On my other blog yesterday, I had a bad link to my spreadsheet. This link has now been fixed. Blog entry was about Dividend Stocks that may be cheap...continue...
I do not own this stock of Stella-Jones Inc. (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.
When I look at insider trading, I see $1.9M in insider selling and $1.9M in net insider selling. There is a minor amount of insider buying. The CEO sold almost a $1M in stock in 2012. He got stock options worth between $13M and $14M in 2012.
Stella Jones International S.A. which is based in Luxembourg is a joint venture between James Jones & Sons Ltd. and Eurocanadian Investments SA. James Jones & Sons Limited (forest products, UK) and Stella SpA, through the Stella Jones International S.A. joint venture, control a majority of Stella-Jones Inc.
The 5 year low, median and high median Price/Earnings Ratios are 9.05, 12.00 and 14.73. The current P/E is 13.94. The P/E for 2014 is higher at 15.20 because analysts expect the company to earn less in 2014 than it will earn in 2013. By this measure, the current stock price is on the high side but still reasonable using the P/E for 2013. However, using the P/E for 2014, the stock price becomes high.
I get a current Graham Price of $15.58. The 10 year low, median and high median Price/Graham Price Ratios are 0.67, 0.94 and 1.14. The current P/GP Ratios is 1.45. I get a Graham Price of $17.79 for 2014 and this gives a P/GP Ratio of 1.51. By this measure the stock price is rather high.
The 10 year median Price/Book Value Ratio is 1.92 and the current P/B Ratio is 3.39. This stock price tests says that the stock is rather high as the current P/B Ratio is some 78% higher than the 10 year P/B Ratio.
The 5 year median dividend yield is 1.31% and the current dividend yield is 0.74% a values some 43% lower than the 5 year median. This stock price test suggests that the stock price is rather high.
When I look at analysts' recommendations, I find Buy and Hold recommendations. There is more Buy than Hold recommendations and the consensus recommendation is a Buy. The 12 months consensus stock price is $38.80 and this implies a total return of 44.98% with 44.24% from capital gain and 0.74% from dividends.
There is an interesting article in Financial Post entitled how Stella Jones got its groove back. This article also talks about the stock price being too high and a stock split is necessary. By the way, the company has just done a 4 to 1 stock split.
By historical standards this stock is overpriced. On the other hand, historical data can only tell you about the past and it offers nothing about the future. As regards to P/E ratios, a P/E Ratio of 13.94 or 15.20 is not particularly high in absolute terms. However, a P/GP Ratio of 1.45 and a P/B Ratio of 3.39 are rather high in absolute terms.
As regards to dividend yield, 0.74% is not the lowest it has been as it high 0.5% in 2007. That was on a stock price of $12.00 and the stock is up some 124% since then. But I am talking about today. After the high of $12.00 in 2007, the stock price dropped and only got back there in 2012. See my spreadsheet at sj.htm.
This is the second of two parts. The first part was posted on Monday, December 30, 2013 and is available here.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones.
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, December 31, 2013
Monday, December 30, 2013
Stella-Jones Inc.
On my other blog I am today writing about Dividend Stocks that may be cheap...continue...
I have just finished covering my list of stock for 2013 as Stella-Jones is the last stock on my list. I will cover this stock today and on Tuesday. On Thursday, January 2, 2014, I will start back with covering the banks and other stocks with financial years ending prior to December 2013.
I do not own this stock of Stella-Jones Inc. (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.
This is a dividend growth company. The configuration is low dividend and high growth in dividends. The 5 and 10 year growth of dividends is at 21% and 25.5% per year. Because the current yield is so low, it will take a number of years at this growth rate to get a very good yield on a current purchase of this stock.
At 21%, in 10 years' time the yield will only be 5% on your original purchase price. However, in 15 years' time, the dividend yield on your original purchase price will be almost 13%. This is the reason you buy dividend growth stocks. It is so you can growth your dividends income over time.
The yield on this stock is not always so low. The 5 year median dividend yield is better at 1.31%. The stock market is on a bit of a tear at present and this stock is currently doing very well. If you like this stock, you might want to wait until the price gets more reasonable.
Outstanding shares have increased by 6.8% and 6.6% per year over the past 5 and 10 years. Shares have increased due to stock issues and stock options.
Revenues are up by 21.6% and 22.2% per year over the past 5 and 10 years. Revenue per share is up by 13.8% and 14.6% per year over the past 5 and 10 years. On my spreadsheet I denote good growth in green, mediocre growth in blue and low and negative growth in red. Looking at this spreadsheet, all I see is green.
Earnings per Share is up by 17% and 27% per year over the past 5 and 10 years. Cash Flow per Share is up by 10.6% and 21.5% per year over the past 5 and 10 years.
The Return on Equity has been above 10% since 1998. The ROE for the 2012 financial year was 15.6% and it is expected to be slightly higher in 2013 at 17.6%. The ROE on comprehensive income is sometimes higher and sometimes lower than the ROE on Net Income. For the 2012 financial year it was close at 14.4%.
This stock has good debt ratios. The current Liquidity Ratio is 8.67. The current Debt Ratio is 2.26. The current Leverage Debt/Equity Ratios are 1.80 and 0.80. The Leverage Debt/Equity Ratios can vary and the 10 year median ratios are 2.03 and 1.03.
This is a Dividend growth stock with good growth. See my spreadsheet at sj.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 31, 2013 and will be available here.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones.
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 have just finished covering my list of stock for 2013 as Stella-Jones is the last stock on my list. I will cover this stock today and on Tuesday. On Thursday, January 2, 2014, I will start back with covering the banks and other stocks with financial years ending prior to December 2013.
I do not own this stock of Stella-Jones Inc. (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.
This is a dividend growth company. The configuration is low dividend and high growth in dividends. The 5 and 10 year growth of dividends is at 21% and 25.5% per year. Because the current yield is so low, it will take a number of years at this growth rate to get a very good yield on a current purchase of this stock.
At 21%, in 10 years' time the yield will only be 5% on your original purchase price. However, in 15 years' time, the dividend yield on your original purchase price will be almost 13%. This is the reason you buy dividend growth stocks. It is so you can growth your dividends income over time.
The yield on this stock is not always so low. The 5 year median dividend yield is better at 1.31%. The stock market is on a bit of a tear at present and this stock is currently doing very well. If you like this stock, you might want to wait until the price gets more reasonable.
Outstanding shares have increased by 6.8% and 6.6% per year over the past 5 and 10 years. Shares have increased due to stock issues and stock options.
Revenues are up by 21.6% and 22.2% per year over the past 5 and 10 years. Revenue per share is up by 13.8% and 14.6% per year over the past 5 and 10 years. On my spreadsheet I denote good growth in green, mediocre growth in blue and low and negative growth in red. Looking at this spreadsheet, all I see is green.
Earnings per Share is up by 17% and 27% per year over the past 5 and 10 years. Cash Flow per Share is up by 10.6% and 21.5% per year over the past 5 and 10 years.
The Return on Equity has been above 10% since 1998. The ROE for the 2012 financial year was 15.6% and it is expected to be slightly higher in 2013 at 17.6%. The ROE on comprehensive income is sometimes higher and sometimes lower than the ROE on Net Income. For the 2012 financial year it was close at 14.4%.
This stock has good debt ratios. The current Liquidity Ratio is 8.67. The current Debt Ratio is 2.26. The current Leverage Debt/Equity Ratios are 1.80 and 0.80. The Leverage Debt/Equity Ratios can vary and the 10 year median ratios are 2.03 and 1.03.
This is a Dividend growth stock with good growth. See my spreadsheet at sj.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 31, 2013 and will be available here.
Stella-Jones Inc. is a leading North American producer and marketer of industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. It has sales in Canada and US. Its web site is here Stella Jones.
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, December 27, 2013
Mullen Group Ltd. 2
On my other blog I am today writing about My Portfolio Index spreadsheet...continue...
I do not own this stock of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing again.
When I look at insider trading, I find a very small amount of insider buying last May and no insider selling. There are not many outstanding options currently. There is insider ownership. For example, the Chairman of the Board has shares worth some $77.4M, the CEO has shares worth some $13.5M and the CFO has shares worth some $1M.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.82, 13.77 and 15.73. The current P/E Ratio is 16.69 based on a stock price of $28.20 and 2013 earnings estimate of $1.69. The P/E Ratio for 2014 is at 15.24, based on 2014 earnings estimates of $1.85 and stock price of $28.20. We are almost to 2014. Both the P/E Ratios for 2013 and 2014 suggest that the current stock price is rather high. On an absolute basis, the P/E Ratios are not that high.
I get a current Graham price of $19.77 and 10 year low, median and high median Price/Graham Price Ratios of 0.89, 1.09 and 1.33. The current P/GP Ratio is 1.43. The P/GP Ratio for 2014 is 1.36, based on a stock price of $28.20 and a Graham Price of $20.69. Both the P/GP Ratio for 2013 and 2014 suggest that the stock price is rather high.
The 10 year Price/Book Value per Share Ratio is 1.61 and the current P/B Ratio is 2.74, a value some 70% higher. This stock test suggests that the current stock price is rather high.
The 5 year median dividend yield is 4.44% and the current dividend yield is 4.26%. It is best if the current yield is above the 10 year median yield, but since the difference is just 4%, this test suggests that the stock price is rather reasonable.
The analysts' recommendations are Buy and Hold. There are a lot more Hold recommendations than Buy recommendations and the consensus recommendation would be a Hold. The 12 month stock price is $28.90 and this suggests a total return of 6.74% with 4.26% from dividends and 2.48% from capital gains.
An article in Proactive Investors talk about the good third quarter that the company had and the fact that the stock price is up by more than 30% this year. The Million Dollar Journey blogger has this stock in his portfolio.
I still like this company. They are doing well. The stock is up almost 35% so far this year. On some measures the stock is relatively overpriced. However, on my favourite measure, which is the dividend yield measure it is not. It is rather considered to be at a reasonable level. See my spreadsheet at mtl.htm.
This is the second of two parts. The first part was posted on Tuesday, December 24, 2013 and is available here.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen.
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 of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing again.
When I look at insider trading, I find a very small amount of insider buying last May and no insider selling. There are not many outstanding options currently. There is insider ownership. For example, the Chairman of the Board has shares worth some $77.4M, the CEO has shares worth some $13.5M and the CFO has shares worth some $1M.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.82, 13.77 and 15.73. The current P/E Ratio is 16.69 based on a stock price of $28.20 and 2013 earnings estimate of $1.69. The P/E Ratio for 2014 is at 15.24, based on 2014 earnings estimates of $1.85 and stock price of $28.20. We are almost to 2014. Both the P/E Ratios for 2013 and 2014 suggest that the current stock price is rather high. On an absolute basis, the P/E Ratios are not that high.
I get a current Graham price of $19.77 and 10 year low, median and high median Price/Graham Price Ratios of 0.89, 1.09 and 1.33. The current P/GP Ratio is 1.43. The P/GP Ratio for 2014 is 1.36, based on a stock price of $28.20 and a Graham Price of $20.69. Both the P/GP Ratio for 2013 and 2014 suggest that the stock price is rather high.
The 10 year Price/Book Value per Share Ratio is 1.61 and the current P/B Ratio is 2.74, a value some 70% higher. This stock test suggests that the current stock price is rather high.
The 5 year median dividend yield is 4.44% and the current dividend yield is 4.26%. It is best if the current yield is above the 10 year median yield, but since the difference is just 4%, this test suggests that the stock price is rather reasonable.
The analysts' recommendations are Buy and Hold. There are a lot more Hold recommendations than Buy recommendations and the consensus recommendation would be a Hold. The 12 month stock price is $28.90 and this suggests a total return of 6.74% with 4.26% from dividends and 2.48% from capital gains.
An article in Proactive Investors talk about the good third quarter that the company had and the fact that the stock price is up by more than 30% this year. The Million Dollar Journey blogger has this stock in his portfolio.
I still like this company. They are doing well. The stock is up almost 35% so far this year. On some measures the stock is relatively overpriced. However, on my favourite measure, which is the dividend yield measure it is not. It is rather considered to be at a reasonable level. See my spreadsheet at mtl.htm.
This is the second of two parts. The first part was posted on Tuesday, December 24, 2013 and is available here.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen.
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, December 26, 2013
Mullen Group Ltd.
I am writing this entry in the afternoon of December 24, 2013. I still do not have any internet so I do not know when I might be able to post it.
I do not own this stock of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing again.
The dividends are down by 11% per year over the past 5 years, but up by 22% per year over the past 10 years. When the company changed to a corporation, they changed from a monthly distribution to a quarterly distribution. In 2013, they changed the distribution of dividends back to a monthly distribution. The last dividend increase was for 20%.
Dividend increase for 2013 does not show up well in my spreadsheet because the quarterly dividend declared in December 2012 was paid in January 2013. For 2013 the company paid one quarterly dividend and 11 monthly dividends. From 2014 on the company will pay 12 monthly dividends.
Shareholders have done well with this stock. The stock is up some 35% this year. The 5 and 10 year total return to date is 21.70% and 13.68% per year. The capital gains portion of this return is 17.19% and 7.91% per year and the dividend portion is 4.51 and 5.77% per year. The dividend portion of total returns should decrease as they did decrease their dividends at conversion to a corporation.
The outstanding shares have grown at the rate of 1.7% per year and 7% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs. There has been fairly good growth in revenue, earnings and cash flow over the past 5 and 10 years for this company.
Revenue per Share is up by 3.3% and 9% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the Revenue per Share is up by 10.6% and 8% per year over the past 5 and 10 years.
Earnings per Share are up by 14% per year over the past 10 years. I have no 5 year growth as 5 years ago the company has an earnings loss. If you look at the 5 year running averages, EPS is up by 11.8% and 7.5% per year over the past 5 and 10 years.
