On my other blog I am today writing about by investing experience in TransAlta...continue...
I do not own this stock Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.
When I look at insider trading I find a small amount of insider buying ($0.2m) and not insider selling. There does not seem to be much in the way of options or option like vehicles (except one officer has some rights). The CEO has shares worth $3M and has no options. The CFO has shares worth $0.8M and has no options. An officer has shares worth $0.7M and has no options. A director has shares worth $1.1M and has no options. 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 7.40, 9.67 and 12.98. The have been on the rise as with all x-Income Trust companies as their dividend yields decline. The lowest P/E of 2012 was at 15.40. I get a current P/E Ratio of 18.39. This is not unreasonable, but is relatively high for this company. However, this is not a good test because company used to be an Income Trust company.
I get a Graham Price of $12.96. The 10 year low, median and high median Price/Graham Price Ratio are 0.96, 1.11 and 1.27. The current P/GP Ratio is 1.32. This is relatively high for this stock. A stock is considered cheap if the P/GP is 1.00 or lower. So by this measure, this stock is not cheap.
The 10 year median Price/Book Value per Share Ratio is 1.73. The current P/B Ratio at 2.13 is some 23% higher and this test says that the current stock price is on the high side. (A P/B Ratio of 1.50 and lower is considered to show a good stock price.)
The 10 year Price/Cash Flow per Share is 6.39 and the current P/CF Ratio is 5.33 based on $3.21 Cash Flow per Share for 2013 and a stock price of $17.10. The current P/CF Ratio is some 16% lower than the 10 year median value and this suggests that the stock price is cheap.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most recommendations are a Hold and the consensus recommendation would be a Hold. The consensus 12 month stock price is $18.20. This implies a total return of 13.45% with 7.02% from dividends and 6.43% from capital gains.
Pat McKeough of TSI Network has positive and interesting things to say about Chemtrade. Canadian Dividend Blogger has a interesting and negative take on Chemtrade. He also points out that distributions are not wholly treated as dividends. For example in 2012, 20% was "Other Income" , 48% was dividends and 31% was Foreign Business Income.
Mostly my testing shows that the stock price is currently a little too high. I feel that this is a good company and might buy it if price was lower. See my spreadsheet at che.htm.
This is the second of two parts. The first part was posted on Thursday, August 29th, 2013 and is available here.
The Chemtrade Logistics Income Fund is a global supplier of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite and a processor of spent acid, particularly in the U.S. Gulf Coast region.
Chemtrade is also a regional supplier of sulphur, sodium chlorate and phosphorus pentasulphide, and also produces zinc oxide at three North American locations. Its web site is here Chemtrade.
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, August 30, 2013
Thursday, August 29, 2013
Chemtrade Logistics Income Fund
I do not own this stock Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.
This company started off as an Income Trust. It is still called an Income Fund and has a UN as part of its TSX symbol. However, Income Trusts lost their tax advantages in 2011. This company stopped raising dividends and started to decrease them in 2007 just after the tax department changed the tax rules on Income Trusts. The dividends were decreased some 17% and they have not changed since.
The Dividend Payout Ratio for earnings has been mostly above 100%, with a 5 year median at 99%. The 5 year median DPR for cash flow is better at 61%. The most recent DPR for earnings was at 128% and for cash flow was at 43% for the financial year of 2012. One analyst thought that the company might start to raise dividends again in 2015.
The 5 year median dividend yield is at 9.57%. However, this yield has been decreasing as the dividend yield has decreased on most old Income Trust stocks. The current dividend yield is still quite high at 7.02%.
The shareholders have so far done quite well with the 5 and 10 year total return at 24.77% and 17.78%. The dividend portion of this total return is at 11.20% and 12.78% per year and the capital gain portion is at 13.56% and 5% per year, respectively. Note that the dividend portion of the total return will probably decrease in future years.
The outstanding shares on this stock have increased by 4.4% and 10% per year over the past 5 and 10 years. They have increased due to Debenture Conversions and Share issues. They have decreased due to buy backs. Revenues and earnings have increased nicely. There is lower growth in cash flows and mediocre growth in book value.
Revenue has increased by 11% and 16% per year over the past 5 and 10 years. For Revenue per Share, looking at 5 year running averages, these have increased by 9.7% and 9.8% per year over the past 5 and 10 years. Earnings per Share, looking again at 5 year running averages, these have increased by 18% and 7% per year over the past 5 and 10 years.
The Cash Flow per Share, using the 5 year running averages, has increased by 7.7% and 4.8% per year over the past 5 and 10 years. The Book Value per Share is up by 4.7% per year over the past 5 years, but down by 7.2% per year over the past 10 years. (Generally speaking, Income Trust tends to have declining book values.)
The Liquidity Ratio has varied over the years. The current ratio is 1.06. However, if you add in cash flows after dividends it gets to a much better one of 1.60. The Liquidity Ratio for 2012 was lower at 0.92 and with the added in cash flows after dividends getting it to just 1.27.
The Debt Ratios tend to be a bit better with the current one at 1.52 and the one for 2012 at 1.47. The Leverage and Debt/Equity Ratios are fine and currently at 2.91 and 1.91.
The current Return on Equity for 2012 was at 12.1% and the 5 year median ROE was at 17.8%. However, the ROE on comprehensive income is coming in generally quite a bit lower and for 2012 was 25% lower with an ROE at 9.1%. This can point to the fact that the quality of the earnings may not be very good. However, in some years, the ROE on comprehensive income is higher than the ROE on net income. It has a 5 year median value of 13.9.
I think that this company is performing quite well. It was expected that the dividend yield on old Income Trust companies would end up by now in the 4% to 5% range. Perhaps this is lagging in this respect because it is a small company and it has not yet got the DPRs for earnings in the right place. See my spreadsheet at che.htm.
This is the first of two parts. Second part will be posted on Friday, August 30th, 2013 and will be here.
Chemtrade Logistics Income Fund is a global supplier of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite and a processor of spent acid, particularly in the U.S. Gulf Coast region. Chemtrade is also a regional supplier of sulphur, sodium chlorate and phosphorus pentasulphide, and also produces zinc oxide at three North American locations. Its web site is here Chemtrade.
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 company started off as an Income Trust. It is still called an Income Fund and has a UN as part of its TSX symbol. However, Income Trusts lost their tax advantages in 2011. This company stopped raising dividends and started to decrease them in 2007 just after the tax department changed the tax rules on Income Trusts. The dividends were decreased some 17% and they have not changed since.
The Dividend Payout Ratio for earnings has been mostly above 100%, with a 5 year median at 99%. The 5 year median DPR for cash flow is better at 61%. The most recent DPR for earnings was at 128% and for cash flow was at 43% for the financial year of 2012. One analyst thought that the company might start to raise dividends again in 2015.
The 5 year median dividend yield is at 9.57%. However, this yield has been decreasing as the dividend yield has decreased on most old Income Trust stocks. The current dividend yield is still quite high at 7.02%.
The shareholders have so far done quite well with the 5 and 10 year total return at 24.77% and 17.78%. The dividend portion of this total return is at 11.20% and 12.78% per year and the capital gain portion is at 13.56% and 5% per year, respectively. Note that the dividend portion of the total return will probably decrease in future years.
The outstanding shares on this stock have increased by 4.4% and 10% per year over the past 5 and 10 years. They have increased due to Debenture Conversions and Share issues. They have decreased due to buy backs. Revenues and earnings have increased nicely. There is lower growth in cash flows and mediocre growth in book value.
Revenue has increased by 11% and 16% per year over the past 5 and 10 years. For Revenue per Share, looking at 5 year running averages, these have increased by 9.7% and 9.8% per year over the past 5 and 10 years. Earnings per Share, looking again at 5 year running averages, these have increased by 18% and 7% per year over the past 5 and 10 years.
The Cash Flow per Share, using the 5 year running averages, has increased by 7.7% and 4.8% per year over the past 5 and 10 years. The Book Value per Share is up by 4.7% per year over the past 5 years, but down by 7.2% per year over the past 10 years. (Generally speaking, Income Trust tends to have declining book values.)
The Liquidity Ratio has varied over the years. The current ratio is 1.06. However, if you add in cash flows after dividends it gets to a much better one of 1.60. The Liquidity Ratio for 2012 was lower at 0.92 and with the added in cash flows after dividends getting it to just 1.27.
The Debt Ratios tend to be a bit better with the current one at 1.52 and the one for 2012 at 1.47. The Leverage and Debt/Equity Ratios are fine and currently at 2.91 and 1.91.
The current Return on Equity for 2012 was at 12.1% and the 5 year median ROE was at 17.8%. However, the ROE on comprehensive income is coming in generally quite a bit lower and for 2012 was 25% lower with an ROE at 9.1%. This can point to the fact that the quality of the earnings may not be very good. However, in some years, the ROE on comprehensive income is higher than the ROE on net income. It has a 5 year median value of 13.9.
I think that this company is performing quite well. It was expected that the dividend yield on old Income Trust companies would end up by now in the 4% to 5% range. Perhaps this is lagging in this respect because it is a small company and it has not yet got the DPRs for earnings in the right place. See my spreadsheet at che.htm.
This is the first of two parts. Second part will be posted on Friday, August 30th, 2013 and will be here.
Chemtrade Logistics Income Fund is a global supplier of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite and a processor of spent acid, particularly in the U.S. Gulf Coast region. Chemtrade is also a regional supplier of sulphur, sodium chlorate and phosphorus pentasulphide, and also produces zinc oxide at three North American locations. Its web site is here Chemtrade.
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, August 28, 2013
Calloway Real Estate Investment Trust
On my other blog I am today writing about investing in a few good companies again...continue...
I do not own this stock Calloway Real Estate Investment Trust (TSX-CWT.UN, OTC-CWYUF). In June 2009 I was looking at the dividend achievers list to find good stocks to review. This stock was on that this at that time. However, the problem with such lists is that the constituents of it can chance. This company stopped raising dividends in 2008 and in consequence is no longer on this list.
Because REITs give quite good dividend yields, you generally would expect the growth in dividends to be at or just above inflation. According to the Bank of Canada, Canada's inflation is running close to 1.5%. The dividend growth for this stock is at 0.37% and 3.35% per year over the past 5 and 10 years.
The current dividends are at a 6.27% yield with a stock price of $24.70. The 5 year median dividend yield is higher at 6.96%. The 5 year median Dividend Payout Ratio for AFFO is 94%. The 5 year DPR for cash flow is high at 102%. However, this has been coming down and the DPR for cash flow for 2012 was 84%.
Outstanding shares have increased by 7.5% and 36% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, conversion of Debentures and exchange of deferred shares. Mitchell Goldhar, a director, owns 45% of the outstanding shares, including special voting shares (with 20 votes each) and all his shares are worth around $1.5B.
Revenue per Share, when looking at 5 year running averages has increased by 9.2% and 8% per year over the past 5 and 10 years. EPS seems to have increased a lot because it was up by 378% for 2012. This is probably because of the new accounting rules. The AFFO (Adjusted Funds from Operations) is not up by very much and this is generally how REITs are judged.
Even looking at the 5 year running averages for which I only have a 4 year growth, the AFFO is up by only 1.7% per year. This is a very low value. The FFO is not much better with 5 year running averages over the past 5 years up by only 2% per year. (Of course, the problem with FFO is that how it is calculated has changed over the years.)
The story is brighter if you look at what stockholders have earned over the past 5 and 10 years. The total return over the past 5 and 10 years is at 9.34% and 21.33% with 5.94% and 9.77% per year from distributions and 3.4% and 11.55% per year from capital gains.
According to the financial statements, the Liquidity Ratio is just 0.10. That means that the current assets come nowhere near the current liabilities. Even adding in cash flow after dividends, this value rises to just 0.13. However, you should also look at my remarks below on this subject. The Debt Ratio is very good at 2.26.
The stock price tests I can use for this REIT says the stock price is reasonable to cheap. The 10 year median Price/Book Value per Share Ratio is 1.54 and the current one is 1.01 a value some 65% lower. This test says the stock price is very low. This is based on a stock price of $24.70.
If you look at Price/AFFO Ratio, I get a 5 year median P/AFFO Ratio of 14.44 and a current ratio of 15.06, which is only 4% higher. The 5 year median Price/Cash Flow per Share is 15.52 and the current P/CF Ratio is 16.89, a value only 9% higher. (However, it is above the 5 year median high P/CF Ratio of 16.81.) The 5 year dividend yield is 6.96% and the current dividend yield is 6.27% a value only 10% higher. All these tests suggest that the stock price is in the reasonable range.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are in the Hold category and the consensus would be a Hold. The 12 month consensus stock price is $28.60. This implies a total return of 22.06% with 6.27% from distributions and 15.76% from capital gains.
Zolmax has commented on a few analysts' rating changes for Calloway. I cannot find much in the way of comments on this stock except that one analyst feels that Calloway will again raise the distributions in 2014.
What I do not like about this stock is the complicated ownership structure. Sometimes it might be worth it for superior returns for the ordinary shareholder, but I do not see this happening here, especially at present. Although I must admit that over the past 10 years with a total return of 21.33% that the company is close to superior returns. However, this is not true over the past 5 year.
Also, the company's statements might be more complex than they originally appear. My general attitude is that if the accounting records are hard to understand, I do not want to invest. You got to ask yourself, what are they trying to hide?
For example, for current assets, G&M gets $239.86 and for current liabilities gets $100.28, for a Liquidity Ratio of 239. The Balance Sheet in the annual statements gives values of $38.8 and $120.6 for a Liquidity Ratio of 0.39. In the notes they do talk about other receivables, but I cannot replicate G&M figures and it is hard to tease out exactly what some of the notes mean. See G&M's site. Google Finance on their site get the same values as I do. Why invest in a company that makes it difficult for you to figure out their financial statements?
I do not like the complex ownership nor the not easy to decipher accounting. There are other REITs to buy. See my spreadsheet at cwt.htm.
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway.
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 do not own this stock Calloway Real Estate Investment Trust (TSX-CWT.UN, OTC-CWYUF). In June 2009 I was looking at the dividend achievers list to find good stocks to review. This stock was on that this at that time. However, the problem with such lists is that the constituents of it can chance. This company stopped raising dividends in 2008 and in consequence is no longer on this list.
