I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
When I look at insider trading, I find insider selling at $10.6M and it is all by the CEO. It seems that he is cashing in options. There is a bit of insider buying by directors at $1M. The net insider selling is at $9.6M. Under this company there are not just options, but other option type vehicles like Performance-based Restricted Share Units and Restricted Share Units.
The CEO has shares worth $6.9M and has options are worth $80.2M. The CFO has shares worth $0.2M and has options worth $20.7M. An officer has shares worth $0.5M and has options are worth $13.8M. A director has shares worth $0.9M and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.65, 12.47 and 13.74. I get a current P/E Ratio of 15.23 based on 2013 earnings of $3.10 and stock price of $47.21. I get a Graham Price of $30.70 and 10 year low, median and high median Price/Graham Price Ratios of 1.04, 1.21 and 1.32. The current P/GP Ratio is 1.54. Both these tests suggest that the stock price is on the high side.
I get a 10 year median Price/Book Value per Share Ratio of 2.07. The current P/B Ratio is 3.49. The current ratio is some 69% higher than the 10 year median and this suggests a rather high stock price. (The Book Value has been declining lately, however, there is still a big difference in these ratios.)
The 5 year median dividend yield 5.91% and the current dividend yield on a stock price of $47.21 is 4.94% a value that is some 7% lower. There is not a huge difference, but it still suggests that the stock price is relatively high.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The vast majority of the recommendations are a Hold recommendation and the consensus recommendation is a hold. The 12 month stock price target is $44.80. This implies no total return over the next year with 4.94% from dividends, but a capital loss of 5.10%. The capital loss would basically cancel out the dividend income. (See my site for information on analyst ratings and what they mean.)
See report on BCE at CanTech where Rob Goff of Byron Capital says why he rates BCE as a Hold. Gordon Pape likes this stock and you can read what he says at The Stock Advisors site. He thinks it is a good stock for conservative investors. According to Mideast Times CIBC reiterated their sector perform (Hold) rating recently for BCE.
I think that the stock price is a little too high relatively to make a good long term purchase of this stock. Dividend is good at 4.94%. If dividends are important to you, it is good and there is certainly a good chance it will continue to grow. However, if you hold a stock for the long term, paying too much can greatly affect your long term total earnings.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 or StockTwits.
Thursday, March 28, 2013
Wednesday, March 27, 2013
BCE Inc
On my other blog I am today I am writing about stock Buy Backs...continue...
I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). This is one of the first stocks I bought way back in 1982. Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). Both these stocks I sold as I did not want to keep for the long term. I also sold half my shares of BCE in 2005. I have tracked this stock in Quicken since 1987. I also bought BCE for my RRSP account in 1999.
According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
If I just look at my trading account from which I held the stock bought in 1982, but have only tracked from 1987, I have made less. In this case my total return was 9.4%, with 3.38% from capital gains and 5.57% from dividends. This is still a good return. If you look at the last 5 years, the total return on this stock is 5.43% per year with 1.46% from capital gains and 3.97% from dividends.
Current dividend yield is 4.94%. This stock has a fairly good record of dividend increases over the past 5 and 10 years with dividend growth at 8.5% and 6.2% per year over these periods. Lately they have increased the dividend twice a year, with the most recent increase at just 2.6%. The prior one was for 4.6%. Total dividend increased in 2012 by 7.3%.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 71% and the 5 year median DPR for Cash Flow at 27%. These DPRs are close to what is expected this year and next year.
Over the past 5 and 10 years the outstanding shares have decreased by 0.75% and 1.65% per year. Shares increased due to stock options and share issues and decreased due to share buy backs.
Revenue has only increased by 2.3% and 0.6% per year over the past 5 and 10 years. Revenue per share has increased by 3% and 2.2% per year over these periods.
Earnings are not much better with 5 year EPS down by 7% per year and only up by 2.5% per year over the past 10 years. If you use 5 year running averages, earnings are down by 0.8% and 1.4% per year over the past 5 and 10 years. The reason for the variation in the two views is because earnings have tended to fluctuate year to year. 5 years ago earnings were at a high that has not been obtained since.
When I look at cash flow per share, growth is flat over the past 5 years and has increased by 2.5% per year over the past 10 years. Even growth in book value per share is not great with book value decreasing by 5.5% per year over the past 5 years and increasing by only 1% per year over the past 10 years.
The Return on Equity looks very good at 20.7% for the financial year of 2012. The 5 year median is also good at 11.9%. However, ROE looks good because book value has decreased in the last couple of years. Sometimes high ROE is not a great thing and too high ROE can point to problems, not a great stock.
The ROE on comprehensive income has been very different over the last two years with the ROE on comprehensive income at 12.3% for 2012 (that is a 41% difference). The 5 year median ROE for comprehensive income is much closer to the ROE on net income at 11.8%. (What the difference between the comprehensive income and net income does is to call into question the quality of the net income.)
The Liquidity Ratio is low even for BCE at 0.58. This means that current assets cannot cover current debt. A couple of things mitigate this. First there is a current portion of Long Term Debt included in the current debt, but it has been handled. Take of this debt and Liquidity Ratio rises to 0.85. Still current assets cannot cover current debt (until ratio is 1.00). Another thing is that cash flow after dividends raises the 0.58 ratio to 1.15 and raises the 0.85 ratio to 1.68. However, this is a retail type stock and cash flows are not, by any means, assured.
If you got any decent size of a portfolio you probably should have exposure to at least one stock in this communications sector. Although I must admit at this time I am not very excited about these stocks. This stock does provide a decent dividend. Demand for telecom products is high and growing. The question is can these companies make money even though their prices are high? BCE's profits certainly have not grown much at all in the last 5 years.
This company will probably provide a good dividend and maybe some capital gains over the next while.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 or StockTwits.
I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). This is one of the first stocks I bought way back in 1982. Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). Both these stocks I sold as I did not want to keep for the long term. I also sold half my shares of BCE in 2005. I have tracked this stock in Quicken since 1987. I also bought BCE for my RRSP account in 1999.
According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
If I just look at my trading account from which I held the stock bought in 1982, but have only tracked from 1987, I have made less. In this case my total return was 9.4%, with 3.38% from capital gains and 5.57% from dividends. This is still a good return. If you look at the last 5 years, the total return on this stock is 5.43% per year with 1.46% from capital gains and 3.97% from dividends.
Current dividend yield is 4.94%. This stock has a fairly good record of dividend increases over the past 5 and 10 years with dividend growth at 8.5% and 6.2% per year over these periods. Lately they have increased the dividend twice a year, with the most recent increase at just 2.6%. The prior one was for 4.6%. Total dividend increased in 2012 by 7.3%.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 71% and the 5 year median DPR for Cash Flow at 27%. These DPRs are close to what is expected this year and next year.
Over the past 5 and 10 years the outstanding shares have decreased by 0.75% and 1.65% per year. Shares increased due to stock options and share issues and decreased due to share buy backs.
Revenue has only increased by 2.3% and 0.6% per year over the past 5 and 10 years. Revenue per share has increased by 3% and 2.2% per year over these periods.
Earnings are not much better with 5 year EPS down by 7% per year and only up by 2.5% per year over the past 10 years. If you use 5 year running averages, earnings are down by 0.8% and 1.4% per year over the past 5 and 10 years. The reason for the variation in the two views is because earnings have tended to fluctuate year to year. 5 years ago earnings were at a high that has not been obtained since.
When I look at cash flow per share, growth is flat over the past 5 years and has increased by 2.5% per year over the past 10 years. Even growth in book value per share is not great with book value decreasing by 5.5% per year over the past 5 years and increasing by only 1% per year over the past 10 years.
The Return on Equity looks very good at 20.7% for the financial year of 2012. The 5 year median is also good at 11.9%. However, ROE looks good because book value has decreased in the last couple of years. Sometimes high ROE is not a great thing and too high ROE can point to problems, not a great stock.
The ROE on comprehensive income has been very different over the last two years with the ROE on comprehensive income at 12.3% for 2012 (that is a 41% difference). The 5 year median ROE for comprehensive income is much closer to the ROE on net income at 11.8%. (What the difference between the comprehensive income and net income does is to call into question the quality of the net income.)
The Liquidity Ratio is low even for BCE at 0.58. This means that current assets cannot cover current debt. A couple of things mitigate this. First there is a current portion of Long Term Debt included in the current debt, but it has been handled. Take of this debt and Liquidity Ratio rises to 0.85. Still current assets cannot cover current debt (until ratio is 1.00). Another thing is that cash flow after dividends raises the 0.58 ratio to 1.15 and raises the 0.85 ratio to 1.68. However, this is a retail type stock and cash flows are not, by any means, assured.
If you got any decent size of a portfolio you probably should have exposure to at least one stock in this communications sector. Although I must admit at this time I am not very excited about these stocks. This stock does provide a decent dividend. Demand for telecom products is high and growing. The question is can these companies make money even though their prices are high? BCE's profits certainly have not grown much at all in the last 5 years.
This company will probably provide a good dividend and maybe some capital gains over the next while.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 or StockTwits.
Tuesday, March 26, 2013
AltaGas Ltd 2
I own this stock of AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The insider trading report shows some $3.1M of insider selling and a bit of insider buying with a net of insider selling of $2.9M. The selling seems to be of stock options. Insiders have options and also option like things called Rights Performance Units and Rights Restricted Units.
The CEO has shares worth $44.8M and has options are worth $43.7M. The CFO has shares worth $0.8M and has options worth $7.8M. An officer has shares worth $1.3M and has options are worth $0.9M. A director has no share and has options worth $1.4M. This is just to give you an idea on insider share ownership and option values.
I have 5 year low, median and high median Price/Earnings Ratios of 13.88, 16.25 and 18.61. Even with the drop in stock price yesterday, the current P/E Ratio is 19.09 based on 2013 earnings of 1.41 and stock price of $34.90. This shows that the stock price is on the high side.
I get a Graham Price of $23.06 and the 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.22 and 1.43. The current P/GP Ratio 1.51 based on a stock price of $34.90. This also shows a relatively high stock price.
I get a 10 year median Price/Book Value per Share stock price of 2.50 and a current P/B Ratio of 2.08 which is some 83% of the 10 year median and shows that the stock price is quite reasonable. (To be cheap, the current P/B Ratio would have to be at 80% or less of the 10 year P/B Ratio.)
The Dividend Yield is not a good test of the stock price as the dividend was cut due to the change of this company from an Income Trust to a corporation. It was felt that the dividend yield on these stocks would move to the 4 to 5% range. At a current 4.13%, it has moved to the bottom of this range and this suggests a reasonable stock price.
If you look at Cash Flow, I get on 5 year P/CF on the median price of 8.20. If you use CF for the last 12 months (that is to the end of 2012 and last financial statement), you get a P/CF of 14.48. This would suggest that the stock price is rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Buy. The 12 month consensus stock price is $37.10. This implies a 10.43% total return with 4.13% from dividends and 6.3% from capital gains.
Yesterday AltaGas Ltd announced the purchase of Blythe Energy. At the same time, the stock price dropped. See article in Market Wire. In the grand scheme of things, you would normally treat this as a buying opportunity. One problem I see is that the stock did not really drop enough to be called cheap. So, it is not much of a buying opportunity.
B.C. government's plan for new taxes on LNG exports could create problems and uncertainty for companies like AltaGas Ltd.
A lot of analysts like this company, but not all of them do. I think that the stock price is a bit too high, even with the price drop on Monday. A lot of utility companies have rather high stock prices at this point.
The Liquidity Ratio is a bit low. This happens on utilities companies and they generally make up for this with cash flow. However, this company, currently is paying too much of the cash flow in dividends. This will correct over time and is a problem for a number of companies that switched from income trusts to corporations. The ROE for the last couple of years is not good at this point and this will probably adjust itself over the next couple of years also.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 or StockTwits.
The insider trading report shows some $3.1M of insider selling and a bit of insider buying with a net of insider selling of $2.9M. The selling seems to be of stock options. Insiders have options and also option like things called Rights Performance Units and Rights Restricted Units.
The CEO has shares worth $44.8M and has options are worth $43.7M. The CFO has shares worth $0.8M and has options worth $7.8M. An officer has shares worth $1.3M and has options are worth $0.9M. A director has no share and has options worth $1.4M. This is just to give you an idea on insider share ownership and option values.
I have 5 year low, median and high median Price/Earnings Ratios of 13.88, 16.25 and 18.61. Even with the drop in stock price yesterday, the current P/E Ratio is 19.09 based on 2013 earnings of 1.41 and stock price of $34.90. This shows that the stock price is on the high side.
I get a Graham Price of $23.06 and the 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.22 and 1.43. The current P/GP Ratio 1.51 based on a stock price of $34.90. This also shows a relatively high stock price.
I get a 10 year median Price/Book Value per Share stock price of 2.50 and a current P/B Ratio of 2.08 which is some 83% of the 10 year median and shows that the stock price is quite reasonable. (To be cheap, the current P/B Ratio would have to be at 80% or less of the 10 year P/B Ratio.)
The Dividend Yield is not a good test of the stock price as the dividend was cut due to the change of this company from an Income Trust to a corporation. It was felt that the dividend yield on these stocks would move to the 4 to 5% range. At a current 4.13%, it has moved to the bottom of this range and this suggests a reasonable stock price.
If you look at Cash Flow, I get on 5 year P/CF on the median price of 8.20. If you use CF for the last 12 months (that is to the end of 2012 and last financial statement), you get a P/CF of 14.48. This would suggest that the stock price is rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Buy. The 12 month consensus stock price is $37.10. This implies a 10.43% total return with 4.13% from dividends and 6.3% from capital gains.