Cash Flow per Share is up by 3.3% and 14.5% per year over the past 5 and 10 years. If you look at the 5 year running averages, the growth is at 5.4% per year and 11.8% per year over the past 5 and 10 years.
The Return on Equity has generally, but not always been above 10%. The ROE for 2012 was 15.8% and the 5 year median ROE is 10.2%. The ROE on comprehensive income is also 15.8% for 2012.
The debt ratios, including Leverage and Debt/Equity Ratios are all quite good. The Liquidity Ratio is currently at 2.69 and the Debt Ratio is 2.31. This company has a strong Balance Sheet. The Leverage and Debt/Equity Ratios are also quite good at 1.76 and 0.76.
The current dividend at 4.26% with a 20% last dividend increase shows a company with a great dividend and great growth. This is a dividend growth stock. The company seems to be doing well. It has a strong balance sheet and this helps any company through recessionary periods. See my spreadsheet at mtl.htm.
This is the first of two parts. Second part will be posted on Friday, December27, 2013 and will be available here.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen.
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 of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing again.
The dividends are down by 11% per year over the past 5 years, but up by 22% per year over the past 10 years. When the company changed to a corporation, they changed from a monthly distribution to a quarterly distribution. In 2013, they changed the distribution of dividends back to a monthly distribution. The last dividend increase was for 20%.
Dividend increase for 2013 does not show up well in my spreadsheet because the quarterly dividend declared in December 2012 was paid in January 2013. For 2013 the company paid one quarterly dividend and 11 monthly dividends. From 2014 on the company will pay 12 monthly dividends.
Shareholders have done well with this stock. The stock is up some 35% this year. The 5 and 10 year total return to date is 21.70% and 13.68% per year. The capital gains portion of this return is 17.19% and 7.91% per year and the dividend portion is 4.51 and 5.77% per year. The dividend portion of total returns should decrease as they did decrease their dividends at conversion to a corporation.
The outstanding shares have grown at the rate of 1.7% per year and 7% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs. There has been fairly good growth in revenue, earnings and cash flow over the past 5 and 10 years for this company.
Revenue per Share is up by 3.3% and 9% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the Revenue per Share is up by 10.6% and 8% per year over the past 5 and 10 years.
Earnings per Share are up by 14% per year over the past 10 years. I have no 5 year growth as 5 years ago the company has an earnings loss. If you look at the 5 year running averages, EPS is up by 11.8% and 7.5% per year over the past 5 and 10 years.
Cash Flow per Share is up by 3.3% and 14.5% per year over the past 5 and 10 years. If you look at the 5 year running averages, the growth is at 5.4% per year and 11.8% per year over the past 5 and 10 years.
The Return on Equity has generally, but not always been above 10%. The ROE for 2012 was 15.8% and the 5 year median ROE is 10.2%. The ROE on comprehensive income is also 15.8% for 2012.
The debt ratios, including Leverage and Debt/Equity Ratios are all quite good. The Liquidity Ratio is currently at 2.69 and the Debt Ratio is 2.31. This company has a strong Balance Sheet. The Leverage and Debt/Equity Ratios are also quite good at 1.76 and 0.76.
The current dividend at 4.26% with a 20% last dividend increase shows a company with a great dividend and great growth. This is a dividend growth stock. The company seems to be doing well. It has a strong balance sheet and this helps any company through recessionary periods. See my spreadsheet at mtl.htm.
This is the first of two parts. Second part will be posted on Friday, December27, 2013 and will be available here.
Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen.
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, December 25, 2013
Methanex Corp.
First of all, I am writing this on December 23, 2013, but I do not know when I will be able to post it because my internet is down and had it has been down for a while. Rogers said that they should be able to restore it by later on tonight, but who knows.
On my other blog I am today writing about The Next Bear Market...continue...
I do not own this stock of Methanex Corp. (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid "C" grade in a 2009 money sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.
Part of the problem with this stock for Canadian investors is that the dividend is paid in US$ so it will vary depending on the US$ to CDN$ currency exchange rate. The stock used to have a decent dividend with a decent growth rate. The 5 year median dividend yield is 2.9% and the 10 year median dividend yield is 2.4%. The 10 year growth in dividends is 10.9% per year in CDN$ and 14.2% per year US$.
Currently the dividend yield is rather low and the dividend growth rate is mediocre. The current dividend yield is just 1.4% and the 5 year dividend growth is 4% per year in CDN$ and 5.9% in US$. This is because of low or no growth in dividends in 2009 and 2010. The most recent dividend increase is not bad at 8.1% in 2013.
As far as total return goes, shareholders have done well over the past 5 and 10 years to date. The stock has increase by some 89% this year. The 5 and 10 year total return is at 37.45% and 17.49% per year with 34.34% and 15.22% per year from capital gains and 3.12% and 2.27% per year from dividends.
Outstanding shares have decreased by 1% and 2.8% per year over the past 5 and 10 years. Shares have increased due to stock options and decreased due to buy backs.
Revenue growth is not bad with the 5 and 10 years growth in Revenue per Share up by 4.2% and 13.4% per year over the past 5 and 10 years in US$. The 5 and 10 years growth in Revenue per Share is not as good in CDN$ with the growth at 4.6% per year and 8.3% per year over the past 5 and 10 years.
Earnings per Share is not as good as revenue, with EPS declining over the last 5 year by some 18% per year in CDN$. EPS is better over the past 10 years and is up by some 26.5% per year in CDN$. Here I am using the 5 year running averages as there was an EPS loss in 2012. The Cash Flow per Share is somewhat better than EPS with CFPS down by 1.5% per year over the past 5 years and up by 4% per year over the past 10 years in CDN$.
To the end of the Quarter 3 in 2013, Revenue, EPS and Cash Flow are all up. The best is Cash Flow which is up by 14% in US$ and then Revenue up by 6.2% in US$. EPS is positive and but is down by 70% over EPS in 2011.
The Return on Equity is negative in 2012 because of negative earnings in 2012. ROE based on the last 12 months to the end of Quarter 3 in 2013 is just 5.9%. However, analysts still expect it to be around 20% for 2013.
This company has a strong balance sheet with a current Liquidity Ratio of 2.39 and a current Debt Ratio of 1.80. This is important as companies with strong balance sheet can survive recessions better than companies with weak balance sheets. I wish the current Leverage and Debt/Equity Ratios were a bit lower, but they are ok at 2.25 and 1.25.
The 10 year low, median and high median Price/Earnings Ratios are 10.23, 12.76 and 15.29. The current P/E Ratio is 12.31 and this test suggests that the current stock price is reasonable. The current P/E is based on a current stock price of $59.94 and 2013 earnings estimate of $4.87. These are in CDN$.
I get a Graham Price of $42.58 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 1.03 and 1.23. Based on a current stock price $59.94, the current P/GP Ratio is 1.41. This stock test suggests that the current stock price is rather high. The Graham price for 2014 is $45.66 and this give a P/GP of 1.31 and this still suggests that the stock price is rather high.
The 10 year Price/Book Value per Share Ratio is 2.15 and the current P/B Ratio is 3.62 a value some 70% higher. This stock price test suggests that the stock price is rather high.
The 5 year median dividend yield is 2.53% and the current dividend yield is just 1.42, a value some 44% lower. This test suggests that the stock price is rather high. I get the same results if I look at the historical high and low dividend yields which are 4.72% and 1.58%.
I think that this dividend growth stock is overpriced at this point in time. See my spreadsheet at mx.htm.
In order to get through all my stock reviews by the end of the year, I have to do 3 a week with one review having only one entry. For this week, I am doing only one entry on this stock.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex.
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.
On my other blog I am today writing about The Next Bear Market...continue...
I do not own this stock of Methanex Corp. (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid "C" grade in a 2009 money sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.
Part of the problem with this stock for Canadian investors is that the dividend is paid in US$ so it will vary depending on the US$ to CDN$ currency exchange rate. The stock used to have a decent dividend with a decent growth rate. The 5 year median dividend yield is 2.9% and the 10 year median dividend yield is 2.4%. The 10 year growth in dividends is 10.9% per year in CDN$ and 14.2% per year US$.
Currently the dividend yield is rather low and the dividend growth rate is mediocre. The current dividend yield is just 1.4% and the 5 year dividend growth is 4% per year in CDN$ and 5.9% in US$. This is because of low or no growth in dividends in 2009 and 2010. The most recent dividend increase is not bad at 8.1% in 2013.
As far as total return goes, shareholders have done well over the past 5 and 10 years to date. The stock has increase by some 89% this year. The 5 and 10 year total return is at 37.45% and 17.49% per year with 34.34% and 15.22% per year from capital gains and 3.12% and 2.27% per year from dividends.
Outstanding shares have decreased by 1% and 2.8% per year over the past 5 and 10 years. Shares have increased due to stock options and decreased due to buy backs.
Revenue growth is not bad with the 5 and 10 years growth in Revenue per Share up by 4.2% and 13.4% per year over the past 5 and 10 years in US$. The 5 and 10 years growth in Revenue per Share is not as good in CDN$ with the growth at 4.6% per year and 8.3% per year over the past 5 and 10 years.
Earnings per Share is not as good as revenue, with EPS declining over the last 5 year by some 18% per year in CDN$. EPS is better over the past 10 years and is up by some 26.5% per year in CDN$. Here I am using the 5 year running averages as there was an EPS loss in 2012. The Cash Flow per Share is somewhat better than EPS with CFPS down by 1.5% per year over the past 5 years and up by 4% per year over the past 10 years in CDN$.
To the end of the Quarter 3 in 2013, Revenue, EPS and Cash Flow are all up. The best is Cash Flow which is up by 14% in US$ and then Revenue up by 6.2% in US$. EPS is positive and but is down by 70% over EPS in 2011.
The Return on Equity is negative in 2012 because of negative earnings in 2012. ROE based on the last 12 months to the end of Quarter 3 in 2013 is just 5.9%. However, analysts still expect it to be around 20% for 2013.
This company has a strong balance sheet with a current Liquidity Ratio of 2.39 and a current Debt Ratio of 1.80. This is important as companies with strong balance sheet can survive recessions better than companies with weak balance sheets. I wish the current Leverage and Debt/Equity Ratios were a bit lower, but they are ok at 2.25 and 1.25.
The 10 year low, median and high median Price/Earnings Ratios are 10.23, 12.76 and 15.29. The current P/E Ratio is 12.31 and this test suggests that the current stock price is reasonable. The current P/E is based on a current stock price of $59.94 and 2013 earnings estimate of $4.87. These are in CDN$.
I get a Graham Price of $42.58 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 1.03 and 1.23. Based on a current stock price $59.94, the current P/GP Ratio is 1.41. This stock test suggests that the current stock price is rather high. The Graham price for 2014 is $45.66 and this give a P/GP of 1.31 and this still suggests that the stock price is rather high.
The 10 year Price/Book Value per Share Ratio is 2.15 and the current P/B Ratio is 3.62 a value some 70% higher. This stock price test suggests that the stock price is rather high.
The 5 year median dividend yield is 2.53% and the current dividend yield is just 1.42, a value some 44% lower. This test suggests that the stock price is rather high. I get the same results if I look at the historical high and low dividend yields which are 4.72% and 1.58%.
I think that this dividend growth stock is overpriced at this point in time. See my spreadsheet at mx.htm.
In order to get through all my stock reviews by the end of the year, I have to do 3 a week with one review having only one entry. For this week, I am doing only one entry on this stock.
Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex.
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, December 20, 2013
Stantec Inc. 2
I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN). I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. A lot of people were recommending it as a great stock. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building.
When I look at insider trading, I find $1.8M of insider selling and $1.8M of net insider selling. There is a very small amount of insider buying. The insider selling seems to be of options. Not only do insiders have options, but they have option like vehicles like Common Shares Restricted Share Units and Common Shares Deferred Share Units. There are a lot of officers of the company that have options.
There is insider ownership with the CEO having shares worth $4.7M and the CFO having shares worth $1.8M. The Chairman of the Board has shares worth $10.7M. There is a couple of Subsidiary Executives with shares worth over $7M.
The 5 year low, median and high median Price/Earnings Ratios are 15.52, 20.40 and 25.29. The current P/E Ratio is 22.21 based on a stock price of $69.75 and 2013 EPS estimate of $3.14. The P/E Ratio for 2014 is 19.76 based on a stock price of $69.75 and 2014 EPS estimate of $3.53. This is relevant as we are almost to 2014. The P/E Ratios have been moving up as the 10 year median P/E low, median and high median P/E Ratios are at 14.63, 16.68 and 19.65.
I get a current Graham Price of $35.82 and the 10 year low, median and high median Price/Graham Price Ratios are 1.10, 1.36 and 1.54. The current P/GP Ratio is 1.95. The Graham Price for 2014 is at $37.98 and the P/GP Ratio for 2014 is 1.84. This is not much better than the one for 2013 and suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share Ratio is 2.53. The current P/B Ratio is 3.84 a value some 51% higher. This stock price test suggests that the stock price is relatively high.
This stock just started paying dividends so I cannot do a dividend yield test, but I can do a Price/Cash Flow per Share Ratio test. The 5 year median P/CF Ratio is 8.52. The current P/CF Ratio is 16.45, a values some 91% higher. The current P/CF Ratio is based on a stock price of $69.75 and CFPS for 2013 of $4.24. If you look at the P/CF Ratio for 2014 its value is 15.91 based on a stock price of $69.75 and CFPS for 2014 of $4.44.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $66.90 a price below the current stock price and this implies a loss of 3.14% over the next 12 months with 0.95% from dividends and a capital loss of 4.09%. This does not really jibe with the analysts' recommendation results.
According to the site of North Fork Vue RBC Capital increased their target price on Stantec to $79.00 on December 10, 2013. There is an article in the Edmonton Journal that talks about Stantec stock soaring after good 3rd quarterly results. There is also an interesting blog entry about Stantec's involvement in stream restoration projects. The thing is that I want the companies I invest in to do good things. I am sure other people feel the same way.
