Sound bite for Twitter and StockTwits is: Good stock price. The stock price is relatively cheap to reasonable. Life Insurance companies are going to suffer under low interest rates. If you have time to wait, this might be a good stock to buy. This would be under the rule of buy good companies when they are cheap. You wait for better times, but in the meantime you collect dividends income. See my spreadsheet on Great-West Lifeco Inc.
I do not own this stock of Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. I have been following this stock for some time. However, I will not buy it because I have Power Financial Corp. (TSX-PWF). Great West Lifeco Inc. is one of the companies under the Power Financial Corp. and Power Corp. (TSX-POW).
Dividends are moderate to good. The current dividend yield is 4.28%. The 5 year median is 4.28% and the historical median is 3.10%. As with a lot of insurance companies, this company stopped raising their dividends because of the 2008 crisis. They had flat dividends from 2009 to 2015. The last dividend raise was in 2016 and it was for 6.1%. The 5 and 10 years dividend growth is at 1.2% and 4.9% per year.
The 5 year low, median and high Price/Earnings per Share Ratios are 10.54, 12.34 and 13.30. The corresponding 10 year ratios are 11.34, 12.48 and 15.08. The historical ratios are 12.27, 13.47 and 15.32. I would image the P/E Ratios went down because of flat dividends from 2009 or 2015. The dividend increases are not as good as they used to be. The median dividend increase was 20% before 2009. The two increases since they restarted in 2015 were 6% and 6.1%. This may not get any better anytime soon while interest rates are so low.
The current P/E Ratio is 12.34 based on 2016 EPS estimate of $2.62 and a stock price of $32.33. On any grounds this P/R Ratio points to a stock price that is relatively reasonable and below the median. It may be a bit on the relatively cheap side.
I get a Graham Price of $33.46. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.02 and 1.21. The current P/GP Ratio is 0.97 based on a stock price of $32.33. This test suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.87. The current P/B Ratio is 1.70 based on a stock price of $32.33 and a BVPS of $19.00. The current P/B Ratio is some 9% lower than the 10 year median ratio and this testing suggests that the stock price is relatively reasonable.
I get a current dividend yield of 4.28% based on a stock price of $32.33 and dividends of $1.38. The historical median dividend yield is 3.10% and this is some38% lower than the current dividend yield. The 5 year median dividend yield is 4.28% and the 10 year median dividend yield is 4.33%. The stock price has relatively been lower than historically because of the flat dividend rate from 2009 to 2015. Also life insurance companies are still, relatively, having a hard time with the low current interest rates. I do not think that anyone knows when we will get back to more normal rates.
This all suggests that the stock price is relatively low historically, but relatively reasonable and around the median more recently.
When I look at analysts' recommendations, I find mostly Hold recommendations and 1 sell recommendations. The 12 months stock price consensus is $33.91. This implies a total return of 9.17% with 4.28% from dividends and 4.89% from capital gains. Obviously lots of analysts' have not heard you should buy stocks when they are cheap. This is how you actually make money in the stock market. In fact, for good dividend stocks a reasonable return is 4% from dividends and 4% from capital gains.
This article on Market Watch talks about Great-West Life opening the TSX celebrating its 125th anniversary and 30 years on the stock exchange. Trent Williams on Community Financial News talks about recent analysts' recommendations which are mostly Hold recommendations. This article by Jonathan Ratner in the Financial Post talks about Brexit affecting this company as it gets some 40% of its revenue and 44% of its earnings from Europe. No one really knows how Brexit is going to work out. Nelson Smith of Motley Fool likes this company and feels investors should load up on Canadian Financials while their prices are low.
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 Canyon Services Group (TSX-FRC, OTC-CYSVF)... learn more . The next stock I will write about will be Granite REIT (TSX-GRT.UN, NYSE-GRP.U)... learn more Monday, October 3, 2016 around 5 pm.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West Lifeco 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, September 30, 2016
Wednesday, September 28, 2016
Canyon Services Group
Sound bite for Twitter and StockTwits is: Probably cheap and risky. I think you can probably make more money and dividends from companies that service the oil and gas industry than companies in the oil and gas extraction industry. You would buy such companies for diversification. See my spreadsheet on Canyon Services Group .
I do not own this stock of Canyon Services Group (TSX-FRC, OTC-CYSVF). I get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19, 2012 and I was impressed with it so I did a spreadsheet. You can sign up for this newsletter at their site.
This company was just listed on the TSX in 2006. In 2011 the company started to pay dividends. This year, 2016, the company suspended dividends after they had a negative earnings year in 2015. They will probably restart them at some time in the future. Since this company is in the business of services to the oil and gas industry, it is hardly surprising that it is having difficulties.
Last was not a good year for this company. It had an earnings loss and lower revenue and cash flow. Debt ratios are fairly good. The Liquidity Ratio for 2015 was 1.43 and it has a 5 year median of 1.54. I would prefer for safety's sake that this ratio be 1.50 or high. The Debt Ratio at 3.13 is good. I like this ratio to be 1.50 or higher. The Leverage and Debt/Equity Ratios are good at 1.47 and 0.47 respectively.
I cannot do stock price testing using Price/Earnings Ratios because they have had a number of negative earnings years. This can result in impossibly low P/E Ratios. For example the 10 year median P/E Ratio is 1.72. Because of negative earnings the Graham Price is also probably off. I get $2.61 and a current Price/Graham Price Ratio of 1.80. This is rather high. Since they have cut the dividends, I cannot do any stock price testing using the dividend yield.
The 10 year Price/Book Value per Share Ratio is 2.04. The current P/B Ratio is 1.09 a values some 47% lower. The current P/B Ratio is based on BVPS of $4.31 and a stock price of $4.69. This stock price testing suggests that the stock price is relatively cheap. This is always a good test because it does not use estimates.
The other thing I can look at is P/S Ratio. The 10 year median P/S Ratio is 1.87. The current P/S Ratio is 1.71 a value some 9% lower. The current P/S Ratio is based on Revenue of $236M and Revenue per Share of $2.75. However, for 2017 and 2018 the P/S Ratio just goes down. It would be 0.99 in 2017 on revenue estimate of $408M and 0.78 on revenue estimate of $514M. These are 47% lower and 58% lower than the current P/S Ratio.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 months consensus stock price is $6.71. This implies a 43.07% total return with 43.07% from capital gains and 0% from dividends.
Trent Williams on Community Financial News talks about recent analysts' recommendations. Most are a Buy. A recent press release was on Stockhouse which talked about Canyon is upgrading 11 existing hydraulic horse power pumps. This article by Dan Healing of Calgary Herald talks about more people being paid by the day or hour rather than by salary at 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 Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF)... learn more . The next stock I will write about will be Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)... learn more on Friday, September 30, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Stephen Moore... learn more on Thursday, September 29, 2016 around 5 pm.
Canyon Services Group Inc. is a fast-growing company providing hydraulic fracturing and other well-stimulation services, including coiled tubing, acidizing, cementing, nitrogen and carbon dioxide, to oil and natural gas producers developing a variety of play types across Western Canada. Its web site is here Canyon Services Group.
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 Canyon Services Group (TSX-FRC, OTC-CYSVF). I get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19, 2012 and I was impressed with it so I did a spreadsheet. You can sign up for this newsletter at their site.
This company was just listed on the TSX in 2006. In 2011 the company started to pay dividends. This year, 2016, the company suspended dividends after they had a negative earnings year in 2015. They will probably restart them at some time in the future. Since this company is in the business of services to the oil and gas industry, it is hardly surprising that it is having difficulties.
Last was not a good year for this company. It had an earnings loss and lower revenue and cash flow. Debt ratios are fairly good. The Liquidity Ratio for 2015 was 1.43 and it has a 5 year median of 1.54. I would prefer for safety's sake that this ratio be 1.50 or high. The Debt Ratio at 3.13 is good. I like this ratio to be 1.50 or higher. The Leverage and Debt/Equity Ratios are good at 1.47 and 0.47 respectively.
I cannot do stock price testing using Price/Earnings Ratios because they have had a number of negative earnings years. This can result in impossibly low P/E Ratios. For example the 10 year median P/E Ratio is 1.72. Because of negative earnings the Graham Price is also probably off. I get $2.61 and a current Price/Graham Price Ratio of 1.80. This is rather high. Since they have cut the dividends, I cannot do any stock price testing using the dividend yield.
The 10 year Price/Book Value per Share Ratio is 2.04. The current P/B Ratio is 1.09 a values some 47% lower. The current P/B Ratio is based on BVPS of $4.31 and a stock price of $4.69. This stock price testing suggests that the stock price is relatively cheap. This is always a good test because it does not use estimates.
The other thing I can look at is P/S Ratio. The 10 year median P/S Ratio is 1.87. The current P/S Ratio is 1.71 a value some 9% lower. The current P/S Ratio is based on Revenue of $236M and Revenue per Share of $2.75. However, for 2017 and 2018 the P/S Ratio just goes down. It would be 0.99 in 2017 on revenue estimate of $408M and 0.78 on revenue estimate of $514M. These are 47% lower and 58% lower than the current P/S Ratio.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 months consensus stock price is $6.71. This implies a 43.07% total return with 43.07% from capital gains and 0% from dividends.
Trent Williams on Community Financial News talks about recent analysts' recommendations. Most are a Buy. A recent press release was on Stockhouse which talked about Canyon is upgrading 11 existing hydraulic horse power pumps. This article by Dan Healing of Calgary Herald talks about more people being paid by the day or hour rather than by salary at 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 Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF)... learn more . The next stock I will write about will be Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)... learn more on Friday, September 30, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Stephen Moore... learn more on Thursday, September 29, 2016 around 5 pm.
Canyon Services Group Inc. is a fast-growing company providing hydraulic fracturing and other well-stimulation services, including coiled tubing, acidizing, cementing, nitrogen and carbon dioxide, to oil and natural gas producers developing a variety of play types across Western Canada. Its web site is here Canyon Services Group.
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, September 26, 2016
Canadian Utilities Ltd
Sound bite for Twitter and StockTwits is: Price is reasonable. The price is reasonable if you use the sort of testing I prefer of P/B Ratios and dividend yields. I find them better as you get rid of temporary distortions (i.e. lower than usual EPS) and they do not use estimates. See my spreadsheet on Canadian Utilities Ltd.
I do not own this stock of Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF). I started to follow this stock in January of 2009 because it was on the Dividend Achievers list, the Dividend Aristocrats list and was also on Mike Higgs' dividend growth list at that time. The Dividend Aristocrats list is now an index on the TSX. ATCO (TSX-ACO-X) owns 88% of this stock, so you would not buy both these stocks. Canadian Utilities has hiked its dividend each year for over 40 years.
The dividend yield is moderate with moderate dividend growth. The current dividend is 3.5%, the 5 year median dividend yield is 2.8% and the historical median dividend yield is 3.7%. The 5 and 10 year growth of dividends is at 9.3% and 7.9% per year. The last dividend increase was this year and it was for 10.2%.
If you had held this stock for 5, 10 or 15 years, the dividends would have covered 19.1%, 42.6% or 93.4% of the cost of your stock if you paid a median price for it. If you had held this stock for 5, 10 or 15 years, the dividends on your original purchase price would be 4.6% 6.2% or 10.3% if you paid a median price for it.
Revenue growth is weak, but cash flow growth is strong. The Revenue per Share growth over the past 5 and 10 years is at 3% and 2.1% per year. The Cash Flow per Share growth is at 15.1% and 8.65 per year over the past 5 and 10 years.
They are not bad in the debt ratios category. The Liquidity Ratio is low at 1.32, but if you add in cash flow after dividends this ratio becomes 2.95. The Debt Ratio is 1.52. Leverage and Debt/Equity Ratios for 2015 is 2.92 and 1.92.
The Return on Equity is low in 2015 at just 7.8%, but the 5 year median is 15.9% and the ROE has been above 10% 9 of the past 10 years. Also, the comprehensive income ROE for 2015 is 10.7% which implies that the company might have done better in earnings that the net income suggests.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.56, 15.99 and 17.59. The corresponding 10 year values are 13.78, 15.65 and 17.51. The corresponding historical values are 10.73, 13.30 and 15.55. The current P/E Ratio is 18.54 based on a stock price of $37.26 and 2016 EPS estimate of $2.01. This stock price testing suggests that the stock is relatively expensive.