Because REITs give quite good dividend yields, you generally would expect the growth in dividends to be at or just above inflation. According to the Bank of Canada, Canada's inflation is running close to 1.5%. The dividend growth for this stock is at 0.37% and 3.35% per year over the past 5 and 10 years.
The current dividends are at a 6.27% yield with a stock price of $24.70. The 5 year median dividend yield is higher at 6.96%. The 5 year median Dividend Payout Ratio for AFFO is 94%. The 5 year DPR for cash flow is high at 102%. However, this has been coming down and the DPR for cash flow for 2012 was 84%.
Outstanding shares have increased by 7.5% and 36% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, conversion of Debentures and exchange of deferred shares. Mitchell Goldhar, a director, owns 45% of the outstanding shares, including special voting shares (with 20 votes each) and all his shares are worth around $1.5B.
Revenue per Share, when looking at 5 year running averages has increased by 9.2% and 8% per year over the past 5 and 10 years. EPS seems to have increased a lot because it was up by 378% for 2012. This is probably because of the new accounting rules. The AFFO (Adjusted Funds from Operations) is not up by very much and this is generally how REITs are judged.
Even looking at the 5 year running averages for which I only have a 4 year growth, the AFFO is up by only 1.7% per year. This is a very low value. The FFO is not much better with 5 year running averages over the past 5 years up by only 2% per year. (Of course, the problem with FFO is that how it is calculated has changed over the years.)
The story is brighter if you look at what stockholders have earned over the past 5 and 10 years. The total return over the past 5 and 10 years is at 9.34% and 21.33% with 5.94% and 9.77% per year from distributions and 3.4% and 11.55% per year from capital gains.
According to the financial statements, the Liquidity Ratio is just 0.10. That means that the current assets come nowhere near the current liabilities. Even adding in cash flow after dividends, this value rises to just 0.13. However, you should also look at my remarks below on this subject. The Debt Ratio is very good at 2.26.
The stock price tests I can use for this REIT says the stock price is reasonable to cheap. The 10 year median Price/Book Value per Share Ratio is 1.54 and the current one is 1.01 a value some 65% lower. This test says the stock price is very low. This is based on a stock price of $24.70.
If you look at Price/AFFO Ratio, I get a 5 year median P/AFFO Ratio of 14.44 and a current ratio of 15.06, which is only 4% higher. The 5 year median Price/Cash Flow per Share is 15.52 and the current P/CF Ratio is 16.89, a value only 9% higher. (However, it is above the 5 year median high P/CF Ratio of 16.81.) The 5 year dividend yield is 6.96% and the current dividend yield is 6.27% a value only 10% higher. All these tests suggest that the stock price is in the reasonable range.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are in the Hold category and the consensus would be a Hold. The 12 month consensus stock price is $28.60. This implies a total return of 22.06% with 6.27% from distributions and 15.76% from capital gains.
Zolmax has commented on a few analysts' rating changes for Calloway. I cannot find much in the way of comments on this stock except that one analyst feels that Calloway will again raise the distributions in 2014.
What I do not like about this stock is the complicated ownership structure. Sometimes it might be worth it for superior returns for the ordinary shareholder, but I do not see this happening here, especially at present. Although I must admit that over the past 10 years with a total return of 21.33% that the company is close to superior returns. However, this is not true over the past 5 year.
Also, the company's statements might be more complex than they originally appear. My general attitude is that if the accounting records are hard to understand, I do not want to invest. You got to ask yourself, what are they trying to hide?
For example, for current assets, G&M gets $239.86 and for current liabilities gets $100.28, for a Liquidity Ratio of 239. The Balance Sheet in the annual statements gives values of $38.8 and $120.6 for a Liquidity Ratio of 0.39. In the notes they do talk about other receivables, but I cannot replicate G&M figures and it is hard to tease out exactly what some of the notes mean. See G&M's site. Google Finance on their site get the same values as I do. Why invest in a company that makes it difficult for you to figure out their financial statements?
I do not like the complex ownership nor the not easy to decipher accounting. There are other REITs to buy. See my spreadsheet at cwt.htm.
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway.
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, August 27, 2013
Badger Daylighting Ltd 2
I do not own this stock Badger Daylighting Ltd (TSX-BAD, OTC-BADFF). ). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at what stocks might appeal to a conservative investor looking for income.
When I look at insider trading, I find no insider buying and no insider selling. Insiders do not have options per se, but have what they call deferred shares.
The CEO has shares worth $25.8M and has options worth $2.4M. The CFO has shares worth $3.7M and has options worth $1.3M. An officer has shares worth $0.9M and has options worth $0.9M. A director has shares worth $7.7M and has options worth $0.2M. 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 7.60, 9.38 and 11.17. The current P/E Ratio is 18.78 based on a stock price of $55.60 and 2013 earnings of $2.96. This test implies that the stock price is relatively high. The 5 year median values are fairly low ones and 18.78 is not that high for an industrial stock, but the stock has recently had a very good run increasing some 30% last year and 80% so far this year.
I get a Graham Price of $28.76. The 10 year low, median and high median Price/Graham Price Ratios are 0.86, 1.12 and 1.32. These are reasonable ratios as it is basically felt that a P/GP Ratio of 1.00 or lower is pointing to a cheap stock price. The current P/GP Ratio is 1.93 and this test suggests that the stock price is both relatively high and absolutely high.
The 10 year Price/Book Value per Share is 2.72. The current P/B Ratio is 4.48, a value some 64% higher. This test suggests that the stock price is relatively high.
The dividend yield test will not provide any insight as dividends have been decreased on the company that used to be an Income Trust. It was felt that when Income Trusts turned into corporation that their dividends would decrease probably to the 4 to 5% range.
I looked at the Price/Cash Flow per Share Ratios. The 10 year P/CF Ratio is 5.60. The current P/CF Ratio is 10.45 based on a stock price of $55.60 and Cash Flow per Share for 2013 of $5.32. This test suggests that the stock price is relatively high. (What is considered to be a good P/CF Ratio is in the 5.00 range.)
There are only two analysts following this stock as far as I can see and their recommendations are Strong Buy and Buy. The consensus would be a Buy. The 12 month stock price is $63.00. This implies a total return of 15.25% with 13.31% from capital gains and 1.94% from dividends.
A Financial Post article talks about shareholders rejecting an buy offer just over two years ago. The company has done very well since then. Investment Diary gives clip of Jean-Francois Tardif talking about Badger Daylighting on BNN. The stuff on Badger Daylighting comes at the 4.30 mark in this video.
I think that this is a great company, but I feel that the stock price is just too high to buy at present. See my spreadsheet at bad.htm.
This is the second of two parts. The first part was posted on Monday, August 26th, 2013 and is available here.
Badger is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Badger's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Its web site is here Badger Daylighting.
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 no insider buying and no insider selling. Insiders do not have options per se, but have what they call deferred shares.
The CEO has shares worth $25.8M and has options worth $2.4M. The CFO has shares worth $3.7M and has options worth $1.3M. An officer has shares worth $0.9M and has options worth $0.9M. A director has shares worth $7.7M and has options worth $0.2M. 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 7.60, 9.38 and 11.17. The current P/E Ratio is 18.78 based on a stock price of $55.60 and 2013 earnings of $2.96. This test implies that the stock price is relatively high. The 5 year median values are fairly low ones and 18.78 is not that high for an industrial stock, but the stock has recently had a very good run increasing some 30% last year and 80% so far this year.
I get a Graham Price of $28.76. The 10 year low, median and high median Price/Graham Price Ratios are 0.86, 1.12 and 1.32. These are reasonable ratios as it is basically felt that a P/GP Ratio of 1.00 or lower is pointing to a cheap stock price. The current P/GP Ratio is 1.93 and this test suggests that the stock price is both relatively high and absolutely high.
The 10 year Price/Book Value per Share is 2.72. The current P/B Ratio is 4.48, a value some 64% higher. This test suggests that the stock price is relatively high.
The dividend yield test will not provide any insight as dividends have been decreased on the company that used to be an Income Trust. It was felt that when Income Trusts turned into corporation that their dividends would decrease probably to the 4 to 5% range.
I looked at the Price/Cash Flow per Share Ratios. The 10 year P/CF Ratio is 5.60. The current P/CF Ratio is 10.45 based on a stock price of $55.60 and Cash Flow per Share for 2013 of $5.32. This test suggests that the stock price is relatively high. (What is considered to be a good P/CF Ratio is in the 5.00 range.)
There are only two analysts following this stock as far as I can see and their recommendations are Strong Buy and Buy. The consensus would be a Buy. The 12 month stock price is $63.00. This implies a total return of 15.25% with 13.31% from capital gains and 1.94% from dividends.
A Financial Post article talks about shareholders rejecting an buy offer just over two years ago. The company has done very well since then. Investment Diary gives clip of Jean-Francois Tardif talking about Badger Daylighting on BNN. The stuff on Badger Daylighting comes at the 4.30 mark in this video.
I think that this is a great company, but I feel that the stock price is just too high to buy at present. See my spreadsheet at bad.htm.
This is the second of two parts. The first part was posted on Monday, August 26th, 2013 and is available here.
Badger is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Badger's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Its web site is here Badger Daylighting.
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, August 26, 2013
Badger Daylighting Ltd
On my other blog I am today writing about investing in a few good companies...continue...
I do not own this stock Badger Daylighting Ltd (TSX-BAD, OTC-BADFF). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at what stocks might appeal to a conservative investor looking for income.
This company used to be an income trust. It changed to a corporation in 2010 and reduced the dividends by some 19%. This was after the dividends had been held flat since 2008. In 2012 they raised the dividend by 5.9%. This is a very good sign that they have started to raise dividends again. The dividend raise was at the end of 2012 and so far there has been no raise of dividends in 2013.
The Dividend Payout Ratios, after peaking in 2010 have been declining. The 5 year median DPR for earnings is 69% and for cash flow is 35%. For 2012 these ratios were at 43% for earnings and at 25% for cash flow.
The dividend yield has been fall dramatically. The company has a 5 year median dividend yield of 6.67%. The current dividend yield is 1.94%. This is because the stock price is up some 80% this year.
The total return over the past 5 and 10 years is at 12.11% and 50.48% per year. The capital gains portion of this return is 7.32% and 33.47% per year and the dividend portion of this return is 4.08% and 17.01% per year, respectively. Going forward it would appear that there would be far less return from dividends and more from capital gains.
The outstanding shares have increased by 2.8% and 2.1% per year over the past 5 and 10 years. The increase in outstanding shares has occurred because of stock options and shares issues. This company has had good growth over the past 5 and 10 years.
Revenues have grown at 15% and 17% per year over the past 5 and 10 years. Revenue per Share has grown at 12% and 15% per year over the past 5 and 10 years. Earnings are up by 9% and 44% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the growth over the past 5 and 10 years is at 10% and 29% per year for earnings.
For cash flow per share, using the 5 year running averages, the growth is at 10% and 15% per year over the past 5 and 10 years. Book Value has also grown well with growth at 16% and 13% per year over the past 5 and 10 years.
The Return on Equity for this company is at 20.1% for the financial year ending in 2012. The ROE on comprehensive income is not far behind, with the ROE at 19.2%. If you look at ROE for the last 12 months ending at June 2013, the ROE is 20.4% for both net income and comprehensive income.
The debt ratios are currently very good on this stock. The current Liquidity Ratio is 2.68 and the current Debt Ratio is 2.42. The current Leverage and Debt/Equity Ratios are also very good at 1.70 and 0.70.
This company is doing very well. They have very good growth and they have started to raise their dividends again. See my spreadsheet at bad.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 27th, 2013 and will be here.
Badger is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Badger's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Its web site is here Badger Daylighting.
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 do not own this stock Badger Daylighting Ltd (TSX-BAD, OTC-BADFF). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at what stocks might appeal to a conservative investor looking for income.
This company used to be an income trust. It changed to a corporation in 2010 and reduced the dividends by some 19%. This was after the dividends had been held flat since 2008. In 2012 they raised the dividend by 5.9%. This is a very good sign that they have started to raise dividends again. The dividend raise was at the end of 2012 and so far there has been no raise of dividends in 2013.
The Dividend Payout Ratios, after peaking in 2010 have been declining. The 5 year median DPR for earnings is 69% and for cash flow is 35%. For 2012 these ratios were at 43% for earnings and at 25% for cash flow.
The dividend yield has been fall dramatically. The company has a 5 year median dividend yield of 6.67%. The current dividend yield is 1.94%. This is because the stock price is up some 80% this year.
The total return over the past 5 and 10 years is at 12.11% and 50.48% per year. The capital gains portion of this return is 7.32% and 33.47% per year and the dividend portion of this return is 4.08% and 17.01% per year, respectively. Going forward it would appear that there would be far less return from dividends and more from capital gains.
The outstanding shares have increased by 2.8% and 2.1% per year over the past 5 and 10 years. The increase in outstanding shares has occurred because of stock options and shares issues. This company has had good growth over the past 5 and 10 years.
Revenues have grown at 15% and 17% per year over the past 5 and 10 years. Revenue per Share has grown at 12% and 15% per year over the past 5 and 10 years. Earnings are up by 9% and 44% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the growth over the past 5 and 10 years is at 10% and 29% per year for earnings.
For cash flow per share, using the 5 year running averages, the growth is at 10% and 15% per year over the past 5 and 10 years. Book Value has also grown well with growth at 16% and 13% per year over the past 5 and 10 years.
The Return on Equity for this company is at 20.1% for the financial year ending in 2012. The ROE on comprehensive income is not far behind, with the ROE at 19.2%. If you look at ROE for the last 12 months ending at June 2013, the ROE is 20.4% for both net income and comprehensive income.
The debt ratios are currently very good on this stock. The current Liquidity Ratio is 2.68 and the current Debt Ratio is 2.42. The current Leverage and Debt/Equity Ratios are also very good at 1.70 and 0.70.
This company is doing very well. They have very good growth and they have started to raise their dividends again. See my spreadsheet at bad.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 27th, 2013 and will be here.
