Sound bite for Twitter and StockTwits is: Price probably reasonable. However, price may not be as reasonable as it might appear. The P/GP Ratio test shows the price a bit high and the dividend yield test may not be a good one for this stock. This is not a dividend growth stock. You should also note that lots of consumer discretionary companies are having a hard time in the long slow recovery. See my spreadsheet on Dorel Industries Inc.
I do not own this stock of Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF) but I used to. I am following this stock because I used to own it. I am always curious about what happens to stocks after I no longer hold them. This was a stock recommended by Investment Reporter as a conservative investment. I sold the stock in 2006 because I had it for 7 years from 1999 and it was going nowhere. I bought this stock before I stopped working and at that time I did not mind buying stocks with no dividends.
This stock did not have a dividend when I held it. It started to pay dividend in 2007 around 9 years ago. They report in US$ and do business in the US. Their dividend is paid in US$. They have increased their dividends in some years quite nicely, but they are inconsistent and here has been no dividend increase since 2013. In US$ terms the dividends have grown by 15.9% and 15.7% per year over the past 5 and 10 years.
Also I should point out that the dividend increases came at the expense of the Dividend Payout Ratio for EPS. Over the last 3 years the DPR has been 67%, -181% and 152%. Analysts expect that the DPR for EPS would be around 54% for 2016. This is in US$ terms.
I think that they would have been better off with a lower DPR for EPS and they should have kept the DPR low. I think that they should have only modestly increased the dividend each year. They are a consumer discretionary stock and their EPS tends to vary from year to year. EPS varying year to year is not unusual.
Their dividend yield is good. The current dividend is 4.19% in US$ terms based on a stock price of $28.67 and dividends of $1.20. The dividend is 4.20% in CDN$ terms based on a stock price of $37.69 and dividends of $1.58. You are going to get small variants in dividend yield between CDN$ and US$ due to the currency exchange. Problem I see is that as an investor it is hard to know where they are going with the dividends. They should have realized that the EPS would fluctuate as they always had in the past.
The last couple of years have not been all that good for this company. Sometimes using the 5 year running averages can put things is better perspective. It can show if there has been any growth over the past 5 year when a company has recent problems. The 5 year running averages for the past 5 years compare the average for the past 5 years to the average for past years of 6 to 10. The 5 year running averages for the past 10 years compare the average for the past 5 years to the average for the past years of 11 to 15. All the figures are in US$ unless otherwise stated as this company reports in US$.
The Revenue is up by 3% and 4.3% per year over the past 5 and 10 years. If you look at 5 year running averages the growth is up by 5.1% and 6.8% per year. The 5 year running averages are better, but growth is still moderate.
Earnings per Share are down by 27% and 12% per year over the past 5 and 10 years. For the 5 year running averages, the figures are less bad at declines of 12.3% and 4.7% per year. Analysts expect EPS growth to be much better in 2016 with a growth of 182% to $2.23 EPS. If you look at Q1 2016 EPS, EPS is up by 41%. This is a start. However, for 2015 EPS was expected to be $1.94 and it came in at $0.79.
Cash Flow declined by 1.4% and increased by 1.6% over the past 5 and 10 years. The 5 year running averages show growth of 2.7% and 5.2% per year over the past 5 and 10 years.
Return on Equity has been low lately with ROE for 2015 at 2.3% and 5 year median ROE at 4.3%. However, comprehensive income for 2016 is negative. The ROE for Comprehensive Income for 2015 is a negative 6.1%. This makes you wonder about the quality of the earnings. (Note with ROE it does not matter if I use US$ or CDN$, the results will be basically the same.)
These P/E Ratios are using CDN$. The 5 year low, median and high median Price/Earnings per Share are 7.35, 9.36 and 11.38. The corresponding 10 year values are 7.46, 9.03 and 10.67. The historical values are 7.35, 12.16 and 14.80. The current P/E Ratio is 12.83 based on a stock price of 37.69 and 2016 EPS estimate of $2.94 (CDN$ or $2.23 US$). This stock price testing suggests that the stock price is relatively expensive. (Note the P/E Ratios in US$ are similar with 5 year values at 7.33, 9.33 and 11.34.)
I get a Graham Price of $55.28 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.54, 0.63 and 0.72. The current P/GP Ratio is 0.68 based on a stock price of $37.69 CDN$. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year Price/Book Value per Share 0.81. The current P/B Ratio is 0.82 a values some 1% higher. The current P/B Ratio is based on BVPS of $35.07 CDN$ and a stock price of $37.69 CDN$. This stock price testing suggests that the stock price is relatively reasonable and around the median.
The current dividend yield is 4.20% based on dividends of $1.58 CDN$ and a stock price of $37.69 CDN$ . The historical (sort of, but only covering 9 years) dividend yield is 2.51%. The current dividend yield at 4.2% is some 67% higher. This would suggest that the stock price is getting relatively cheap. However, this is not much data and the dividend has been rammed up with no corresponding increase in EPS.
When I look at analysts' recommendations I find Buy and Hold, but the vast majority are a Hold. The consensus would be a Hold. The 12 month stock price consensus is $33.83 CDN$ ($25.67 US$). This implies a total return of a loss of 6.05% with a capital loss of 10.25% and dividends of 4.20%.
Camille Ainsworth talks about recent analysts calls on Fiscal Standard. Will Ashworth on Motley Fool says why he likes this stock. I do not know where he got the dividend growth by 10% per year over the past 5 years, but this completely ignores the fact that dividends have not grown since 2013. Dorel recently lost a court case over one of their children car seats in Texas as reported in Bloomberg.
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.
The last stock I wrote about was about was Canam Group Inc. (TSX-CAM, OTC-CNMGA)... learn more. The next stock I will write about will be Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF)... learn more on August 2, 2016 around 5 pm.
Dorel Industries Inc. is a world class juvenile products and bicycle company. Dorel's Home Furnishings segment markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel has facilities in seventeen countries, and sales worldwide.
There concentrated ownership of this company by the Schwartz family (66%) and Segel family (17%). Its web site is here Dorel Industries 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. 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.
Friday, July 29, 2016
Wednesday, July 27, 2016
Canam Group Inc.
Sound bite for Twitter and StockTwits is: Price is cheap to reasonable. This is a relatively small but growing company. It could do very well if governments invest in infrastructure. See my spreadsheet on Canam Group Inc.
I do not own this stock of Canam Group Inc. (TSX-CAM, OTC-CNMGA). I started following this stock in September 2009 as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate.
Dividends were started in 1999, but they have been on a rollercoaster ride. They have gone up and down and been cancelled and reinstated. Dividends were restarted in 2014 and since then have been flat. If you had bought this stock 5, 10, 15 or 20 years ago at a median price, dividends would have paid for 8.3%, 13%, 19% and 69% of your stock's cost. If you have bought this stock 5, 10, 15 or 20 years ago at a median price you would be earning a dividend yield of 2.8%, 1.7%, 1.9% or 4.2%.
The current dividend yield is low and it is hard to say when or if ever the dividends would increase. The company had never paid a higher dividend than it is paying at present. It has gotten as high as the current dividend in the past. The current dividend yield is just 1.49% based on dividends of $0.16 and a stock price of $10.75.
Can shareholders make any money on this stock? It probably depends on when it is bought. For the 5 and 10 years to the end of 2015, the Total Return was 14.60% and 8.35% per year. The dividend portion of this return was at 0.78% and 1.35% per year. The capital gain portion of this return was at 13.82% and 7.00% per year.
However, if you bought this stock 5 or 10 years ago to the present date the story is different for both the 5 and 10 years periods. . For the 5 and 10 years to the present, the Total Return is 22.58% and 2.73% per year. The dividend portion of this return is at 1.32% and 1.22% per year. The capital gain portion of this return was at 21.26% and 1.50% per year. It would seem you need to pick your entry point carefully.
Ten years ago from the present it was not so much that the stock's price was high, but today's price is after a fall of the stock's price by 23% in 2016. This can account for the low 2.7% total return over 10 years. Five years ago from the present this stock was at a low point and this accounts for the 22.6% total return over past 5 years.
This stock has very good debt ratios. This enables a company to ride out the bad times. The Liquidity Ratio for 2015 is 2.01 and the 5 year median ratio is also 2.01. The Debt Ratio for 2015 is 2.15 and its 5 year median ratio is 2.09. The Leverage and Debt/Equity Ratio for 2015 are 1.87 and 0.87 respectively. The corresponding 5 year median ratios are 1.92 and 0.92, respectively.
The Return on Equity Ratios, especially over the past 5 years has been low. The ROE for 2015 is just 7.5% and the 5 year median is 6.4%. However, the ROE using the Comprehensive Income has been better with the ROE for 2015 at 17.3% and the 5 year median at 11.4%. This would suggest that earnings are better than stated.
The have had good revenue growth with Revenue per Share growth at 15% and 9.3% per year over the past 5 and 10 years. Earnings have been all over the place with 2015 being a very good year. EPS is up by 244% and 1.6% per year over the past 5 and 10 years. However, if you look at 5 year running average, over the past 5 years EPS is down by 7.6% per year.
CFPS is more consistent, but 5 years ago was not a good year for CFPS and therefore the 5 year growth is at 21.5%. However, if you look at 5 year running averages, CFPS is down by 18.3% per year. (5 year running averages compare the last 5 years averages to years 6 to 10 averages.)
The 5 year low, median and high median Price/Earnings per Share Ratios are 9.61, 12.43 and 14.95. The corresponding 10 year values are 9.49, 12.71 and 12.78. The historical values are 7.77, 9.80 and 12.63. The current P/E Ratio is 10.64 based on a stock price of $10.75 and 2016 EPS estimate of $1.01. This testing would suggest that the stock price is relatively reasonable and below the median.
I get a Graham Price of $17.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.59, 0.78 and 1.02. The current P/GP Ratio is 0.63 based on a stock price of $10.75. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 years Price/Book Value per Share Ratio 0.99. The current P/B Ratio is 0.84 based on BVPS of $12.87 and a stock price of $10.75. The current P/B Ratio is some 16% lower than the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. The current ratio would have to be 20% lower than the 10 years ratio for the stock to be considered relatively cheap.
I get an historical median dividend yield of 1.30%. The current dividend yield of 1.49% is some 14.5% higher based on dividends of $0.16 and a stock price of $10.75. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts' recommendations I find Buy and Hold recommendations. Most recommendations are a Buy and the consensus is a Buy. The 12 month consensus stock price is 15.79. This implies a total return of 48.37% with 1.49% from dividends and 46.88% from capital gains. This would basically take this stock back to the highs of 2014 and 2015.
In a press report on News Wire Canam Group announced that an in-depth assessment will lead to the recording of an after-tax reserve of $32M in the second quarter of 2016 to take into account the revised cost estimates for a significant project. Scott Moore on The Certa Gem talks about recent analysts' reports. Damon van der Linde on Financial Post does a rather favorable report on this company. It points out both positive and negative aspects of this company.
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.
The last stock I wrote about was about was Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE)... learn more . The next stock I will write about will be Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more on Friday, July 29, 2016 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth... learn more on Thursday, July 28, 2016 around 5 pm.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Its web site is here Canam 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. 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.
I do not own this stock of Canam Group Inc. (TSX-CAM, OTC-CNMGA). I started following this stock in September 2009 as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate.
Dividends were started in 1999, but they have been on a rollercoaster ride. They have gone up and down and been cancelled and reinstated. Dividends were restarted in 2014 and since then have been flat. If you had bought this stock 5, 10, 15 or 20 years ago at a median price, dividends would have paid for 8.3%, 13%, 19% and 69% of your stock's cost. If you have bought this stock 5, 10, 15 or 20 years ago at a median price you would be earning a dividend yield of 2.8%, 1.7%, 1.9% or 4.2%.
The current dividend yield is low and it is hard to say when or if ever the dividends would increase. The company had never paid a higher dividend than it is paying at present. It has gotten as high as the current dividend in the past. The current dividend yield is just 1.49% based on dividends of $0.16 and a stock price of $10.75.
Can shareholders make any money on this stock? It probably depends on when it is bought. For the 5 and 10 years to the end of 2015, the Total Return was 14.60% and 8.35% per year. The dividend portion of this return was at 0.78% and 1.35% per year. The capital gain portion of this return was at 13.82% and 7.00% per year.