Yesterday AltaGas Ltd announced the purchase of Blythe Energy. At the same time, the stock price dropped. See article in Market Wire. In the grand scheme of things, you would normally treat this as a buying opportunity. One problem I see is that the stock did not really drop enough to be called cheap. So, it is not much of a buying opportunity.
B.C. government's plan for new taxes on LNG exports could create problems and uncertainty for companies like AltaGas Ltd.
A lot of analysts like this company, but not all of them do. I think that the stock price is a bit too high, even with the price drop on Monday. A lot of utility companies have rather high stock prices at this point.
The Liquidity Ratio is a bit low. This happens on utilities companies and they generally make up for this with cash flow. However, this company, currently is paying too much of the cash flow in dividends. This will correct over time and is a problem for a number of companies that switched from income trusts to corporations. The ROE for the last couple of years is not good at this point and this will probably adjust itself over the next couple of years also.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 or StockTwits.
Monday, March 25, 2013
AltaGas Ltd
On my other blog I am today I am writing about Kiva...continue...
I own this stock of AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. It was on the dividend lists that I was following and I was looking for something to buy. A lot has happened since then. The company was an income trust when I bought it and in 2010 it converted from an income trust to a corporation and cut its dividend 39%.
I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The 5 and 10 year total return on this stock is at 11.13% and 24.07% per year. Over these periods, 4.89% and 13.56% was made in capital gains and 6.24% and 10.51% from dividends (or distributions).
The 5 year median dividend yield is 8.64%. Generally speaking income trusts had much higher yields than other stocks. It was felt that the good ones would have their stock prices up and the dividends down so that the end results would be a yield around 4 to 5%. This is what has happened in this stock. The current yield is 4.1%.
It was removed from the dividends lists because of this cut in dividends. However, this stock again started to raise the dividend in 2011 (by 4.5%). The company again raised the dividend in 2012 and this increase was a 4.3% increase. Over the past 10 years, the growth in dividends is at 17% per year. (The decrease over the past 5 years is 7.8%.)
The Dividend Payout Ratios for earnings is a bit high, with a 5 year median of 131%. However, this used to be an income trust company and they do make a profit. It is expected that the DPR for earnings will move below the earnings by 2014. The 5 year median DPR for cash flow is 71%. The DPR for cash flow for 2012 was 58%.
The outstanding shares have increased by 12.6% and 8.8% per year over the past 5 and 10 years. Shares have increased due to Stock Options, Shares Issues and DRIP. They have made acquisitions.
Last year was not a great year for revenue as it was down by 7% and analysts expect another year of lower revenue in 2013, but they expect a nice increase in 2014. The Revenue is up by 0.3% and 11.6% per year over the past 5 and 10 years. Revenue per Share is down over the past 5 years by 11% and up over the past 10 years by 2.5%.
Earnings per Share is down by 14% per year over the past 5 years and up by 7.2% over the past 10 years. If you look at 5 year running averages, earnings are only down by 1% per year over the past 5 years and up by 12% per year over the past 10 years.
Cash Flow per Share is down by 3% per year over the past 5 years and up by 4.6% per year over the past 10 years. The Book Value per Share is up by 11% and 12% per year over the past 5 and 10 years. This company has changed their accounting rules to US GAAP and this has affected the Book Value.
The Return on Equity is low for 2012 at just 6.8%. The 5 year median value is better at 10%. The ROE on comprehensive income is close, but lower at 6.6%.
The Liquidity Ratio has always been rather low and it still is at 1.05 for 2012. The Debt Ratio is better at 1.51. Leverage and Debt/Equity Ratios are rather normal for a utility at 3.35 and 2.22.
I have been pleased with my investment in the company. I do not expect my high return going into the future. The dividend yield is lower and on utilities you can expect that capital gain, on a long term basis to be similar to dividend increases. That would translate into dividends around 4% and capital gain around 4%.
However, as this stock is of a median risk and is into LNG exports, the capital gain would probably be higher than 4%. I know some analysts expect the capital gains would be more than twice the 4% I have suggested for utilities. They are probably right. In any event, I will not earn the 30% per year return I have been earning going into the future.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 or StockTwits.
I own this stock of AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. It was on the dividend lists that I was following and I was looking for something to buy. A lot has happened since then. The company was an income trust when I bought it and in 2010 it converted from an income trust to a corporation and cut its dividend 39%.
I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The 5 and 10 year total return on this stock is at 11.13% and 24.07% per year. Over these periods, 4.89% and 13.56% was made in capital gains and 6.24% and 10.51% from dividends (or distributions).
The 5 year median dividend yield is 8.64%. Generally speaking income trusts had much higher yields than other stocks. It was felt that the good ones would have their stock prices up and the dividends down so that the end results would be a yield around 4 to 5%. This is what has happened in this stock. The current yield is 4.1%.
It was removed from the dividends lists because of this cut in dividends. However, this stock again started to raise the dividend in 2011 (by 4.5%). The company again raised the dividend in 2012 and this increase was a 4.3% increase. Over the past 10 years, the growth in dividends is at 17% per year. (The decrease over the past 5 years is 7.8%.)
The Dividend Payout Ratios for earnings is a bit high, with a 5 year median of 131%. However, this used to be an income trust company and they do make a profit. It is expected that the DPR for earnings will move below the earnings by 2014. The 5 year median DPR for cash flow is 71%. The DPR for cash flow for 2012 was 58%.
The outstanding shares have increased by 12.6% and 8.8% per year over the past 5 and 10 years. Shares have increased due to Stock Options, Shares Issues and DRIP. They have made acquisitions.
Last year was not a great year for revenue as it was down by 7% and analysts expect another year of lower revenue in 2013, but they expect a nice increase in 2014. The Revenue is up by 0.3% and 11.6% per year over the past 5 and 10 years. Revenue per Share is down over the past 5 years by 11% and up over the past 10 years by 2.5%.
Earnings per Share is down by 14% per year over the past 5 years and up by 7.2% over the past 10 years. If you look at 5 year running averages, earnings are only down by 1% per year over the past 5 years and up by 12% per year over the past 10 years.
Cash Flow per Share is down by 3% per year over the past 5 years and up by 4.6% per year over the past 10 years. The Book Value per Share is up by 11% and 12% per year over the past 5 and 10 years. This company has changed their accounting rules to US GAAP and this has affected the Book Value.
The Return on Equity is low for 2012 at just 6.8%. The 5 year median value is better at 10%. The ROE on comprehensive income is close, but lower at 6.6%.
The Liquidity Ratio has always been rather low and it still is at 1.05 for 2012. The Debt Ratio is better at 1.51. Leverage and Debt/Equity Ratios are rather normal for a utility at 3.35 and 2.22.
I have been pleased with my investment in the company. I do not expect my high return going into the future. The dividend yield is lower and on utilities you can expect that capital gain, on a long term basis to be similar to dividend increases. That would translate into dividends around 4% and capital gain around 4%.
However, as this stock is of a median risk and is into LNG exports, the capital gain would probably be higher than 4%. I know some analysts expect the capital gains would be more than twice the 4% I have suggested for utilities. They are probably right. In any event, I will not earn the 30% per year return I have been earning going into the future.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 or StockTwits.
Friday, March 22, 2013
Atlantic Power Corp
I do not own this stock of Atlantic Power Corp (TSX-ATP, NYSE-AT). Can it be any surprise that this company has cut dividends? Since set up in 2004, they made a profit only in one year, 2008. Every other year there was a loss.
Dividends were dropped 65%. However, I do not think that paying dividends is very wise when there are no earnings. Yes, the Dividend Payout Ratio for cash flow was not that bad with the current one for 2012 at 82%. However, the 5 year median DPR for CF is 90% and for 2011 the DPR for cash flow was 179%. Anyone still feel this company should pay dividends.
I know that people like also look at AFFO and FFO. The DPRs for 2012 for FFO was 100% and for AFFO was 99.6%. The DPR for 2013 for AFFO is expected to be 101% and for 2014 is expected to be 83.5%.
I do not think I can talk about total returns. I usually talk about this to the end of the prior year and in this case it would be 2012. There was not much in capital gain, which was running at just over 1% per year. However, there were good dividends in the 8% to 10% yield range. However, just after the decrease in dividends was announced, the shares fell over 50%.
The company has increased outstanding shares by 14% and 16% per year over the past 5 and 10 years. The increase in shares is due to Stock Options, DRIP and Issuance of new shares.
Growth in revenue was good, with growth at 8.3% and 46% per year over the past 5 and 10 years. However, because of the increase in outstanding shares, Revenue per Share was not so great. The Revenue per Share was done 5% per year over the past 5 years. Revenue per Share was up by 26% per year over the past 10 years.
There has also been some growth in Cash Flow per Share, with CFPS up 2% per year over the past 5 years and up 30% per year over the past 10 years.
When I look at the insider trading report, I find a bit of insider buying of $114,000. The buying was at prices just over $5 per share. There was no insider selling. In any event insiders do not own much. The CEO has $1.5M of shares, and one officer has $0.3M. There is not much in options or options like vehicles. There are some Deferred Share Units and some Notional Shares, but there is not much here either.
When I look at analysts' recommendations, I find Hold and Underperform recommendations. The consensus would be a Hold. I must say I am surprise there is no sell recommendations. The 12 month consensus stock price is $6.89. This implies a total return of 33.52% with 7.33% from dividends and 26.19% from capital gain. But, is this really believable? Analysts expect no profits over the next two years, but they do expect losses to be lower. Also, it is expected that AFFO will drop 44% in 2013 and another 25% in 2014.
People generally buy utilities because they are generally low risk companies. The tradeoff is low risk and a decent return. This is a high risk company. I do not see any possibility of a large return to justify the risk. They cannot earn a profit. Personally I would avoid it totally.
I bought TransCanada Corp in 2000 when they cut their dividend. However, the management had proven that they could make money for their shareholders. They also had a good plan to reorganize the company for the future. So far the only thing that Atlantic Power has shown is that they cannot make a profit.
To get other's point of view, look at Motley Fool. However, they do not have a positive view either and feel that the company is cheap for very good reasons. There is also a comment on this stock by BMO at Benzinga. It is not very positive either. The dividend girl decided to sell her shares in this company.
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 or StockTwits.
Dividends were dropped 65%. However, I do not think that paying dividends is very wise when there are no earnings. Yes, the Dividend Payout Ratio for cash flow was not that bad with the current one for 2012 at 82%. However, the 5 year median DPR for CF is 90% and for 2011 the DPR for cash flow was 179%. Anyone still feel this company should pay dividends.
I know that people like also look at AFFO and FFO. The DPRs for 2012 for FFO was 100% and for AFFO was 99.6%. The DPR for 2013 for AFFO is expected to be 101% and for 2014 is expected to be 83.5%.
I do not think I can talk about total returns. I usually talk about this to the end of the prior year and in this case it would be 2012. There was not much in capital gain, which was running at just over 1% per year. However, there were good dividends in the 8% to 10% yield range. However, just after the decrease in dividends was announced, the shares fell over 50%.
The company has increased outstanding shares by 14% and 16% per year over the past 5 and 10 years. The increase in shares is due to Stock Options, DRIP and Issuance of new shares.
Growth in revenue was good, with growth at 8.3% and 46% per year over the past 5 and 10 years. However, because of the increase in outstanding shares, Revenue per Share was not so great. The Revenue per Share was done 5% per year over the past 5 years. Revenue per Share was up by 26% per year over the past 10 years.
There has also been some growth in Cash Flow per Share, with CFPS up 2% per year over the past 5 years and up 30% per year over the past 10 years.
When I look at the insider trading report, I find a bit of insider buying of $114,000. The buying was at prices just over $5 per share. There was no insider selling. In any event insiders do not own much. The CEO has $1.5M of shares, and one officer has $0.3M. There is not much in options or options like vehicles. There are some Deferred Share Units and some Notional Shares, but there is not much here either.
When I look at analysts' recommendations, I find Hold and Underperform recommendations. The consensus would be a Hold. I must say I am surprise there is no sell recommendations. The 12 month consensus stock price is $6.89. This implies a total return of 33.52% with 7.33% from dividends and 26.19% from capital gain. But, is this really believable? Analysts expect no profits over the next two years, but they do expect losses to be lower. Also, it is expected that AFFO will drop 44% in 2013 and another 25% in 2014.
People generally buy utilities because they are generally low risk companies. The tradeoff is low risk and a decent return. This is a high risk company. I do not see any possibility of a large return to justify the risk. They cannot earn a profit. Personally I would avoid it totally.
I bought TransCanada Corp in 2000 when they cut their dividend. However, the management had proven that they could make money for their shareholders. They also had a good plan to reorganize the company for the future. So far the only thing that Atlantic Power has shown is that they cannot make a profit.
To get other's point of view, look at Motley Fool. However, they do not have a positive view either and feel that the company is cheap for very good reasons. There is also a comment on this stock by BMO at Benzinga. It is not very positive either. The dividend girl decided to sell her shares in this company.
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 or StockTwits.
Thursday, March 21, 2013
Veresen Inc 2
I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends.
When I look at the insider trading report, I see a bit of insider buying ($0.7M) and no insider selling. There seems to be low insider ownership and little in the way of options. They have an option like vehicle called Deferred Share Units, but few insiders seem to have any or much of these types of options. The CEO is new and seems to have received some $30,000 in options for 2012.