I get a Graham Price of $27.57. The 10 year low, median and high median Price/Graham Price Ratios are 1.12, 1.28 and 1.45. The current P/GP Ratio is 1.35. 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 Ratio of 2.29. The current P/B Ratio is 2.22 a value some 3.3% lower. The current P/B Ratio is based on a stock price of $37.26 and a BVPS of $16.80. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The current dividend yield is 3.49% based on stock price of $37.26 and dividends of $1.30. The 5 year median dividend yield is 2.78% and the current yield is some 25% higher. (The 10 year median dividend yield is 2.81% and this is still below the current dividend yield.) The historical dividend yield is 3.71% and this is some 6% higher than the current dividend yield.
If you compare the current dividend yield to that of the last 5 and 10 years the stock price is relatively cheap. If you look at historical dividend yield the stock price is relatively reasonable but above the median.
When I look at analysts' recommendations, I find Hold and Underperform Recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $40.83. This would imply a total return of 13.07% with 9.58% from capital gains and 3.49% from dividends based on a stock price of $37.26.
Demetris Afxentiou of Motley Fool likes this stock because it is regulated and this translate into guaranteed revenue. Camille Ainsworth at Fiscal Standard talks about analysts' recommendations on this stock. See what analysts think about this stock on Stock Chase. The blogger Dividend Growth Investing and Retirement talks about buying this stock and why. One thing he liked is that they have been growing their dividends for around 44 years.
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 Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more . The next stock I will write about will be Canyon Services Group (TSX-FRC, OTC-CYSVF)... learn more on Wednesday, September 28, 2016 around 10 am. Tomorrow on my other blog I will write about Money Show 2016 - Mark Mills... learn more on Tuesday, September 27, 2016 around 5 pm.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. Its web site is here Canadian Utilities 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 Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF). I started to follow this stock in January of 2009 because it was on the Dividend Achievers list, the Dividend Aristocrats list and was also on Mike Higgs' dividend growth list at that time. The Dividend Aristocrats list is now an index on the TSX. ATCO (TSX-ACO-X) owns 88% of this stock, so you would not buy both these stocks. Canadian Utilities has hiked its dividend each year for over 40 years.
The dividend yield is moderate with moderate dividend growth. The current dividend is 3.5%, the 5 year median dividend yield is 2.8% and the historical median dividend yield is 3.7%. The 5 and 10 year growth of dividends is at 9.3% and 7.9% per year. The last dividend increase was this year and it was for 10.2%.
If you had held this stock for 5, 10 or 15 years, the dividends would have covered 19.1%, 42.6% or 93.4% of the cost of your stock if you paid a median price for it. If you had held this stock for 5, 10 or 15 years, the dividends on your original purchase price would be 4.6% 6.2% or 10.3% if you paid a median price for it.
Revenue growth is weak, but cash flow growth is strong. The Revenue per Share growth over the past 5 and 10 years is at 3% and 2.1% per year. The Cash Flow per Share growth is at 15.1% and 8.65 per year over the past 5 and 10 years.
They are not bad in the debt ratios category. The Liquidity Ratio is low at 1.32, but if you add in cash flow after dividends this ratio becomes 2.95. The Debt Ratio is 1.52. Leverage and Debt/Equity Ratios for 2015 is 2.92 and 1.92.
The Return on Equity is low in 2015 at just 7.8%, but the 5 year median is 15.9% and the ROE has been above 10% 9 of the past 10 years. Also, the comprehensive income ROE for 2015 is 10.7% which implies that the company might have done better in earnings that the net income suggests.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.56, 15.99 and 17.59. The corresponding 10 year values are 13.78, 15.65 and 17.51. The corresponding historical values are 10.73, 13.30 and 15.55. The current P/E Ratio is 18.54 based on a stock price of $37.26 and 2016 EPS estimate of $2.01. This stock price testing suggests that the stock is relatively expensive.
I get a Graham Price of $27.57. The 10 year low, median and high median Price/Graham Price Ratios are 1.12, 1.28 and 1.45. The current P/GP Ratio is 1.35. 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 Ratio of 2.29. The current P/B Ratio is 2.22 a value some 3.3% lower. The current P/B Ratio is based on a stock price of $37.26 and a BVPS of $16.80. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The current dividend yield is 3.49% based on stock price of $37.26 and dividends of $1.30. The 5 year median dividend yield is 2.78% and the current yield is some 25% higher. (The 10 year median dividend yield is 2.81% and this is still below the current dividend yield.) The historical dividend yield is 3.71% and this is some 6% higher than the current dividend yield.
If you compare the current dividend yield to that of the last 5 and 10 years the stock price is relatively cheap. If you look at historical dividend yield the stock price is relatively reasonable but above the median.
When I look at analysts' recommendations, I find Hold and Underperform Recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $40.83. This would imply a total return of 13.07% with 9.58% from capital gains and 3.49% from dividends based on a stock price of $37.26.
Demetris Afxentiou of Motley Fool likes this stock because it is regulated and this translate into guaranteed revenue. Camille Ainsworth at Fiscal Standard talks about analysts' recommendations on this stock. See what analysts think about this stock on Stock Chase. The blogger Dividend Growth Investing and Retirement talks about buying this stock and why. One thing he liked is that they have been growing their dividends for around 44 years.
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 Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more . The next stock I will write about will be Canyon Services Group (TSX-FRC, OTC-CYSVF)... learn more on Wednesday, September 28, 2016 around 10 am. Tomorrow on my other blog I will write about Money Show 2016 - Mark Mills... learn more on Tuesday, September 27, 2016 around 5 pm.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. Its web site is here Canadian Utilities 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, September 23, 2016
Wajax Corp
Sound bite for Twitter and StockTwits is: Industrial stock cheap. With a cheap price, you will also get risk. I believe that this company will recover, but I do not know when. Time to buy good companies is when they are cheap. See my spreadsheet on Wajax Corp.
I do not own this stock of Wajax Corp. (TSX-WJX, OTC- WJXFF). TD Waterhouse put out a report on good dividend paying stocks to own in November 2011. This was a stock they named. I had not heard of it before, so I decided to investigate it.
This is a company I would consider if I was looking for an Indusial stock. This sector has its ups and downs. They have paid good dividends when they could. I am sure dividends will grow as they can. However, industrial company can seldom raise their dividends consistently. The company has good debt ratios and this is a plus for companies in volatile sectors. The reason to invest in this stock is diversification.
The dividend yield is rather high and they struggle to cover the dividend with earnings. They had an earnings loss in 2015 and the Dividend Payout Ratio for 2016 is expected to be 135%. However, they are expected to have enough earnings in 2017 to cover the dividends. The DPR for CFPS is better. The DPR for CFPS in 2015 was 32% and the 5 year median was 44%.
When the company has paid dividends, the dividend yield was generally good to high. Current the Dividend yield is 6.84% based on dividends of $1.00 a stock price of $14.62. The historical high dividend yield is over 15% because this company was once an Income Trust. The historical low dividend is 0% and the historical median dividend yield is 4.01%. The 5 year median dividend yield is 6.62%. I consider any dividend of 6% or higher as a high dividend.
The problem with this stock if you depend on dividend income is that it probably will not be producing any or will cut their dividends in economic recessionary periods. They did not cut the dividend when they went from an income trust to a corporation, but they have been cutting their dividend every year since 2013. Dividends are down by 67% since their peak in 2012. They are possibly finished with dividends cuts for now. They also paid dividends between 1986 and 1991 but then cut them for some 12 years to 2004.
The company has good debt ratios. The Liquidity Ratio for 2015 was at 2.38 and the Debt Ratio for 2015 is 1.74. These are very good. The Leverage and Debt/Equity Ratios are fine but I like to see them lower. They were 2.35 and 1.35 for 2015.
The outstanding shares have increased and they have grown at 1.9% and 3.8% per year over the past 5 and 10 years. I would look at per share values to decide if company is growing or not.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.00, 11.76 and 13.52. The corresponding 10 year values are lower at 6.28, 8.72 and 11.28. The historical values are 8.22, 10.76 and 13.52. The current P/E Ratio is 19.76 based on a stock price of $14.62 and 2016 EPS estimate of $0.74. Note that the 2017 P/E Ratio is 11.16. The P/E for 2016 looks expensive, but not so for 2017 which points to a stock price that is relatively reasonable and around the median.
I get a Graham Price of $15.05. The 10 year low, median and high median Price/Graham Price Ratios are 0.79, 1.05 and 1.35. The current P/GP Ratio is 0.97 based on a stock price of $14.62. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Book Value per Share Ratio is 2.54. The current P/B Ratio is 1.08, a value some 58% lower. The current P/B Ratio is based on a stock price of $14.62 and BVPS of $13.60. This stock price testing suggests that the stock price is relatively cheap.
The historical median dividend yield is 4.01%. The current dividend is 6.84% based on dividends of $1.00 and a stock price of $14.62. Usually when dividends are cut this test would not show a cheap price. However, the current dividend yield is some 70% higher than the historical median dividend yield. Of course it is nowhere near the historical high of 15% and will probably never get there again. Dividend yield has been all over the place since this company was a corporation, then an income trust and then again a corporation. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median P/S Ratio of 0.44. The current P/S Ratio is 0.23 based on 2016 revenue estimate of $1,246M for 2016 ($62.71 Revenue per Share). The current P/S Ratio is based on a stock price of $14.62 and 19.870M shares. The current P/S Ratio is some 47% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.
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.
When I look at analysts' recommendations, I find only Hold recommendations, so the consensus would be a hold. The 12 month price consensus is $16.00. This implies total return of 16.28% with 9.44% from capital gains and 6.84% from dividends.
Hazel Jackson on Engelwood Daily talks about the stock gaining 1.5% on September 20, 2016. This article by the Canadian Press in the Winnipeg Free Press talks about the company reorganizing its operations in the face of a downturn in Western Canada's energy sector. The Western energy sector is still a problem. Brenda Bouw for the G&M talks about problems in Wajax Corp.
The last stock I wrote about was about was Telus Corp. (TSX-T, NYSE-TU)... learn more . The next stock I will write about will be Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF)... learn more on Monday, September 26, 2016 around 5 pm.
Wajax is a leading Canadian distributor and service support provider of mobile equipment, industrial components and power systems. Reflecting a diversified exposure to the Canadian economy, Wajax has three distinct business divisions. The organization's customer base covers core sectors of the Canadian economy - mining, oil and gas, forestry, construction, manufacturing, industrial processing, transportation and utilities. Its web site is here Wajax 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 Wajax Corp. (TSX-WJX, OTC- WJXFF). TD Waterhouse put out a report on good dividend paying stocks to own in November 2011. This was a stock they named. I had not heard of it before, so I decided to investigate it.
This is a company I would consider if I was looking for an Indusial stock. This sector has its ups and downs. They have paid good dividends when they could. I am sure dividends will grow as they can. However, industrial company can seldom raise their dividends consistently. The company has good debt ratios and this is a plus for companies in volatile sectors. The reason to invest in this stock is diversification.
The dividend yield is rather high and they struggle to cover the dividend with earnings. They had an earnings loss in 2015 and the Dividend Payout Ratio for 2016 is expected to be 135%. However, they are expected to have enough earnings in 2017 to cover the dividends. The DPR for CFPS is better. The DPR for CFPS in 2015 was 32% and the 5 year median was 44%.
When the company has paid dividends, the dividend yield was generally good to high. Current the Dividend yield is 6.84% based on dividends of $1.00 a stock price of $14.62. The historical high dividend yield is over 15% because this company was once an Income Trust. The historical low dividend is 0% and the historical median dividend yield is 4.01%. The 5 year median dividend yield is 6.62%. I consider any dividend of 6% or higher as a high dividend.
The problem with this stock if you depend on dividend income is that it probably will not be producing any or will cut their dividends in economic recessionary periods. They did not cut the dividend when they went from an income trust to a corporation, but they have been cutting their dividend every year since 2013. Dividends are down by 67% since their peak in 2012. They are possibly finished with dividends cuts for now. They also paid dividends between 1986 and 1991 but then cut them for some 12 years to 2004.
The company has good debt ratios. The Liquidity Ratio for 2015 was at 2.38 and the Debt Ratio for 2015 is 1.74. These are very good. The Leverage and Debt/Equity Ratios are fine but I like to see them lower. They were 2.35 and 1.35 for 2015.