However, if you bought this stock 5 or 10 years ago to the present date the story is different for both the 5 and 10 years periods. . For the 5 and 10 years to the present, the Total Return is 22.58% and 2.73% per year. The dividend portion of this return is at 1.32% and 1.22% per year. The capital gain portion of this return was at 21.26% and 1.50% per year. It would seem you need to pick your entry point carefully.
Ten years ago from the present it was not so much that the stock's price was high, but today's price is after a fall of the stock's price by 23% in 2016. This can account for the low 2.7% total return over 10 years. Five years ago from the present this stock was at a low point and this accounts for the 22.6% total return over past 5 years.
This stock has very good debt ratios. This enables a company to ride out the bad times. The Liquidity Ratio for 2015 is 2.01 and the 5 year median ratio is also 2.01. The Debt Ratio for 2015 is 2.15 and its 5 year median ratio is 2.09. The Leverage and Debt/Equity Ratio for 2015 are 1.87 and 0.87 respectively. The corresponding 5 year median ratios are 1.92 and 0.92, respectively.
The Return on Equity Ratios, especially over the past 5 years has been low. The ROE for 2015 is just 7.5% and the 5 year median is 6.4%. However, the ROE using the Comprehensive Income has been better with the ROE for 2015 at 17.3% and the 5 year median at 11.4%. This would suggest that earnings are better than stated.
The have had good revenue growth with Revenue per Share growth at 15% and 9.3% per year over the past 5 and 10 years. Earnings have been all over the place with 2015 being a very good year. EPS is up by 244% and 1.6% per year over the past 5 and 10 years. However, if you look at 5 year running average, over the past 5 years EPS is down by 7.6% per year.
CFPS is more consistent, but 5 years ago was not a good year for CFPS and therefore the 5 year growth is at 21.5%. However, if you look at 5 year running averages, CFPS is down by 18.3% per year. (5 year running averages compare the last 5 years averages to years 6 to 10 averages.)
The 5 year low, median and high median Price/Earnings per Share Ratios are 9.61, 12.43 and 14.95. The corresponding 10 year values are 9.49, 12.71 and 12.78. The historical values are 7.77, 9.80 and 12.63. The current P/E Ratio is 10.64 based on a stock price of $10.75 and 2016 EPS estimate of $1.01. This testing would suggest that the stock price is relatively reasonable and below the median.
I get a Graham Price of $17.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.59, 0.78 and 1.02. The current P/GP Ratio is 0.63 based on a stock price of $10.75. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 years Price/Book Value per Share Ratio 0.99. The current P/B Ratio is 0.84 based on BVPS of $12.87 and a stock price of $10.75. The current P/B Ratio is some 16% lower than the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. The current ratio would have to be 20% lower than the 10 years ratio for the stock to be considered relatively cheap.
I get an historical median dividend yield of 1.30%. The current dividend yield of 1.49% is some 14.5% higher based on dividends of $0.16 and a stock price of $10.75. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts' recommendations I find Buy and Hold recommendations. Most recommendations are a Buy and the consensus is a Buy. The 12 month consensus stock price is 15.79. This implies a total return of 48.37% with 1.49% from dividends and 46.88% from capital gains. This would basically take this stock back to the highs of 2014 and 2015.
In a press report on News Wire Canam Group announced that an in-depth assessment will lead to the recording of an after-tax reserve of $32M in the second quarter of 2016 to take into account the revised cost estimates for a significant project. Scott Moore on The Certa Gem talks about recent analysts' reports. Damon van der Linde on Financial Post does a rather favorable report on this company. It points out both positive and negative aspects of this company.
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.
The last stock I wrote about was about was Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE)... learn more . The next stock I will write about will be Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more on Friday, July 29, 2016 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth... learn more on Thursday, July 28, 2016 around 5 pm.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Its web site is here Canam 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. 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.
Monday, July 25, 2016
Penn West Petroleum Ltd
Sound bite for Twitter and StockTwits is: Cheap to Reasonable, Speculative. Price would seem to be cheap to reasonable. It is certainly a Speculative Buy. Analysts certainly do not see the price recovering soon with a 12 month consensus of stock price rise of only 3.3% See my spreadsheet on Penn West Petroleum Ltd.
I do not own this stock of Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE), but I used to. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006 and I got .6 of a share for each share I had.
I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. I sold this stock of Penn West in 2010 as it was changing to a corporation, but they are also getting back into exploration, rather than just selling oil from their wells. They also just reduced their dividends from $.15 per share per month to $.09 per share per month.
I am tracking this stock from Maximum Energy Trust to Penn West and have tracked it since 1996. Dividends have gone up as well as down over the period I have tracked this stock. After two years of negative earnings in 2014 and 2015 the company cancelled the dividend payments in 2016. The company is not expected to make any profit over the next few years so we probably will not see any more dividends anytime soon.
The problem I see is that their long term debt level being greater than the market cap of the stock. The Debt/MC Ratio was 3.30 in 2015 and dropping down to 2.04 in the first quarter of 2016. This ratio approaching 1.00 is a real concern. It means that the market says that the company is worth less than its long term debt. This is not a good situation. In this news release Penn West expects to be in full compliance with all of their financial covenants at the end of the second quarter. (The ratio could be around 0.66 then and that ratio is fine.)
Analysts seem to think that the company will have positive FFO and CFPS in 2016 and continuing on into the future. Analysts seem to think that Revenue will drop significantly. They have been selling off assets.
There is little in stock price testing to do. Dividend Yield testing is out as dividends are discontinued. You cannot do Price/Earnings per Share test because EPS are negative.
The nearest I can get to a Graham price is one at $2.43. This is probably too high. However, the current stock price of $1.81 is just at a Price/Graham Price Ratio of 0.75. This would suggest that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 0.99. The current P/B Ratio is 0.32 a value some 68% lower. The current P/B Ratio is based on a BVPS of $5.65 and a stock price $1.81. This stock price testing suggests that the stock price is relatively cheap. Generally any P/B Ratio below 1.50 suggests a stock price is cheap.
I get a 5 year low median and high P/FFO Ratio of 3.98, 5.44 and 8.39. The corresponding 10 year ratios are 4.11, 5.82 and 8.26. The current P/FFO Ratio is 5.03 based on FFO estimate for 2016 of $0.67 and a stock price of $1.81. The FFO estimate for 2016 is some 86% above the FFO for 2015 of $0.36. However, the FFO for the 12 month period ending at the end of the first quarter is $1.04. So the estimate for 2016 would seem reasonable. This stock price testing suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations, I find them all over the place with Buy, Hold, Underperform and Sell recommendations. The only recommendation not present is a Strong Buy. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $1.87. This implies a total return in capital gains of 3.31%.
Bill Dery talks about the recent stock movements of Penn West on Founders Daily. Matt DiLallo of Motley Fool gives a favorable impression of this stock. According to a press release on News Wire Penn West settle a class action suit that claimed their annual statements did not follow GAAP or IFRS rules. The suit claims that the defendants between 2011 and 2014 misrepresented Penn West's financial statements as following GAAP or IFRS rules. On July 2014 Penn West disclosed that certain of the company's historical financial statements must be restated.
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.
The last stock I wrote about was about was Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more . The next stock I will write about will be Canam Group Inc. (TSX-CAM, OTC-CNMGA)... learn more on Wednesday, July 27, 2016 around 5 pm. Tomorrow on my other blog I will write about Disposable Income for the young... learn more on Tuesday, July 26, 2016 around 5 pm.
Penn West is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West Petroleum 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.
I do not own this stock of Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE), but I used to. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006 and I got .6 of a share for each share I had.
I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. I sold this stock of Penn West in 2010 as it was changing to a corporation, but they are also getting back into exploration, rather than just selling oil from their wells. They also just reduced their dividends from $.15 per share per month to $.09 per share per month.
I am tracking this stock from Maximum Energy Trust to Penn West and have tracked it since 1996. Dividends have gone up as well as down over the period I have tracked this stock. After two years of negative earnings in 2014 and 2015 the company cancelled the dividend payments in 2016. The company is not expected to make any profit over the next few years so we probably will not see any more dividends anytime soon.
The problem I see is that their long term debt level being greater than the market cap of the stock. The Debt/MC Ratio was 3.30 in 2015 and dropping down to 2.04 in the first quarter of 2016. This ratio approaching 1.00 is a real concern. It means that the market says that the company is worth less than its long term debt. This is not a good situation. In this news release Penn West expects to be in full compliance with all of their financial covenants at the end of the second quarter. (The ratio could be around 0.66 then and that ratio is fine.)
Analysts seem to think that the company will have positive FFO and CFPS in 2016 and continuing on into the future. Analysts seem to think that Revenue will drop significantly. They have been selling off assets.
There is little in stock price testing to do. Dividend Yield testing is out as dividends are discontinued. You cannot do Price/Earnings per Share test because EPS are negative.
The nearest I can get to a Graham price is one at $2.43. This is probably too high. However, the current stock price of $1.81 is just at a Price/Graham Price Ratio of 0.75. This would suggest that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 0.99. The current P/B Ratio is 0.32 a value some 68% lower. The current P/B Ratio is based on a BVPS of $5.65 and a stock price $1.81. This stock price testing suggests that the stock price is relatively cheap. Generally any P/B Ratio below 1.50 suggests a stock price is cheap.
I get a 5 year low median and high P/FFO Ratio of 3.98, 5.44 and 8.39. The corresponding 10 year ratios are 4.11, 5.82 and 8.26. The current P/FFO Ratio is 5.03 based on FFO estimate for 2016 of $0.67 and a stock price of $1.81. The FFO estimate for 2016 is some 86% above the FFO for 2015 of $0.36. However, the FFO for the 12 month period ending at the end of the first quarter is $1.04. So the estimate for 2016 would seem reasonable. This stock price testing suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations, I find them all over the place with Buy, Hold, Underperform and Sell recommendations. The only recommendation not present is a Strong Buy. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $1.87. This implies a total return in capital gains of 3.31%.
Bill Dery talks about the recent stock movements of Penn West on Founders Daily. Matt DiLallo of Motley Fool gives a favorable impression of this stock. According to a press release on News Wire Penn West settle a class action suit that claimed their annual statements did not follow GAAP or IFRS rules. The suit claims that the defendants between 2011 and 2014 misrepresented Penn West's financial statements as following GAAP or IFRS rules. On July 2014 Penn West disclosed that certain of the company's historical financial statements must be restated.
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.
The last stock I wrote about was about was Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more . The next stock I will write about will be Canam Group Inc. (TSX-CAM, OTC-CNMGA)... learn more on Wednesday, July 27, 2016 around 5 pm. Tomorrow on my other blog I will write about Disposable Income for the young... learn more on Tuesday, July 26, 2016 around 5 pm.
Penn West is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West Petroleum 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.
Friday, July 22, 2016
Lassonde Industries Inc.
Sound bite for Twitter and StockTwits is: Currently expensive. This would be a good stock to use to build a stock portfolio with low dividends (less tax) and moderate dividend growth. It is expensive currently, but it will not always be so. See my spreadsheet on Lassonde Industries Inc.
I do not own this stock of Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF). Although this stock is not on the Investment Reporter list, MPL communications does write about this stock. It has been covered several times in their Advice Hotline emails in 2010. Reports have been favorable and they suggest buying it for dividends and long term capital gains.
The dividend yield is low and the dividend growth is moderate. The current dividend yield is 1.02%. This is based on dividends of $2.04 and a stock price of $199.68. The 5 year median dividend yield is 1.64% and the median historical dividend yield is 1.80%. Dividends have increased by 15.06% and 14.04% per year over the past 5 and 10 years.
With low dividends, it takes a while to growth them into good yields on the original stock price. If you had bought this stock 5, 10 or 15 years ago at a median price you would be earnings 2.9%, 5.2% and 13.4% dividend yield on your original stock price. If you had bought this stock 5 years ago and paid a median price, dividends would have covered 11.7%, 33.4% and 102% of the original cost of your stock.