The 5 year low, median and high median Price/Earnings Ratios are 23.79, 29.84 and 35.89. The current P/E Ratio is 42.06 based on 2013 earnings of $0.31 and current stock price of $13.04. First, all these P/E Ratios are very high for a utility. Even at that the current P/E is higher than the 5 year high median value.
I get a current Graham Price of $6.41. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.35 and 1.58. The current P/GP Ratio is 2.03. The current ratio is high compared to historical ratio. Also, for utility companies you would expect the P/GP Ratio to be around 1.00 in any event.
The 10 year Price/Book Value per Share Ratio is 1.91 and the current P/B Ratio is 15% higher at 2.21. This would point to a rather relatively reasonable stock price. The main problem with the book value is that it is going south. Until they earn more than they pay in dividends, this will continue.
The dividend yield is 7.67% and the 5 year median dividend yield is 8.92% a value some 14% higher. This higher dividend yield points to a stock price relatively reasonable to a bit high.
Looking at the Price/AFFO Ratios, I get a 5 year high median of 10.6 and the current P/AFFO Ratio is 11.96. I get a 5 year median Price/Cash Flow per Share Ratio on closing stock price of 7.74 and a current P/CF Ratio of 12.36. There is no measurement that I see where it does not show the stock price as relatively high.
When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendation and the consensus recommendation is a Buy. (This is the most common configuration you can get with analysts' recommendations.) The 12 month stock price consensus is $13.50. This implies a total return of 11.2%, with 7.67% from dividends and 3.53% from capital gains.
One analyst says that this is a buy because the stock can provide attractive income for its shareholders. Some analysts have wondered about the sustainability of the dividend and also whether it will be able in the future to raise the dividend. There are some recent comments on this stock at Stock Chase.
I think that there is not much room for a stock price increases given the lack of any future potential dividend increase. Because a yield of 7.7% is quite good as a return on this stock I will continue to hold what I have. However, I am keeping an eye on this stock. (There is no other utility I want to replace this with and all the good ones seem to have relatively high stock prices.) In the meantime, I do not think much is going to happen with this stock.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 or StockTwits.
When I look at the insider trading report, I see a bit of insider buying ($0.7M) and no insider selling. There seems to be low insider ownership and little in the way of options. They have an option like vehicle called Deferred Share Units, but few insiders seem to have any or much of these types of options. The CEO is new and seems to have received some $30,000 in options for 2012.
The 5 year low, median and high median Price/Earnings Ratios are 23.79, 29.84 and 35.89. The current P/E Ratio is 42.06 based on 2013 earnings of $0.31 and current stock price of $13.04. First, all these P/E Ratios are very high for a utility. Even at that the current P/E is higher than the 5 year high median value.
I get a current Graham Price of $6.41. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.35 and 1.58. The current P/GP Ratio is 2.03. The current ratio is high compared to historical ratio. Also, for utility companies you would expect the P/GP Ratio to be around 1.00 in any event.
The 10 year Price/Book Value per Share Ratio is 1.91 and the current P/B Ratio is 15% higher at 2.21. This would point to a rather relatively reasonable stock price. The main problem with the book value is that it is going south. Until they earn more than they pay in dividends, this will continue.
The dividend yield is 7.67% and the 5 year median dividend yield is 8.92% a value some 14% higher. This higher dividend yield points to a stock price relatively reasonable to a bit high.
Looking at the Price/AFFO Ratios, I get a 5 year high median of 10.6 and the current P/AFFO Ratio is 11.96. I get a 5 year median Price/Cash Flow per Share Ratio on closing stock price of 7.74 and a current P/CF Ratio of 12.36. There is no measurement that I see where it does not show the stock price as relatively high.
When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendation and the consensus recommendation is a Buy. (This is the most common configuration you can get with analysts' recommendations.) The 12 month stock price consensus is $13.50. This implies a total return of 11.2%, with 7.67% from dividends and 3.53% from capital gains.
One analyst says that this is a buy because the stock can provide attractive income for its shareholders. Some analysts have wondered about the sustainability of the dividend and also whether it will be able in the future to raise the dividend. There are some recent comments on this stock at Stock Chase.
I think that there is not much room for a stock price increases given the lack of any future potential dividend increase. Because a yield of 7.7% is quite good as a return on this stock I will continue to hold what I have. However, I am keeping an eye on this stock. (There is no other utility I want to replace this with and all the good ones seem to have relatively high stock prices.) In the meantime, I do not think much is going to happen with this stock.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 or StockTwits.
Wednesday, March 20, 2013
Veresen Inc
On my other blog I am today I am writing about Stock Price Ratios...continue...
I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in December 2008 and March 2009. When I bought it, it was still a limited partnership under Fort Chicago Energy (TSX-FCE.UN). When I bought this stock it had a good record of distribution increases. However, since they decided to change to a corporation, there has been no dividend (or distribution) increases. We are in the 5th year of no increase and I do not see any in the immediate future either.
There are 10 analysts covering this stock and they all see no increases for the dividends. They also see no decrease either. Certainly, analysts covering this stock feel that the current dividend level is sustainable because of cash flows. See forecasts at Financial Times.
The problem this company has is that it is not making enough in earnings to cover the dividends. The 5 year median Dividend Payout Ratio for Earnings is 303%. However, if you look at DPR for CF, the 5 year median is much better at 63%. The DPR for Adjusted Funds from Operations (AAFO) is also fine with the 5 year median at 85%.
I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends. If you look at the past 5 and 10 years, the total return for this stock is 10.70% and 13.39% per year, respectively. The return from capital gains is 1.76% and 3.67% per year, respectively. The return from dividend is 8.94% and 9.72% per year, respectively.
At some point they are going to have to get the earnings above the dividends. Personally, I think that they should bit the bullet and cut dividends in half. I cannot see total return much above the dividend distributions until they are in a position to increase dividends. However, since the dividend has yield of 7.67%, the stock has a pretty good return.
The outstanding shares have increased by 8.5% and 10.3% per year over the past 5 and 10 years. Shares have increased due to Stock Issues, DRIP and Conversion of Debentures (to shares).
They changed their accounting rules from CDN GAAP to US GAAP. This accounting change and greatly affected the Revenue and I can get no fix on growth in Revenue. Analysts do expect Revenue to increase in 2013 and 2014.
The calculation of earnings does not seem to be affected by the accounting change. No matter how you look at it, 2012 was not a good year for this company. Earnings per Share is down 40% for 2012. (The company also took a 40% EPS cut in 2011.) Analysts expect EPS share to rise this year and next. The only positive thing to say is that the company has earnings.
The Cash Flow per Share is also down for 2012 by some 34%. CFPS has decreased over the past 5 years by 9.4% per year, but has increased over the past 10 years by 7.3 per year.
Before 2011, the Return on Equity was ok. Last year and this year it has been quite low, with ROE coming in at 6.5% and 4% respectively. The ROE on comprehensive income is lower at 3.5%, but there is usually a difference between net income and comprehensive income.
One warning message is from the Accrual Ratio. I get one of 30.14% for 2012. This is quite high and would suggest that stock price should go down this year. However, so far this year, the stock price is up 10%. We are currently in a bit of a bull market.
Generally, the Liquidity Ratio has been quite low, but the company had good cash flow. For the year ended in 2012, the Liquidity Ratio was a very good 1.66. The Debt Ratio has been low in the past, but for 2012 it was also quite good at 1.67. The Leverage and Debt/Equity Ratios have also improved and for 2012 stand at 2.70 and 1.53. These are good ratios for a utility.
I still think that for longer term they should cut their dividend. However, a number of analysts imply they are recommending this stock because they expect the current dividend to continue. The company has the cash flow to pay the dividend. The problem with paying a dividend that cannot be covered by the earnings is that book value will decrease.
I will not be buying more stock, but for now I will be holding on to what I have. I do not have much, less than .5% of my portfolio in this stock. I still do not like the fact that the earnings do not cover the dividends. Maybe I am old fashion, but sometimes you earn money by being old fashion.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 or StockTwits.
I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in December 2008 and March 2009. When I bought it, it was still a limited partnership under Fort Chicago Energy (TSX-FCE.UN). When I bought this stock it had a good record of distribution increases. However, since they decided to change to a corporation, there has been no dividend (or distribution) increases. We are in the 5th year of no increase and I do not see any in the immediate future either.
There are 10 analysts covering this stock and they all see no increases for the dividends. They also see no decrease either. Certainly, analysts covering this stock feel that the current dividend level is sustainable because of cash flows. See forecasts at Financial Times.
The problem this company has is that it is not making enough in earnings to cover the dividends. The 5 year median Dividend Payout Ratio for Earnings is 303%. However, if you look at DPR for CF, the 5 year median is much better at 63%. The DPR for Adjusted Funds from Operations (AAFO) is also fine with the 5 year median at 85%.
I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends. If you look at the past 5 and 10 years, the total return for this stock is 10.70% and 13.39% per year, respectively. The return from capital gains is 1.76% and 3.67% per year, respectively. The return from dividend is 8.94% and 9.72% per year, respectively.
At some point they are going to have to get the earnings above the dividends. Personally, I think that they should bit the bullet and cut dividends in half. I cannot see total return much above the dividend distributions until they are in a position to increase dividends. However, since the dividend has yield of 7.67%, the stock has a pretty good return.
The outstanding shares have increased by 8.5% and 10.3% per year over the past 5 and 10 years. Shares have increased due to Stock Issues, DRIP and Conversion of Debentures (to shares).
They changed their accounting rules from CDN GAAP to US GAAP. This accounting change and greatly affected the Revenue and I can get no fix on growth in Revenue. Analysts do expect Revenue to increase in 2013 and 2014.
The calculation of earnings does not seem to be affected by the accounting change. No matter how you look at it, 2012 was not a good year for this company. Earnings per Share is down 40% for 2012. (The company also took a 40% EPS cut in 2011.) Analysts expect EPS share to rise this year and next. The only positive thing to say is that the company has earnings.
The Cash Flow per Share is also down for 2012 by some 34%. CFPS has decreased over the past 5 years by 9.4% per year, but has increased over the past 10 years by 7.3 per year.
Before 2011, the Return on Equity was ok. Last year and this year it has been quite low, with ROE coming in at 6.5% and 4% respectively. The ROE on comprehensive income is lower at 3.5%, but there is usually a difference between net income and comprehensive income.
One warning message is from the Accrual Ratio. I get one of 30.14% for 2012. This is quite high and would suggest that stock price should go down this year. However, so far this year, the stock price is up 10%. We are currently in a bit of a bull market.
Generally, the Liquidity Ratio has been quite low, but the company had good cash flow. For the year ended in 2012, the Liquidity Ratio was a very good 1.66. The Debt Ratio has been low in the past, but for 2012 it was also quite good at 1.67. The Leverage and Debt/Equity Ratios have also improved and for 2012 stand at 2.70 and 1.53. These are good ratios for a utility.
I still think that for longer term they should cut their dividend. However, a number of analysts imply they are recommending this stock because they expect the current dividend to continue. The company has the cash flow to pay the dividend. The problem with paying a dividend that cannot be covered by the earnings is that book value will decrease.
I will not be buying more stock, but for now I will be holding on to what I have. I do not have much, less than .5% of my portfolio in this stock. I still do not like the fact that the earnings do not cover the dividends. Maybe I am old fashion, but sometimes you earn money by being old fashion.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 or StockTwits.
Tuesday, March 19, 2013
TransAlta Corp 2
I own this stock of TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%. (What I would like from utility investments is 4% in dividends and 4% in capital gains each year.)
The report on insider trading is interesting. There is a small amount of insider buying ($0.5M) and no insider selling. Not only does this company have options, but it has option like vehicles called Performance Share Ownership Plan (PSOP) and Restricted Share Units (RSU). Both insider ownership and options are rather modest.
The CEO has shares worth $1.3M and has options are worth $6.4M. The CFO has shares worth $0.6M and has options worth $1.8M. Officers seem to have modest holdings and modest options. A director has some share and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values.
I get 5 year low, median and high median Price/Earnings Ratios of 17.80, 21.80 and 23.98. The current P/E Ratio is 18.32 based on 2013 earnings estimates of $0.82 and a stock price of $15.02. This implies a relatively good stock price. However, I personally find these P/E Ratios a bit high, especially for low growth utility stock.
I get a Graham Price of $12.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.31 and 1.55. The current P/GP Ratio is 1.18. This again shows a relatively good stock price.
I get a 10 year Price/Book Value per Share of 1.74. The current P/B Ratio is very close at 1.72 and this shows a relatively average stock price.
The place that shows a really good stock price is looking at the Dividend Yield. The 5 year median Dividend Yield is 5.35% and the current Dividend Yield is 7.86%. The current yield is some 47% higher than the 5 year median Dividend Yield. This is signaling that the stock is cheap. This test also might be the best test for this stock.
The analysts' recommendations have a rather curious formation. I find Strong Buy, Hold and Underperform recommendations. (There are no Buy recommendations.) The consensus recommendation is a Hold. The 12 month stock consensus is $15.70. This implies a total return of 12.38%, with 7.86% from dividends and 4.53% from capital gains.
On the positive side, no one expects this company to go belly up, nor does anyone expect them to cut their dividends. The dividends do give support to the stock price. It has been suggested that the company hit bottom in the second quarter of 2012 and it will improve from there. However, analysts are being very cautiously optimistic with most saying giving a recommendation of Hold or Underperform.
A number of analysts are worried about the effects of issues with Centralia power Plant in Washington State. It seems like there is some resolution to this. See article in Calgary Herald. It would seem that analysts probably like other utility companies better because this company has mostly older coal fired plants.
