Friday, May 29, 2015

Automodular Corp.

Sound bite for Twitter and StockTwits is: Price is good for interesting situation. This company currently has not business, but since I have not much invested I am holding on to my shares to see what happens. See my spreadsheet at am.htm.

I own this stock of Automodular Corp. (TSX-AM, OTC- AMZKF). In January 2012, I went looking for some dividend paying small cap to soak up extra money in the TFSA. This is one of the stocks that I found.

When I first bought this stock in 2012, it was a functioning company and was paying a dividend. They wound up their contract with Ford at the end of December 2014. They are now looking around for something else to do. They have higher cash on hand than the market cap of this stock.

I am holding on to my shares at the moment as this is an interesting situation. I do not have much invested in this company, just over $1,000.00. Dan Stringer at Seeking Alpha does a very good job of explaining what is going on currently with this company.

I see no point in doing any stock price testing. In the first quarter of this year they had no revenue. They only thing I can say is that the cash on hand per share is higher than the current share price. They worse case seems to be the company breaking up and returning cash to the shareholders, although I do hope that they come up with some future work.

The web site of Sleek Money talks about recent insider buying on this stock. The site of Market Watch talks about this company's first quarterly results of 2015. Earlier this year the company announced their desire to do a stock Buy Back.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow. Also, there is not much to say on this company that I own and have recently reviewed. I also do not think that any analysts are following this stock currently.

Automodular Corporation was a sequencer and sub-assembler of components and modules that are installed in cars and trucks made by North American Original Equipment Manufacturers ("OEMs"), at plants in Canada. It is looking for work at the present time. Its web site is here Automodular.

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.

Thursday, May 28, 2015

Progressive Waste Solutions Ltd. 2

Sound bite for Twitter and StockTwits is: Price is high on a number of tests. The stock price is high when doing the P/B Ratio, Dividend Yield and P/CF Ratio tests. I like the P/B Ratio and Dividend Yield tests because you are using real, compared to estimated values. The price is reasonable using the P/E Ratio test using 2015 EPS estimate. See my spreadsheet at bin.htm.

I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 because TD Securities had a very favorable report on this stock and had it on it action buy lists. I had money because I had recently sold RIM. At that time it was an income fund. In 2010, I needed to buy something for Pension Account. I have this already and it was on TD Action Buy List.

Under insider trading, I find there was some $0.5M of insider buying and $0.4M of insider selling for $0.1M of net insider buying. This is too small of an amount to register at two decimal points of a percentage of the market cap. In 2014 outstanding shares were increased by 12,000 shares for stock options or 0.01% of the outstanding shares. This is a very small number also.

There is some insider ownership with the CEO owning shares worth $12.4M, the CFO owning shares worth $0.9M and the chairman owning shares worth $2.4M. Of course all this together is less than 1% of the stock's market cap.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.54, 23.66 and 27.77. These are a bit lower than the corresponding 10 year values at 20.90, 24.55 and 30.76. The current P/E Ratio is 23.06 based on a stock price of $34.85 and 2014 EPS of $1.51 CDN$ or $1.23 US$. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $20.92. The 10 year low, median and high median Price/Graham Price Ratios are 1.29, 1.52 and 1.79. The current P/GP Ratio is 1.67 based on a stock price of $34.85. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 1.92. The current P/B Ratio is 2.71, a value 41% higher. This stock price test suggests that the stock price is relatively expensive.

Because this used to be an income trust with very high dividend yields, you really cannot get a fix on the current stock price using historical dividend yields. The best is the 5 year median dividend yield. This dividend yield is 2.37%. The current Dividend Yield at 1.85% is some 22.6% higher. This stock price test suggests that the stock price is relatively expensive.

Another test we can use is the Price/Cash Flow per Share Ratio. Since the reporting is in US$, I will use the US$ values. The 10 year median P/CF Ratio is 6.19. The current P/CF Ratio at 8.58 is some 39% higher. This stock price test suggests that the stock price is relatively expensive. Using CDN$ values, the test comes out basically the same.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price consensus stock price is $32.10 US$ or $39.44 CDN$. This implies a total return of $15.02% with 1.84% from dividends and $13.18% from capital gains.

The web site called The Market Daily talks about what analysts are saying about this stock. There is an article in the Daily Journal about this company addressing complaints in Thibodaux, Louisiana. A recent article in the G&M by Brenda Bouw talks about buying this stock as an defensive play .

This is the second of two parts. The first part was posted on Wednesday, May 27, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Progressive Waste Solutions Ltd. are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Its web site is here Progressive Waste.

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.

Wednesday, May 27, 2015

Progressive Waste Solutions Ltd.

On my other blog I am today writing about a recent paper on Financial Planning and Investing Behavior continue...

Sound bite for Twitter and StockTwits is: Dividend growth Industrial stock. This stock is producing solid results. I bought it for diversification. See my spreadsheet at bin.htm.

I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 because TD Securities had a very favorable report on this stock and had it on it action buy lists. I had money because I had recently sold RIM. At that time it was an income fund. In 2010, I needed to buy something for Pension Account. I have this already and it was on TD Action Buy List.

When this company changed from an income trust to a corporation in 2008, it decreased its dividends and the final dividends decrease in 2010 was a 72.5% decrease. In 2011 it started to increase the dividend again. Since then dividends are up 64%, but they are still some 65% lower than dividends paid in 2008. The last dividend increase was in 2014 and the increase was for 6.7%.

The problem a lot of income trusts had with dividends was that they were paying out more than their EPS. Some of the ones that cut their dividends have been able to start increasing them again. This is one such company. The Dividend Payout Ratio for 2014 was 47.8% for EPS and 14.7% for CFPS.

Currently the dividend yield is low with the current yield at 1.84%. The 5 year median dividend yield is at 2.23% is a moderate dividend. The dividend growth has been at 5.1% per year since increases have restarted. So the dividend growth is moderate. The Dividend Payout Ratio for EPS is moderate with the 5 year median at 52.5%.

My total return has been 8.53% per year with 5.97% per year from capital gains and 2.56% per year from dividends. The 5 and 10 year total return is 9.67% and 5.58% per year with 7.58% and 2.18% per year from capital gains and 2.09% and 3.40% from dividends.

The outstanding shares have increased by 6.4% and 15.5% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and have decreased due to Buy Backs. I will report growth in US$ as more than 60% of this companies business Revenue is from US and the company reports in US$. Revenue growth is moderate to good as is EPS. Cash Flow growth is good.

Revenue is up by 14.8% and 28.8% per year over the past 5 and 10 years. Revenue per Share is up by 7.9% and 11.5% per year over the past 5 and 10 years. Analysts do not expect any growth in Revenues for 2015 and modest growth in 2016. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows revenues to down modestly (less than 1%).

EPS has grown at 16% and 7.5% per year over the past 5 and 10 years. Analysts expect good growth in EPS this year and next year. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows EPS to down by 6.4%.

Cash Flow is up by 15% and 25.4% per year over the past 5 and 10 years. CFPS is up by 8.2% and 8.6% per year over the past 5 and 10 years. Analysts expect cash flow to decline this year and next and then start going up again in 2017. The 12 month period to the end of the first quarter as compared to the 12 month period to the end of 2014, shows Cash Flow is down by 38%.

The Return on Equity has been rather low for this company until last year. Last year the ROE was 9.1% and this year it was over 10% at 10.3%. A problem is that the ROE on comprehensive income is much lower in 2014 than the ROE on Net Income at just 6.9%. This could suggest that the earnings may not be of good quality.

