Progressive Waste Solutions Ltd.

Sound bite for Twitter and StockTwits is: Stock is relatively expensive. It is probably a good time for me to sell this stock. It is estimated that BIN will end up with 30% of the new company after the merger. See my spreadsheet on Progressive Waste Solutions Ltd.

I no longer 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. I bought more in 2010. I sold this stock today. BIN is merging with a US company of Waste Connections, Inc. (NYSE: WCN). This is not the company I bought and also they are going to lower their dividends. The new company will have dividend yields to match WCN, which is less 1%. I replaced this company with WSP Global Inc. (TSX-WSP, OTC- WSPOF)

I did well with this stock. I earned total return of 10.68% per year with 2.37% per year from dividends and 8.31% per year from capital gain. I had this stock for some 8.5 years and the dividends paid $4.57 per share again my average price of $24.88 per share.

This company is merging with Waste Connections, Inc. (NYSE: WCN). One of the things that BIN has said is that they will harmonize their dividends with the WCN. WCN's dividend yield is 0.85% currently. BIN just reduced their dividends by some 35%, but since the dividend yield is currently at 1.02% with this cut, I would expect further cuts.

Also, I would expect, since BIN is the junior partner that future dividends will be in US$. The problems with receiving dividends in US$, is that you never quite know how much you will be getting because they are constantly changing with the currency exchange. BIN already reports in US$ so this will not change.

It is really hard to know how this company will change in the future because of the merger. It is considered a Tax Inversion. In theory, BIN is taking over WCN and the Head Office will be in Canada. This is a risk that the merger will not occur, but this is probably small.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.18, 22.58 and 26.08. The corresponding 10 year ratios are 19.36, 23.12 and 28.11. The historical ratios are 21.06, 26.62 and 33.20. The current P/E Ratio is 30.53 based on a stock price of $43.12 and 2016 EPS estimate of $1.09. This testing would suggest that the stock price is relatively expensive or getting there.

I get a Graham price of $20.72. The 10 year low, median and high median Price/Graham Price Ratios are 1.29, 1.49 and 1.75. The current P/GP Ratio is 2.08 based on a stock price $43.12. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 2.00. The current P/B Ratio is 3.19 a value some 60% higher. The current P/B Ratio is based on BVPS of $13.51 and a stock price of $43.12. This stock price testing suggests that the stock price is relatively expensive.

You cannot really test on dividend yield. This is for a couple of reasons. This stock used to be an income trust and as such had quite high dividend yields. The dividends have recently been cut. Currently the dividend yield at 1.02% is based on dividends of $0.44 and a stock price of $43.12. Even without the dividend cut, the yield would be 1.53%, which would still be one of the lowest levels for this stock.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. There are more Hold recommendations, but the consensus recommendation is a Buy. The 12 month stock price is $33.30 US$. The current stock price is $33.34 which is almost the same.

Sylvia Delisle on Risers and Fallers talks about recent changes to analysts' recommendations. This press release on EIN News talks about BIN's first quarterly results and about voting for proposed combination with Waste Connections Inc. Alpha Gen Capital talks about the merger with WCN on Seeking Alpha. See some analysts' comments on Stock Chase. David Paddon of the The Canadian Press wrote an article for CTV News about the merger with WCN.

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 that report here and here.

Yesterday on my other blog I wrote about Sectors I Invest In... learn more . The next stock I will write about will be Ag Growth International (TSX-AFN, OTC-AGGZF)... learn more on Monday, May 16 around 5 pm.

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 Solutions 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. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.