TransAlta is trying to diversity away from coal fired electrical plants and is building Wind Mill farms. See article in Wind Powering Engineering site.
The Ontario Government has been determined to build wind mills farms and TransAlta has one on Wolfe Island in Ontario. There is a positive article on wind farms by David Suzuki and it is the first positive article I have seen on wind farms. You can read the article here. Of course, the report could be very much coloured by the fact that Suzuki is very much in favour of wind mills politically. There is an article by CBC that is more negative.
However, you have to wonder if wind mills producing electricity is the future. In Ontario we have problems with this electricity. The wind blows when it blows and not when we need electricity. Because of this we have sold wind mill electricity at a negative price. (Yes, we paid people to take the electricity off our hands.) This is not sustainable. However, the Ontario government has recently been talking about using batteries to store excess wind mill electricity until it is needed. I cannot find the articles I read in the past, but this Toronto Star article talks a bit about the problems Ontario has with electricity produced by wind mills.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 or StockTwits.
The report on insider trading is interesting. There is a small amount of insider buying ($0.5M) and no insider selling. Not only does this company have options, but it has option like vehicles called Performance Share Ownership Plan (PSOP) and Restricted Share Units (RSU). Both insider ownership and options are rather modest.
The CEO has shares worth $1.3M and has options are worth $6.4M. The CFO has shares worth $0.6M and has options worth $1.8M. Officers seem to have modest holdings and modest options. A director has some share and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values.
I get 5 year low, median and high median Price/Earnings Ratios of 17.80, 21.80 and 23.98. The current P/E Ratio is 18.32 based on 2013 earnings estimates of $0.82 and a stock price of $15.02. This implies a relatively good stock price. However, I personally find these P/E Ratios a bit high, especially for low growth utility stock.
I get a Graham Price of $12.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.31 and 1.55. The current P/GP Ratio is 1.18. This again shows a relatively good stock price.
I get a 10 year Price/Book Value per Share of 1.74. The current P/B Ratio is very close at 1.72 and this shows a relatively average stock price.
The place that shows a really good stock price is looking at the Dividend Yield. The 5 year median Dividend Yield is 5.35% and the current Dividend Yield is 7.86%. The current yield is some 47% higher than the 5 year median Dividend Yield. This is signaling that the stock is cheap. This test also might be the best test for this stock.
The analysts' recommendations have a rather curious formation. I find Strong Buy, Hold and Underperform recommendations. (There are no Buy recommendations.) The consensus recommendation is a Hold. The 12 month stock consensus is $15.70. This implies a total return of 12.38%, with 7.86% from dividends and 4.53% from capital gains.
On the positive side, no one expects this company to go belly up, nor does anyone expect them to cut their dividends. The dividends do give support to the stock price. It has been suggested that the company hit bottom in the second quarter of 2012 and it will improve from there. However, analysts are being very cautiously optimistic with most saying giving a recommendation of Hold or Underperform.
A number of analysts are worried about the effects of issues with Centralia power Plant in Washington State. It seems like there is some resolution to this. See article in Calgary Herald. It would seem that analysts probably like other utility companies better because this company has mostly older coal fired plants.
TransAlta is trying to diversity away from coal fired electrical plants and is building Wind Mill farms. See article in Wind Powering Engineering site.
The Ontario Government has been determined to build wind mills farms and TransAlta has one on Wolfe Island in Ontario. There is a positive article on wind farms by David Suzuki and it is the first positive article I have seen on wind farms. You can read the article here. Of course, the report could be very much coloured by the fact that Suzuki is very much in favour of wind mills politically. There is an article by CBC that is more negative.
However, you have to wonder if wind mills producing electricity is the future. In Ontario we have problems with this electricity. The wind blows when it blows and not when we need electricity. Because of this we have sold wind mill electricity at a negative price. (Yes, we paid people to take the electricity off our hands.) This is not sustainable. However, the Ontario government has recently been talking about using batteries to store excess wind mill electricity until it is needed. I cannot find the articles I read in the past, but this Toronto Star article talks a bit about the problems Ontario has with electricity produced by wind mills.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 or StockTwits.
Monday, March 18, 2013
TransAlta Corp
On my other blog I am today I am writing a few thoughts on capitalism and socialism...continue...
I own this stock of TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%.
This stock has a current dividend yield of 7.86% and has a 5 year median dividend yield of 5.35%. This stock has never been dividend growth stock as they have been inconsistent in raising their dividends. However, they have increased the dividends over the years. The 5 and 10 year growth in dividends is at 3.28% per year and 1.63% per year, respectively. The most recent increase was in 2012 and the increase was only for 1.72%.
Lately the company has been paying out more in dividends than it has earned. The 2012 financial year was not good for this company. It suffered a loss in the second quarter that dominated the year and it ended the year with an EPS loss. See an article in the Financial Post.
It is expected that the Dividend Payout Ratio for earnings for this year and 2014 will be around 150%. This is certainly a negative for this stock. However, it is in better shape when looking at the DPR for cash flow, where the 5 year median DPR is 32%. The DPR for CF was higher in 2012 at 52%, but it is expected to go to 36% and 34% for 2013 and 2014. Dividends are not expected to change over the next two years.
Shareholders have not made much on this stock over the past 5 and 10 years. Over the past 5 years there was total return loss of 9.86% per year with a capital loss of 14.63% per year and dividends at 4.77% per year. Over the past 10 years shareholders would have made a total return of 5.3% per year, with a capital loss of 1.23% per year and dividends at 6.53% per year.
Outstanding shares have increased over the past 5 and 10 years at4.9% and 4.1% per year, respectively. Shares have increased due DRIP, Stock Options and Share Issues. In the past there has also been some share buy backs.
The company has not done much to increase its revenue over the past 5 and 10 years. Revenue is down 4% per year over the past 5 year and is up by only 2.23% per year over the past 10 years. Revenue per Share is down by 8.45% per year and 1.84% per year over the past 5 and 10 years, respectively. Revenue is expected to increase modestly over the next couple of years.
Cash Flow per Share is also down with CFPS down 10.4% and 2.9% per year over the past 5 and 10 years, respectively. Book Value per share is also down with BVPS down 5.2% and 3.4% per year over the past 5 and 10 years. None of this is good. However, CFPS is expected to rise this year and next.
Generally speaking the Return on Equity tends to be fine. Since 2012 had an earnings loss there is no ROE for this stock for 2012.
The Liquidity Ratio tends to be rather low, but this company has a good cash flow. The Debt Ratio is fine at 1.55. The Leverage and Debt/Equity Ratios are a bit high at 4.24 and 2.74, but utility companies tend to have rather high Leverage and Debt/Equity Ratios.
A number of analysts feel that this stock has now bottomed out and hopefully this is true. It has been a rough year for this company. Last year was no better. See my reports from last year, report 1 or report 2.
Hopefully 2013 will be a better year for this company. However, so far the stock is still tracking south.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 or StockTwits.
I own this stock of TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%.
This stock has a current dividend yield of 7.86% and has a 5 year median dividend yield of 5.35%. This stock has never been dividend growth stock as they have been inconsistent in raising their dividends. However, they have increased the dividends over the years. The 5 and 10 year growth in dividends is at 3.28% per year and 1.63% per year, respectively. The most recent increase was in 2012 and the increase was only for 1.72%.
Lately the company has been paying out more in dividends than it has earned. The 2012 financial year was not good for this company. It suffered a loss in the second quarter that dominated the year and it ended the year with an EPS loss. See an article in the Financial Post.
It is expected that the Dividend Payout Ratio for earnings for this year and 2014 will be around 150%. This is certainly a negative for this stock. However, it is in better shape when looking at the DPR for cash flow, where the 5 year median DPR is 32%. The DPR for CF was higher in 2012 at 52%, but it is expected to go to 36% and 34% for 2013 and 2014. Dividends are not expected to change over the next two years.
Shareholders have not made much on this stock over the past 5 and 10 years. Over the past 5 years there was total return loss of 9.86% per year with a capital loss of 14.63% per year and dividends at 4.77% per year. Over the past 10 years shareholders would have made a total return of 5.3% per year, with a capital loss of 1.23% per year and dividends at 6.53% per year.
Outstanding shares have increased over the past 5 and 10 years at4.9% and 4.1% per year, respectively. Shares have increased due DRIP, Stock Options and Share Issues. In the past there has also been some share buy backs.
The company has not done much to increase its revenue over the past 5 and 10 years. Revenue is down 4% per year over the past 5 year and is up by only 2.23% per year over the past 10 years. Revenue per Share is down by 8.45% per year and 1.84% per year over the past 5 and 10 years, respectively. Revenue is expected to increase modestly over the next couple of years.
Cash Flow per Share is also down with CFPS down 10.4% and 2.9% per year over the past 5 and 10 years, respectively. Book Value per share is also down with BVPS down 5.2% and 3.4% per year over the past 5 and 10 years. None of this is good. However, CFPS is expected to rise this year and next.
Generally speaking the Return on Equity tends to be fine. Since 2012 had an earnings loss there is no ROE for this stock for 2012.
The Liquidity Ratio tends to be rather low, but this company has a good cash flow. The Debt Ratio is fine at 1.55. The Leverage and Debt/Equity Ratios are a bit high at 4.24 and 2.74, but utility companies tend to have rather high Leverage and Debt/Equity Ratios.
A number of analysts feel that this stock has now bottomed out and hopefully this is true. It has been a rough year for this company. Last year was no better. See my reports from last year, report 1 or report 2.
Hopefully 2013 will be a better year for this company. However, so far the stock is still tracking south.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 or StockTwits.
Friday, March 15, 2013
ARC Resources Ltd
I do not own this stock ARC Resources Ltd. (TSX-ARX, OTC-AETUF). I first reviewed this stock in January 2009 when it was an Income Trust and it was a recommended stock for TFSA accounts. The stock converted to a corporation in January 2011.
This is an oil and gas company. These sorts of companies, if they paid good dividends, tend to have fluctuating dividends. Over time you can make good dividends, but you have to be prepared for fluctuations. Current the dividend yield is 4.45% and the 5 year median dividend yield is 5.43%.
This company has always paid out more in dividends or distributions than its earnings. The 5 year median Dividend Payout Ratio for earnings is 121%. However, the DPR for cash flow is much better at 52%. There are some 15 analysts following this stock and the consensus is an expected decrease in dividend by 7.4% to $1.11 this year.
The Liquidity Ratio has always been quite low and the current one is 1.08. However, this company does have strong cash flows. The Debt Ratio has always been good and the current one is 2.52. The current Leverage and Debt/Equity Ratios are good at 1.66 and 0.66.
The outstanding shares have increased by 8% and 9.6% per year over the past 5 and 10 years. The shares have increased due to stock options and the issuance of shares. Shares issues have been used for capital expenditures and acquisitions. When looking at growth, the 10 year growth figures are better than the 5 year figures.
The 10 year growth figures are in the 2% to 3% range, and the 5 year figures are negative. For example, the 5 year growth in Revenue per Share is a negative 4.8% per year. The 10 year growth in Revenue per Share is 2.6% per year.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy and most analysts are recommending a Buy. The 12 month stock price consensus is $26.80. This is just slightly less than the current stock price of $26.95. This implies that the total return over the next 12 months will all be from dividends.
A recommendation of a Buy and little total return over the next 12 months does not really match up. The high stock price given for the next 12 months is $31 which would suggest a total return of $19.48% with 15.03% from capital gains and 4.45% from dividends. The low 12 month stock price is $24.00 and this implies a loss over the next year.
There is a positive report on this sock from Utility Forecaster via MPL Communication Buy-Sell Adviser email. This report recommends paying no more than $25 a share for this company.
Some analysts like the yield and feel that this should be a core oil and gas stock holding in any portfolio. Some mention that the stock is expensive. It currently has a Price/Earnings Ratio of 46.47 based on a stock price of $26.95 and earnings for 2013 of $0.58. The Price/Graham Price Ratio at 2.25 is also very high.
The relative price moderates a bit looking at dividend yield and P/B Ratios, but does not moderate that much. The current dividend yield is 4.45% is 18% lower than the 5 year median 5.43%. The 10 year Price/Book Value per Share Ratio is 2.21 and the current P/B Ratio at 2.25 is 11% higher.
However, if you look at Price/Cash Flow per Share I get a 5 year median P/CF Ratio of 8.25 and a current P/CF Ratio of 11.67. The current one is based on the current stock price of $26.95 and a 2013 CFPS of $2.13. The current ratio is 42% higher than the 5 year median ratio. The stock price, no matter how you look at it is rather pricey.
So, it would appear that this is a good solid company. However, again, no matter how I look at the stock price, the stock price is relatively high.
ARC Resources Ltd. is one of Canada's leading conventional oil and gas companies. Its focus is on acquiring and developing long-life oil and gas properties across western Canada. Its web site is here ARC. See my spreadsheet at arx.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 or StockTwits.
This is an oil and gas company. These sorts of companies, if they paid good dividends, tend to have fluctuating dividends. Over time you can make good dividends, but you have to be prepared for fluctuations. Current the dividend yield is 4.45% and the 5 year median dividend yield is 5.43%.
This company has always paid out more in dividends or distributions than its earnings. The 5 year median Dividend Payout Ratio for earnings is 121%. However, the DPR for cash flow is much better at 52%. There are some 15 analysts following this stock and the consensus is an expected decrease in dividend by 7.4% to $1.11 this year.
The Liquidity Ratio has always been quite low and the current one is 1.08. However, this company does have strong cash flows. The Debt Ratio has always been good and the current one is 2.52. The current Leverage and Debt/Equity Ratios are good at 1.66 and 0.66.