The outstanding shares have increased and they have grown at 1.9% and 3.8% per year over the past 5 and 10 years. I would look at per share values to decide if company is growing or not.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.00, 11.76 and 13.52. The corresponding 10 year values are lower at 6.28, 8.72 and 11.28. The historical values are 8.22, 10.76 and 13.52. The current P/E Ratio is 19.76 based on a stock price of $14.62 and 2016 EPS estimate of $0.74. Note that the 2017 P/E Ratio is 11.16. The P/E for 2016 looks expensive, but not so for 2017 which points to a stock price that is relatively reasonable and around the median.
I get a Graham Price of $15.05. The 10 year low, median and high median Price/Graham Price Ratios are 0.79, 1.05 and 1.35. The current P/GP Ratio is 0.97 based on a stock price of $14.62. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Book Value per Share Ratio is 2.54. The current P/B Ratio is 1.08, a value some 58% lower. The current P/B Ratio is based on a stock price of $14.62 and BVPS of $13.60. This stock price testing suggests that the stock price is relatively cheap.
The historical median dividend yield is 4.01%. The current dividend is 6.84% based on dividends of $1.00 and a stock price of $14.62. Usually when dividends are cut this test would not show a cheap price. However, the current dividend yield is some 70% higher than the historical median dividend yield. Of course it is nowhere near the historical high of 15% and will probably never get there again. Dividend yield has been all over the place since this company was a corporation, then an income trust and then again a corporation. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median P/S Ratio of 0.44. The current P/S Ratio is 0.23 based on 2016 revenue estimate of $1,246M for 2016 ($62.71 Revenue per Share). The current P/S Ratio is based on a stock price of $14.62 and 19.870M shares. The current P/S Ratio is some 47% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.
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.
When I look at analysts' recommendations, I find only Hold recommendations, so the consensus would be a hold. The 12 month price consensus is $16.00. This implies total return of 16.28% with 9.44% from capital gains and 6.84% from dividends.
Hazel Jackson on Engelwood Daily talks about the stock gaining 1.5% on September 20, 2016. This article by the Canadian Press in the Winnipeg Free Press talks about the company reorganizing its operations in the face of a downturn in Western Canada's energy sector. The Western energy sector is still a problem. Brenda Bouw for the G&M talks about problems in Wajax Corp.
The last stock I wrote about was about was Telus Corp. (TSX-T, NYSE-TU)... learn more . The next stock I will write about will be Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF)... learn more on Monday, September 26, 2016 around 5 pm.
Wajax is a leading Canadian distributor and service support provider of mobile equipment, industrial components and power systems. Reflecting a diversified exposure to the Canadian economy, Wajax has three distinct business divisions. The organization's customer base covers core sectors of the Canadian economy - mining, oil and gas, forestry, construction, manufacturing, industrial processing, transportation and utilities. Its web site is here Wajax 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.
Wednesday, September 21, 2016
Telus Corp
Sound bite for Twitter and StockTwits is: Price seems reasonable. See my spreadsheet on Telus Corp.
I do not own this stock of Telus Corp. (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from KeyStone Financial Publishing Corp talked about having recommended this stock. Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets and compelling valuations.
They have been raising their dividends from 2005. Before that there was dividend increases, but between 2001 and 2002 dividends were decreased by some 57% and then they were flat for two years. The dividend yield has always been good, but increases have varied. The current dividend increases are moderate, but they used to be quite good.
The current dividend is 4.38% based on dividends of $1.84 and a stock price of $42.03. The 5 year median dividend yield is 3.91% and the historical median is 3.87%. The 5 and 10 year growth is 11% and 26% per year. The last dividend increase was this year and it was for 4.5%. However, they often increase the dividend twice each year. The total dividend increase for 2016 is 9.8%.
If you had bought this stock 5, 10 or 15 years ago, your current dividend yield on your original price if you paid a median price would be 6.98%, 6.67% and 11.83%. The reason why the 10 year dividend yield is lower than the 5 year one is because the stock price was higher 10 years ago than 5 years ago. If you bought the stock today and annual increases continue to be around 10%, then in 5, 10 or 15 years you could have a yield of 7.05%, 11.35% or 18.29%. Real life can be somewhat different.
They can afford their dividends. The Dividend Payout Ratio for EPS for 2015 was 71.2%. The 5 year median DPR for EPS was 64%. The DPR for CFPS was 27.65 and the 5 year median was 27%.
Shares have been decreasing by 1.6% per year over the past 5 and 10 years. So, I would be looking at such things as Revenue growth instead of Revenue per Share growth. Revenue per Share has grown at 6.76% and 6.11% per year over the past 5 and 10 years. Revenue has grown at 5.04% and 4.385 per year over the past 5 and 10 years.
The debt ratios are low. The Liquidity Ratio is just 0.55. This means current assets cannot cover current liabilities. If you add in cash flow after dividends it rises to only 1.15. The Debt Ratio is 1.41. This is low. I prefer both to be at or above 1.50 for safety’s sake. Low debt ratios make a company vulnerable in bad times. Other telecoms also tend to rely on cash flow to increase Liquidity. The Leverage and Debt/Equity Ratios are a bit too high 3.44 and 2.44 for 2015. These are also a bit higher than other telecoms.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.84, 16.76 and 18.69. The corresponding 10 year ratios are 13.66, 15.38 and 16.94. The historical ratios are 13.87, 17.05 and 19.64. The current P/E Ratio is 15.12 based on a stock price of $42.03 and 2016 EPS estimate of $2.78. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $29.15. The 10 year low, median and high median Price/Graham Price Ratios are 1.17, 1.36 and 1.49. The current P/GP Ratio is 1.44 based on a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year Price/Book Value per Share Ratio is 2.60. The current P/B Ratio is 3.09 a value some 19.1% higher. This is based on BVPS of $13.58 and a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The historical median dividend yield is 3.87%. The current dividend yield at 4.38% is some 13% higher. This dividend yield is based on dividends of $1.84 and a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $44.20. This implies a total return of 9.54% with 5.16% from capital gains and 4.38% from dividends. This is based on a current stock price of $42.03.
Andrew Walker of Motley Fool likes this stock. He says that the company plans to raise dividends between 7 and 10% from now through 2019. There are several recent articles on this stock for Motley Fool. Emily Jackson at the Financial Post talks about the Broadband war between Telus and Shaw out west. This article by Peter Mitham in Vancouver Business talks about how Telus is trying for exclusive rights to condos. Some people do not like this idea. 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 Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more . The next stock I will write about will be Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more on Friday, September 23, 2016 around 5 pm. Tomorrow on my other blog I will write about Bear Market Income... learn more on Thursday, September 22, 2016 around 5 pm.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus 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 Telus Corp. (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from KeyStone Financial Publishing Corp talked about having recommended this stock. Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets and compelling valuations.
They have been raising their dividends from 2005. Before that there was dividend increases, but between 2001 and 2002 dividends were decreased by some 57% and then they were flat for two years. The dividend yield has always been good, but increases have varied. The current dividend increases are moderate, but they used to be quite good.
The current dividend is 4.38% based on dividends of $1.84 and a stock price of $42.03. The 5 year median dividend yield is 3.91% and the historical median is 3.87%. The 5 and 10 year growth is 11% and 26% per year. The last dividend increase was this year and it was for 4.5%. However, they often increase the dividend twice each year. The total dividend increase for 2016 is 9.8%.
If you had bought this stock 5, 10 or 15 years ago, your current dividend yield on your original price if you paid a median price would be 6.98%, 6.67% and 11.83%. The reason why the 10 year dividend yield is lower than the 5 year one is because the stock price was higher 10 years ago than 5 years ago. If you bought the stock today and annual increases continue to be around 10%, then in 5, 10 or 15 years you could have a yield of 7.05%, 11.35% or 18.29%. Real life can be somewhat different.
They can afford their dividends. The Dividend Payout Ratio for EPS for 2015 was 71.2%. The 5 year median DPR for EPS was 64%. The DPR for CFPS was 27.65 and the 5 year median was 27%.
Shares have been decreasing by 1.6% per year over the past 5 and 10 years. So, I would be looking at such things as Revenue growth instead of Revenue per Share growth. Revenue per Share has grown at 6.76% and 6.11% per year over the past 5 and 10 years. Revenue has grown at 5.04% and 4.385 per year over the past 5 and 10 years.
The debt ratios are low. The Liquidity Ratio is just 0.55. This means current assets cannot cover current liabilities. If you add in cash flow after dividends it rises to only 1.15. The Debt Ratio is 1.41. This is low. I prefer both to be at or above 1.50 for safety’s sake. Low debt ratios make a company vulnerable in bad times. Other telecoms also tend to rely on cash flow to increase Liquidity. The Leverage and Debt/Equity Ratios are a bit too high 3.44 and 2.44 for 2015. These are also a bit higher than other telecoms.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.84, 16.76 and 18.69. The corresponding 10 year ratios are 13.66, 15.38 and 16.94. The historical ratios are 13.87, 17.05 and 19.64. The current P/E Ratio is 15.12 based on a stock price of $42.03 and 2016 EPS estimate of $2.78. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $29.15. The 10 year low, median and high median Price/Graham Price Ratios are 1.17, 1.36 and 1.49. The current P/GP Ratio is 1.44 based on a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year Price/Book Value per Share Ratio is 2.60. The current P/B Ratio is 3.09 a value some 19.1% higher. This is based on BVPS of $13.58 and a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The historical median dividend yield is 3.87%. The current dividend yield at 4.38% is some 13% higher. This dividend yield is based on dividends of $1.84 and a stock price of $42.03. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $44.20. This implies a total return of 9.54% with 5.16% from capital gains and 4.38% from dividends. This is based on a current stock price of $42.03.
Andrew Walker of Motley Fool likes this stock. He says that the company plans to raise dividends between 7 and 10% from now through 2019. There are several recent articles on this stock for Motley Fool. Emily Jackson at the Financial Post talks about the Broadband war between Telus and Shaw out west. This article by Peter Mitham in Vancouver Business talks about how Telus is trying for exclusive rights to condos. Some people do not like this idea. 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 Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more . The next stock I will write about will be Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more on Friday, September 23, 2016 around 5 pm. Tomorrow on my other blog I will write about Bear Market Income... learn more on Thursday, September 22, 2016 around 5 pm.
Telus is a national telecommunications company in Canada. Telus provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Its web site is here Telus 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.
Tuesday, September 20, 2016
Accord Financial Corp
Sound bite for Twitter and StockTwits is: Price is cheap to reasonable. This is about as good as it usually gets. The stock has solid if unspectacular returns. See my spreadsheet on Accord Financial Corp.
I do not own this stock of Accord Financial Corp (TSX-ACD, OTC-ACCFF). Fred Poulin from StockTwits recommended this stock saying it was a small cap that pays dividends. Also the stock has a solid background and would be a good filler stock.
Let's start with dividends. The dividend is moderate (almost good) and the increases are low. The current dividend is 3.85% based on dividends of $0.36 and a stock price of $9.35. The 5 year median dividend yield is 3.98%. Dividends have grown at 4.6% and 6.9% per year over the past 5 and 10 years.
The Dividend Payout Ratio for EPS for 2015 is 33% and the 5 year median DPR for ESP is 40%. The DPR for CFPS for 2015 is 23% and the 5 year median is also 23%. They can afford their dividends. They do not raise the dividends every year, but generally every second year.
Because the outstanding shares have been decreasing I would be more interested as an investor in Revenue and Net Income growth rather than per share growth as in Revenue per Share and EPS. The shares have decreased by 1.7% and 1.8% per year over the past 5 and 10 years. When growth is low, 1.7% per year can count. For example Revenue is up by 0.11% and 1.87% per year over the past 5 and 10 years. Revenue per Share is up by 1.87% and 3.71% over the same time period.
Net Income has had low growth, but cash flow has done better. The 5 and 10 year growth in Net Income is at 1.19% and 3.50% per year over the past 5 and 10 years. Cash Flow growth is at 6.34% and 7.71% per year over the past 5 and 10 years
If you look at total return for 5 year periods to the end of 2015 for the past 19 years this company only had 3 really bad years and another 3 that were mediocre. If you look at total return for 10 year periods over the past 14 years, there were no bad periods, but there were 3 with mediocre total returns.
The Debt Ratio in 2015 was very good at 1.90 and the 5 year median ratio is also very good at 1.79. The Leverage and Debt/Equity Ratios are relatively good for a financial services company at 2.12 and 1.12 for 2015 and with 5 year median values of 2.26 and 1.26.