The most recent dividend increase was in 2016 and it was for 24.4%. The dividend increases tend to fluctuate a lot. After a really high one, the company tends to give a low increase. The dividend increases in the past 3 years are 25.8%, 2.65 and 2.5%. If you bought the stock today at $199.68 and the dividends growth was at 14%, then in 5, 10 and 15 years you could be earning dividend yields on today's price of 2%, 3.8 and 7.3%.
The company has had good growth in revenues, earnings and cash flow. Revenue per Share is up by 20.5% and 51.9% per year over the past 5 and 10 years. EPS is up by 11.1% and 12.5% per year over the past 5 and 10 years. Cash Flow per Share is up by 23.4% and 18.25 per year over the past 5 and 10 years.
Debt Ratios are good to very good. The Liquidity Ratio for 2015 is 1.75. The Debt Ratio for 2015 is 1.90. The Leverage and Debt/Equity Ratios for 2015 are 2.11 and 1.11.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.69, 13.99 and 16.30. The 10 year corresponding ratios are lower at 10.80, 12.38 and 14.12. The historical ratios are at 10.37, 13.00 and 14.61. Part of the stock's price increases lately has come from an increase in the P/E Ratios. The current P/E Ratio is 22.46 based on a stock price of $199.68 and past 12 month's EPS of 8.89. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $117.68. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.99 and 1.13. The current P/GP Ratio is 1.71 based on a stock price of $199.68. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share 1.80. The current P/B Ratio is 2.91 a values some 62.3% higher. The current P/B Ratio is based on a stock price of $199.68 and BVPS of $68.53. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 1.80%. The current dividend yield of 1.02% is based on dividends of $2.04 and a stock price of $199.68. The current dividend is some 43% lower than the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
There is only one analyst following this stock and the recommendation is a Buy. The 12 month stock consensus is $225.00. This implies a total return of $13.70% with 12.68% from capital gains and 1.02% from dividends.
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 Money-Weighted Reporting for Mutual Funds.... learn more . The next stock I will write about will be Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE)... learn more on Monday, July 25, 2016 around 5 pm.
Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of fruit and vegetable juices and drinks marketed under recognized brands such as Apple & Eve, Everfresh, Fairlee, Flavür, Fruité, Graves, Northland, Oasis, Rougemont, Seneca and The Switch. Lassonde is the second-largest producer of store brand ready-to-drink fruit juices and drinks in the United States and a major producer of cranberry juices, drinks and sauces. Its web site is here Lassonde Industries 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. 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.
I do not own this stock of Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF). Although this stock is not on the Investment Reporter list, MPL communications does write about this stock. It has been covered several times in their Advice Hotline emails in 2010. Reports have been favorable and they suggest buying it for dividends and long term capital gains.
The dividend yield is low and the dividend growth is moderate. The current dividend yield is 1.02%. This is based on dividends of $2.04 and a stock price of $199.68. The 5 year median dividend yield is 1.64% and the median historical dividend yield is 1.80%. Dividends have increased by 15.06% and 14.04% per year over the past 5 and 10 years.
With low dividends, it takes a while to growth them into good yields on the original stock price. If you had bought this stock 5, 10 or 15 years ago at a median price you would be earnings 2.9%, 5.2% and 13.4% dividend yield on your original stock price. If you had bought this stock 5 years ago and paid a median price, dividends would have covered 11.7%, 33.4% and 102% of the original cost of your stock.
The most recent dividend increase was in 2016 and it was for 24.4%. The dividend increases tend to fluctuate a lot. After a really high one, the company tends to give a low increase. The dividend increases in the past 3 years are 25.8%, 2.65 and 2.5%. If you bought the stock today at $199.68 and the dividends growth was at 14%, then in 5, 10 and 15 years you could be earning dividend yields on today's price of 2%, 3.8 and 7.3%.
The company has had good growth in revenues, earnings and cash flow. Revenue per Share is up by 20.5% and 51.9% per year over the past 5 and 10 years. EPS is up by 11.1% and 12.5% per year over the past 5 and 10 years. Cash Flow per Share is up by 23.4% and 18.25 per year over the past 5 and 10 years.
Debt Ratios are good to very good. The Liquidity Ratio for 2015 is 1.75. The Debt Ratio for 2015 is 1.90. The Leverage and Debt/Equity Ratios for 2015 are 2.11 and 1.11.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.69, 13.99 and 16.30. The 10 year corresponding ratios are lower at 10.80, 12.38 and 14.12. The historical ratios are at 10.37, 13.00 and 14.61. Part of the stock's price increases lately has come from an increase in the P/E Ratios. The current P/E Ratio is 22.46 based on a stock price of $199.68 and past 12 month's EPS of 8.89. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $117.68. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.99 and 1.13. The current P/GP Ratio is 1.71 based on a stock price of $199.68. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share 1.80. The current P/B Ratio is 2.91 a values some 62.3% higher. The current P/B Ratio is based on a stock price of $199.68 and BVPS of $68.53. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 1.80%. The current dividend yield of 1.02% is based on dividends of $2.04 and a stock price of $199.68. The current dividend is some 43% lower than the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
There is only one analyst following this stock and the recommendation is a Buy. The 12 month stock consensus is $225.00. This implies a total return of $13.70% with 12.68% from capital gains and 1.02% from dividends.
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 Money-Weighted Reporting for Mutual Funds.... learn more . The next stock I will write about will be Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE)... learn more on Monday, July 25, 2016 around 5 pm.
Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of fruit and vegetable juices and drinks marketed under recognized brands such as Apple & Eve, Everfresh, Fairlee, Flavür, Fruité, Graves, Northland, Oasis, Rougemont, Seneca and The Switch. Lassonde is the second-largest producer of store brand ready-to-drink fruit juices and drinks in the United States and a major producer of cranberry juices, drinks and sauces. Its web site is here Lassonde Industries 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. 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.
Wednesday, July 20, 2016
Alaris Royalty Corp
Sound bite for Twitter and StockTwits is: Price reasonable to expensive. This looks like an interesting company and could provide nice diversification in a portfolio. Dividends are high and moderate increases and good debt ratios. I just started to follow this company. See my spreadsheet on Alaris Royalty Corp.
I do not own this stock of Alaris Royalty Corp (TSX-AD, OTC-ALARF). This is a stock that Dividends In Hand Blogger has bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest.
This company was started at the end of 2007. It went public in December 2008. It started to pay dividends in 2009. So dividends have been paid for 7 years. Dividends are high with moderate dividend growth. The growth in dividends is at 10.8% and 7.8% per year over the past 5 and 6 years. The current dividend is 5.47% based on dividends of $1.62 and a stock price of $29.60. Dividends are paid monthly.
When you have the combination of high dividends and moderate dividend growth you tend to get good coverage of your original stock cost and good dividend yields on your original cost. If you had bought this stock 5 years ago and paid a median price, your dividends would have covered 48% of the cost of your stock and be paying a yield of 10.9% on your original cost.
If you bought this stock today at around $28.49 and say conservatively the company’s increases were at 8% per year, then in 5 year time your dividend yield on your original cost would be 8.4%, in 10 years 12.3% and in 15 years 18%.
They are paying out a high portion of their earnings with a Dividend Payout Ratio of 92.6% for earnings. The 5 year median DPR is 91.9%. The Dividend Payout Ratio for CFPS is at 85%. The 5 year median DPR for EPS is at 101%. EPS has been quite volatile. For example EPS in 2010 to 2013 was at $0.73, $1.97, $0.84 and $1.97. The 5 year running growth over the past 4 years is at 6%.
The outstanding shares have increased by 17% and 49% per year over the past 5 and 8 years. The company started out with few shares. This means that I as an investor would be very interested in per shares values to gauge growth. Shares have increased due to Share Issues, Warrants exercised and Stock Options. The 8 year growth using per share values are therefore not good. For example, the Revenue over the past 5 and 8 years is at 36.1% and 27.1% per year. Revenue per Share is at 16.1% and a negative 14.6% over the same time period.
Shareholders have done quite well over the past 5 and 9 years. The total growth is at 16.21 and 18.75% over these periods. The portion of this total return attributed to dividends is at 6.59% and 6.42% per year over these periods. The portion of this total return attributed to capital gains is at 9.62% and 12.34% per year over these periods.
The debt ratios are very good. The Liquidity Ratio for 2015 is 3.73with 5 year median of 3.67%. The Debt Ratio for 2015 is 7.09 with a 5 year median of 9.43%. The Leverage and Debt/Equity Ratios for 2015 are 1.16 and 0.16. The 5 year median values are 1.12 and 0.12
The Return on Equity is lower than I generally like as I prefer it to be at 10% or higher. The ROE for 2015 was 8.5% and the 5 year median value is also 8.5%. The Comprehensive Income and Net Income vary around each other quite a bit. For example in 2015 the Comprehensive Income ROE was 43% above the ROE on the Net Income. However, over the past 5 years the difference nets to just a negative 0.5%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.18, 19.21 and 23.23. The corresponding 8 year values are lower at 12.38, 15.66 and 18.94. The current P/E Ratio is 25.96 based on a stock price of $29.60 and 2016 EPS estimate of $1.88. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $27.66. The 8 year low, median and high median Price/Graham Price Ratios are 0.76, 0.96 and 1.17. The current P/GP Ratio is 1.07 based on a stock price of $29.60. This stock price testing suggests that the stock price is reasonable but above the median.
I get an 8 year median Price/Book Value per Share Ratio of 1.23. The current P/B Ratio is 1.64 a value 33.39% higher. The current P/B Ratio is based on BVPS of 18.09 and a stock price of $29.60. This stock price testing suggests that the stock price is relatively expensive. However, a P/B Ratio of 1.64 is not a high P/B Ratio.
I get a historical median dividend yield of 5.62%. (Note that the term historical for this company is 8 years.) The current dividend yield is 5.47% based on dividends of $1.62 and a stock price of 29.60. The current dividend yield is some 3% higher than the historical dividend yield. This stock price testing suggests that the stock price is reasonable but above the median. However 3% above the median is not much above the median.
When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The vast majority is Buy recommendations and the consensus is a Buy recommendation. The 12 month stock price is $33.85. This implies a total return of 20.00% with 5.47% from dividends and 14.53% from capital gains.
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.
The last stock I wrote about was about was Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more . The next stock I will write about will be Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more on Wednesday, July 22, 2016 around 5 pm. Tomorrow on my other blog I will write about Money-Weighted Reporting.... learn more on Thursday, July 21, 2016 around 5 pm.
Alaris Royalty Corp. forms partnerships with and invests in private companies where owners want to maintain control of their business. Typically, this financial services provider participates in the form of preferred limited partnership interests, preferred interest in limited liability corporations in North America, or long-term license and royalty arrangements. Its web site is here Alaris Royalty 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
I do not own this stock of Alaris Royalty Corp (TSX-AD, OTC-ALARF). This is a stock that Dividends In Hand Blogger has bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor’s Digest.
This company was started at the end of 2007. It went public in December 2008. It started to pay dividends in 2009. So dividends have been paid for 7 years. Dividends are high with moderate dividend growth. The growth in dividends is at 10.8% and 7.8% per year over the past 5 and 6 years. The current dividend is 5.47% based on dividends of $1.62 and a stock price of $29.60. Dividends are paid monthly.
When you have the combination of high dividends and moderate dividend growth you tend to get good coverage of your original stock cost and good dividend yields on your original cost. If you had bought this stock 5 years ago and paid a median price, your dividends would have covered 48% of the cost of your stock and be paying a yield of 10.9% on your original cost.
If you bought this stock today at around $28.49 and say conservatively the company’s increases were at 8% per year, then in 5 year time your dividend yield on your original cost would be 8.4%, in 10 years 12.3% and in 15 years 18%.
They are paying out a high portion of their earnings with a Dividend Payout Ratio of 92.6% for earnings. The 5 year median DPR is 91.9%. The Dividend Payout Ratio for CFPS is at 85%. The 5 year median DPR for EPS is at 101%. EPS has been quite volatile. For example EPS in 2010 to 2013 was at $0.73, $1.97, $0.84 and $1.97. The 5 year running growth over the past 4 years is at 6%.
