On my other blog I am today writing about possible cheap dividend stocks for February 2015 continue...
I do not own this stock of Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). It was a stock on Investment Reporter's list, a MPL Communications Publication.
This is a dividend growth stock. The dividends grew faster in the past then they do today. The 5 and 10 year dividend growth is at 5.3% and 29.5% per year over the past 5 and 10 years. When dividends were first paid they were below 1%. The dividends have been in the 4% range since 2009.
What we have here is a dividend growth stock with moderate to good dividends and moderate dividend growth. The dividend yield has been growing and the current dividend yield is 3.78% and it has a 5 year median of 4.23%. The most recent dividend increase was in 2014 and the increase was for 7.7%.
As I have mentioned before, I color code the growth in Revenue, Earnings and Cash Flow on my spreadsheet. Red is for low or negative growth. That is growth lower than 3% and into negative growth. Blue is for moderate growth which for me is from 3% to below 8%. Green is for good growth which I define at 8% and above. When I look at the spreadsheet for this company I see lots of green, some blue and a bit of red. (Note: I use these colors for other values. The codes still are for low, moderate and good values, but some rules are different.)
For revenue and earnings I see mostly green but also a bit of blue. Revenue per Share has grown by 7.6% and 9.7% per year over the past 5 and 10 years. For Earnings per Share I get growth of 8.2% and 32.5% per year over the past 5 and 10 years. EPS growth is a bit volatile, but even using 5 year running averages, EPS growth is at 7.7% and 37% per year over the past 5 and 10 years.
For cash flow, I see some green, some blue and some red. Cash Flow per share is at 1.4% and 8.2% per year over the past 5 and 10 years. It does improve if I use the 5 year running averages and then growth is at 5.7% and 13.5% per year over the past 5 and 10 years.
The Return on Equity has only been below 10% once in the past 10 years and that is 10 years ago. Prior to 10 years ago, ROE was quite low. The ROE for 2014 is at 17.1% and the 5 year median ROE is 17.1%. The ROE on Comprehensive Income is a bit lower with a ROE of 16.2% for 2014 and a 5 year median ROE also at 16.2%.
One thing I do not like about this company is the low Liquidity Ratios. Over the past 10 years the company has needed current cash flow to cover current liabilities. Before that, even with cash flow, the Liquidity Ratio seldom was at 1.00 and above. The Liquidity Ratio for 2014 is better than most years coming in at 0.95. When you added in Cash Flow after dividends, it becomes 1.85.
The Debt Ratio is good at 1.59 for 2014, but it has been lower and has a 5 year median value of just 1.46. The Leverage and Debt/Equity Ratios are a little high but ok at 2.68 and 1.68.
For some reason, analysts' consensus estimates for CFPS for 2015 shows a rise of 248% with CFPS going from $3.30 to $11.50 from 2014 to 2015. However, with the first quarterly financial reports for 2015 in, CFPS rose under 1%. I cannot find out why such a rise in CFPS is suggested.
Sound bite for Twitter and StockTwits is: Dividend Growth Telecom Stock. See my spreadsheet at sjr.htm.
This is the first of two parts. The second part will be posted on Tuesday, February 3, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.
Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Industry: Communications & Media (Cable). SJR.B shares are non-voting and the SJR.A shares are voting shares. J.R. Shaw owns 79%. Its web site is here Shaw Communications.
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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