The debt ratios are fine. The Liquidity Ratio is low at 0.89 in 2014. However when you add in Cash Flow less dividends then it is 2.08. The Debt Ratio is the best at 1.57 in 2014. The Leverage and Debt/Equity Ratios are a little high but fine at 2.75 and 1.75 in 2014.

This is the first of two parts. The second part will be posted on Thursday, May 28, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Progressive Waste Solutions Ltd. are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Its web site is here Progressive Waste.

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.

Tuesday, May 26, 2015

Power Financial Corp. 2

Sound bite for Twitter and StockTwits is: Stock is at a good price. In a lot of the stock price testing, the stock price is below the relative median price and this suggests that the price is good. It is not cheap, but rather at a relatively good price. See my spreadsheet at pwf.htm.

I own this stock of Power Financial Corp. (TSX-PWF, OTC- POFNF). When I sold some bonds in 2001, I had money to spend. This was a stock on my hit list and was selling at a reasonable price. This stock was on Mike Higgs' dividend growth stocks and that is why I started a spreadsheet to investigate this stock in the first place.

When I look at insider trading, I find insider selling at $74.3M and no insider buying. Insider selling is at 0.28% of the market cap. This is a bit high. There is insider ownership by the Desmarais Family and they own some 65.7% of the outstanding shares. They have been doing some selling over the past few years. See article linked below. The CEO also owns shares worth around $14.5M or 0.06% of the company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.38, 11.87 and 13.17. These are a bit lower than the 10 year values of 10.48, 12.13 and 14.60. The current P/E Ratio is 11.45 based on a stock price of $36.97 and 2015 EPS estimate of $3.23. This testing suggests that the stock price is reasonable, but towards the lower end of the reasonableness scale.

I get a Graham Price of $39.37. The 10 year low, median and high median Price/Graham Price Ratios are 0.83, 1.03 and 1.21 and the current P/GP Ratio is 0.94 based on a stock price of $36.97. This stock price testing suggests that the stock price is reasonable. It is a bit below the median P/GP Ratio and this is good. Also a P/GP Ratio of less than 1.00 shows also that the price is good.

I get a 10 year Price/Book Value per Share Ratio of 1.77 and a current P/B Ratio of 1.73. The current ratio is based on a BVPS of $21.33 and a stock price of $36.97. The current P/B Ratio is 2% lower than the 10 year median ratio. This stock price testing suggests that the stock price is reasonable.

The current Dividend Yield is 4.03%. The 5 year median dividend yield is 13% higher at 4.61%. This testing suggests that the stock price is reasonable, but towards the higher end of the reasonableness scale. However, interests have recently been high historically.

The historical average dividend yield at 3.92% is lower than the current dividend yield by 3%. This suggests that the stock price is reasonable. However, the historical median dividend yield at 2.98% is some 35% lower than the current dividend yield. This testing suggests that the stock price is reasonable, but towards the lower end of the reasonableness scale. Using a median value is thought to be a better reflection of value that an average value.

The analysts' recommendations are Buy and Hold. There are more Hold recommendations than Buy recommendations (4 to 3), so the consensus recommendations is a Hold. The 12 month stock price consensus is $40.70. This implies a total return of 14.12% with 4.03% from dividends and 10.09% from capital gains. This is a good return for an insurance company so it matches more to a Buy recommendation than a Hold recommendation. (That is a think there is a mismatch between the recommendations and expected total return over the next 12 months.)

This Financial Post article of 2014 by Barry Critchley talks about the third time in less than 6 years when the disposed of a major block of stock in Power Corp. Power Corp controls Power Financial Corp. This Financial Post article by Sean Silcoff talks about the restoration of dividend increases for this stock.

This is the second of two parts. The first part was posted on Monday, May 25, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.

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.

Monday, May 25, 2015

Power Financial Corp.

On my other blog I am today writing revising my web site to make it smartphone compatible continue...

Sound bite for Twitter and StockTwits is: Back to Dividend Growth Stock. I stuck it out with insurance companies during their recent bad times as I expected to eventually be rewarded. Several insurance companies have again started to grow their dividends. I expect that the growth will be low as long as interest rates are low. See my spreadsheet at pwf.htm.

I own this stock of Power Financial Corp. (TSX-PWF, OTC- POFNF). When I sold some bonds in 2001, I had money to spend. This was a stock on my hit list and was selling at a reasonable price. This stock was on Mike Higgs' dividend growth stocks and that is why I started a spreadsheet to investigate this stock in the first place.

As with other insurance companies, this company stopped increasing their dividends in 2009. Dividends were flat from 2009 to 2014 inclusive. In 2015 dividends were finally raised again and the increase was for 6.4%. The dividend growth is 0% and 6.7% per year over the past 5 and 10 years. The current dividend yield is quite good at the moment at 4.03%. The 5 year median is higher at 4.6%.

Dividend Payout Ratios are good with the 2014 DPR for EPS at 46.7% and for CFPS at 14.7%. The 5 year median values are for EPS at 58.15 and 16.4%.

The historical median dividend yield is much lower at 3% than the 5 year median dividend yield. If you use the median dividend yield to 2008 it is even lower at 2.8%. Also, the 10 year growth in dividends to 2008 was much higher than the current one at 18.2% per year. The thing is times will not always be tough for insurance companies, and if you are buying them now, you should also look to see what the characteristics of them were prior to 2008.

I bought stock in this company in 2001, 2004 and 2011. My total return is 8.83% per year with 4.75% from capital gains and 4.08% from dividends. I have received some $11.91 per share in dividends and my cost basis per share is 23.23. That means that dividends have covered some 51.35 of my share costs. On the shares I bought in 2001, my dividend yield on my original cost is 7.8%.

The recent total returns have not been that great as this stock, like other insurance companies, took a big hit in 2008. The 5 and 10 years total returns on this stock have been 8.05% and 4.81% per year. The portion of this return attributable to capital gains is at 3.77% and 1.02% per year. The portion of this return attributable to dividends is at 4.28% and 3.79% per year.

The number of outstanding shares has changed over the past 5 and 10 years, increasing only at 0.2% and 0.1%. The shares have increased due to Stock options mostly, but also for Employees Stock Participation Plan. Revenue growth has been moderate over the past 5 and 10 years. EPS growth has been moderate to good over the past 5 and 10 years and Cash Flow growth has been low to moderate over the past 5 and 10 years.

Revenue is up by 5% and 5.7% per year over the past 5 and 10 years. Revenue per Share is up by 4.8% and 5.6% per year over the past 5 and 10 years. Last year, 2014, was a good year for revenue for this company with Revenue up 44%. This year is expected to be good year for Revenue growth also.

EPS growth is up by 9.5% and 3.6% per year over the past 5 and 10 years. Growth in EPS has been good over the past 3 years and is expected to be moderate for this year.

Cash Flow is up by 2% and 5.8% per year over the past 5 and 10 years. CFPS is up by 1.8% and 5.7% per year over the past 5 and 10 years. The problem is 2011 which saw a big drop in cash flow. However, Cash Flow has been growing since then.

The Return on Equity was over 10% until 2008 and has been lower than 10% since then. The ROE for 2014 was just 7.4% and it has a 5 year median of 7.1%. The comprehensive income has varied over time from the ROE on Net Income. The ROE on comprehensive income in 2014 was 7.3% and this has a 5 year median of 7.3%.

