76 are quite good and they are a bit lower than the 5 year median values of 2.23 and 0.71.
One way of valuing a small company is to look at Gross Profit Margin. This is a financial metric we can use to assess a company's financial health by see the proportion of money left over from revenues after accounting for the cost of goods sold. Unfortunately, the Gross Profit Margin on this company is going the wrong way. In 2006 the GPM was 25.13%. In 2011 the GPM was 24.41. For the most recent quarter, the GPM was 22.54%. It is going the wrong way. However, the Operational Profit Margin Ratio (CF/Revenue) seems to be improving.
The Price/Sales Ratio is quite good at 0.25. (This means that you are getting a $1 of sales for just $.25.) This would be a bargain if the company was making money. This company is making money and it has never had a negative EPS, except when it wrote off some of its goodwill in 2011. The problem with this company is that the goodwill left on its books is still 113% of the company's market capital. Will the company need to write off any more goodwill? This is a possibility.
The ratio of the company's goodwill and its market cap is getting better, but it is still over 100%. In fact the Globe and Mail just had an article on this very subject at the end of August. The recession is not yet over and things might get worse before getting any better.
Unfortunately, this stock might get hammered more before we see any real improvements. The company has little debt, so chances are good it will survive. But for an investment in a company, you want a company to thrive, not just survive. It is producing some good statistics, but a lot are going the wrong way.
Coast is a leading independent supplier of major household appliances and accessories. Headquartered in Vancouver, British Columbia, we sell to developers and builders of multi-family and single-family housing, designers and retail customers. Its web site is here Coast Wholesale Appliances. See my spreadsheet at cwa.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, September 5, 2012
Canadian Pacific Railway 2
Companies are going away from plain stock options into all sorts of fancy ways of giving employees shares. This company has not only options but Rights Deferred Share Units (DSU), Rights Performance Share Unit (PSU), and Rights Share Appreciation Rights (SARS). Over the last year, insider trading reports show insider selling of $32.3M and minimal insider buying with net insider selling at $32M. CFO had insider selling of $10.4M and the rest was by officers. As far as I can see the insider selling was of the cashing in of options.
The new CEO owns some $7.7M of shares in the company and he has options worth around $55.6M. William Ackman owns some 14% of CP stock that is worth just under $2B.
I cannot find institutional holders on the site I usually go to, but CNBC says that there are 376 Institutional Holders, 626 Mutual fund Holders and some 36 other Major Holders and totally they hold 77% of the outstanding shares. It has says that over the past 3 months, these holders have reduced their holdings by 9%. (By the way, they only give out information on US companies and so they are using the NYSE-CP symbol.)
However, Nasdaq.com says that there are 291 institutional holders, holding 73% of the shares and that as of June 30, 2012 there was an increase of 4.6% in what these institutions hold in shares. Plus, J3sg.com says that currently there are 250 institutional owners holding 72.97% of the outstanding share and who increased their shares by 1.4% over the past 3 months. Well, I do not think I learned much from this.
The 5 year low, median and high median Price/Earnings Ratios are 9.83, 13.94 and 17.37. The current P/E Ratio is 18.63 on a stock price of $82.34 and on 2012 earnings of $4.42. This would suggest that the stock price is relatively high.
I get a Graham Price of $53.84 and the 10 year low, median and high median Price/Graham Price Ratios are 0.77, 0.93 and 1.11. The current P/GP Ratio on a stock price of $82.34 is 1.53. This would suggest a relatively very high stock price. The P/GP ratios have fluctuated over the past 10 year, but they have been at their highest over the past two years, with the low P/GP in 2010 and 2011 at 1.01 and 1.02. What you should be looking for is a P/GP at or below 1.00. Still, however you look at it a P/GP of 1.53 is high.
The 10 year median Price/Book Value Ratio is 1.69. The current P/B Ratio is 2.82, which is some 67% higher. This would also suggest that the stock price is relatively high.
