Monday, September 18, 2017

Accord Financial Corp

Sound bite for Twitter and StockTwits is: Dividend growth financial. This stock currently seems to be cheap but of a high risk. 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.

What I have noticed is that this company seemed to have hit a peak in 2010 and has not gone anywhere since. A peak was hit in revenue and in EPS. The other thing is that dividend growth was cut in half after 2011. Prior to 2011 dividend 5 year dividend growth was 9.2% per year. The current 5 year dividend growth is 3.7% per year. Also there was no dividend increase in 2016 and so far no increase in 2017.

The current dividend yield is good and the dividend growth is low. However the yield used to be in the moderate range. The current dividend yield is 4.11%. The 5 year median dividend yield is 3.90% with a historical median of 2.56%. The dividend growth as was 3.7% and 6.1% per year over the past 5 and 10 years.

For a financial stock the debt ratios are relatively good. For the 2016 financial year the Long Term Debt/Market Cap Ratio was 0.79, the Debt Ratio was 1.96 and the Leverage and Debt/Equity Ratios were 2.05 and 1.05. At the end of the second quarter all these ratios declined with Long Term Debt/Market Cap Ratio at 1.28, the Debt Ratio at 1.65 and the Leverage and Debt/Equity Ratios were 2.54 and 1.54.

Note that for the Long Term Debt/Market Cap Ratio and Leverage and Debt/Equity Ratios lower ratios are better and the Debt Ratio higher is better. The other thing to note is that company says that for the second quarter they are still in compliance with their loan covenants.

Revenue and EPS have had meager or no growth over the past 5 and 10 years. Growth in Revenue per Share is 1.05% and 1.17% per year over the past 5 and 10 years. EPS is down by 1.45% and up and 0.93% per year over the past 5 and 10 years. Things have not improved in the second quarter of 2017 as Revenue, Earnings and Cash Flow are all decreasing.

The 5 year running average is better for both Revenue per Share and EPS. Here Revenue per Share is up by 2.4% and 2.1% per year over the past 5 and 10 years. EPS is up by 5.4% and 2.8% per year over the past 5 and 10 years. When there is volatility, then comparing one 5 year period to the pervious one or to a 5 year period 10 years ago, can give you a better idea of if there is growth.

The cash flow has been growing well despite no growth in revenue or earnings. The Cash Flow per Share is up by 29% and 16.6% per year over the past 5 and 10 years. Interestingly, when I look at the 5 year running average, these values are lower at 10.3% and 14.2% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 8.57, 10.06 and 11.56. The corresponding 10 year values are 8.77, 10.63 and 11.95. The historical values are 8.55, 10.25 and 11.56. These are fairly consistent. The current P/E Ratio is 14.34 based on a stock price of $8.75 and 12 month EPS to end of second quarter. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $11.11. The 10 year low, median and high median Price/Graham Price Ratios are 0.64, 0.74 and 0.85. The current P/GP Ratio is 0.79 based on a stock price of $8.75. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Book Value per Share Ratio is 1.27. The current P/B Ratio is 0.97 based on a stock price of $8.75, Book Value of $74.7M and BVPS of $8.99. The current P/B Ratio is some 23.5% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

The historical dividend yield is 2.56%. The current dividend yield is 4.11% based on dividends of $0.36 and a stock price of $8.75. The current dividend yield is some 60% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.44. The current P/S Ratio is 2.61 based on 12 month to the end of the second quarter Revenue of $27.9M, Revenue per Share of 3.35 and a stock price of $8.75. The current P/S Ratio is some 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. The P/S Ratio testing is important because it is ultimately Revenue growth that pushes EPS and Cash Flow.

There does not seem to be any analysts following this stock. However, I got a CFRA report and they have a recommendation of Underperform. They also say that the stock is of High Risk. They give no estimates.

Austin Wood on Simply Wall Street talks about who owns this company. He says the main holders of stocks are the general public, Private Equity and Private companies. Toi Williams on True Blue Tribune talks about the CEO purchasing more shares. There are interesting but old comments on this company at Stock Chase.

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.

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 20, 2017around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 – Jaime Purvis... learn more on Tuesday, September 19, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, September 15, 2017

Just Energy Group Inc.