The Return on Equity has consistently been 10% or higher. The ROE for 2015 was 12% and the 5 year median is 12.2%. The ROE on Comprehensive Income is higher so this basically suggests that the earnings are of good quality.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.55, 10.02 and 11.48. The corresponding 10 year values are 8.77, 10.32 and 11.52. The historical values are 8.55, 10.15 and 11.52. These are highly consistent. The current P/E Ratio is 9.26 based on a stock price of $9.35 and 12 months EPS to the end of the second quarter of 2015 of $1.01. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $14.06. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.77 and 0.89. The current P/GP Ratio is 0.67 based on a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year Price/Book Value per Share Ratio is 1.29. The current P/B Ratio is some 16.8% lower at 1.08 based on BVPS of $8.69 and a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The historical median dividend yield is 2.56%. The current dividend yield at 3.85% is some 50% higher. The current dividend yield is based on dividends of $0.36 and a stock price of $9.35. This stock price testing suggests that the stock price might be cheap. It is not a relatively low as it has been in the past where there was a dividend yield of 5%.
If I was looking for a small cap financial stock, I would consider this stock. The dividend is good and it does raise the dividend regularly. It has had some problems recently, but a lot of companies are with this long drawn out recover. As with all small cap stocks there is low trading volume.
Fabrice Taylor in a G&M article says "We live in low-growth world, so when a 40-year-old company posts a 100-per-cent increase in net income, investors take notice". Unfortunately this was only for the one quarterly report in 2015. It did not carry through to the annual report where net income increased by 27%. This News Release talks about Accord launching an innovative small business lending program. See past comments on this company by analysts on Stock Chase. Not everyone likes this company.
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 Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more . The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm.
Accord Financial Corp. is a provider of asset-based financial services to businesses, such as asset-based lending (ABL), including factoring, lease financing, working capital financing, credit protection and receivables management, and supply chain financing for importers. Its web site is here Accord Financial 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 Accord Financial Corp (TSX-ACD, OTC-ACCFF). Fred Poulin from StockTwits recommended this stock saying it was a small cap that pays dividends. Also the stock has a solid background and would be a good filler stock.
Let's start with dividends. The dividend is moderate (almost good) and the increases are low. The current dividend is 3.85% based on dividends of $0.36 and a stock price of $9.35. The 5 year median dividend yield is 3.98%. Dividends have grown at 4.6% and 6.9% per year over the past 5 and 10 years.
The Dividend Payout Ratio for EPS for 2015 is 33% and the 5 year median DPR for ESP is 40%. The DPR for CFPS for 2015 is 23% and the 5 year median is also 23%. They can afford their dividends. They do not raise the dividends every year, but generally every second year.
Because the outstanding shares have been decreasing I would be more interested as an investor in Revenue and Net Income growth rather than per share growth as in Revenue per Share and EPS. The shares have decreased by 1.7% and 1.8% per year over the past 5 and 10 years. When growth is low, 1.7% per year can count. For example Revenue is up by 0.11% and 1.87% per year over the past 5 and 10 years. Revenue per Share is up by 1.87% and 3.71% over the same time period.
Net Income has had low growth, but cash flow has done better. The 5 and 10 year growth in Net Income is at 1.19% and 3.50% per year over the past 5 and 10 years. Cash Flow growth is at 6.34% and 7.71% per year over the past 5 and 10 years
If you look at total return for 5 year periods to the end of 2015 for the past 19 years this company only had 3 really bad years and another 3 that were mediocre. If you look at total return for 10 year periods over the past 14 years, there were no bad periods, but there were 3 with mediocre total returns.
The Debt Ratio in 2015 was very good at 1.90 and the 5 year median ratio is also very good at 1.79. The Leverage and Debt/Equity Ratios are relatively good for a financial services company at 2.12 and 1.12 for 2015 and with 5 year median values of 2.26 and 1.26.
The Return on Equity has consistently been 10% or higher. The ROE for 2015 was 12% and the 5 year median is 12.2%. The ROE on Comprehensive Income is higher so this basically suggests that the earnings are of good quality.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.55, 10.02 and 11.48. The corresponding 10 year values are 8.77, 10.32 and 11.52. The historical values are 8.55, 10.15 and 11.52. These are highly consistent. The current P/E Ratio is 9.26 based on a stock price of $9.35 and 12 months EPS to the end of the second quarter of 2015 of $1.01. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $14.06. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.77 and 0.89. The current P/GP Ratio is 0.67 based on a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year Price/Book Value per Share Ratio is 1.29. The current P/B Ratio is some 16.8% lower at 1.08 based on BVPS of $8.69 and a stock price of $9.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The historical median dividend yield is 2.56%. The current dividend yield at 3.85% is some 50% higher. The current dividend yield is based on dividends of $0.36 and a stock price of $9.35. This stock price testing suggests that the stock price might be cheap. It is not a relatively low as it has been in the past where there was a dividend yield of 5%.
If I was looking for a small cap financial stock, I would consider this stock. The dividend is good and it does raise the dividend regularly. It has had some problems recently, but a lot of companies are with this long drawn out recover. As with all small cap stocks there is low trading volume.
Fabrice Taylor in a G&M article says "We live in low-growth world, so when a 40-year-old company posts a 100-per-cent increase in net income, investors take notice". Unfortunately this was only for the one quarterly report in 2015. It did not carry through to the annual report where net income increased by 27%. This News Release talks about Accord launching an innovative small business lending program. See past comments on this company by analysts on Stock Chase. Not everyone likes this company.
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 Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more . The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm.
Accord Financial Corp. is a provider of asset-based financial services to businesses, such as asset-based lending (ABL), including factoring, lease financing, working capital financing, credit protection and receivables management, and supply chain financing for importers. Its web site is here Accord Financial 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, September 19, 2016
Just Energy Group Inc.
Sound bite for Twitter and StockTwits is: High risk, price reasonable. See my spreadsheet on Just Energy Group Inc.
I do not own this stock of Just Energy Group Inc. (TSX-JE, NYSE-JE). I started to follow this is July 2010. It was one of the high yield income trusts that people were talking about, so I decided to check it out.
The first thing to note is that the company has a negative book value. The book value has been negative since 2009. This means that theoretically if the company broke up or went bankrupt, there would be no value. It would be worth less than zero. It would not be my first choice to buy such a company.
This company did not decrease their dividends when they changed from an income trust to a corporation. They did decrease them in 2012 when they determined that the distributable cash payout ratio was over 100%. They also started to pay quarterly dividends rather than month dividends. Between 2013 and 2016 they decreased their dividends by some 60%. The distributable cash payout ratio for 2016 is at 53%. (Their financial year ends in March each year, so I am dealing with the year end of March 2016.)
If you want to look at dividend decline for the last 5 and 10 years, the dividends have decline by 16.6% and 5.7% per year over the past 5 and 10 years.
Dividend yields have generally been quite high. Today is no different. The current dividend yield is 7.33% based on dividends of $0.50 and a stock price of $6.82. The historical high is over 19.5% and the historical median is 8.4%. The 5 year median is 9.8%. These are all very high. This tells you that the company is a risky buy.
The company is expected to earn $2.86 this year compared to $0.43 last year and $0.28 next year. The extra seems to come down to the change in fair value of derivative instruments. This seems just a one shot deal so it has no bearing on what can be earned. The distributable cash is expected to be $0.92 this year compared to $0.94 last year and $1.00 next year.
The debt ratios are awful with the Liquidity Ratio at 0.87 meaning current assets cannot cover current liabilities. You only get to 0.99 if you add in cash flow after dividends. With a negative book value, the Debt Ratio is just 0.66 which means the assets cannot cover the liabilities.
The only things to grow are outstanding shares growing at 1.5% and 3.3% per year over the last 5 and 10 years and Revenue. Revenue is up by 6.8% and 13% per year over the past 5 and 10 years. Revenue per Share is up by 5.3% and 9.4% per year over the past 5 and 10 years. Earnings, distributable cash, stock price and cash flow are all down or only up marginally.
It makes more sense to look at Price/Distributable Cash Ratios than Price/Earnings per Share Ratios for this company because of the onetime abnormal earnings for this year.. The 5 year low, median and high median P/DC Ratios are 7.09, 9.13 and 11.83. The corresponding 10 year values are 7.39, 9.48 and 11.55. The current P/DC Ratio is 7.41. This would suggest that the stock price is reasonable and below the median.
Since this stock has negative book value I cannot do any stock price testing using Graham Price or Book Value. We can do testing using the dividend yield. The current dividend yield is 7.33% using dividends of $0.50 and a stock price $6.82. The historical median dividend yield is 8.42% a value some 13% higher. This stock price testing suggests that the stock price is reasonable but above the median.
When I look at analysts' recommendations, I find Buy and Hold recommendations. I am surprise there is no sell recommendations after all it has a negative book value. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock target is $8.90. This implies a total return of 37.83% with 30.50% from capital gains and 7.33% from dividends.
This News Release says that the September dividend is still at $0.125 or $.50 per annum. I think that the dividend could be at risk. Perhaps it is not at risk for next year. This article in Kentucky Post News talk about this company issuing unsecured senior subordinate debentures at 6.75%. This article on Breaking Financial News talks about Royal Bank rising their 12 months stock price to $9.00. See what analysts think of this stock at Stock Chase. A couple of analysts think it is good for shorting.
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 Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more . The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm. Tomorrow on my other blog I will write about Going to ETFs 2... learn more on Tuesday, September 20, 2016 around 5 pm.
Tomorrow on my other blog I will write also about Accord Financial Corp (TSX-ACD, OTC- ACCFF)... learn more on Tuesday, September 20, 2016 around 5 pm. I haven't got time to publish separately before the end of the year.
Just Energy's business involves the sale of natural gas and/or electricity to residential and commercial customers under long-term fixed-price and price-protected contracts. Just Energy derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the associated volumes from its suppliers. The company also offers "green" products through its Just Green program. Through its subsidiary Terra Grain Fuels, the Fund produces and sells wheat-based ethanol. Its web site is here Just Energy 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 Just Energy Group Inc. (TSX-JE, NYSE-JE). I started to follow this is July 2010. It was one of the high yield income trusts that people were talking about, so I decided to check it out.
The first thing to note is that the company has a negative book value. The book value has been negative since 2009. This means that theoretically if the company broke up or went bankrupt, there would be no value. It would be worth less than zero. It would not be my first choice to buy such a company.
This company did not decrease their dividends when they changed from an income trust to a corporation. They did decrease them in 2012 when they determined that the distributable cash payout ratio was over 100%. They also started to pay quarterly dividends rather than month dividends. Between 2013 and 2016 they decreased their dividends by some 60%. The distributable cash payout ratio for 2016 is at 53%. (Their financial year ends in March each year, so I am dealing with the year end of March 2016.)
If you want to look at dividend decline for the last 5 and 10 years, the dividends have decline by 16.6% and 5.7% per year over the past 5 and 10 years.
Dividend yields have generally been quite high. Today is no different. The current dividend yield is 7.33% based on dividends of $0.50 and a stock price of $6.82. The historical high is over 19.5% and the historical median is 8.4%. The 5 year median is 9.8%. These are all very high. This tells you that the company is a risky buy.
The company is expected to earn $2.86 this year compared to $0.43 last year and $0.28 next year. The extra seems to come down to the change in fair value of derivative instruments. This seems just a one shot deal so it has no bearing on what can be earned. The distributable cash is expected to be $0.92 this year compared to $0.94 last year and $1.00 next year.
The debt ratios are awful with the Liquidity Ratio at 0.87 meaning current assets cannot cover current liabilities. You only get to 0.99 if you add in cash flow after dividends. With a negative book value, the Debt Ratio is just 0.66 which means the assets cannot cover the liabilities.
The only things to grow are outstanding shares growing at 1.5% and 3.3% per year over the last 5 and 10 years and Revenue. Revenue is up by 6.8% and 13% per year over the past 5 and 10 years. Revenue per Share is up by 5.3% and 9.4% per year over the past 5 and 10 years. Earnings, distributable cash, stock price and cash flow are all down or only up marginally.
It makes more sense to look at Price/Distributable Cash Ratios than Price/Earnings per Share Ratios for this company because of the onetime abnormal earnings for this year.. The 5 year low, median and high median P/DC Ratios are 7.09, 9.13 and 11.83. The corresponding 10 year values are 7.39, 9.48 and 11.55. The current P/DC Ratio is 7.41. This would suggest that the stock price is reasonable and below the median.
