Friday, October 30, 2015

Equitable Group Inc.

Sound bite for Twitter and StockTwits is: Price reasonable but above relative median. I do not see the point in buying this bank. I think it is riskier than the big banks and yet offers lower dividends and probably lower total return. Other people say that they like it because its net profit margin is better than other banks. See my spreadsheet on Equitable Group Inc.

I do not own this stock of Equitable Group Inc.(TSX-EQB, OTC-EQGPF). I had read a glowing report on investing on this company in 2013, so I decided to check it out. It was interesting as it was loaning money to new immigrants, a class of people who generally have a difficult time getting loans and mortgages from our regular banks. It sounded intriguing.

On this stock, dividends are low and dividend increases are moderate. The current dividend is 1.35% based on a stock price of $56.21 and dividends of $0.76. The 5 year median dividend yield is 1.6%. The 5 and 9 year dividend growth is at 10.9% and 8.9% per year. The last dividend increase occurred in 2015 and was for 5.6%.

This bank is paying out a low amount of its earnings. The Dividend Payout Ratios for EPS for 2014 was 10.26% and the 5 year median is 10.26%. DPR is expected to be similar in 2015. Since reported cash flow has been negative lately, there is no DPR for cash flow. A lot of analysts currently think that a bank's reported cash flow is basically meaningless.

An article in CFO.com of 2009 talks about this subject. Sites that give estimates, generally do not give Cash Flow estimates on this bank. They basically ignore cash flow. For example, 4 Traders, a site that generally give cash flow estimates, just ignores them for this bank. However, it does give cash flow estimates for other Canadian Banks. For example, see their site on Bank of Nova Scotia.

The next thing to look at is insider trading. The Net Insider Selling is at 0.03%. This is a little high. So it does not add anything positive to this stock.

Shareholders have done fine with 5 and 10 total returns to date of 19.26% and 9.96% per year. The portion of this total return attributable to dividends is 1.66% and 1.34% per year. The portion of this total return attributable to capital gain is 17.60% and 8.61% per year. Shareholders did better to the end of 2014. The stock price has dropped some 14.4% this year.

The outstanding shares have increased by 0.7% and 2.8% per year over the past 5 and 10 years. Shares have increased due to Stock Issues and Stock Options. I have looked a growth in Net Interest, Revenue and Earnings. For all of these, growth is good.

Revenue has growth at 20.3% and 21.5% per year over the past 5 and 10 years. Revenue per Share has grown at 19.4% and 18.1% per year over the past 5 and 10 years. Net Interest Income has grown by 22.8% and 21.7% per year over the past 5 and 10 years. Analysts expect good growth in Net Interest Income for 2015 of some 18%. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, Net Interest Income has grown by 9%.

EPS is up by 14.2% and 17.5% per year over the past 5 and 10 years. Analysts expect good growth also in 2015 by around 15%. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, EPS has grown by 10%.

The 5 year low, median and high median Price/Earnings per Share Ratios are at 5.67, 6.93 and 8.37. The 10 years corresponding ratios are a bit higher at 5.87, 7.10 and 9.60. The current P/E Ratio is 7.47 based on a stock price of $56.21 and 2015 EPS estimate of $7.52. This stock price testing suggests that the stock price is reasonable, but above the relative median.

I get a Graham Price of $87.60. The 10 year low, median and high median Price/Graham Price Ratios are 0.48, 0.60 and 0.81. The current P/GP Ratio is 0.64 based on a stock price of $56.21. This stock price testing suggests that the stock price is reasonable, but above the relative median.

The 10 year median Price/Book Value per Share Ratio is 1.14. The current P/B Ratio is 1.24 a value 8% higher than the 10 year median ratio. The current P/B Ratio is based on BVPS of $48.49 and a stock price of $56.21. This stock price testing suggests that the stock price is reasonable, but above the relative median.

The 5 year n median Dividend Yield is 1.60% and the current Dividend Yield at 1.35% is some 15% lower. The historical dividend yield is 1.44% and the current dividend yield is some 6% lower. (Historical is not long as dividends have been paid for only some 10 years.) This stock price testing suggests that the stock price is reasonable, but above the relative median.

When I look at analysts' recommendations I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $70.00. This implies a total return of 25.895 with 1.35% from dividends and 24.53% from capital gains.

The site of Mideast Time talks about RBC raising the price for this company. This Newswire article talks about an insider buying more shares. A couple of analyst talk about Equitable Group Inc on Stock Chase.

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.

Equitable Group Inc. is a niche mortgage lender. The company's primary business is first charge mortgage financing, which offer through company's wholly owned subsidiary, Equitable Bank (formerly The Equitable Trust Company). Equitable Bank is a Schedule I bank pursuant to the Bank Act, it actively originates mortgages across Canada and serves single family, small & large commercial borrowers. Its web site is here Equitable Group Inc.

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, October 29, 2015

Gluskin Sheff + Associates Inc. 2

Sound bite for Twitter and StockTwits is: Price is reasonable and below relative median. A plus for this company is the special dividends given each year. However, dividends are tax higher than capital gains and there is not much in capital gains. See my spreadsheet on Gluskin Sheff + Associates Inc.

I do not own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. I did a spreadsheet on this stock in February 2010. I chose this stock because I recognized the names of Gluskin and Sheff. Their financial year ends June 30 each year.

First I should mention that the two founders have basically left this company and there are some concerns about how the company will be run in the future. Currently some insiders own shares in this company. The CEO has shares worth around $47M and some 5.9% of the outstanding shares.

Also a couple of officers own shares with $20M and $45.8M which is 2.6% and 5.8% of the outstanding shares. They do not seem to have a new chairman for the board, but there is a lead director. He has shares worth around $0.3M and this is some 0.04% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.47, 11.60 and 13.73. The 10 year corresponding ratios are a bit higher at 10.41, 15.57 and 18.49. The historical median P/E Ratio is 15.57. The current P/E Ratio is 13.71 based on a stock price of $22.76 and 2016 EPS of $1.70. This stock price testing suggests that the stock price is relatively reasonable and possibly below the relative median.

I get a Graham Price of $12.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.49, 2.07 and 2.55. The current P/GP is 1.85 based on a stock price of $22.76. This stock price testing suggests that the stock price is reasonable and below the relative median.

These P/GP Ratios are high. According to Graham Price theory, a good price to pay for a stock is when the Graham Price is 1.00. However, there are lots of stocks that never get a Graham Price that low. I deal with relative values as a lot of things about the stock market are based on relative values. On a relative basis, this testing says that the stock price is reasonable and below the relative median.

I get a 10 year median Price/Book Value per Share Ratio of 6.67. The current P/B Ratio is 5.78 a value some 13% lower than the 10 year median ratio. This current P/B Ratio is based on BVPS of $3.94 and a stock price of $22.76. This stock price testing suggests that the stock price is reasonable and below the relative median. As with the P/GP Ratios, this P/B Ratio of 5.78 is a rather high P/B Ratio.