The Liquidity Ratio is very good in 2014 and it has generally been very good. The Liquidity Ratio for 2014 is 2.08 and it has a 5 year median of 2.08. As with other financials, the Debt Ratio tends to be rather low and the Leverage and Debt/Equity Ratios tend to be rather high. The Debt Ratio for 2014 is 1.08 and the 5 year median is 1.10. The Leverage and Debt/Equity Ratios for 2014 are 12.93 and 11.93, respectively. The 5 year median values are 11.05 and 9.90.

This is the first of two parts. The second part will be posted on Tuesday, May 26, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.

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.

Friday, May 22, 2015

Fortis Inc. 2

Sound bite for Twitter and StockTwits is: Stock price is relatively reasonable. It is a core portfolio stock of mine, but I still do not like the Liquidity Ratio on this stock. Low Liquidity Ratio stocks can get into trouble when there is a recession. However, this is a utility stock and does get a steady cash flow. See my spreadsheet at fts.htm.

I own this stock of Fortis Inc. (TSX-FTS, OTC-FRTSF). It was on Mike's site showing Dividend Paying Canadian Growth stocks. I bought this stock as Newfoundland Light and Power Co. Ltd. Class A shares in 1987. I bought more in 1995 and 1998. In 2005 I sold some Fortis from my RRSP account as I needed to get $20,000 in this account and I was concerned about the debt liquidity of this stock. However, this stock continues to be one of my big stock holdings.

Last year the outstanding shares were increased by 1.38M shares for stock options. This is 0.50% of the outstanding shares and I think is a little high for a utility stock. Over the past year in insider trading, there was no insider buying but insider selling was at $9.4M. This is 0.09% of the outstanding shares. This seems a bit high also.

There is some insider ownership with the CEO owning shares worth around $6.7M and the CFO owning shares worth around $4.1M. The shares owned by the Chairman are worth around $0.5M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.20, 18.72 and 20.76. The corresponding 10 year values are similar at 16.32, 18.48 and 20.62. The current P/E Ratio is 18.97 based on a stock price of $38.88 and 2015 EPS estimate of $2.05. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $34.98. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.18 and 1.30. The current P/GP Ratio is 1.11 based on a stock price of $38.88. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year median Price/Book Value per Share Ratio of 1.59. The current P/B Ratio is 1.47 based on a BVPS of $26.33 and a current stock price of $38.88. The current P/B Ratio is 7.6% lower than the 10 year median P/B Ratio. This stock price test suggests that the stock price is relatively reasonable.

The current dividend yield is 3.5%. This is some 6% higher than the 5 year average of 3.3%. The historical average dividend yield at 4.96% is 29% higher than the current dividend yield of 3.5% and that is quite a bit higher. However, a lot of people think we are better off using median values. The historical median is 3.67% and this is just almost 5% higher than the current dividend yield. This stock price test suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most recommendations are a Buy and the consensus is a Buy. The 12 months stock price is $42.00. This implies a total return of 11.52% with 8.02% from capital gains and 3.50% from dividends. This is a good total return from a utility stock.

This CBC article talks about Fortis selling off some of their real estate holdings. This article by Joseph Solitro of the Motley Fool suggests that this stock is currently at a good long term buying opportunity. In this article, Nelson Smith of the Motley Fool suggests that Fortis is overpriced with a P/E multiple of near 20 times earnings. By the way, if you have trouble getting the whole Motley Fool article, you can often go you and back into the article and it all will show. This article in Hydro World talks about Fortis buying more shares in Fortis Energy (Bermuda) Ltd.

This is the second of two parts. The first part was posted on Thursday, May 21, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Fortis is a diversified, international distribution utility holding company. Its regulated holdings include electric distribution utilities in five Canadian provinces and three Caribbean countries and a natural gas utility in British Columbia. Fortis owns and operates non-regulated generation assets across Canada and in Belize and Upper New York State. It also owns hotels and commercial office and retail space primarily in Atlantic Canada. Its web site is here Fortis.

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.

Thursday, May 21, 2015

Fortis Inc.

I have hit a milestone today as I started to bog on May 21, 2008, some 7 years ago.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. If you hold stocks over the very long term there will be ups and downs in growth rates. Why I hold over the longer term is the growth in dividends. On my original purchase I am earnings a dividend yield of 29%. See my spreadsheet at fts.htm.

I own this stock of Fortis Inc. (TSX-FTS, OTC-FRTSF). It was on Mike's site showing Dividend Paying Canadian Growth stocks. I bought this stock as Newfoundland Light and Power Co. Ltd. Class A shares in 1987. I bought more in 1995 and 1998. In 2005 I sold some Fortis from my RRSP account as I needed to get $20,000 in this account and I was concerned about the debt liquidity of this stock. However, this stock continues to be one of my big stock holdings.

This stock has moderate dividends and moderate dividend growth. The current dividend is 3.5% and the 5 year median dividend yield is 3.3%. The dividends have grown at 4.24% and 9% per year over the past 5 and 10 years. The 10 year growth is higher than usual because dividend growth was fast between 2005 and 2008. This probably will not happen again.

The Dividend Payout Ratio for EPS is a bit high in 2014 at 91%, but it is expected to moderate this year. The DPR for CFPS was higher this year than normal at 32%, but it is also expected to go lower to around 26% for this year. The 5 year median DPRs for EPS is 72% and for CFPS is 27%.

I have had this stock for just over 27 years. The total return is 13.9% per year with 8.19% per year from capital gains and 4.90% per year from dividends. My stock cost is $6.81per year and I have received $18.43 per share in dividends.

The 5 and 10 year total return to the end of 2014 was 10.03% and 12.35% per year. The dividend portion of this return was 3.71% and 3.94% per year, respectively. The capital gains portion of this return was 6.32% and 8.41% per year, respectively. The total return to date over the past 5 and 10 years is lower at 6.20% and 8.38% per year.

The outstanding shares have increased by 10% and 11% per year over the past 5 and 10 years. The shares have increased due to Share Issues, Stock options, DRIPs, Employee Participation Plan and Debenture Conversions. For me as a shareholder, I am interested in per share values to determine how well this company is growing.

Revenue growth is good, but Revenue per Share growth is non-existent to moderate. Earnings growth is moderate to good but EPS growth is non-existent to moderate. Cash Flow growth is good, but CFPS growth is low to moderate.

Revenue has growth at 8.2% and 16.8% per year over the past 5 and 10 years. Revenue per Share is down by 1.6% and up by 5% per year over the past 5 and 10 years. Revenue is expected to grow well in 2015.

Net Income is up 3.9% and 13.31% per year over the past 5 and 10 years. EPS is down by 1.5% and up by 3.3% per year over the past 5 and 10 years. EPS is expected to grow in 2015 by 46%, but it is only up by 3.5% in the first quarter.

Cash Flow is up by 10.3% and 17.3% per year over the past 5 and 10 years. CFPS is up by 0.2% and 5.5% per year over the past 5 and 10 years. Analysts seem to expect good growth in CFPS for 2015.

The Return on Equity has consistently been moderate on this stock. The ROE for 2014 was 4.6% and the 5 year median is 7%. The ROE on Comprehensive Income was a bit better in 2014 at 5.7% but it has a 5 year median of just 5.9%.

The Liquidity Ratio for 2014 was 0.73. If you add in cash flow after dividends it is 0.97. If you add in the current portion of the long term debt and cash flow after dividends it is 1.19. This is a low number but adequate. The Debt Ratio is good in 2014 at 1.53. Leverage and Debt/Equity Ratios are a little high but acceptable at 2.92 and 1.92.