The outstanding shares have increased by 17% and 49% per year over the past 5 and 8 years. The company started out with few shares. This means that I as an investor would be very interested in per shares values to gauge growth. Shares have increased due to Share Issues, Warrants exercised and Stock Options. The 8 year growth using per share values are therefore not good. For example, the Revenue over the past 5 and 8 years is at 36.1% and 27.1% per year. Revenue per Share is at 16.1% and a negative 14.6% over the same time period.
Shareholders have done quite well over the past 5 and 9 years. The total growth is at 16.21 and 18.75% over these periods. The portion of this total return attributed to dividends is at 6.59% and 6.42% per year over these periods. The portion of this total return attributed to capital gains is at 9.62% and 12.34% per year over these periods.
The debt ratios are very good. The Liquidity Ratio for 2015 is 3.73with 5 year median of 3.67%. The Debt Ratio for 2015 is 7.09 with a 5 year median of 9.43%. The Leverage and Debt/Equity Ratios for 2015 are 1.16 and 0.16. The 5 year median values are 1.12 and 0.12
The Return on Equity is lower than I generally like as I prefer it to be at 10% or higher. The ROE for 2015 was 8.5% and the 5 year median value is also 8.5%. The Comprehensive Income and Net Income vary around each other quite a bit. For example in 2015 the Comprehensive Income ROE was 43% above the ROE on the Net Income. However, over the past 5 years the difference nets to just a negative 0.5%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.18, 19.21 and 23.23. The corresponding 8 year values are lower at 12.38, 15.66 and 18.94. The current P/E Ratio is 25.96 based on a stock price of $29.60 and 2016 EPS estimate of $1.88. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $27.66. The 8 year low, median and high median Price/Graham Price Ratios are 0.76, 0.96 and 1.17. The current P/GP Ratio is 1.07 based on a stock price of $29.60. This stock price testing suggests that the stock price is reasonable but above the median.
I get an 8 year median Price/Book Value per Share Ratio of 1.23. The current P/B Ratio is 1.64 a value 33.39% higher. The current P/B Ratio is based on BVPS of 18.09 and a stock price of $29.60. This stock price testing suggests that the stock price is relatively expensive. However, a P/B Ratio of 1.64 is not a high P/B Ratio.
I get a historical median dividend yield of 5.62%. (Note that the term historical for this company is 8 years.) The current dividend yield is 5.47% based on dividends of $1.62 and a stock price of 29.60. The current dividend yield is some 3% higher than the historical dividend yield. This stock price testing suggests that the stock price is reasonable but above the median. However 3% above the median is not much above the median.
When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The vast majority is Buy recommendations and the consensus is a Buy recommendation. The 12 month stock price is $33.85. This implies a total return of 20.00% with 5.47% from dividends and 14.53% from capital gains.
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.
The last stock I wrote about was about was Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more . The next stock I will write about will be Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more on Wednesday, July 22, 2016 around 5 pm. Tomorrow on my other blog I will write about Money-Weighted Reporting.... learn more on Thursday, July 21, 2016 around 5 pm.
Alaris Royalty Corp. forms partnerships with and invests in private companies where owners want to maintain control of their business. Typically, this financial services provider participates in the form of preferred limited partnership interests, preferred interest in limited liability corporations in North America, or long-term license and royalty arrangements. Its web site is here Alaris Royalty 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
Monday, July 18, 2016
Atlantic Power Corp
Sound bite for Twitter and StockTwits is: Rather speculative. Personally I would not buy this stock. However, they are making an effort by starting to reduce debt and cutting the dividend. See my spreadsheet on Atlantic Power Corp.
I do not own this stock of Atlantic Power Corp (TSX-ATP, NYSE-AT). Because I like utility companies and in 2010, I have read two columns that recommended this particular utility company (TSX-ATP), I decided to investigate it. After investigating this stock, my impression is that I would not touch it with a barge-pole. However, I will talk about it and upload my spreadsheet so that you can decide for yourself. I have changed my mind about this stock.
What is interesting is that in March 2014 Nizar Amarsi in a Morningstar article gives examples of Value Traps in Torstar Corp (TSX-TS.B) and Atlantic Power Corp (TSX-APT, NYSE-AT). At that time the P/B Ratio for APT was 0.58 and the dividend yield was 13%. For the year ending 2015 the P/B was 1.13 and today it is 1.40. The current dividend yield is at 0% as they will pay no dividends in 2016.
What I do not like especially is the long term debt to market cap ratio which is currently 2.19. This means that the debt is twice as high as the market cap. Any ratio approaching 1.00 is real cause for concern. The long term debt ratios have been over 1.00 since 2012. They started to reduce the debt in 2014 when it declined by 15% and again in 2015 when debt declined was 25%.
In twelve years since this stock was issued they made a profit one year that was in 2008. Yes, I know that generally people look at Distributable Income, FFO and AFFO for utilities, but only one year of profit? I rather put my money elsewhere.
Since shares have grown at 12.7% and 10.7% per year over the past 5 and 10 years, I would be personally looking at per share values to gauge growth. Revenue growth may look at fine at 16.6% and 8.6% per year over the past 5 and 10 years, but Revenue per Share not so much. Revenue per share is at 3.4% and negative 1.9% growth over the past 5 and 10 years. This is in US$ as the company reports in US$.
Distributable Income has been negative in 2014 and 2015. AFFO is expected to be negative in 2016 by analysts. According to ATP's presentation for Q1 2016 they say that AFFO for the 12 months ending March 2016 is $0.08 US$ (or $0.10 CDN$). The analyst report I read acknowledged this and still put AFFO for 2016 at a negative $0.04.
The Graham Price calculation cannot handle negative values. If we use the AFFO for Q1 2016, you get a current Graham Price of $2.30. The current Price/Graham Price Ratio would be 1.41 based on a stock price of $3.23. The 10 year low, median and high median P/GP Ratios using AFFO would be 0.89, 1.02 and 1.16. This would suggest that the stock price is relatively expensive.
The 10 year Price/Book Value per Share is 1.93. The current P/B Ratio is 1.40 a value some 27% lower based on BVPS of $2.31 and a stock price of $3.23. This testing would suggest that the stock price is relatively cheap. One point to make is that BVPS has been falling with it falling by 17.6% and 2% per year over the past 5 and 10 years. A falling BVPS is not a good sign.
I only have AFFO values for 5 years. The 5 year P/AFFO low, median and high median ratios are 9.58, 11.49 and 13.77. These ratios are a little high for P/AFFO ratios, but they are not extraordinarily high. The current P/AFFO Ratio is 31.73 based on a stock price of $3.23 and AFFO for the last 12 months of $0.10. This testing suggests that the stock price is relatively expensive.
I cannot do any dividend yield tests because this only works well with dividend growth stocks and this stock has eliminated its dividend. It is hard to know how valid P/S Ratio or P/CF Ratio testing is because analysts expect growth in Revenue and Cash Flow but both declined in the first quarter of 2016.
When I look at analysts' recommendations I find Buy, Hold and Underperform Recommendations. The consensus would be a Hold. The 12 months stock price consensus is $2.77 US$ or $3.59 CDN$. This implies a total return of 11.27% with 0% from dividends and 11.27% from capital gains.
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.
See what analyst say about this stock on Stock Chase. There is only one comment for 2016 and it is negative. Not many analysts follow this stock. On the Press Telegraph we hear that recent analysts' reports show both rate this stock a Sell. A note in Lawyers Weekly state that a plaintiff tried to start a class action again this company alleging that the company's former CEO and CFO had misrepresented the company's ability to maintain the existing dividend level. This failed. This law suit is more fully explained in a recent article in Lexpert.
The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more . The next stock I will write about will be Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Wednesday, July 20, 2016 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth to 2015 and 2007.... learn more on Tuesday, July 19, 2016 around 5 pm.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power 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.
I do not own this stock of Atlantic Power Corp (TSX-ATP, NYSE-AT). Because I like utility companies and in 2010, I have read two columns that recommended this particular utility company (TSX-ATP), I decided to investigate it. After investigating this stock, my impression is that I would not touch it with a barge-pole. However, I will talk about it and upload my spreadsheet so that you can decide for yourself. I have changed my mind about this stock.
What is interesting is that in March 2014 Nizar Amarsi in a Morningstar article gives examples of Value Traps in Torstar Corp (TSX-TS.B) and Atlantic Power Corp (TSX-APT, NYSE-AT). At that time the P/B Ratio for APT was 0.58 and the dividend yield was 13%. For the year ending 2015 the P/B was 1.13 and today it is 1.40. The current dividend yield is at 0% as they will pay no dividends in 2016.
What I do not like especially is the long term debt to market cap ratio which is currently 2.19. This means that the debt is twice as high as the market cap. Any ratio approaching 1.00 is real cause for concern. The long term debt ratios have been over 1.00 since 2012. They started to reduce the debt in 2014 when it declined by 15% and again in 2015 when debt declined was 25%.
In twelve years since this stock was issued they made a profit one year that was in 2008. Yes, I know that generally people look at Distributable Income, FFO and AFFO for utilities, but only one year of profit? I rather put my money elsewhere.
Since shares have grown at 12.7% and 10.7% per year over the past 5 and 10 years, I would be personally looking at per share values to gauge growth. Revenue growth may look at fine at 16.6% and 8.6% per year over the past 5 and 10 years, but Revenue per Share not so much. Revenue per share is at 3.4% and negative 1.9% growth over the past 5 and 10 years. This is in US$ as the company reports in US$.
Distributable Income has been negative in 2014 and 2015. AFFO is expected to be negative in 2016 by analysts. According to ATP's presentation for Q1 2016 they say that AFFO for the 12 months ending March 2016 is $0.08 US$ (or $0.10 CDN$). The analyst report I read acknowledged this and still put AFFO for 2016 at a negative $0.04.
The Graham Price calculation cannot handle negative values. If we use the AFFO for Q1 2016, you get a current Graham Price of $2.30. The current Price/Graham Price Ratio would be 1.41 based on a stock price of $3.23. The 10 year low, median and high median P/GP Ratios using AFFO would be 0.89, 1.02 and 1.16. This would suggest that the stock price is relatively expensive.
The 10 year Price/Book Value per Share is 1.93. The current P/B Ratio is 1.40 a value some 27% lower based on BVPS of $2.31 and a stock price of $3.23. This testing would suggest that the stock price is relatively cheap. One point to make is that BVPS has been falling with it falling by 17.6% and 2% per year over the past 5 and 10 years. A falling BVPS is not a good sign.
I only have AFFO values for 5 years. The 5 year P/AFFO low, median and high median ratios are 9.58, 11.49 and 13.77. These ratios are a little high for P/AFFO ratios, but they are not extraordinarily high. The current P/AFFO Ratio is 31.73 based on a stock price of $3.23 and AFFO for the last 12 months of $0.10. This testing suggests that the stock price is relatively expensive.
I cannot do any dividend yield tests because this only works well with dividend growth stocks and this stock has eliminated its dividend. It is hard to know how valid P/S Ratio or P/CF Ratio testing is because analysts expect growth in Revenue and Cash Flow but both declined in the first quarter of 2016.
When I look at analysts' recommendations I find Buy, Hold and Underperform Recommendations. The consensus would be a Hold. The 12 months stock price consensus is $2.77 US$ or $3.59 CDN$. This implies a total return of 11.27% with 0% from dividends and 11.27% from capital gains.
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.
See what analyst say about this stock on Stock Chase. There is only one comment for 2016 and it is negative. Not many analysts follow this stock. On the Press Telegraph we hear that recent analysts' reports show both rate this stock a Sell. A note in Lawyers Weekly state that a plaintiff tried to start a class action again this company alleging that the company's former CEO and CFO had misrepresented the company's ability to maintain the existing dividend level. This failed. This law suit is more fully explained in a recent article in Lexpert.
The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more . The next stock I will write about will be Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Wednesday, July 20, 2016 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth to 2015 and 2007.... learn more on Tuesday, July 19, 2016 around 5 pm.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power 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.
Friday, July 15, 2016
Artis REIT
Sound bite for Twitter and StockTwits is: Price is reasonable, below median. This is a stock I am not currently interested in because it is not a dividend growth stock and I do not like the Liquidity Ratios. See my spreadsheet on Artis REIT.
I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. It is also not a dividend growth stock.