The current Dividend Yield is 3.95% based on dividends of $0.90 and a stock price of $22.76. The 5 year median Dividend Yield is 3.16% a value some 25% lower. Also, the historical median dividend yield is 2.93% which is some 35% lower than the current Dividend Yield. This stock price testing suggests that the stock price is relatively reasonable and below the relative median. However note that this stock has not been around that long and the historical median is based on only 8 years.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a buy. The 12 month stock price consensus is $27.80. This implies total returns of 26.10% with 3.95% from dividends and 22.14% from capital gains.

In this Dakota Financial News release, RBC Capital have rated this company as "outperform" (a Buy recommendation). Joseph Solitro at Motley Fool thinks this is a great small cap to buy. Michael Decter on Stock Chase wonders about the effect of the departure of the founders of this company will have on it.

This is the second of two parts. The first part was posted on Wednesday, October 28, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff + Associates Inc.

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, October 28, 2015

Gluskin Sheff + Associates Inc.

On my other blog I am today writing about comparing the effect on dividends of original purchase price learn more...

Sound bite for Twitter and StockTwits is: Financial Service Dividend Growth Stock. This is a relatively small company with a current Market Cap of around $721M. They also give out special dividends each year. See my spreadsheet on Gluskin Sheff + Associates Inc.

I do not own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. I did a spreadsheet on this stock in February 2010. I chose this stock because I recognized the names of Gluskin and Sheff. Their financial year ends June 30 each year.

This company pays a special dividend every year. I do not know of another company that does this. This special dividend is often more than the regular dividends. The company decides each year how much to pay in special dividends. It can make a big difference sometimes. In 2014 the total dividend yield was 11.2% compared to the regular dividend yield 2.4%. It was less of difference in 2015 when total dividend yield was 4.9% compared to 3.5%.

The other difference you see is in the original stock price coverage after 5 and 10 years. To date total dividends have covered 43.5% and 79.7% of the original stock price after 5 and 10 years. To date regular dividends have covered 23.8% and 43.3% of the original stock price after 5 and 10 years.

The regular dividends are good with moderate dividend growth. The current dividend is 3.95% and the 5 and 10 years dividend growth is 12.1% and 14% per year. The last dividend increase was this year and the increase was for 12.5%.

They are paying out a good percentage of their earnings and cash flow. The Dividend Payout Ratio covering total dividends in 2015 was 73.8% for EPS and was 55.6% for CFPS. The 5 year median DPR for EPS is 84.2% and for CFPS is 72.4%.

Shareholders have done fine over the past 5 and 10 years in total returns. However, most of the returns are in dividends. The total return to date over the past 5 and 10 years is at 9.84% and 8.36% per year. The portion of this total return attributable to dividends is at 8.02% and 6.26% per year. The portion of this total return attributable to capital gains is at 1.83% and 2.09% per year.

Outstanding shares have increased by 1.6% and 0.9% per year over the past 5 and 10 years. Assets under Management have grown well. Revenue growth is low to moderate. EPS has grown moderately over the past 5 years. Cash Flow growth is moderate to good.

Assets under Management have grown at 9% and 14.1% per year over the past 5 and 10 years. Revenue has grown at 5.9% and 2.9% per year over the past 5 and 10 years. Revenue per share has grown at 4.3% per year over the past 5. The 10 year growth in Revenue per Share is probably not a true reflection of its growth. Analysts expect low growth for 2016 and better growth in 2017.

Net Income has grown at 6.4% and 27.13% per year over the past 5 and 10 years. EPS has grown at 5% per year over the past 5 years. The 10 year growth in EPS is probably not a true reflection of its growth. Analysts expect low growth in EPS for 2016 and better growth in 2017.

Cash Flow has grown at 7.1% and 10.4% over the past 5 and 10 years. CFPS has grown at 5.3% over the past 5 years. The 10 year growth in CFPS is probably not a true reflection of its growth.

The Return on Equity has always been quite high on this stock. The ROE for the 2015 financial year is 41.9% and 5 year median is 50.7%. The ROE on Comprehensive Income is similar at 41.5% and a 5 year median at 50.7%. Sometimes high ROE are not good and ROEs can be high when debt levels are high. However, this is not the case here as debt levels are relatively low.

The debt ratios are quite good. The Liquidity Ratio is 1.86 and the Debt Ratio is 3.23 in 2015. The Leverage and Debt/Equity Ratios are 1.45 and 0.45.

This is the first of two parts. The second part will be posted on Thursday, October 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff + Associates Inc.

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, October 27, 2015

Medtronic PLC 2

Sound bite for Twitter and StockTwits is: Cheap to reasonable. On some levels this stock is quite cheap. It would appear to mostly below the relative mean. See my spreadsheet on Medtronic PLC.

I do not own this stock of Medtronic Inc. (NYSE-MDT). In 2009 I was looking for a good US stock for my US$ account. I had heard good things about this stock and also it is in Health Care sector which is a weak sector in Canada. This is one of the few US stocks that I follow. Their financial year is April 30 each year.

There is not much insider ownership, but this company is worth around $104B. The amount of stock options granted, especially in the last two years seem quite high to me. However, the company does not seem to separate stock options from ESPP stock. This year some 17M stock options and shares via ESPP were granted which is some 1.2% of the outstanding shares. The book value of these shares was $1.1B. This number of shares was worth $1.2B at the end of April 2015 financial year.

The 5 year low, median and high Price/Earnings per Share Ratios are 10.91, 12.77 and 14.64. The corresponding 10 year Ratios are higher at 14.04, 19.10 and 21.58. The P/E Ratios have been decreasing lately. Note that the historical median P/E Ratio is 25.96. The current P/E Ratio is 22.81 based on a stock price of $73.69 and 2016 EPS estimate of $3.23. By the 10 year measuring stick, this testing suggests that the stock price is relatively expensive.

I get a Graham Price of $51.96. The 10 years low, median and high median Price/Graham Price Ratio is 1.19, 1.51 and 1.74. The current P/GP Ratio is 1.42 based on a stock price of $73.69. This stock price testing suggests that the stock price is relatively reasonable and below the relative median.

The 10 year Price/Book Value per Share Ratio is 2.86. The current P/B Ratio is 1.98 a value some 31% lower. The current P/B Ratio is based on BVPS of $37.15 and a stock price of $73.69. This stock price testing suggests that the stock price is relatively cheap.

The 5 year median Dividend Yield is 2.46%. The current Dividend Yield at 2.06% is some 16% lower. This stock price testing suggests that the stock price is relatively reasonable, but above the relative median.

However, on a historical basis, the current dividend yield is very high. The historical median dividend yield is just 0.72% a value that is some 172% lower than the current dividend yield of 2.06%. On this level the stock price is getting cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy. The consensus recommendation is a Buy. The 12 month consensus stock price is $86.20. This implies a total return of 19.04% with 2.06% from dividends and 16.98% from capital gains.

This Reuters article talks about the recommended suspension of a Medtronic implant by the EU Drug Agency. This Insider Trading Report talks about recent insider trading at this company. This report says in the net insider trading over the last 6 months is a change of negative 4.11%. Recently Medtronic was allowed to transfer cash to the US by paying a 5% tax rate.

This is the second of two parts. The first part was posted on Monday, October 26, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic PLC.

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, October 26, 2015

Medtronic PLC.

On my other blog I am today writing about updating my index and dividend spreadsheets learn more...