Since this stock has negative book value I cannot do any stock price testing using Graham Price or Book Value. We can do testing using the dividend yield. The current dividend yield is 7.33% using dividends of $0.50 and a stock price $6.82. The historical median dividend yield is 8.42% a value some 13% higher. This stock price testing suggests that the stock price is reasonable but above the median.
When I look at analysts' recommendations, I find Buy and Hold recommendations. I am surprise there is no sell recommendations after all it has a negative book value. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock target is $8.90. This implies a total return of 37.83% with 30.50% from capital gains and 7.33% from dividends.
This News Release says that the September dividend is still at $0.125 or $.50 per annum. I think that the dividend could be at risk. Perhaps it is not at risk for next year. This article in Kentucky Post News talk about this company issuing unsecured senior subordinate debentures at 6.75%. This article on Breaking Financial News talks about Royal Bank rising their 12 months stock price to $9.00. See what analysts think of this stock at Stock Chase. A couple of analysts think it is good for shorting.
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 Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more . The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm. Tomorrow on my other blog I will write about Going to ETFs 2... learn more on Tuesday, September 20, 2016 around 5 pm.
Tomorrow on my other blog I will write also about Accord Financial Corp (TSX-ACD, OTC- ACCFF)... learn more on Tuesday, September 20, 2016 around 5 pm. I haven't got time to publish separately before the end of the year.
Just Energy's business involves the sale of natural gas and/or electricity to residential and commercial customers under long-term fixed-price and price-protected contracts. Just Energy derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the associated volumes from its suppliers. The company also offers "green" products through its Just Green program. Through its subsidiary Terra Grain Fuels, the Fund produces and sells wheat-based ethanol. Its web site is here Just Energy 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.
Friday, September 16, 2016
Smart REIT
Sound bite for Twitter and StockTwits is: A bit on the pricey side. It would not be my first choice for a REIT. Liquidity Ratio is rather low and this makes the company vulnerable in bad times. See my spreadsheet on Smart REIT.
I do not own this stock of Smart REIT (TSX-SRU.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. Unfortunately, this stock is no longer on the Dividend Achiever's List.
REITs do not seem to consistently increase dividends over the longer term has been my experience. This stock raised their dividend for a time prior to 2009. There were no increases between 2009 and 2013, inclusive. They have started to raise dividends again in 2014 and in 2015. The last increase was for 3.1%. The 5 and 10 year dividend growth is at 0.78% and 1.62% per year.
The Bank of Canada has been saying that inflation is low at around 1.41% and 1.70% over the past 5 years for Total and Core inflation and around 1.65% and 1.72% over the past 10 years for Total and Core inflation. By this measure, the growth over dividends over the past 10 years at 1.62% looks fine. However, I know no one that believes inflation is that low, including myself. Food, rent and real estate seems a lot higher. In any event, what one expects from REITs is that the dividends would grow at the rate of inflation over the longer term. According to what the Bank of Canada says, this REIT has done this over the past 10 years.
As with many REITs, this company gives good dividends. The current dividend yield is 4.72% and the 5 year median dividend yield is 5.69% with an historical median of 6.05%. You may not want to include these when you are building a portfolio, but they probably should be considered once you start withdrawing money from your portfolio.
I think that comparing the distributions to FFO (Funds from Operations) or AFFO (Adjusted Funds from Operations) is quite valid for REITs. In 2015 the Dividend Payout Ratio for AFFO was 80.95 and for FFO was 76.3%. The 10 year median for AFFO was at 91.31% and for FFO was at 86.74%. Generally, you expect DPRs to be between 75% and 95% for REITS.
They have increased their outstanding share a lot over the years. Trust Units have grown by 6.2% and 8.3% per year over the past 5 and 10 years. For me, I would be more interested in the per share values. This has affected Revenues the most. The growth in Revenue is at 6.3% and 12.8% per year over the past 5 and 10 years. However, growth in Revenue per Share is very low over the past 5 years. Growth in Revenue per Share is at 0.06% and 4.2% per year over the past 5 and 10 years.
The 5 year running averages over the past 5 years confirm this with a 5 year growth of 0.5%. Also Revenue grew at 10% in 2015, but the Revenue per Share declined by 2.6% in 2015. There was a big increase in shares in 2015 and outstanding shares grew by 12.9%. Some 68% of the units issued were for cash, with another 18.9% because of converted debentures. Some 11% was because of DRIP and this is common for this stock to issue trust units re DRIP each year.
What I really do not like is that the Liquidity Ratio is very low. Current assets less current liabilities give a ratio of 0.25. In other words current assets do not come close to covering current liabilities. For this company they do not pay all their distributions in cash as some are under DRIP. Also part of the current liabilities is the current portion of their debt.
They have this debt covered. So, if you include in this ratio cash flow less distributions paid in cash and take out the current portion of their debt you get a Ratio of 1.35. Not great, but acceptable. The problem with low Liquidity Ratios is that companies are vulnerable in bad times. Unfortunately, this is not the only REIT with low Liquidity Ratios.
You cannot get a good handle on REIT's stock price when dealing with Price/Earnings per Share Ratio. I prefer to use the Price/FFO Ratio or Price/AFFO Ratio. The 5 year low, median and high median P/AFFO Ratios are 13.89, 15.24 and 16.60. The current P/AFFO Ratio is 18.41 based on a stock price of $34.97 and 2016 AFFO estimate of $1.90. The current P/AFFO Ratio is some 21% higher than 5 year median P/AFFO and is above the 5 year median high of 16.60. This testing would suggest that the stock price is relatively expensive.
The new accounting rules of IFRS affected EPS for REITs quite strongly in some cases. For the Graham Price on this stock I am using FFO in the calculation rather than EPS. For 2015 I have a Graham Price of $34.92. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 0.91 and 0.99. The current P/GP Ratio is 1.00 based on a stock price of $34.947. This testing would suggest that the stock price is relatively expensive. However, it is just inside the expensive range.
I get a 10 year median Price/Book Value per Share Ratio of 1.33. The current P/B Ratio is 1.43 a value some 7.3% higher. The current P/B Ratio is based on a BPVS of $24.41 and a stock price of $34.97. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The historical dividend yield is 6.05%. The current dividend at 4.72% is some 22% lower. The current dividend yield is based on dividends of $1.65 and a stock price of $34.97. This testing would suggest that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $37.41. This implies a total return of 11.70% with 4.72% from dividends and 6.98% from capital gains.
Joseph Solitro of Motley Fool likes this REIT because of the good quality of its portfolio and good earnings. Cynthia Vaughn on Community Financial News talks about 6 research firms giving this stock a Hold rating. Barry Critchley in the Financial Post talks about this company's recent selling of Convertible Debentures.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more . The next stock I will write about will be Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more on Monday, September 19, 2016 around 5 pm.
Smart REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Smart 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 Smart REIT (TSX-SRU.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. Unfortunately, this stock is no longer on the Dividend Achiever's List.
REITs do not seem to consistently increase dividends over the longer term has been my experience. This stock raised their dividend for a time prior to 2009. There were no increases between 2009 and 2013, inclusive. They have started to raise dividends again in 2014 and in 2015. The last increase was for 3.1%. The 5 and 10 year dividend growth is at 0.78% and 1.62% per year.
The Bank of Canada has been saying that inflation is low at around 1.41% and 1.70% over the past 5 years for Total and Core inflation and around 1.65% and 1.72% over the past 10 years for Total and Core inflation. By this measure, the growth over dividends over the past 10 years at 1.62% looks fine. However, I know no one that believes inflation is that low, including myself. Food, rent and real estate seems a lot higher. In any event, what one expects from REITs is that the dividends would grow at the rate of inflation over the longer term. According to what the Bank of Canada says, this REIT has done this over the past 10 years.
As with many REITs, this company gives good dividends. The current dividend yield is 4.72% and the 5 year median dividend yield is 5.69% with an historical median of 6.05%. You may not want to include these when you are building a portfolio, but they probably should be considered once you start withdrawing money from your portfolio.
I think that comparing the distributions to FFO (Funds from Operations) or AFFO (Adjusted Funds from Operations) is quite valid for REITs. In 2015 the Dividend Payout Ratio for AFFO was 80.95 and for FFO was 76.3%. The 10 year median for AFFO was at 91.31% and for FFO was at 86.74%. Generally, you expect DPRs to be between 75% and 95% for REITS.
They have increased their outstanding share a lot over the years. Trust Units have grown by 6.2% and 8.3% per year over the past 5 and 10 years. For me, I would be more interested in the per share values. This has affected Revenues the most. The growth in Revenue is at 6.3% and 12.8% per year over the past 5 and 10 years. However, growth in Revenue per Share is very low over the past 5 years. Growth in Revenue per Share is at 0.06% and 4.2% per year over the past 5 and 10 years.
The 5 year running averages over the past 5 years confirm this with a 5 year growth of 0.5%. Also Revenue grew at 10% in 2015, but the Revenue per Share declined by 2.6% in 2015. There was a big increase in shares in 2015 and outstanding shares grew by 12.9%. Some 68% of the units issued were for cash, with another 18.9% because of converted debentures. Some 11% was because of DRIP and this is common for this stock to issue trust units re DRIP each year.
What I really do not like is that the Liquidity Ratio is very low. Current assets less current liabilities give a ratio of 0.25. In other words current assets do not come close to covering current liabilities. For this company they do not pay all their distributions in cash as some are under DRIP. Also part of the current liabilities is the current portion of their debt.
They have this debt covered. So, if you include in this ratio cash flow less distributions paid in cash and take out the current portion of their debt you get a Ratio of 1.35. Not great, but acceptable. The problem with low Liquidity Ratios is that companies are vulnerable in bad times. Unfortunately, this is not the only REIT with low Liquidity Ratios.
You cannot get a good handle on REIT's stock price when dealing with Price/Earnings per Share Ratio. I prefer to use the Price/FFO Ratio or Price/AFFO Ratio. The 5 year low, median and high median P/AFFO Ratios are 13.89, 15.24 and 16.60. The current P/AFFO Ratio is 18.41 based on a stock price of $34.97 and 2016 AFFO estimate of $1.90. The current P/AFFO Ratio is some 21% higher than 5 year median P/AFFO and is above the 5 year median high of 16.60. This testing would suggest that the stock price is relatively expensive.
The new accounting rules of IFRS affected EPS for REITs quite strongly in some cases. For the Graham Price on this stock I am using FFO in the calculation rather than EPS. For 2015 I have a Graham Price of $34.92. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 0.91 and 0.99. The current P/GP Ratio is 1.00 based on a stock price of $34.947. This testing would suggest that the stock price is relatively expensive. However, it is just inside the expensive range.
I get a 10 year median Price/Book Value per Share Ratio of 1.33. The current P/B Ratio is 1.43 a value some 7.3% higher. The current P/B Ratio is based on a BPVS of $24.41 and a stock price of $34.97. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The historical dividend yield is 6.05%. The current dividend at 4.72% is some 22% lower. The current dividend yield is based on dividends of $1.65 and a stock price of $34.97. This testing would suggest that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $37.41. This implies a total return of 11.70% with 4.72% from dividends and 6.98% from capital gains.
Joseph Solitro of Motley Fool likes this REIT because of the good quality of its portfolio and good earnings. Cynthia Vaughn on Community Financial News talks about 6 research firms giving this stock a Hold rating. Barry Critchley in the Financial Post talks about this company's recent selling of Convertible Debentures.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more . The next stock I will write about will be Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more on Monday, September 19, 2016 around 5 pm.
Smart REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Smart 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, September 14, 2016
High Liner Foods
Sound bite for Twitter and StockTwits is: Probably reasonable. By the dividend yield testing the stock price seems better than it has been over the past 5 years, but not over the past 10 years. It is a dividend growth stock I would consider buying when looking at ay consumer stock to buy. See my spreadsheet on High Liner Foods.
I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. The MPL Communication's site is here. Ryan Irvine of Keystone also likes this company.
Dividend is low to moderate. The dividend growth is moderate to good. The current dividend yield is 2.04% and the 5 year median dividend yield with 1.82% with a historical dividend yield at 2.15%. The dividends have grown at 23% and 16.6% per year over the past 5 and 10 years. The last dividend raise was this year and it was for 8.3%.
I believe that they can afford the dividends. The Dividend Payout Ratio for the 2015 financial year is at 35% for EPS and 15% for CFPS. The 5 year median DPR is at 35% for DPS and 13% for CFPS.