The 5 year median dividend yield is 1.78% and the current yield is 1.7%, which is 4.7% lower. What you are looking for is a current yield that is higher than the 5 year median. However, it is not that much higher and so the current dividend yield suggests a high reasonable price. Note that the 10 year median dividend yield at 1.55% is quite a bit lower than the 5 year median dividend yield. The current dividend yield is almost 9.7% lower than the 10 year median dividend yield. For investors that like to use dividend yield to check stock prices, this shows that the current price is quite reasonable.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold, and Underperform. The consensus recommendation would be a Hold recommendation. The consensus 12 month stock price is $86.50. This implies a 12 month total return of 6.75%, with 1.7% from dividends and $5.05% from capital gains.
One analysts with a Hold thought that the price was too high, saying that a he thought that a P/E of 14 would be a good P/E for this stock and would be similar to the industry's long term average. (My 5 year median P/E ratio for this stock was 13.94.) A number of analysts remarked that they liked Canadian National Railway better (TSX-CNR).
One analyst thought that the price was too high and that CP will go through a few years of anguish before it solves its problems. A couple of analysts thought the stock has recently gone up because of the proxy fight. However, they feel that the company still has to improve its profitability before it will be a good buy.
See an article in the Globe and Mail related to the hiring of Harrison for CP Railways. If you do not already know, Harrison used to be the CEO at Canadian National Railways (TSX-CNR) until he retired.
It is obvious that I also prefer Canadian National Railways (TSX-CNR). Stock seems a bit pricey when we do not know for sure if Harrison can turn this company around to higher profitability.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
The new CEO owns some $7.7M of shares in the company and he has options worth around $55.6M. William Ackman owns some 14% of CP stock that is worth just under $2B.
I cannot find institutional holders on the site I usually go to, but CNBC says that there are 376 Institutional Holders, 626 Mutual fund Holders and some 36 other Major Holders and totally they hold 77% of the outstanding shares. It has says that over the past 3 months, these holders have reduced their holdings by 9%. (By the way, they only give out information on US companies and so they are using the NYSE-CP symbol.)
However, Nasdaq.com says that there are 291 institutional holders, holding 73% of the shares and that as of June 30, 2012 there was an increase of 4.6% in what these institutions hold in shares. Plus, J3sg.com says that currently there are 250 institutional owners holding 72.97% of the outstanding share and who increased their shares by 1.4% over the past 3 months. Well, I do not think I learned much from this.
The 5 year low, median and high median Price/Earnings Ratios are 9.83, 13.94 and 17.37. The current P/E Ratio is 18.63 on a stock price of $82.34 and on 2012 earnings of $4.42. This would suggest that the stock price is relatively high.
I get a Graham Price of $53.84 and the 10 year low, median and high median Price/Graham Price Ratios are 0.77, 0.93 and 1.11. The current P/GP Ratio on a stock price of $82.34 is 1.53. This would suggest a relatively very high stock price. The P/GP ratios have fluctuated over the past 10 year, but they have been at their highest over the past two years, with the low P/GP in 2010 and 2011 at 1.01 and 1.02. What you should be looking for is a P/GP at or below 1.00. Still, however you look at it a P/GP of 1.53 is high.
The 10 year median Price/Book Value Ratio is 1.69. The current P/B Ratio is 2.82, which is some 67% higher. This would also suggest that the stock price is relatively high.
The 5 year median dividend yield is 1.78% and the current yield is 1.7%, which is 4.7% lower. What you are looking for is a current yield that is higher than the 5 year median. However, it is not that much higher and so the current dividend yield suggests a high reasonable price. Note that the 10 year median dividend yield at 1.55% is quite a bit lower than the 5 year median dividend yield. The current dividend yield is almost 9.7% lower than the 10 year median dividend yield. For investors that like to use dividend yield to check stock prices, this shows that the current price is quite reasonable.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold, and Underperform. The consensus recommendation would be a Hold recommendation. The consensus 12 month stock price is $86.50. This implies a 12 month total return of 6.75%, with 1.7% from dividends and $5.05% from capital gains.
One analysts with a Hold thought that the price was too high, saying that a he thought that a P/E of 14 would be a good P/E for this stock and would be similar to the industry's long term average. (My 5 year median P/E ratio for this stock was 13.94.) A number of analysts remarked that they liked Canadian National Railway better (TSX-CNR).