Sound bite for Twitter and StockTwits is: US Health Care dividend growth stock. Dividends have grown strongly lately and analysts seem to expect more growth in the future. They have increased dividends every year for the past 25 years. See my spreadsheet on Medtronic PLC.

I do not own this stock of Medtronic Inc. (NYSE-MDT). In 2009 I was looking for a good US stock for my US$ account. I had heard good things about this stock and also it is in Health Care sector which is a weak sector in Canada. This is one of the few US stocks that I follow. Their financial year is April 30 each year.

The first thing to mention is that this company changed its name from Medtronic Inc. to Medtronic PLC effective January 2015. This was after buying Covidien PLC of Ireland and moving to Ireland. US companies are doing this for tax reasons. US taxes for companies are around the highest in the world. If they bring in profits made outside the US, they have to pay taxes on this money between the taxes they paid on it and the US rate of 35%. All currency in this report is in US$ unless otherwise stated.

I have records on this company going back to 2002 and they have increased their dividends every year since then. That is for 25 years. The dividend yield is moderate and the dividend increases are moderate. The current is 2.06% based on dividends of $1.52 and a stock price of $73.69. The dividends have grown at 8.3% and 13.6% per year over the past 5 and 10 years.

The recent dividend yields have been a lot higher than they have been historically. The 5 year median dividend yield is 2.46%. The historical median dividend yield is just 0.72%. The historical high is around 3%. Yields have been higher since around 2009. They are also paying out a higher proportion of earnings and cash flows.

The Dividend Payout Ratios are generally good. The DPR for 2014 for EPS is 51% and for CFPS is 52%. The 5 year median DPRs for EPS is 31% and for CFPS is 23%. Analysts expect these ratios to be around 47% for EPS and 30% for CFPS in 2016. The last dividend increase was in 2015 and it was for 24.6%.

The total return for this stock to date is 17.10% and 4.21% per year over the past 5 and 10 years. The portion of this total return attributable to dividends is 2.38% and 1.71% per year. The portion of this total return attributable to capital gain is 14.72% and 2.50% per year.

What is of interest to Canadians is that if you had invested in this stock it is only in the last 2 five year periods where you would have made money. I have looked at total Canadian returns for this stock for each 5 year period from 2002 to the present time. The 5 year periods from 2005 to 2013 have total loss from 10% to 0.6% per year. For example, for the 5 year period from 2000 to 2005 there was a total return of a negative 2.8% per year. For the last two 5 year periods ending in 2014 and 2015, the total returns are 13.2% and 17.4% per year, respectively.

Outstanding shares have increased by 5.3% and 1.6% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and decreased due to Buy Backs. Shares increased some 42% in 2015 mainly due to purchase of Covidien PLC.

The financial year ending in April 30, 2015 was not a particularly good year for this company as earnings and cash flow was down. However, analysts expect the next financial year to be better. Revenues growth is nonexistent to moderate. Earnings growth is nonexistent to moderate. Cash Flow growth is nonexistent to low.

Revenue has grown by 5.1% and 7.3% per year over the past 5 and 10 years. Revenue per Share is down by 0.2% and up by 5.5% per year over the past 5 and 10 years. Analysts expect good growth in 2016 at around 43%. If you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Revenue is up by 14.8%.

EPS is down by 2.9% and up by 5% per year over the past 5 and 10 years. Analysts expect EPS to growth by 34% for the next financial period. However, if you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, EPS is down by 12.5%. It is not going in the right direction.

Cash Flow is down by 3% and up by 1.6% per year over the past 5 and 10 years. CFPS is down by 7.9% and up by 0% per year over the past 5 and 10 years. Analysts expect Cash Flow to increase by 45% in 2016 financial year. If you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Cash Flow is up by 10.3%.

The Return on Equity for the 2015 financial year was 5% and the 5 year median is 18.6%. The ROE was below 10% 2 years in the past 5 years and in 3 years in the past 10 years. The ROE on comprehensive income for the 2015 financial year was 3.9%. However, the 5 year median ROE was 18.5%.

Analysts expect Net Income to increase by around 82% in 2016. However, if you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Net Income is down by 1.9%. It is not going in the right direction. Also, the first quarterly results do not seem to include comprehensive income.

Debt ratios are generally quite good. The Liquidity Ratio for 2015 was 3.36. This ratio has been quite high since 2013. The Debt Ratio is 2.00. The Leverage and Debt/Equity Ratios for 2015 were 2.00 and 1.00.

This is the first of two parts. The second part will be posted on Tuesday, October 27, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic PLC.

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, October 23, 2015

Canadian Pacific Railway 2

Sound bite for Twitter and StockTwits is: Stock is relatively expensive. The things I do not like is the very low dividend yield, the dropping Book Value and the much lower comprehensive income compared to the net income. See my spreadsheet on Canadian Pacific Railway.

I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list. It is a stock I held from 1987 to 1999 so I am following it. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and choice CN as my railway stock.

Harrison owns shares worth around $34.8M but only 0.1% of the outstanding shares. However, Ackman has shares worth around $2.7B and some 8.4% of the outstanding shares. In this past year in insider trading, there was insider buying and insider selling with net insider selling at $20M and 0.06% of market cap.

The 5 year low, median and high median Price/Earnings per share Ratios are 18.54, 23.55 and 28.57. The corresponding 10 year values are a lot lower at 12.27, 15.58 and 18.04. The current P/E Ratio is 19.93 based on a stock price of $194.73 and 2015 EPS estimates of $9.77. If you look at the 5 year values this P/E Ratio is reasonable and below the median. However, looking longer term, this P/E Ratio suggests that the stock price is rather expensive.

I get a Graham Price of $72.69. The 10 year Price/Graham Price Ratios are 0.93, 1.12 and 1.31. The current P/GP Ratio is 2.68 based on a stock price of $194.73. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share is 2.07. The current P/B Ratio is 8.10, quite a high number and some 291% above the 10 year P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.

The problem is that book value has been dropping, especially in the last couple of years. (This is mainly because the comprehensive income is a lot lower than the net income.) The Book Value has dropped some 40% between the end of 2013 and the third quarter of 2015.

The current dividend yield is 0.72% based on dividends of $1.40 and a stock price of $194.73. I do not buy stocks with dividends below 1%. The 5 year median dividend yield is 1.77% and the historical median dividend yield is 1.79%. The current dividend yield is some 53% to 59% below the 5 year median and historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The most recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus sock price is $215.00. This implies a total return of 11.135 with 0.72% from dividends and $10.41% from capital gains.

The Kristine Owram of the Financial Post had a positive article on this company recently. The site of Dakota Financial News talks about recent analysis recommendations for this company.

This is the second of two parts. The first part was posted on Thursday, October 22, 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 transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here Canadian Pacific Railway.

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, October 22, 2015

Canadian Pacific Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Stock. See my spreadsheet on Canadian Pacific Railway.

I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list. It is a stock I held from 1987 to 1999 so I am following it. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock.

This company has been paying dividends from 2002. It has often raised its dividends, but not every year. They did not raise dividends in 2009. Also 2012 is the last year they raised dividends. That raise was for 16.7%. Some analysts feel that CP will again raise dividends, possibly this year.