Both the P/B Ratio and P/CF Ratio tests show that this stock is overpriced. This is not surprising considering the stock price is up by 75% this year and was also up last year by some 44%. I still think this is a good company, but to make money on a stock over the longer term, it is important not to pay too high a price for it. See my spreadsheet at stn.htm.
This is the second of two parts. The first part was posted on Thursday, December 19, 2013 and is available here.
Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec.
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 $1.8M of insider selling and $1.8M of net insider selling. There is a very small amount of insider buying. The insider selling seems to be of options. Not only do insiders have options, but they have option like vehicles like Common Shares Restricted Share Units and Common Shares Deferred Share Units. There are a lot of officers of the company that have options.
There is insider ownership with the CEO having shares worth $4.7M and the CFO having shares worth $1.8M. The Chairman of the Board has shares worth $10.7M. There is a couple of Subsidiary Executives with shares worth over $7M.
The 5 year low, median and high median Price/Earnings Ratios are 15.52, 20.40 and 25.29. The current P/E Ratio is 22.21 based on a stock price of $69.75 and 2013 EPS estimate of $3.14. The P/E Ratio for 2014 is 19.76 based on a stock price of $69.75 and 2014 EPS estimate of $3.53. This is relevant as we are almost to 2014. The P/E Ratios have been moving up as the 10 year median P/E low, median and high median P/E Ratios are at 14.63, 16.68 and 19.65.
I get a current Graham Price of $35.82 and the 10 year low, median and high median Price/Graham Price Ratios are 1.10, 1.36 and 1.54. The current P/GP Ratio is 1.95. The Graham Price for 2014 is at $37.98 and the P/GP Ratio for 2014 is 1.84. This is not much better than the one for 2013 and suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share Ratio is 2.53. The current P/B Ratio is 3.84 a value some 51% higher. This stock price test suggests that the stock price is relatively high.
This stock just started paying dividends so I cannot do a dividend yield test, but I can do a Price/Cash Flow per Share Ratio test. The 5 year median P/CF Ratio is 8.52. The current P/CF Ratio is 16.45, a values some 91% higher. The current P/CF Ratio is based on a stock price of $69.75 and CFPS for 2013 of $4.24. If you look at the P/CF Ratio for 2014 its value is 15.91 based on a stock price of $69.75 and CFPS for 2014 of $4.44.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $66.90 a price below the current stock price and this implies a loss of 3.14% over the next 12 months with 0.95% from dividends and a capital loss of 4.09%. This does not really jibe with the analysts' recommendation results.
According to the site of North Fork Vue RBC Capital increased their target price on Stantec to $79.00 on December 10, 2013. There is an article in the Edmonton Journal that talks about Stantec stock soaring after good 3rd quarterly results. There is also an interesting blog entry about Stantec's involvement in stream restoration projects. The thing is that I want the companies I invest in to do good things. I am sure other people feel the same way.
Both the P/B Ratio and P/CF Ratio tests show that this stock is overpriced. This is not surprising considering the stock price is up by 75% this year and was also up last year by some 44%. I still think this is a good company, but to make money on a stock over the longer term, it is important not to pay too high a price for it. See my spreadsheet at stn.htm.
This is the second of two parts. The first part was posted on Thursday, December 19, 2013 and is available here.
Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec.
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, December 19, 2013
Stantec Inc.
I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN). I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. I lot of people were recommending it as a great stock. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building.
I bought this stock for capital gains in April 2008. I sold in September 2011. I wanted to get rid of non-core stocks and this stock had not produced capital gains. I had a capital loss of 22.6%.
An interesting development is that this stock started to pay dividends in 2012. In 2013, it increased its dividend by 10%. Yield is currently extremely low at 0.95%. The median yield for 2012 would be 1.78%. Perhaps this stock will turn into a dividend growth stock. Only time will tell.
The return to the end of 2012 was very low for the past 5 years. However, this stock has gained some 75% this year. The return to date is 18.72% and 20.47% per year over the past 5 and 10 years. The capital gain portion of this return is at 18.26% and 20.23% per year over these periods. Dividend portion these return would be 0.23% and 0.46% per year over these periods.
The outstanding shares have not grown over the past 5 years and have grown just 2.3% per year over the past 10 years. Shares were increased for Share Issues and Stock Options and decreased for Buy Backs. The company has grown its revenue, earnings and cash flow quite well over the past 5 and 10 years.
Revenue per Share growth is 15% and 13% per year over the past 5 and 10 years. Earnings per Share have grown at the rate of 12% and 17% per year over the past 5 and 10 years. Cash Flow per Share has grown at the rate of 14% and 17% per year over the past 5 and 10 years.
The Return on Equity is generally good. The ROE for 2012 is 16.6%. The 5 year median ROE is at 10.2%. The ROE on comprehensive income is close to the ROE on net income, coming in at 15.7% for 2012. The ROE for 2013 is expected to come in at around 17%.
The Liquidity Ratio is at 1.71 and the current one is 1.74. These are good. The Debt Ratio is also quite good at 1.98 and the current one is at 2.07. I would like to see the Leverage and Debt/Equity Ratios a little lower but they are fine at 2.02 and 1.02 for 2012. They are currently better and fine at 1.93 and 0.93.
This stock is doing very well. It is growing quite nicely and it has started to buy a dividend. This was a nice stock to analyze and not complex as some other stocks have been. See my spreadsheet at stn.htm.
This is the first of two parts. Second part will be posted on Friday, December 19, 2013 and will be available here.
Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec.
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 bought this stock for capital gains in April 2008. I sold in September 2011. I wanted to get rid of non-core stocks and this stock had not produced capital gains. I had a capital loss of 22.6%.
An interesting development is that this stock started to pay dividends in 2012. In 2013, it increased its dividend by 10%. Yield is currently extremely low at 0.95%. The median yield for 2012 would be 1.78%. Perhaps this stock will turn into a dividend growth stock. Only time will tell.
The return to the end of 2012 was very low for the past 5 years. However, this stock has gained some 75% this year. The return to date is 18.72% and 20.47% per year over the past 5 and 10 years. The capital gain portion of this return is at 18.26% and 20.23% per year over these periods. Dividend portion these return would be 0.23% and 0.46% per year over these periods.
The outstanding shares have not grown over the past 5 years and have grown just 2.3% per year over the past 10 years. Shares were increased for Share Issues and Stock Options and decreased for Buy Backs. The company has grown its revenue, earnings and cash flow quite well over the past 5 and 10 years.
Revenue per Share growth is 15% and 13% per year over the past 5 and 10 years. Earnings per Share have grown at the rate of 12% and 17% per year over the past 5 and 10 years. Cash Flow per Share has grown at the rate of 14% and 17% per year over the past 5 and 10 years.
The Return on Equity is generally good. The ROE for 2012 is 16.6%. The 5 year median ROE is at 10.2%. The ROE on comprehensive income is close to the ROE on net income, coming in at 15.7% for 2012. The ROE for 2013 is expected to come in at around 17%.
The Liquidity Ratio is at 1.71 and the current one is 1.74. These are good. The Debt Ratio is also quite good at 1.98 and the current one is at 2.07. I would like to see the Leverage and Debt/Equity Ratios a little lower but they are fine at 2.02 and 1.02 for 2012. They are currently better and fine at 1.93 and 0.93.
This stock is doing very well. It is growing quite nicely and it has started to buy a dividend. This was a nice stock to analyze and not complex as some other stocks have been. See my spreadsheet at stn.htm.
This is the first of two parts. Second part will be posted on Friday, December 19, 2013 and will be available here.
Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec.
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, December 18, 2013
Keg Royalties Income Fund
On my other blog I am today writing about The Folly with P/E Multiples...continue...
I do not own this stock of Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF). This was a stock suggested by one of my readers. I like dinning at The Keg. I find the food very good. At stock forums I viewed, investors liked this company as it is guaranteed 4% of the sales at Keg restaurants as income to the fund. So I decided to take a look at it.
In my original blog entry on this stock I wrote: "I will be upfront. I would not invest in this stock. If I understand the accounting records, I would be deeply concerned about two things, just as far as income is concerned. One, money is flowing into this fund from Keg Restaurants Ltd. (KRL) and this company, after a disastrous year in 2009, stopped publishing their accounting statements. The restaurant business is a tough business. If KRL is not making money how will they be able to pay money into this fund?
The second concern I have is that interest income makes up a large portion of the income of this fund. If I am reading the statements correctly, the fund loaned KRL $57M and is collecting 7.5% interest on this loan. This is a high interest rate under the current circumstances. And, we go back to the thought of, if KRL is not making money how will they be able to pay this interest?
Also, if I am reading the financial statements correctly, this fund pays a distribution to Class C shares held by KRL of $.0625 per share. In 2011 $4.275M was paid on Class C shares and fund got paid interest of $4.281M on KRL's loan. The notes say that this distribution is due to KRL as long as the note is outstanding.
I know that this income fund is due 4% of revenue for Keg restaurants. I understand that people think this is great, because no matter what, the fund is due this 4%. However, I would be very concerned about the ability of the restaurants to make money and paid this royalty."
I went looking again this year for KRL's financial statements and found ones for 2010. The earnings loss was less than for 2009, but it still had an earnings loss. I find more things that I do not like. For instance, as I read the financial statements, the reason that profit dropped was because of an increase in the"Fair value of Exchangeable Partnership Units" that Keg Restaurants Ltd. (KRL) owns in KEG.
Another thing is that everyone seems to say something like The Keg Royalties Income Fund distributes royalties of 4% of gross sales to unitholders each month. However, this is not strictly true. According to my calculations in 2012 4% of KRL sales is $19.4M and the fund paid out in distributions $10.9M or some 56%. The 7 year median payout comparing 4% of KRL's gross sales to KRI distributions is 68%.
The dividend yield is currently quite good at 6%. However, dividends have varied and there was a decrease in 2011. Over the past 5 and 9 years dividends have declined by 4.3% per year and 1.3% per year.
The stock price has done well and the stock price is up over 10% year to date. The total returns on this stock to date over the past 5 and 10 years is 32.16% and 14.72% per year with 19.21% and 5.03% per year in capital gains and 12.95 and 9.69% in dividends.
Revenue is increasing, EPS are growing not badly, but there is no growth in cash flow. For example, Revenue per share is up 9% and 17% per year over the past 5 and 10 years. EPS is up by 4.3% over the past 5 years using the 5 year running averages and is up by 8.3% per year over the past 10 years. Cash flow per Share is up by 1.6% per year over the past 5 years and up by 0% over the past 10 years.
As far as I can see the stock price seems to be relatively high. For example, the current dividend yield at 6% is some 46% higher than the 5 year median dividend yield of 11.08%. The current Price/Earnings per Share Ratio is 19.77 using the EPS for the last 12 months to the end of Quarter 3 and a stock price of $16.01. The 5 year low, median and high median P/E Ratios are 8.53, 9.30 and 10.07. There are rather low P/E Ratios, but a ratio of 19.77 is rather high for an income trust stock.
There is an interesting article in the financial post about Fairfax buying a stake in Keg Restaurants Ltd. Fairfax bought a 51% interest in this company. This is the company that pays royalties to The Keg Royalties Income Fund.
I can find no analysts that follow this stock. I still do not like this stock and I think that it is rather overprice. See my spreadsheet at keg.htm.
Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. Its web site is here Keg 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 of Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF). This was a stock suggested by one of my readers. I like dinning at The Keg. I find the food very good. At stock forums I viewed, investors liked this company as it is guaranteed 4% of the sales at Keg restaurants as income to the fund. So I decided to take a look at it.
In my original blog entry on this stock I wrote: "I will be upfront. I would not invest in this stock. If I understand the accounting records, I would be deeply concerned about two things, just as far as income is concerned. One, money is flowing into this fund from Keg Restaurants Ltd. (KRL) and this company, after a disastrous year in 2009, stopped publishing their accounting statements. The restaurant business is a tough business. If KRL is not making money how will they be able to pay money into this fund?
The second concern I have is that interest income makes up a large portion of the income of this fund. If I am reading the statements correctly, the fund loaned KRL $57M and is collecting 7.5% interest on this loan. This is a high interest rate under the current circumstances. And, we go back to the thought of, if KRL is not making money how will they be able to pay this interest?
Also, if I am reading the financial statements correctly, this fund pays a distribution to Class C shares held by KRL of $.0625 per share. In 2011 $4.275M was paid on Class C shares and fund got paid interest of $4.281M on KRL's loan. The notes say that this distribution is due to KRL as long as the note is outstanding.
I know that this income fund is due 4% of revenue for Keg restaurants. I understand that people think this is great, because no matter what, the fund is due this 4%. However, I would be very concerned about the ability of the restaurants to make money and paid this royalty."
I went looking again this year for KRL's financial statements and found ones for 2010. The earnings loss was less than for 2009, but it still had an earnings loss. I find more things that I do not like. For instance, as I read the financial statements, the reason that profit dropped was because of an increase in the"Fair value of Exchangeable Partnership Units" that Keg Restaurants Ltd. (KRL) owns in KEG.
Another thing is that everyone seems to say something like The Keg Royalties Income Fund distributes royalties of 4% of gross sales to unitholders each month. However, this is not strictly true. According to my calculations in 2012 4% of KRL sales is $19.4M and the fund paid out in distributions $10.9M or some 56%. The 7 year median payout comparing 4% of KRL's gross sales to KRI distributions is 68%.
The dividend yield is currently quite good at 6%. However, dividends have varied and there was a decrease in 2011. Over the past 5 and 9 years dividends have declined by 4.3% per year and 1.3% per year.
The stock price has done well and the stock price is up over 10% year to date. The total returns on this stock to date over the past 5 and 10 years is 32.16% and 14.72% per year with 19.21% and 5.03% per year in capital gains and 12.95 and 9.69% in dividends.