The outstanding shares have increased by 8% and 9.6% per year over the past 5 and 10 years. The shares have increased due to stock options and the issuance of shares. Shares issues have been used for capital expenditures and acquisitions. When looking at growth, the 10 year growth figures are better than the 5 year figures.
The 10 year growth figures are in the 2% to 3% range, and the 5 year figures are negative. For example, the 5 year growth in Revenue per Share is a negative 4.8% per year. The 10 year growth in Revenue per Share is 2.6% per year.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy and most analysts are recommending a Buy. The 12 month stock price consensus is $26.80. This is just slightly less than the current stock price of $26.95. This implies that the total return over the next 12 months will all be from dividends.
A recommendation of a Buy and little total return over the next 12 months does not really match up. The high stock price given for the next 12 months is $31 which would suggest a total return of $19.48% with 15.03% from capital gains and 4.45% from dividends. The low 12 month stock price is $24.00 and this implies a loss over the next year.
There is a positive report on this sock from Utility Forecaster via MPL Communication Buy-Sell Adviser email. This report recommends paying no more than $25 a share for this company.
Some analysts like the yield and feel that this should be a core oil and gas stock holding in any portfolio. Some mention that the stock is expensive. It currently has a Price/Earnings Ratio of 46.47 based on a stock price of $26.95 and earnings for 2013 of $0.58. The Price/Graham Price Ratio at 2.25 is also very high.
The relative price moderates a bit looking at dividend yield and P/B Ratios, but does not moderate that much. The current dividend yield is 4.45% is 18% lower than the 5 year median 5.43%. The 10 year Price/Book Value per Share Ratio is 2.21 and the current P/B Ratio at 2.25 is 11% higher.
However, if you look at Price/Cash Flow per Share I get a 5 year median P/CF Ratio of 8.25 and a current P/CF Ratio of 11.67. The current one is based on the current stock price of $26.95 and a 2013 CFPS of $2.13. The current ratio is 42% higher than the 5 year median ratio. The stock price, no matter how you look at it is rather pricey.
So, it would appear that this is a good solid company. However, again, no matter how I look at the stock price, the stock price is relatively high.
ARC Resources Ltd. is one of Canada's leading conventional oil and gas companies. Its focus is on acquiring and developing long-life oil and gas properties across western Canada. Its web site is here ARC. See my spreadsheet at arx.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 or StockTwits.
Thursday, March 14, 2013
Russel Metals Inc 2
I own this stock of Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
When I look at insider trading, I find insider buying at $2M and insider selling at $3.1M with net insider selling at $1.1M. Some options were kept and some were sold. There is also buying under the company plan. Nothing of this tells us anything. There are options and options like vehicles call Rights Deferred Share Units and Rights Restricted Share Units.
The CEO has shares worth $2.9M and has options are worth $18M. The CFO has shares worth $2.5M and has options worth $9.3M. An officer has some shares and has options worth $0.6M. A director has shares worth $0.5M and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values. A number of insiders also hold Convertible Debentures.
The 5 year low, median and high median Price/Earnings Ratios are 10.22, 12.30 and 14.38. The current P/E Ratio would be12.71 based on a stock price of $28.22 and 2013 earnings of $2.22. I get a Graham Price of $25.75. The 10 year low, median and high Price/Graham Price Ratios are 0.62, 0.82 and 1.07. The current P/GP Ratio would be 1.10.
I get a 10 year Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 2.13 a value some 22% higher. A potential problem with the PB Ratio is that the Book Value has been declining over the past 5 years. The current dividend yield is 4.96% and the 5 year median is 5.24%. The current yield is some 5% lower than the 5 year median yield.
Well, none of the tests says the stock is cheap. Mostly we see that the stock is a bit higher than the median, which would suggest it is reasonable. Other tests show the price is bit higher than the median high, relatively speaking. So the price is on the high side, but it is not unreasonable.
One analysts thought that the current EPS consensus was too high because most analysts are too optimistic about the companies Energy Products segment. They also thought the current stock price was too high. (The implications of a too high of EPS consensus is that, if the earnings are lower, then we would expect the P/E Ratio would go higher.)
When I look at the analysts' recommendations I find only Buy and Hold. The consensus recommendation would be a Buy (but it is getting close to a Hold). The consensus 12 months stock price is $31.20. This implies a total return of 15.52% with 4.96% from dividends and 10.56% from capital gains.
This company is well thought of. Everyone seems to feel that the current dividend is safe. One analyst suggested that investors should wait for a pull-back in stock price before buying. Most think that the price is a bit too high.
The blogger, the Happy Capitalism commented on this stock late last year. One interesting comment he made is that the stock price has been helped by the quarterly dividend increases in 2011 and 2012. I must admit that I have found that over time, the capital gain on dividend stocks is greatly affected by the dividend increases.
The Jags Report comments on several recent analysts rating modifications on this stock. Mostly analysts are raising the 12 months stock price.
I will continue to hold the stock I have. When I have more money to invest, I might buy more as I do not have that much of this stock. It would seem that the price is relatively high, but then the TSX is relatively high at the moment. I expect it to do well in the long term.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 or StockTwits.
When I look at insider trading, I find insider buying at $2M and insider selling at $3.1M with net insider selling at $1.1M. Some options were kept and some were sold. There is also buying under the company plan. Nothing of this tells us anything. There are options and options like vehicles call Rights Deferred Share Units and Rights Restricted Share Units.
The CEO has shares worth $2.9M and has options are worth $18M. The CFO has shares worth $2.5M and has options worth $9.3M. An officer has some shares and has options worth $0.6M. A director has shares worth $0.5M and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values. A number of insiders also hold Convertible Debentures.
The 5 year low, median and high median Price/Earnings Ratios are 10.22, 12.30 and 14.38. The current P/E Ratio would be12.71 based on a stock price of $28.22 and 2013 earnings of $2.22. I get a Graham Price of $25.75. The 10 year low, median and high Price/Graham Price Ratios are 0.62, 0.82 and 1.07. The current P/GP Ratio would be 1.10.
I get a 10 year Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 2.13 a value some 22% higher. A potential problem with the PB Ratio is that the Book Value has been declining over the past 5 years. The current dividend yield is 4.96% and the 5 year median is 5.24%. The current yield is some 5% lower than the 5 year median yield.
Well, none of the tests says the stock is cheap. Mostly we see that the stock is a bit higher than the median, which would suggest it is reasonable. Other tests show the price is bit higher than the median high, relatively speaking. So the price is on the high side, but it is not unreasonable.
One analysts thought that the current EPS consensus was too high because most analysts are too optimistic about the companies Energy Products segment. They also thought the current stock price was too high. (The implications of a too high of EPS consensus is that, if the earnings are lower, then we would expect the P/E Ratio would go higher.)
When I look at the analysts' recommendations I find only Buy and Hold. The consensus recommendation would be a Buy (but it is getting close to a Hold). The consensus 12 months stock price is $31.20. This implies a total return of 15.52% with 4.96% from dividends and 10.56% from capital gains.
This company is well thought of. Everyone seems to feel that the current dividend is safe. One analyst suggested that investors should wait for a pull-back in stock price before buying. Most think that the price is a bit too high.
The blogger, the Happy Capitalism commented on this stock late last year. One interesting comment he made is that the stock price has been helped by the quarterly dividend increases in 2011 and 2012. I must admit that I have found that over time, the capital gain on dividend stocks is greatly affected by the dividend increases.
The Jags Report comments on several recent analysts rating modifications on this stock. Mostly analysts are raising the 12 months stock price.
I will continue to hold the stock I have. When I have more money to invest, I might buy more as I do not have that much of this stock. It would seem that the price is relatively high, but then the TSX is relatively high at the moment. I expect it to do well in the long term.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 or StockTwits.
Wednesday, March 13, 2013
Russel Metals Inc
On my other blog I am today writing about comprehensive income...continue...
I own this stock of Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
If you look at the 5 and 10 year total return on this stock they are at 6.50% and 29.69% per year. The dividend portion of this total return was 4.89% and 11.30% per year with the capital gain portion at 1.61% and 18.38% per year.
If you look at the growth in dividends there is none over the past 5 year and the negative growth is at 5%. However, over the past 10 years, dividends have grown at 21%. The reason is that they just started dividends in 2000 and they moved up rapidly until 2008. However, the recent recession has hit this stock hard and dividends were cut by 45%.
However, dividends have been growing since 2011. The latest dividend increase was in 2012 and it was an 18% increase. The dividend yield is good at a current 5.1% and a 5 year median at 5.2%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 60% and cash flow at 47%. Russel Metals sees their target dividend payout ratio as 80% of earnings over a business cycle.
Over the past 5 years outstanding shares have declined by 1% per year and over the past 10 years have increased by 4.7% per year. Outstanding shares have decreased due to share buyback. Shares have increased due to stock options and the conversion of convertible debentures to shares.
The revenues of the company have grown at the rate of 3.2% and 7.9% per year over the past 5 and 10 years. Revenue per Share has grown at the rate of 4.2% and 3.1% per year over the past 5 and 10 years.
The Earnings per Share has declined over the past 5 years at 1.4% per year and has grown over the past 10 years at 9.2% per year. There is wide disagreement over EPS for 2013 and 2014, but all analysts expect earnings to climb well over the next while.
Cash Flow per Share did not grow over the past 5 years, but grew at the rate of 4.2% per year over the past 10 years. The financial year ending in 2012 was not a great year for this company, but analysts also expect CFPS to grow over the next two years.
The Return on Equity for this company was 12.4% for the financial year ending in 2012. The 5 year median ROE is also 12.4%. The ROE on comprehensive income is also good, but a little lower for 2012 at 10.7% with a 5 year median also at 10.7%.
The debt ratios have been good on this company, with the 2012 Liquidity Ratio at 3.27 and the Debt Ratio at 1.86. The Leverage and Debt/Equity Ratios are a little higher than normal at 2.25 and 1.21. The 5 year median Leverage and Debt/Equity Ratios are 1.91 and 0.87.
My Accrual Ratio at 18.72% is high and might suggest that the quality of the earnings or cash flow is not as good as they could be. However, the difference between the ROE on Net Income and Comprehensive income is not that great at 13%. A difference between the ROE on Net Income and Comprehensive income also questions the quality of earnings. The EPS/CF Ratio is 0.74 and is below 1.00 and this is good. A high Accrual Ratio is just a warning.
I still expect to do well in this stock over the long term. It is an Industrial stock, so it will have more volatility over the business cycle, than say utility stocks. Because of volatility it is also riskier.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 or StockTwits.
I own this stock of Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
If you look at the 5 and 10 year total return on this stock they are at 6.50% and 29.69% per year. The dividend portion of this total return was 4.89% and 11.30% per year with the capital gain portion at 1.61% and 18.38% per year.
If you look at the growth in dividends there is none over the past 5 year and the negative growth is at 5%. However, over the past 10 years, dividends have grown at 21%. The reason is that they just started dividends in 2000 and they moved up rapidly until 2008. However, the recent recession has hit this stock hard and dividends were cut by 45%.
However, dividends have been growing since 2011. The latest dividend increase was in 2012 and it was an 18% increase. The dividend yield is good at a current 5.1% and a 5 year median at 5.2%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 60% and cash flow at 47%. Russel Metals sees their target dividend payout ratio as 80% of earnings over a business cycle.
Over the past 5 years outstanding shares have declined by 1% per year and over the past 10 years have increased by 4.7% per year. Outstanding shares have decreased due to share buyback. Shares have increased due to stock options and the conversion of convertible debentures to shares.
The revenues of the company have grown at the rate of 3.2% and 7.9% per year over the past 5 and 10 years. Revenue per Share has grown at the rate of 4.2% and 3.1% per year over the past 5 and 10 years.
The Earnings per Share has declined over the past 5 years at 1.4% per year and has grown over the past 10 years at 9.2% per year. There is wide disagreement over EPS for 2013 and 2014, but all analysts expect earnings to climb well over the next while.
Cash Flow per Share did not grow over the past 5 years, but grew at the rate of 4.2% per year over the past 10 years. The financial year ending in 2012 was not a great year for this company, but analysts also expect CFPS to grow over the next two years.
The Return on Equity for this company was 12.4% for the financial year ending in 2012. The 5 year median ROE is also 12.4%. The ROE on comprehensive income is also good, but a little lower for 2012 at 10.7% with a 5 year median also at 10.7%.
The debt ratios have been good on this company, with the 2012 Liquidity Ratio at 3.27 and the Debt Ratio at 1.86. The Leverage and Debt/Equity Ratios are a little higher than normal at 2.25 and 1.21. The 5 year median Leverage and Debt/Equity Ratios are 1.91 and 0.87.
My Accrual Ratio at 18.72% is high and might suggest that the quality of the earnings or cash flow is not as good as they could be. However, the difference between the ROE on Net Income and Comprehensive income is not that great at 13%. A difference between the ROE on Net Income and Comprehensive income also questions the quality of earnings. The EPS/CF Ratio is 0.74 and is below 1.00 and this is good. A high Accrual Ratio is just a warning.
I still expect to do well in this stock over the long term. It is an Industrial stock, so it will have more volatility over the business cycle, than say utility stocks. Because of volatility it is also riskier.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 or StockTwits.
Tuesday, March 12, 2013
RioCan Real Estate 2
I own this stock of RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
When I look at the insider trading report, I find $0.6M of insider buying and $12M of insider selling for net insider selling of $11.4M. There seems to be buying under the company plan and the selling seems to be of options. Insiders seem to have lots of options, especial the CEO, CFO and officers. The CEO, CFO and officers have options, but directors have Restricted Equity Units.