The dividend yield is low and the dividend increases are moderate. The current dividend is 0.72% based on a stock price of $194.73 and dividends of $1.40. The 5 year median dividend is 1.77% and the historical median dividend yield is 1.53%. The dividends have grown by 7.18% and 10.41% per year over the past 5 and 10 years.

The Dividend Payout Ratios are low. The DPR for 2014 for EPS was 16.5% and for CFPS was 10.4%. The 5 year median DPR for EPS is 28.23% and for CFPS 15.95%. The DPR are expected to be lower in 2015.

Outstanding shares have not changed much (under 0.5%) over the past 5 and 10 years. Outstanding shares have increased by Stock Options and Share Issues and have decreased by Buy Backs. Revenue growth is moderate to good. Earnings growth is good. Cash Flow growth is good.

Revenue is up by 9% and 5.4% per year over the past 5 and 10 years. Revenue per Share growth is 9.3% and 5% per year over the past 5 and 10 years. Analysts expect revenues to grow by around 3.4% in 2015. If you look at the 12 month period to the end of the third quarter and the 12 month period to the end of 2014, revenue is up by 2.5%.

EPS have grown at the rate of 18.2% and 12.5% per year over the past 5 and 10 years. Analysts expect growth in EPS for 2015 to be around 15.5%. If you look at the 12 month period to the end of the third quarter and the 12 month period to the end of 2014, EPS is up by 5.7%.

Cash Flow is up by 36.3% and 10% per year over the past 5 and 10 years. Analysts expect growth of around 18.9% for 2015. If you look at the 12 month period to the end of the third quarter and the 12 month period to the end of 2014, cash flow is up by 17.4%.

Return on Equity for 2014 was 26.3%. The 5 year median ROE is 14.9%. However, the ROE on comprehensive income is a lot lower. The ROE on comprehensive income for 2014 was 13.5% and the 5 year median is 8.9%. The lower ROE on comprehensive income suggests that earnings may not be as good as they seem. This is a cautionary point.

The debt ratios are fine, but could be better. The Liquidity Ratio for 2014 is 0.91. If you add in cash flow after dividends, the ratio is 2.24. This means that the company counts on cash flow to cover current liabilities because current assets cannot do so. The Debt Ratio is good at 1.51. I would prefer the Leverage and Debt/Equity Ratios to be lower, but they are at a normal level for this company at 2.97 and 1.97.

This is the first of two parts. The second part will be posted on Friday, October 23, 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 transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here Canadian Pacific Railway.

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, October 21, 2015

Kombat Copper Inc.

On my other blog I am today writing Dividend Paying Small Caps learn more...

Sound bite for Twitter and StockTwits is: Following for fun. My current investment in this stock is $3.00 so it would cost more to sell than it is worth. See my spreadsheet on Kombat Copper Inc.

I own this stock of Kombat Copper Inc. (TSX-KBT, OTC-PNTZF). I originally brought this stock in 2000 as Tathacus Resources Ltd. because it was doing interesting things. It was part of a basket of small caps that I was buying at that time. There was a reverse takeover (RTO) of this company on April 28, 2011 by Pan Terra Industries Inc. Symbol PNT. On May 2, 2012 there was a name change from Pan Terra Industries (PNT) to Kombat Copper Inc. (KBT).

I do not have much to say on this company. It is usually around this time of the year that I receive an annual report from this company if I am to receive one. This year, I did not get one. The only reason that I am holding on to this stock is that it is worth some $3.00 (300 shares at $0.05). It would cost more to sell than it is worth. It costs me nothing to hold on to it. I am also curious on how it will all turn out.

The last year this company had revenue is 2009. It has been issuing shares to raise money. It has negative earnings and cash flow, but this is to be expected with no revenue.

The debt ratios are good, with the Liquidity Ratio at 4.64, Debt Ratio at 6.49 and Leverage and Debt/Equity Ratios at 1.18 and 0.18.

The company is, of course, using up its cash. At the end of the March 2015 financial year the company had $999,251 in cash. By the end of the first quarter in 2016 cash was at $564.798, down some 43%.

In this report, Kombat provides an update on its drilling program on Market Wired. In June of this year there was an interview with the CEO Bill Nielsen published on Stock House. There was a March 2015 notice of Kombat divesting itself of non-core assets on Market Wired.

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. Besides, there is not much to report on here.

Kombat Copper Inc. is a publicly traded Canadian exploration and development company. Its core operations are focused on copper resources in Namibia, one of the world's most prospective copper regions, where they have substantial assets in place Its web site is here Kombat Copper Inc.

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, October 20, 2015

Teck Resources Ltd.

Sound bite for Twitter and StockTwits is: The big question is when are resources going to recover. See my spreadsheet on Teck Resources Ltd.

I do not own this stock of Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK), but I have. I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.

For a dividend paying stock, this stock is all over the place. Dividends were flat from 1993 to 2003. There were some big increases from 2004 to 2006. Dividends were then flat until they were cut in 2009. Dividends were reinstated in 2010 and they were almost back to where they were in 2008 by 2014. However, dividends were cut by 67% this year.

Dividends are volatile as is this stock, but it is a resource stock. Most analysts seem to feel that the current dividend will stay around for a while. The current dividend yield is rather good at 3.71% based on dividend of $0.30 and a stock price of $8.09. They seem to give out dividends as they can.

Outstanding shares have decreased by 0.4% and increased by 3.7% per year over the past 5 and 10 years. Outstanding shares have increased due to Share Issues and Stock Options and decreased due to Buy Backs. Revenue growth is low to good. There has been no earnings growth lately. Cash flow growth is negative to moderate.

Revenue is up by 2.3% and 9.6% per year over the past 5 and 10 years. Revenue per Share is up by 2.8% and 5.8% per year over the past 5 and 10 years. Analysts seem to expect this year to have declining revenues before they revive in 2016.

Last year, 2014, was not a great year for earnings as they fell some 62%. They are expected to fall another 38% this year before reviving again in 2016. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, EPS is down by 4.8%.

Cash Flow is down by 2.5% and up by 5.8% per year over the past 5 and 10 years. CFPS is down by 2.1% and up by 2.1% per year over the past 5 and 10 years. Here again analysts expect Cash Flow to go down in 2015 and have some revival in 2016.

The debt ratios on this stock are very good. The Liquidity Ratio is 2.04. The Debt Ratio is 2.05. The Leverage and Debt/Equity Ratios are 1.96 and 0.96.

There are Class A and Class B shares. The Class A shares has 100 votes per share and Class B shares having 1 vote per share. Insiders and Caisse de dépôt et placement du Québec have Class A shares. For example the chairman has Class A and Class B shares and has shares worth around $7.9M. Caisse de dépôt et placement du Québec has Class A and Class B shares and has shares worth around $84.9M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.76, 17.78 and 22.80. The corresponding 10 year values are 7.89, 13.19 and 16.98. The current P/E Ratio is 20.74 based on 2015 earnings estimate of $0.39 and a stock price of $8.09. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $16.78. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.94 and 1.26. The current P/GP Ratio is 0.48. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 1.39. The current P/B Ratio at 0.25 is based on BVPS of $32.10 and a stock price of $8.09. The 10 year median P/B Ratio is some 82% higher than the current P/B Ratio. This stock price testing suggests that the stock price is cheap.