If you had purchased this stock some 5, 10 or 15 years ago, you would be making a dividend yield on your original purchase price of 6.7%, 11% or 21%. If you had purchased this stock 5, 10 or 15 years ago, dividends would have covered your purchase price of 26%, 57% or 123%.
On a relative basis they have lots of debt. The Long Term Debt to Market Cap is at the end of 2015 was 0.81, but has fallen to 0.63 in the second quarter. Still the Leverage and Debt/Equity Ratio for 2015 are relatively high for a Consumer Discretionary Stock at 3.46 and 2.46 and even the lower ones at the end of second quarter at 3.00 and 2.00 are a bit high for a Consumer Discretionary stock.
The Liquidity Ratio is good at 2.34 for the 2015 financial year. The Debt Ratio is a bit low at 1.41 for the 2015 financial year. I prefer both these to be at or above 1.50 for safety's sake.
I have 5 year low, median and high median Price/Earnings per Share ratios of 13.92, 18.32 and 22.39. The corresponding 10 year values are 12.75, 15.44 and 19.28. The historical values are 8.35, 10.65 and 13.15 and a quite a bit lower. The current P/E Ratio is 11.51 based on a stock price of $25.51 and 2016 EPS estimates of $1.70 US$ or 2.22 CDN$. This stock price testing suggests that the stock price is relatively reasonable and around or below the median.
I get a Graham Price of $21.25. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 1.04 and 1.24. The current P/GP Ratio is 1.20 based on a stock price of $25.51. This stock price testing suggests that the stock price is relatively reasonable below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.38. The current P/B Ratio is 2.82, a value some 104% higher. The P/B Ratio is based on a stock price of $25.51 and BVPS of $9.06. This stock price testing suggests that the stock price is relatively expensive.
The historical dividend yield is 2.15% and the current dividend yield is 2.04% based on dividends of $0.52 and a stock price of $25.51. The current yield is some 5.2% below the historical median and this suggests that the stock price is reasonable but above the median. The 5 year median dividend yield is 1.82% and the current dividend yield at 2.04% and some 11.8% above the 5 year median. This testing suggests that the stock price is relatively reasonable and below the 5 year median.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus would be a Buy. The 12 months stock price consensus stock price is $22.33. This is lower than the current stock price of $25.51 and would imply a total loss of 10.43% with 2.04% from dividends and 12.47% from a capital loss.
There is a number of stories about Blue Harvest Fisheries buying High Liner Foods' scallop business and processing facility in New Bedford, MA. This is one of the articles. There is a News Wire item for this company's second quarter of 2016. It points out that for the purposes of calculating financial ratios, including dividend payout and share price-to-earnings ratios, to take into consideration that the Company's share price and dividend rate are reported in CAD and its earnings and financial position are reported in USD. This article by Teresa Graham on The Cerbat Gem talks about Royal Bank increasing their target price on 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 ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more . The next stock I will write about will be Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more on Friday, September 16, 2016around 5 pm. Tomorrow on my other blog I will write about Going to ETFs... learn more on Thursday, September 15, 2016 around 5 pm.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner Foods.
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 High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. The MPL Communication's site is here. Ryan Irvine of Keystone also likes this company.
Dividend is low to moderate. The dividend growth is moderate to good. The current dividend yield is 2.04% and the 5 year median dividend yield with 1.82% with a historical dividend yield at 2.15%. The dividends have grown at 23% and 16.6% per year over the past 5 and 10 years. The last dividend raise was this year and it was for 8.3%.
I believe that they can afford the dividends. The Dividend Payout Ratio for the 2015 financial year is at 35% for EPS and 15% for CFPS. The 5 year median DPR is at 35% for DPS and 13% for CFPS.
If you had purchased this stock some 5, 10 or 15 years ago, you would be making a dividend yield on your original purchase price of 6.7%, 11% or 21%. If you had purchased this stock 5, 10 or 15 years ago, dividends would have covered your purchase price of 26%, 57% or 123%.
On a relative basis they have lots of debt. The Long Term Debt to Market Cap is at the end of 2015 was 0.81, but has fallen to 0.63 in the second quarter. Still the Leverage and Debt/Equity Ratio for 2015 are relatively high for a Consumer Discretionary Stock at 3.46 and 2.46 and even the lower ones at the end of second quarter at 3.00 and 2.00 are a bit high for a Consumer Discretionary stock.
The Liquidity Ratio is good at 2.34 for the 2015 financial year. The Debt Ratio is a bit low at 1.41 for the 2015 financial year. I prefer both these to be at or above 1.50 for safety's sake.
I have 5 year low, median and high median Price/Earnings per Share ratios of 13.92, 18.32 and 22.39. The corresponding 10 year values are 12.75, 15.44 and 19.28. The historical values are 8.35, 10.65 and 13.15 and a quite a bit lower. The current P/E Ratio is 11.51 based on a stock price of $25.51 and 2016 EPS estimates of $1.70 US$ or 2.22 CDN$. This stock price testing suggests that the stock price is relatively reasonable and around or below the median.
I get a Graham Price of $21.25. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 1.04 and 1.24. The current P/GP Ratio is 1.20 based on a stock price of $25.51. This stock price testing suggests that the stock price is relatively reasonable below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.38. The current P/B Ratio is 2.82, a value some 104% higher. The P/B Ratio is based on a stock price of $25.51 and BVPS of $9.06. This stock price testing suggests that the stock price is relatively expensive.
The historical dividend yield is 2.15% and the current dividend yield is 2.04% based on dividends of $0.52 and a stock price of $25.51. The current yield is some 5.2% below the historical median and this suggests that the stock price is reasonable but above the median. The 5 year median dividend yield is 1.82% and the current dividend yield at 2.04% and some 11.8% above the 5 year median. This testing suggests that the stock price is relatively reasonable and below the 5 year median.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus would be a Buy. The 12 months stock price consensus stock price is $22.33. This is lower than the current stock price of $25.51 and would imply a total loss of 10.43% with 2.04% from dividends and 12.47% from a capital loss.
There is a number of stories about Blue Harvest Fisheries buying High Liner Foods' scallop business and processing facility in New Bedford, MA. This is one of the articles. There is a News Wire item for this company's second quarter of 2016. It points out that for the purposes of calculating financial ratios, including dividend payout and share price-to-earnings ratios, to take into consideration that the Company's share price and dividend rate are reported in CAD and its earnings and financial position are reported in USD. This article by Teresa Graham on The Cerbat Gem talks about Royal Bank increasing their target price on 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 ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more . The next stock I will write about will be Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more on Friday, September 16, 2016around 5 pm. Tomorrow on my other blog I will write about Going to ETFs... learn more on Thursday, September 15, 2016 around 5 pm.
High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. Their retail branded products are sold throughout the United States, Canada and Mexico and are available in most grocery and club stores. They also sell their branded products to restaurants and institutions and they are the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. Its web site is here High Liner Foods.
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, September 12, 2016
ATCO Ltd
Sound bite for Twitter and StockTwits is: Price reasonable, below median. On some tests the stock price looks relatively expensive, but the test I like best is that of the dividend yield as you are using current data and not estimates. See my spreadsheet on ATCO Ltd.
I do not own this stock of ATCO Ltd (TSX-ACO.X, OTC-ACLLF). I started to look at this stock in 2009 because it was a dividend paying stock that was on everyone's list. At that time this stock is on the Dividend Achievers list, the Dividend Aristocrats list and also was on Mike Higgs' list. TCO (TSX-ACO-X) owns 88% Canadian Utilities (TSX-CU, so you would not buy both these stocks.
Dividends are low to moderate and the dividend increases are moderate. The current dividend is 2.47% with a 5 year median dividend yield of 1.88% and a historical median dividend yield of 2.08%. The dividend growth over the past 5 and 10 years is at 13.3% and 10.1% per year. The last dividend increase was this year and the increase was for 15.2%.
If you had bought this stock 5, 10 or 15 years ago and paid a median price, you would be earning a dividend yield of 3.8%, 5.4% or 9.5% on your original investment. If you had bought this stock 5, 20 or 15 years ago, dividends paid would cover 14.5%, 32.5% or 71.7% of the cost of your stock. If you bought this stock today and the dividends increase at 13%, then in 5, 10 or 15 years you could be earning a yield of 4.6%, 8.4% or 15.4% on your purchase price.
Last year was not a good year for this company. The EPS was just $1.33 a values some 63% lower than the previous year. However, EPS have picked up this year and if you compare the 12 month EPS to the end of the second quarter to the EPS for 2015, EPS is up by 45%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.05, 12.40 and 13.75. The 10 year corresponding values are 9.91, 11.53 and 13.10. The historical values are 9.04, 10.59 and 12.31. The current P/E Ratio is 16.05 based on a stock price of $46.21 and 2016 EPS estimate of $2.88. This stock price testing suggests that the stock is relatively expensive.
I get a Graham Price of $43.48. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 0.94 and 1.07. The current P/GP Ratio is 1.06 based on a stock price of $46.21. This stock price testing suggests that the stock price is reasonable, but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 1.58 a value some 4% lower. The current P/B Ratio is based on a stock price of $46.21 and BVPS of $29.18. This stock price testing suggest that the stock price is reasonable and below the median.
The current dividend yield is 2.47% based on a stock price of $46.21 and dividends of $1.14. The historical dividend yield is 2.08% a value some 19% below the current dividend yield. Also, the 5 year median dividend yield is 1.88% which is some 31% below the current dividend yield. This stock price testing suggests that the stock price is relatively cheap to reasonable.
When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendations would be a Hold. The 12 month stock price consensus is $48.25. This implies a total return of 6.88% with 4.41% from capital gains and 2.47% from dividends based on a current price of $46.21.
Kay Ng of Motley Fool likes this stock and thinks that it is reasonably priced with good potential and good dividend growth. In this article by Chris Varcoe in the Calgary Herald he talks about the annual meeting of this company and that the CEO and Chair believes in Fort McMurray rebuilding. In this article by Jeff Lewis at the G&M he talks about the founder of this company Ron Southern.
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 Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more . The next stock I will write about will be High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more on Wednesday, September 14, 2016 around 5 pm. Tomorrow on my other blog I will write about Defined Contribution Pensions... learn more on Tuesday, September 13, 2016 around 5 pm.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has just over 50% stake in Canadian Utilities Ltd. The company utilizes a dual share structure of voting and non-voting shares. Its web site is here ATCO 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 ATCO Ltd (TSX-ACO.X, OTC-ACLLF). I started to look at this stock in 2009 because it was a dividend paying stock that was on everyone's list. At that time this stock is on the Dividend Achievers list, the Dividend Aristocrats list and also was on Mike Higgs' list. TCO (TSX-ACO-X) owns 88% Canadian Utilities (TSX-CU, so you would not buy both these stocks.
Dividends are low to moderate and the dividend increases are moderate. The current dividend is 2.47% with a 5 year median dividend yield of 1.88% and a historical median dividend yield of 2.08%. The dividend growth over the past 5 and 10 years is at 13.3% and 10.1% per year. The last dividend increase was this year and the increase was for 15.2%.
If you had bought this stock 5, 10 or 15 years ago and paid a median price, you would be earning a dividend yield of 3.8%, 5.4% or 9.5% on your original investment. If you had bought this stock 5, 20 or 15 years ago, dividends paid would cover 14.5%, 32.5% or 71.7% of the cost of your stock. If you bought this stock today and the dividends increase at 13%, then in 5, 10 or 15 years you could be earning a yield of 4.6%, 8.4% or 15.4% on your purchase price.
Last year was not a good year for this company. The EPS was just $1.33 a values some 63% lower than the previous year. However, EPS have picked up this year and if you compare the 12 month EPS to the end of the second quarter to the EPS for 2015, EPS is up by 45%.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.05, 12.40 and 13.75. The 10 year corresponding values are 9.91, 11.53 and 13.10. The historical values are 9.04, 10.59 and 12.31. The current P/E Ratio is 16.05 based on a stock price of $46.21 and 2016 EPS estimate of $2.88. This stock price testing suggests that the stock is relatively expensive.
I get a Graham Price of $43.48. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 0.94 and 1.07. The current P/GP Ratio is 1.06 based on a stock price of $46.21. This stock price testing suggests that the stock price is reasonable, but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 1.58 a value some 4% lower. The current P/B Ratio is based on a stock price of $46.21 and BVPS of $29.18. This stock price testing suggest that the stock price is reasonable and below the median.