This REIT was started in 2004 and has been paying dividends since 2005 some 11 years ago. In the beginning it raised its dividends, but that has not occurred since 2009. Since there is not much history to draw from I must draw the conclusion that it is not a dividend growth stock until it proves otherwise. Dividend growth is at 0% and 3.8% per year over the past 5 and 10 years
The Dividend Payout Ratios against FFO and AFFO was at 72.5% and 83.1% for 2015. There was an earning loss in 2015 because of Fair Value Loss on some Artis investment property. Because EPS has jumped around a lot it is hard to get a fix on it for Dividend Payout Ratios. However, for the 4 years previous to 2015, it was under 100%. The DPR for CFPS was 83% in 2015 and its 5 year median value is 73%.
Outstanding shares have growth a lot over the past 5 and 10 years with growth at 13% and 33% per year. There were big jumps in shares in 2007 (105%) and 2010 (101%). Shares have growth due to Stock Issues, Conversion of Debentures, DRIP and Stock Options. Still growth in revenue and cash flow is good. For example Revenue has grown by 22.8% and 49.4% per year over the past 5 and 10 years. Revenue per Share has grown at 8.7% and 12.3% per year over the past 5 and 10 years. Revenue per Share growth is still good.
What I do not like in debt ratios is the Liquidity Ratio. It is hopeless low no matter how you look at it. Current Assets cannot cover current Liabilities. This gives the company vulnerability.
When looking at Price and both FFO and AFFO, the stock price appears to be reasonable and below the median. For example, the 5 year low, median and high median Price/FFO Ratios are 9.74, 10.63 and 11.54. The 10 year low, median and high median P/FFO Ratios are 9.48, 10.51 and 11.60. The current P/FFO is 8.97 based on 2016 FFO estimate of $1.51 and a stock price of $13.55. This stock price testing suggests that the stock price is reasonable and below the median.
I get a Graham Price of $22.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.63, 0.95 and 1.20. The current P/GP Ratio is 0.61 based on a stock price of $13.55. This stock price testing suggests that the stock price is cheap. (See my site and blog for information on Graham Price.)
The 10 year Price/Book Value per Share Ratio is 0.93. The current P/B Ratio is 0.87 a value some 6.6% lower. The current P/B Ratio is based on a stock price of $13.55 and BVPS of $15.62. This stock price testing suggests that the stock price is reasonable and below the median. (See blog for information Book Values.)
The historical median dividend yield is 7.15%. The current dividend yield is 7.97% based on dividends (or distributions of) $1.08 and a stock price of $13.55. The current dividend yield is some 11% higher than the historical median dividend yield. This suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. The consensus would be a Buy recommendation. The 12 month stock price would be $14.44. This implies total return of $14.545 with 7.97% from dividends and 6.57% from capital gains. (See my blog for information on Analyst Ratings .)
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 stocks being a Value Trap... learn more . The next stock I will write about will be Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more on Monday, July 18, 2016 around 5 pm.
Artis REIT's portfolio is comprised of industrial, retail, and office space in Canada and the United States. Its web site is here Artis 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. 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.
I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. It is also not a dividend growth stock.
This REIT was started in 2004 and has been paying dividends since 2005 some 11 years ago. In the beginning it raised its dividends, but that has not occurred since 2009. Since there is not much history to draw from I must draw the conclusion that it is not a dividend growth stock until it proves otherwise. Dividend growth is at 0% and 3.8% per year over the past 5 and 10 years
The Dividend Payout Ratios against FFO and AFFO was at 72.5% and 83.1% for 2015. There was an earning loss in 2015 because of Fair Value Loss on some Artis investment property. Because EPS has jumped around a lot it is hard to get a fix on it for Dividend Payout Ratios. However, for the 4 years previous to 2015, it was under 100%. The DPR for CFPS was 83% in 2015 and its 5 year median value is 73%.
Outstanding shares have growth a lot over the past 5 and 10 years with growth at 13% and 33% per year. There were big jumps in shares in 2007 (105%) and 2010 (101%). Shares have growth due to Stock Issues, Conversion of Debentures, DRIP and Stock Options. Still growth in revenue and cash flow is good. For example Revenue has grown by 22.8% and 49.4% per year over the past 5 and 10 years. Revenue per Share has grown at 8.7% and 12.3% per year over the past 5 and 10 years. Revenue per Share growth is still good.
What I do not like in debt ratios is the Liquidity Ratio. It is hopeless low no matter how you look at it. Current Assets cannot cover current Liabilities. This gives the company vulnerability.
When looking at Price and both FFO and AFFO, the stock price appears to be reasonable and below the median. For example, the 5 year low, median and high median Price/FFO Ratios are 9.74, 10.63 and 11.54. The 10 year low, median and high median P/FFO Ratios are 9.48, 10.51 and 11.60. The current P/FFO is 8.97 based on 2016 FFO estimate of $1.51 and a stock price of $13.55. This stock price testing suggests that the stock price is reasonable and below the median.
I get a Graham Price of $22.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.63, 0.95 and 1.20. The current P/GP Ratio is 0.61 based on a stock price of $13.55. This stock price testing suggests that the stock price is cheap. (See my site and blog for information on Graham Price.)
The 10 year Price/Book Value per Share Ratio is 0.93. The current P/B Ratio is 0.87 a value some 6.6% lower. The current P/B Ratio is based on a stock price of $13.55 and BVPS of $15.62. This stock price testing suggests that the stock price is reasonable and below the median. (See blog for information Book Values.)
The historical median dividend yield is 7.15%. The current dividend yield is 7.97% based on dividends (or distributions of) $1.08 and a stock price of $13.55. The current dividend yield is some 11% higher than the historical median dividend yield. This suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. The consensus would be a Buy recommendation. The 12 month stock price would be $14.44. This implies total return of $14.545 with 7.97% from dividends and 6.57% from capital gains. (See my blog for information on Analyst Ratings .)
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 stocks being a Value Trap... learn more . The next stock I will write about will be Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more on Monday, July 18, 2016 around 5 pm.
Artis REIT's portfolio is comprised of industrial, retail, and office space in Canada and the United States. Its web site is here Artis 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. 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.
Wednesday, July 13, 2016
TMX Group Ltd
Sound bite for Twitter and StockTwits is: Price seems reasonable. I still would not buy this stock as there are too many things I do not like about it. See my spreadsheet on TMX Group Ltd.
I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I looked at this stock in 2008 after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks. However, this has not turned out to be a dividend growth stock after all.
The goodwill and intangible items are down in dollar terms because of impairment charges, but at a ratio to the market cap of 2.26 they are still relatively high. Last year the ratio was 1.69. This is not good. If the public values the intangible and goodwill items less than the company's balance sheet, it often leads to write-offs and earnings losses.
Personally, I would not consider this stock. I feel it has too much vulnerability. The debt ratios are low for Liquidity and Debt. The Liquidity does not even get high enough when you add in CF less Dividends. The Goodwill and Intangible Ratios are far too high. Also, it is currently not a dividend growth stock.
Currently the dividend is moderate, but there has been no dividend increase since 2011. It never had the habit of yearly dividend increases. The current dividend yield is 3.00% based on dividends of $1.60 and a stock price of $53.42. The dividend growth for the past 5 and 10 years is at 0.85 and 5.9% per year. If you had bought this stock 5 years ago, the dividend yield on your original purchase if you got it at a median price would only be 3.87%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.69, 21.74 and 24.79. The 10 year corresponding values are similar at 18.57, 21.88 and 24.92. The current P/E Ratio is 15.95 based on a stock price of $53.42 and 2016 EPS estimate of $3.35. This is a big jump over last year's EPS by some 448%. If you compare the 12 month period to the end of the first quarter to the 12 month period to the end of 2015, EPS is only up by 7.3%. EPS for the first quarter of this year is only up by 9% over the first quarter of last year. So you have to wonder about this estimate.
I get a Graham Price of $62.39 when I calculate the Graham Price the way I usually do using in the calculation the EPS estimate for that year. However, the EPS estimate may be way off. Others I know calculate the Graham Price using the 3 years trailing EPS. By this method the Graham Price would be $35.09.
Using either method the 10 year low, median and high median Price/Graham Price Ratios are similar except for the P/GP Ratio median high value. However, the problem is that current P/GP Ratio is 1.52 using the second method but only 0.86 using my usual method. So the second method shows the stock as expensive and my usual method shows it as cheap. These different methods should not have such different results.
The 10 year Price/Book Value per Share Ratio is 2.70. The current P/B Ratio is 1.03 a value some 62% lower based on a BVPS of $51.26 and a stock price of $53.42. This stock price test suggests that the stock is cheap. A P/B Ratio of 1.03 is a low ratio. The BVPS growth is 35% per year over the past 5 years. There was a 226% increase in BVPS in 2012 and a 311% increase in 2008. This is an unusual pattern for book value.
I get a Historical Median Dividend Yield of 3.21%. The current dividend yield is 3.00% based on a stock price of $53.42 and Dividends of $1.60. By this stock price test the stock price is reasonable but above the median. This would be my favourite test as it uses present values and not estimates.
The 10 year Price/Cash Flow per Share Ratio is 11.05. The current P/CF Ratio is 11.38 based on the 12 month Cash Flow of $255.4M and a stock price of $53.42. This stock price testing suggests that the stock price is reasonable but above the median.
The 10 year P/S Ratio is 4.52 and the current P/S Ratio at 4.00 is some 12% lower. The current P/S Ratio is based on 2016 Revenue estimate of $631.1M (Revenue per Share of $13.35) and a stock price of $53.42. This stock price testing suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations I find only Hold and Underperform recommendations. Most recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $48.00. This implies a total loss of 7.15% with 3.00% from dividends and a capital loss of 10.15%.
Jeff Patterson on Finance Magnates talks about the fourth quarter of 2015 loss mainly due to impairment charges. Eric Lam of Bloomberg News talks on Financial Post of this stock becoming world's top-performing stock. However, that is only because it has recovered from the plunge in stock price that occurred in 2015. See analysts remarks on this stock at Stock Chase. There is only one remark in 2016 and that is a Don't Buy recommendation by Bruce Campbell.
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.
The last stock I wrote about was about was Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)... learn more . The next stock I will write about will be Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more on Friday, July 15, 2016 around 5 pm. Tomorrow on my other blog I will write about stocks being a Value Trap... learn more on Thursday, July 14, 2016 around 5 pm.
TMX Group Ltd. operates two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its web site is here TMX Group 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.
I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I looked at this stock in 2008 after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks. However, this has not turned out to be a dividend growth stock after all.
The goodwill and intangible items are down in dollar terms because of impairment charges, but at a ratio to the market cap of 2.26 they are still relatively high. Last year the ratio was 1.69. This is not good. If the public values the intangible and goodwill items less than the company's balance sheet, it often leads to write-offs and earnings losses.
Personally, I would not consider this stock. I feel it has too much vulnerability. The debt ratios are low for Liquidity and Debt. The Liquidity does not even get high enough when you add in CF less Dividends. The Goodwill and Intangible Ratios are far too high. Also, it is currently not a dividend growth stock.
Currently the dividend is moderate, but there has been no dividend increase since 2011. It never had the habit of yearly dividend increases. The current dividend yield is 3.00% based on dividends of $1.60 and a stock price of $53.42. The dividend growth for the past 5 and 10 years is at 0.85 and 5.9% per year. If you had bought this stock 5 years ago, the dividend yield on your original purchase if you got it at a median price would only be 3.87%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.69, 21.74 and 24.79. The 10 year corresponding values are similar at 18.57, 21.88 and 24.92. The current P/E Ratio is 15.95 based on a stock price of $53.42 and 2016 EPS estimate of $3.35. This is a big jump over last year's EPS by some 448%. If you compare the 12 month period to the end of the first quarter to the 12 month period to the end of 2015, EPS is only up by 7.3%. EPS for the first quarter of this year is only up by 9% over the first quarter of last year. So you have to wonder about this estimate.
I get a Graham Price of $62.39 when I calculate the Graham Price the way I usually do using in the calculation the EPS estimate for that year. However, the EPS estimate may be way off. Others I know calculate the Graham Price using the 3 years trailing EPS. By this method the Graham Price would be $35.09.