Dividend Yield testing may not be appropriate because of the volatility of this stock and its dividends. However, the 5 year median dividend yield is 2.21% and the historical median dividend yield is 1.58%. These values are some 61% and 135% lower than the current dividend yield of 3.71% based on dividends of $0.30 and a stock price of $8.09.

To give a better fourth valuation, I looked the P/S Ratio. The 10 year median P/S Ratio is 2.13. The current P/S Ratio is 0.58 a value some 73% lower. This current P/S Ratio is based on 2015 Revenue estimate of $8.147 (and therefore Revenue per Share of $13.91. This stock price testing suggests that the stock price is cheap.

When I look at analysts' recommendations, they are all over the place. Recommendations are Strong Buy, Buy, Hold and Underperform. The vast majority of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $12.40. This implies a total return of $56.98% with 3.71% from dividends and 53.28% from capital gains.

There are some recent analysts' comments on Stock Chase about this stock. The site of The Market Business talks about this stock in October 2015.

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.

Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck Resources Ltd.

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, October 19, 2015

Linamar Corporation 2

On my other blog I am today writing Kathleen Gabriel's new art show in Toronto learn more...

Sound bite for Twitter and StockTwits is: Stock is expensive. Most of my stock price testing shows that the stock is relatively expensive. I also would not buy a dividend stock with a dividend yield of less than 1%. See my spreadsheet on Linamar Corporation.

I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought fit my investment philosophy. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock. However, it has been taken off this list.

There is insider ownership with the CEO having shares worth around $270M and 5.9% of outstanding shares and the Chairman having shares worth around $1B and 23.5% of the outstanding share. On the other hand there was net insider selling of shares worth $15M over the past year. This is 0.34% of the outstanding shares and is relatively a lot. The median insider selling on stocks that I follow is 0.02% and 70% of the stocks I follow have insider selling at 0.09% or less.

Selling of stock is all my officers of the company. One problem can be than employees view stock options as part of their salary. Stock options for 2014 were at 0.49% of the outstanding shares. Still it does not seem that employees are wanting to keep their stock options.

The 5 year low, median and high median Price/Earnings per Share ratios are 8.31, 11.59 and 14.70. The corresponding 10 year values are close at 8.05, 9.95 and 13.62. The current P/E Ratio is 10.73 based on a stock price of $69.86 and 2015 EPS estimate of $6.51. This stock price testing suggests that the stock price is reasonable, but above the relative median.

I get a Graham Price of $66.21. The 10 year low, median and high median Price/Graham Price Ratios are 0.59, 0.78 and 1.01. The current P/GP Ratio is 1.06 based on a stock price of $69.86. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.29. The current P/B Ratio is 2.33 based on a stock price of $69.86 and BVPS of $29.93. The current P/B Ratios is some 88% higher than the 1 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 1.29%. The current dividend yield is 0.57% based on dividends of $0.40 and a stock price of $69.86. The current dividend yield is 55% lower than the 5 year median dividend yield. The historical dividend yield is 1.28%. The current dividend yield at 0.57% is some 55% lower than the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The analysts' recommendations are Strong Buy, Buy and Hold. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $90.60. This implies a total return of 30.26% with 0.57% from dividends and 29.69% from capital gains.

There is a positive report on this company by Doug Watt at Motley Fool. The big new is its purchase of France's Auto Parts Maker Montupet S. A. Canaccord Genuity recently reduced its target price according to OCTA Finance. Pistachio Investments on Seeking Alpha thinks this company is for growth investors.

This is the second of two parts. The first part was posted on Friday, October 16, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Linamar Corporation is a diversified global manufacturing company of highly engineered products. It is a world-class designer and diversified manufacturer of precision metallic components and systems for the automotive industry, and mobile industrial markets. Its web site is here Linamar Corporation.

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, October 16, 2015

Linamar Corporation

Sound bite for Twitter and StockTwits is: Dividend growth with low yield. This company often has a yield below 1% and I would not buy any stock with a dividend yield below 1%. This company has an historical high yield of around 5.4%. It quite often has yields between 1 and 2%. This would be a good buying time or good entry point. See my spreadsheet on Linamar Corporation.

I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought fit my investment philosophy. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock. However, it has been taken off this list.

The dividend yield is generally quite low, but the increases are generally good. However, this company has decreased dividends as well as increased them in the past. For example the dividends were decreased by 50% in 2009, but reinstated at the 2008 rate in 2010. So there is some volatility.

The dividend yield currently is 0.57% based on a stock price of $69.81. The 5 year median dividend yield is 1.29% and the historical median dividend yield is 1.24%. Do not forget that a median value for dividend yield is where the dividend yield is mostly likely to be.

Dividend growth is at 27.2% and 9.6% per year over the past 5 and 10 years. The last dividend increase was in 2014 and it was for 25%. Dividend increases are generally very good when they happen, but they do not happened every year. Some analysts expect dividends to go up again this year or in the near future.

If you had paid a relative median price 5, 10, 15 or 20 years ago, dividends paid would have covered your original investment by 9.6%, 20.3%, 27.2% and 72.7%. If you had paid a relative median price 5, 10, 15 or 20 years ago, you would be making 2.18%, 2.86%, 2.93% or 6.58% on your original purchase price.

The Dividend Payout Ratios are low. The DPR for 2014 for EPS was 8.2% and for CFPS was 4.5%. The 5 year median DPR for EPS is 13.9% and for CFPS is 3.2%.

The outstanding shares have not changed much over the years. Outstanding shares are up by 0.12% and down by 0.81% per year over the past 5 and 10 years. Shares have been increased because of Stock Options and decreased by Buy Backs. Growth in revenue, earnings and cash flow has all been good.

Revenue is up by 20% and 8.5% per year over the past 5 and 10 years. Revenue per Share is up by 19.9% and 9.4% per year over the past 5 and 10 years. Analysts expect good growth in revenue in 2015 at around 23%. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter of 2015, revenue is up by 11.9%.

Total growth in EPS for the last 5 years is at 771%. I cannot get a per year growth as 5 years ago there was an earnings loss. However, if you look at 5 year running averages, EPS is up by 23.7% per year over the past 5 years. EPS grow at 14.1% per year over the past 10 years. Analysts expect good growth this year at around 32.9%. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter of 2015, EPS is up by 19.8%.

Cash Flow has grown by 27.9% and 10.8% per year over the past 5 and 10 years. CFPS has grown by 27.8% and 11.7% per year over the past 5 and 10 years. Analysts expect growth in cash flow at around 11% this year. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter of 2015, Cash Flow is up by 9.9%.

The Return on Equity was more than 10% over the past 5 years. It was more than 10% in 8 of the past 10 years. The ROE for 2014 was 19.2% and its 5 year median is 13.3%. ROE on comprehensive income is 20.2% in 2014 and its 5 year median is 14.5%.

The company has a strong balance sheet. The Liquidity Ratio is 1.72 for 2014. The Debt Ratio was 2.31 in 2014. The Leverage and Debt/Equity Ratios were 1.76 and 0.76 in 2014. These are all very good ratios.