This is the first of two parts. The second part will be posted on Friday, May 22, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Fortis is a diversified, international distribution utility holding company. Its regulated holdings include electric distribution utilities in five Canadian provinces and three Caribbean countries and a natural gas utility in British Columbia. Fortis owns and operates non-regulated generation assets across Canada and in Belize and Upper New York State. It also owns hotels and commercial office and retail space primarily in Atlantic Canada. Its web site is here Fortis.

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.

Wednesday, May 20, 2015

Thomson Reuters Corp. 2

On my other blog I am today writing about my portfolio withdrawal experience continue...

Sound bite for Twitter and StockTwits is: Current Price seems reasonable. I plan to hold on to this stock as a need it for diversification. I made most of my money so far in banks and utilities. You have to wonder about the long term viability of utility stocks. See my spreadsheet at tri.htm.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, almost 30 years. I bought stock to give portfolio some balance as I had too many financial stocks. Performance has been mediocre. I have made a total return of 7.71% per year with 4.42% from capital gains and 3.29% from dividends. These figures are in Canadian dollars.

Over the past year in insider trading there was some $7.8M in insider selling and $7.6M in net insider selling. There was some insider buying, but not much. Insider selling was some 0.02% of the market cap and so relatively small.

As for insider ownership, the Thomson family through The Woodbridge Company Limited owns some 57% of this company which is worth just over $21B. Also, the CEO owns shares worth around $11.3M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.61, 15.54 and 17.47. The corresponding 10 year ratios are higher at 16.72, 18.82 and 21.18. The current P/E Ratio is 30.39 based on a stock price of $49.27 and 2015 EPS of $1.62 CDN$ ($1.35 US$). This stock price testing suggests that the stock price is relatively high.

However, if you look at the Price/Adjusted EPS, they are at 17.29, 19.74 and 22.19 over the 5 year range. The current P/AEPS is 20.51 based on a stock price of $49.27 and 2015 AEPS estimate of $2.40 CDN$ ($2.00 US$). This stock price testing suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 1.69 and the current P/B Ratio 2.45, a value some 45% above the 10 year P/B Ratio. The current P/B Ratio is based on a stock price of $49.27 and 2014 BVPS of $20.06 CDN$. This stock price testing suggests that the stock price is relatively high. Using US$ value gives similar results.

If you do stock price testing using dividend yield, the stock price looks reasonable. The current dividend yield is 3.27%. This historical average and median dividends are 3.25% and 3.06%. These values are slightly lower than the current dividend yield. This stock price testing suggests that the stock price is relatively reasonable. Using US$ value gives similar results.

When I look at analysts’ recommendations, I find Buy, Strong Buy and Hold recommendations. The vast majority of the recommendations are a hold, so the consensus would be a Hold. The 12 month consensus stock price is $42.10 in US$. This would be $50.56 in CDN$ at current exchange rates. This implies a total return of 5.89% with 3.27% from dividends and 2.62% from capital gains.

Joseph Solitro of the Motley Fool thinks that Thomson Reuters’ current weakness represents a buying opportunity. Richard Blackwell writing in the Globe & Mail says that Thomson Reuters has been hit by currency headwinds. He is talking about the strong US dollar. Thomson Reuters has announced that it will repurchases up to $1B of shares by the end of next year.

This is the second of two parts. The first part was posted on Tuesday, May 19, 2015 and is 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. Thomson and Reuters amalgamated in 2008. Its web site is here Thomson and 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.

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

Tuesday, May 19, 2015

Thomson Reuters Corp.

On my other blog I am today writing about the 4% withdrawal rule for portfolios continue...

Sound bite for Twitter and StockTwits is: Mediocre dividend growth stock. With my portfolio I tried to pick dividend growth stocks that would last me for a lifetime. This is not always easy. See my spreadsheet at tri.htm.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, almost 30 years. I bought stock to give portfolio some balance as I had too many financial stocks. Performance has always been mediocre. I have made a total return of 7.71% per year with 4.42% from capital gains and 3.29% from dividends. These figures are in Canadian dollars.

I bought this stock on the TSX in CDN$. I have been holding it in a CDN$ Trading Accounts. Even though the dividends are paid in US$, each one is converted into CDN$ when deposited into to account. Dividends have been paid in US$ since 1996.

The dividends are moderate and the dividend increases are low. The current dividend yield is 3.27%. The dividend growth in US$ is at 3.7% and 5.9% per year over the past 5 and 10 years. The last dividend increase was in 2014 and the increase was at 1.5%

My spreadsheet records what dividends I have actually received in CDN$. For me, the dividend growth is at 3.1% and 3.9% per year over the past 5 and 10 years. These values are, of course, affected by the changing CDN$/US$ exchange rates.

The 5 and 10 year total return is 9.03% and 5.01% per year in CDN$. The portion of this return attributed to dividends is 3.27% and 2.82% per year. The portion of this return attributed to capital gains is 5.76% and 2.91% per year.

The total return in US$ is less at 5.28% and 4.81% per year in US$. The portion of this return attributed to dividends is 3.37% and 3.11% per year. The portion of this return attributed to capital gains is 1.91% and 1.70% per year.

The total outstanding shares have decreased by 0.8% and increased by 2% per year over the past 5 and 10 years. In Revenues, Earnings and Cash flow the growth is better in CDN$ terms than in US$ terms. However, reporting is done in US$, so I will talk about growth in US$ terms. Revenue growth is none existent to moderate. EPS growth is good, but company puts out an Adjusted EPS where growth is low. Cash Flow growth is none existent to moderate.

Revenue declined by 0.6% and grew by 4.5% per year over the past 5 and 10 years. Revenue per Share grew at 0.2% and 2.5% per year over the past 5 and 10 years.

EPS grew by 18.4% and 4.32% per year over the past 5 and 10 years. EPS has fluctuated quite a bit. If you look at EPS using 5 year running averages, EPS is down by 18% and 7% per year over the past 5 and 10 years. The Adjusted EPS is low at 1% and 1.9% per year over the past 5 and 10 years.

Cash Flow is down by 0.6% and up by 3.6% per year over the past 5 and 10 years. CFPS is up by 0.2% and 1.6% per year over the past 5 and 10 years.

The Return on Equity has often been lower than 10%. The ROE was only at or above 10% 4 times in the past 10 years and twice in the past 5 years. The ROE for 2014 was quite good at 13.6% but the 5 year median value for ROE is just 4.7%. A problem is that the ROE comprehensive income is just 0.3% in 2014. This ROE has a 5 year median value of just 2.1%. The problem with such a difference in comprehensive income suggests that the earnings are not of good quality.

The debt ratios are fine, but not great. The Liquidity Ratio is 0.79. When this ratio is below 1.00, it means that the current assets cannot current liabilities. If you add in cash flow after dividends, the Liquidity Ratio is just 1.09, a rather low number. I prefer this number to be 1.50 or better. The Debt Ratio is good at 1.92 in 2014. The Leverage and Debt/Equity Ratios are a little high at 2.09 and 1.09. I prefer these to be under 2.00 and under 1.00, respectively.

This is the first of two parts. The second part will be posted on Wednesday, May 20, 2015 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. Thomson and Reuters amalgamated in 2008. Its web site is here Thomson and 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.

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

Friday, May 15, 2015

SNC-Lavalin Group Inc. 2

Sound bite for Twitter and StockTwits is: Price is looking relatively cheap. I still see this stock as rather risky. You have to wonder if an expected 10% capital gain over the next year is worth the risk. See my spreadsheet at snc.htm.