One analyst thought that the price was too high and that CP will go through a few years of anguish before it solves its problems. A couple of analysts thought the stock has recently gone up because of the proxy fight. However, they feel that the company still has to improve its profitability before it will be a good buy.
See an article in the Globe and Mail related to the hiring of Harrison for CP Railways. If you do not already know, Harrison used to be the CEO at Canadian National Railways (TSX-CNR) until he retired.
It is obvious that I also prefer Canadian National Railways (TSX-CNR). Stock seems a bit pricey when we do not know for sure if Harrison can turn this company around to higher profitability.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Tuesday, September 4, 2012
Canadian Pacific Railway
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. One of the blogs I follow is The Dividend Monk continue...
I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. I originally bought it in 1987 and held it for almost 12 years before selling it. I was not impressed with how it was doing and that is why I sold. I made a total return of 5.40% per year, with 4.82% coming from dividends and .058% from capital gains.
I wanted some more railway stock in 2006 and CP had a relatively better price than CNR so I bought CP. I held it until September 2011 and decided to sell and buy Canadian National Railway (TSX-CNR). I thought I should have one railway company and so I decided to go with CNR. This second time I held the stock for almost 5 years and make a total return of only 0.41% per year. Dividends accounted for 1.77% per year of this total return and I had a capital loss of 1.36% per year. (CNR had been doing better with a total return of some 12.5% per year over the same period.)
I obviously sold CP at the wrong time. If I had waited for the end of the year, I would have done much better. However, CNR would have cost me more. I think that if you want to sell one stock and buy another, it is probably best overall to do the buy and sell in a low market. You may sell low, but you also buy low. This is, of course, a tactical decision.
Total returns over the past 5 and 10 years are much better than what I earned. The 5 and 10 year total return for this stock is 19.20% and 9.78%. The dividend portion of this total return was 2.37% and 1.69% per year over the past 5 and 10 years. The capital gain portion of this total return was 16.83% and 8.09% per year over the past 5 and 10 years. These are quite good returns.
Current dividends are moderate to low at 1.7%. Dividend increases are moderate at 8.73% and 9.35% per year over the past 5 and 10 years. The most recent increase came in 2012 and was quite good at 16.7%. The Dividend Payout Ratios are low as would be expected from a dividend of 1.7%. The 5 year median DPR for earnings is 27% and for cash flow is 30%.
The DPRs point out that EPS was higher than CFPS. This is unusual as you would expect the EPS to be lower than the CFPS. Some people think that it is not good for a company's earnings to be higher than its cash flow. (It is a warning that the company may underperform.) The EPS/CP Ratio on this company has been higher than 1.00 (i.e. EPS higher than CF) since 2009. For a reference to work done by Professor Richard Sloan on this subject, see an investing Daily article on DPRs. It is reference under the 5th section called "Cash Flow or Earnings?"
If you have never heard of Professor Richard Sloan, he works at the University of California, Berkeley. He has done studies on the relationship between accounting information and stock returns. See his Bio.
Most growth under this company is not great. The Revenue growth is just 2.5% and 3.4% per year over the past 5 and 10 years. Outstanding shares have grown slightly each year over the past 5 and 10 years, so Revenue per Share is lower coming in at 0.7% and 2.7% per year over the past 5 and 10 years.
Earnings per Share growth is not really there as EPS has a 5 year decline of 7.8% per year. However, EPS did grow over the past 10 years at 3.6%. Book Value per Share growth is nothing to write home about either, although, I guess the 10 year grow is not bad. Over the past 5 year BVPS has declined by 2.6% per year. BVPS has grown at 6.3% per year over the past 10 years. BVPS has declined over the past 2 years, but it grew over the first two quarters of 2012.
The Return on Equity is quite good with the ROE at the end of the financial year of 2011 at 12.3% and the 5 year median ROE at 12.3%. However, the ROE based on comprehensive income is -1.7%. This is quite a difference and would suggest that the earnings are not as good as they appear. (This would also be a warning to be careful with this stock.)
The current Liquidity Ratio is low at 0.84. When this ratio is less than 1.00 it means that the current assets cannot cover the current liabilities. This improves to 1.25 when you include cash flow less dividends. This is fine, but I would prefer it to be 1.50. The Debt Ratio is fine at 1.52. The current Leverage and Debt/Equity Ratios are ok at 2.92 and 1.92.