The CEO has shares worth $9.6Mand has options are worth $87.7M. The CFO has shares worth $1.8M and has options worth $12.4M. An officer has $0.9M and has options worth $11.1M. A director has some shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
When trying to judge the stock price, the Price/Earnings look very low at 9.44 when the 5 year low median is at 14.53, but earnings have climbed with the new accounting rules. This P/E Ratio of 9.44 is based on a stock price of $27.56 and 2013 earnings of $2.92. The interesting thing about earnings is that all analysts seem to expect earnings to drop significantly over the next while.
The Price/Book Value Ratio share has a similar problem as the P/E Ratio as the Book Value climbed with the new account rules. Over the past two years, the Price/Graham Price Ratios have also been quite low. However, the Graham price uses the earnings and book value in its formula.
The dividend yield seems to be a good measure to use. The current dividend yield at 5.12% is some 24% lower than the 5 year dividend yield at 6.73%. This suggests that the stock price is rather on the high side.
The 5 year low, median and high median Price/Cash Flow per Share Ratios are 13.12, 15.19 and 18.22. The current P/CF Ratio is 16.91. This suggests that while the stock price is in the reasonable zone, it is a bit high.
Perhaps another good test is the Price/Adjusted Funds from Operations ratio. The P/AFFO Ratios is currently at 16.96 based on a stock price of $27.56 and AFFO for 2013 of $1.40. The 5 year low, median and high median P/AFFO Ratios are 12.23, 14.15 and 16.54. Since the current P/AFFO Ratio is higher than the 5 year median high P/AFFO Ratios, it suggests that the stock price is on the high side.
While from all this I can say that the stock price is definitely not cheap. It would seem to be on the high side, but it is not unreasonably high. I recently bought some RioCan at a similar price. However, I sold a stock to buy the RioCan stocks, so relatively speaking I sold a stock at a high price and bought RioCan at a relatively high price.
When I look at analysts' recommendations, I find just Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price consensus is $30.00. This implies 12 months total return of 13.97%, with 5.12% from dividends and 8.85% from capital gains.
There is a Financial Post article about RioCan REIT trimming its Canadian portfolio.
An analyst that thinks this stock is a buy quoted the good dividend yield of $5.2% and that fact that this company has been successful in expanding into the US. Others think that it is a high quality REIT and that it will benefit when Target moves into Canada. See an articles in Globe & Mail and Financial Post that talks about RioCan and Target stores.
The Dividend Girl has recently invested in this stock for her TFSA. Finally, the Jags Report talks about recently rating changes by CIBC and Scotia Bank on this stock. There is also some discussion on this stock at Canadian Money Form.
Personally I think that this is a good company and a well-run REIT. However, at the moment, I think that the stock price is reasonable (but on the high side) to a bit too pricey. However, if you look at the seasonality of this stock, March and April are not great months for capital appreciation, the summer is good and price seems to drop-off in October. See chart at Equity Clock site.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
When I look at the insider trading report, I find $0.6M of insider buying and $12M of insider selling for net insider selling of $11.4M. There seems to be buying under the company plan and the selling seems to be of options. Insiders seem to have lots of options, especial the CEO, CFO and officers. The CEO, CFO and officers have options, but directors have Restricted Equity Units.
The CEO has shares worth $9.6Mand has options are worth $87.7M. The CFO has shares worth $1.8M and has options worth $12.4M. An officer has $0.9M and has options worth $11.1M. A director has some shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
When trying to judge the stock price, the Price/Earnings look very low at 9.44 when the 5 year low median is at 14.53, but earnings have climbed with the new accounting rules. This P/E Ratio of 9.44 is based on a stock price of $27.56 and 2013 earnings of $2.92. The interesting thing about earnings is that all analysts seem to expect earnings to drop significantly over the next while.
The Price/Book Value Ratio share has a similar problem as the P/E Ratio as the Book Value climbed with the new account rules. Over the past two years, the Price/Graham Price Ratios have also been quite low. However, the Graham price uses the earnings and book value in its formula.
The dividend yield seems to be a good measure to use. The current dividend yield at 5.12% is some 24% lower than the 5 year dividend yield at 6.73%. This suggests that the stock price is rather on the high side.
The 5 year low, median and high median Price/Cash Flow per Share Ratios are 13.12, 15.19 and 18.22. The current P/CF Ratio is 16.91. This suggests that while the stock price is in the reasonable zone, it is a bit high.
Perhaps another good test is the Price/Adjusted Funds from Operations ratio. The P/AFFO Ratios is currently at 16.96 based on a stock price of $27.56 and AFFO for 2013 of $1.40. The 5 year low, median and high median P/AFFO Ratios are 12.23, 14.15 and 16.54. Since the current P/AFFO Ratio is higher than the 5 year median high P/AFFO Ratios, it suggests that the stock price is on the high side.
While from all this I can say that the stock price is definitely not cheap. It would seem to be on the high side, but it is not unreasonably high. I recently bought some RioCan at a similar price. However, I sold a stock to buy the RioCan stocks, so relatively speaking I sold a stock at a high price and bought RioCan at a relatively high price.
When I look at analysts' recommendations, I find just Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price consensus is $30.00. This implies 12 months total return of 13.97%, with 5.12% from dividends and 8.85% from capital gains.
There is a Financial Post article about RioCan REIT trimming its Canadian portfolio.
An analyst that thinks this stock is a buy quoted the good dividend yield of $5.2% and that fact that this company has been successful in expanding into the US. Others think that it is a high quality REIT and that it will benefit when Target moves into Canada. See an articles in Globe & Mail and Financial Post that talks about RioCan and Target stores.
The Dividend Girl has recently invested in this stock for her TFSA. Finally, the Jags Report talks about recently rating changes by CIBC and Scotia Bank on this stock. There is also some discussion on this stock at Canadian Money Form.
Personally I think that this is a good company and a well-run REIT. However, at the moment, I think that the stock price is reasonable (but on the high side) to a bit too pricey. However, if you look at the seasonality of this stock, March and April are not great months for capital appreciation, the summer is good and price seems to drop-off in October. See chart at Equity Clock site.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, March 11, 2013
RioCan Real Estate
On my other blog I am today writing about boards having women directors...continue...
I own this stock of RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
Over the past 5 and 10 years, investors in this stock have made returns of 10.58% per year and 15.98% per year. Over these periods the capital gain portion was 4.78% per year and 8.25% per year, respectively. Also over these periods the distribution portion was 5.80% per year and 7.73% per year, respectively.
The dividend growth for this stock used to keep up with inflation. However, lately this has not been true. Inflation over the past 5 and 10 years has been running around 1.8% per year. However, the 5 year growth in distributions is just 1.2% per year. The 10 year growth in dividends is better at 2.5%. For inflation information, see Bank of Canada's website.
The reason for the low growth in dividends is that the company only increased dividends by 1.5% in 2009 and then did no increases in 2010 and 2011. In 2012 they again raised the dividend and this raise was better at 2.2%. It has been a tough economy and lots of companies have had problems. There was good reason to not increase dividends in 2010 and 2011 because the company could not cover the dividends with cash flow. I personally rather a company does this than pay dividends it cannot afford to pay.
The 5 year median Dividend Payout Ratio for cash flow was 102%. The one for 2012 was better at 93% and the DPR for cash flow is expected to be in the high 80%'s in 2013. The 5 year median DPR for Funds from Operations is 95% and from Adjusted Funds from Operations is 106%. Having the distributions higher than AFFO is not good and it is expect that the DPR from AFFO for 2013 will be around 100%.
Over the past 5 and 10 years, outstanding units have increased by 7.3% and 6.6% per year. The increase is due to Stock Options, DRIP and New Share Issued.
Revenue is up by 8.7% per year and 9.6% per year over the past 5 and 10 years. However, the Revenue per Share figures is not good because there is a big difference in the number of units outstanding over these periods. The Revenue per Share is only up 1.3% and 2.8% per year over the past 5 and 10 years. Both these growth rates are significant, but being a unitholder, the per unit values are very important.
The Earnings per Share is up a lot and it seems to be due to the change in accounting rules to IFRS. So the EPS growth is not a guide for us. The FFO and AFFO have not increased much with the FFO up by 1% per year over the past 5 years and the AFFO up 0% and 1.5% per year over the past 5 and 10 years.
The growth in Cash Flow per share has not been stellar either, with growth at just 3.4 and 2.9% per year over the past 5 and 10 years. Book Value was affected by the change in accounting rules and its growth does not tell us much.
The company had a good year in 2012, income wise. The Return on Equity for 2012 is 20.6% and the 5 year median ROE is also good at 14%. The ROE on comprehensive income was very similar with the ROE in 2012 at 20.8% and the 5 year median at 13.3%.
It is not good that the EPS/CF Ratio for 2011 and 2012 are above 1.00 at 2.64 and 3.02. Generally speaking, when the CFPS is lower than EPS is it not good for companies over the longer term. However, the EPS were significantly increased due to IFRS accounting rules, so it hard to say how this will all play out. It its unknown what the long term effects of the new IFRS rules will be.
As far a debt ratios goes, the current Liquidity Ratio is fine, especially since the company has a strong cash flow. The current Debt Ratio is very good at 2.13. Both the current Leverage and Debt/Equity Ratios are good at 1.97 and 0.92.
I would certainly like to see better growth for this stock, but we are in rather tough economic times and it is hard to say when we will hit better times. The current cyclical bull market perhaps says better times are coming, but we will not be home free until the Western world does something about the huge debts that our governments have run up. It will take some time to work off these debts.
The Canadian Federal government under Chretien handled the debt well where they backed off spending, but did it slowly so as not to overwhelm the economy. With some countries, like Greece, the sooner they default on debt they really cannot pay back, the better it will be for everyone. It is not as if this is a new concept. In fact, there are few countries that have never defaulted on their debt. Most have defaulted at some time and a lot of countries have defaulted a number of times in the past.
This is a good stock to buy for diversification. I like that it is in the retail properties. When I look at REITs, I prefer ones in retail and commercial properties. The characteristics of a REIT are a good dividend yield with slightly higher dividend growth than inflation. I would be satisfied with a REIT with 4% dividend yield and 4% capital gain per year over the long term. This one has done better than that for me and I have been pleased with it.
And, by the way, two of the eight directors of this company are women to give a 25% women board member representation.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I own this stock of RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
Over the past 5 and 10 years, investors in this stock have made returns of 10.58% per year and 15.98% per year. Over these periods the capital gain portion was 4.78% per year and 8.25% per year, respectively. Also over these periods the distribution portion was 5.80% per year and 7.73% per year, respectively.
The dividend growth for this stock used to keep up with inflation. However, lately this has not been true. Inflation over the past 5 and 10 years has been running around 1.8% per year. However, the 5 year growth in distributions is just 1.2% per year. The 10 year growth in dividends is better at 2.5%. For inflation information, see Bank of Canada's website.
The reason for the low growth in dividends is that the company only increased dividends by 1.5% in 2009 and then did no increases in 2010 and 2011. In 2012 they again raised the dividend and this raise was better at 2.2%. It has been a tough economy and lots of companies have had problems. There was good reason to not increase dividends in 2010 and 2011 because the company could not cover the dividends with cash flow. I personally rather a company does this than pay dividends it cannot afford to pay.
The 5 year median Dividend Payout Ratio for cash flow was 102%. The one for 2012 was better at 93% and the DPR for cash flow is expected to be in the high 80%'s in 2013. The 5 year median DPR for Funds from Operations is 95% and from Adjusted Funds from Operations is 106%. Having the distributions higher than AFFO is not good and it is expect that the DPR from AFFO for 2013 will be around 100%.
Over the past 5 and 10 years, outstanding units have increased by 7.3% and 6.6% per year. The increase is due to Stock Options, DRIP and New Share Issued.
Revenue is up by 8.7% per year and 9.6% per year over the past 5 and 10 years. However, the Revenue per Share figures is not good because there is a big difference in the number of units outstanding over these periods. The Revenue per Share is only up 1.3% and 2.8% per year over the past 5 and 10 years. Both these growth rates are significant, but being a unitholder, the per unit values are very important.
The Earnings per Share is up a lot and it seems to be due to the change in accounting rules to IFRS. So the EPS growth is not a guide for us. The FFO and AFFO have not increased much with the FFO up by 1% per year over the past 5 years and the AFFO up 0% and 1.5% per year over the past 5 and 10 years.
The growth in Cash Flow per share has not been stellar either, with growth at just 3.4 and 2.9% per year over the past 5 and 10 years. Book Value was affected by the change in accounting rules and its growth does not tell us much.
The company had a good year in 2012, income wise. The Return on Equity for 2012 is 20.6% and the 5 year median ROE is also good at 14%. The ROE on comprehensive income was very similar with the ROE in 2012 at 20.8% and the 5 year median at 13.3%.
It is not good that the EPS/CF Ratio for 2011 and 2012 are above 1.00 at 2.64 and 3.02. Generally speaking, when the CFPS is lower than EPS is it not good for companies over the longer term. However, the EPS were significantly increased due to IFRS accounting rules, so it hard to say how this will all play out. It its unknown what the long term effects of the new IFRS rules will be.
As far a debt ratios goes, the current Liquidity Ratio is fine, especially since the company has a strong cash flow. The current Debt Ratio is very good at 2.13. Both the current Leverage and Debt/Equity Ratios are good at 1.97 and 0.92.