I own this stock of SNC-Lavalin Group Inc. (TSX-SNC, OTC- SNCAF). This stock was one from Mike Higgs' list of dividend growth stocks. I liked the idea of low dividends and high dividend increases. When you are building up a portfolio, low dividends are good for tax reasons. High dividend increases are attractive for the future.

When I look at insider trading over the past year, I find $0.2M of insider buying and $0.9M of insider selling with net insider selling at $0.7M. This is 0.01% of the outstanding shares and therefore relatively quite small.

In 2014 the outstanding share were increased by 658,000 or 0.43% for stock options. There is some insider ownership with the CEO owning shares worth around $1.4M and the Chairman owning share worth around $1.4M. This is way under 1% of the outstanding shares and so relatively small. The Caisse de dépôt et placement du Québec is a large shareholder.

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.06, 20.50 and 24.93. The 10 year corresponding ratios are similar at 16.61, 21.62 and 27.63. The current P/E Ratio is 20.99 based on a stock price of $45.33 and 2014 EPS estimate of $2.16. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $33.72. The 10 year low, median and high median Price/Graham Price Ratios are 1.56, 2.09 and 2.52. The current P/GP Ratio is 1.34 based on a stock price of $45.33. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 4.28. The current P/B Ratio is 1.94 based on a stock price of $45.33 and BVPS of $23.40. The current P/B Ratio is some 55% lower than the 10 year median P/B Ratio. However, I must say that a ratio of 4.28 is a bit high. This stock price testing suggests that the stock price is relatively cheap.

The current Dividend Yield is 2.21%. The 5 year median Dividend Yield is 1.94% a value some 13% lower. Recently because of company problems, the Dividend Yields are getting higher. This stock price testing suggests that the stock price is relatively reasonable.

The historical average Dividend Yield is 1.64% and the historical median Dividend Yield is 1.40%. These Dividend Yields are 35% and 57% lower than the current Dividend Yield of 2.21% and suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendation. Most of the recommendations are a Buy and the consensus would be a Buy. The 12 month stock price consensus is $50.20. This implies a total return of 12.95% with 2.21% from dividends and 10.74% from capital gains.

This Financial Post article by Yadullah Hussain talks about Caisse de dépôt et placement du Québec raising their stake in SNC. It would seem that they own 12% of the shares worth around $820M. This Financial Post article by Damon van der Linde talks about SNC hoping to resolve their legal troubles. Joseph Solitro of the Motley Fool recently gave this stock a good review.

This is the second of two parts. The first part was posted on Thursday, May 14, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

SNC-Lavalin are involved with engineering and construction work around the world, this includes infrastructure and Buildings; infrastructure and construction; power (nuclear, thermal, hydro etc); chemicals and petroleum; environmental projects; mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is here SNC-Lavalin.

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.

Thursday, May 14, 2015

SNC-Lavalin Group Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. I still like this stock. I have been selling it off in the RRSP/RRIF accounts because of the low dividend. However, I have started to buy shares for the TFSA and hope in the future to buy more. This is not a perfect dividend growth stock, but has positive points and probably will do well over the longer term. It has higher risks as it is an industrial stock. See my spreadsheet at snc.htm.

I own this stock of SNC-Lavalin Group Inc. (TSX-SNC, OTC- SNCAF). This stock was one from Mike Higgs' list of dividend growth stocks. I liked the idea of low dividends and high dividend increases. When you are building up a portfolio, low dividends are good for tax reasons. High dividend increases are attractive for the future.

First of all I will talk about dividends. The current dividend yield is 2.21% is relatively high for this company which has often had yields less than 1%. They have had some problems so the stock has declined and as yield moves in the opposite direction, yields have climbed.

This company had had a long history of dividend increases. These have slowed down recently with dividend increases since 2012 at just over 4% per year, including for 2015. The long term median increase was 23%. The growth in dividends over the past 5 and 10 years is at 9.9% and 18% per year.

In order to make sense out of the earnings reported on this stock, TD Waterhouse uses an Adjusted EPS which is core E&C (Engineering and Construction) earnings. This is because SNC shows EPS at $0.24 for 2013 and $8.74 for 2014. The adjusted EPS is $2.46 and this is more in line with what SNC was making prior to 2013. The company made money selling Infrastructure Concession Investments (ICI) investments in 2014.

The Dividend Payout Ratios seem fine. The 5 year median values are 33% and 22%. If we use the Adjusted EPS for 2014, the DPR is 39%. The DPR for CFPS for 2014 is 88%, a rather high value. Analysts seem to think that the cash flow in 2015 will be negative. However, they think that cash flow will be positive in 2016 and then the DPR for CFPS would be around 28%. The Cash Flow did turn negative for the first quarter of 2015.

I first bought this stock in 1998. I have had a good return of 25.57% per year with 23.90% from capital gains and 1.67% from dividends. I have received $7.53 per share in dividends and my cost per share is $5.66. So presently I have received more in dividends that I have paid for this stock.

This stock has not been so kind to recent investors. The 5 and 10 year total returns are a loss of 3.65% and a gain of 7.97% per year. The portion of these returns attributable to dividends is 1.73% and 2.02% per year over these periods. The portion of these returns attributable to capital gain/loss is a loss of 5.38% and gain of 5.95% per year over these periods.

Outstanding shares have not changed over the past 5 and 10 years. Shares have increased due to Stock Options and have decreased due to Buy Backs. Revenue growth is moderate to good. Earnings growth is good over the past 10 years but not so over the past 5 years. For Cash Flow there is no growth over the past 10 years and Cash Flow has declined over the past 5 years.

Revenue is up by 6.2% and 9.1% per year over the past 5 and 10 years. Revenue per Share is up by 6% and 9% per year over the past 5 and 10 years. If we look at the EPS to Adjusted EPS, EPS has growth of almost 1% per year over the past 5 years and 13.7% per year over the past 10 years.

Cash Flow per Share is flat for the past 10 years and down by 24% per year over the past 5 years. However, Cash Flow is uneven and if you look at CFPS using 5 year running averages, growth is at 5.4% and 12.8% per year over the past 5 and 10 years.

Until 2013, the Return on Equity has been good and always above 10%. In 2013 it was 1.8% and this year it is 40.2%. However, for 2014 if you look use the Adjusted Net Income, the ROE becomes a probably more realistic 11.3%.

A negative thing about this stock is that the debt ratios are not very good. The Liquidity Ratios tend to be low and just squeeze past 1.00 when you add in cash flow less dividends. Debt Ratios are low and Leverage and Debt/Equity Ratios are high. However, there has been improvement in the last two recently.

In 2014 the Liquidity Ratio is 0.97. If you add in cash flow less dividends the ratio becomes 0.99. The Liquidity Ratio taking off the current portion of the long term debt is 0.97 and if you add in cash flow after dividends it becomes 1.00.

The Debt Ratio for 2015 is good at 1.50. However, its 5 year median value is 1.29. The 1.50 ratio for 2014 is the best one ever. Leverage and Debt/Equity Ratios for 2014 are 3.02 and 2.02. These are better than the 5 year median ratio of 4.75 and 3.78. These ratios have recently been improving.

This is the first of two parts. The second part will be posted on Friday, May 15, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

SNC-Lavalin are involved with engineering and construction work around the world, this includes infrastructure and Buildings; infrastructure and construction; power (nuclear, thermal, hydro etc.); chemicals and petroleum; environmental projects; mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is here SNC-Lavalin.