Revenue is increasing, EPS are growing not badly, but there is no growth in cash flow. For example, Revenue per share is up 9% and 17% per year over the past 5 and 10 years. EPS is up by 4.3% over the past 5 years using the 5 year running averages and is up by 8.3% per year over the past 10 years. Cash flow per Share is up by 1.6% per year over the past 5 years and up by 0% over the past 10 years.
As far as I can see the stock price seems to be relatively high. For example, the current dividend yield at 6% is some 46% higher than the 5 year median dividend yield of 11.08%. The current Price/Earnings per Share Ratio is 19.77 using the EPS for the last 12 months to the end of Quarter 3 and a stock price of $16.01. The 5 year low, median and high median P/E Ratios are 8.53, 9.30 and 10.07. There are rather low P/E Ratios, but a ratio of 19.77 is rather high for an income trust stock.
There is an interesting article in the financial post about Fairfax buying a stake in Keg Restaurants Ltd. Fairfax bought a 51% interest in this company. This is the company that pays royalties to The Keg Royalties Income Fund.
I can find no analysts that follow this stock. I still do not like this stock and I think that it is rather overprice. See my spreadsheet at keg.htm.
Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. Its web site is here Keg 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.
Tuesday, December 17, 2013
Magna International Inc. 2
I do not own this stock of Magna International Inc. (TSX-MG, NYSE-MGA). Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy.
I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.
Over the past year insider trading has been $31.6M of insider selling and no insider buying. The company is also busy buying back shares. There has been no insider selling in the past month. There is insider ownership with the CEO owning shares worth around $44.7M and the CFO owing shares worth around $22.7M.
Not only is there options, but there are options like vehicles called Rights Restricted Stock Units, Rights Stock Appreciation Rights, Rights Restricted Shares and Units Deferred Share Units. There are lots of these options and options like vehicles outstanding for insiders.
The 5 year low, median and high median Price/Earnings per Share Ratios are 6.68, 9.62 and 12.56. These are rather low P/E Ratios. The 10 year low, median and high median P/E Ratios are 10.96, 12.38 and 14.25. The current P/E Ratio is 12.39 based on a stock price of $83.74 and 2013 EPS estimate of $6.76 CDN$. The P/E using the 2014 EPS estimate is even lower at 10.39 using the current stock price of $83.74 and EPS estimate of $8.06 CDN$.
I get a current Graham Price of $82.83 CDN$. The 10 year low, median and high median P/GP Ratios are 0.76, 0.90 and 1.02. The P/GP ratio would be 1.01. The 2014 Graham Price is $90.46 with a P/GP Ratio of 0.93. The first test shows that the stock price is relatively high and the second shows it is relatively reasonable.
The 10 year median Price/Book Value per share Ratio is 1.21 and the current P/B Ratio is 1.88 a value some 53% higher. This stock test shows that the stock price is relatively high.
The current dividend yield is 1.62% and the 5 year median is 2.17% a value some 26% higher. What you want is a current dividend yield higher than the 5 year median dividend yield or at least close to it. These last two stock tests suggest that the stock price is rather high.
If you look at historical dividend yields, the historical high is 3.15% and the historical low is 0.74% with 1.95% being the historical average. The current dividend yield is still some 17% lower than the historical average and suggests that the stock price is relatively high.
When I look at analysts' recommendations they are all over the place. I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are Buy and Hold recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $81.60 a value below the current stock price of $83.74. This implies a negative total return of 1% with 2.61% from dividends and a capital loss of 2.56%.
On December 13, 2013 Zacks site said that this stock has entered oversold territory. (Price ended at $83.74 CDN$ on this date.) There is also an article in Forbes in early December says that this stock was in oversold territory. There is also a good review of this stock at Motley Fool. In November 2013, the WKRB site said Morgan Stanley raised their 12 month stock price to $85.00 US$.
On some measures, the stock price would appear to be relatively high. See my spreadsheet at mg.htm.
This is the second of two parts. The first part was posted on Monday, December 16, 2013 and is available here.
Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna.
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 held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.
Over the past year insider trading has been $31.6M of insider selling and no insider buying. The company is also busy buying back shares. There has been no insider selling in the past month. There is insider ownership with the CEO owning shares worth around $44.7M and the CFO owing shares worth around $22.7M.
Not only is there options, but there are options like vehicles called Rights Restricted Stock Units, Rights Stock Appreciation Rights, Rights Restricted Shares and Units Deferred Share Units. There are lots of these options and options like vehicles outstanding for insiders.
The 5 year low, median and high median Price/Earnings per Share Ratios are 6.68, 9.62 and 12.56. These are rather low P/E Ratios. The 10 year low, median and high median P/E Ratios are 10.96, 12.38 and 14.25. The current P/E Ratio is 12.39 based on a stock price of $83.74 and 2013 EPS estimate of $6.76 CDN$. The P/E using the 2014 EPS estimate is even lower at 10.39 using the current stock price of $83.74 and EPS estimate of $8.06 CDN$.
I get a current Graham Price of $82.83 CDN$. The 10 year low, median and high median P/GP Ratios are 0.76, 0.90 and 1.02. The P/GP ratio would be 1.01. The 2014 Graham Price is $90.46 with a P/GP Ratio of 0.93. The first test shows that the stock price is relatively high and the second shows it is relatively reasonable.
The 10 year median Price/Book Value per share Ratio is 1.21 and the current P/B Ratio is 1.88 a value some 53% higher. This stock test shows that the stock price is relatively high.
The current dividend yield is 1.62% and the 5 year median is 2.17% a value some 26% higher. What you want is a current dividend yield higher than the 5 year median dividend yield or at least close to it. These last two stock tests suggest that the stock price is rather high.
If you look at historical dividend yields, the historical high is 3.15% and the historical low is 0.74% with 1.95% being the historical average. The current dividend yield is still some 17% lower than the historical average and suggests that the stock price is relatively high.
When I look at analysts' recommendations they are all over the place. I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are Buy and Hold recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $81.60 a value below the current stock price of $83.74. This implies a negative total return of 1% with 2.61% from dividends and a capital loss of 2.56%.
On December 13, 2013 Zacks site said that this stock has entered oversold territory. (Price ended at $83.74 CDN$ on this date.) There is also an article in Forbes in early December says that this stock was in oversold territory. There is also a good review of this stock at Motley Fool. In November 2013, the WKRB site said Morgan Stanley raised their 12 month stock price to $85.00 US$.
On some measures, the stock price would appear to be relatively high. See my spreadsheet at mg.htm.
This is the second of two parts. The first part was posted on Monday, December 16, 2013 and is available here.
Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna.
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, December 16, 2013
Magna International Inc.
On my other blog I am today writing about the trouble with RRSPs...continue...
I do not own this stock of Magna International Inc. (TSX-MG, NYSE-MGA). Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.
Dividends have had a varied life on this stock where there have been both decreases and increases and some years where nothing occurred for the dividend. Even with all this, dividends are up by 14% and 0% per year over the past 5 and 10 years in CDN$ terms.
The dividends are paid in US$, so in US$ the dividends are up by 14% and 5% per year over the past 5 and 10 years. Because dividends are paid in US$ they can vary for Canadian investors depending on the exchange rate.
The stock price is up some 67% this year. So, the 5 and 10 year total return to date is very good over the past 5 years. The 5 and 10 year total return is 37.39% and 6.11% per year with 35.44% and 4.88% per year from capital gains and 1.95% and 1.24% per year from dividends.
This stock had sort of flat lined between 2001 and 2006. The stock price dropped significantly in 2008 and only recovered in 2012. The stock is now at a higher price that it has ever been.
The outstanding shares have increased by 0% and 2% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, Share Issues and collapse of dual classes of shares. They have decreased due to buy backs.
The growth in this company is better in US$ than in CDN$. Revenue per Share is up by 3.3% and 7% per year over the past 5 and 10 years in US$ terms, but is up by 3.5% and 2% per year in CDN$ terms. Earnings per Share is up by around 16% per year in both US$ and CDN$ terms over the past 5 years. The EPS is up by 7.7% in US$ and by 2.8% in CDN$ terms over the past 10 years.
Cash Flow per Share is up by just over 4% per year over the past 5 and 10 years in US$ and CDN$ terms. It is flat over the past 10 years in US$ terms and down by 4.6% per year over the past 10 years in CDN$ terms.
The Return on Equity has improved since 2010 and the ROE for 2012 was 15.2% and is expected to be around 14.2% in 2013. The ROE on comprehensive income is close at 16% for 2012 and is higher than the one for net income by 5.4%.
The Liquidity Ratio has generally hovered around 1.50. For 2012 it is just 1.37 and the current one is a bit lower at 1.35. The Debt Ratio has always been good and is currently at 2.13. The current Leverage and Debt/Equity Ratios are good at 1.88 and 0.88.
Frank Stronach was bought out in 2010 and since then there has been increases in revenue, earnings and cash flow. See my spreadsheet at mg.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 17, 2013 and will be available here.
Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna.
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 of Magna International Inc. (TSX-MG, NYSE-MGA). Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.
Dividends have had a varied life on this stock where there have been both decreases and increases and some years where nothing occurred for the dividend. Even with all this, dividends are up by 14% and 0% per year over the past 5 and 10 years in CDN$ terms.
The dividends are paid in US$, so in US$ the dividends are up by 14% and 5% per year over the past 5 and 10 years. Because dividends are paid in US$ they can vary for Canadian investors depending on the exchange rate.
The stock price is up some 67% this year. So, the 5 and 10 year total return to date is very good over the past 5 years. The 5 and 10 year total return is 37.39% and 6.11% per year with 35.44% and 4.88% per year from capital gains and 1.95% and 1.24% per year from dividends.
This stock had sort of flat lined between 2001 and 2006. The stock price dropped significantly in 2008 and only recovered in 2012. The stock is now at a higher price that it has ever been.
The outstanding shares have increased by 0% and 2% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, Share Issues and collapse of dual classes of shares. They have decreased due to buy backs.
The growth in this company is better in US$ than in CDN$. Revenue per Share is up by 3.3% and 7% per year over the past 5 and 10 years in US$ terms, but is up by 3.5% and 2% per year in CDN$ terms. Earnings per Share is up by around 16% per year in both US$ and CDN$ terms over the past 5 years. The EPS is up by 7.7% in US$ and by 2.8% in CDN$ terms over the past 10 years.
Cash Flow per Share is up by just over 4% per year over the past 5 and 10 years in US$ and CDN$ terms. It is flat over the past 10 years in US$ terms and down by 4.6% per year over the past 10 years in CDN$ terms.
The Return on Equity has improved since 2010 and the ROE for 2012 was 15.2% and is expected to be around 14.2% in 2013. The ROE on comprehensive income is close at 16% for 2012 and is higher than the one for net income by 5.4%.
The Liquidity Ratio has generally hovered around 1.50. For 2012 it is just 1.37 and the current one is a bit lower at 1.35. The Debt Ratio has always been good and is currently at 2.13. The current Leverage and Debt/Equity Ratios are good at 1.88 and 0.88.
Frank Stronach was bought out in 2010 and since then there has been increases in revenue, earnings and cash flow. See my spreadsheet at mg.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 17, 2013 and will be available here.
Magna International is the most diversified global automotive supplier. They design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Their capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly. Its web site is here Magna.
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, December 13, 2013
H & R Real Estate Trust 2
I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed. They are not on any dividend list that I know of at this time.
There is not much going on in insider trading. There is $188,160 in insider buying and $165,488 in insider selling for net insider buying of $22.672 over the past year. There was no insider trading in the last month. There seems to be lots of options. In 2011 stock options exercised were worth $6.9M at 2011's median stock price and in 2012 stock options exercised were worth $12.2M at 2012's median stock price.
The company obviously does not want anyone to use Price/Earnings per Share Ratios as they do not provide any EPS values. However, they do provide net income and average and diluted shares outstanding. The 5 year low, median and high median P/E Ratios are 8.64, 15.21 and 17.50. The P/E Ratio based on diluted EPS for the 12 months ending in Quarter 3 at $1.17 and a stock price of $21.12 is 18.12.
The 5 year low, median and high median Price/FFO Ratios are 11.66, 12.84 and 14.06. The current P/FFO Ratio is 12.00 based on FFO estimate for 2013 of $1.76 and a stock price of $21.12. Using the latest favourite valuation ratio of the AFFO, I find that the 5 year low, median and high median Price/AFFO Ratios are 12.92, 14.65 and 15.99. The current P/AFFO Ratio is 14.67 based on AFFO estimates for 2013 $1.44 and a stock price of $21.12.
All of this shows that using the P/E Ratio, the current ratio is slightly above the 5 year median high ratio and therefore the stock price is on the high side. The P/FFO testing shows that the current P/FFO Ratio is slightly below the 5 year median ratio and therefore the stock price is reasonable. The P/AFFO testing shows that the current P/AFFO Ratio is slightly above the 5 year median P/AFFO and therefore the stock price is still reasonable.
If you use the Graham Price test and calculate the Graham Price using the EPS and FFO, then in both cases the P/GP Ratio is lower than the 10 year median low P/GP Ratios and shows that the stock price is low. The Graham Price using EPS is $24.59 and using FFO is $30.23.
The 10 year median Price/Book Value per Share Ratio is 1.69 and the current P/B Ratio is 0.92 a value that is only 54% of the 10 year median P/B Ratio. This test shows that the stock price is cheap on a relatively basis. It also shows that the stock is cheap on an absolute basis because the Book Value is higher than the stock price.
Now on to what is my favourite test and that is comparing the 5 year median dividend yield, which is 4.79%, and the current dividend yield which is 6.39%. This test says that the stock price is cheap as the current dividend yield is 33.5% higher than the 5 year median dividend yield.
Why is the dividend yield test my favourite? I cannot see much room for anyone to manipulate any values here. It is pretty clear what dividends were paid and what the stock prices has been. The method of calculating FFO values has changed over the years and for both FFO and AFFO, different analysts seem to have different methods to calculate these values. As far as book value goes, the new accounting methods have had a significant effect on this, especially for real estate companies.