The current dividend yield is 2.47% based on a stock price of $46.21 and dividends of $1.14. The historical dividend yield is 2.08% a value some 19% below the current dividend yield. Also, the 5 year median dividend yield is 1.88% which is some 31% below the current dividend yield. This stock price testing suggests that the stock price is relatively cheap to reasonable.
When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendations would be a Hold. The 12 month stock price consensus is $48.25. This implies a total return of 6.88% with 4.41% from capital gains and 2.47% from dividends based on a current price of $46.21.
Kay Ng of Motley Fool likes this stock and thinks that it is reasonably priced with good potential and good dividend growth. In this article by Chris Varcoe in the Calgary Herald he talks about the annual meeting of this company and that the CEO and Chair believes in Fort McMurray rebuilding. In this article by Jeff Lewis at the G&M he talks about the founder of this company Ron Southern.
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 Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more . The next stock I will write about will be High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more on Wednesday, September 14, 2016 around 5 pm. Tomorrow on my other blog I will write about Defined Contribution Pensions... learn more on Tuesday, September 13, 2016 around 5 pm.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has just over 50% stake in Canadian Utilities Ltd. The company utilizes a dual share structure of voting and non-voting shares. Its web site is here ATCO 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, September 9, 2016
Exchange Income Corp
Sound bite for Twitter and StockTwits is: Price reasonable to expensive. I personally would not be interested in buy shares in this company, mainly because this company manufactures mostly airplanes. I do not like airplane companies (i.e. those in the travel business) because I do not see that they can be profitable in the longer term. See my spreadsheet on Exchange Income Corp.
I do not own this stock of Exchange Income Corp (TSX-EIF, OTC-EIFZF). One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind. This article is available here.
Dividend yields are good and growth is low to moderate. The current dividend yield is 5.81% and the 5 year median dividend yield is 7.42%. The dividend growth over the past 5 and 10 years is 2.9% and 5.6%. The last dividend increase was in 2016 and it was for 4.7%.
This company used to be an income trust. They did not decrease or keep the dividends level when changing to a corporation. They are still having problems paying for the dividends from EPS. However, their Dividend Payout Ratio for EPS is getting better. The DPR for EPS for 2015 is 112%. It is expected to be around 93% in 2016 and get better from there. The DPR for CFPS is better at 46% for 2015 and with a 5 year median of 44%.
Because of the DPR for EPS, they are providing Free Cash Flow values and are using Free Cash Flow in a Dividend Payout Ratio to show that they can afford their dividends. They give a Dividend Payout Ratio for FCF of 60%. A reason to like this company is because it is a dividend growth company.
Outstanding shares have grown a lot. Their growth is at 13.7% and 26.8% per year over the past 5 and 10 years. So I would look at the per share values. It can make a difference. The Revenue growth is 27% and 30.3% per year over the past 5 and 10 years. The Revenue per Share growth is 11.6% and 2.7% per year.
The EPS and CFPS have been picking up recently and this is a good sign. EPS grew over the past 5 years at 10.5%. EPS over the past 10 years is very low at 0.8% growth. EPS good growth is due to the most recent financial year. The 5 year running average for EPS growth over the past 5 years is a decline of 4.7%. CFPS is up by 15.8% and 5.7% per year over the past 5 and 10 years.
A reason not to currently like it is that the ROE has been less than 10% every year in the past 5 years. The ROE for 2015 was 9.0% and the 5 year median is 8.6%. When it began, it was making ROEs at or above 10%, but this has not been true since 2010.
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.13, 20.58 and 23.03. The corresponding 10 year values are 13.01, 15.52 and 18.03. The current P/E Ratio is 16.15 based on a stock price of $34.57 and 2016 EPS estimate of $2.14. This suggests that the stock price that is relatively reasonable and around the median.
I get a Graham Price of $27.85. The10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.08 and 1.26. The current P/GP Ratio is 1.24 based on a stock price of $34.57. This suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.57. The current P/B Ratio is 2.15 based on BVPS of $16.11 and a stock price of $34.57. The current P/B Ratio is some 37% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
There is a problem with using the historical median dividend yield for checking relative stock price for old income trust companies as these companies will probably never hit again the dividend yields they had as income trusts.
The 10 year median P/S Ratio is 0.66. The current P/S Ratio is 1.05 based on 2016 Revenue estimates of 910M, Revenue per Share of $32.93 and a stock price of $34.57. The current P/S Ratio is some 59% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Cash Flow per Share Ratio is 4.69 based on 2016 CFPS estimate of $5.56 and a stock price of $34.57. The current P/CF Ratio is some 35% higher than the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month target stock price is $39.15. This implies a total return of 19.065 with 13.25% from capital gains and 5.81% from dividends.
David Milstead wrote an article on this stock in the G&M in 2014. It is still interesting because of what it points out about this company. He is certainly right about increase in debt and shares. Long Term Debt as a percentage of the Market Cap went from a ratio of 0.03 to 0.39 between 2014 and 2015. Shares between 2014 and 2015were increased by almost 23%. See what analysts are saying at 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 Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more . The next stock I will write about will be ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more on Monday, September 12 around 5 pm.
Exchange Income Corporation was created to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States and to distribute stable monthly cash dividends to its shareholders. The Company currently owns subsidiaries in two niche business segments, aviation and specialty manufacturing. Its web site is here Exchange Income 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 Exchange Income Corp (TSX-EIF, OTC-EIFZF). One of my blogger readers suggested this stock as one to review. There was an interesting article about this stock in the G&M in May 2013. This article suggested that the company had a hefty yield with an acquisition tailwind. This article is available here.
Dividend yields are good and growth is low to moderate. The current dividend yield is 5.81% and the 5 year median dividend yield is 7.42%. The dividend growth over the past 5 and 10 years is 2.9% and 5.6%. The last dividend increase was in 2016 and it was for 4.7%.
This company used to be an income trust. They did not decrease or keep the dividends level when changing to a corporation. They are still having problems paying for the dividends from EPS. However, their Dividend Payout Ratio for EPS is getting better. The DPR for EPS for 2015 is 112%. It is expected to be around 93% in 2016 and get better from there. The DPR for CFPS is better at 46% for 2015 and with a 5 year median of 44%.
Because of the DPR for EPS, they are providing Free Cash Flow values and are using Free Cash Flow in a Dividend Payout Ratio to show that they can afford their dividends. They give a Dividend Payout Ratio for FCF of 60%. A reason to like this company is because it is a dividend growth company.
Outstanding shares have grown a lot. Their growth is at 13.7% and 26.8% per year over the past 5 and 10 years. So I would look at the per share values. It can make a difference. The Revenue growth is 27% and 30.3% per year over the past 5 and 10 years. The Revenue per Share growth is 11.6% and 2.7% per year.
The EPS and CFPS have been picking up recently and this is a good sign. EPS grew over the past 5 years at 10.5%. EPS over the past 10 years is very low at 0.8% growth. EPS good growth is due to the most recent financial year. The 5 year running average for EPS growth over the past 5 years is a decline of 4.7%. CFPS is up by 15.8% and 5.7% per year over the past 5 and 10 years.
A reason not to currently like it is that the ROE has been less than 10% every year in the past 5 years. The ROE for 2015 was 9.0% and the 5 year median is 8.6%. When it began, it was making ROEs at or above 10%, but this has not been true since 2010.
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.13, 20.58 and 23.03. The corresponding 10 year values are 13.01, 15.52 and 18.03. The current P/E Ratio is 16.15 based on a stock price of $34.57 and 2016 EPS estimate of $2.14. This suggests that the stock price that is relatively reasonable and around the median.
I get a Graham Price of $27.85. The10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.08 and 1.26. The current P/GP Ratio is 1.24 based on a stock price of $34.57. This suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.57. The current P/B Ratio is 2.15 based on BVPS of $16.11 and a stock price of $34.57. The current P/B Ratio is some 37% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
There is a problem with using the historical median dividend yield for checking relative stock price for old income trust companies as these companies will probably never hit again the dividend yields they had as income trusts.
The 10 year median P/S Ratio is 0.66. The current P/S Ratio is 1.05 based on 2016 Revenue estimates of 910M, Revenue per Share of $32.93 and a stock price of $34.57. The current P/S Ratio is some 59% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Cash Flow per Share Ratio is 4.69 based on 2016 CFPS estimate of $5.56 and a stock price of $34.57. The current P/CF Ratio is some 35% higher than the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month target stock price is $39.15. This implies a total return of 19.065 with 13.25% from capital gains and 5.81% from dividends.
David Milstead wrote an article on this stock in the G&M in 2014. It is still interesting because of what it points out about this company. He is certainly right about increase in debt and shares. Long Term Debt as a percentage of the Market Cap went from a ratio of 0.03 to 0.39 between 2014 and 2015. Shares between 2014 and 2015were increased by almost 23%. See what analysts are saying at 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 Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more . The next stock I will write about will be ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more on Monday, September 12 around 5 pm.
Exchange Income Corporation was created to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States and to distribute stable monthly cash dividends to its shareholders. The Company currently owns subsidiaries in two niche business segments, aviation and specialty manufacturing. Its web site is here Exchange Income 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.
Wednesday, September 7, 2016
Alimentation Couche-Tard Inc.
Sound bite for Twitter and StockTwits is: Currently expensive. This has had a good run up, but I think it is a bit pricy at the moment. It is a good company though. See my spreadsheet on Alimentation Couche-Tard Inc. .
I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
They started to pay a dividend in 2006. The dividends are very low with good growth. The current dividend is 0.56%. The historical median dividend yield is 0.60%. The historical high is 1.31%. Mind here historical means 10 years of dividends. The growth in dividends over the past 5 and 9 years was 32.5% and 23.5% per year. I generally do not buy stocks with dividends less than 1% because it takes so long to get to a really good dividend yield on your original stock purchase.
The dividends are very affordable with the 2016 Dividend Payout Ratio for EPS at 9.2% and the CFPS at 6.1%. The last dividend increase was this year for 14.8%. However, they often increase the dividend more than once a year. Last year total dividend increase was 40%. (Note that the financial year for this company ends around the end of April each year.)
This stock reports in US$. Growth is good for Revenue, Earnings and Cash Flow. There is little change in outstanding shares. Revenue grew at 12.5% and 12.9% per year over the past 5 and 10 years. EPS grew at 26.3% and 21% per year over the past 5 and 10 years. Cash Value grew at 22.8% and 18.8% per year over the past 5 and 10 years. All this growth is in US$.
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.48, 15.96 and 19.85. The 10 year corresponding values are 12.26, 15.9 and 19.64. The historical values are 12.50, 17.40 and 20.80. They are remarkable similar. The current P/E Ratio is 22.54 based on a stock price of $68.26 and 2017 EPS estimate of $3.03 CDN$ ($2.33 US$). This suggests that the stock price is relatively expensive.
I get a Graham Price of $28.77. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81. The current P/GP Ratio is 2.37 based on a stock price of $68.26. This suggests that the stock price is relatively expensive.
The 10 year Price/Book Value per Share Ratio is 2.88. The current P/B Ratio is 5.62 based on BVPS of $12.14 and a stock price of $68.26. The current P/B Ratio is some 95% higher than the 10 year median ratio. This suggests that the stock price is relatively expensive.
The historical median dividend yield is 0.60%. The current dividend at 0.45% is based on dividends of $0.37 and a stock price of $68.26. The current dividend is some 24% lower than the historical median. This suggests that the stock price is relatively expensive.
When I look at analysts' recommendations I find Strong Buy, Buy and Underperform. The vast majority of the recommendations are a Buy. The 12 months stock price is $78.38 CDN$ ($60.30 US$). This implies a total return of $15.29% with 14.83% from capital gains and 0.45% from dividends.
Will Ashworth of Motley Fool talks about this company buying CST Brands Inc. They have also bought 53 Cracker Barrel locations. Unfortunately, Canadian companies buying American companies have not always worked to our benefit. Jared Coughlin on Community Financial News talks about Desjardins' increasing their target price. See what analysts are saying at 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 and here.
The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more . The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Friday, September 9, 2016 around 10 am. Tomorrow on my other blog I will write about Something to Buy September 2016... learn more on September 8, 2016 around 5 pm.
Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard 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 Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it had a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had a good past record and had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.