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.

Wednesday, May 13, 2015

Veresen Inc. 2

On my other blog I am today writing about my investment accounts at TD continue...

Sound bite for Twitter and StockTwits is: Stock price is relatively expensive and risky. I look at a number of values, and most point to a very high relative current stock price. Jordan Cove project seems to have a lot of outstanding risks at present. See my spreadsheet at vsn.htm.

I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in 2008 as Fort Chicago Energy Partnership. At that time it was a publicly traded limited partnership with increasing and high dividends. In 2010 the company changed to a corporation.

Outstanding shares are not being increased for stock options. It is not that there are no stock options, but they are in the form of Performance Share Units and Restricted Share Units.

There is not much insider ownership. The CEO owns shares worth around $0.4M, the CFP owns shares worth around $0.5M and the Chairman owns shares worth around $0.9M. This all add up to very little. When I look at insider trading over the past year, I find $0.8M of insider buying and no Insider Selling.

The 5 year low, median and high median Price/Earnings per Share Ratios are 42.93, 47.89 and 52.85. These are a lot higher than the corresponding 10 year values of 20.71, 25.47 and 30.38. All these P/E Ratios are rather high for a utility. This stock used to have more reasonable P/E Ratios until the stock price started to climb in 2011 with no corresponding climb in EPS. The current P/E Ratio is 59.48 based on a stock price of $18.44 and 2015 EPS estimate of $0.31. This stock price testing, of course, is suggesting that the stock price is relatively expensive.

I get a Graham Price of $9.12. The 10 year low, median and high median Price/Graham Price Ratios are 1.35, 1.64 and 1.93. The current P/GP Ratio is 2.02 based on a stock price of $18.44. This stock price testing suggests that the stock price is relatively expensive.

If we look at Distributable Cash the Price/Distributable Cash Ratios are 10.42, 11.71 and 13.01. The current P/DI Ratio is 17.56 based on a stock price of $18.44 and 2015 DI estimate of 1.05. The $1.05 is lower than the 2014 DI by some 6.3%. When we look at 12 month ending at the first quarter compared to the 12 months ending in 2014, DI is down by 4.5%. So a decline for 2015 is not unreasonable. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 1.92. The current P/B Ratio at 1.55 is some 19% lower. The current P/B Ratio is based on a stock price of $18.44 and BVPS of $11.93. This stock price testing is suggesting that the stock price is relatively reasonable and heading for relatively cheap.

The lowering of debt has affected the book value. Over the past few years the debt ratios have improved as the Book Value has grown. Debt ratios are currently quite good. A few years ago debt ratios were not good at all.

I cannot do any dividend yield testing. The yields used to be much higher than they are today, and the dividend rate has not changed since 2008. This stock used to be a Limited Partnership before changing to corporation. Because of this change the yield is declining. It was expected to decline to 4 or 5%, but the yield is still 5.42%. This would imply that the stock price can still climb or that dividends will be cut. The Payout Ratios are high.

The 10 year median Price/Cash Flow per Share Ratio is 7.76. The current P/CF Ratio at 14.10 is some 105% higher. The P/CF Ratio is based on a stock price of $18.44 and 2015 CFPS estimate of $1.16, an increase of CFPS of around 12%. The difference between the CFPS for the 12 months to the end of the first quarter and the end of 2014 is an increase of 1%. I think that this stock price testing is suggesting that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. Most recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $19.10. This implies a total return of 9% with 5.42% from dividends and 3.58% from capital gains. You have to wonder about Buy recommendations and capital gains of only 3.6%.

This article in the Financial Post talks about Veresen Inc.'s Jordan Cove project. The CEO calls this a high-risk game. This article in Hydroworld talks about Veresen's first quarterly results for 2015. This Newswire article talks about Energy Fundamentals Group's recent win in court re its options on Jordan Cove Energy project.

This is the second of two parts. The first part was posted on Tuesday, May 12, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen.

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.

Tuesday, May 12, 2015

Veresen Inc.

Sound bite for Twitter and StockTwits is: High dividend yield and risks. This used to be a dividend growth company, but it is currently not that. However, the dividend is still quite high at 5.42%. I will be keeping this stock, but I do not also have a lot invested in it. See my spreadsheet at vsn.htm.

I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in 2008 as Fort Chicago Energy Partnership. At that time it was a publicly traded limited partnership with increasing and high dividends. In 2010 the company changed to a corporation.

Although I have made good money on this stock and the dividend yield is still quite good, I do wonder how well it will do in the future. I think that the stock is riskier than when I initially bought it. I have had this stock for just over 6 years. My total return is 27.76% with 16.55% from capital gains and 11.21% from dividends.

The other thing is that I have collected some $6.24 per share in dividends and this equals some 88% of the price I paid for this stock of $7.08 per share. The current dividend is 5.42%. In the future the portion of the total return attributable to dividends will be lower. Also, this stock has already has had the run up in share price from converting to a corporation, so the capital gain portion of the total return in the future will also be lower.

A problem with this stock is that the dividend has been level since 2008. I do not see this changing anytime soon. The Dividend Payout Ratio for 2014 is 416% for EPS and 94.19% for CFPS. The company also puts out a distributable cash value and the company is paying out 91.7% of this value in 2012. No one thinks that they will lower the dividend, but then no one thinks that it will rise anytime soon.

The 5 and 10 year total return on this stock is 16.39% and 11.35% per year. The portion attributable to dividends is 7.19% and 6.95% per year over these periods. The portion attributable to capital gains is 9.19% and 4.40% per year over these periods.

The outstanding shares have increased by 7.6% and 6.3% per year over the past 5 and 10 years. As a shareholder, I am going to be more interested in the per share value to tell me how well the company is growing. With the company, the only growth is over the past 10 years in cash flow. Otherwise there is no real growth.

With Revenue, there is a problem in judging whether or not there is growth. They have been investing in other projects and companies and they now have dividend and equity income rather than "revenue". These are not really the same thing. However, over the past 3 years Operating Revenue and Other Income has been increasing, so this is good.

They give out a Distributable Cash value and this has been increasing, but only at a low level with the 5 and 10 year growth at 0% and 2.4% per year. EPS is down by 3% and 10.5% per year over the past 5 and 10 years. In EPS, there has been some gain over the past 3 years.

Cash Flow is down by 1.4% and up by 2.3% per year over the past 5 and 10 years. CFPS is down by 8.4% and 3.8% per year over the past 5 and 10 years. Both Cash Flow and CFPS has been level over the past 3 years. This is not a great showing.

The only bright spot in growth is in Book Value. BVPS is up by 17% and 6.3% per year over the past 5 and 10 years.

With lousy earnings, we also have lousy Return on Equity. The ROE was 2.1% in 2014 and the 5 year median value was 4.5%. The ROE on comprehensive income was better at 5.3% with a 5 year median value of 8.3%. This suggests that Earnings might be a bit better than they appear.

Until recently, the Liquidity Ratio was low. The 5 year median value until this year was 0.85. The Liquidity Ratio for 2014 was very good at 2.18. The Debt Ratio has often been low (under 1.50). However, the one for 2014 is 2.15. Leverage and Debt/Equity Ratios used to be rather high. The current ones at 1.87 and 0.87 are good. Debt ratios have much improved over the past few years.

This is the first of two parts. The second part will be posted on Wednesday, May 13, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen.

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.

Monday, May 11, 2015

Canadian Natural Resources 2

On my other blog I am today writing about austerity measures and they do not work continue...