Sound bite for Twitter and StockTwits is: Dividend Paying Energy Utility. It would appear that the stock price could be cheap, but why anyone would buy a stock with a negative book value is beyond me. This stock is of high risk, it is quite vulnerable to any bad economic situation and one where I do not see why a high reward might be given for such a risk. 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 thing to notice about this stock is its negative book value. The Debt Ratio is 0.89. This means that the assets cannot cover the liabilities. Why anyone would buy a company with negative book value beyond speculation I would not understand. It means that if the company broke up today, your shares are worthless. It is not that they do not have assets that are worth a lot of money. The problem is that their debt is very high. Shareholders in bankruptcies get paid last if there is anything left. This is a very high vulnerability.

The Liquidity Ratio is not great either. The one for the financial year ending March 2017 is 1.15. This is very low. I like this ratio to be at least 1.50. Even adding in cash flow after dividends it is just 1.26. This ratio has a 5 year median of just 0.92 and with cash flow after dividends a ratio the 5 year median is 0.99. If the ratio is at or below 1.00 means that the current assets cannot cover current liabilities. This gives this company another very high vulnerability.

On the other hand according to Reuters some 33% of this stock is held my institutions. It is in the TSX Index and this could be a reason for it being held by institutions. In the article below by Sebastian Weber on The Ledger Gazette, Sebastian seems to think that institutions expect that this stock is poised for long-term growth.

It has not done that well for investors. The total return over the past 5 years is 1.25% with 6.92% from dividends and a capital loss of 5.66%. The total return over the past 10 years is a loss 1.42% with 7.62% from dividends and a capital loss of 9.05%.

The other thing I noticed is the decline of the dividend payments. This company used to be an income trust. All income trusts paid higher dividends than they could afford just looking at earnings. Instead dividend payments were measured against the Funds from Operations (FFO). On that basis the company was paying out some 80% of the FFO where acceptable rates were considered to be between 75% and 90%.

When the company became a corporation in 2011 it needed to reconsider the payout ratios and compare them to the earnings. What the company did was to leave the dividends flat until 2013 and then decreased them in 2014 and 2015 and made the dividends payments quarterly instead of monthly in 2015. Dividends are down by 16.6% and 6.7% per year over the past 5 and 10 years.

The other thing to point out is the extreme volatility of the earnings. Earnings for the last 10 years are $1.41, loss of $10.03, $1.79, $3.73, loss of $0.93, $3.68, $1.12, loss of $4.01, $0.43, and $2.42. The change in earnings over this time is down 811.35%, up 117.85%, up 108.38%, down 125%, up 496%, down 70%, down 458%, up 111%, and up 463%. Earnings for the financial year of March 2018 are expected to be down by 59%. This gives the company vulnerability. You expect some volatility in earnings, but this seems extreme.

The 5 year low, median and high median Price/Earnings per Share Ratios are 2.66, 3.11 and 3.56. The 10 year corresponding values are 2.91, 3.40 and 3.89. The historical ratios are 7.32, 8.73 and 10.15. The P/E Ratios are very low because of past earnings losses. The current P/E Ratio is 7.09 based on a stock price of $7.09 and 2018 EPS estimate of $1.00. On an absolute basis a P/E Ratio of 7.09 says that the stock is relatively cheap. This P/E Ratio is lower than the historical median low and so is relatively cheap.

You need a positive book value to calculate a Graham Price. This company has not had a positive book value since 2008. I would also need a positive book value to do some stock price testing using the Price/Book Value Ratio.

The historical median dividend yield is 8.17%. The median dividend yield since 2011 is 9.01%. The 5 year median dividend yield is 8.42%. All these yields are higher than the current yield of 7.05% by 14%, by 22% and by 16%. The current dividend yield is based on dividends of $0.50 and a stock price of $7.09. So this stock price testing suggests that the stock price is probably relatively reasonable but above the median.

The other thing is that a dividend yield of 7.05% is a very high yield. If a yield on a company is over 5%, this generally points to a high risk company. The yields are high for a reason. The market thinks that the company could get into difficulties and so wants a high yield. Always be very careful when investing in a company with yields over 5%.

The 10 year median Price/Sales (Revenue) Ratio is 0.49. The current P/S Ratio is 0.27 based on 2018 Revenue estimate of $3,881M, Revenue per Share of $26.43 and a stock price of $7.09. The current P/S Ratio is some 45% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (2) and Hold (4). The consensus would be a Buy. The 12 month stock price is $8.72. This implies a total return of 30.04% with 22.99% from capital gains and 7.05% from dividends.