This is the first of two parts. The second part will be posted on Monday, October 19, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Linamar Corporation is a diversified global manufacturing company of highly engineered products. It is a world-class designer and diversified manufacturer of precision metallic components and systems for the automotive industry, and mobile industrial markets. Its web site is here Linamar Corporation.

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, October 15, 2015

HNZ Group Inc.

Sound bite for Twitter and StockTwits is: Reasonable price, but risky. Most of the good stock price testing suggests that the stock price is merely reasonable. Because this company is in some trouble and has yet to turn itself around, there is much risky involved in buying it. I do not think that the stock price is low enough for the risk to be taken. So on a risk/reward basis the stock might not be cheap enough. See my spreadsheet on HNZ Group Inc.

I do not own this stock of HNZ Group Inc. (TSX-HNZ.A, OTC- CDHPF). Canadian Helicopters Group Inc. has come up in Daily Buy and Sell Advisor of MPL Communications. Dividend Ninja Blogger also mentioned this stock in a blog entry talking about High Yield Canadian Stocks. Richard Morrison wrote about small caps in the Financial Post in February 2011. He was screening financially healthy, profitable, reasonably valued small companies. He got 18 of them, many were former income trusts. One of the 18 stocks was this stock.

Of course, what I do not like about this company is that it is not currently a dividend growth company. There was only one dividend increase and that was in 2008. This is another company that was an income trust that converted to a corporation. A lot of the converted income trust companies that did not decrease dividends at conversion have not been able to raise them after conversion.

The Dividend Payout Ratios were fine until 2014 when the DPR for EPS was 1173%. The 5 year median DPR for EPS is 52.5%. For this company earnings peaked in 2011. A lot of companies are having a hard time in this long slow recovery form the last recession.

If you had bought this stock 5 or 10 years ago paying a relative median price some 40.9% or 125% of the cost of your stock would have been covered by dividends payments. This is because dividend yields have been high. Also, if you had bought this stock 5 or 10 years ago paying a relative median price you would be earning 8.2% or 12.6% yield on your original investment.

The stock price hit a peak in 2012 and has been travelling south ever since. Today, Shareholders returns over the past 5 and 10 years are low with the 5 and 10 years total return at 6.27% and 15.96% per year. The portion of these returns attributable to dividends is 6.85% and 9.99% per year. The portion of this return attributable to capital changes is a decline of 0.58% per year over the past 5 years and capital gains of 5.97% per year over the past 10 years.

Outstanding shares have increased by 4.85 and 2.4% over the past 5 and 10 years. Revenue growth is low to moderate; there is no earnings growth and cash flow growth is negative to good.

Revenues peaked in 2011 and have been travelling south ever since. Revenue growth over the past 5 and 10 years is 6.1% and 6% per year. Revenue per Share growth is 1.2% and 3.7% per year. Analysts expect revenue to decline again in 2015 before starting to recover in 2016.

EPS peaked in 2011 and has also been travelling south ever since. Analysts expect EPS to start to growth again in 2015. However, if you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, EPS has declined by 711% to a negative value (i.e. a loss).

Cash Flow per share is up by 3.4% and 31.5% per year over the past 5 and 10 years. CFPS is down by 1.4% and up by 28.33% per year over the past 5 and 10 years. For the 12 month period to the end of the second quarter Cash Flow is down by 32% to a negative value.

The 5 year median low, median and high median Price/Earnings per Share Ratios are 5.94, 8.32 and 10.70. The corresponding 10 year values are lower at 4.83, 6.46 and 8.70. The P/E Ratio for 2015 is 143.64 based on a stock price of $15.80 and 2015 EPS of $0.11. This stock price testing suggests that the stock price is relatively expensive. However, P/E is very high because EPS is currently very low.

I get a Graham Price of $6.75. This Price has also been travelling south because a lot of other values are going in that direction. The 10 year Price/Graham Price Ratios are 0.42, 0.54 and 0.69. These are very low ratios because a stock is considered a good buy at P/GP Ratio of 1.00. The current P/GP is 2.34 a very high value and suggests that the stock price is relatively expensive. The current P/GP is based on a stock price of $15.80.

The 10 years Price/Book Value per Share Ratio is 1.01. The current P/B Ratio is 0.86 a value some 14.7% lower and is based on a Book Value per Share of $18.42 and a stock price of $15.80. This stock price testing suggests that the stock price is relatively reasonable. However, the stock price is theoretically below the break up price of the company. Also, this company has $0.79 per share in cash or some 5% of the stock price in cash.

Part of the problem of using the dividend yield stock price test is that dividend yields for all old income trust companies have declined when they converted to corporation. The 5 year median dividend yield is 5.42% a value that is some 28% lower than the current dividend yield of 6.98%. The current dividend yield is based on dividends of $1.10 and a stock price of $15.80. This stock price test suggests that that the stock price is relatively reasonable.

The historical median dividend yield is 6.82% a value that is some 2.3% lower than the current dividend yield of 6.98%. This stock price test suggests that that the stock price is relatively reasonable. However, analysts had expected that the dividend yields for old income trusts would be in the 4 to 5% range and by this measure this stock is looking relatively cheap.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock price is $20.00. This implies a total return of 33.56% with 6.98% from dividends and 26.58% from capital gains.

The web site of Octa Finance says that in August Desjardins Securities lowered their 12 months stock price to $18.00. They also say that the stock price is in a down trend. This is a rather small company with a market cap of $200M and there is not much news for it.

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.

HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Its web site is here HNZ Group Inc.

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, October 14, 2015

Enbridge Income Fund Holdings Inc.

On my other blog I am today writing color coding on my spreadsheets learn more...

Sound bite for Twitter and StockTwits is: Reasonable to expensive, insider buying. The insider buying suggests that insiders are confident in the fund's future. The stock is a bit pricey, but there is not many stock price testing I can do. See my spreadsheet on Enbridge Income Fund Holdings Inc and on Enbridge Income Fund.

I do not own this stock of Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF). I have followed this stock for some time but I have not owned it. I do own Enbridge Inc. (TSX-ENB, NYSE-ENB). You would not want to invest in both this fund and Enbridge Inc. as Enbridge Inc. is invested in this fund.

The one thing that I do not like about this fund is that it is complex to analyze. Not only do you have financial statements for the Enbridge Fund Holdings, but also for the Enbridge Income Fund it invests in. The harder it is to analyze a stock, the easier it is to make mistakes about the stock. This complex structure was set up in 2011.

This stock has a good dividend and low dividend increases. The current dividend yield is 4.76%. Dividends have increased by 3.8% and 4.9% per year over the past 5 and 10 years. If you had bought this stock 5 or 10 years ago paying a relative median price your dividends would have covered 44% and 90% of the cost of your stock purchase price. If you had bought this stock 5 or 10 years ago paying a relative median price you would be earning 10% and 11.7% on your original purchase price.

Shareholders have done well with total return to date of 18.20% and 14.10 over the past 5 and 10 years. The portion of this return attributable to dividends is 5.85% and 5.72% and to capital gains is 12.35% and 8.39%. Shareholders did even better to the end of December 2014 with total return at 31.17% and 16.33% over the previous 5 and 10 years.