The thing with my favourite stock price test is that it is using just 5 years of data and this is a relatively short period of time. If I test the current dividend yield against the 10 year median dividend yield, I get a 10 year median dividend yield of 6.25% compared to the current dividend yield of 6.39%. In this case the stock price is relatively reasonable as the current yield is only 2.3% higher than the 10 years median dividend yield.
A final note on stock price is the fact that the dividend yields used to be significantly higher on this stock if you look at the ones in the 1990's. I have values going back to 1997 and if you get relative highs and lows for dividend yield from 1997 to today, these dividend yields have a high value of 11.40% and a low value of 4.52% and an average value of 7.96%. This historical average is some 19.7% higher than the current dividend yield and suggests the stock price may actually be rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations, with the consensus being a Buy. The 12 month target price is $24.50 and this implies a total return of 22.4% with 16.0% from capital gains and 6.4% from dividends.
The charts show that this stock hit a peak in May of 2013 and have been trending lower ever since. Also, the charts show that the stock hit a peak in August 2012 that it has never breached since. The blogger Happy Capitalism addresses this subject.
There is an article in the Financial Post talking about the $200M price tag for the company to internalize the management contract. The Motley Fool thinks that this stock currently deserves a close look at present.
The stock price is probably reasonable. See my spreadsheet at hr.htm.
This is the second of two parts. The first part was posted on Thursday, December 11, 2013 and is available here.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate .
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.
There is not much going on in insider trading. There is $188,160 in insider buying and $165,488 in insider selling for net insider buying of $22.672 over the past year. There was no insider trading in the last month. There seems to be lots of options. In 2011 stock options exercised were worth $6.9M at 2011's median stock price and in 2012 stock options exercised were worth $12.2M at 2012's median stock price.
The company obviously does not want anyone to use Price/Earnings per Share Ratios as they do not provide any EPS values. However, they do provide net income and average and diluted shares outstanding. The 5 year low, median and high median P/E Ratios are 8.64, 15.21 and 17.50. The P/E Ratio based on diluted EPS for the 12 months ending in Quarter 3 at $1.17 and a stock price of $21.12 is 18.12.
The 5 year low, median and high median Price/FFO Ratios are 11.66, 12.84 and 14.06. The current P/FFO Ratio is 12.00 based on FFO estimate for 2013 of $1.76 and a stock price of $21.12. Using the latest favourite valuation ratio of the AFFO, I find that the 5 year low, median and high median Price/AFFO Ratios are 12.92, 14.65 and 15.99. The current P/AFFO Ratio is 14.67 based on AFFO estimates for 2013 $1.44 and a stock price of $21.12.
All of this shows that using the P/E Ratio, the current ratio is slightly above the 5 year median high ratio and therefore the stock price is on the high side. The P/FFO testing shows that the current P/FFO Ratio is slightly below the 5 year median ratio and therefore the stock price is reasonable. The P/AFFO testing shows that the current P/AFFO Ratio is slightly above the 5 year median P/AFFO and therefore the stock price is still reasonable.
If you use the Graham Price test and calculate the Graham Price using the EPS and FFO, then in both cases the P/GP Ratio is lower than the 10 year median low P/GP Ratios and shows that the stock price is low. The Graham Price using EPS is $24.59 and using FFO is $30.23.
The 10 year median Price/Book Value per Share Ratio is 1.69 and the current P/B Ratio is 0.92 a value that is only 54% of the 10 year median P/B Ratio. This test shows that the stock price is cheap on a relatively basis. It also shows that the stock is cheap on an absolute basis because the Book Value is higher than the stock price.
Now on to what is my favourite test and that is comparing the 5 year median dividend yield, which is 4.79%, and the current dividend yield which is 6.39%. This test says that the stock price is cheap as the current dividend yield is 33.5% higher than the 5 year median dividend yield.
Why is the dividend yield test my favourite? I cannot see much room for anyone to manipulate any values here. It is pretty clear what dividends were paid and what the stock prices has been. The method of calculating FFO values has changed over the years and for both FFO and AFFO, different analysts seem to have different methods to calculate these values. As far as book value goes, the new accounting methods have had a significant effect on this, especially for real estate companies.
The thing with my favourite stock price test is that it is using just 5 years of data and this is a relatively short period of time. If I test the current dividend yield against the 10 year median dividend yield, I get a 10 year median dividend yield of 6.25% compared to the current dividend yield of 6.39%. In this case the stock price is relatively reasonable as the current yield is only 2.3% higher than the 10 years median dividend yield.
A final note on stock price is the fact that the dividend yields used to be significantly higher on this stock if you look at the ones in the 1990's. I have values going back to 1997 and if you get relative highs and lows for dividend yield from 1997 to today, these dividend yields have a high value of 11.40% and a low value of 4.52% and an average value of 7.96%. This historical average is some 19.7% higher than the current dividend yield and suggests the stock price may actually be rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations, with the consensus being a Buy. The 12 month target price is $24.50 and this implies a total return of 22.4% with 16.0% from capital gains and 6.4% from dividends.
The charts show that this stock hit a peak in May of 2013 and have been trending lower ever since. Also, the charts show that the stock hit a peak in August 2012 that it has never breached since. The blogger Happy Capitalism addresses this subject.
There is an article in the Financial Post talking about the $200M price tag for the company to internalize the management contract. The Motley Fool thinks that this stock currently deserves a close look at present.
The stock price is probably reasonable. See my spreadsheet at hr.htm.
This is the second of two parts. The first part was posted on Thursday, December 11, 2013 and is available here.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate .
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, December 12, 2013
H & R Real Estate Trust
I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed. They are not on any dividend list that I know of at this time.
Since this company cut their dividend in 2009, they have again been doing dividend increases. The cut was a 50% one and although there has been some nice dividend increases since, they are still some 6% below the dividend of 2008. The most recent increase was in 2013 and it was an 8% increase.
The current Dividend Payout Ratios seem fine. Last year was a one year that they did not payout in dividends more than they earned. The DPR for EPS for 2012 was 50%. The DPR for CFPS was 42% as was the 5 year median DPR for CFPS. The DPR for FFO for 2012 was 68% and is expected to be 77% for 2013. Dividend growth over the past 5 and 10 years is a decline of 3% and 0% per year.
The total return has been good with the 5 and 10 year total return at 31.85% and 9.60% per year with 23.17% and 2.89% per year from capital gains and 8.68% and 6.71% per year from dividends.
Outstanding share have increased by 8.7% and 10.6% per year over the past 5 and 10 years. They have increased due to Share Issues, Stock Options, DRIP and Debenture Conversions.
Revenue has increased by 7.5% and 11% per year over the past 5 and 10 years. However, Revenue per Share is down by 1% and 0% per year over the past 5 and 10 years.
If you look at EPS using the 5 year running averages, it is up by 4% per year over the past 5 years and down by 2% over the past 10 years. (I used 5 year running averages because of negative earning years.) The AFFO is down by 19.5% and 3% per year over the past 5 and 7 years. (AFFO values only go back some 7 years.) The FFO is down by 0% and 2.3% per year over the past 5 and 10 years. This is not a great showing.
However, there have been increases in AFFO and FFO over the past few years and both are expected to be up this year. The AFFO and FFO are up by 1% and 2% for the 12 months to the end of the Quarter 3 compared to the 12 months to the end of 2012.
The Return on Equity and really been quite low for a number of years until 2012. For 2012 the ROE was 11.3%, which is respectable. The ROE on comprehensive income was close at 11%. However, the 12 months to the end of Quarter 3, 2013, the ROE is back being quite low at just 5%.
The Liquidity Ratios are generally quite low on this stock, but current cash flow does pull them up. The current Liquidity Ratio is just 0.99. However, with cash flow after dividends this ratio is at 2.13. The Debt Ratio is generally fine with the current one at 1.85. The current Leverage Debt/Equity Ratios at 2.18 and 1.18 are typical for a real estate company.
My overall impression is that although they are growing their revenues per share growth is negligible. See my spreadsheet at hr.htm.
This is the first of two parts. Second part will be posted on Friday, December 12, 2013 and will be available here.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate .
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 cut their dividend in 2009, they have again been doing dividend increases. The cut was a 50% one and although there has been some nice dividend increases since, they are still some 6% below the dividend of 2008. The most recent increase was in 2013 and it was an 8% increase.
The current Dividend Payout Ratios seem fine. Last year was a one year that they did not payout in dividends more than they earned. The DPR for EPS for 2012 was 50%. The DPR for CFPS was 42% as was the 5 year median DPR for CFPS. The DPR for FFO for 2012 was 68% and is expected to be 77% for 2013. Dividend growth over the past 5 and 10 years is a decline of 3% and 0% per year.
The total return has been good with the 5 and 10 year total return at 31.85% and 9.60% per year with 23.17% and 2.89% per year from capital gains and 8.68% and 6.71% per year from dividends.
Outstanding share have increased by 8.7% and 10.6% per year over the past 5 and 10 years. They have increased due to Share Issues, Stock Options, DRIP and Debenture Conversions.
Revenue has increased by 7.5% and 11% per year over the past 5 and 10 years. However, Revenue per Share is down by 1% and 0% per year over the past 5 and 10 years.
If you look at EPS using the 5 year running averages, it is up by 4% per year over the past 5 years and down by 2% over the past 10 years. (I used 5 year running averages because of negative earning years.) The AFFO is down by 19.5% and 3% per year over the past 5 and 7 years. (AFFO values only go back some 7 years.) The FFO is down by 0% and 2.3% per year over the past 5 and 10 years. This is not a great showing.
However, there have been increases in AFFO and FFO over the past few years and both are expected to be up this year. The AFFO and FFO are up by 1% and 2% for the 12 months to the end of the Quarter 3 compared to the 12 months to the end of 2012.
The Return on Equity and really been quite low for a number of years until 2012. For 2012 the ROE was 11.3%, which is respectable. The ROE on comprehensive income was close at 11%. However, the 12 months to the end of Quarter 3, 2013, the ROE is back being quite low at just 5%.
The Liquidity Ratios are generally quite low on this stock, but current cash flow does pull them up. The current Liquidity Ratio is just 0.99. However, with cash flow after dividends this ratio is at 2.13. The Debt Ratio is generally fine with the current one at 1.85. The current Leverage Debt/Equity Ratios at 2.18 and 1.18 are typical for a real estate company.
My overall impression is that although they are growing their revenues per share growth is negligible. See my spreadsheet at hr.htm.
This is the first of two parts. Second part will be posted on Friday, December 12, 2013 and will be available here.
H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate .
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, December 11, 2013
FirstService Corp
On my other blog I am today writing about Reitmans' dividend cut...continue...
I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSRV), but I used to. I bought FirstService Corp in 2002 as it a good solid company that knows how to make money. At that time I was still buying companies to earn capital gains. This one replaces Inco (which I had brought for CG and sold when I made them.) I bought more of this company in 2007 from my profit from RIM. FSV was a non-dividend paying stock, but it had issued preferred shares to shareholders.
By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends. Their way of paying dividends by issuing preferred shares was interesting. However, only if you held shares at the time of the special dividend of preferred shares would you get any dividends.
The first thing to say about this company is that they do not make it easy to analyses their financials. First they produce their financials in US$. In 2007, instead of issuing dividends, they issued to their shareholders preferred shares with dividends. So if you had shares when these preferreds were issued, your returns would be very different that of shareholders that did not receive these preferred shares.
In 2013 they cancelled the preferred shares and started issuing dividends on the stock. Dividends are issued in US$, so if you are Canadian, the dividends would fluctuate with the currency exchange rate. The last thing is that they talked about EPS and Adjusted EPS. Most analysts seem to give estimates based on Adjusted EPS, but not all so you left to guess what the estimates are for. All this stuff makes for a very long and complicated spreadsheet.
And, if that was not enough, they do not put quarterly reports on their site, only annual reports. Even when you find the quarterly report, it does not give any Adjusted EPS information. You have to find a copy of the news release for the quarterly report to get this.
With the issuance of dividends the company may become more interesting. The dividends are rather low and the current yield is only 1%. The Dividend Payout Ratios are low also. The DPR for cash flow is around 9.5%. Since earnings was negative in 2012 and are expected to be negative in 2013, there is no DPR for earnings. However, if you look at Adjusted EPS, the DPR is 22%. With a 1% dividend, if it is to be a dividend growth company, you would want dividend growth to be at 20% plus per year.
The outstanding shares have really not changed over the past 5 and 10 years. Shares have increased due to stock options and Share Issues and decreased due to Buy Backs. Revenue is up by 8% and 16% per year over the past 5 and 10 years. If you look at Adjusted EPS, this is up by 3.5% and 10% per year over the past 5 and 10 years.
The problem is growth in cash flow. Cash flow is up 0% and 2% per year over the past 5 and 10 years. Looking at 5 year running averages, cash flow has declined by 4% per year over the past 5 years and is up by 2.4% per year over the past 10 years.
Stock prices have really climbed this year and the stock is up some 52% this year. The 5 and 10 year total return is at 22% per year and 11% per year over the past 5 and 10 years.
I cannot judge the stock price based on P/E Ratios as there were negative earnings in 2012 and negative earnings are expected also in 2013. However, if I use Price/Adjusted EPS Ratios, I find the 5 year low, median and high median P/AE Ratios to be 12.43, 15.58 and 18.72. The current P/AE Ratio is 21.38 based on Adj. EPS of $2.00 and stock price of $42.76. (These are in CDN$.)
If I use the Adj. EPS in calculating the Graham Price, I get one of $11.72. The 10 year low, median and high median AE/GP Ratios are 1.40, 1.69 and 2.10. Using the current stock price of $42.76, the current AE/GP Ratios would be 3.65.