Sebastian Weber on The Ledger Gazette seems to be to have analyzed two loser companies and declared this company a winner. Sebastian Eder on Simply Wall Street points to the current good Dividend Payout Ratio. See my comments on this below. See what analysts are saying on Stock Chase. On analysts says that it is a risky business model so he would stay away. I do tend to agree with this.

I get Dividend Payout Ratio for the financial year of March 2017 of 20.66%. This is because of the very high earnings in the last fiscal year. However, to me that looks like a blimp as the EPS for the 12 month period ending in the first quarter of 2018 (June 2017) is just $0.47. The EPS for the financial year ending of March 2016 was $0.44. The DPR for the financial year of March 2018 is expected to be 50%. However, the 5 year coverage will be 260%. At least Sebastian Eder thinks you should say clear of this stock because of the volatility of its dividends.

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.

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 Accord Financial Corp (TSX-ACD, OTC- ACCFF)... learn more on Monday, September 18, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, September 13, 2017

Smart REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The current price certainly seems good at the present time. I would like to see a better Liquidity Ratio. 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.

What I noticed when updating the spreadsheet is that this company has a very high distribution yield at 5.65% but it has a very low distribution growth. They did not increase the distribution at all between 2009 and 2013. Since then the distributions have increase at around 3% per year. However, the growth over the past 5 and 10 years is 1.39% and 1.21%. According to the bank of Canada inflation over the same period was at 1.33% and 1.46%. With very low inflation this is not very good. You expect a REIT to increase just a bit above inflation or at inflation.

The Liquidity is very low coming in at just 0.23. If this is below 1.00 it means that the current assets cannot cover current liabilities. With this company adding in cash flow after distributions just increases it to 0.31. If you include only distributions paid in cash it is 0.43.

You only get it to a decent rate by adding back in current portion of long term debt. This means that every year you have to check to make sure that they are handling outstanding long term debt. For 2016 annual statement they cover this question. For any year, the company should answer this question in the annual statement in the notes on the Financial Statements.

This REIT's debt ratio is good at 2.14 for the financial year of 2016. Also the Leverage and Debt/Equity Ratios are good for this company at 1.87 and 0.87 for the financial year of 2016.

The Return on Equity is on the low said at 8.3% for the 2016 financial year and with a 5 year median value of 8.3%. The Comprehensive Income ROE is the same at 8.3% for 2016 with a 5 year of 8.3%.

The outstanding shares have increased a lot of the years. Outstanding shares have increased by 4.6% and 5.6% per year over the past 5 and 10 years. This means that to judge growth you need to look at per share values. It can make a difference. For example the growth in revenue over the past 5 and 10 years is at 5.9% and 8.9% per year. However, the real growth is the growth in revenue per share which is at 1.2% and 3.1% per year over the past 5 and 10 years.

The 10 year low, median and high median Price/Earnings per Share Ratios are 11.75, 13.56 and 14.54. The 10 year corresponding values are 12.79, 15.43 and 16.99. The historical values are 12.17, 13.83 and 15.29. The current P/E Ratio is 11.93 based on12 month EPS to the end of the second quarter of $2.52 and a stock price of $30.11. This stock price testing suggests that the stock price is relatively reasonable and below the median to relatively cheap.

This is a REIT so often people look at Price/Funds from Operations Ratio or Price/Adjusted Funds from Operations Ratio. I will use the P/FFO Ratio. The 10 year low, median and high median P/FFO Ratios are 12.98, 14.69 and 16.19. The current P/FFO Ratio is 13.62 based on a stock price of $30.11 and 2017 estimate FFO of $2.21. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $35.51. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 0.91 and 0.99. The current P/GP Ratio is 0.85 based on a stock price of $30.11. This stock price testing 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 1.27. The current P/B Ratio is 1.19 a value some 6.8% lower. The current P/B Ratio is based on a Book Value of $3,914M, Book Value per Share of $23.36 and a stock price of $30.11. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median distribution yield of 5.93%. The current distribution yield is 5.65% based on distributions of $1.70 and a stock price of $30.11. The current distribution yield is some 4.8% below the historical median distribution yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 6.08. The current P/S Ratio is 6.26 a values some 3% higher. The current P/S Ratio is based on 2017 estimate Revenue of $742M, Revenue per Share of $4.81 and a stock price of $30.11. This stock price testing suggests that the stock price is relatively reasonable and above the median.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (5) and Hold (3). Most are a Buy and the consensus is a Buy. The 12 month stock price is $35.03. This implies a total return of 21.99% with 16.34% from capital gains and 5.65% from distribution on a current price of $30.11.

