Thomson Reuters Corp.

Sound bite for Twitter and StockTwits is: Price probably reasonable. The stock price is only showing as reasonable using the dividend yield. However, using this test you are using current data not estimates. See my spreadsheet on Thomson Reuters Corp.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, just over 30 years. I bought stock to give portfolio some balance as I had too many financial stocks. Performance has always been mediocre. So it is not one of my most brilliant long term buys.

As a Canadian I have done well with increases to dividends over the past 5 and 10 years. My dividends have gone up by 8.1% and 6.2% per year over these time periods. The dividend yield is good also, currently at 3.3% and the historical median dividend yield at 3.1%. The current dividend yield is based on dividends of $1.71 and a stock price of $51.72.

However, dividends are paid in US$. The US$ has gone up in regards to the CDN$ currency by 1.76% and 6.84% per year over the past 5 and 10 years. The dividends in US$ have only increased by 2.9% and 5.4% per year over the past 5 and 10 years. However, the dividend yield is very similar to the CDN$ dividend yield with the current yield at 3.3% and an historical median dividend yield at3.2%. The current dividend yield is based on dividends of $1.36 and a stock price of $41.26.

The Liquidity Ratio is low on this company and it has always been. The Liquidity Ratio for 2015 is 0.66 and has a 5 year median of 0.82. If you add in cash flow after dividends, the ratio is 0.99 with a 5 year median of 1.08. This gives this company vulnerability in bad times.

The Return on Equity is also rather low. It has only been at or above 10% three times in the last 5 years and 5 times in the last 10 years. I have had this stock for just over 30 years. My total return is 7.72% per year with 4.41% from capital gains and 3.31% from dividends. My stock cost me $13.91 and I have received $28.26 in dividends or 203% of the cost of my stock. My expectations are some 8% of total return per year and this stock is not that far off. It is just in comparison my utility stock has done much better.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.61, 15.54 and 17.47. The corresponding 10 year P/E Ratios are 20.41, 18.82 and 21.18. The corresponding historical P/E Ratios are 20.22, 22.63 and 25.25. It is interesting that P/E Ratios have been coming down on this stock. The current P/E Ratio is 30.09 based on a stock price of $51.72 and 2016 EPS estimate of $1.72 CDN$ ($1.37 US$). This stock price testing suggests that the stock is relatively expensive.

I get a Graham Price of $29.39 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.19, 1.43 and 1.60. I get a current P/GP Ratio of 1.75 based on a stock price of $51.72. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.69 CDN$. The current P/B Ratio is 2.38 based on BVPS of $20.08 CDN$ and a stock price of $51.72. The current P/B Ratio is some 53% above the 10 year ratio. This stock price testing suggests that the stock is relatively expensive.

The only testing that suggests that the price might be reasonable is if we look at dividend yields. The current dividend yield is 3.3% based on dividends of $1.71 CDN$ and a stock price of $51.72. You can the same dividend yield of 3.3% with US$ with dividends at $1.36 US$ and a stock price of $41.26 US$. The historical median dividend yield is 3.12% and the current dividend yield is some 5.8% higher. This stock price testing suggests that the stock price is reasonable and below the median.

If I use US$ in these tests I get similar results.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock price is $41.81 US$. This implies a total return of 4.63% with 1.33% from capital gains and 3.30% from dividends and based on a stock price of $41.26US$.

Joseph Solitro of Motley Fool thinks this company is a good buy. Stock price was similar then as it is now. Todd Miller of The Post talks about recent analysts ratings on this stock. There is an interesting article by The Investment Doctor in Seeking Alpha about the aggressive Thomson Reuters buyback.

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.

Yesterday on my other blog I wrote about Something to Buy May 2016... learn more . The next stock I will write about will be MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF)... learn more on Monday, May 9, 2016 around 5 pm.

Also, on my book blog I have put a review of the book The Geography of Genius by Eric Weiner learn more...

Thomson Reuters Corp is the leading source of intelligent information for businesses and professionals. The company delivers this must-have insight to the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. They derive the majority of their revenues from selling electronic content and services to professionals, primarily on a subscription basis. Thomson and Reuters amalgamated in 2008. Its web site is here Thomson Reuters Corp.

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.