The 10 Year median Price/Book Value per Share Ratio is 3.69 and the current ratio is 6.01 a value some 63% higher. The 5 year low, median and high median Price/Cash Flow per Share Ratios are 6.66, 8.34 and 10.02. The current P/CF Ratio is 9.53 based on a stock price of $42.76 and CFPS for 2013 of $4.49. (This is in CDN$.)
When I look at analysts' recommendations, I Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus target stock price would $47.48. This implies a total return of 12.04% with 1% from dividends and 11.04% from capital gains.
On all the things I have tested the current stock price it would seem that it is relatively high. This is probably not surprising after the 53% run up in stock price this year. So this is a current negative. Also, there has been quite a bit of insider selling over the past month. This is another negative. See my spreadsheet at fsv.htm.
I have to blog only one entry on a stock each week in order to go through the list of stocks I want to cover in a year. This week, I am only doing one entry on this stock.
This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Controlling shareholder is Jay Hennick. He has 9% holding, but has 52.5% voting control. Its web site is here FirstService.
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 of FirstService Corp (TSX-FSV, NASDAQ-FSRV), but I used to. I bought FirstService Corp in 2002 as it a good solid company that knows how to make money. At that time I was still buying companies to earn capital gains. This one replaces Inco (which I had brought for CG and sold when I made them.) I bought more of this company in 2007 from my profit from RIM. FSV was a non-dividend paying stock, but it had issued preferred shares to shareholders.
By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends. Their way of paying dividends by issuing preferred shares was interesting. However, only if you held shares at the time of the special dividend of preferred shares would you get any dividends.
The first thing to say about this company is that they do not make it easy to analyses their financials. First they produce their financials in US$. In 2007, instead of issuing dividends, they issued to their shareholders preferred shares with dividends. So if you had shares when these preferreds were issued, your returns would be very different that of shareholders that did not receive these preferred shares.
In 2013 they cancelled the preferred shares and started issuing dividends on the stock. Dividends are issued in US$, so if you are Canadian, the dividends would fluctuate with the currency exchange rate. The last thing is that they talked about EPS and Adjusted EPS. Most analysts seem to give estimates based on Adjusted EPS, but not all so you left to guess what the estimates are for. All this stuff makes for a very long and complicated spreadsheet.
And, if that was not enough, they do not put quarterly reports on their site, only annual reports. Even when you find the quarterly report, it does not give any Adjusted EPS information. You have to find a copy of the news release for the quarterly report to get this.
With the issuance of dividends the company may become more interesting. The dividends are rather low and the current yield is only 1%. The Dividend Payout Ratios are low also. The DPR for cash flow is around 9.5%. Since earnings was negative in 2012 and are expected to be negative in 2013, there is no DPR for earnings. However, if you look at Adjusted EPS, the DPR is 22%. With a 1% dividend, if it is to be a dividend growth company, you would want dividend growth to be at 20% plus per year.
The outstanding shares have really not changed over the past 5 and 10 years. Shares have increased due to stock options and Share Issues and decreased due to Buy Backs. Revenue is up by 8% and 16% per year over the past 5 and 10 years. If you look at Adjusted EPS, this is up by 3.5% and 10% per year over the past 5 and 10 years.
The problem is growth in cash flow. Cash flow is up 0% and 2% per year over the past 5 and 10 years. Looking at 5 year running averages, cash flow has declined by 4% per year over the past 5 years and is up by 2.4% per year over the past 10 years.
Stock prices have really climbed this year and the stock is up some 52% this year. The 5 and 10 year total return is at 22% per year and 11% per year over the past 5 and 10 years.
I cannot judge the stock price based on P/E Ratios as there were negative earnings in 2012 and negative earnings are expected also in 2013. However, if I use Price/Adjusted EPS Ratios, I find the 5 year low, median and high median P/AE Ratios to be 12.43, 15.58 and 18.72. The current P/AE Ratio is 21.38 based on Adj. EPS of $2.00 and stock price of $42.76. (These are in CDN$.)
If I use the Adj. EPS in calculating the Graham Price, I get one of $11.72. The 10 year low, median and high median AE/GP Ratios are 1.40, 1.69 and 2.10. Using the current stock price of $42.76, the current AE/GP Ratios would be 3.65.
The 10 Year median Price/Book Value per Share Ratio is 3.69 and the current ratio is 6.01 a value some 63% higher. The 5 year low, median and high median Price/Cash Flow per Share Ratios are 6.66, 8.34 and 10.02. The current P/CF Ratio is 9.53 based on a stock price of $42.76 and CFPS for 2013 of $4.49. (This is in CDN$.)
When I look at analysts' recommendations, I Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus target stock price would $47.48. This implies a total return of 12.04% with 1% from dividends and 11.04% from capital gains.
On all the things I have tested the current stock price it would seem that it is relatively high. This is probably not surprising after the 53% run up in stock price this year. So this is a current negative. Also, there has been quite a bit of insider selling over the past month. This is another negative. See my spreadsheet at fsv.htm.
I have to blog only one entry on a stock each week in order to go through the list of stocks I want to cover in a year. This week, I am only doing one entry on this stock.
This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Controlling shareholder is Jay Hennick. He has 9% holding, but has 52.5% voting control. Its web site is here FirstService.
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, December 10, 2013
First Capital Realty 2
I do not own this stock of First Capital Realty (TSX-FCR, OTC- FCRGF). Last year a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.
Over the past year in insider trading, there has been $04M of insider buying and $2.3M of insider selling for a net of insider selling of $1.9M. Most of the selling was earlier in the year at $18 to $19 and the buying was in the last few months at $17. There is insider ownership. For example the CEO has shares worth $20.2M and the CFO has shares worth $16.4. Insiders not only have options, but also Units Restricted Share Units, Deferred Share Units and Warrants.
I cannot make any sense out of the P/E ratios. For example, the 5 year median P/E Ratio is 40.03 a value that is ridiculous for a REIT. The 5 year low, median and high P/AFFO Ratios are 15.44, 16.87 and 18.31. The current P/AFFO Ratio is 19.52 based on a stock price of $17.57 and 2013 AFFO estimate of $.90. Since the AFFO to the end of Quarter 3 is $.89, it is probably reasonable.
The 5 year low, median and high P/FFO Ratios are 13.71, 14.98 and 16.26. The current P/FFO Ratio is 17.06 based on a stock price of $17.57 and 2013 FFO estimate of $1.03. Since the FFO to the end of Quarter 3 is $1.07, it is probably reasonable. Both P/FFO and P/AFFO shows that the current price is high.
Using a Graham Price that has FFO rather than EPS, I get a Graham Price of $19.28. The 10 year low, median and high median P/GP Ratios are 0.89, 0.97 and 1.11. The current P/GP is .91. This stock test shows that the current price is reasonable.
If you look at cash flows, the 5 year low, median and high median P/CF Ratios are 13.25, 14.49 and 15.72. The current P/CF Ratios is 18.92. This stock price test says that the stock price is high.
I get a 5 year median dividend yield of 5.45% and the current dividend yield at 4.78% is some 13% lower. This stock test suggests that the stock price is getting rather high. If you use historical dividend yields, the median dividend yield is even high at 7.02% and that is some 31% higher than the current dividend yield.
The blogger Dividend Blogger talks in August of this year about a number of REITs and Real Estate companies.
If you look at analysts' recommendations, there are Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $19.80. This implies total returns of 17.47% with 12.69% from capital gains and 4.78% from dividends. My current price is $17.57.
I think that this stock is relatively overpriced. This is no surprising to me. The stock price has been increasing faster than revenue, FFO, AFFO, dividends and cash flow over the past 5 years. The capital gains on this stock over the past 5 years to the end of 2012 are 4.62% per year. Over this period dividends increased by 1.02% per year, FFO by 0% per year, AFFO by 0.9% per year. The revenue per share is down by 1.2% per year and cash flow per share is down by 2.8% per year.
In my experience with dividend paying stocks, the capital gains over the longer term match dividend increases. Even if you do not see things that way, the stock price cannot continue to increase faster than every other measurement of growth. Yes, I know that some of these measurements are estimated to increase this year, but if you look at 5 year growth using 2013 estimates, there still is not much in the way of growth, except again for stock capital gains. See my spreadsheet at fcr.htm.
This is the second of two parts. The first part was posted on Monday, December 9, 2013 and is available here.
First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty.
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.
Over the past year in insider trading, there has been $04M of insider buying and $2.3M of insider selling for a net of insider selling of $1.9M. Most of the selling was earlier in the year at $18 to $19 and the buying was in the last few months at $17. There is insider ownership. For example the CEO has shares worth $20.2M and the CFO has shares worth $16.4. Insiders not only have options, but also Units Restricted Share Units, Deferred Share Units and Warrants.
I cannot make any sense out of the P/E ratios. For example, the 5 year median P/E Ratio is 40.03 a value that is ridiculous for a REIT. The 5 year low, median and high P/AFFO Ratios are 15.44, 16.87 and 18.31. The current P/AFFO Ratio is 19.52 based on a stock price of $17.57 and 2013 AFFO estimate of $.90. Since the AFFO to the end of Quarter 3 is $.89, it is probably reasonable.
The 5 year low, median and high P/FFO Ratios are 13.71, 14.98 and 16.26. The current P/FFO Ratio is 17.06 based on a stock price of $17.57 and 2013 FFO estimate of $1.03. Since the FFO to the end of Quarter 3 is $1.07, it is probably reasonable. Both P/FFO and P/AFFO shows that the current price is high.
Using a Graham Price that has FFO rather than EPS, I get a Graham Price of $19.28. The 10 year low, median and high median P/GP Ratios are 0.89, 0.97 and 1.11. The current P/GP is .91. This stock test shows that the current price is reasonable.
If you look at cash flows, the 5 year low, median and high median P/CF Ratios are 13.25, 14.49 and 15.72. The current P/CF Ratios is 18.92. This stock price test says that the stock price is high.
I get a 5 year median dividend yield of 5.45% and the current dividend yield at 4.78% is some 13% lower. This stock test suggests that the stock price is getting rather high. If you use historical dividend yields, the median dividend yield is even high at 7.02% and that is some 31% higher than the current dividend yield.
The blogger Dividend Blogger talks in August of this year about a number of REITs and Real Estate companies.
If you look at analysts' recommendations, there are Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $19.80. This implies total returns of 17.47% with 12.69% from capital gains and 4.78% from dividends. My current price is $17.57.
I think that this stock is relatively overpriced. This is no surprising to me. The stock price has been increasing faster than revenue, FFO, AFFO, dividends and cash flow over the past 5 years. The capital gains on this stock over the past 5 years to the end of 2012 are 4.62% per year. Over this period dividends increased by 1.02% per year, FFO by 0% per year, AFFO by 0.9% per year. The revenue per share is down by 1.2% per year and cash flow per share is down by 2.8% per year.
In my experience with dividend paying stocks, the capital gains over the longer term match dividend increases. Even if you do not see things that way, the stock price cannot continue to increase faster than every other measurement of growth. Yes, I know that some of these measurements are estimated to increase this year, but if you look at 5 year growth using 2013 estimates, there still is not much in the way of growth, except again for stock capital gains. See my spreadsheet at fcr.htm.
This is the second of two parts. The first part was posted on Monday, December 9, 2013 and is available here.
First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty.
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, December 9, 2013
First Capital Realty
On my other blog I am today writing about Markets Bulls and Bears...continue...
I do not own this stock of First Capital Realty (TSX-FCR, OTC- FCRGF). In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.
This stock used to have a record of raising the dividends, maybe not every year, but the dividend was rising until 2008. The 5 and 10 year growth in dividends was at 2.13 and 4.2% per year when inflation was running around 2%. The 5 and 10 year growth in dividends to date is 1.02% and 1.76%. This is running below or close to inflation which is running at around 1.66% and 1.77% per year over the past 5 and 10 years.
Part of the problem with this stock is that dividends were not raised at all between 2008 and 2011. At the end of 2012 dividend were increased by 5%. However, it would appear that no dividend raise will be made this year as all dividends for 2013 have been declared and paid. I like my investments in Real Estate to run at least at the rate of inflation, which is stock has not lately been able to do.
The Dividend Payout Ratio for EPS is good at 41%. However, the DPR for cash flow is quite high at 93%. It is not good with the DPR for Cash Flow being so high. Also, it shows that the CFPS is higher than EPS. Companies that have CFPS higher than EPS tend not to do so well in the longer term. The situation was the same for 2011 and is expected to be the same for 2013. This is not good.
Even though the stock price is down year to date by some 6.6%, Shareholders have made good total returns on this stock. The total return over the past 5 and 10 years to date is 14.62% and 12.37% per year with 8.18% and 5.87% per year from capital gains and 6.44% and 6.50% per year from dividends.
The outstanding shares have increased by 10% and 21% per year over the past 5 and 10 years. Shares have increased due to Conversion of Debentures to shares, Stock Options and Share Issues. Revenues have increased by 8.8% and 16.4% per year over the past 5 and 10 years. However, Revenue per Share has decreased over these periods by 1% and 3.8% per year. Per share values become much more important when outstanding shares increase so much.
Because the change in accounting rules to the IFRS rules greatly affected the EPS for this stock, you cannot get any reliable growth in earnings. Looking at FFO, growth is at 0% and 1.1.6% per year over the past 5 and 10 years. The growth in AFFO over the past 5 years is also weak at just 0.9% per year.
Cash Flow per Share is down by 2.8% and 6.4% per year over the past 5 and 10 years. However, if you look at the 5 year running averages, the cash flow declines are at 1% and 1.3% per year. This shows that declines are not as bad as they first appeared, but still you would want cash flows to increase, not decrease.
The Return on Equity is at 12% for 2012 as is the ROE on comprehensive income.
The current Liquidity Ratio is just .057. This means that current assets cannot cover the current liabilities. The Liquidity Ratio only rises to 1.28 if you include cash flow after dividends. The Debt Ratio is much better at current value of 1.78. The current Leverage and Debt/Equity Ratios are at 2.29 and 1.29. These are fairly typical for Real Estate companies.