Outstanding shares have increased by 7.4% and 15.2% per year over the past 5 and 10 years. The stock has good growth in income and EPS, but negative growth in cash flow.

This company does not report revenue, only income. The income growth over the past 3 years is up by 35.3% per year. The Income per Share is up by 11.8% per year over this same time period. Analysts believe that income will increase by 40% this year. If you look at the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter income is up by 20.9%.

EPS is up by 33.3% and 18.22% per year over the past 5 and 10 years. Cash Flow is down by 1.6% and up by 1.9% per year over the past 5 and 10 years. CFPS is down by 14.6% and 5.1% per year over the past 5 and 10 years. However, if we look at CFPS over the past 3 years it is up by 17.1% per year. Analysts expect good growth in cash flow for 2015.

Insiders seem to be confident in this stock. There is only insider buying and no insider selling. Insider buying is at 0.26% of the market cap of this stock. This is relatively high. Most insider trading is around 0.01% or 0.02%. 70% of the stock I cover have insider trading at 0.09%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.52, 15.81 and 17.10. The corresponding 10 year values are mostly higher at 14.68, 17.23 and 20.24. The current P/E Ratio is 19.52 based on a stock price of $32.40. This stock price testing suggests that the stock price is still reasonable, but it is getting expensive and way above the relative median price.

I get a Graham Price of $10.41. The 10 year low, median and high median Price/Graham Price Ratios are 1.23, 1.48 and 1.74. The current P/GP Ratio is 3.11 based on a stock price of $32.40. This testing suggests that the stock price is relatively expensive. Problem is with the book value component of the Graham Price. The accounting for this fund shows a positive book value as do analysts, but this completely ignores the Enbridge Income Fund accounting, the fund which this stock invests in.

The 5 year median dividend yield is 5.56% a value some 14% above the current dividend yield of 4.76% based on dividends of $1.54 and a stock price of $32.40. This stock price testing suggests that the stock price is reasonable although it is above the relative median. However, the historical average and historical median dividend yields are 7.96% and 7%, values that are 40% and 32% above the current dividend yield. This stock price testing suggests that the stock price is expensive.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $41.10. This implies a total return of $31.61% with 4.76% from dividends and $26.85% from capital gains. Also, I would like to note that this stock is down by 19.7% in 2015 from the end of 2014.

This company Enbridge Income Fund Holdings Inc. has announced they are raising money by selling more shares. This Motley Fool article talks about Enbridge Inc.'s drop down of assets to this fund. There are also comments on this company at Stock Chase.

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.

Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, holds high quality, low risk energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and interests in more than 400 megawatts of renewable and alternative power generation capacity. Its web site is here Enbridge Income Fund Holdings Inc.

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, October 13, 2015

K-Bro Linen Inc. 2

On my other blog I am today writing about stocks I looked at more closely in my monthly update learn more...

Sound bite for Twitter and StockTwits is: Expensive, wait for better entry point. See my spreadsheet on K-Bro Linen Inc.

I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.

This is the second of two parts. The first part was posted on Friday, October 09, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

There is not much insider ownership. However, the CEO has shares worth $6.2M. His shares are only 1.6% of outstanding shares. Stock options as a percentage of outstanding shares were not high in 2015 at 0.31% of outstanding shares, but stock options given out in 2013 and 2014 were 0.70% and 0.57% of the outstanding shares. I think that outstanding shares should be increased a maximum of 0.50% for stock options. So stock options given are a rather high.

Also, in the past year insider selling was at 0.11% of market cap. This is also rather high. Most of the stock I look at has insider selling at 0.01% or 0.02% of market cap. 70% of the stocks I follow had net insider selling at less than 0.09% of market cap.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.56, 17.74 and 19.91. The 10 year corresponding ratios are a bit lower at 14.53, 16.42 and 19.03. The current P/E Ratio is 30.61 based on a stock price of $49.90 and 2015 EPS estimate of $1.63. This stock price testing suggests that the stock price is expensive. A P/E Ratio of 30.61 is quite a high one for this type of company.

I get a Graham Price of $22.66. The 10 year low, median and high median Price/Graham Price Ratios are 1.00, 1.14 and 1.27. The current P/GP Ratio is 2.20 based on a stock price of $49.90. This stock price testing suggests that the stock price is expensive.

The 9 year Price/Book Value per Share Ratio is 1.70. The current P/B Ratio is 3.56 based on BVPS of $14.00 and a stock price of $49.90. This stock price testing suggests that the stock price is expensive.

I do not know how valuable it is to use dividend yields to judge the stock price because this stock used to be an Income Trust and as such had quite high dividend yields. It was thought that old income trust would end up with dividend yields between 4 and 5%. This stock has a current dividend yield of 2.40%. The 5 year median dividend yield is 4.60 % which is some 48% higher than the current dividend yield. The historical median dividend yield is 7.11% a value some 66% higher than the current dividend yield. If this testing says anything, it is that the stock price is expensive.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price is $51.30. This implies a total return of 5.21% with 2.40% from dividends and 2.81% from capital gains. This is rather a low return for a buy recommendation.

This company is doing jobs previously done by unionized workers in the public sector. This is controversial as show in this blog on Rabble.ca. A number of analysts mention this stock on Stock Chase. Some think it is overpriced.

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria. Its web site is here K-Bro Linen Inc.

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, October 9, 2015

K-Bro Linen Inc.

Sound bite for Twitter and StockTwits is: Interesting dividend growth small cap. It has not had very good growth so far in dividends, but it is expected to do better. It would be an interesting investment. See my spreadsheet on K-Bro Linen Inc.

I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.

This is another stock that used to be an Income Trust. It did not decrease the dividends when changing to a corporation. Although dividends were flat at the beginning, in 2011 it started to raise dividends. Dividend increases are 1.8% and 1.7% per year over the past 5 and 9 years. The last dividend increase was in 2013 and it was for 4.4%. Dividends are paid monthly. Dividends are moderate and currently at 2.4%. Analysts expect that the company will raise dividends again, possibly this year.

The Dividend Payout Ratios are 2014 was 70% for EPS and 42.3% for CFPS. These are lower ratios than in the past especially for EPS. The DPRs for 2015 are expected to be similar to those of 2014. They also give DPR for Distributable Cash at 42.1%.

If you had held this company for 5 or 10 years, the dividends would have paid for 36% and 98% of the cost of the your stock if you paid a relatively median price. If you had held this company for 5 and 10 years, you would be earnings 7.3% or 10.3% on your original investment if you had paid a relatively median price for the stock.

Outstanding shares have increased by 2.6% and 6.8% per year over the past 5 and 9 years. Revenues growth is moderate to good. Earnings growth is good. Distributable cash growth is moderate. Cash Flow growth is moderate to good. Because of the growth in outstanding shares, I will pay more attention to per share values.

Revenue has grown by 9.3% and 11% per year over the past 5 and 10 years. Revenue per share has grown at 6.5% and 4.6% per year over the past 5 and 10 years. Analysts expect good growth in revenues for 2015 at around 10%. However, if you compare the 12 month period to the end of 2014 with the 12 month period to the end of the second quarter, Revenue has grown at just 1.9%.

