Manitoba Telecom Services Inc. 2

I own this stock of Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF). In 2006, I was look for something to buy and I wanted a good dividend paying Canadian Stock. TD recommended this stock as a current Buy. I checked the stock out and it looked good. By 2010 I was being to worry about this stock and I sold a third of what I had.

When I look at insider trading, I find no insider buying and very minimal insider selling. Insiders have stock options and other options like vehicles like Rights Performance Share Units, Rights Restricted Share Units and Rights Director Compensation Units. The outstanding shares were not increased in 2013 for stock options. There is some insider ownership with the CEO having shares worth around $4.2M and the CFO having shares worth around $0.4M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.19, 12.32 and 13.50. The current P/E is 17.17 based on EPS estimates for 2014 of $1.75 and a stock price of $30.04. This stock price tests suggests that the current stock price is relatively expensive.

I get a Graham price of $23.69. The 10 year low, median and high median Price/Graham price Ratios are 0.99, 1.15 and 1.31. The current P/GP Ratio is 1.27. This stock price test suggests that the stock price is on the high side but still relatively reasonable.

The 10 year median Price/Book Value per Share Ratio is 2.09. The current P/B Ratio is 2.11 and this is very close to the 10 year P/B Ratio. This stock price tests suggests that the stock price is relatively reasonable.

The 5 year median Dividend Yield is 5.41% and the current Dividend Yield is 5.66%. Here again the 5 year median and current values are close and this suggests that the current stock price is relatively reasonable.

When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendations would be a Hold recommendation. The 12 months stock price consensus us $30.20 which is very close to the current stock price of $30.04. This implies a 12 month total return of 6.19% with 0.53% from capital gains and 5.66% from dividends.

At the Stock Chase site there is a number of view of this company by analysts. For 2014 is there are two Buys, one Hold and one Don't Buy recommendations. At the Stockhouse site, Gaalen Engen talks about a recent pension judgment going against this company. The WKRB site talks about TD Securities still having a Buy rating on this stock even though it has lowered its target price to $32 from $33.

The stock price seems to be relatively reasonable. There does not seem to be any other bloggers following this stock as far as I can see. The problem with the stock I own is that I bought it before the dividend was cut and therefore paid a rather high price. I have sort of broken even because of the dividends paid. It is not a stock that anyone would get excited about. See my spreadsheet at mbt.htm.

This is the second of two parts. The first part was posted on Tuesday, February 18, 2014 and is available here.

This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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