Thursday, November 14, 2013

Keyera Corp 2

I am putting up on my other blog my notes from the World Money Show 2013 in Toronto. I will put up these notes as I transcribe them here.

I do not own this stock Keyera Corp (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. This stock was also talked about at the recent World Money Show in Toronto. Everyone seemed to love this stock.

Over the past year there has been $0.3M of insider selling and $0.1M of insider buying with $0.2M of net insider selling. There is some insider ownership with the CEO having shares worth some $21M and an officer having shares worth $13M. Their long term incentive plan is an expense and therefore affects earnings.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.14, 16.52 and 19.90. The current P/E Ratio is 29.36 based on a current stock price of $59.90 and 2013 EPS estimate of $2.04. I get a current Graham Price of $23.13 and the current Price/Graham Price Ratio is 2.59. The 10 year low, median and high median P/GP Ratios are 1.00, 1.27 and 1.54. Both these stock price tests say that the current price is relatively quite high.

The 10 year median Price/Book Value per Share Ratio is 2.14 and the current P/B Ratio is 5.14 a values some 140% higher. This stock test also says that the stock price is relatively very high. I took a look at the P/S Ratio and the P/CF Ratio and they all say that the stock price is relatively very high. It is also high on an absolute basis. A P/E Ratio of 29.36 is very high for a utility stock as is the P/GP Ratio of 2.59.

When I look at the analysts' recommendation I get Buy and Hold recommendations. There are even numbers of both these recommendations, so the consensus recommendation would be a Buy. The consensus 12 month stock price is $64.20. This would imply total returns of 11.19% with 4.01% from dividends and 7.18% from capital gains.

There is an interesting article on Forbes saying that since Keyera Corp's yield is 4% the stock is on sale. The Achieve Global Blogger has an interesting article about Keyera Commitments to Leadership Development. There is also an interesting article by the Top Stock Millionaire on how environmentalists may be winning the battle against Keystone pipeline, but top midstream companies may be winning the pipeline war.

It is obviously a very good company. However, it is very overpriced. See my spreadsheet at hse.htm.

This is the second of two parts. The first part was posted on Wednesday, November 13, 2013 and is available here.

Keyera provides essential services and products to oil and gas producers in western Canada, and markets related natural gas liquids (NGLs) throughout North America. Its web site is here Keyera.

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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