Thomson Reuters Corp.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985. I am following it because I own it. This certainly has not been a spectacular investment. The company I bought was Thomson Corp. It has had its ups and downs. I have had it for some 29 years and my return is 7.22% per year with 3.59% from dividends and 3.63% from capital gains.

One problem with this stock is that dividends are paid in US$. The problem with this is that every dividend is different as this stock is in my Canadian Trading Account and I get paid in CDN$. Even though dividends have gone up each year, my dividends have fluctuated. For example in 2008 my dividends went up 36.6% and then in 2009 they went down 11.4%. In US$, dividends went up by 10.2% in 2008 and then up 3.7% in 2009.

This stock has been having problems since 2008 and the 5 year median Dividend Payout Ratio is 107%. The DPR for 2013 was at 825%. DPR for cash flow is better with the 5 year DPR at 35.7%. The DPR for CFPS for 2013 was at 53%. For 2014, the DPR for EPS is expected to be at 94% and for CFPS is expected to be 43%.

The total return over the past 5 and 10 years has been low. The 5 and 10 year total return is at 6.02% and 1.91% per year. The portion of this return attributable to dividends is at 2.89% and 3.58% per year over these periods. The portion of this return attributable to capital gains over the past 5 years is 2.44% and the capital loss over the past 10 years is at 0.98% per year.

The total return over the past 10 years in US$ is similar with the 5 and 10 year total return at 5.69% and 3.29% per year. The portion of this return attributable to dividends is at 3.77% and 3.13% per year over these periods. The portion of this return attributable to capital gains over the past 5 years is 1.96% and the capital loss over the past 10 years is at 0.16% per year.

The outstanding shares are the same over the past 5 years and are up by 2.3% per year over the past 10 years. Shares have increased due to stock options, DRIP and Share Issues. Shares have decreased due to Buy Backs.

Revenues growth is mediocre, earnings growth is non-existent and there is not much in the way of cash flow growth. Growth is better in US$ terms than in CDN$ terms, but that does not change the above statement. The year 2013 was not a good year for this company.

Revenue is up by 1.6% and 5.5% per year over the past 5 and 10 years in US$ terms. The 5 year running average is better with growth at 9.2% and 6.6%. The Revenue per Share growth is at 1.8% and 3.2% per year over the past 5 and 10 years in US$ terms. The 5 year running averages have growth of 5.2% and 3.9% per year over the past 5 and 10 years. The 5 year running averages are better because growth was negative over the past 2 years.

Earnings per Share is down by 38.4% and 19.2% per year over the past 5 and 10 years in US$ terms. The 5 year running averages is better and here EPS is down by 24.7% and 6.9% over the past 5 and 10 years in US$ Terms. Earnings are down 4 of the past 5 years.

Cash Flow per share is down by 4.3% and 0.8% per year over the past 5 and 10 years in US$ Terms. If you look at 5 year running averages, CFPS is up by 0.7% and 3.4% per year over the past 5 and 10 years in US$ terms. CFPS is down in 3 of the past 5 years, including 2013.

Needless to say, but the Return on Equity was low in 2013 at 1.1%. The 5 year median ROE is just 4.7%. ROE is only over 10% in 3 of the past 10 years. The ROE on comprehensive income is slightly better at 2.4% for 2013. (For ratios, because they are relative, it does not matter if you calculate them in US$ or CDN$ terms.)

The Liquidity Ratio is low at 0.82%. That means that current assets cannot cover current liabilities. This ratio has always been low. If you add in cash flow after dividends, this ratio becomes 1.05. The company counts on cash flow to cover current liabilities.

The Debt Ratio is very good and has always been so. The Debt Ratio for 2013 is 2.05. The 5 year median Debt Ratio is 2.16. The current Leverage and Debt/Equity Ratios are good at 1.96 and 0.96.

The problem with owning stock in any one company for a very long time is that all companies are sure to go through at least one reorganization. Even though this company is currently a drag on my portfolio, if you buy big blue chip stocks, you are unlikely to lose a lot of money. As I had said earlier my total return on this stock has been at 7.2% per year. This is not great, but it is not a disaster either. The money that I have received in dividends at 3.6% a year, I have already received. See my spreadsheet at tri.htm.

This is the first of two parts. The second part will be posted on Friday, April 9, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Thomson Reuters Corp is the leading source of intelligent information for businesses and professionals. The company delivers this must-have insight to the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. They derive the majority of their revenues from selling electronic content and services to professionals, primarily on a subscription basis. Its web site is here Thomson Reuters.

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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