Sound bite for Twitter and StockTwits is: Stock is currently cheap. Although this company may have problems until the price of oil recovers, you can pick up this dividend growth stock at a good price currently. See my spreadsheet at cnq.htm.

I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%. I sold some TransAlta to buy this stock. In April 2013 I bought more shares of this stock because the yield was now at 1.54%.

First of all I would like to talk about stock options. The outstanding shares were increased by 1.34% for stock options in 2014. This is rather high as most stocks only increase outstanding shares by 0.50% per year or lower for stock options. For 2013 the shares were increased by .0.50% and in 2012 by 0.61%. So all this says that stock options are rather high.

There is some insider ownership with the CEO having shares worth around $84.2, an officer has shares worth around $30M and a director has shares worth around $811.2M. These are the largest of insider ownership. The director with $811.2M of shares owns just over 2% of the company.

Over the past year insider buying was around $4.9M and insider selling was at $52.1M. There is a net of insider selling at $47.2M or 0.11% of the outstanding shares. Insiders seem to be selling off stock options.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.82, 16.38 and 20.71. The corresponding 10 year ratios are lower at 12.26, 15.96 and 18.99. The current P/E Ratio is 201.42 based on a stock price of $38.27 and 2015 EPS estimate of $0.19. It appears that most analysts think that this company will have little to no earnings this year.

The EPS for 2012 to 2014 were $1.72, $2.08 and $3.58. Over the next three years earnings are expected to be $0.19, 1.69 and $3.07. If we use the EPS estimate for 2016, the P/E Ratio is 22.64, a ratio that is a bit high but not as high as the 201.42 ratio using the EPS estimate for 2015. You have to wonder what if testing the stock price using the P/E Ratios is worthwhile.

Because of the big drop in EPS estimate for 2015 from the EPS in 2014, the Graham Price dropped from $46.17 to $10.55. You also have to question the use of the Price/Graham Ratio in testing the stock price.

I get a 10 year Price/Book Value per Share of 1.75. The current P/B Ratio is 1.47, a value some 24.6% lower. The current P/B Ratio is based on a stock price of $38.27 and BVPS of $26.02. This stock price testing suggests that the stock price is relatively cheap.

The historical high dividend yield is 2.21%. The current dividend yield is 2.40% based on a stock price of $38.27 and a dividend of $0.92. Since the current dividend yield is higher than the historical dividend yield, this stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy Hold and Sell recommendations. The vast majority of the recommendations are a Buy and the consensus is a Buy. The 12 month consensus stock price is $45.30. This implies a total return of 20.77% with 2.40% from dividends and 18.37% from capital gains.

This CTV News article talks about Canadian Natural Resources' first 2015 quarterly earnings loss. This article in the Brandon Sun talks about this company cutting spending as it waits for a rebound in crude prices. Adam Mancini of the Motley Fool gives a good report on this stock.

This is the second of two parts. The first part was posted on Friday, May 08, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources.

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.

Friday, May 8, 2015

Canadian Natural Resources

Sound bite for Twitter and StockTwits is: Dividend Growth Resource Stock. Currently the dividend increases have slowed down a lot. However, I am sure that when the price of oil recovers, so will the dividend increases for this stock. See my spreadsheet at cnq.htm.

I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%. I sold some TransAlta to buy this stock. In April 2013 I bought more shares of this stock because the yield is now at 1.54%.

This company only started to pay dividends in 2001. Up until 2011, dividends were mainly below 1%. The dividend is currently at 2.4% and the 5 year median is just 1.22%. This company has a great record of dividend increases with the 5 and 10 year growth in dividends is at 33% and 25% per year. On the other hand the most recent dividend increase is the lowest ever at just 2.2%.

Under recently, the Dividend Payout Ratios for EPS was very low. In 2011 the DPR for EPS was 14%. In 2015 the DPR for EPS was 24.4%. It is expected to be 481% in 2015 as this company is not expected to earn much in 2015.

The DPR for CFPS has also climbed, but not as much. In 2011 the DPR for CFPS was 6%. In 2015 it was 10.4%. The DPR for CFPS is expected to be around 17% for 2015. This company also has an Adjusted EPS value which adjusts EPS for certain items of a non-operational nature. The DPR for Adjusted EPS was 25% for 2015 and is expected to be 28% for 2015.

The outstanding shares have not changed over the past 5 and 10 years. Outstanding shares have increased due to Stock Options and Share Issues and have decreased because of Buy Backs. Revenue, Earnings and Cash flow has had good growth over the past 5 and 10 years.

Revenue per Share has grown at 13.8% and 10.7% per year over the past 5 and 10 years. EPS has grown by 20% and 10.7% per year over the past 5 and 10 years. CFPS has grown at 8.6% and 9.3% per year over the past 5 and 10 years.

However, analysts expect that 2015 will not be a good year for this company and Revenue, Earnings and Cash Flow are all expected to decline in 2015. The following year, 2016 is expected to be better. Certainly the first quarter for 2015 was not good with the company having an EPS loss and lower Revenues and Cash Flows.

It is interesting to note that growth in Adjusted EPS has not been good over the past 5 and 10 years. Growth has been moderate to low. The Adjusted EPS growth is at 7% and 2.9% per year over the past 5 and 10 years.

Until 2009 this company had a number of years of over 10% Return on Equity. Over the past 5 years, this has only occurred twice and 2015 was one of these years. The ROE for 2014 is at 13.6%, but the 5 year median is just 8.8%. The ROE on comprehensive income was also 13.6% in 2014 and this suggests that the earnings are of good quality. The 5 year median ROE on comprehensive income is 8.7%, a value close to that on net income.

The Liquidity Ratio has always been low on this stock. The 2014 ratio is 0.68. However, when you add in cash flow after dividends, this ratio has been very good. The ratio for 2014 was 2.14. The Debt Ratio has been good also with the value in 2014 at 1.92. The Leverage and Debt/Equity Ratios have been a little high with the 2014 ratios at 2.08 and 1.08. I would prefer them to be under 2.00 and under 1.00, respectively, but they are not far off this.

This is the first of two parts. The second part be posted on Monday, May 11, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is here Canadian Natural Resources.

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.

Thursday, May 7, 2015

Pembina Pipelines Corp. 2

Sound bite for Twitter and StockTwits is: This utility stock seems presently expensive. I still like this stock and have no intention of selling what I have. I still think that the price is expensive currently. See my spreadsheet at ppl.htm.

I own this stock of Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA). In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock it was an Income Trust company.

Last year outstanding shares were increased by some 792,000 shares or by 0.23% because of stock options. The book value of these shares was $25M and this number of shares was worth $33.5M at the end of 2014.

There is some insider ownership with the CFO owning shares worth around $9M, a Director with share worth around 19.7M and the Chairman owning share worth around $5.8M. Of course all this adds up to less than 1% of outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 25.51, 29.46 and 33.41. The 10 year corresponding ratios are a lot lower at 19.82, 22.79 and 25.76. These are rather high ratios for a utility. The current P/E Ratio is 37.04. This is based on a stock price of $42.60 and 2015 EPS estimate of $1.15. This stock price testing suggests that the stock is relatively expensive.

I get a Graham Price of $22.14. The 10 year low, median and high median Price/Graham Price Ratios are 1.39, 1.59 and 1.39. The current P/GP Ratio is 1.92. These ratios are rather high for a utility stock. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year median Price/Book Value per Share ratio of 1.96. The current P/B Ratio is 2.25 a value some 15% higher. The current P/B Ratio is based on a stock price of $42.60 and BVPS of $18.95. This stock price testing suggests that the stock is relatively reasonable.