Using either method the 10 year low, median and high median Price/Graham Price Ratios are similar except for the P/GP Ratio median high value. However, the problem is that current P/GP Ratio is 1.52 using the second method but only 0.86 using my usual method. So the second method shows the stock as expensive and my usual method shows it as cheap. These different methods should not have such different results.
The 10 year Price/Book Value per Share Ratio is 2.70. The current P/B Ratio is 1.03 a value some 62% lower based on a BVPS of $51.26 and a stock price of $53.42. This stock price test suggests that the stock is cheap. A P/B Ratio of 1.03 is a low ratio. The BVPS growth is 35% per year over the past 5 years. There was a 226% increase in BVPS in 2012 and a 311% increase in 2008. This is an unusual pattern for book value.
I get a Historical Median Dividend Yield of 3.21%. The current dividend yield is 3.00% based on a stock price of $53.42 and Dividends of $1.60. By this stock price test the stock price is reasonable but above the median. This would be my favourite test as it uses present values and not estimates.
The 10 year Price/Cash Flow per Share Ratio is 11.05. The current P/CF Ratio is 11.38 based on the 12 month Cash Flow of $255.4M and a stock price of $53.42. This stock price testing suggests that the stock price is reasonable but above the median.
The 10 year P/S Ratio is 4.52 and the current P/S Ratio at 4.00 is some 12% lower. The current P/S Ratio is based on 2016 Revenue estimate of $631.1M (Revenue per Share of $13.35) and a stock price of $53.42. This stock price testing suggests that the stock price is reasonable and below the median.
When I look at analysts' recommendations I find only Hold and Underperform recommendations. Most recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $48.00. This implies a total loss of 7.15% with 3.00% from dividends and a capital loss of 10.15%.
Jeff Patterson on Finance Magnates talks about the fourth quarter of 2015 loss mainly due to impairment charges. Eric Lam of Bloomberg News talks on Financial Post of this stock becoming world's top-performing stock. However, that is only because it has recovered from the plunge in stock price that occurred in 2015. See analysts remarks on this stock at Stock Chase. There is only one remark in 2016 and that is a Don't Buy recommendation by Bruce Campbell.
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.
The last stock I wrote about was about was Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)... learn more . The next stock I will write about will be Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more on Friday, July 15, 2016 around 5 pm. Tomorrow on my other blog I will write about stocks being a Value Trap... learn more on Thursday, July 14, 2016 around 5 pm.
TMX Group Ltd. operates two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its web site is here TMX Group 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.
Monday, July 11, 2016
Inter Pipeline Ltd
Sound bite for Twitter and StockTwits is: Price reasonable to expensive. However, stock is cheaper than it was in 2014. Good dividend and decent increases. Shareholders have done well. See my spreadsheet on Inter Pipeline Ltd.
I do not own this stock of Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF). In 2008, a friend had asked me about this pipeline and I had no information on it, so I investigated it. It is a utility and I follow and have lots of utility stocks.
I noted that for the 2015 financial year there was a big rise in dividends paid in cash. The reason is a big drop in DRIP dividends. In August 2015 Inter Pipeline Ltd stopped giving a premium reinvestment discount on DRIPs.
The dividend is good and the dividend increases are moderate. The current dividend yield is 5.66% based on dividends of $1.56 and a stock price of $27.56. It has a 5 year median dividend yield is 5.07% and its historical dividend yield is 8.89%. This stock was a limited partnership until it became a corporation in 2013. The dividends growth has been 10.42% and 7.02% per year over the past 5 and 10 years. Dividends are paid monthly.
The Dividend Payout Ratios for this company are high. The DPR for EPS for 2015 was 115%. Analysts expect it to be around 101% by 2018. The DPR for EPS has almost always been above 100%. The DPR for CFPS has been better. The DPR for CFPS was 64% in 2015. The 5 year median DPR for CFPS is 69%.
The stock has also provided shareholders with good total returns. The total return over the past 5 and 10 years is 14.08% and 19.12% per year. The portion of this return attributable to dividends is at 5.93% and 7.35% per year over the past 5 and 10 years. The portion of this return to capital gains is at 8.15% and 11.79% per year over the past 5 and 10 years.
The Liquidity Ratios are very low at first glance with a value of 0.15 for 2015. A proper ratio should be around 1.50 or higher. However, part of the reason is outstanding commercial papers listed as current liabilities. However, excluding commercial paper value the ratio is only 0.76. If you add in cash flow after dividends you get a ratio of 1.57. The problem is that this gives the company vulnerabilities in bad economic times. The Debt Ratio is fine at 1.54. The Leverage and Debt/Equity Ratio at 2.86 and 1.86 are rather normal for a pipeline.
The Return on Equity has been below 10% 2 times in the past 5 years and 4 times during the past 10 years. I prefer it not to be below 10% in any year. The ROE for 2015 was 13.5% and the 5 year median ROE is also 13.5%.
The other thing to mention is that outstanding shares have grown at 5.5% and 6.2% per year over the past 5 and 10 years. Therefore I would, if I was invested in the stock look at the per share values to get a proper idea of actual growth. This can make a difference. For example Revenue growth looks good at 11% and 6.1% per year over the past 5 and 10 years. However, the real growth is shown in Revenue per Share where growth is at 5.2% and 0% over the past 5 and 10 years.
Over the past 5 and 10 years earnings and cash flow growth is better. The EPS growth over the past 5 and 10 years is at 7.1% and 10.3% per year. The CFPS growth over the past 5 and 10 years is at 12.2% and 10.8% per year.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.21, 18.16 and 21.18. The 10 year corresponding values are lower at 12.03, 14.29 and 16.76. The historical ratios are similar at 15.13, 17.86 and 19.92. The current P/E Ratio is 20.88 based on a stock price of $27.56 and 2016 EPS estimate of $1.32. This stock price testing suggests that the stock price is relatively high.
I get a Graham Price of $15.59. The 10 year low, median and high median Price/Graham Price Ratios are 1.18, 1.41 and 1.62. The current P/GP Ratio is 1.77 based on a stock price of $27.56. 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 2.81. The current P/B Ratio is 3.37 a value 20% higher. The current P/B Ratio is based on a stock price of $27.56 and BVPS of $8.18. This stock price testing suggests that the stock price is relatively expensive
With dividend yield testing, the current dividend yield is 5.66% and the 5 year median dividend yield is 12% lower at 5.07%. This tells you that the current price is better than the median price over the past 5 years. However, the historical dividend yield is a lot higher at 8.07%. But, as a Limited Partnership you would expect rather high dividend yields. This company changed from a Limited Partnership in 2013.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and so the consensus recommendation is a Hold. The 12 month stock price if $27.54. This implies a total return of 5.59% with 5.66% from dividends and a capital loss of 0.07%.
Andrew Walker of Motley Fool likes this stock and thinks that the company will raise the dividends a second time this year. Lee Rogers on Press Telegraph talks about recent analysts ratings saying 4 rate it a Buy, 7 a Hold and 0 a Sell meaning analysts are 36% positive on this stock. See what analysts are saying about this stock on Stock Chase. In July of 2015 the blogger Road Map 2 Retire talks about why he bought this company.
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.
The last stock I wrote about was about was Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more . The next stock I will write about will be TMX Group Ltd (TSX-X, OTC-TMXXF)... learn more on Wednesday, July 13, 2016 around 5 pm. Tomorrow on my other blog I have some notes on my updating of my stock list... learn more on Tuesday, July 12, 2016 around 5 pm.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not an income trust. Its web site is here Inter Pipeline 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.
I do not own this stock of Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF). In 2008, a friend had asked me about this pipeline and I had no information on it, so I investigated it. It is a utility and I follow and have lots of utility stocks.
I noted that for the 2015 financial year there was a big rise in dividends paid in cash. The reason is a big drop in DRIP dividends. In August 2015 Inter Pipeline Ltd stopped giving a premium reinvestment discount on DRIPs.
The dividend is good and the dividend increases are moderate. The current dividend yield is 5.66% based on dividends of $1.56 and a stock price of $27.56. It has a 5 year median dividend yield is 5.07% and its historical dividend yield is 8.89%. This stock was a limited partnership until it became a corporation in 2013. The dividends growth has been 10.42% and 7.02% per year over the past 5 and 10 years. Dividends are paid monthly.
The Dividend Payout Ratios for this company are high. The DPR for EPS for 2015 was 115%. Analysts expect it to be around 101% by 2018. The DPR for EPS has almost always been above 100%. The DPR for CFPS has been better. The DPR for CFPS was 64% in 2015. The 5 year median DPR for CFPS is 69%.
The stock has also provided shareholders with good total returns. The total return over the past 5 and 10 years is 14.08% and 19.12% per year. The portion of this return attributable to dividends is at 5.93% and 7.35% per year over the past 5 and 10 years. The portion of this return to capital gains is at 8.15% and 11.79% per year over the past 5 and 10 years.
The Liquidity Ratios are very low at first glance with a value of 0.15 for 2015. A proper ratio should be around 1.50 or higher. However, part of the reason is outstanding commercial papers listed as current liabilities. However, excluding commercial paper value the ratio is only 0.76. If you add in cash flow after dividends you get a ratio of 1.57. The problem is that this gives the company vulnerabilities in bad economic times. The Debt Ratio is fine at 1.54. The Leverage and Debt/Equity Ratio at 2.86 and 1.86 are rather normal for a pipeline.
The Return on Equity has been below 10% 2 times in the past 5 years and 4 times during the past 10 years. I prefer it not to be below 10% in any year. The ROE for 2015 was 13.5% and the 5 year median ROE is also 13.5%.
The other thing to mention is that outstanding shares have grown at 5.5% and 6.2% per year over the past 5 and 10 years. Therefore I would, if I was invested in the stock look at the per share values to get a proper idea of actual growth. This can make a difference. For example Revenue growth looks good at 11% and 6.1% per year over the past 5 and 10 years. However, the real growth is shown in Revenue per Share where growth is at 5.2% and 0% over the past 5 and 10 years.
Over the past 5 and 10 years earnings and cash flow growth is better. The EPS growth over the past 5 and 10 years is at 7.1% and 10.3% per year. The CFPS growth over the past 5 and 10 years is at 12.2% and 10.8% per year.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.21, 18.16 and 21.18. The 10 year corresponding values are lower at 12.03, 14.29 and 16.76. The historical ratios are similar at 15.13, 17.86 and 19.92. The current P/E Ratio is 20.88 based on a stock price of $27.56 and 2016 EPS estimate of $1.32. This stock price testing suggests that the stock price is relatively high.
I get a Graham Price of $15.59. The 10 year low, median and high median Price/Graham Price Ratios are 1.18, 1.41 and 1.62. The current P/GP Ratio is 1.77 based on a stock price of $27.56. 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 2.81. The current P/B Ratio is 3.37 a value 20% higher. The current P/B Ratio is based on a stock price of $27.56 and BVPS of $8.18. This stock price testing suggests that the stock price is relatively expensive
With dividend yield testing, the current dividend yield is 5.66% and the 5 year median dividend yield is 12% lower at 5.07%. This tells you that the current price is better than the median price over the past 5 years. However, the historical dividend yield is a lot higher at 8.07%. But, as a Limited Partnership you would expect rather high dividend yields. This company changed from a Limited Partnership in 2013.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and so the consensus recommendation is a Hold. The 12 month stock price if $27.54. This implies a total return of 5.59% with 5.66% from dividends and a capital loss of 0.07%.
Andrew Walker of Motley Fool likes this stock and thinks that the company will raise the dividends a second time this year. Lee Rogers on Press Telegraph talks about recent analysts ratings saying 4 rate it a Buy, 7 a Hold and 0 a Sell meaning analysts are 36% positive on this stock. See what analysts are saying about this stock on Stock Chase. In July of 2015 the blogger Road Map 2 Retire talks about why he bought this company.
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.
The last stock I wrote about was about was Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more . The next stock I will write about will be TMX Group Ltd (TSX-X, OTC-TMXXF)... learn more on Wednesday, July 13, 2016 around 5 pm. Tomorrow on my other blog I have some notes on my updating of my stock list... learn more on Tuesday, July 12, 2016 around 5 pm.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not an income trust. Its web site is here Inter Pipeline 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.
Friday, July 8, 2016
Morneau Shepell Inc.