Badger is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Badger's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Its web site is here Badger Daylighting.
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, August 23, 2013
Telus Corp
I do not own this stock Telus Corp (TSX-T, NYSE-TU). I started to follow this stock because people I liked reading liked this stock. John Sartz talked about it in 2008 and then at the 2009 and 2010 Aaron Dunn of KeyStone Financial Publishing Corp talked about this stock. This will be a one day report as I have too many stocks on my list to cover to do two day reports on them all.
This stock has not done badly by investors as far as dividends go. I have dividend information going back to 1994 and in most years, with some exceptions, they have increased their dividends. They, as did all telecom stocks, had a rough time with the 2000 bear market and recession. In 2000, dividends were flat; they were decreased in 2001 and then remained flat until 2004. The drop in dividends was around 60% in 2001. However, when increases started again in 2005, dividends were increased by 33% and then by 37% in 2006.
The 5 and 10 year growth in dividends is at 9.67% and 17.2% per year. The most recent dividend increase was in 2013 for 6.3%. However, this is the second increase for 2013 and total increase for 2013 is at 11.5%. The current dividend is at 4.27%, which is a good dividend and the 5 year growth rate of 9.67% is very good also.
This means potentially after 10 years, if this continues, you could be earnings come 10.7% return on money invested today. If you look at history, people who invested 10 years ago are earnings around 12.9% on their investment. However, if you look at what people who invested 15 years ago are earning, it is lower at 6%. This is because 15years ago the stock price was higher than what it was 10 years ago.
The Dividend Payout Ratios for this stock are good with the 5 year median DPR for earnings at 59% and the 5 year median DPR for cash flow at23.5%. The DPR for the last financial year was similar and for 2013 the DPRs are expected to be a bit higher at 63% for earnings and 27% for cash flow.
As with utility stocks, this company relies on cash flow to get to a Liquidity Ratio of more than 1.00. The current Liquidity Ratio is 0.70 and this means that current assets cannot cover current liabilities. If you add in the cash flow after dividends you get a Liquidity Ratio of 1.38. (I prefer to see this ratio at 1.50.)
The Debt Ratio is better and the current one is at 1.56. The current Leverage and Debt/Equity Ratios are ok at 2.78 and 1.78.
When you look at growth, I find that EPS is growing a lot faster than revenue or cash flow. Looking at 5 year running averages growth, I find over the past 10 years Revenue per Share has grown at 3.2% per year, cash flow per share at 3.6% per year, but EPS at 17.2% per year. Earnings do tend to fluctuate on this stock.
The Return on Equity is good coming in at 17.1% for the 2012 financial year. However, this is quite a bit higher than the ROE on comprehensive income which was lower by some 28% at 12.3%. If you look at ROE on net income and comprehensive income over the past 12 months to the end of June 2013, there is still a big spread of 25%. (The problem with divergence of net income and comprehensive income is that the earnings may not be as good as they may appear to be.)
When I look at my stock tests, I find that the Price/EPS Ratio test, the Price/Graham Price test (GP at $23.21) and the Price/Book Value Test (with 10 year P/B Ratio at 2.08) all show that the stock price is rather high. For example, the 5 year low median and high P/E Ratios are 10.10, 12.46 and 14.81. The current P/E Ratio is 15.25 and suggests that the stock price is relatively high. The current P/E is based on a stock price is $31.88 and 2013 earnings of $2.09.
However, the Dividend Yield test suggests that the stock price is reasonable. The current dividend yield is 4.27% and the 5 year median dividend yield is 4.42%. The current dividend yield is just 3.5% lower than the 5 year median.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is at $34.90. This implies a total return of 13.74% with 4.27% from dividends and 9.47% from capital gains.
Insider Monkey talks about Hedge funds being bullish about this stock and insiders being neutral about this stock. The blogger Sunny talks about the recent split in Telus' stock. And, lastly, Pro Active Investors bloggers talk about Telus' second quarter.
What I have not talked about and it is what most news for the telecoms is about, is the current sale of wireless spectrum by the Canadian Government. I do not think anyone knows how this is going affect the telecoms in the long run.
Currently I think that an investment in a Telecom company at present is rather risky. It has not been a favourite sector of mine for a while. Telecom rates are high in Canada, so there has to be some sort of shake out sometime in the future. See my spreadsheet at tel.htm.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus.
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 stock has not done badly by investors as far as dividends go. I have dividend information going back to 1994 and in most years, with some exceptions, they have increased their dividends. They, as did all telecom stocks, had a rough time with the 2000 bear market and recession. In 2000, dividends were flat; they were decreased in 2001 and then remained flat until 2004. The drop in dividends was around 60% in 2001. However, when increases started again in 2005, dividends were increased by 33% and then by 37% in 2006.
The 5 and 10 year growth in dividends is at 9.67% and 17.2% per year. The most recent dividend increase was in 2013 for 6.3%. However, this is the second increase for 2013 and total increase for 2013 is at 11.5%. The current dividend is at 4.27%, which is a good dividend and the 5 year growth rate of 9.67% is very good also.
This means potentially after 10 years, if this continues, you could be earnings come 10.7% return on money invested today. If you look at history, people who invested 10 years ago are earnings around 12.9% on their investment. However, if you look at what people who invested 15 years ago are earning, it is lower at 6%. This is because 15years ago the stock price was higher than what it was 10 years ago.
The Dividend Payout Ratios for this stock are good with the 5 year median DPR for earnings at 59% and the 5 year median DPR for cash flow at23.5%. The DPR for the last financial year was similar and for 2013 the DPRs are expected to be a bit higher at 63% for earnings and 27% for cash flow.
As with utility stocks, this company relies on cash flow to get to a Liquidity Ratio of more than 1.00. The current Liquidity Ratio is 0.70 and this means that current assets cannot cover current liabilities. If you add in the cash flow after dividends you get a Liquidity Ratio of 1.38. (I prefer to see this ratio at 1.50.)
The Debt Ratio is better and the current one is at 1.56. The current Leverage and Debt/Equity Ratios are ok at 2.78 and 1.78.
When you look at growth, I find that EPS is growing a lot faster than revenue or cash flow. Looking at 5 year running averages growth, I find over the past 10 years Revenue per Share has grown at 3.2% per year, cash flow per share at 3.6% per year, but EPS at 17.2% per year. Earnings do tend to fluctuate on this stock.
The Return on Equity is good coming in at 17.1% for the 2012 financial year. However, this is quite a bit higher than the ROE on comprehensive income which was lower by some 28% at 12.3%. If you look at ROE on net income and comprehensive income over the past 12 months to the end of June 2013, there is still a big spread of 25%. (The problem with divergence of net income and comprehensive income is that the earnings may not be as good as they may appear to be.)
When I look at my stock tests, I find that the Price/EPS Ratio test, the Price/Graham Price test (GP at $23.21) and the Price/Book Value Test (with 10 year P/B Ratio at 2.08) all show that the stock price is rather high. For example, the 5 year low median and high P/E Ratios are 10.10, 12.46 and 14.81. The current P/E Ratio is 15.25 and suggests that the stock price is relatively high. The current P/E is based on a stock price is $31.88 and 2013 earnings of $2.09.
However, the Dividend Yield test suggests that the stock price is reasonable. The current dividend yield is 4.27% and the 5 year median dividend yield is 4.42%. The current dividend yield is just 3.5% lower than the 5 year median.
When I look at the analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is at $34.90. This implies a total return of 13.74% with 4.27% from dividends and 9.47% from capital gains.
Insider Monkey talks about Hedge funds being bullish about this stock and insiders being neutral about this stock. The blogger Sunny talks about the recent split in Telus' stock. And, lastly, Pro Active Investors bloggers talk about Telus' second quarter.
What I have not talked about and it is what most news for the telecoms is about, is the current sale of wireless spectrum by the Canadian Government. I do not think anyone knows how this is going affect the telecoms in the long run.
Currently I think that an investment in a Telecom company at present is rather risky. It has not been a favourite sector of mine for a while. Telecom rates are high in Canada, so there has to be some sort of shake out sometime in the future. See my spreadsheet at tel.htm.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus.
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, August 22, 2013
ATCO Ltd 2
I do not own this stock ATCO Ltd (TSX-ACO.X, OTC-ACLLF). This is a utility stock that gives a rather low dividend for a utility, but it has reasonable growth in dividends at just over 8% per year. This is a dividend paying stock that is on everyone's list. This stock is on the Dividend Achievers list, the Dividend Aristocrats list and was also on Mike Higgs' list.
I think the important thing to mention here is insider ownership. Ronald D. Southern owns about 85% of the Class II voting shares. He seems to be handing the operation of this company over to his daughter Nancy Southern. There are other insiders having some Class II shares, but quite small amounts. Also, because this company owns around 50% of Canadian Utilities (TSX-CU), you probably would not want to own both companies.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.94, 10.49 and 11.73. The current P/E Ratio is 12.80 based on a stock price of $43.40 and EPS estimate for 2013 of $3.39. This test suggests that the stock price is relatively high.
I get a Graham Price of $41.69. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 084 and 0.92. The current P/GP Ratio is 1.04 based on a stock price of $43.40. This test suggests that the stock price is relatively high.
I get a 10 year median Price/Book Value per Share ratio of 1.58. The current P/B Ratio is 1.90, a value 20% higher. This test also suggests that the stock price is relatively high.
The 5 year median dividend yield is 2.01%. The current dividend yield is 1.73% a value some 14% lower. This test also suggests that the current stock price is relatively high.
There are not that many analysts following this stock. However, the analysts' recommendations are split between Buy and Hold and the consensus recommendation would be a Buy. The 12 months stock price is $48.00. This implies a total return of 12.33% with 1.73 from Dividends and 10.60% from capital gains. A 12% total return from a Utility is a good return.
Winnipeg Free Press reports on ATCO's second quarterly results. There is an interesting article on Ronald Southern at Business World Magazine. Pat McKeough talks about this stock on TSI Network. And lastly, My Own Advisor blogger has an interesting take on TSI Network, including this stock.
As with a lot of utility stocks, I think that this one's stock price is too high. There will be future times to buy at relatively better prices. See my spreadsheet at aco.htm.
This is the second of two parts. The first part was posted on Wednesday, August 21st, 2013 and is available here.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. Its web site is here ATCO.
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 think the important thing to mention here is insider ownership. Ronald D. Southern owns about 85% of the Class II voting shares. He seems to be handing the operation of this company over to his daughter Nancy Southern. There are other insiders having some Class II shares, but quite small amounts. Also, because this company owns around 50% of Canadian Utilities (TSX-CU), you probably would not want to own both companies.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.94, 10.49 and 11.73. The current P/E Ratio is 12.80 based on a stock price of $43.40 and EPS estimate for 2013 of $3.39. This test suggests that the stock price is relatively high.
I get a Graham Price of $41.69. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 084 and 0.92. The current P/GP Ratio is 1.04 based on a stock price of $43.40. This test suggests that the stock price is relatively high.
I get a 10 year median Price/Book Value per Share ratio of 1.58. The current P/B Ratio is 1.90, a value 20% higher. This test also suggests that the stock price is relatively high.
The 5 year median dividend yield is 2.01%. The current dividend yield is 1.73% a value some 14% lower. This test also suggests that the current stock price is relatively high.
There are not that many analysts following this stock. However, the analysts' recommendations are split between Buy and Hold and the consensus recommendation would be a Buy. The 12 months stock price is $48.00. This implies a total return of 12.33% with 1.73 from Dividends and 10.60% from capital gains. A 12% total return from a Utility is a good return.
Winnipeg Free Press reports on ATCO's second quarterly results. There is an interesting article on Ronald Southern at Business World Magazine. Pat McKeough talks about this stock on TSI Network. And lastly, My Own Advisor blogger has an interesting take on TSI Network, including this stock.
As with a lot of utility stocks, I think that this one's stock price is too high. There will be future times to buy at relatively better prices. See my spreadsheet at aco.htm.
This is the second of two parts. The first part was posted on Wednesday, August 21st, 2013 and is available here.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. Its web site is here ATCO.
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, August 21, 2013
ATCO Ltd
On my other blog I am today writing about space again and Mars...continue...
I do not own this stock ATCO Ltd (TSX-ACO.X, OTC-ACLLF). This is a utility stock that gives a rather low dividend for a utility, but it has reasonable growth in dividends at just over 8% per year. It had higher growth in dividends prior to 2003 so that people that bought this stock at a median price 15 years ago is getting around 8.7% return on their original purchase price. If bought today at current increases that return would be around 8.9%.
The reason to buy dividend growth companies is because you will get good growth in dividends but accept a current lower dividend yield. This is why you might want to take a look at dividend yields on an original stock purchase price. Because I have a combination of low dividend yield and high dividend grow companies and high dividend yield but low dividend yield companies and some in between I have a portfolio that has grown my dividend income by just over 100% over the past 10 years.
The Dividend Payout Ratios are low for this company coming in at a 5 year median DPRs for earnings at 20% and for cash flow at 5.8%. Low DPRs can affect the viability of dividends and therefore can be seen as a good thing.
The total return on this stock is also quite good with 5 and 10 years total returns at 9.58% and 16.52% per year with 7.89% and 14.14% per year from capital gains and 1.68 and 2.38% per year from dividends.
Outstanding share have decreased by marginal amounts over the past 5 and 10 years. Outstanding shares were increased by stock options and decreased by buy backs. There is sometimes value in using 5 year running averages. Revenue per share has grown over the past 5 and 10 years at 8.6% and 3.5% per year. However, if you look at 5 year running average growth over these periods, they are much lower at 3.2% and 2.6% per year.
The growth in Earnings per Share is better with growth over the past 5 and 10 years at 8.7% and 9.2% per year. Growth in Cash Flow per Share is also quite good at 14.9% and 12.5% per year over the past 5 and 10 years. The growth in Book Value per Share is also good at 8.6% and 8.9% per year over the past 5 and 10 years.
The Return on Equity for the financial year ending in 2012 is good at 13.8%. However, it is usually lower and the ROE has a 5 year median value of just 7.3%. The ROE on Comprehensive Income seems to be consistently lower with the ROE for 2012 at 10.2% and the 5 year median value at just 7.0%.