Looking over my spreadsheet, the only good news is in share price growth. Share price growth is unsustainable without growth in other areas. See my spreadsheet at fcr.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 10, 2013 and will be available here.
First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty.
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 of First Capital Realty (TSX-FCR, OTC- FCRGF). In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.
This stock used to have a record of raising the dividends, maybe not every year, but the dividend was rising until 2008. The 5 and 10 year growth in dividends was at 2.13 and 4.2% per year when inflation was running around 2%. The 5 and 10 year growth in dividends to date is 1.02% and 1.76%. This is running below or close to inflation which is running at around 1.66% and 1.77% per year over the past 5 and 10 years.
Part of the problem with this stock is that dividends were not raised at all between 2008 and 2011. At the end of 2012 dividend were increased by 5%. However, it would appear that no dividend raise will be made this year as all dividends for 2013 have been declared and paid. I like my investments in Real Estate to run at least at the rate of inflation, which is stock has not lately been able to do.
The Dividend Payout Ratio for EPS is good at 41%. However, the DPR for cash flow is quite high at 93%. It is not good with the DPR for Cash Flow being so high. Also, it shows that the CFPS is higher than EPS. Companies that have CFPS higher than EPS tend not to do so well in the longer term. The situation was the same for 2011 and is expected to be the same for 2013. This is not good.
Even though the stock price is down year to date by some 6.6%, Shareholders have made good total returns on this stock. The total return over the past 5 and 10 years to date is 14.62% and 12.37% per year with 8.18% and 5.87% per year from capital gains and 6.44% and 6.50% per year from dividends.
The outstanding shares have increased by 10% and 21% per year over the past 5 and 10 years. Shares have increased due to Conversion of Debentures to shares, Stock Options and Share Issues. Revenues have increased by 8.8% and 16.4% per year over the past 5 and 10 years. However, Revenue per Share has decreased over these periods by 1% and 3.8% per year. Per share values become much more important when outstanding shares increase so much.
Because the change in accounting rules to the IFRS rules greatly affected the EPS for this stock, you cannot get any reliable growth in earnings. Looking at FFO, growth is at 0% and 1.1.6% per year over the past 5 and 10 years. The growth in AFFO over the past 5 years is also weak at just 0.9% per year.
Cash Flow per Share is down by 2.8% and 6.4% per year over the past 5 and 10 years. However, if you look at the 5 year running averages, the cash flow declines are at 1% and 1.3% per year. This shows that declines are not as bad as they first appeared, but still you would want cash flows to increase, not decrease.
The Return on Equity is at 12% for 2012 as is the ROE on comprehensive income.
The current Liquidity Ratio is just .057. This means that current assets cannot cover the current liabilities. The Liquidity Ratio only rises to 1.28 if you include cash flow after dividends. The Debt Ratio is much better at current value of 1.78. The current Leverage and Debt/Equity Ratios are at 2.29 and 1.29. These are fairly typical for Real Estate companies.
Looking over my spreadsheet, the only good news is in share price growth. Share price growth is unsustainable without growth in other areas. See my spreadsheet at fcr.htm.
This is the first of two parts. Second part will be posted on Tuesday, December 10, 2013 and will be available here.
First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty.
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, December 6, 2013
Crescent Point Energy Corp. 2
I do not own this stock Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. See his site is here. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.
When I first reviewed this stock, besides not liking the fact it cannot raise dividends, I felt that the Liquidity Ratio was much too low as was the Return on Equity. At the end of 2012, the situation had not changed. The Liquidity Ratio and ROE are pathetic.
The insider trading report shows that $5.5M of insider buying and $16.7M of insider selling occurred over the past 12 months, with a net insider selling of $11.2M. There is a fair amount of insider ownership with the CEO having shares worth $42M and the CFO having shares worth $10.1M. I do not see any options, but there are option like vehicles called Restricted Share Units and Deferred Share Units.
I cannot get a fix on historical Price/Earnings per Share Ratios over the last 5 years as the EPS has been all over the place, including an EPS loss year. For example the 5 year median P/E Ratio is 59.49. This is a very high ratio. The 10 year median P/E Ratios are more rational with the low, median and high median ratios being 13.46, 17.98 and 21.06.
I get a current P/E Ratio of 38.00 based on a stock price of $40.66 and 2013 EPS estimate of $1.07. However, the 12 month EPS to the end of the 3rd quarter is $0.09, so you have to wonder at the estimate. Using the 12 month EPS, the P/E Ratio is 451.78. The P/E Ratio for 2014 using a stock price of $40.66 and the 2014 earnings estimate of $1.60 is a more reasonable, but still high P/E of 25.41.
I get a Graham Price of $23.07. The 10 year low, median and high median Price/Graham Price Ratios are 1.03, 1.20 and 1.57. The current P/GP Ratio is 1.76. By this stock price test, the current stock price is relatively quite high.
The 10 year median Price/Book Value per Share Ratio is 2.05 and the current P/B Ratio is 1.84 a value 89% of the 10 year median ratio. This stock test suggests that the stock price is relatively reasonable.
The 5 year median Dividend Yield is 6.96% and the current Dividend Yield is 6.79% a value 2.4% lower. This stock test suggests that the stock price is reasonable.
When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $46.90. This implies a total return of 22.13% with 6.79% from dividends and 15.35% from capital gains.
The Motley Fool talks about whether the dividend is sustainable. They come to the conclusion that the company is treating the dividend as an operational expense rather than returning excess earnings to the shareholders. Their conclusion is that the dividend is sustainable. On Seeking Alpha Caiman Valores gives a good analysis of why he likes this stock. He looks at the potential of 7% dividend and 30% capital gains.
He also talks about the company treating the dividend as an operational expense and the fact that Canadian Lightstream Resources (TSX-LTS) that did the same have just slashed their dividend by 40%. He thinks that CPG's dividend is safe because of the company's low debt, solid balance sheet and strong operational cash flows. He also thinks that the stock is currently fairly valued on some criteria, but undervalues on a Net Asset Value (NAV) basis.
The stock price seems to be relatively reasonable. Although I looked at the two analyses above and I understand their point of view, this is probably not the sort of stock I like. I generally do not like oil and gas companies. I generally do not like stocks that do not grow their dividends. See my spreadsheet at cpg.htm.
This is the second of two parts. The first part was posted on Thursday, December 5, 2013 and is available here.
Crescent Point Energy Corp. is a conventional oil and gas income trust with assets focused in properties comprised of light oil and natural gas reserves in Western Canada. They acquire, exploit and develop high-quality, large resource-in-place assets and manage risk through a solid hedging program and a clean balance sheet. Its web site is here Crescent Point 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.
When I first reviewed this stock, besides not liking the fact it cannot raise dividends, I felt that the Liquidity Ratio was much too low as was the Return on Equity. At the end of 2012, the situation had not changed. The Liquidity Ratio and ROE are pathetic.
The insider trading report shows that $5.5M of insider buying and $16.7M of insider selling occurred over the past 12 months, with a net insider selling of $11.2M. There is a fair amount of insider ownership with the CEO having shares worth $42M and the CFO having shares worth $10.1M. I do not see any options, but there are option like vehicles called Restricted Share Units and Deferred Share Units.
I cannot get a fix on historical Price/Earnings per Share Ratios over the last 5 years as the EPS has been all over the place, including an EPS loss year. For example the 5 year median P/E Ratio is 59.49. This is a very high ratio. The 10 year median P/E Ratios are more rational with the low, median and high median ratios being 13.46, 17.98 and 21.06.
I get a current P/E Ratio of 38.00 based on a stock price of $40.66 and 2013 EPS estimate of $1.07. However, the 12 month EPS to the end of the 3rd quarter is $0.09, so you have to wonder at the estimate. Using the 12 month EPS, the P/E Ratio is 451.78. The P/E Ratio for 2014 using a stock price of $40.66 and the 2014 earnings estimate of $1.60 is a more reasonable, but still high P/E of 25.41.
I get a Graham Price of $23.07. The 10 year low, median and high median Price/Graham Price Ratios are 1.03, 1.20 and 1.57. The current P/GP Ratio is 1.76. By this stock price test, the current stock price is relatively quite high.
The 10 year median Price/Book Value per Share Ratio is 2.05 and the current P/B Ratio is 1.84 a value 89% of the 10 year median ratio. This stock test suggests that the stock price is relatively reasonable.
The 5 year median Dividend Yield is 6.96% and the current Dividend Yield is 6.79% a value 2.4% lower. This stock test suggests that the stock price is reasonable.
When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $46.90. This implies a total return of 22.13% with 6.79% from dividends and 15.35% from capital gains.
The Motley Fool talks about whether the dividend is sustainable. They come to the conclusion that the company is treating the dividend as an operational expense rather than returning excess earnings to the shareholders. Their conclusion is that the dividend is sustainable. On Seeking Alpha Caiman Valores gives a good analysis of why he likes this stock. He looks at the potential of 7% dividend and 30% capital gains.
He also talks about the company treating the dividend as an operational expense and the fact that Canadian Lightstream Resources (TSX-LTS) that did the same have just slashed their dividend by 40%. He thinks that CPG's dividend is safe because of the company's low debt, solid balance sheet and strong operational cash flows. He also thinks that the stock is currently fairly valued on some criteria, but undervalues on a Net Asset Value (NAV) basis.
The stock price seems to be relatively reasonable. Although I looked at the two analyses above and I understand their point of view, this is probably not the sort of stock I like. I generally do not like oil and gas companies. I generally do not like stocks that do not grow their dividends. See my spreadsheet at cpg.htm.
This is the second of two parts. The first part was posted on Thursday, December 5, 2013 and is available here.
Crescent Point Energy Corp. is a conventional oil and gas income trust with assets focused in properties comprised of light oil and natural gas reserves in Western Canada. They acquire, exploit and develop high-quality, large resource-in-place assets and manage risk through a solid hedging program and a clean balance sheet. Its web site is here Crescent Point 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, December 5, 2013
Crescent Point Energy Corp.
I do not own this stock Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. See his site here. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.
The dividend is still good and shareholders have made good returns over the past 5 and 10 years to the end of 2012 and to date. The dividend yield is still quite good at 6.79%. However, dividend increases are non-existent and I would assume because the DPR for earnings will not happen any time soon. I still do not like companies that cannot increase their dividends. If the dividend is high, I only require increases at the rate of inflation and this company has not raised dividends since 2009
When I first reviewed this stock, I did not like because of the fact it cannot raise dividends, I felt that the Liquidity Ratio was much too low as was the Return on Equity. At the end of 2012, the situation had not changed. The Liquidity Ratio and ROE are pathetic. I do not see why people like it.
The stock is no longer an income trust and the Dividend Payout Ratio for earnings is important. Yes, I know that people have told me that the only DPR that is important is the one for cash flow. I am of the opinion that both are very important.
For DPR I am using actual dividends paid compared to actual net income and cash flow rather than per share values. The problem on this stock is that with rapid changes in outstanding shares it is difficult to know what level of outstanding shares to use in these calculations. I know that some analysts take into consideration the actual money going out the door for dividends, but excluding the DRIP dividend payments. I think that this just makes the DPR look better without any real improvements in the DRP.
The DPR for earnings in 2012 was 183% and this is not good. I estimate that the DPR for earnings will move to 127% in 2013 and this is still not good. The DPR for cash flow was for 2012 was 22% and this is probably just fine for an oil and gas company. I estimate that the DPR for cash flow will be even lower in 2013 at around 17%.
Another thing is that oil and gas producers that have good yields tend to vary the dividends over the years because of changes in the price of oil and gas. This company was increasing the dividends until 2009 and since then they have remained flat.
Outstanding shares have increased by 27% and 41% per year over the past 5 and 10 years. The shares have increased due to stock options, DRIP and share issues. Revenues have increased by 33% and 60% per year over the past 5 and 10 years. Revenue per share has increased at 5% and 13% per year over the past 5 and 10 years. So revenue growth is reasonable to good.
EPS is up by 7.4% per year over the past 5 years using the 5 year running average. 5 years ago the company had an earnings loss, so it is not possible to calculate a 5 year growth rate. EPS is down by 6.6% per year over the past 10 years. The problem with EPS is that it is all over the past with some years being good and other not so much. It tends to go up and down a lot.
Looking at cash flow, I calculate that they have increased by 6% and 15% per year over the past 5 and 10 years. Looking at the 5 year running average the increase over the past 5 years is at 12% a year. So cash flows have had nice growth.
As I had pointed out above, the Return on Equity is pathetic and has been so or most years. The ROE at the end of 2012 is just 2.2%. Well, at least the ROE on comprehensive income is close, coming in at 2.1%.
Also, as I had pointed out above, the Liquidity Ratios are very low, with the one for 2012 at 0.47 and the current one at 0.46. The problem with this is that in recessions, companies with low Liquidity Ratios are the ones that tend to get into trouble. For the ROE at the end of 2012, if you add in cash flow after dividends, the ratio becomes 1.20. This is a better ratio but still low. Also, you must ask yourself, how dependable is the cash flow?
Sorry, I still do not see why anyone would like to buy this stock. I agree with Genevieve Roch Decker of the Money Show in 2013 in that better money at less risk is available in oil and gas infrastructure than in oil and gas producers. In this company I see the risk/reward is out of whack. See my spreadsheet at cpg.htm.
This is the first of two parts. Second part will be posted on Friday, December 06, 2013 and will be available here.
Crescent Point Energy Corp. is a conventional oil and gas income trust with assets focused in properties comprised of light oil and natural gas reserves in Western Canada. They acquire, exploit and develop high-quality, large resource-in-place assets and manage risk through a solid hedging program and a clean balance sheet. Its web site is here Crescent Point 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.