They started to pay a dividend in 2006. The dividends are very low with good growth. The current dividend is 0.56%. The historical median dividend yield is 0.60%. The historical high is 1.31%. Mind here historical means 10 years of dividends. The growth in dividends over the past 5 and 9 years was 32.5% and 23.5% per year. I generally do not buy stocks with dividends less than 1% because it takes so long to get to a really good dividend yield on your original stock purchase.
The dividends are very affordable with the 2016 Dividend Payout Ratio for EPS at 9.2% and the CFPS at 6.1%. The last dividend increase was this year for 14.8%. However, they often increase the dividend more than once a year. Last year total dividend increase was 40%. (Note that the financial year for this company ends around the end of April each year.)
This stock reports in US$. Growth is good for Revenue, Earnings and Cash Flow. There is little change in outstanding shares. Revenue grew at 12.5% and 12.9% per year over the past 5 and 10 years. EPS grew at 26.3% and 21% per year over the past 5 and 10 years. Cash Value grew at 22.8% and 18.8% per year over the past 5 and 10 years. All this growth is in US$.
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.48, 15.96 and 19.85. The 10 year corresponding values are 12.26, 15.9 and 19.64. The historical values are 12.50, 17.40 and 20.80. They are remarkable similar. The current P/E Ratio is 22.54 based on a stock price of $68.26 and 2017 EPS estimate of $3.03 CDN$ ($2.33 US$). This suggests that the stock price is relatively expensive.
I get a Graham Price of $28.77. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81. The current P/GP Ratio is 2.37 based on a stock price of $68.26. This suggests that the stock price is relatively expensive.
The 10 year Price/Book Value per Share Ratio is 2.88. The current P/B Ratio is 5.62 based on BVPS of $12.14 and a stock price of $68.26. The current P/B Ratio is some 95% higher than the 10 year median ratio. This suggests that the stock price is relatively expensive.
The historical median dividend yield is 0.60%. The current dividend at 0.45% is based on dividends of $0.37 and a stock price of $68.26. The current dividend is some 24% lower than the historical median. This suggests that the stock price is relatively expensive.
When I look at analysts' recommendations I find Strong Buy, Buy and Underperform. The vast majority of the recommendations are a Buy. The 12 months stock price is $78.38 CDN$ ($60.30 US$). This implies a total return of $15.29% with 14.83% from capital gains and 0.45% from dividends.
Will Ashworth of Motley Fool talks about this company buying CST Brands Inc. They have also bought 53 Cracker Barrel locations. Unfortunately, Canadian companies buying American companies have not always worked to our benefit. Jared Coughlin on Community Financial News talks about Desjardins' increasing their target price. See what analysts are saying at 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 and here.
The last stock I wrote about was about was Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more . The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Friday, September 9, 2016 around 10 am. Tomorrow on my other blog I will write about Something to Buy September 2016... learn more on September 8, 2016 around 5 pm.
Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard 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.
Tuesday, September 6, 2016
Chemtrade Logistics Income Fund
Sound bite for Twitter and StockTwits is: Probably reasonably priced. On the stock price tests the P/B Ratios tests looks the best to my mind. Although some suggest that stock because of its high dividends, I prefer stocks with increasing dividends, even if the increase is low. It does not take much nowadays to have increase above inflation. See my spreadsheet on Chemtrade Logistics Income Fund .
I do not own this stock of Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.
In 2007 this company decreased its dividend just over 16%. Since then it has held the dividend flat. It was late in 2006 that the government announced the changes to income trusts to take effect in 2011. They have a problem in that they cannot afford their dividends from the point of view of their earnings. They say it is fine looking at distributable cash.
The Dividend Payout Ratio for EPS for 2015 is negative because the EPS was negative. However, the 5 year running average for DPR for EPS is 271%. It is expected to be 316% in 2016. Their coverage by CFPS is better with the 2015 value at 35% and the 5 year median at 37%.
The company still puts out Funds from Operations (FFO) or Distributable Cash and Adjusted Funds from Operations (AFFO) measuring their payout. In 2015 the DPR for FFO was 60.9% and for AFFO was 44%.
Because the outstanding shares have increased by 17.6% and 7.5% over the past 5 and 10 years, I would be interested in the per share values. Revenue growth looks good at 19.6% and 12.4% per year growth over the past 5 and 10 years. However, the Revenue per Share growth is just 1.7% and 4.5% for the past 5 and 10 years.
Growth is better in Cash Flow with the Cash Flow growth at 32.4% and 17.4% per year and CFPS at 12.6% and 9.2% per year over the past 5 and 10 years. Since the EPS was negative this year, there is no growth here. The Comprehensive Income was high at $120.6M and with an ROE of 13.7%. However, this was all from foreign exchange.
They struggle with the Liquidity Ratio. The Liquidity Ratio is 1.05 for 2015 with a 5 year median of just 0.98. If you add in cash flow after dividends the ratio becomes 1.36 with a 5 year median of 1.36. This is a vulnerability and I prefer to see Liquidity Ratios of 1.50 and above for safety's sake.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.40, 16.79 and 18.17. The 10 year corresponding values are 10.56, 12.78 and 15.00. Historical values are 13.90, 15.19 and 16.73. The current P/E Ratio is 47.00 based on a stock price of $17.86 and 2016 EPS estimate of $0.38. This suggests that the stock price is relatively expensive.
The 5 year low, median and high median Price/ Funds from Operations Ratios are 8.24, 9.71 and 10.55. The corresponding 10 year values are 6.38, 7.44 and 8.51. The current P/FFO Ratio is 8.67 based on 2016 FFO estimate of $2.06 and a stock price of $17.86. This could suggest that the stock price is relatively reasonable and below the median when viewed over the past 5 years.
I get a Graham Price of $9.83. The 10 year low, median and high median Price/Graham Price Ratio is 0.98, 1.11 and 1.27. The current P/GP Ratio is 1.82 based on a stock price of $17.86. This suggests that the stock price is relatively expensive.
The 10 year median Price/Book Value per Share Ratio is 1.66. The current P/B Ratio is 1.58 based on BVPS of $11.30 and a stock price of $17.86. The current P/B Ratio is 4.75 lower than the 10 year median. This could suggest that the stock price is relatively reasonable and below the median.
Since this stock used to be an income trust company the stock price testing using dividend yield does not work well. These companies will not have such high dividends again as they had as income trusts. The 5 year median dividend yield is 6.73%, just marginally higher than the current dividend yield of 6.72% which is based on dividends of $1.20 and a stock price of $17.86. This is implies that the stock price is reasonable and around the median, at least for the past 5 years. However, the dividend yield is still rather high as the old income trust were expected to have future dividend yields in the 4 to 5% range.
When I look at analysts' recommendations, I find Buy and Hold recommendations, but most recommendations are Hold recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $19.08. This implies a total return of 13.55% with 6.83% from capital gains and 6.72% from dividends based on a current stock price of $17.86.
Chemtrade Logistics Income Fund announced via Market Wired that they have completed a $143.75 Million Public Offering of Convertible Debentures Bought Deal . Chemtrade will use the net proceeds of the offering to repay existing indebtedness under its credit facility and for general trust purposes. Jared Coughlin on Community Financial News talks about recent analysts' reports. A couple has lowered their target prices. Joseph Solitro of Motley Fool likes this stock for its dependable dividend. I prefer dividend growth stocks.
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 Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more. The next stock I will write about will be Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more on Wednesday, September 7, 2016 around 5 pm. Today on my other blog I will write about Dividend Stocks September 2016... learn more.
Chemtrade Logistics Income Fund is a global supplier of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite and a processor of spent acid, particularly in the U.S. Gulf Coast region. Chemtrade is also a regional supplier of sulphur, sodium chlorate and phosphorus pentasulphide, and also produces zinc oxide at three North American locations. Its web site is here Chemtrade Logistics Income Fund.
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 Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF). I decided to investigate this stock after reading an article in the G&M in February 2012 about investing in small cap stocks that pay dividends. This was one of the stocks mentioned that I had never heard of before.
In 2007 this company decreased its dividend just over 16%. Since then it has held the dividend flat. It was late in 2006 that the government announced the changes to income trusts to take effect in 2011. They have a problem in that they cannot afford their dividends from the point of view of their earnings. They say it is fine looking at distributable cash.
The Dividend Payout Ratio for EPS for 2015 is negative because the EPS was negative. However, the 5 year running average for DPR for EPS is 271%. It is expected to be 316% in 2016. Their coverage by CFPS is better with the 2015 value at 35% and the 5 year median at 37%.
The company still puts out Funds from Operations (FFO) or Distributable Cash and Adjusted Funds from Operations (AFFO) measuring their payout. In 2015 the DPR for FFO was 60.9% and for AFFO was 44%.
Because the outstanding shares have increased by 17.6% and 7.5% over the past 5 and 10 years, I would be interested in the per share values. Revenue growth looks good at 19.6% and 12.4% per year growth over the past 5 and 10 years. However, the Revenue per Share growth is just 1.7% and 4.5% for the past 5 and 10 years.
Growth is better in Cash Flow with the Cash Flow growth at 32.4% and 17.4% per year and CFPS at 12.6% and 9.2% per year over the past 5 and 10 years. Since the EPS was negative this year, there is no growth here. The Comprehensive Income was high at $120.6M and with an ROE of 13.7%. However, this was all from foreign exchange.
They struggle with the Liquidity Ratio. The Liquidity Ratio is 1.05 for 2015 with a 5 year median of just 0.98. If you add in cash flow after dividends the ratio becomes 1.36 with a 5 year median of 1.36. This is a vulnerability and I prefer to see Liquidity Ratios of 1.50 and above for safety's sake.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.40, 16.79 and 18.17. The 10 year corresponding values are 10.56, 12.78 and 15.00. Historical values are 13.90, 15.19 and 16.73. The current P/E Ratio is 47.00 based on a stock price of $17.86 and 2016 EPS estimate of $0.38. This suggests that the stock price is relatively expensive.
The 5 year low, median and high median Price/ Funds from Operations Ratios are 8.24, 9.71 and 10.55. The corresponding 10 year values are 6.38, 7.44 and 8.51. The current P/FFO Ratio is 8.67 based on 2016 FFO estimate of $2.06 and a stock price of $17.86. This could suggest that the stock price is relatively reasonable and below the median when viewed over the past 5 years.
I get a Graham Price of $9.83. The 10 year low, median and high median Price/Graham Price Ratio is 0.98, 1.11 and 1.27. The current P/GP Ratio is 1.82 based on a stock price of $17.86. This suggests that the stock price is relatively expensive.
The 10 year median Price/Book Value per Share Ratio is 1.66. The current P/B Ratio is 1.58 based on BVPS of $11.30 and a stock price of $17.86. The current P/B Ratio is 4.75 lower than the 10 year median. This could suggest that the stock price is relatively reasonable and below the median.
Since this stock used to be an income trust company the stock price testing using dividend yield does not work well. These companies will not have such high dividends again as they had as income trusts. The 5 year median dividend yield is 6.73%, just marginally higher than the current dividend yield of 6.72% which is based on dividends of $1.20 and a stock price of $17.86. This is implies that the stock price is reasonable and around the median, at least for the past 5 years. However, the dividend yield is still rather high as the old income trust were expected to have future dividend yields in the 4 to 5% range.
When I look at analysts' recommendations, I find Buy and Hold recommendations, but most recommendations are Hold recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $19.08. This implies a total return of 13.55% with 6.83% from capital gains and 6.72% from dividends based on a current stock price of $17.86.
Chemtrade Logistics Income Fund announced via Market Wired that they have completed a $143.75 Million Public Offering of Convertible Debentures Bought Deal . Chemtrade will use the net proceeds of the offering to repay existing indebtedness under its credit facility and for general trust purposes. Jared Coughlin on Community Financial News talks about recent analysts' reports. A couple has lowered their target prices. Joseph Solitro of Motley Fool likes this stock for its dependable dividend. I prefer dividend growth stocks.
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 Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more. The next stock I will write about will be Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more on Wednesday, September 7, 2016 around 5 pm. Today on my other blog I will write about Dividend Stocks September 2016... learn more.
Chemtrade Logistics Income Fund is a global supplier of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite and a processor of spent acid, particularly in the U.S. Gulf Coast region. Chemtrade is also a regional supplier of sulphur, sodium chlorate and phosphorus pentasulphide, and also produces zinc oxide at three North American locations. Its web site is here Chemtrade Logistics Income Fund.
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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