Utility companies generally have big debt loads and they often rely on cash flow to get to a decent Liquidity Ratio. The Liquidity Ratio on this company has varied a lot over time. The ratio for 2012 is 1.36 and the current one is even lower at 0.90. However, when you add in cash flow after dividends these ratios are 2.68 and 1.66, respectively.
The Debt Ratio for this company is generally good with the one for 2012 at 1.52 and the current one at 1.63. The current Leverage and Debt/Equity Ratios are fine at 2.58 and 1.58.
This utility has provided its shareholders with a good return over the years. The dividend yield has always been a bit low. The dividends have been increasing since 1993 when data in my spreadsheet starts. It is on a number of dividend growth stock lists. This is why I follow this stock. I have not bought it because I already possess enough utility stocks.
It is a good dividend growth utility stock. See my spreadsheet at aco.htm.
This is the first of two parts. Second part will be posted on Thursday, August 22nd, 2013 and will be here.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. Its web site is here ATCO.
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 do not own this stock ATCO Ltd (TSX-ACO.X, OTC-ACLLF). This is a utility stock that gives a rather low dividend for a utility, but it has reasonable growth in dividends at just over 8% per year. It had higher growth in dividends prior to 2003 so that people that bought this stock at a median price 15 years ago is getting around 8.7% return on their original purchase price. If bought today at current increases that return would be around 8.9%.
The reason to buy dividend growth companies is because you will get good growth in dividends but accept a current lower dividend yield. This is why you might want to take a look at dividend yields on an original stock purchase price. Because I have a combination of low dividend yield and high dividend grow companies and high dividend yield but low dividend yield companies and some in between I have a portfolio that has grown my dividend income by just over 100% over the past 10 years.
The Dividend Payout Ratios are low for this company coming in at a 5 year median DPRs for earnings at 20% and for cash flow at 5.8%. Low DPRs can affect the viability of dividends and therefore can be seen as a good thing.
The total return on this stock is also quite good with 5 and 10 years total returns at 9.58% and 16.52% per year with 7.89% and 14.14% per year from capital gains and 1.68 and 2.38% per year from dividends.
Outstanding share have decreased by marginal amounts over the past 5 and 10 years. Outstanding shares were increased by stock options and decreased by buy backs. There is sometimes value in using 5 year running averages. Revenue per share has grown over the past 5 and 10 years at 8.6% and 3.5% per year. However, if you look at 5 year running average growth over these periods, they are much lower at 3.2% and 2.6% per year.
The growth in Earnings per Share is better with growth over the past 5 and 10 years at 8.7% and 9.2% per year. Growth in Cash Flow per Share is also quite good at 14.9% and 12.5% per year over the past 5 and 10 years. The growth in Book Value per Share is also good at 8.6% and 8.9% per year over the past 5 and 10 years.
The Return on Equity for the financial year ending in 2012 is good at 13.8%. However, it is usually lower and the ROE has a 5 year median value of just 7.3%. The ROE on Comprehensive Income seems to be consistently lower with the ROE for 2012 at 10.2% and the 5 year median value at just 7.0%.
Utility companies generally have big debt loads and they often rely on cash flow to get to a decent Liquidity Ratio. The Liquidity Ratio on this company has varied a lot over time. The ratio for 2012 is 1.36 and the current one is even lower at 0.90. However, when you add in cash flow after dividends these ratios are 2.68 and 1.66, respectively.
The Debt Ratio for this company is generally good with the one for 2012 at 1.52 and the current one at 1.63. The current Leverage and Debt/Equity Ratios are fine at 2.58 and 1.58.
This utility has provided its shareholders with a good return over the years. The dividend yield has always been a bit low. The dividends have been increasing since 1993 when data in my spreadsheet starts. It is on a number of dividend growth stock lists. This is why I follow this stock. I have not bought it because I already possess enough utility stocks.
It is a good dividend growth utility stock. See my spreadsheet at aco.htm.
This is the first of two parts. Second part will be posted on Thursday, August 22nd, 2013 and will be here.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. Its web site is here ATCO.
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, August 20, 2013
MacDonald, Dettwiler & Associates 2
I do not own this stock MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also and it is a Tech stock with dividends.
When I look at insider trading, I find insider selling at $1.2M and no insider buying. The insiders do have options per se, but have option like vehicles called Deferred Share Unit (DSU), Share Appreciation Rights (SAR) and Deferred Restricted Share Units (DRSU). There is some insider ownership, but not that much. For example, the CEO has shares worth $3.3M and the CFO has shares worth $2.2M. Both these add up to only 0.2% of the company.
The 5 year low, median and high median Price/Earnings per Share Ratios are 13.45, 18.62 and 22.51. The current P/E Ratios is 15.00 based on 2013 earnings estimates of $5.28 and a current stock price of $79.20. Since earnings for the first 6 months are down by 1.5%, you have to wonder about the estimates. Based on earnings for the year to June 2013, the P/E ratio would be 29.66 based on earnings of $2.67 and stock price of $79.20.
The current Graham Price has some of the same problems as the P/E Ratio with the Graham Price of $47.20 partly based on high expected earnings by analysts. The current Price/Graham Price Ratio is 1.68. The 10 year low, median and high median P/GP Ratios of 1.61, 1.89 and 2.25 this tests shows the price is reasonable.
A test based on the Price/Book Value per Share Ratio however, shows the same thing, that the stock price is relatively reasonable. The 10 year P/B Ratio is 3.94 and the current P/B Ratio of 4.22 is just some 7% higher and points to a reasonable stock price. However, a P/B Ratio of 4.22 is rather high.
The dividend yield test is the only one to show something different. Since dividends have only been paid for two years, this is not a great test. The 2 year median dividend yield is 2.29% and the current one is 1.64%, showing that the current dividend yield is some 28% lower than the 2 year dividend yield and suggests a rather high price.
Looking at other stock price tests, like Price/Cash Flow per Share Ratio shows a relatively reasonable stock price, but here again, the P/CF ratio is rather high. The 10 year median P/CF Ratio is 11.25 and the current one is 11.73 which is only some 4% higher and points to a relatively reasonable stock price.
If you look at the Price/Sales per Share Ratio, this shows that the price is good. The 10 year median P/S Ratio is 1.54 and the current one is 1.35 based on sales estimates. Even if you use the sales for the last year to June 2013, the current P/S Ratio is 1.79 and only 17% higher.
The thing also to consider is that Ratios tend to be higher on tech stocks than some other types of stocks. For this stock most of the stock tests point to a relatively reasonable current stock price.
When you look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority of the recommendations are a Buy. The consensus recommendation would be a Buy. However, the 12 month stock price consensus is just $83.00. This consensus price gives a 12 month total return of just 6.44% with 4.8% from Capital Gains and 1.64% from Dividends. This is rather a low total return on a Tech stock.
CanTech has a positive review of this stock in August 2013. Donville Kent Asset Management covers this stock in their July 2013 issue.
The stock price may be relatively reasonable, but the easy money on this tech stock has already been made. Since the end of last year this stock has rallied around 60%. I would like to see another dividend increase before looking at this stock again. See my spreadsheet at mda.htm.
This is the second of two parts. The first part was posted on Monday, August 19th, 2013 and is available here.
MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald, Dettwiler and Associates.
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 selling at $1.2M and no insider buying. The insiders do have options per se, but have option like vehicles called Deferred Share Unit (DSU), Share Appreciation Rights (SAR) and Deferred Restricted Share Units (DRSU). There is some insider ownership, but not that much. For example, the CEO has shares worth $3.3M and the CFO has shares worth $2.2M. Both these add up to only 0.2% of the company.
The 5 year low, median and high median Price/Earnings per Share Ratios are 13.45, 18.62 and 22.51. The current P/E Ratios is 15.00 based on 2013 earnings estimates of $5.28 and a current stock price of $79.20. Since earnings for the first 6 months are down by 1.5%, you have to wonder about the estimates. Based on earnings for the year to June 2013, the P/E ratio would be 29.66 based on earnings of $2.67 and stock price of $79.20.
The current Graham Price has some of the same problems as the P/E Ratio with the Graham Price of $47.20 partly based on high expected earnings by analysts. The current Price/Graham Price Ratio is 1.68. The 10 year low, median and high median P/GP Ratios of 1.61, 1.89 and 2.25 this tests shows the price is reasonable.
A test based on the Price/Book Value per Share Ratio however, shows the same thing, that the stock price is relatively reasonable. The 10 year P/B Ratio is 3.94 and the current P/B Ratio of 4.22 is just some 7% higher and points to a reasonable stock price. However, a P/B Ratio of 4.22 is rather high.
The dividend yield test is the only one to show something different. Since dividends have only been paid for two years, this is not a great test. The 2 year median dividend yield is 2.29% and the current one is 1.64%, showing that the current dividend yield is some 28% lower than the 2 year dividend yield and suggests a rather high price.
Looking at other stock price tests, like Price/Cash Flow per Share Ratio shows a relatively reasonable stock price, but here again, the P/CF ratio is rather high. The 10 year median P/CF Ratio is 11.25 and the current one is 11.73 which is only some 4% higher and points to a relatively reasonable stock price.
If you look at the Price/Sales per Share Ratio, this shows that the price is good. The 10 year median P/S Ratio is 1.54 and the current one is 1.35 based on sales estimates. Even if you use the sales for the last year to June 2013, the current P/S Ratio is 1.79 and only 17% higher.
The thing also to consider is that Ratios tend to be higher on tech stocks than some other types of stocks. For this stock most of the stock tests point to a relatively reasonable current stock price.
When you look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority of the recommendations are a Buy. The consensus recommendation would be a Buy. However, the 12 month stock price consensus is just $83.00. This consensus price gives a 12 month total return of just 6.44% with 4.8% from Capital Gains and 1.64% from Dividends. This is rather a low total return on a Tech stock.
CanTech has a positive review of this stock in August 2013. Donville Kent Asset Management covers this stock in their July 2013 issue.
The stock price may be relatively reasonable, but the easy money on this tech stock has already been made. Since the end of last year this stock has rallied around 60%. I would like to see another dividend increase before looking at this stock again. See my spreadsheet at mda.htm.
This is the second of two parts. The first part was posted on Monday, August 19th, 2013 and is available here.
MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald, Dettwiler and Associates.
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, August 19, 2013
MacDonald, Dettwiler & Associates
On my other blog I am today writing about space...continue...
I do not own this stock MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also and it is a Tech stock with dividends.
Dividends are a recent addition to this stock as they were started only in 2011. They are also only paying them semi-annually rather than the normal timing of quarterly. They started off with their dividends around 2%. There was a 30% increase in dividends in 2012, but no increase in 2013. The current dividend yield is just 1.6%. Mainly we have lower dividends as this stock in currently on a tear upwards.
The dividend Payout Ratios are good with the ratio for earnings being some 25% in 2011 and 48% in 2012. The DPR for cash flow was also quite good at 24% for 2011 and 29% or 2012.
Total Return over the past 5 and 10 years has been at 6.92% and 10.01% with 6.03% and 9.54% from capital gains and 0.88% and 0.46% from dividends. (There were only dividends during the last 2 years of these periods.)
The outstanding shares have declined over the past 5 and 10 years with the decline being at 4.8% and 1.5% per year over these periods. The shares have increased due to stock options, employee purchase plan and share issues. The shares have decreased due to buy backs.
No matter how you look at the statistics on revenues, the last 5 years have had no growth. Revenue is down by 6% per year over the past 5 years and up by only 4.4% per year over the past 10 years. The Revenue per share, if you look at the 5 year running averages is only up by 1.8% per year over the past 5 years and by 7.8% per year over the past 10 years. However, analysts expect good growth over the next few years. The latest financial shows that year over year revenues are up by 60% to the end of June 2013.
Earnings have had better growth with the 5 and 10 year growth, using 5 year running averages, up by 7% and 14.6% per year, respectively. Analysts are also expecting growth in earnings for the next few years, but looking at the latest report of June 2013, year over year earnings are down by 1.5%.
The cash flow per share has also grown well and the 5 and 10 year growth, using 5 year running averages is up by 9.9% and 16.6% per year. The analysts expect good growth here too and looking at the latest report of June 2013, year over year cash flow is up by 39%.
The Return on Equity has generally been quite good with the ROE at the end of last year at 32.4% with a 5 year median value of 20.3%. The comprehensive income has varied from net income. Comprehensive income was higher in 2011. It was then lower in 2012. If you look the year ending in June 2013, it is again higher (by some 27%).
They have recently been going into debt to buy assets so debt ratios were not great for the financial year ending in 2012. However, they have been improving with the current Liquidity Ratio at 0.92 up from 0.75. However, if you take off the current portion of long term debt and add in cash flow after dividends, the ratio can get to 1.24. Not great, but not that bad.
The Debt Ratio has improved since the end of last year, with the current ratio at 1.31, up from 1.13. The Leverage and Debt/Equity Ratios were rather high at the end of last year coming in at 8.70 and 7.70. They have now improved to 4.24 and 3.24, respectively. Still a little higher than I would like.
I have always had a soft spot for tech companies. This just might be a candidate for a stock to replace Shoppers that I sold from my TFSA. Tomorrow I will look at what my stock price tests tell me and also what others are saying about this stock. See my spreadsheet at mda.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 20th, 2013 and will be here.
MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald, Dettwiler and Associates.
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 do not own this stock MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF). I read about this stock in MPL Communication's Advice Hotline dated October 10, 2012. CanTech likes it also and it is a Tech stock with dividends.
Dividends are a recent addition to this stock as they were started only in 2011. They are also only paying them semi-annually rather than the normal timing of quarterly. They started off with their dividends around 2%. There was a 30% increase in dividends in 2012, but no increase in 2013. The current dividend yield is just 1.6%. Mainly we have lower dividends as this stock in currently on a tear upwards.
The dividend Payout Ratios are good with the ratio for earnings being some 25% in 2011 and 48% in 2012. The DPR for cash flow was also quite good at 24% for 2011 and 29% or 2012.
