Monday, February 23, 2015

Bombardier Inc.

On my other blog I am today writing about changes I am making to my RRSP and RRIF accounts continue...

I own this stock of Bombardier Inc. (TSX-BBD.B, OTC- BDRAF). The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I never sold.

There is more than one way to look at my investment in Bombardier. Over the long term I have made a total return of 11.50% per year with 6.30% from capital gains and 5.20% from dividends. I paid some $0.60 per share for my Bombardier shares. I have received $1.91 per share in dividends. My dividends are some 319% of my original cost. On my original investment I am making a dividend yield of 17.2%.

If I ask the question of what has Bombardier done for me lately, the answer would have to be not much. The stock just recently took a dive because there was an earnings loss for 2014. So far this year the stock is down by almost 44%. It is also not a dividend growth stock. Since restarting dividends in 2009, the dividends have remained flat. They have also recently suspended the dividends again.

The 2014 financial year was not good. The company does have it problems and they are still hoping to turn it around. They had an earnings loss in 2014. No much is happening in Cash Flow which is down by 7.2% per year over the past 5 years and up by 5.3% per year over the past 10 years. These figures are in US$

Revenue is up slightly by 0.6% and 2.7% per year over the past 5 and 10 years in US$. Revenues were up by 10.8% in 2014 but analysts expect little to no increase for 2015.

Sound bite for Twitter and StockTwits is: I still have hope in this company. I may have hope in this company because I have held it for so long. I also see no great urgency to sell it at this point. See my spreadsheet at bbd.htm.

This is the first of two parts. The second part will be posted on Tuesday, February 24, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. The Bombardier family controls 64% of the voting rights under this stock. Its web site is here Bombardier.

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.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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