Friday, February 12, 2016

Manitoba Telecom Services Inc.

Sound bite for Twitter and StockTwits is: Relatively expensive. It is interesting that this stock seems to be going in the opposite direction of the TSX over the past year. See my spreadsheet on Manitoba Telecom Services Inc.

I own this stock of Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF). I still have some of this stock but I do wish I had never bought it. I have not lost money on it, but I have gained very little. I have made a return of 2.55%. I have a capital loss, but I have had some good dividend income.

This is not a dividend growth stock. It appeared to be prior to my purchase in 2006 that they might be a dividend growth stock since they started to pay dividends in 1997. They had raised their dividends each year except for one year between 1998 and 2006. However, since 2006 dividends have been flat or cut in every year.

The most recent change in dividends was in 2015 when dividends were cut by 23.5%. Dividends have declined by 11.4% and 6.7% per year over the past 5 and 10 years. They really cannot even afford current dividends. The Dividend Payout Ratio for EPS for 2015 was 168%. Analysts expect DPR for EPS to be over 100% in 2016 and decline below 100% in 2017.

The dividends are not extraordinarily high currently. The current dividend yield is 4.19% based on dividends $1.30 and a stock price of $31.06. The historical median dividend yield is 5.27% as is the 5 year median dividend yield.

I do not have much good to report. The Revenues, Earnings, Cash Flow and Book Value have all been heading south. Their Liquidity Ratio is very low at 0.87. This means that current assets cannot cover current liabilities. The Liquidity Ratio tends to be low in Telecom stocks, but for this stock if you add in cash flow after dividends you only get to 0.89. Other Telecom stocks I follow with cash flow after dividends added in gets you above 1.00. This gives the company vulnerably in bad times and times are not currently very good.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.19, 12.32 and 13.50. The P/E Ratios have been getting lower. The corresponding 10 year ratios are 14.96, 17.17 and 19.21. This generally means that investors are unwilling to pay the same relative price for this stock against EPS than in the past.

The current P/E Ratio is 25.67 based on a stock price of $31.06 and 2016 EPS estimate of $1.21. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $18.97. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.20 and 1.33. The current P/GP Ratio is 1.64. This stock price testing suggests that the stock price is relatively expensive.

Even the dividend yield tends to show that the stock price is relatively expensive. The historical median dividend yield is 5.27% and this is some 20.6% higher than the current dividend yield of 4.19%.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. The consensus would be a Hold. The 12 month stock price consensus is $30.09. This implies a total return of $1.06% with a capital loss of 3.12% and dividends of 4.19%.

Maddie Sorensen on Financial Market News talks about some recent analysts changes on this stock. Jonathan Ratner at the Financial Post talks about why BCE should buy this company. See what analysts are saying about this company on Stock Chase. Note that this company has sold Allstream.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here

On my other blog I wrote yesterday about Planning for Bear Markets . Since Monday is a holiday, I will not be doing any post. On Tuesday, I write on my other blog about problems of taxing the "rich". The next stock I will write about will be Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more on Wednesday, February 17, 2015.

The company serves its customers through two industry-leading service platforms: FirstService Residential, North America's largest manager of residential communities; and FirstService Brands, one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations. Its web site is here Manitoba Telecom Services 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.

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