Total Return over the past 5 and 10 years has been at 6.92% and 10.01% with 6.03% and 9.54% from capital gains and 0.88% and 0.46% from dividends. (There were only dividends during the last 2 years of these periods.)
The outstanding shares have declined over the past 5 and 10 years with the decline being at 4.8% and 1.5% per year over these periods. The shares have increased due to stock options, employee purchase plan and share issues. The shares have decreased due to buy backs.
No matter how you look at the statistics on revenues, the last 5 years have had no growth. Revenue is down by 6% per year over the past 5 years and up by only 4.4% per year over the past 10 years. The Revenue per share, if you look at the 5 year running averages is only up by 1.8% per year over the past 5 years and by 7.8% per year over the past 10 years. However, analysts expect good growth over the next few years. The latest financial shows that year over year revenues are up by 60% to the end of June 2013.
Earnings have had better growth with the 5 and 10 year growth, using 5 year running averages, up by 7% and 14.6% per year, respectively. Analysts are also expecting growth in earnings for the next few years, but looking at the latest report of June 2013, year over year earnings are down by 1.5%.
The cash flow per share has also grown well and the 5 and 10 year growth, using 5 year running averages is up by 9.9% and 16.6% per year. The analysts expect good growth here too and looking at the latest report of June 2013, year over year cash flow is up by 39%.
The Return on Equity has generally been quite good with the ROE at the end of last year at 32.4% with a 5 year median value of 20.3%. The comprehensive income has varied from net income. Comprehensive income was higher in 2011. It was then lower in 2012. If you look the year ending in June 2013, it is again higher (by some 27%).
They have recently been going into debt to buy assets so debt ratios were not great for the financial year ending in 2012. However, they have been improving with the current Liquidity Ratio at 0.92 up from 0.75. However, if you take off the current portion of long term debt and add in cash flow after dividends, the ratio can get to 1.24. Not great, but not that bad.
The Debt Ratio has improved since the end of last year, with the current ratio at 1.31, up from 1.13. The Leverage and Debt/Equity Ratios were rather high at the end of last year coming in at 8.70 and 7.70. They have now improved to 4.24 and 3.24, respectively. Still a little higher than I would like.
I have always had a soft spot for tech companies. This just might be a candidate for a stock to replace Shoppers that I sold from my TFSA. Tomorrow I will look at what my stock price tests tell me and also what others are saying about this stock. See my spreadsheet at mda.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 20th, 2013 and will be here.
MacDonald, Dettwiler & Associates Ltd. provides solutions that capture and process large amounts of data, produce essential information and improve the decision making and operational performance of business and government organizations worldwide. Its web site is here MacDonald, Dettwiler and Associates.
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, August 16, 2013
Alimentation Couche-Tard Inc 2
I do not own this stock Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. Today I want to take a look at what the analyst say about this stock and also look at what different stock price tests say about the current stock price.
When I look at insider trading, I find $8.7M of insider selling and net insider selling at $8.3M. There is some $0.4M of insider buying. A lot of recent selling took place around the $64-$65 price. There are not only options but Phantom Share Unit (Unité d'action fictive). The Class A multiple voting shares are owned by insiders and Metro (with some 22%). Some insiders, like Jacques D'Amours own in the hundreds of million dollars of Shares (i.e. worth some $638M ).
The CEO has $1.1B of Class A shares and $171M of Class B shares and has options worth $48.8M. The CFO has shares worth $1M and has options with $2.6M. One officer has some shares and has some options but there are officers with both Class A and Class B shares worth in the $100Ms. A director has shares worth $0.8M and has some options. 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 9.48, 12.00 and 14.52. The 10 year low, median and high median P/E Ratios are a bit higher at 12.35, 16.06 and 19.77. The current P/E Ratio is 15.21 based on a stock price of $59.17 and 2014earnings estimates of $3.89 CDN$. (Note financial years for this company end in April each year.)
The current Graham price is $39.02 and the 10 year low, median and high median Price/Graham price Ratios 1.10, 1.50 and 1.85. The current P/GP Ratio is 1.52 based on a stock price of $59.17. The 10 year median Price/Book Value per Share Ratio is 3.32. The current P/B Ratio is 3.40 a value only some 2% higher.
The current dividend yield is 0.51% and the 5 year median dividend yield is 0.81% a value some 38% higher. Most of the test points to the price being a bit higher than the median but within the reasonable arrange. However, the dividend yield tests, which is a very important test says otherwise. It says that the stock price is currently too high. If there is disagreement among the stock price tests, it is best to go with the dividend yield test unless there is some good reason not to. In this case, I see no good reason why not to go with the dividend yield test.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. The 12 month consensus stock price is $61.80. This implies a total return of 4.95%, with 0.51% from dividends and 4.44% from capital gains. This is really not a great potential return.
The Motley Fool Site suggests that investor might want to wait another business quarter to see how this company swallows Statoil Fuel & Retail and see whether or not it starts to pay down its debt. The CSP.net site has an interview with Alimentation Couche-Tard Inc. president and CEO Alain Bouchard who says that "fiscal 2014 should be a year of execution and achievements".
I have always liked this company, but I feel that the price is currently too high. I do hope to own it again in the future. It might make a good addition to the stocks in the TFSA since I sold Shoppers and have some money to spend. See my spreadsheet at atd.htm.
This is the second of two parts. The first part was posted on Thursday, August 15th, 2013 and is available here.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Alimentation Couche-Tard.
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 $8.7M of insider selling and net insider selling at $8.3M. There is some $0.4M of insider buying. A lot of recent selling took place around the $64-$65 price. There are not only options but Phantom Share Unit (Unité d'action fictive). The Class A multiple voting shares are owned by insiders and Metro (with some 22%). Some insiders, like Jacques D'Amours own in the hundreds of million dollars of Shares (i.e. worth some $638M ).
The CEO has $1.1B of Class A shares and $171M of Class B shares and has options worth $48.8M. The CFO has shares worth $1M and has options with $2.6M. One officer has some shares and has some options but there are officers with both Class A and Class B shares worth in the $100Ms. A director has shares worth $0.8M and has some options. 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 9.48, 12.00 and 14.52. The 10 year low, median and high median P/E Ratios are a bit higher at 12.35, 16.06 and 19.77. The current P/E Ratio is 15.21 based on a stock price of $59.17 and 2014earnings estimates of $3.89 CDN$. (Note financial years for this company end in April each year.)
The current Graham price is $39.02 and the 10 year low, median and high median Price/Graham price Ratios 1.10, 1.50 and 1.85. The current P/GP Ratio is 1.52 based on a stock price of $59.17. The 10 year median Price/Book Value per Share Ratio is 3.32. The current P/B Ratio is 3.40 a value only some 2% higher.
The current dividend yield is 0.51% and the 5 year median dividend yield is 0.81% a value some 38% higher. Most of the test points to the price being a bit higher than the median but within the reasonable arrange. However, the dividend yield tests, which is a very important test says otherwise. It says that the stock price is currently too high. If there is disagreement among the stock price tests, it is best to go with the dividend yield test unless there is some good reason not to. In this case, I see no good reason why not to go with the dividend yield test.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. The 12 month consensus stock price is $61.80. This implies a total return of 4.95%, with 0.51% from dividends and 4.44% from capital gains. This is really not a great potential return.
The Motley Fool Site suggests that investor might want to wait another business quarter to see how this company swallows Statoil Fuel & Retail and see whether or not it starts to pay down its debt. The CSP.net site has an interview with Alimentation Couche-Tard Inc. president and CEO Alain Bouchard who says that "fiscal 2014 should be a year of execution and achievements".
I have always liked this company, but I feel that the price is currently too high. I do hope to own it again in the future. It might make a good addition to the stocks in the TFSA since I sold Shoppers and have some money to spend. See my spreadsheet at atd.htm.
This is the second of two parts. The first part was posted on Thursday, August 15th, 2013 and is available here.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Alimentation Couche-Tard.
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, August 15, 2013
Alimentation Couche-Tard Inc.
I do not own this stock Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it has a good reputation and my spreadsheet showed I should do well with it. The only problem I had with it then was it had no dividend. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I did not buy much mid-year as P/E was rather high.
By the year end I bought more as TD Bank said it was a good time to buy this stock. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
The dividends are quite low on this stock coming in currently at 0.5%. It has never been very high and barely, at the best of times reaching 1%. However, the increases have been very nice. The 5 and 7 year growth in dividends is at 17% and 18% per year, respectively. The Dividend Payout Ratio is quite low with the 5 year median DPR for earnings at 10% and for cash flow at 5%.
The total return on this stock over the past 5 and 10 years is very good. The 5 and 10 year total return is at 34.55% and 25.06% with 33.75% and 24.48% per year coming from capital gains and 0.8% and 0.58% per year from dividends.
Outstanding shares have decreased over the past 5 years by 1% per year and increased over the past 10 years at 1% per year. Shares have increased due to stock options and share issues. They have decreased due to Buy Backs. There are two types of shares with Class A shares being multiple voting shares and Class B shares being subordinate voting shares. There has also been conversion of Class A shares into Class B shares.
This company reports in US currency and has done better in US$ than in CDN$. However the company has shown great growth in Revenues, Earnings and Cash Flow. Revenue is up by 18% and 31% per year over the past 5 and 10 years. Earnings per Share are up by 27% and 23% per year over the past 5 and 10 years. Cash Flow per Share is up by 23% and 24% per year over the past 5 and 10 years.
The Return on Equity is consistently good with the one for the financial year ending in April 2013 at 17.8% and with a 5 year median of 19.1%. The ROE on Comprehensive Income is usually different and sometimes lower and sometimes higher than the ROE on net income. For example for the year ending April 2013 it is 30% higher and for the year ending April 2012 it was 7% lower.
The Liquidity Ratio is rather low at 1.05, but if you add in cash flow after dividends it is higher at 1.40. Unfortunately, most retail food companies tend to have rather low Liquidity Ratios and this is not uncommon. The Debt Ratio for the April 2013 financial year is rather low at 1.44 and this is unusual for this stock. The 5 year median Debt Ratio is 1.65.
This is a dividend growth stock. It is suitable for diversification and to build up a dividend income portfolio. I would buy it again, but only for my trading account. This is because I am withdrawing money from my RRSP accounts and I like to have stocks with higher dividend yields than this one had. See my spreadsheet at atd.htm.
This is the first of two parts. Second part will be posted on Friday, August 16th, 2013 and will be here.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Alimentation Couche-Tard.
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.
By the year end I bought more as TD Bank said it was a good time to buy this stock. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
The dividends are quite low on this stock coming in currently at 0.5%. It has never been very high and barely, at the best of times reaching 1%. However, the increases have been very nice. The 5 and 7 year growth in dividends is at 17% and 18% per year, respectively. The Dividend Payout Ratio is quite low with the 5 year median DPR for earnings at 10% and for cash flow at 5%.
The total return on this stock over the past 5 and 10 years is very good. The 5 and 10 year total return is at 34.55% and 25.06% with 33.75% and 24.48% per year coming from capital gains and 0.8% and 0.58% per year from dividends.
Outstanding shares have decreased over the past 5 years by 1% per year and increased over the past 10 years at 1% per year. Shares have increased due to stock options and share issues. They have decreased due to Buy Backs. There are two types of shares with Class A shares being multiple voting shares and Class B shares being subordinate voting shares. There has also been conversion of Class A shares into Class B shares.
This company reports in US currency and has done better in US$ than in CDN$. However the company has shown great growth in Revenues, Earnings and Cash Flow. Revenue is up by 18% and 31% per year over the past 5 and 10 years. Earnings per Share are up by 27% and 23% per year over the past 5 and 10 years. Cash Flow per Share is up by 23% and 24% per year over the past 5 and 10 years.
The Return on Equity is consistently good with the one for the financial year ending in April 2013 at 17.8% and with a 5 year median of 19.1%. The ROE on Comprehensive Income is usually different and sometimes lower and sometimes higher than the ROE on net income. For example for the year ending April 2013 it is 30% higher and for the year ending April 2012 it was 7% lower.
The Liquidity Ratio is rather low at 1.05, but if you add in cash flow after dividends it is higher at 1.40. Unfortunately, most retail food companies tend to have rather low Liquidity Ratios and this is not uncommon. The Debt Ratio for the April 2013 financial year is rather low at 1.44 and this is unusual for this stock. The 5 year median Debt Ratio is 1.65.
This is a dividend growth stock. It is suitable for diversification and to build up a dividend income portfolio. I would buy it again, but only for my trading account. This is because I am withdrawing money from my RRSP accounts and I like to have stocks with higher dividend yields than this one had. See my spreadsheet at atd.htm.
This is the first of two parts. Second part will be posted on Friday, August 16th, 2013 and will be here.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Alimentation Couche-Tard.
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, August 14, 2013
Andrew Peller Ltd
On my other blog I am today writing about pension assumptions...continue...
I do not own this stock Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF). I started a spreadsheet in April 2009 after I read a favorable report on the stock. Also, this stock was on Mike Higgs' dividend growth stock list.
I do not think that it is a dividend growth stock. They did some nice dividend increases between 2007 and 2009. Before that, dividends had been level for 8 years. In 2013 the company again had dividend increases. (Financial year ends in March of each year, so March 2013 was last financial year and we are in the 2014 financial year.)
The current dividend yield is 2.82%; however the 5 and 10 year median yields are higher at 3.67% and 3.28%, respectively. The dividend growth over the past 5 and 10 years are 4.8% and 5.9% per year, respectively. The Dividend Payout Ratios are quite good with the 5 year median ratio for earnings at 41% and for cash flow at 23%.
The 5 and 10 year total return is quite decent with the total return at 7.52% and 11.22% per year respectively. The capital gain portion of these returns was at 4.11% and 7.46% per year. The dividend portion of these returns was at 3.41% and 3.76% per year.
There are two types of shares. Class A shares are non-voting shares and Class B shares are voting shares. Insiders own almost 87% of the Class B shares. Total outstanding shares have decreased marginally per year over the past 5 and 10 years. The company at times has repurchased shares. They have issued, but not often stock options. They also have an Employee Stock Purchase Plan.