Sound bite for Twitter and StockTwits is: Seems expensive, good dividend. This stock has a very good dividend at 4.34%. Both the P/B Ratio and P/CF Ratio show this stock to be expensive. See my spreadsheet on Morneau Shepell Inc.
I do not own this stock of Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF). Every once in a while I go through the stocks that my brokerage, TD Waterhouse, is recommending to find promising new stocks. In February 2013 this stock was rated a buy by TD Waterhouse. It was under Diversified Financials.
This stock was an income trust from 2005 to 2011. When it changed to a corporation, it decreased its dividend by 17.4%. Since that time the dividend has been flat. The problem is that they are paying out, in 2015 some 236% of their earnings. However, analysts expect a good increase in EPS in 2016 and the Payout to be reduced to 85%. One problem I see is that the EPS dropped in the first quarter of 2016.
The dividend yield is very good. It is a company that was an income trust and these companies were expected to end up with dividends in the 4 to 5% range. This stock has a current dividend of 4.34% based on dividends of $0.78 and a stock price of $17.97. The 5 year median dividend yield is 5.6%.
I would only be interested in this stock if they can change the dividend picture and their earnings picture. They would need to pay out less in dividends than earnings and they would have to start increasing their dividends. The Return on Equity is 5.5% in 2015 with the 5 year median at 6.1%. I prefer companies with ROE of at least 10%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 27.59, 30.92 and 34.25. The corresponding 10 year values are close at 24.35, 29.22 and 32.30. I think that these P/E Ratios are rather high. The current P/E Ratio is 19.53 based on a stock price of $17.97 and 2016 EPS estimate of $0.92. This stock price testing suggests that the stock price is relatively cheap. I think that P/E Ratios of around 10 shows a stock is cheap.
I get a Graham Price of $11.30. The 10 year low, median and high median Price/Graham Price Ratios are 1.24, 1.45 and 1.59. The current P/GP Ratio is 1.59 based on a stock price of $17.97. This stock price testing suggests that the stock price is relatively reasonable, but at the far range end of the reasonableness range. A P/GP Ratio is 1.59 is a rather high ratio.
I get a 10 year median Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 2.91 a values some 77% higher. The current P/B Ratio is based on a Book Value per Share of $6.17 and a stock price of $17.97. This stock price testing suggests that the stock price is expensive. The problem here is that the Book Value is declining. This is not a good thing.
When you look at P/S Ratios, the 10 year median P/S Ratio is 1.41 and the current ratios is 1.43. This stock price testing suggests that the stock price is reasonable and around the median.
This is not true looking at Cash Flow. The 10 year median Price/Cash Flow per Share Ratio is 12.40. The current P/CF Ratio is 16.34 based on a stock price of $17.97 and CFPS estimate for 2016 of $1.10. The current P/CF Ratio is some 32% higher than the 10 year median ratio. This stock price testing suggests that the stock price is expensive.
On a positive note, the company is growing both Revenue and Cash Flow. The 5 and 10 year growth in Revenue per share is 10.9% and 10.4% per year. The 5 and 10 year growth in CFPS is 6.6% and 21.2% per year. The dividend is good at 4.34%. Studies have shown that high dividend stocks can do very well in the long term.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most recommendations are a Buy. The 12 month stock consensus price is $19.10. This implies a total return of $10.63 with 6.29% from capital gains and 4.34% from dividends based on a stock price of $17.97.
In this press release, Morneau Shepell talks about celebrating their 50th anniversary. On Breaking Financial News we hear that National Bank Financial upped their target price to $20.00. See what analysts say about this stock on Stock Chase
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.
The last stock I wrote about was about was Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more . The next stock I will write about will be Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)... learn more on Monday, July 11, 2016 around 5 pm.
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 Morneau Shepell 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. 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.
I do not own this stock of Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF). Every once in a while I go through the stocks that my brokerage, TD Waterhouse, is recommending to find promising new stocks. In February 2013 this stock was rated a buy by TD Waterhouse. It was under Diversified Financials.
This stock was an income trust from 2005 to 2011. When it changed to a corporation, it decreased its dividend by 17.4%. Since that time the dividend has been flat. The problem is that they are paying out, in 2015 some 236% of their earnings. However, analysts expect a good increase in EPS in 2016 and the Payout to be reduced to 85%. One problem I see is that the EPS dropped in the first quarter of 2016.
The dividend yield is very good. It is a company that was an income trust and these companies were expected to end up with dividends in the 4 to 5% range. This stock has a current dividend of 4.34% based on dividends of $0.78 and a stock price of $17.97. The 5 year median dividend yield is 5.6%.
I would only be interested in this stock if they can change the dividend picture and their earnings picture. They would need to pay out less in dividends than earnings and they would have to start increasing their dividends. The Return on Equity is 5.5% in 2015 with the 5 year median at 6.1%. I prefer companies with ROE of at least 10%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 27.59, 30.92 and 34.25. The corresponding 10 year values are close at 24.35, 29.22 and 32.30. I think that these P/E Ratios are rather high. The current P/E Ratio is 19.53 based on a stock price of $17.97 and 2016 EPS estimate of $0.92. This stock price testing suggests that the stock price is relatively cheap. I think that P/E Ratios of around 10 shows a stock is cheap.
I get a Graham Price of $11.30. The 10 year low, median and high median Price/Graham Price Ratios are 1.24, 1.45 and 1.59. The current P/GP Ratio is 1.59 based on a stock price of $17.97. This stock price testing suggests that the stock price is relatively reasonable, but at the far range end of the reasonableness range. A P/GP Ratio is 1.59 is a rather high ratio.
I get a 10 year median Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 2.91 a values some 77% higher. The current P/B Ratio is based on a Book Value per Share of $6.17 and a stock price of $17.97. This stock price testing suggests that the stock price is expensive. The problem here is that the Book Value is declining. This is not a good thing.
When you look at P/S Ratios, the 10 year median P/S Ratio is 1.41 and the current ratios is 1.43. This stock price testing suggests that the stock price is reasonable and around the median.
This is not true looking at Cash Flow. The 10 year median Price/Cash Flow per Share Ratio is 12.40. The current P/CF Ratio is 16.34 based on a stock price of $17.97 and CFPS estimate for 2016 of $1.10. The current P/CF Ratio is some 32% higher than the 10 year median ratio. This stock price testing suggests that the stock price is expensive.
On a positive note, the company is growing both Revenue and Cash Flow. The 5 and 10 year growth in Revenue per share is 10.9% and 10.4% per year. The 5 and 10 year growth in CFPS is 6.6% and 21.2% per year. The dividend is good at 4.34%. Studies have shown that high dividend stocks can do very well in the long term.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most recommendations are a Buy. The 12 month stock consensus price is $19.10. This implies a total return of $10.63 with 6.29% from capital gains and 4.34% from dividends based on a stock price of $17.97.
In this press release, Morneau Shepell talks about celebrating their 50th anniversary. On Breaking Financial News we hear that National Bank Financial upped their target price to $20.00. See what analysts say about this stock on Stock Chase
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.
The last stock I wrote about was about was Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more . The next stock I will write about will be Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)... learn more on Monday, July 11, 2016 around 5 pm.
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 Morneau Shepell 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. 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.
Wednesday, July 6, 2016
Empire Company Ltd
Sound bite for Twitter and StockTwits is: Cheap and risky. My favourite stock price test is using the dividend yield if applicable. It is only this test that shows that the stock is cheap. The problem is integration of Safeway. The loss for the latest financial year is write offs due to Safeway. Some people are worried that this company has become a value trap. I will put a note out later on what this means. See my spreadsheet on Empire Company Ltd.
I do not own this stock of Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). I have known about this stock for some time, but I had not had the opportunity to follow it before.
This stock has a rather low dividend and moderate dividend growth. The current dividend is the highest it has been at 2.13%. The historical high dividend yield is 1.97% and the 5 year median dividend yield is 1.49%. The historical median dividend yield is 1.44%. The 5 and 10 year growth in dividends is at 8.5% and 7.92% per year over the past 5 and 10 years.
Last year, in 2015 the dividend increase was for 11.1%. This year the dividend increase is a lot lower at just 2.5%. The financial year ends at or just after the end of April each year. They have raised their dividends every year since 1996. I have dividend information back to 1985 and they have been raising their dividend inconsistently since. That is some years had no dividend increases.
They had a big earnings lost for the financial year ending 7 May 2016 at $7.78. The company said that the main reason is that impairment losses were recognized in the West business unit for goodwill and long-lived assets of $1,285.9 million and $10.9 million, respectively. Although in the accounting records they seem to take impairment charges of $3,027 million and 10.9 million.
Shares have grown by 5.9% and 3.3% per year over the past 5 and 10 years. This makes per share values the most important ones to me. Revenue growth is low to good. Earnings growth is low to moderate. Cash Flow growth is moderate to good.
Revenue has grown at 9% and 6.5% per year over the past 5 and 10 years. Revenue per share has grown at 3% and 3.1% per year over the past 5 and 10 years.
Some sites including TD Waterhouse give the adjusted EPS value. For this stock for the financial year ending 7 May 2016 the EPS is $1.50. Even using this EPS value the growth in EPS is a decline of 3.7% and flat earnings over the past 5 and 10 years.
Cash Flow has grown by 11.1% and 7.6% over the past 5 and 10 years. CFPS has grown by 4.9% and 4.2% per year over the past 5 and 10 years.
The Liquidity Ratio for the financial year ending in May 2016 is just 0.96. The 5 year median is just 0.96 also. This means that current assets cannot cover current liabilities. If you add in cash flow after dividends, the ratio is 1.25. I much prefer this ratio to be 1.50. The Debt Ratio is better at 1.68 and has a 5 year median of 1.99. Leverage and Debt/Equity Ratios are a bit high at 2.51 and 1.49, respectively.
Until recently the Return on Equity was good. The 5 year median was 10.2% in 2013. The last three years it has been 4.1%, 7% and -58.8%.
The 5 year low, median and high median Price/Earnings per Share are 13.56, 17.04 and 20.53. This is higher than the corresponding 10 year values of 10.52, 11.62 and 13.12. They are also higher than the corresponding historical values of 9.48, 11.14 and 13.43. The current P/E Ratio is 12.64 based on 2017 EPS estimates of $1.52 and a stock price of $19.21. This would suggest that the stock price is probably reasonable, but above the median.
I get a Graham Price of $21.37. The 10 years Price/Graham Price Ratios are 0.72, 0.78 and 0.90. The current P/GP Ratio is 0.90. This stock price testing suggests that the stock price is reasonable but above the median.
I get a 10 year Price/Book Value per Share Ratio of 1.20. The current P/B Ratio is 1.44 based on BVPS of $13.35 and a stock price of $19.21. The current P/B Ratio is some 19.5% higher than the 10 year median. This stock price testing suggests that the stock price is reasonable but above the median. If the current P/B Ratio was 20% above the 10 year median, the stock price would be considered expensive. So in this test it is quite close to expensive.
The historical median dividend yield is 1.44%. The current dividend yield is 2.13% based on dividends of $0.41 and a stock price of $19.21. The current dividend is some 48% higher than the historical dividend yield. This would suggest that the stock price is cheap. This historical high is 1.97% and the current dividend yield is 8% above this. This testing is saying the stock is cheap.
When I look analysts' recommendations, I find Buy, Hold and Underperform. The vast majority is a Hold recommendation and the consensus recommendation would be a Hold. The 12 month stock price is $21.67. This implies a 14.94% total return with 12.81% from capital gains and 2.13% from dividends.
This article from the Canadian Press on CBC News talks about Empire big reported loss in the 4th quarter of their financial year ending 7 May 2016. Kay Ng of Motley Fool asks if Empire is currently a bargain. She concludes that at best it is fairly valued. Renee Jackson on The Cebat Gem talks about what analysts ratings on this stock. See what analysts are saying about this company on Stock Chase. Their real problem is the integration of Safeway out west.
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.
Yesterday on my other blog I wrote about Dividend Stocks July 2016... learn more. The next stock I will write about will be Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more on Friday, July 8, 2016 around 5 pm. Tomorrow on my other blog I will write about Something to Buy July 2016... learn more on Thursday, July 7, 2016 around 5 pm.