I would certainly like to see better growth for this stock, but we are in rather tough economic times and it is hard to say when we will hit better times. The current cyclical bull market perhaps says better times are coming, but we will not be home free until the Western world does something about the huge debts that our governments have run up. It will take some time to work off these debts.
The Canadian Federal government under Chretien handled the debt well where they backed off spending, but did it slowly so as not to overwhelm the economy. With some countries, like Greece, the sooner they default on debt they really cannot pay back, the better it will be for everyone. It is not as if this is a new concept. In fact, there are few countries that have never defaulted on their debt. Most have defaulted at some time and a lot of countries have defaulted a number of times in the past.
This is a good stock to buy for diversification. I like that it is in the retail properties. When I look at REITs, I prefer ones in retail and commercial properties. The characteristics of a REIT are a good dividend yield with slightly higher dividend growth than inflation. I would be satisfied with a REIT with 4% dividend yield and 4% capital gain per year over the long term. This one has done better than that for me and I have been pleased with it.
And, by the way, two of the eight directors of this company are women to give a 25% women board member representation.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Friday, March 8, 2013
Manitoba Telecom Services Inc 2
I own this stock of Manitoba Telecom Services Inc. (TSX:-MBT, OTC-MOBAF). I first bought this stock in 2006. I sold some in 2010 and on these shares I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock that I bought in 2006 and still have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
When I look at the insider trading report, I find no insider selling and no insider buying. It would appear that insiders are holding on to the shares they are getting via their stock options. This is a positive. Not only do insiders have stock options, they also have stock option like vehicles called Rights Performance Share Units, Rights Restricted Share Units and Rights Director Compensation Units.
The CEO has shares worth $4.5M and has options are worth $49.7M. The CFO has shares worth $0.4M and has options worth $9.7M. An officer has some shares and has options worth $1M. A director has some shares and has options worth $0.2. This is just to give you an idea on insider share ownership and option values.
I get low, median and high median Price/Earnings Ratios of 14.33, 16.91 and 19.48. The current P/E is 15.24 based on 2013 earnings of 2.13 and a stock price of $32.46. This test shows that this stock is at a very reasonable price.
I get a Graham Price of $24.06. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.17 and 1.32. The current P/GP Ratio is 1.35. I get a 10 year Price/Book Value per Share Ratio of 2.09. The current P/B Ratio is 2.69, a value some 29% higher. Both these tests show that the stock is rather high. The BV has been falling lately and this would affect both these tests.
Since the dividend was cut within the last few years, a dividend yield test is probably not so helpful. However, there are other things to look at. One is the Price/Cash Flow per Share Ratio. The 5 year median P/CF Ratio is 4.96. We can also look at the Price/Sales per Share Ratio. For the P/S Ratio the 5 year median is 1.22 and the 5 year high median is 1.34. The current P/S Ratio is 1.30.
As with most ratios, for the P/CF Ratio and the P/S Ratio, lower is better. The P/CF shows that the stock price is reasonable. The P/S Ratio shows also a reasonable, but a bit high. After all this, the current price is probably reasonable, but there are some tests that show that the price is a bit too high.
When I look at the analysts' recommendations, I find that they are all over the place. I find Buy, Hold, Underperform and Sell recommendations. However, most of the recommendations are in the Hold category and this give a consensus recommendation of Hold. The consensus 12 month stock price is $33.10. This is a price very close to the current only, so not much in capital appreciation is expected this year.
In Canada, I understand that we have some of the highest prices for telecom services in the world and this company cannot do well. Is this complacency? Is it poor business planning? I must say that I am rather underwhelmed. I am only holding on to it because the dividend seems safe and yield is good. I will get rid of it once I find a good replacement stock.
I do not see this stock as a good long term investment and my preference is for stocks that make a good long term investment. However, it is interesting that the over the past year insiders are holding on to stock acquired through options.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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 or StockTwits.
When I look at the insider trading report, I find no insider selling and no insider buying. It would appear that insiders are holding on to the shares they are getting via their stock options. This is a positive. Not only do insiders have stock options, they also have stock option like vehicles called Rights Performance Share Units, Rights Restricted Share Units and Rights Director Compensation Units.
The CEO has shares worth $4.5M and has options are worth $49.7M. The CFO has shares worth $0.4M and has options worth $9.7M. An officer has some shares and has options worth $1M. A director has some shares and has options worth $0.2. This is just to give you an idea on insider share ownership and option values.
I get low, median and high median Price/Earnings Ratios of 14.33, 16.91 and 19.48. The current P/E is 15.24 based on 2013 earnings of 2.13 and a stock price of $32.46. This test shows that this stock is at a very reasonable price.
I get a Graham Price of $24.06. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.17 and 1.32. The current P/GP Ratio is 1.35. I get a 10 year Price/Book Value per Share Ratio of 2.09. The current P/B Ratio is 2.69, a value some 29% higher. Both these tests show that the stock is rather high. The BV has been falling lately and this would affect both these tests.
Since the dividend was cut within the last few years, a dividend yield test is probably not so helpful. However, there are other things to look at. One is the Price/Cash Flow per Share Ratio. The 5 year median P/CF Ratio is 4.96. We can also look at the Price/Sales per Share Ratio. For the P/S Ratio the 5 year median is 1.22 and the 5 year high median is 1.34. The current P/S Ratio is 1.30.
As with most ratios, for the P/CF Ratio and the P/S Ratio, lower is better. The P/CF shows that the stock price is reasonable. The P/S Ratio shows also a reasonable, but a bit high. After all this, the current price is probably reasonable, but there are some tests that show that the price is a bit too high.
When I look at the analysts' recommendations, I find that they are all over the place. I find Buy, Hold, Underperform and Sell recommendations. However, most of the recommendations are in the Hold category and this give a consensus recommendation of Hold. The consensus 12 month stock price is $33.10. This is a price very close to the current only, so not much in capital appreciation is expected this year.
In Canada, I understand that we have some of the highest prices for telecom services in the world and this company cannot do well. Is this complacency? Is it poor business planning? I must say that I am rather underwhelmed. I am only holding on to it because the dividend seems safe and yield is good. I will get rid of it once I find a good replacement stock.
I do not see this stock as a good long term investment and my preference is for stocks that make a good long term investment. However, it is interesting that the over the past year insiders are holding on to stock acquired through options.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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 or StockTwits.
Thursday, March 7, 2013
Manitoba Telecom Services Inc
I own this stock of Manitoba Telecom Services Inc. (TSX:-MBT, OTC- MOBAF), but I probably should not. I first bought this stock in 2006 on the recommendation of TD Waterhouse. The best I can say about this stock is that it is not the worse purchase I have made. Originally, I bought a fair bit of this stock, but I have sold some but still have some left.
What I bought in 2006 and sold in 2010, I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock I have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
In 2010, this company cut its dividends by 35%. If you look at dividend growth over the past 5 and 10 years, the 10 year growth is at 7.6% per year. Over the past 5 years dividends have declined by 8% per year. The current dividend is high at 5.2%. The 5 year dividend yield is 6.9%.
The dividend was cut because earnings fell. Since the dividend cut, dividends have remained the same. It does not look like their dividend policy is going to change any time soon. The Dividend Payout Ratio for earnings for 2013 and 2014 is expected to be around 80%. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 1.27% with a capital loss of 6.72% per year and dividend at 5.45% per year. The total return over the past 10 years is 5.15%, with a capital loss of 1.03% per year and dividends at 6.18% per year.
The outstanding shares have increased less than 1% per year over the past 5 and 10 years. They have increased due to DRIP and stock options and have decreased due to buy backs. When looking at growth, the growth for the last 10 years is better than that for the last 5 years.
Revenue per share is down 3% per year over the past 5 years and up by 5.5% per year over the past 10 years. Earnings per share over the past 5 and 10 years are flat. However, if you look at 5 year running averages, EPS is down by 7.7% per year over the past 5 years and up by 3% per year over the past 10 years.
Cash Flow per Share is down by 4.7% per year over the past 5 years and is up by 4.3% per year over the past 10 years. Book Value per share has been going down over the past 5 and 10 years. There was a decline in book value because of the change to the IFRS accounting rules. However, book value was going down even without the change in accounting rules.
The Return on Equity for the financial year of 2012 looks very good at 21.7%. However, the ROE on comprehensive income is a lot less at 12.2%. (That is a 44% difference and may suggest that the quality of the earnings is not good.)
The Liquidity Ratio is very low at 0.47. (When this is below 1.00 it means that current assets cannot cover current liabilities.) If you can consider cash flow after dividends, this moves up at 1.17. This is an ok ratio, but it is better if it were at 1.50 or higher. The Debt Ratio at 1.42 is a bit low also and would be better if it was at 1.50 or higher. The Leverage and Debt/Equity Ratios are a bit high at 3.38 and 2.38.
Eventually, I will get rid of this stock as I have determined that is not a core investment for me. However, there is nothing I see to replace it at the moment as most utilities stocks that I like are rather pricey at this point. TD Waterhouse still has a buy on this stock. I do not think that anything startling is going to happen to this stock, so it is safe for the next while.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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 or StockTwits.
What I bought in 2006 and sold in 2010, I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock I have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
In 2010, this company cut its dividends by 35%. If you look at dividend growth over the past 5 and 10 years, the 10 year growth is at 7.6% per year. Over the past 5 years dividends have declined by 8% per year. The current dividend is high at 5.2%. The 5 year dividend yield is 6.9%.
The dividend was cut because earnings fell. Since the dividend cut, dividends have remained the same. It does not look like their dividend policy is going to change any time soon. The Dividend Payout Ratio for earnings for 2013 and 2014 is expected to be around 80%. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 1.27% with a capital loss of 6.72% per year and dividend at 5.45% per year. The total return over the past 10 years is 5.15%, with a capital loss of 1.03% per year and dividends at 6.18% per year.
The outstanding shares have increased less than 1% per year over the past 5 and 10 years. They have increased due to DRIP and stock options and have decreased due to buy backs. When looking at growth, the growth for the last 10 years is better than that for the last 5 years.
Revenue per share is down 3% per year over the past 5 years and up by 5.5% per year over the past 10 years. Earnings per share over the past 5 and 10 years are flat. However, if you look at 5 year running averages, EPS is down by 7.7% per year over the past 5 years and up by 3% per year over the past 10 years.
Cash Flow per Share is down by 4.7% per year over the past 5 years and is up by 4.3% per year over the past 10 years. Book Value per share has been going down over the past 5 and 10 years. There was a decline in book value because of the change to the IFRS accounting rules. However, book value was going down even without the change in accounting rules.
The Return on Equity for the financial year of 2012 looks very good at 21.7%. However, the ROE on comprehensive income is a lot less at 12.2%. (That is a 44% difference and may suggest that the quality of the earnings is not good.)
The Liquidity Ratio is very low at 0.47. (When this is below 1.00 it means that current assets cannot cover current liabilities.) If you can consider cash flow after dividends, this moves up at 1.17. This is an ok ratio, but it is better if it were at 1.50 or higher. The Debt Ratio at 1.42 is a bit low also and would be better if it was at 1.50 or higher. The Leverage and Debt/Equity Ratios are a bit high at 3.38 and 2.38.
Eventually, I will get rid of this stock as I have determined that is not a core investment for me. However, there is nothing I see to replace it at the moment as most utilities stocks that I like are rather pricey at this point. TD Waterhouse still has a buy on this stock. I do not think that anything startling is going to happen to this stock, so it is safe for the next while.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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 or StockTwits.
Wednesday, March 6, 2013
Emera Inc 2
On my other blog I am today writing about the pain and pleasure in trading stocks...continue...
I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list some time ago. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
When I look at the insider trading report, I find $11.6M of insider selling and $0.4M of insider buying. That gives a net of insider selling of $11.1M. The selling seems to involve stock options. The company not only has options, but option like vehicles like Performance Share Units (PSU) and Deferred Share Unit (DSU).
The CEO has shares worth $0.5M and has options are worth $43M. The CFO has shares worth $0.3M and has options worth $6.8M. An officer has some shares and has options worth $5M. A director has some shares and has options worth $2.8M. This is just to give you an idea on insider share ownership and option values.
I get a Graham Price of $22.46 for 2013. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.07 and 1.20. Using the current stock price of $35.72, I get a P/GP Ratio of 1.59. My spreadsheet shows a 10 year median Price/Book Value per Share of 1.79 and a current P/B Ratio of 2.82. The current P/B Ratio is some 58% higher than the 10 year median ratio. Both these tests say that the stock price is quite high.
The 5 year low, median and high median Price/Earnings Ratios are 14.14, 16.63 and 18.70. I get a current P/E 20.18 based on 2013 earnings $1.77 and stock price of $35.72. I get a current dividend yield of 3.92% and a 5 year median dividend yield of 4.25%. The current yield is some 8% higher than the 5 year dividend yield. These tests say that the stock price is on the high side, but not by very much.
Unless there is a particular reason not to use the dividend yield test, this is the test that is the best for dividend paying stocks. The stock is therefore on the high side. However, the dividend yield is still good at 3.9%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $36.90. This implies a total return of 7.22%, with 3.92% from dividends and 3.3% from capital gains. Some analysts think that the stock price will be lower in 12 months.
This is a low risk stock with a relatively good dividend yield. The company seems to have a target of growth dividends and earnings at 4 to 6% over the medium term that seems reasonable. This is a utility stock which people buy for the low risk and good dividend. In the longer term, capital gains on dividend stocks tend to equal dividend growth. So a 4% dividend and 4% capital gain is a good return for a utility stock.