I cannot really do any historical dividend yield testing on for this stock as it was an income trust and income trust companies generally have dividend a lot higher than other companies. However, the 5 year median dividend yield at 5.73% is some 28% higher than the current dividend yield of 4.08%. This would suggest that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The vast majority of the recommendations are Buy recommendations and the consensus would be a Buy. The 12 month consensus stock price is $48.30. This implies a total return of 17.46%, with 13.38% from capital gains and 4.08% from dividends.

Pembina announced a 5.2% dividend increase for the May 2015 dividend payment. Andrew Walker of the Motley Fool gives three reasons to buy this stock. An April article in The Legacy talks about US analysts ratings on this stock. Most are buys, but one analyst rated it as a Sell.

This is the second of two parts. The first part was posted on Wednesday, May 06, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina.

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.

Wednesday, May 6, 2015

Pembina Pipelines Corp.

On my other blog I am today writing about possible cheap dividend stocks for May 2015 continue...

Sound bite for Twitter and StockTwits is: Dividend Growth Utility stock. I am in this stock for the long term, but they do seem to have some trouble with earnings. It just raised their dividend again. They do have cash flow to cover this. See my spreadsheet at ppl.htm.

I own this stock of Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA). In Dec 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock it was an Income Trust company.

This company converted from an income trust to a corporation in 2010. When it converted it kept its dividend level. They increased the dividends in 2012 modest amounts (that is under2%). The dividend increase was 3.7% in 2013 and 3.6% in 2014.

They are still paying out more in dividends that they are earning but they have the dividend to cash flow ratio under control. In 2014 the Dividend Payout Ratio for EPS is 161% and for CFPS was 60%. They had a tax pool that would allow them not to be taxes between conversion and now.

This stock used to have a very high dividend yield. The historical high is over 15%. When income trusts became corporations it was felt that dividend yields, because of dividend cuts and stock price increases would end up in the 4 to 5% dividend yield range. Currently this stock has a dividend yield of 4.08% and this is because of the rise in the stock price.

I made my initial purchase in this stock just over 13 years ago. I have received some $17.33 per share in dividends and my stock cost basis is $11.50. This is the reason to investing in dividend growth stock. My return is very good with an 18.38% per year total return. The portion attributable to capital gain is 10.57% per year. The portion attributable to dividends is 7.81% per year.

I expect both the capital gains and dividends to be lower in the future. The run up in stock price for this company as a result of the switch to a corporation is over. Dividend yields have also moderated from a median of around 8.9% to one of just over 5% and current dividend is just over 4%.

Shares have grown at 16% and 13% per year over the past 5 and 10 years. Shares have grown due to Shares Issues, Stock Options, DRIP and Debenture Conversions. So as a shareholder I am most interested in per share values.

There has been good growth in Revenue, Adjusted Funds from Operations (AFFO), Funds from Operations (FFO) and Cash Flow. The problem is growth in earnings and this has been non-existent to moderate.

Revenue has grown at 50% and 36% per year over the past 5 and 10 years. Revenue per Share has grown at 29% and 21% per year over the past 5 and 10 years. The 5 year growth in AFFO is at 8.6% per year and for FFO is at 10.6% and 8.6% per year over the past 5 and 10 years.

Cash Flow has grown at 33% and 24% per year over the past 5 and 10 years. CFPS has grown at 14.7% and 10.5% per year over the past 5 and 10 years.

The growth in Net Income is good at 19% and 20% per year over the past 5 and 10 years. However, EPS has had no growth over the past 5 and has grown at 5.9% per year over the past 10 years. In 2014, EPS was down some 5.4% at $1.06. For 2015 EPS is expected to be $1.15, an 8.5% increase. I note that the first quarterly dividend came in under the estimate.

I have Return on Equity Ratios over the past 18 years. Of these years, 13 or 72% of these years had ROE of less than 10%. The last time the ROE was over 10% was in 2011. For 2014 the ROE is 6% and the 5 year median value is 6.8%. The ROE on comprehensive income is lower at 5.9% but the 5 year median is a bit better at 7.1%.

The debt ratios are mostly good. The Liquidity Ratio for 2014 was at 0.98, but if you add in dividends less cash flow the value is 1.29. The Debt Ratios for 2014 are 2.29 a very good ratio. Leverage and Debt/Equity Ratios for 2014 are 1.78 and 0.78, which are also good ratios.

This is the first of two parts. The second part will be posted on Thursday, May 07, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina.

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.

Tuesday, May 5, 2015

Leon's Furniture Ltd. 2

Sound bite for Twitter and StockTwits is: Getting cheap. The time to buy good stocks for the longer term is when they are cheap. I think that this stock has shown that is a good stock over time. A lot of retail stocks are having a hard time at the moment. Still buy good stocks when cheap or relatively cheap. See my spreadsheet at lnf.htm.

I own this stock of Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.

In 2014 the outstanding shares were increased by some 422,000 shares or 0.59% of the outstanding shares. These shares have a book value of $3.8M and were worth at the end of 2014$7.6M. This is a bit high but in 2013 increase in outstanding shares was only 0.10%. Employees are given interest free loans to buy convertible non-voting shares with dividends and cash.

The Leon family owns a lot of the outstanding shares. As far as I can see they current own some 83% of the outstanding shares. Last year they seemed to own some 86% of the outstanding shares. The Leon siblings own shares through their own limited companies.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.16, 16.40 and 18.65. These are slightly higher than the corresponding 10 year ratios at 13.37, 15.09 and 17.50. The current P/E Ratio is 14.22 based on a stock price of $15.36 and 2015 EPS estimate of $1.08. This stock price test suggests that the stock price is reasonable. It is also near the bottom of the range.

I get a Graham Price of $13.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.08, 1.25 and 1.41. The current P/GP Ratio is 1.16 based on a stock price of $15.36. This stock price test suggests that the stock price is reasonable.

The 10 year Price/Book Value per Share Ratio is 2.17. The current P/B Rati is 2.12 some 2.2% lower. The current P/B Ratio is based on a BVPS of $7.25 and a stock price of $15.36. This stock price test suggests that the stock price is reasonable.

The 5 year median dividend yield is 2.70% and the current dividend yield at 2.60% is lower by 3.4%. This stock price test suggests that the stock price is reasonable. However, the Historical Average and Historical Median is 2.34% and 1.85% values that are some 12% and 41% lower than the current dividend yield. This is starting to show that the price is getting cheap historically. However, the historical dividend low is lower than the current dividend yield and it is at just 1.17%.

I can only find one analysts following this stock and the recommendation given is a Hold. The target stock price given is $16.00. This suggests a total return of 6.77% with 2.60% from dividends and 4.17% from capital gains.

In February 2015, Leon's announced a good fourth quarter. In late March 2015Dakota Financial News talks about some insider buying. This March 2015 article by Michael J. Knell in Furniture Today talks about Leon's good fourth quarter for 2014 and the positive integration of The Brick into Leon's.

This is the second of two parts. The first part was posted on Monday, May 04, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Leon's Furniture Limited is a Canada-based company is retailer of home furnishings, electronics and appliances across Canada from Alberta to Newfoundland and Labrador. Leon's sells under several banners including Leon's, The Brick, Appliance Canada and United Furniture Warehouse. Its web site is here Leon's.

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.