Empire Company Limited is engaged in the business of food retailing and related real estate. The Company operates through two segments: Food Retailing and Investments and Other Operations. The Company's Investments and Other Operations segment includes its equity investments in real estate, which are focused on the ownership of income-producing retail, office and mixed-use properties through an equity accounted ownership interest in Crombie REIT and residential land development in select communities in Ontario, Western Canada and the United States through its investments in Genstar. Its web site is here Empire Company 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.
I do not own this stock of Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). I have known about this stock for some time, but I had not had the opportunity to follow it before.
This stock has a rather low dividend and moderate dividend growth. The current dividend is the highest it has been at 2.13%. The historical high dividend yield is 1.97% and the 5 year median dividend yield is 1.49%. The historical median dividend yield is 1.44%. The 5 and 10 year growth in dividends is at 8.5% and 7.92% per year over the past 5 and 10 years.
Last year, in 2015 the dividend increase was for 11.1%. This year the dividend increase is a lot lower at just 2.5%. The financial year ends at or just after the end of April each year. They have raised their dividends every year since 1996. I have dividend information back to 1985 and they have been raising their dividend inconsistently since. That is some years had no dividend increases.
They had a big earnings lost for the financial year ending 7 May 2016 at $7.78. The company said that the main reason is that impairment losses were recognized in the West business unit for goodwill and long-lived assets of $1,285.9 million and $10.9 million, respectively. Although in the accounting records they seem to take impairment charges of $3,027 million and 10.9 million.
Shares have grown by 5.9% and 3.3% per year over the past 5 and 10 years. This makes per share values the most important ones to me. Revenue growth is low to good. Earnings growth is low to moderate. Cash Flow growth is moderate to good.
Revenue has grown at 9% and 6.5% per year over the past 5 and 10 years. Revenue per share has grown at 3% and 3.1% per year over the past 5 and 10 years.
Some sites including TD Waterhouse give the adjusted EPS value. For this stock for the financial year ending 7 May 2016 the EPS is $1.50. Even using this EPS value the growth in EPS is a decline of 3.7% and flat earnings over the past 5 and 10 years.
Cash Flow has grown by 11.1% and 7.6% over the past 5 and 10 years. CFPS has grown by 4.9% and 4.2% per year over the past 5 and 10 years.
The Liquidity Ratio for the financial year ending in May 2016 is just 0.96. The 5 year median is just 0.96 also. This means that current assets cannot cover current liabilities. If you add in cash flow after dividends, the ratio is 1.25. I much prefer this ratio to be 1.50. The Debt Ratio is better at 1.68 and has a 5 year median of 1.99. Leverage and Debt/Equity Ratios are a bit high at 2.51 and 1.49, respectively.
Until recently the Return on Equity was good. The 5 year median was 10.2% in 2013. The last three years it has been 4.1%, 7% and -58.8%.
The 5 year low, median and high median Price/Earnings per Share are 13.56, 17.04 and 20.53. This is higher than the corresponding 10 year values of 10.52, 11.62 and 13.12. They are also higher than the corresponding historical values of 9.48, 11.14 and 13.43. The current P/E Ratio is 12.64 based on 2017 EPS estimates of $1.52 and a stock price of $19.21. This would suggest that the stock price is probably reasonable, but above the median.
I get a Graham Price of $21.37. The 10 years Price/Graham Price Ratios are 0.72, 0.78 and 0.90. The current P/GP Ratio is 0.90. This stock price testing suggests that the stock price is reasonable but above the median.
I get a 10 year Price/Book Value per Share Ratio of 1.20. The current P/B Ratio is 1.44 based on BVPS of $13.35 and a stock price of $19.21. The current P/B Ratio is some 19.5% higher than the 10 year median. This stock price testing suggests that the stock price is reasonable but above the median. If the current P/B Ratio was 20% above the 10 year median, the stock price would be considered expensive. So in this test it is quite close to expensive.
The historical median dividend yield is 1.44%. The current dividend yield is 2.13% based on dividends of $0.41 and a stock price of $19.21. The current dividend is some 48% higher than the historical dividend yield. This would suggest that the stock price is cheap. This historical high is 1.97% and the current dividend yield is 8% above this. This testing is saying the stock is cheap.
When I look analysts' recommendations, I find Buy, Hold and Underperform. The vast majority is a Hold recommendation and the consensus recommendation would be a Hold. The 12 month stock price is $21.67. This implies a 14.94% total return with 12.81% from capital gains and 2.13% from dividends.
This article from the Canadian Press on CBC News talks about Empire big reported loss in the 4th quarter of their financial year ending 7 May 2016. Kay Ng of Motley Fool asks if Empire is currently a bargain. She concludes that at best it is fairly valued. Renee Jackson on The Cebat Gem talks about what analysts ratings on this stock. See what analysts are saying about this company on Stock Chase. Their real problem is the integration of Safeway out west.
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.
Yesterday on my other blog I wrote about Dividend Stocks July 2016... learn more. The next stock I will write about will be Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more on Friday, July 8, 2016 around 5 pm. Tomorrow on my other blog I will write about Something to Buy July 2016... learn more on Thursday, July 7, 2016 around 5 pm.
Empire Company Limited is engaged in the business of food retailing and related real estate. The Company operates through two segments: Food Retailing and Investments and Other Operations. The Company's Investments and Other Operations segment includes its equity investments in real estate, which are focused on the ownership of income-producing retail, office and mixed-use properties through an equity accounted ownership interest in Crombie REIT and residential land development in select communities in Ontario, Western Canada and the United States through its investments in Genstar. Its web site is here Empire Company 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.
Monday, July 4, 2016
Suncor Energy Inc.
Sound bite for Twitter and StockTwits is: Cheap and risky. If you think oil will recover it is best to buy low dividend yield oil stocks when the dividend yield is relatively high. The tests that do not involved estimates show that the stock price is cheap to reasonable. I would buy this company but only at times that the dividend yield was over 1%. See my spreadsheet on Suncor Energy Inc.
I do not own this stock of Suncor Energy Inc. (TSX-SU, NYSE-SU). I started following this stock as Petro-Canada (TSX-PCA). It was on Mike Higgs' list of dividend growth stocks. This was also a key stock for the Investment Reporter. My spreadsheet follows PCA into SU. PCA and SU merged in 2009.
Currently the dividend yield is quite high compared to historical yields. The historical high is 3.27%. The current dividend yield is 3.17% based on dividends of $1.16 and a stock price of $36.65. They have had a great run with dividend increases. The 5 and 10 growth is at 23.3% and 27.2% per year. However, the most recent increase in 2015 was for only 3.6%.
Generally, they have had good Dividend Payout Ratios, with the 5 year median at 28%. However, last year there was an earnings loss and an earnings loss is also expected for 2016. The DPR for CFPS has been good. The 5 year median value is 11%. In 2015, the DPR for CFPS was 24%.
Stock price prices have basically gone nowhere since 2009. The 5 and 10 year total return is at 0.67% and 1.16% per year. The portion of this return attributable to dividends is 2.04% and 1.36% per year over the past 5 and 10 years. The portion of this return attributable to capital loss is 1.37% and 0.20% per year over the past 5 and 10 years.
I cannot test out the stock price using Price/Earnings per Share Ratios because the EPS is expected to be negative in 2016. However, the 5 year low, median and high median P/E Ratios are 10.58, 13.45 and 17.37. The 10 year corresponding values are higher at 12.94, 16.85 and 21.99. The historical values are even higher at 18.57, 23.89 and 29.58.
I get a Graham Price $26.15. This Graham Price is a lot lower than it was recently. For example, in 2013 and 2014, the Graham Prices were $40.37 and $34.54. The 10 year Price/Graham Price Ratios are 0.83, 1.07 and 1.37. The current P/GP Ratio is 1.40 based on a stock price of $36.65.
I get a 10 year Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 1.35 based on a stock price of $36.65 and BVPS of 27.14. This stock price testing suggests that the stock price is reasonable and at the median.
In such cases as these, this is where the dividend yield gives you a clearer picture of the stock price. The historical median dividend yield is just 0.59%. The current dividend yield at 3.17% is some 436% higher. The current dividend yield is just 35 lower than the historical dividend yield high. This stock price testing suggests that the stock is cheap.
The analysts' recommendations are all over the place. There are Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommends are a Buy. The consensus would be a buy. The 12 month price consensus is $40.50. This implies a total return of 13.67% with 10.50% from capital gains and 3.17% from dividends.
Jacob Donnelly of Motley Fool thinks that this company is a good buy and you should ride out its period of acquisitions. The CFO of Suncor says it is looking for more assets to buy. John Tilak and Nia Williams of Reuters talk about Suncor looking for acquisitions in the North Sea and Easter Canada in this Financial Post article. This Press Reader article talks about the recent National Post article about Suncor Energy offering to repurchase its own notes to reduce debt.
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.
The last stock I wrote about was about was Premium Brands Holdings Corp (TSX-PBH, OTC- PRBZF)... learn more. The next stock I will write about will be Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more on Wednesday, July 6 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2016... learn more on Tuesday, July 5, 2016 around 5 pm.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor Energy 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. 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.
I do not own this stock of Suncor Energy Inc. (TSX-SU, NYSE-SU). I started following this stock as Petro-Canada (TSX-PCA). It was on Mike Higgs' list of dividend growth stocks. This was also a key stock for the Investment Reporter. My spreadsheet follows PCA into SU. PCA and SU merged in 2009.
Currently the dividend yield is quite high compared to historical yields. The historical high is 3.27%. The current dividend yield is 3.17% based on dividends of $1.16 and a stock price of $36.65. They have had a great run with dividend increases. The 5 and 10 growth is at 23.3% and 27.2% per year. However, the most recent increase in 2015 was for only 3.6%.
Generally, they have had good Dividend Payout Ratios, with the 5 year median at 28%. However, last year there was an earnings loss and an earnings loss is also expected for 2016. The DPR for CFPS has been good. The 5 year median value is 11%. In 2015, the DPR for CFPS was 24%.
Stock price prices have basically gone nowhere since 2009. The 5 and 10 year total return is at 0.67% and 1.16% per year. The portion of this return attributable to dividends is 2.04% and 1.36% per year over the past 5 and 10 years. The portion of this return attributable to capital loss is 1.37% and 0.20% per year over the past 5 and 10 years.
I cannot test out the stock price using Price/Earnings per Share Ratios because the EPS is expected to be negative in 2016. However, the 5 year low, median and high median P/E Ratios are 10.58, 13.45 and 17.37. The 10 year corresponding values are higher at 12.94, 16.85 and 21.99. The historical values are even higher at 18.57, 23.89 and 29.58.
I get a Graham Price $26.15. This Graham Price is a lot lower than it was recently. For example, in 2013 and 2014, the Graham Prices were $40.37 and $34.54. The 10 year Price/Graham Price Ratios are 0.83, 1.07 and 1.37. The current P/GP Ratio is 1.40 based on a stock price of $36.65.
I get a 10 year Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 1.35 based on a stock price of $36.65 and BVPS of 27.14. This stock price testing suggests that the stock price is reasonable and at the median.
In such cases as these, this is where the dividend yield gives you a clearer picture of the stock price. The historical median dividend yield is just 0.59%. The current dividend yield at 3.17% is some 436% higher. The current dividend yield is just 35 lower than the historical dividend yield high. This stock price testing suggests that the stock is cheap.
The analysts' recommendations are all over the place. There are Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommends are a Buy. The consensus would be a buy. The 12 month price consensus is $40.50. This implies a total return of 13.67% with 10.50% from capital gains and 3.17% from dividends.
Jacob Donnelly of Motley Fool thinks that this company is a good buy and you should ride out its period of acquisitions. The CFO of Suncor says it is looking for more assets to buy. John Tilak and Nia Williams of Reuters talk about Suncor looking for acquisitions in the North Sea and Easter Canada in this Financial Post article. This Press Reader article talks about the recent National Post article about Suncor Energy offering to repurchase its own notes to reduce debt.
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.
The last stock I wrote about was about was Premium Brands Holdings Corp (TSX-PBH, OTC- PRBZF)... learn more. The next stock I will write about will be Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more on Wednesday, July 6 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2016... learn more on Tuesday, July 5, 2016 around 5 pm.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor Energy 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. 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.
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