A number of analysts say the same thing. That is they think that the dividend is good, the company is solid but the stock is a bit pricey. Some investors have been interested in the dividend yield because what you get from bonds is so low.
As far as bloggers go, the Dividend Girl is buying this stock. This blogger has a rather interesting approach to investing. The Happy Capitalism blogger also review this stock a while ago. And, there is an interesting article in the Financial Post late last year called "Emera's timely $175-million deal".
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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 or StockTwits.
I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list some time ago. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
When I look at the insider trading report, I find $11.6M of insider selling and $0.4M of insider buying. That gives a net of insider selling of $11.1M. The selling seems to involve stock options. The company not only has options, but option like vehicles like Performance Share Units (PSU) and Deferred Share Unit (DSU).
The CEO has shares worth $0.5M and has options are worth $43M. The CFO has shares worth $0.3M and has options worth $6.8M. An officer has some shares and has options worth $5M. A director has some shares and has options worth $2.8M. This is just to give you an idea on insider share ownership and option values.
I get a Graham Price of $22.46 for 2013. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.07 and 1.20. Using the current stock price of $35.72, I get a P/GP Ratio of 1.59. My spreadsheet shows a 10 year median Price/Book Value per Share of 1.79 and a current P/B Ratio of 2.82. The current P/B Ratio is some 58% higher than the 10 year median ratio. Both these tests say that the stock price is quite high.
The 5 year low, median and high median Price/Earnings Ratios are 14.14, 16.63 and 18.70. I get a current P/E 20.18 based on 2013 earnings $1.77 and stock price of $35.72. I get a current dividend yield of 3.92% and a 5 year median dividend yield of 4.25%. The current yield is some 8% higher than the 5 year dividend yield. These tests say that the stock price is on the high side, but not by very much.
Unless there is a particular reason not to use the dividend yield test, this is the test that is the best for dividend paying stocks. The stock is therefore on the high side. However, the dividend yield is still good at 3.9%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $36.90. This implies a total return of 7.22%, with 3.92% from dividends and 3.3% from capital gains. Some analysts think that the stock price will be lower in 12 months.
This is a low risk stock with a relatively good dividend yield. The company seems to have a target of growth dividends and earnings at 4 to 6% over the medium term that seems reasonable. This is a utility stock which people buy for the low risk and good dividend. In the longer term, capital gains on dividend stocks tend to equal dividend growth. So a 4% dividend and 4% capital gain is a good return for a utility stock.
A number of analysts say the same thing. That is they think that the dividend is good, the company is solid but the stock is a bit pricey. Some investors have been interested in the dividend yield because what you get from bonds is so low.
As far as bloggers go, the Dividend Girl is buying this stock. This blogger has a rather interesting approach to investing. The Happy Capitalism blogger also review this stock a while ago. And, there is an interesting article in the Financial Post late last year called "Emera's timely $175-million deal".
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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 or StockTwits.
Tuesday, March 5, 2013
Emera Inc
I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
If you look at total return over the past 5 and 10 years to the end of 2012, you get returns of 14.07% and 12.6% per year, respectively. Of these returns 4.39% and 4.52% per year respectively is attributable to dividends and 9.68% and 8.08% per year respectively is attributable to capital gains.
The growth in dividends over the past 5 and 10 years has been at 8.7% and 4.7% per year. The latest dividend increase at the end of 2012 was for 3.7%. The current dividend yield is 3.92%. I have held this stock for 8 years and on my original investments I am making a yield of 6.8%.
The Dividend Payout Ratios are fine, with the 5 year median DPR for earnings at 70% and the DPR for cash flow at 37%.
Over the past 5 and 10 years outstanding shares have increased by2% and 3.3% per year. The increase is due to stock options, Employees Plan, DRIP and issuance of stock. Revenue is up by 9% and 5.3% per year over the past 5 and 10 years. Revenue per Share is up by 5.5% and 3.3% per year over the past 5 and 10 years.
Earnings per Share is up by 5.9% and 7.6% per year over the past 5 and 10 years. Cash Flow per Share has not changed over the past 5 years and is up by only 2.8% per year over the past 10 years. If you look at 5 year running averages over the past 5 and 10 years, cash flow is up by 2.5% and 2% per year.
Book Value per share has really not changed over the past 5 and 10 years. Part of the reason for this is that the company changed their accounting rules from CDN GAAP to US GAAP and there was a 17% drop in book value with accounting change. The company has also issued preferred shares and there is an increase in the non-controlling interest in this company.
The Return on Equity looks good with a ROE at the end of the financial year of 2012 at 10.8% and with a 5 year median of 10.7%. However, there is a big difference between the ROE on net income and the ROE on comprehensive income. The ROE on comprehensive income is at 6. 2% for the financial year of 2012 and it has a 5 year median of 7.33%. This could mean that there could be problems with the quality of the earnings reported.
As are most utilities, this company has a heavy debt load. However, the Liquidity Ratio is low at just 0.93. (This means that the current assets cannot cover the current debt.) If you add in cash flow after dividends, you get a better ratio of 1.15. The Debt Ratio is also a bit low at 1.43, but is rather typical of this company.
The Leverage and Debt/Equity Ratios at 4.54 and 3.16 are a bit high and higher than the 10 year median ratios of 3.24 and 2.23. In other words, the debt ratios are not where I would prefer to see them and they are probably at this point a bit worse than the industry average for utilities. (See my site and my blog for further information on Debt Ratios.)
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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 or StockTwits.
If you look at total return over the past 5 and 10 years to the end of 2012, you get returns of 14.07% and 12.6% per year, respectively. Of these returns 4.39% and 4.52% per year respectively is attributable to dividends and 9.68% and 8.08% per year respectively is attributable to capital gains.
The growth in dividends over the past 5 and 10 years has been at 8.7% and 4.7% per year. The latest dividend increase at the end of 2012 was for 3.7%. The current dividend yield is 3.92%. I have held this stock for 8 years and on my original investments I am making a yield of 6.8%.
The Dividend Payout Ratios are fine, with the 5 year median DPR for earnings at 70% and the DPR for cash flow at 37%.
Over the past 5 and 10 years outstanding shares have increased by2% and 3.3% per year. The increase is due to stock options, Employees Plan, DRIP and issuance of stock. Revenue is up by 9% and 5.3% per year over the past 5 and 10 years. Revenue per Share is up by 5.5% and 3.3% per year over the past 5 and 10 years.
Earnings per Share is up by 5.9% and 7.6% per year over the past 5 and 10 years. Cash Flow per Share has not changed over the past 5 years and is up by only 2.8% per year over the past 10 years. If you look at 5 year running averages over the past 5 and 10 years, cash flow is up by 2.5% and 2% per year.
Book Value per share has really not changed over the past 5 and 10 years. Part of the reason for this is that the company changed their accounting rules from CDN GAAP to US GAAP and there was a 17% drop in book value with accounting change. The company has also issued preferred shares and there is an increase in the non-controlling interest in this company.
The Return on Equity looks good with a ROE at the end of the financial year of 2012 at 10.8% and with a 5 year median of 10.7%. However, there is a big difference between the ROE on net income and the ROE on comprehensive income. The ROE on comprehensive income is at 6. 2% for the financial year of 2012 and it has a 5 year median of 7.33%. This could mean that there could be problems with the quality of the earnings reported.
As are most utilities, this company has a heavy debt load. However, the Liquidity Ratio is low at just 0.93. (This means that the current assets cannot cover the current debt.) If you add in cash flow after dividends, you get a better ratio of 1.15. The Debt Ratio is also a bit low at 1.43, but is rather typical of this company.
The Leverage and Debt/Equity Ratios at 4.54 and 3.16 are a bit high and higher than the 10 year median ratios of 3.24 and 2.23. In other words, the debt ratios are not where I would prefer to see them and they are probably at this point a bit worse than the industry average for utilities. (See my site and my blog for further information on Debt Ratios.)
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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 or StockTwits.
Monday, March 4, 2013
Bombardier Inc
On my other blog I am today writing about the Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)...continue...
I own this stock of Bombardier Inc. (TSX-BBD.B, OTC-BDRAF). I bought this company in 1987. One of my problems is that I comparatively paid very little for this stock and if I sold almost all I get would be taxed as capital gain. This is one reason why I have not sold it. Another reason is that I have felt it will recover. When it will recover is a big question. You got to wonder how well it can do in the near term in light of our current economic situation.
If I look at my return since 1987, I have made a total return of 12.64% per year with 8.06% from capital gains and 4.58% from dividends. Over the past 5 years my total return is a negative 1.5% per year and over the past 10 years my return is a negative 0.7% per year. I do not think that anyone has made money on this stock recently. This is certainly true if you bought this stock as a long term investment.
This stock reports in US$. It has done better in US$ terms than in CDN$ terms. However, it has not done well in growing revenue or cash flow. They have done much better in growing earnings. Also, comparing 5 year running averages over the past 5 years, it has also done better than just comparing values 5 and 10 years ago to current values.
The Return on Equity looks ridiculously high because of the high debt load this company has. However, it would seem that it is typical for this industry. For this stock it is probably better to look at Return on Assets (ROA) and this looks a little low at 2.3% with a 5 year median better at 3.3%.
Debt Ratios are not great with both the Liquidity Ratio at 1.07 and the Debt Ratios at 1.06 being rather low. The Leverage and Debt/Equity Ratios are quite high at 26.21 and 24.81 respectively. However, they are down considerably from last year's highs.
As far as insider trading is concerned, there is not much with no insider buying and only $1M in insider selling. The Bombardier family controls this company through the use of different classes of stock. They do have a lot of money tied up in the company.
The 5 year low, median and high median Price/Earnings Ratios are 7.45, 11.34 and 14.49. The current P/E ratio is 9.22 based on a stock price of $4.05 CDN$ and earnings for 2013 of $0.44 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.68 and 2.09. The current P/GP Ratio is 1.69.
There is no sense in looking at book value as the book value dropped significantly with the changing of the account rules of IFRS so I cannot get a good comparison. The 5 year median dividend yield is 1.92% and the current dividend yield 2.47% a value some 29% higher. On these tests the stock price would appear to be reasonable.
When you look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. However, the recommendations are towards to buy side and the consensus would be a Strong Buy. The consensus 12 month stock price is $4.93 and this implies total return of 24.2%, with 2.47% from dividends and 21.73% from capital gains.
The problem I have with Bombardier is that I paid so little for this stock that the value of the stock is almost all capital gain. If I sell, I would get hit with a very big tax bill. I also expect the company to recover. However, this will take time as we are still in the secular bear market started in 2000. We are also still affected by the recession that started in 2008.
I am holding on to my stock because I believe that the company will recover. If I thought it would not recover, I would sell it. However, I am not yet tempted to buy any more.
Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. Its web site is here Bombardier. See my spreadsheet at bbd.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 or StockTwits.
I own this stock of Bombardier Inc. (TSX-BBD.B, OTC-BDRAF). I bought this company in 1987. One of my problems is that I comparatively paid very little for this stock and if I sold almost all I get would be taxed as capital gain. This is one reason why I have not sold it. Another reason is that I have felt it will recover. When it will recover is a big question. You got to wonder how well it can do in the near term in light of our current economic situation.
If I look at my return since 1987, I have made a total return of 12.64% per year with 8.06% from capital gains and 4.58% from dividends. Over the past 5 years my total return is a negative 1.5% per year and over the past 10 years my return is a negative 0.7% per year. I do not think that anyone has made money on this stock recently. This is certainly true if you bought this stock as a long term investment.
This stock reports in US$. It has done better in US$ terms than in CDN$ terms. However, it has not done well in growing revenue or cash flow. They have done much better in growing earnings. Also, comparing 5 year running averages over the past 5 years, it has also done better than just comparing values 5 and 10 years ago to current values.
The Return on Equity looks ridiculously high because of the high debt load this company has. However, it would seem that it is typical for this industry. For this stock it is probably better to look at Return on Assets (ROA) and this looks a little low at 2.3% with a 5 year median better at 3.3%.
Debt Ratios are not great with both the Liquidity Ratio at 1.07 and the Debt Ratios at 1.06 being rather low. The Leverage and Debt/Equity Ratios are quite high at 26.21 and 24.81 respectively. However, they are down considerably from last year's highs.
As far as insider trading is concerned, there is not much with no insider buying and only $1M in insider selling. The Bombardier family controls this company through the use of different classes of stock. They do have a lot of money tied up in the company.
The 5 year low, median and high median Price/Earnings Ratios are 7.45, 11.34 and 14.49. The current P/E ratio is 9.22 based on a stock price of $4.05 CDN$ and earnings for 2013 of $0.44 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.68 and 2.09. The current P/GP Ratio is 1.69.
There is no sense in looking at book value as the book value dropped significantly with the changing of the account rules of IFRS so I cannot get a good comparison. The 5 year median dividend yield is 1.92% and the current dividend yield 2.47% a value some 29% higher. On these tests the stock price would appear to be reasonable.
When you look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. However, the recommendations are towards to buy side and the consensus would be a Strong Buy. The consensus 12 month stock price is $4.93 and this implies total return of 24.2%, with 2.47% from dividends and 21.73% from capital gains.
The problem I have with Bombardier is that I paid so little for this stock that the value of the stock is almost all capital gain. If I sell, I would get hit with a very big tax bill. I also expect the company to recover. However, this will take time as we are still in the secular bear market started in 2000. We are also still affected by the recession that started in 2008.
I am holding on to my stock because I believe that the company will recover. If I thought it would not recover, I would sell it. However, I am not yet tempted to buy any more.
Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. Its web site is here Bombardier. See my spreadsheet at bbd.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 or StockTwits.
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