This is a retail stock and earnings have fluctuated over the years. The 5 and 10 year growth in earnings are at 6.3% and 7.9% per year, respectively. However, if you use the 5 year running averages, growth over the last 5 and 10 years is at 1.1% and 3.9%, much lower figures. Revenues have progressed nice as has cash flow with growth in the 5 to 7% range
The Return on Equity is generally in the 9 to 11% range. The ROE for comprehensive income is often the same as for net income but this has been lower over the past two years with the ROE on comprehensive income some 6% lower for the financial year ending in March 2013. However, ROE on comprehensive income was still at 10.7% a good value.
An April 2013 article by Martin Mittelstaedt in the G&M says that this stock is cheap but illiquid. The Canadian Dividend Blogger also wrote a favorable report on this stock in June 2013.
As far as the current stock price goes, both the dividend yield test and the book value tests show that it is relatively expensive. The current dividend yield is 2.82% and the stock has a 5 year median dividend yield of 3.67% which is some 23% higher. The 10 year median Price/Book Value per Share is 1.29 and the current P/B Ratio is some 22% higher at 1.57. See my spreadsheet at adw.htm.
Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan and Similkameen Valleys and vineyards around the world. They also market craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company's products are sold predominantly in Canada. Class A shares are non-voting. Its web site is here Andrew Peller.
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 do not own this stock Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF). I started a spreadsheet in April 2009 after I read a favorable report on the stock. Also, this stock was on Mike Higgs' dividend growth stock list.
I do not think that it is a dividend growth stock. They did some nice dividend increases between 2007 and 2009. Before that, dividends had been level for 8 years. In 2013 the company again had dividend increases. (Financial year ends in March of each year, so March 2013 was last financial year and we are in the 2014 financial year.)
The current dividend yield is 2.82%; however the 5 and 10 year median yields are higher at 3.67% and 3.28%, respectively. The dividend growth over the past 5 and 10 years are 4.8% and 5.9% per year, respectively. The Dividend Payout Ratios are quite good with the 5 year median ratio for earnings at 41% and for cash flow at 23%.
The 5 and 10 year total return is quite decent with the total return at 7.52% and 11.22% per year respectively. The capital gain portion of these returns was at 4.11% and 7.46% per year. The dividend portion of these returns was at 3.41% and 3.76% per year.
There are two types of shares. Class A shares are non-voting shares and Class B shares are voting shares. Insiders own almost 87% of the Class B shares. Total outstanding shares have decreased marginally per year over the past 5 and 10 years. The company at times has repurchased shares. They have issued, but not often stock options. They also have an Employee Stock Purchase Plan.
This is a retail stock and earnings have fluctuated over the years. The 5 and 10 year growth in earnings are at 6.3% and 7.9% per year, respectively. However, if you use the 5 year running averages, growth over the last 5 and 10 years is at 1.1% and 3.9%, much lower figures. Revenues have progressed nice as has cash flow with growth in the 5 to 7% range
The Return on Equity is generally in the 9 to 11% range. The ROE for comprehensive income is often the same as for net income but this has been lower over the past two years with the ROE on comprehensive income some 6% lower for the financial year ending in March 2013. However, ROE on comprehensive income was still at 10.7% a good value.
An April 2013 article by Martin Mittelstaedt in the G&M says that this stock is cheap but illiquid. The Canadian Dividend Blogger also wrote a favorable report on this stock in June 2013.
As far as the current stock price goes, both the dividend yield test and the book value tests show that it is relatively expensive. The current dividend yield is 2.82% and the stock has a 5 year median dividend yield of 3.67% which is some 23% higher. The 10 year median Price/Book Value per Share is 1.29 and the current P/B Ratio is some 22% higher at 1.57. See my spreadsheet at adw.htm.
Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan and Similkameen Valleys and vineyards around the world. They also market craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company's products are sold predominantly in Canada. Class A shares are non-voting. Its web site is here Andrew Peller.
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, August 13, 2013
TECSYS Inc 2
I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. However, in the end I did not buy it was a filler stock, I bought it for my trading accounting as a small cap dividend paying growth stock.
When I look at insider trading, I find $0.5M of insider selling and no insider buying. The Brereton family owes some 46% of the outstanding stock. The biggest holder is David Brereton with 31% of the outstanding shares. The company has been buying back shares.
The CEO has shares worth $1.7M and has options worth $0.3M. The CFO has shares worth $0.2M and has no options. An officer has shares worth $14.3M and has no options. The other officer has shares worth $0.2M and has some options. A director has no shares and has some options. 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 13.33, 15.21 and 17.08. The current P/E Ratio is 21.26 based on a stock price of $4.04 and 2014 earnings of $0.19. (Note that the annual financial year is April each year so last financial year was April 2013 and next is April 2014.)
I get a Graham Price of 2.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 1.69 based on a $4.04 stock price. The 10 year median Price/Book Value per Share ratio is 1.60. The current one is 3.03, a value some $90% higher.
The 5 year median dividend yield is 2.71%. The current dividend yield based on no increase in dividends this year is just 1.73, a value some 30% lower. If you consider a dividend increase for this year of 10% you have a current dividend of 1.91%, a value some 23% lower than the 5 year median dividend yield. If you consider a dividend increase for this year of 16.67 (same as last year), the dividend yield would be 2.02%, a value some 18% lower than the 5 year median dividend yield.
This article talks about a $.4m overrun on an LCBO warehouse system that was to cost $1.55M. This is a huge overrun. However, the article sights LCBO changing specs. I worked on IT projects and I know from experience that if you want to bring in a project on time and on budget, you never allow users to change specs once you have a budget and timing set. (I was in a company where this happened on a project. We ended up calling the project a black hole.)
There is an article on So-Co-IT site about TECSYS expanding its footprint in hospitals with a major product for the operating room. This company also got a positive review on CanTech.
There is only one analyst following this stock and he gives the stock a Buy recommendation. The 12 months consensus stock price is $4.75. This implies at least a 19.31% return with 17.57% from capital gains and at least 1.73% from dividends.
It would seem no matter how you look at this stock, the price is relatively high. This is a tech stock and maybe setting some new highs. The P/E high last year was 45.63 and the P/E low was 26.38. On the other hand, the fall is coming and for the stock market the fall can be a time of new stock market lows. I am not, at present, in a hurry to buy more of this stock.
I would pay more attention to dividend yield than other measures. This company gives out a dividend in mid-September each year. It is this dividend that generally has the increase. So stay tuned. See my spreadsheet at tcs.htm.
This is the second of two parts. The first part was posted on Monday, August 12th, 2013 and is available here.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.
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 $0.5M of insider selling and no insider buying. The Brereton family owes some 46% of the outstanding stock. The biggest holder is David Brereton with 31% of the outstanding shares. The company has been buying back shares.
The CEO has shares worth $1.7M and has options worth $0.3M. The CFO has shares worth $0.2M and has no options. An officer has shares worth $14.3M and has no options. The other officer has shares worth $0.2M and has some options. A director has no shares and has some options. 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 13.33, 15.21 and 17.08. The current P/E Ratio is 21.26 based on a stock price of $4.04 and 2014 earnings of $0.19. (Note that the annual financial year is April each year so last financial year was April 2013 and next is April 2014.)
I get a Graham Price of 2.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 1.69 based on a $4.04 stock price. The 10 year median Price/Book Value per Share ratio is 1.60. The current one is 3.03, a value some $90% higher.
The 5 year median dividend yield is 2.71%. The current dividend yield based on no increase in dividends this year is just 1.73, a value some 30% lower. If you consider a dividend increase for this year of 10% you have a current dividend of 1.91%, a value some 23% lower than the 5 year median dividend yield. If you consider a dividend increase for this year of 16.67 (same as last year), the dividend yield would be 2.02%, a value some 18% lower than the 5 year median dividend yield.
This article talks about a $.4m overrun on an LCBO warehouse system that was to cost $1.55M. This is a huge overrun. However, the article sights LCBO changing specs. I worked on IT projects and I know from experience that if you want to bring in a project on time and on budget, you never allow users to change specs once you have a budget and timing set. (I was in a company where this happened on a project. We ended up calling the project a black hole.)
There is an article on So-Co-IT site about TECSYS expanding its footprint in hospitals with a major product for the operating room. This company also got a positive review on CanTech.
There is only one analyst following this stock and he gives the stock a Buy recommendation. The 12 months consensus stock price is $4.75. This implies at least a 19.31% return with 17.57% from capital gains and at least 1.73% from dividends.
It would seem no matter how you look at this stock, the price is relatively high. This is a tech stock and maybe setting some new highs. The P/E high last year was 45.63 and the P/E low was 26.38. On the other hand, the fall is coming and for the stock market the fall can be a time of new stock market lows. I am not, at present, in a hurry to buy more of this stock.
I would pay more attention to dividend yield than other measures. This company gives out a dividend in mid-September each year. It is this dividend that generally has the increase. So stay tuned. See my spreadsheet at tcs.htm.
This is the second of two parts. The first part was posted on Monday, August 12th, 2013 and is available here.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.
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, August 12, 2013
TECSYS Inc
On my other blog I am today writing about pension woes...continue...
I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. However, in the end I did not buy it was a filler stock, I bought it for my trading accounting as a small cap dividend paying growth stock.
This company started to pay dividends in 2008. The dividends have been increased each financial year since with the growth of dividends at 11.8% per year. Dividends are only paid twice a year (rather than the normal quarterly payment). The last dividend raise was for the fiscal year ending in April 2013 and was a 16.7% rise.
The current dividend yield is a moderate one, with the current dividend yield at 1.75%, but the 5 year median is higher at 2.7%. However, there seems no reason not to expect another dividend raise this year. If dividends are increased by 10%, the current yield would be 1.91% and if they are increased at 16.7% again as they were last year that would make the current yield 2.02%.
The Dividend Payout Ratios are good with the 5 year median at 46% for earnings and 27% for cash flow. The DPRs are expected to be around the same or better for the current financial year.
Total return for the last 5 and 10 years is at 16.23% and 11.35% per year with 13.89% and 10.21% from capital gains and 2.34% and 1.14% from dividends. My return, since I bought this stock in February 2011 is 38.13% per year with 34.74% from capital gains and 3.39% from dividends.
The outstanding shares have declined over the past 5 and 10 years at 2.5% and 2.3% per year. Shares have increased due to stock options and decreased due to buy backs. Growth has been better over the past 10 year than the past 5 years. However, the only analyst following this stock expects good growth for this financial year.
Revenue has grown at 2.4% and 11% per year over the past 5 and 10 years. Revenue per Share has grown at 5% and 14% per year over the past 5 and 10 years. If you look at Revenue per Share growth over the past 5 and 10 years using 5 year running averages, the growth is different at 9% and 6.6% per year.
Before 2008, this company only had one year of positive earnings. If you look at 5 year growth in earnings they are down some 2.3% per year. If you use 5 year running averages, earnings are up over the past 5 years at 95% per year. The company's earnings decreased over the last two years, but are expected to be up substantially over the next couple of years.
Before 2004, the company also had problems with negative cash flows. Also, 5 years ago was a very good year for cash flow and they were higher than for the past few years. However, if you look at a5 year running averages over the past 5 years, you get growth in cash flow of around 17% per year.
One thing that is not good is the Return on Equity. This ratio is not very good coming in at just 5.8% for the last fiscal year and has a 5 year median of just 8.5%. The ROE on comprehensive income is the same as for the ROE on net income. The thing is that companies with low ROEs tend to, over the longer term, underperform the market.
The debt ratios are good for this company. The current Liquidity Ratio is quite good at 1.60. However, the 5 year median is lower at 1.45 and not quite to the 1.50 ratio I like. The Debt Ratio is very good at 1.90 and the 5 year median ratio is even better at 2.11. The current Leverage and Debt/Equity Ratios are fine and are at 2.11 and 1.11, respectively.
I have not invested much in this stock, but I have been pleased with the results I have had. This is a rather risky stock and I bought it to tuck it away for a while and see how it does. I have not bought more as I think that it is getting expensive. However, I am sure that they will be times when it is a good buy again as we are still in a secular bear market. See my spreadsheet at tcs.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 13th, 2013 and will be here.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.
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 TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. However, in the end I did not buy it was a filler stock, I bought it for my trading accounting as a small cap dividend paying growth stock.
This company started to pay dividends in 2008. The dividends have been increased each financial year since with the growth of dividends at 11.8% per year. Dividends are only paid twice a year (rather than the normal quarterly payment). The last dividend raise was for the fiscal year ending in April 2013 and was a 16.7% rise.
The current dividend yield is a moderate one, with the current dividend yield at 1.75%, but the 5 year median is higher at 2.7%. However, there seems no reason not to expect another dividend raise this year. If dividends are increased by 10%, the current yield would be 1.91% and if they are increased at 16.7% again as they were last year that would make the current yield 2.02%.
The Dividend Payout Ratios are good with the 5 year median at 46% for earnings and 27% for cash flow. The DPRs are expected to be around the same or better for the current financial year.
Total return for the last 5 and 10 years is at 16.23% and 11.35% per year with 13.89% and 10.21% from capital gains and 2.34% and 1.14% from dividends. My return, since I bought this stock in February 2011 is 38.13% per year with 34.74% from capital gains and 3.39% from dividends.
The outstanding shares have declined over the past 5 and 10 years at 2.5% and 2.3% per year. Shares have increased due to stock options and decreased due to buy backs. Growth has been better over the past 10 year than the past 5 years. However, the only analyst following this stock expects good growth for this financial year.
Revenue has grown at 2.4% and 11% per year over the past 5 and 10 years. Revenue per Share has grown at 5% and 14% per year over the past 5 and 10 years. If you look at Revenue per Share growth over the past 5 and 10 years using 5 year running averages, the growth is different at 9% and 6.6% per year.
Before 2008, this company only had one year of positive earnings. If you look at 5 year growth in earnings they are down some 2.3% per year. If you use 5 year running averages, earnings are up over the past 5 years at 95% per year. The company's earnings decreased over the last two years, but are expected to be up substantially over the next couple of years.
Before 2004, the company also had problems with negative cash flows. Also, 5 years ago was a very good year for cash flow and they were higher than for the past few years. However, if you look at a5 year running averages over the past 5 years, you get growth in cash flow of around 17% per year.