Distributable Cash (the way they calculate this is close to how free cash flow is calculated), has grown by 7.4% and 7.3% per year over the past 5 and 9 years. Analysts do not seem to mention Distributable Cash when giving estimates.

The EPS has grown by 7.5% and 7.3% per year over the past 5 and 9 years. Analysts expect lower EPS for 2015 by around 5%. If you compare the 12 month period to the end of 2014 with the 12 month period to the end of the second quarter, EPS has grown at 0.6%.

Cash Flow has grown at 8.3% and 13.7% per year over the past 5 and 9 years. Cash Flow per Share has grown at 5.5% and 6.5% per year over the past 5 and 9 years. Analysts expect cash flow to decline slightly for 2015. However, if you compare the 12 month period to the end of 2014 with the 12 month period to the end of the second quarter, Cash Flow has grown at 5.3%.

The Return on Equity has been over 10 years for the last 5 years. The ROE for 2014 was 11.1% and the 5 year median is 12.6%. Net Income and Comprehensive Income are the same so this suggests that the earnings are of good quality.

This is a small company and you would want it to have good debt ratios. Small companies are more vulnerable in bad times that are large companies. The current Liquidity Ratio is quite good at 2.25, but this is not always the case. The 5 year median value is a little low at 1.42. The Debt Ratio has always been good and the ratio for 2014 is 5.72. It has a 5 year value of 3.24. The Leverage and Debt/Equity Ratios are good at 1.21 and 0.21 for 2014. The corresponding 5 year ratios are 1.45 and 0.45.

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

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria. Its web site is here K-Bro Linen Inc.

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, October 8, 2015

Le Chateau Inc.

Sound bite for Twitter and StockTwits is: Cheap and very risky. See my spreadsheet on Le Chateau Inc .

I do not own this stock of Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. The Investor's Digest is a publication of MPL Communications.

This company started to have problems in 2010. They cut their dividends totally in 2010. It is uncertain whether or not this company will survive let alone restart dividends again.

Revenue hit a peak in 2010 and they have declined since then. Revenue declined further in the second quarter of 2016. (The financial reporting date is on 31 January each year.) They have had earnings losses since 2012. Cash Flows hit a peak in 2009 and it has been declining since then, but Cash Flow is still positive.

Debt ratios are still very good. The Liquidity Ratio is 3.25. The Debt Ratio is 2.03. The Leverage and Debt/Equity Ratios are 1.97 and 0.97.

The company put out a rather depressing news release on their second quarterly report on Market Watch. However, they are trying to turn the company around. A report on Stock House talks about Herschel Segal, the founder of Le Chateau and a Director and majority shareholder of the company providing some long term financing for this company. Kenneth Chan on Van City Buzz asks if this company is on a death watch. He does not see much in the way of hope for this company.

There are two levels of shares. The Class A Shares carry one vote per share and the Class B Shares carry 10 votes per share. The Segal family owns all of the Class B shares.

As far as I can see, there are no analysts currently following this stock.

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.

Le Chateau is a Canadian specialty retailer and manufacturer of contemporary fashion apparel, accessories, and footwear at value pricing for style-conscious women and men of all ages. The Company has retail locations in Canada and in the Middle East. Le Chateau's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. Its web site is here Le Chateau Inc.

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, October 7, 2015

Granite REIT

On my other blog I am today writing about possible cheap dividend stocks for October 2015 learn more...

Sound bite for Twitter and StockTwits is: stock is cheap to reasonable. It is hard to judge this stock as there have been a lot of changes with the company refocusing on Real Estate Revenue in 2012 and recent management changes. You wonder where it is going to go. See my spreadsheet on Granite REIT.

I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U), but I used to. I first bought some of this stock in 2003 when it was called MI Developments (TSX-MIM.A). It was a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) on this stock.

By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold it in 2009; being discourage it would ever do well again.

The company used to report in US$ and pay dividends in US$. In 2012 they started to report in CDN$ and pay dividends in CDN$. The current dividend is a good one at 6.03%. The dividend increases have been good with the 5 and 10 year dividend growth at 28.4% and 17.6% per year in CDN$. However, the only reason for the good growth was the high dividend increase of around 150% given in 2012.

In the past dividends have both gone up and gone down. The most recent dividend increase was in 2015 and it was for 4.9%. The dividend increase in 2014 was for around 9.1%.

It is probably best to base a Dividend Payout Ratio on the Funds from Operations (FFO). This company does not always give out an EPS (although it can be calculated). They have been giving out an FFO value since 2002. The current DPR based on FFO is 82.6%. A 5 year median DPR based on FFO is probably not helpful since they did a big dividend increase in 2012.

The number of outstanding shares has not really changed over the past 5 and 10 years. They used to have other revenue besides Real Estate Revenue, but since they only now only have Real Estate Revenue, I will discuss that. Growth in Revenue is non-existent to moderate. FFO growth is low to good. Cash Flow growth is low to good.

Revenue has fallen by 2.5% per year over the past 5 years and has grown by 3% over the past 10 years. Analysts expect modest growth in Revenue in 2015.

FFO is up by 17.5% and 1.4% per year over the past 5 and 10 years. Analysts expect good growth of around 9% for 2015. However, if you compare the 12 month period to the end of 2014 with the 12 month period to the end of the second quarter, FFO is flat. (There can also be a problem with FFO as not everyone calculates it in the same way.)

Cash Flow is up by 2.5% and 8.4% per year over the past 5 and 10 years. CFPS is up by 2.3% and 8.6% per year over the past 5 and 10 years. No Analysts is giving estimates for cash flow. However, if you compare the 12 month period to the end of 2014 with the 12 month period to the end of the second quarter, Cash Flow is up by 33%.

The Liquidity Ratio could be better. It tends to jump around a lot. For 2014 this ratio is just 0.90. For the end of the second quarter it is 1.14. The Debt Ratio has been generally good as has the Leverage and Debt/Equity Ratios. The Debt Ratio for 2014 is 3.02. The Leverage and Debt/Equity Ratios for 2014 are 1.50 and 0.50.

It is probably best to use P/FFO Ratios for looking at stock price than the P/EPS Ratios. The 5 year low, median and high median P/FFO Ratios are 11.64, 13.52 and 15.69. The corresponding 10 year ratios are 11.00, 12.85 and 14.97. The current P/FFO Ratio is 10.95 based on 2015 FFO estimate of $3.49 and a stock price of $38.22. This stock price testing suggests that the price is relatively cheap.

I get a Graham Price of $53.49. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.74 and 0.86. The current P/GP Ratio is 0.71. This stock price testing suggests that the stock price is relatively reasonable and below the relative median.

The historical median dividend yield is 2.68%. The current dividend yield is 6.03% is some 124% higher. This stock price testing suggests that the stock price is relatively reasonable and below the relative median. (This stock has an historical high dividend yield of just over 11.00%).

When I look at analysts' recommendations, I find 4 analysts following this stock and all give a Hold Rating. The consensus rating would be a Hold. The 12 month stock price consensus would be $44.00. This implies a total return of 21.15% with 15.12% from capital gains and 6.03% from dividends.

The site of Stock Chase shows some analysts' thoughts on this stock. There have been recent management changes and this REIT has a huge exposure to Magna (TSX-MG).

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.

Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite REIT.

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.