People expect this company to perform better under its new CEO, Hunter Harrison. See Globe and Mail article on Harrison taking over CPR. Hopefully this will be true.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. I originally bought it in 1987 and held it for almost 12 years before selling it. I was not impressed with how it was doing and that is why I sold. I made a total return of 5.40% per year, with 4.82% coming from dividends and .058% from capital gains.
I wanted some more railway stock in 2006 and CP had a relatively better price than CNR so I bought CP. I held it until September 2011 and decided to sell and buy Canadian National Railway (TSX-CNR). I thought I should have one railway company and so I decided to go with CNR. This second time I held the stock for almost 5 years and make a total return of only 0.41% per year. Dividends accounted for 1.77% per year of this total return and I had a capital loss of 1.36% per year. (CNR had been doing better with a total return of some 12.5% per year over the same period.)
I obviously sold CP at the wrong time. If I had waited for the end of the year, I would have done much better. However, CNR would have cost me more. I think that if you want to sell one stock and buy another, it is probably best overall to do the buy and sell in a low market. You may sell low, but you also buy low. This is, of course, a tactical decision.
Total returns over the past 5 and 10 years are much better than what I earned. The 5 and 10 year total return for this stock is 19.20% and 9.78%. The dividend portion of this total return was 2.37% and 1.69% per year over the past 5 and 10 years. The capital gain portion of this total return was 16.83% and 8.09% per year over the past 5 and 10 years. These are quite good returns.
Current dividends are moderate to low at 1.7%. Dividend increases are moderate at 8.73% and 9.35% per year over the past 5 and 10 years. The most recent increase came in 2012 and was quite good at 16.7%. The Dividend Payout Ratios are low as would be expected from a dividend of 1.7%. The 5 year median DPR for earnings is 27% and for cash flow is 30%.
The DPRs point out that EPS was higher than CFPS. This is unusual as you would expect the EPS to be lower than the CFPS. Some people think that it is not good for a company's earnings to be higher than its cash flow. (It is a warning that the company may underperform.) The EPS/CP Ratio on this company has been higher than 1.00 (i.e. EPS higher than CF) since 2009. For a reference to work done by Professor Richard Sloan on this subject, see an investing Daily article on DPRs. It is reference under the 5th section called "Cash Flow or Earnings?"
If you have never heard of Professor Richard Sloan, he works at the University of California, Berkeley. He has done studies on the relationship between accounting information and stock returns. See his Bio.
Most growth under this company is not great. The Revenue growth is just 2.5% and 3.4% per year over the past 5 and 10 years. Outstanding shares have grown slightly each year over the past 5 and 10 years, so Revenue per Share is lower coming in at 0.7% and 2.7% per year over the past 5 and 10 years.
Earnings per Share growth is not really there as EPS has a 5 year decline of 7.8% per year. However, EPS did grow over the past 10 years at 3.6%. Book Value per Share growth is nothing to write home about either, although, I guess the 10 year grow is not bad. Over the past 5 year BVPS has declined by 2.6% per year. BVPS has grown at 6.3% per year over the past 10 years. BVPS has declined over the past 2 years, but it grew over the first two quarters of 2012.
The Return on Equity is quite good with the ROE at the end of the financial year of 2011 at 12.3% and the 5 year median ROE at 12.3%. However, the ROE based on comprehensive income is -1.7%. This is quite a difference and would suggest that the earnings are not as good as they appear. (This would also be a warning to be careful with this stock.)
The current Liquidity Ratio is low at 0.84. When this ratio is less than 1.00 it means that the current assets cannot cover the current liabilities. This improves to 1.25 when you include cash flow less dividends. This is fine, but I would prefer it to be 1.50. The Debt Ratio is fine at 1.52. The current Leverage and Debt/Equity Ratios are ok at 2.92 and 1.92.
People expect this company to perform better under its new CEO, Hunter Harrison. See Globe and Mail article on Harrison taking over CPR. Hopefully this will be true.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR. See my spreadsheet at cp.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Subscribe to:
Posts (Atom)