The dividend is still good and shareholders have made good returns over the past 5 and 10 years to the end of 2012 and to date. The dividend yield is still quite good at 6.79%. However, dividend increases are non-existent and I would assume because the DPR for earnings will not happen any time soon. I still do not like companies that cannot increase their dividends. If the dividend is high, I only require increases at the rate of inflation and this company has not raised dividends since 2009
When I first reviewed this stock, I did not like because of the fact it cannot raise dividends, I felt that the Liquidity Ratio was much too low as was the Return on Equity. At the end of 2012, the situation had not changed. The Liquidity Ratio and ROE are pathetic. I do not see why people like it.
The stock is no longer an income trust and the Dividend Payout Ratio for earnings is important. Yes, I know that people have told me that the only DPR that is important is the one for cash flow. I am of the opinion that both are very important.
For DPR I am using actual dividends paid compared to actual net income and cash flow rather than per share values. The problem on this stock is that with rapid changes in outstanding shares it is difficult to know what level of outstanding shares to use in these calculations. I know that some analysts take into consideration the actual money going out the door for dividends, but excluding the DRIP dividend payments. I think that this just makes the DPR look better without any real improvements in the DRP.
The DPR for earnings in 2012 was 183% and this is not good. I estimate that the DPR for earnings will move to 127% in 2013 and this is still not good. The DPR for cash flow was for 2012 was 22% and this is probably just fine for an oil and gas company. I estimate that the DPR for cash flow will be even lower in 2013 at around 17%.
Another thing is that oil and gas producers that have good yields tend to vary the dividends over the years because of changes in the price of oil and gas. This company was increasing the dividends until 2009 and since then they have remained flat.
Outstanding shares have increased by 27% and 41% per year over the past 5 and 10 years. The shares have increased due to stock options, DRIP and share issues. Revenues have increased by 33% and 60% per year over the past 5 and 10 years. Revenue per share has increased at 5% and 13% per year over the past 5 and 10 years. So revenue growth is reasonable to good.
EPS is up by 7.4% per year over the past 5 years using the 5 year running average. 5 years ago the company had an earnings loss, so it is not possible to calculate a 5 year growth rate. EPS is down by 6.6% per year over the past 10 years. The problem with EPS is that it is all over the past with some years being good and other not so much. It tends to go up and down a lot.
Looking at cash flow, I calculate that they have increased by 6% and 15% per year over the past 5 and 10 years. Looking at the 5 year running average the increase over the past 5 years is at 12% a year. So cash flows have had nice growth.
As I had pointed out above, the Return on Equity is pathetic and has been so or most years. The ROE at the end of 2012 is just 2.2%. Well, at least the ROE on comprehensive income is close, coming in at 2.1%.
Also, as I had pointed out above, the Liquidity Ratios are very low, with the one for 2012 at 0.47 and the current one at 0.46. The problem with this is that in recessions, companies with low Liquidity Ratios are the ones that tend to get into trouble. For the ROE at the end of 2012, if you add in cash flow after dividends, the ratio becomes 1.20. This is a better ratio but still low. Also, you must ask yourself, how dependable is the cash flow?
Sorry, I still do not see why anyone would like to buy this stock. I agree with Genevieve Roch Decker of the Money Show in 2013 in that better money at less risk is available in oil and gas infrastructure than in oil and gas producers. In this company I see the risk/reward is out of whack. See my spreadsheet at cpg.htm.
This is the first of two parts. Second part will be posted on Friday, December 06, 2013 and will be available here.
Crescent Point Energy Corp. is a conventional oil and gas income trust with assets focused in properties comprised of light oil and natural gas reserves in Western Canada. They acquire, exploit and develop high-quality, large resource-in-place assets and manage risk through a solid hedging program and a clean balance sheet. Its web site is here Crescent Point 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.
Wednesday, December 4, 2013
Canada Bread Co.
On my other blog I am today writing about Buy and Sell Advisor's 6-Pak Approach for 2013...continue...
I do not own this stock Canada Bread Co. (TSX-CBY, OTC-CBDLF), but I used to in 2000. I started following this stock as I read a favorable review of this stock as a good dividend paying stock to invest in. This stock has come up a number of times in favorable reviews. It is a stock on the Investment Reporter list. One thing that has occurred since I owned this stock is that it merged with Maple Leaf's baking division and now Maple Leaf owns 90% of Canada Bread.
I held this stock 1999 to 2000 because it was on Investment Reporter list. I sold as I thought it was going nowhere. I lost around 30% per year on this stock. Part of the reason I sold was that I thought the stock was just masquerading as a dividend stock. They had not changed their dividend from 1992.
The first dividend change after 1992 was in 2011 when the dividend increase was over 200%. In 2012 they increased the dividend 150%. The dividend in 2013 has not changed.
In 2011 the company changed their dividend policy to give out quite good dividends. Dividend used to be around 0.5% and they were increased to around 4%. In 2013 this stock has taken off and the stock price is up almost 50% in 2013. Dividends are currently running at around 2.7%.
When I look for analysts' recommendations, I only find one analysts following this stock and it has a recommendation of Hold and a 12 month stock price of $67.00, which is lower than the current stock price.
Maple Leaf says that they reviewing options for Canada Bread that could result in the sale of its shares in this company. Since Maple Leaf owns 90% of this company and they sell it to an US Bakery company, I doubt if it will still be listed on the TSX. The rise in price is probably explained by the potential sale of this company.
The 5 year low, median and high median Price/Earnings Ratios are 14.73, 20.47 and 23.44. The current P/E Ratio is 20.85 based on a stock price of $75.05 and earnings estimates for 2013 of 3.60. Since the 12 month EPS to the end of the 3rd quarter is $2.90, close to last year earnings, I wonder if the estimate for 2013 will be met. Using the 12 month EPS, the P/E Ratio is 25.88, a stock price that is relatively high.
I get a Graham Price of $42.95. The 10 year low, median and high median Price/Graham Price Ratios are 1.02, 1.25 and 1.38. The current P/GP Ratio is 1.75. This stock price test suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share Ratio is 2.03 and the current P/B Ratio is 2.65, a value 30% higher. This stock test suggests that the stock price is relatively high.
The 5 year median Price/Sales Ratio is 0.73 and the current P/S Ratio at 1.22 is some 67% higher. This test suggests that the stock price is relatively high.
The 5 year median Price/Cash Flow per Share is 9.38 and the current P/CF Ratio using the 12 month CFPS to the end of the 3rd quarter is 9.54, a value some 2% higher and this test suggests that the stock price is reasonable. However, CFPS has is up some 72% for the 12 month period ending in the 3rd Quarter of 2013 compared to the 12 months period ending in 4th Quarter of 2012.
Stock Price Tests answers are mixed, but I would guess price is relatively high because Maple Leaf wants to sell their 90% holding in this company. I do not see much enhancement to the price is the company is sold. If company is not sold, stock price will probably decline. See my spreadsheet at cby.htm.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster's, Olafson's, POM, Ben's and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 90% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread.
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 Canada Bread Co. (TSX-CBY, OTC-CBDLF), but I used to in 2000. I started following this stock as I read a favorable review of this stock as a good dividend paying stock to invest in. This stock has come up a number of times in favorable reviews. It is a stock on the Investment Reporter list. One thing that has occurred since I owned this stock is that it merged with Maple Leaf's baking division and now Maple Leaf owns 90% of Canada Bread.
I held this stock 1999 to 2000 because it was on Investment Reporter list. I sold as I thought it was going nowhere. I lost around 30% per year on this stock. Part of the reason I sold was that I thought the stock was just masquerading as a dividend stock. They had not changed their dividend from 1992.
The first dividend change after 1992 was in 2011 when the dividend increase was over 200%. In 2012 they increased the dividend 150%. The dividend in 2013 has not changed.
In 2011 the company changed their dividend policy to give out quite good dividends. Dividend used to be around 0.5% and they were increased to around 4%. In 2013 this stock has taken off and the stock price is up almost 50% in 2013. Dividends are currently running at around 2.7%.
When I look for analysts' recommendations, I only find one analysts following this stock and it has a recommendation of Hold and a 12 month stock price of $67.00, which is lower than the current stock price.
Maple Leaf says that they reviewing options for Canada Bread that could result in the sale of its shares in this company. Since Maple Leaf owns 90% of this company and they sell it to an US Bakery company, I doubt if it will still be listed on the TSX. The rise in price is probably explained by the potential sale of this company.
The 5 year low, median and high median Price/Earnings Ratios are 14.73, 20.47 and 23.44. The current P/E Ratio is 20.85 based on a stock price of $75.05 and earnings estimates for 2013 of 3.60. Since the 12 month EPS to the end of the 3rd quarter is $2.90, close to last year earnings, I wonder if the estimate for 2013 will be met. Using the 12 month EPS, the P/E Ratio is 25.88, a stock price that is relatively high.
I get a Graham Price of $42.95. The 10 year low, median and high median Price/Graham Price Ratios are 1.02, 1.25 and 1.38. The current P/GP Ratio is 1.75. This stock price test suggests that the stock price is relatively high.
The 10 year Price/Book Value per Share Ratio is 2.03 and the current P/B Ratio is 2.65, a value 30% higher. This stock test suggests that the stock price is relatively high.
The 5 year median Price/Sales Ratio is 0.73 and the current P/S Ratio at 1.22 is some 67% higher. This test suggests that the stock price is relatively high.
The 5 year median Price/Cash Flow per Share is 9.38 and the current P/CF Ratio using the 12 month CFPS to the end of the 3rd quarter is 9.54, a value some 2% higher and this test suggests that the stock price is reasonable. However, CFPS has is up some 72% for the 12 month period ending in the 3rd Quarter of 2013 compared to the 12 months period ending in 4th Quarter of 2012.
Stock Price Tests answers are mixed, but I would guess price is relatively high because Maple Leaf wants to sell their 90% holding in this company. I do not see much enhancement to the price is the company is sold. If company is not sold, stock price will probably decline. See my spreadsheet at cby.htm.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster's, Olafson's, POM, Ben's and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 90% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread.
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, December 3, 2013
Finning International Inc. 2
I do not own this stock Finning International Inc. (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought.
When I look at insider trading, I find $1M of insider selling and $1.3M of insider buying for $0.3M of net insider buying. Insiders not only options, but have Performance Share Units, Units Deferred Share Units and Share Appreciation Rights. They have a rather new CEO who has $1M in shares and the CFO has $0.5M in shares. There is little insider ownership.
I get 5 year low, median and high median Price/Earnings Ratios of 12.28, 16.16 and 20.03. The current P/E Ratio is 12.80 based on a stock price of $24.84 and 2013 earnings of $1.94. The earnings estimate is lower than last year's EPS, but the 12 month EPS to the 3rd quarter is $2.07 a value 5% higher than last year's EPS. This implies that the actual earnings for 2013 might be higher than the estimate.
I get a Graham Price of $21.05 and the 10 year low, median and high median Price/Graham Price Ratios are 1.18, 1.45 and 1.62. This implies that the stock price is relatively low as the current P/GP Ratio is 1.18.
The 10 year Price/Book Value per Share Ratio is 2.52 and the current P/B Ratio is 2.45. The current ratio is about 97% of the 10 year P/B Ratio and this suggests that the current stock price is reasonable.
The current dividend yield is 2.46% and the 5 year median dividend yield is 2.13%. It is good the dividend yield is higher than the 5 year median dividend yield by around 15%. This stock price test suggests that the stock price is reasonable to cheap. Using the historical high and median dividend yield, the current yield is higher than the median dividend yield, but not above the historical high. This suggests that the current stock price is cheap than average.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendations would be a Buy. The 12 month target price is $28.10. This implies total returns of 15.58% with 2.46% from dividends and 13.12% from capital gains.
The site WKRB talks about some recent analysts upgrades on this stock. The Happy capitalism blogger reviewed this stock last year and said you should be cautious.
There is nothing stellar, but the company is doing fine. Stock price is reasonable to cheap. See my spreadsheet at ftt.htm.
This is the second of two parts. The first part was posted on Monday, December 2, 2013 and is available here.
This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is here Finning.
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 $1M of insider selling and $1.3M of insider buying for $0.3M of net insider buying. Insiders not only options, but have Performance Share Units, Units Deferred Share Units and Share Appreciation Rights. They have a rather new CEO who has $1M in shares and the CFO has $0.5M in shares. There is little insider ownership.
I get 5 year low, median and high median Price/Earnings Ratios of 12.28, 16.16 and 20.03. The current P/E Ratio is 12.80 based on a stock price of $24.84 and 2013 earnings of $1.94. The earnings estimate is lower than last year's EPS, but the 12 month EPS to the 3rd quarter is $2.07 a value 5% higher than last year's EPS. This implies that the actual earnings for 2013 might be higher than the estimate.
I get a Graham Price of $21.05 and the 10 year low, median and high median Price/Graham Price Ratios are 1.18, 1.45 and 1.62. This implies that the stock price is relatively low as the current P/GP Ratio is 1.18.
The 10 year Price/Book Value per Share Ratio is 2.52 and the current P/B Ratio is 2.45. The current ratio is about 97% of the 10 year P/B Ratio and this suggests that the current stock price is reasonable.
The current dividend yield is 2.46% and the 5 year median dividend yield is 2.13%. It is good the dividend yield is higher than the 5 year median dividend yield by around 15%. This stock price test suggests that the stock price is reasonable to cheap. Using the historical high and median dividend yield, the current yield is higher than the median dividend yield, but not above the historical high. This suggests that the current stock price is cheap than average.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendations would be a Buy. The 12 month target price is $28.10. This implies total returns of 15.58% with 2.46% from dividends and 13.12% from capital gains.
The site WKRB talks about some recent analysts upgrades on this stock. The Happy capitalism blogger reviewed this stock last year and said you should be cautious.
There is nothing stellar, but the company is doing fine. Stock price is reasonable to cheap. See my spreadsheet at ftt.htm.
This is the second of two parts. The first part was posted on Monday, December 2, 2013 and is available here.
This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is here Finning.
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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