One thing that is not good is the Return on Equity. This ratio is not very good coming in at just 5.8% for the last fiscal year and has a 5 year median of just 8.5%. The ROE on comprehensive income is the same as for the ROE on net income. The thing is that companies with low ROEs tend to, over the longer term, underperform the market.
The debt ratios are good for this company. The current Liquidity Ratio is quite good at 1.60. However, the 5 year median is lower at 1.45 and not quite to the 1.50 ratio I like. The Debt Ratio is very good at 1.90 and the 5 year median ratio is even better at 2.11. The current Leverage and Debt/Equity Ratios are fine and are at 2.11 and 1.11, respectively.
I have not invested much in this stock, but I have been pleased with the results I have had. This is a rather risky stock and I bought it to tuck it away for a while and see how it does. I have not bought more as I think that it is getting expensive. However, I am sure that they will be times when it is a good buy again as we are still in a secular bear market. See my spreadsheet at tcs.htm.
This is the first of two parts. Second part will be posted on Tuesday, August 13th, 2013 and will be here.
TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.
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, August 9, 2013
Just Energy Group
I do not own this stock Just Energy Group (TSX-JE, NYSE-JE). I started to follow this is July 2010. It was one of the high yield income trusts that people were talking about, so I decided to check it out. At the time I first checked it out, I did not care for it. This company makes its money as an electricity and gas reseller. When I looked into it, there were a lot of complains about the company. The company is currently diversifying into other business.
Dividends were flat from 2009 until this year. In 2013 they decreased the dividends by 32%. Maybe the reason for this is that the analyst following this stock does not expect the company to make any money in 2013. No earnings estimate is given beyond next year. The current dividend is 12.48%.
I do not mind a company's earnings having some fluctuating. What I do not like about the earnings on this company is that the fluctuations are big and the 5 year running average is negative. The 5 year running average earnings have been negative since 2009 because of the big earnings loss of that year.
The revenue is growing and the 5 year running average over the past 5 and 10 years have grown at 11% and 16% per year. The cash flow is also growing and the 5 year running average growth over the past 5 and 10 years is at 5% and 9.6% per year.
The balance sheet is awful. Not only is the Liquidity Ratio very low, but even considering cash flow it cannot break 1.00. This company also has more liabilities than assets with the Debt Ratio at 0.92. Call me old fashion, but I do like a company to have a balance sheet.
When I look at analysts' recommendations, I find Buy, Hold and underperform recommendations. The consensus recommendation would be a Hold. The 12 month consensus stock price is $7.50. This implies a total return of 23.92% with 12.48% from dividends and 11.44% from capital gains. (Frankly, I am rather skeptical of this.)
There is an interesting story about Just Energy and its founder at G&M. Apparently Just Energy has been accused of unethical sales practices and airbrushing its financial situation. Interestingly, another blogger seems to have a positive spin on this company at newsblaze. It misses one small fact that there was an earnings loss of the first quarter of 2014.
Personally, I would not touch this stock. It has a bad reputation, no earnings and a negative book value. Not everyone sees it my way; I note that TD Waterhouse has issued a Buy Rating on this stock. See my spreadsheet at je.htm.
Just Energy's business involves the sale of natural gas and/or electricity to residential and commercial customers under long-term fixed-price and price-protected contracts. Just Energy derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the associated volumes from its suppliers. The company also offers "green" products through its Just Green program. Through its subsidiary Terra Grain Fuels, the Fund produces and sells wheat-based ethanol. Its web site is here Just Energy.
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 flat from 2009 until this year. In 2013 they decreased the dividends by 32%. Maybe the reason for this is that the analyst following this stock does not expect the company to make any money in 2013. No earnings estimate is given beyond next year. The current dividend is 12.48%.
I do not mind a company's earnings having some fluctuating. What I do not like about the earnings on this company is that the fluctuations are big and the 5 year running average is negative. The 5 year running average earnings have been negative since 2009 because of the big earnings loss of that year.
The revenue is growing and the 5 year running average over the past 5 and 10 years have grown at 11% and 16% per year. The cash flow is also growing and the 5 year running average growth over the past 5 and 10 years is at 5% and 9.6% per year.
The balance sheet is awful. Not only is the Liquidity Ratio very low, but even considering cash flow it cannot break 1.00. This company also has more liabilities than assets with the Debt Ratio at 0.92. Call me old fashion, but I do like a company to have a balance sheet.
When I look at analysts' recommendations, I find Buy, Hold and underperform recommendations. The consensus recommendation would be a Hold. The 12 month consensus stock price is $7.50. This implies a total return of 23.92% with 12.48% from dividends and 11.44% from capital gains. (Frankly, I am rather skeptical of this.)
There is an interesting story about Just Energy and its founder at G&M. Apparently Just Energy has been accused of unethical sales practices and airbrushing its financial situation. Interestingly, another blogger seems to have a positive spin on this company at newsblaze. It misses one small fact that there was an earnings loss of the first quarter of 2014.
Personally, I would not touch this stock. It has a bad reputation, no earnings and a negative book value. Not everyone sees it my way; I note that TD Waterhouse has issued a Buy Rating on this stock. See my spreadsheet at je.htm.
Just Energy's business involves the sale of natural gas and/or electricity to residential and commercial customers under long-term fixed-price and price-protected contracts. Just Energy derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the associated volumes from its suppliers. The company also offers "green" products through its Just Green program. Through its subsidiary Terra Grain Fuels, the Fund produces and sells wheat-based ethanol. Its web site is here Just Energy.
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, August 8, 2013
High Liner Foods 2
On my other blog I am today writing about retiring using 8%, 4% rule...continue...
I do not own this stock High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. I have been meaning to look at it for a while. Ryan Irvine of Keystone also likes this company. Just recently, in July 2013, a reader of my blog also asked me to take a look at this stock.
When I look at the insider trading report, I find a very small amount of insider buying and insider selling at $0.4M (and net insider selling at $0.4M). Activity is all by directors. Insiders not only have options, but other option like vehicles called Rights Performance Share Units and Rights Restricted Share Units.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.77, 10.88 and 13.32. The current P/E Ratio is 13.16 based on a stock price or $34.66 and earnings estimates for 2013 of $2.63 CND$ (or $2.54 US$). This test says that the stock price is still within the reasonable range, but on the high side. (Also, I have a hard time believing that this company will make $2.54US$ in 2013 and $3.49 US$ in 2014 (the other consensus earnings estimates.)
I get a current Graham Price of $26.50. (This is a big increase over past Graham Prices.) The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.82 and 0.96. The current P/GP Ratio is 1.31. This test says that the stock price is too high (or that the stock is relatively expensive.)
The 10 year Price/Book Value per Share is 1.20 and the current P/B Ratio is 2.92 a value some 144% higher. This test says that the stock price is relatively expensive. However, the book value has not been growing is part of the reason. It is not a good sign when a stock that cannot grow its book value. However, the BVPS increased by 20% between the end of 2012 and the 2nd quarter of 2013. (This is connected to lower debt and higher dividends for 2013.)
The current dividend yield is 2.08% and the 5 year median dividend yield is 2.6%. The current dividend yield is some 20% lower than the 5 year median and this test says that the stock is relatively expensive. (Also, note that dividends have grown substantially lately. Between the start of 2012 and now they are up some 80%.)
There are few analysts' following this stock. The analysts' recommendations on Buy and Hold with the consensus being a Buy. The 12 month consensus stock price is $38.20. This implies a 12 month total return of 12.29% with 2.08 from dividends and 10.21% from capital gains.
Ryan Irvine of Keystone gave High Liner Foods a good review in June of 2013. He thinks it is a buy over the next 1 to 3 years for both income and capital gains. However, he also says it is only for portfolios of "aggressive-risk". The New Hampshire Union Leader has a Q&A with the Keith A. Decker, president and chief operating officer of High Liner Foods. In technical news, Forbes talks about this stock crossing its 200 day moving average line on July 30, 2013and that this is bullish. One analyst thought that this company should be trading at 13 to 15 times earnings (that is a P/E of 13 to 15). Another thought you should only buy in weakness when the stock goes into the low $30 range.
The company has recently paid down debt and raised the dividends and this is a very good sign. However, I do think it is overpriced. See my spreadsheet at hlf.htm.
This is the second of two parts. The first part was posted on August 7th, 2013 and is available here.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner.
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 do not own this stock High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. I have been meaning to look at it for a while. Ryan Irvine of Keystone also likes this company. Just recently, in July 2013, a reader of my blog also asked me to take a look at this stock.
When I look at the insider trading report, I find a very small amount of insider buying and insider selling at $0.4M (and net insider selling at $0.4M). Activity is all by directors. Insiders not only have options, but other option like vehicles called Rights Performance Share Units and Rights Restricted Share Units.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.77, 10.88 and 13.32. The current P/E Ratio is 13.16 based on a stock price or $34.66 and earnings estimates for 2013 of $2.63 CND$ (or $2.54 US$). This test says that the stock price is still within the reasonable range, but on the high side. (Also, I have a hard time believing that this company will make $2.54US$ in 2013 and $3.49 US$ in 2014 (the other consensus earnings estimates.)
I get a current Graham Price of $26.50. (This is a big increase over past Graham Prices.) The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.82 and 0.96. The current P/GP Ratio is 1.31. This test says that the stock price is too high (or that the stock is relatively expensive.)
The 10 year Price/Book Value per Share is 1.20 and the current P/B Ratio is 2.92 a value some 144% higher. This test says that the stock price is relatively expensive. However, the book value has not been growing is part of the reason. It is not a good sign when a stock that cannot grow its book value. However, the BVPS increased by 20% between the end of 2012 and the 2nd quarter of 2013. (This is connected to lower debt and higher dividends for 2013.)
The current dividend yield is 2.08% and the 5 year median dividend yield is 2.6%. The current dividend yield is some 20% lower than the 5 year median and this test says that the stock is relatively expensive. (Also, note that dividends have grown substantially lately. Between the start of 2012 and now they are up some 80%.)
There are few analysts' following this stock. The analysts' recommendations on Buy and Hold with the consensus being a Buy. The 12 month consensus stock price is $38.20. This implies a 12 month total return of 12.29% with 2.08 from dividends and 10.21% from capital gains.
Ryan Irvine of Keystone gave High Liner Foods a good review in June of 2013. He thinks it is a buy over the next 1 to 3 years for both income and capital gains. However, he also says it is only for portfolios of "aggressive-risk". The New Hampshire Union Leader has a Q&A with the Keith A. Decker, president and chief operating officer of High Liner Foods. In technical news, Forbes talks about this stock crossing its 200 day moving average line on July 30, 2013and that this is bullish. One analyst thought that this company should be trading at 13 to 15 times earnings (that is a P/E of 13 to 15). Another thought you should only buy in weakness when the stock goes into the low $30 range.
The company has recently paid down debt and raised the dividends and this is a very good sign. However, I do think it is overpriced. See my spreadsheet at hlf.htm.
This is the second of two parts. The first part was posted on August 7th, 2013 and is available here.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner.
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, August 7, 2013
High Liner Foods
I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock Investment Reporter has been talking about and is considered to be of average risk. I have been meaning to look at it for a while. Ryan Irvine of Keystone also likes this company. Just recently, in July 2013, a reader of my blog also asked me to take a look at this stock.
Since this company started to pay dividends in 2003, the dividends have grown at 8.59% per year over these 9 years. Dividends have grown at the rate of 16% per year over the past 5 years. After the company started to pay dividends, they were flat for a number of years and they just started increasing them in 2010. The current dividend yield is 2.29%.
Generally speaking the Dividend Payout Ratios are good with the 5 year median DPR for earnings at 28%. The DPR for earnings was very high for 2012 because 2012 was a bad year, but the company had enough confidence in 2013 to raise the dividends by 20%. The DPR for cash flow is also good at 13%.
One complaint is that the company has made their financial reporting unnecessarily complex. Not only have they switch currencies to US$ from CDN$ for the 2012 financial year, they do not make their financial reports on the same day every year. For example in for the 2010 year, their reporting date is January 1, 2011, for 2011 it is December 31, 2011 and for 2012 it is December 29, 2012.
Looking at the history of this company, you can see that the stock is at the same stock price as the company had in 1990. The company used to be called National Sea Products and in the mid 1980's the stock of this company hit around $140.00 per share ($35.00 before 4 to 1split of 1995). The stock fell when fish processing plants in eastern Canada had problems. The stock basically languished for quite some time. Investment Report became interested in it when after the company started to pay dividends. The stock really did not do much until the rise in the stock price in 2010.
It is because of the relatively recent rise in stock price that gives the total return over the past 5 and 10 years such very good returns. The total return over the past 5 and 10 years is at 28.67% and 15.90% per year with 1.95% and 1.48% per year of this return from dividends and 26.72% and 14.42% of this return from capital gains.
Over the past 5 and 10 years the shares have increased by 2.5% and 4.4% per year. Shares have increased due to shares being issued, Debentures being converted to shares and stock options. They have decreased due to share buy backs. Generally speaking, revenues, earnings and cash flow have increased better over the past 5 years than over the past 10 years.
Revenue is up by 28.5% and 11.5% per year over the past 5 and 10 years. Revenue per Share is up by 25.4% and 6.8% per year over the past 5 and 10 years. If you use the 5 year running averages over the past 5 and 10 years, Revenue per Share is up by 11% and 3% per year over the past 5 and 10 years.
If you look at earnings per share growth over the past 5 and 10 years, it is down sharply. However, if you look at 5 year running averages over the past 5 and 10 years you get growth of 20.5% and 6.7% per year. EPS has been quite volatile over the years and there have been a couple of years of losses.
For cash flow per share, growth is at 33% and 14% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the growth is just 16.6% and 5.4% per year over the past 5 and 10 years. The cash flow is also volatile year to year.
As far a Return on Equity goes, 2009 to 2011 inclusive were good years. The most recent year of 2012 was not a good year with ROE at just 1.4%.
The Liquidity Ratio for 2012 is 1.55 and this is a good value. The 5 year median ratio is a bit better at 1.65. The Debt Ratio for 2012 is at 1.32 and this is low. It was also low for 2011. The 5 year median ratio is much better at 1.83. (There was a rise in long term debt in 2011.) The current Leverage and Debt/Equity Ratios are a bit high but ok at 3.26 and 2.26. They are better than they have been for a couple of years.
I wished I could say that this is a gem of a stock, but I cannot. It has a very checkered past. Currently it has a reasonable dividend and has good dividend increases. This gives it the look of a dividend growth stock. But, how long with this continue? It is a consumer stock, so it will be affected by recessions. See my spreadsheet at hlf.htm.
This is the first of two parts. Second part will be posted on Thursday, August 8th, 2013 and will be here.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner.
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.
Since this company started to pay dividends in 2003, the dividends have grown at 8.59% per year over these 9 years. Dividends have grown at the rate of 16% per year over the past 5 years. After the company started to pay dividends, they were flat for a number of years and they just started increasing them in 2010. The current dividend yield is 2.29%.
Generally speaking the Dividend Payout Ratios are good with the 5 year median DPR for earnings at 28%. The DPR for earnings was very high for 2012 because 2012 was a bad year, but the company had enough confidence in 2013 to raise the dividends by 20%. The DPR for cash flow is also good at 13%.
One complaint is that the company has made their financial reporting unnecessarily complex. Not only have they switch currencies to US$ from CDN$ for the 2012 financial year, they do not make their financial reports on the same day every year. For example in for the 2010 year, their reporting date is January 1, 2011, for 2011 it is December 31, 2011 and for 2012 it is December 29, 2012.
Looking at the history of this company, you can see that the stock is at the same stock price as the company had in 1990. The company used to be called National Sea Products and in the mid 1980's the stock of this company hit around $140.00 per share ($35.00 before 4 to 1split of 1995). The stock fell when fish processing plants in eastern Canada had problems. The stock basically languished for quite some time. Investment Report became interested in it when after the company started to pay dividends. The stock really did not do much until the rise in the stock price in 2010.
It is because of the relatively recent rise in stock price that gives the total return over the past 5 and 10 years such very good returns. The total return over the past 5 and 10 years is at 28.67% and 15.90% per year with 1.95% and 1.48% per year of this return from dividends and 26.72% and 14.42% of this return from capital gains.
Over the past 5 and 10 years the shares have increased by 2.5% and 4.4% per year. Shares have increased due to shares being issued, Debentures being converted to shares and stock options. They have decreased due to share buy backs. Generally speaking, revenues, earnings and cash flow have increased better over the past 5 years than over the past 10 years.
Revenue is up by 28.5% and 11.5% per year over the past 5 and 10 years. Revenue per Share is up by 25.4% and 6.8% per year over the past 5 and 10 years. If you use the 5 year running averages over the past 5 and 10 years, Revenue per Share is up by 11% and 3% per year over the past 5 and 10 years.
If you look at earnings per share growth over the past 5 and 10 years, it is down sharply. However, if you look at 5 year running averages over the past 5 and 10 years you get growth of 20.5% and 6.7% per year. EPS has been quite volatile over the years and there have been a couple of years of losses.
For cash flow per share, growth is at 33% and 14% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the growth is just 16.6% and 5.4% per year over the past 5 and 10 years. The cash flow is also volatile year to year.
As far a Return on Equity goes, 2009 to 2011 inclusive were good years. The most recent year of 2012 was not a good year with ROE at just 1.4%.
The Liquidity Ratio for 2012 is 1.55 and this is a good value. The 5 year median ratio is a bit better at 1.65. The Debt Ratio for 2012 is at 1.32 and this is low. It was also low for 2011. The 5 year median ratio is much better at 1.83. (There was a rise in long term debt in 2011.) The current Leverage and Debt/Equity Ratios are a bit high but ok at 3.26 and 2.26. They are better than they have been for a couple of years.
I wished I could say that this is a gem of a stock, but I cannot. It has a very checkered past. Currently it has a reasonable dividend and has good dividend increases. This gives it the look of a dividend growth stock. But, how long with this continue? It is a consumer stock, so it will be affected by recessions. See my spreadsheet at hlf.htm.
This is the first of two parts. Second part will be posted on Thursday, August 8th, 2013 and will be here.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner.
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, August 6, 2013
Exchange Income Corp
On my other blog I am today writing about regulations and capitalism...continue...
I do not own this stock Exchange Income Corp. (TSX-EIF, OTC-EIFZF). My opinion is that this is just another x-income trust company that is having a hard time getting good Dividend Payout Ratios. I think that the easy money has already been made from x-income trust companies and that for such a company to move on they will have to get their DPRs in line.
One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind.
The current yield on this stock is 6.36% based on a stock price of $26.40. The dividend is increasing, but at a low rate of just 2.31% per year over the past 5 years. The increase since inception is much better at 14.72% over the past 8 years. Since it was an income trust and has changed to a corporation, the 5 year record might be closer to what it will do in the future. The last increase was for 3.7%.
Looking at what the yield might be in 10 and 15 years’ time if we use the 6.36% yield and a 2.31% increase per year, it could be at 8% and 9% at the end of these periods. If you do the calculation using a 3.7% increase you could have a dividend yield on your original investment of 9.2% and 11% at the end of these periods.
If you bought this stock from the inception, you would have earned some 17.05% per year with 7.94% per year from dividends and 9.11% per year from capital gains. Over the past 5 years the total return on this stock has been at 29.22% per year with 10.95% per year from dividends and 18.57% from capital gains.
However, the stock price has only grown slightly since 2011, with a growth closer to 2% per year. The dividends have been good with them close to 7.5% per year. That would give a total return close to 9.5% per year. A return on a dividend paying stock of over 8% is considered to be quite good.
There are a couple of reasons why the stock price might have stalled. One is that the Dividend Payout Ratio for earnings is far too high. The 5 year median DPR for earnings is 132%. The DPR for cash flow per share is more reasonable with a 5 year DPR of 67%.
There are a number of analysts following this stock and they tend to believe that the DPR for earnings will drop to around 95% this year and to around 75% next year. However, estimates are just that, estimates. The EPS for the first quarter was up, but only by some 2.4%. Analysts’ are expecting the EPS to rise some 42% in 2013. The first quarter is going in the right direction, but not nearly as strong as needs to be.
The thing is that a number of old income trusts are having a difficult time being corporations. Some have not managed to get the DPRs in line with what is expected of corporations. Some had tax pools that allowed them more time to do this. However, eventually they will have to get their DPRs in line with corporations.
I have a couple of such stocks of Pembina Pipelines (TSX-PPL) and Veresen Inc. (TSX-VSN) that are having the same problems. I have made good money on these stocks. However, they will not progress much currently if they cannot get their DPRs into good shape. Mostly this involves getting the EPS above the dividend levels.
Another reason for the stall in stock price is that the Return on Equity peaked in 2009 (although 2008 was not a good year.) The ROE was just 8.9% in 2012 and it is rather low.
It is obvious that not everyone thinks as I do. On this stock there are Strong Buys, Buys and Hold recommendations, with the consensus recommendation being a Buy. The 12 month stock price consensus is $31.80. This implies a total return of 26.82% with 20.45% and 6.36% from dividend. (However, I am dealing with the closing price on Friday, August 2, 2013. I notice that as of 3.32 today, this stock is down some 2.3%. The TSX is also down, but not nearly as much.) Another thing is that the above configuration of analyst’s recommendation is the most common one and is seen on most stocks.
When I look at insider trading, I get 1.2M of insider buying and $2.1M of insider selling. The majority of this buying and selling is by directors. It is interesting to note that insider ownership is basically only by directors and very little by anyone else. One director owns shares worth $42M and this is the biggest insider ownership. A couple of other directors own shares worth $5 to $6M.
The 5 year low, median and high median Price/Earnings Ratios are 13.82, 17.30 and 20.78. The current P/E ratio is 14.92 based on a stock price of $26.40 and 2013 earnings estimate of $1.77. This suggests a reasonable stock price.
I get a Graham Price of $23.15. The 10 year low, median and high median Price/Graham Price Ratios are 0.66, 0.71 and 0.77. The current P/GP Ratio on a stock price of $26.40 is 1.14. This test suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share is 1.34 and the current P/B Ratio is 1.96 a value some 46% higher. This test suggests that the stock price is relatively high.
I cannot do properly a dividend yield test as the dividend yield has been declining as have all dividend yields on x-income trust companies. However, a Price/Cash Flow per Share test is good. The 10 year P/CF Ratio is 5.06. The current P/CF Ratio is 7.98 based on a stock price of $26.40 and 2013 estimates for CFPS of $3.31. This test shows that the current P/CF Ratio is some 58% higher than the 10 year median and therefore suggests that the stock price is relatively high.
The blogger proactive Investors has a positive report on this stock. The stock is talked about at Canadian Money Forum. One comment is about the high DPR.
What I do not like is the high DPR for earnings. I think that this needs to be gotten under control. My stock tests seem to imply that the stock price is relatively high. See my spreadsheet at eif.htm.
Exchange Income Corporation was created to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States and to distribute stable monthly cash dividends to its shareholders. The Company currently owns subsidiaries in two niche business segments, aviation and specialty manufacturing. Its web site is here Exchange Income Fund.
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 do not own this stock Exchange Income Corp. (TSX-EIF, OTC-EIFZF). My opinion is that this is just another x-income trust company that is having a hard time getting good Dividend Payout Ratios. I think that the easy money has already been made from x-income trust companies and that for such a company to move on they will have to get their DPRs in line.
One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind.
The current yield on this stock is 6.36% based on a stock price of $26.40. The dividend is increasing, but at a low rate of just 2.31% per year over the past 5 years. The increase since inception is much better at 14.72% over the past 8 years. Since it was an income trust and has changed to a corporation, the 5 year record might be closer to what it will do in the future. The last increase was for 3.7%.
Looking at what the yield might be in 10 and 15 years’ time if we use the 6.36% yield and a 2.31% increase per year, it could be at 8% and 9% at the end of these periods. If you do the calculation using a 3.7% increase you could have a dividend yield on your original investment of 9.2% and 11% at the end of these periods.
If you bought this stock from the inception, you would have earned some 17.05% per year with 7.94% per year from dividends and 9.11% per year from capital gains. Over the past 5 years the total return on this stock has been at 29.22% per year with 10.95% per year from dividends and 18.57% from capital gains.
However, the stock price has only grown slightly since 2011, with a growth closer to 2% per year. The dividends have been good with them close to 7.5% per year. That would give a total return close to 9.5% per year. A return on a dividend paying stock of over 8% is considered to be quite good.
There are a couple of reasons why the stock price might have stalled. One is that the Dividend Payout Ratio for earnings is far too high. The 5 year median DPR for earnings is 132%. The DPR for cash flow per share is more reasonable with a 5 year DPR of 67%.
There are a number of analysts following this stock and they tend to believe that the DPR for earnings will drop to around 95% this year and to around 75% next year. However, estimates are just that, estimates. The EPS for the first quarter was up, but only by some 2.4%. Analysts’ are expecting the EPS to rise some 42% in 2013. The first quarter is going in the right direction, but not nearly as strong as needs to be.
The thing is that a number of old income trusts are having a difficult time being corporations. Some have not managed to get the DPRs in line with what is expected of corporations. Some had tax pools that allowed them more time to do this. However, eventually they will have to get their DPRs in line with corporations.
I have a couple of such stocks of Pembina Pipelines (TSX-PPL) and Veresen Inc. (TSX-VSN) that are having the same problems. I have made good money on these stocks. However, they will not progress much currently if they cannot get their DPRs into good shape. Mostly this involves getting the EPS above the dividend levels.
Another reason for the stall in stock price is that the Return on Equity peaked in 2009 (although 2008 was not a good year.) The ROE was just 8.9% in 2012 and it is rather low.
It is obvious that not everyone thinks as I do. On this stock there are Strong Buys, Buys and Hold recommendations, with the consensus recommendation being a Buy. The 12 month stock price consensus is $31.80. This implies a total return of 26.82% with 20.45% and 6.36% from dividend. (However, I am dealing with the closing price on Friday, August 2, 2013. I notice that as of 3.32 today, this stock is down some 2.3%. The TSX is also down, but not nearly as much.) Another thing is that the above configuration of analyst’s recommendation is the most common one and is seen on most stocks.
When I look at insider trading, I get 1.2M of insider buying and $2.1M of insider selling. The majority of this buying and selling is by directors. It is interesting to note that insider ownership is basically only by directors and very little by anyone else. One director owns shares worth $42M and this is the biggest insider ownership. A couple of other directors own shares worth $5 to $6M.
The 5 year low, median and high median Price/Earnings Ratios are 13.82, 17.30 and 20.78. The current P/E ratio is 14.92 based on a stock price of $26.40 and 2013 earnings estimate of $1.77. This suggests a reasonable stock price.
I get a Graham Price of $23.15. The 10 year low, median and high median Price/Graham Price Ratios are 0.66, 0.71 and 0.77. The current P/GP Ratio on a stock price of $26.40 is 1.14. This test suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share is 1.34 and the current P/B Ratio is 1.96 a value some 46% higher. This test suggests that the stock price is relatively high.
I cannot do properly a dividend yield test as the dividend yield has been declining as have all dividend yields on x-income trust companies. However, a Price/Cash Flow per Share test is good. The 10 year P/CF Ratio is 5.06. The current P/CF Ratio is 7.98 based on a stock price of $26.40 and 2013 estimates for CFPS of $3.31. This test shows that the current P/CF Ratio is some 58% higher than the 10 year median and therefore suggests that the stock price is relatively high.
The blogger proactive Investors has a positive report on this stock. The stock is talked about at Canadian Money Forum. One comment is about the high DPR.
What I do not like is the high DPR for earnings. I think that this needs to be gotten under control. My stock tests seem to imply that the stock price is relatively high. See my spreadsheet at eif.htm.
Exchange Income Corporation was created to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States and to distribute stable monthly cash dividends to its shareholders. The Company currently owns subsidiaries in two niche business segments, aviation and specialty manufacturing. Its web site is here Exchange Income Fund.
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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