Staff at Benton Bulletin give some technical analysis. They say that the RSI is reading the stock as neither overbought nor oversold. David Jagielski at Motley Fool says that this is a quality stock trading at market lows. Rex Bailey on Weekly Herald say that the Scotiabank recently dropped their target price on this company. (Note some US sites still have symbol at CWT.U or CWT.UN)

Smart REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Smart REIT.

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 Friday, September 15, 2017 before 8 am. Tomorrow on my other blog I will write about Money Show 2017 - Gordon Pape... learn more on Thursday, September 14, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, September 11, 2017

High Liner Foods

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. It has had some problems lately so the price is current cheap by dividend yield and P/S Ratio testing. It would appear that they can overcome their problems so if you like this stock, now may be a good time 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.

What surprised me about this stock when I was updating my spreadsheet is the volatility in the stock price. The price zoomed up from 2012 and reached heights in 2015 and again in 2016 from which it is falling from. The high in 2015 was $26.48 and in 2016 it was 27.22. However, this is not the first time this stock has zoomed up because in July 1986 it reached a high of $70.00. All these values are after 2014 split is taken into account. It fell from 1987 to 1993.

The stock did not do much between 1993 and 2008/2009 when it started to earn more and have higher revenue. It reached highs in 2015 then fell some 54% and again reached a high in 2016 and fell 54%. The stock at $14.14 is now down some 48% below the 2016 highs. The year 2016 was not good because of falling revenues, but earnings were up and cash flow was flat.

The other thing to note is the very high level of insider selling. The Net Insider Buying is at 0.28%. Normal would be around 0.1% or 0.2%. This is in contrast to last year when Net Insider Buying was at 0.04%. However, most of the selling was by the CEO who left the company and a director who left. If you take out this selling the NIS is at a normal 0.01%.

This company started to pay dividends in 2004, some 13 years ago. Since 2008 they have been raising their dividends every year. The dividend yields are moderate (2 to 3 range) and the dividend growth is good (over 15% per year). The current dividend is 3.96%, but the 5, 10 and historical yields are lower at 1.85%, 2.49% and 2.16% respectively. Dividends have grown at 21.7% and 17.9% per year over the past 5 and 10 years.

They can afford their dividends. The 2016 Dividend Payout Ratio is 36.5% with 5 year coverage of 39%. The DPR for 2016 for CFPS is 15.4% and with 5 year coverage at 13.1%. This company gives out an Adjusted EPS was well as EPS. I generally do not agree with individual companies doing their own thing for EPS, but the DPR for and Adjust EPS is at 29.6% with 5 year coverage of 25.6%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.92, 18.32 and 22.39. The corresponding 10 year values are 10.39, 14.29 and 18.77. The historical values are 8.41, 10.88 and 13.32. It would seem that the rises in prices are due to rising P/E ratios. The current P/E Ratio is 12.95 based on a stock price of $14.14 CDN$ and 2017 EPS estimate of $1.09 CDN$ ($0.90 US$). This stock price testing suggests that the stock price is probably reasonable.

I get a Graham Price of $15.01 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 1.01 and 1.28. The current P/GP Ratio is 0.94 based on a stock price of $14.14 CDN$. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share of 1.73. The current P/B Ratio is 1.54 based on Book Value of $305M CDN$, $9.17 CDN$ and a stock price of $14.14 CDN$. The current P/B Ratio is some 10.8% lower than the 10 years ratio. . This stock price testing suggests that the stock price is relatively reasonable and below the median.

The current dividend yield is 3.96% based on dividends of $0.56 CDN$ and a stock price of $14.14 CDN$. The historical dividend yield is 2.16% a values some 83% lower. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Sales (Revenue) Ratio is 0.44. The current P/S Ratio is 0.30 based on a stock price of $14.14 CDN$, 2017 Revenue estimate of $1564M CDN$ ($1289M US$) and Revenue per Share of $46.92 CDN$. The current ratio is some 32% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Strong Buy (1), Buy (1) and Hold (3). The consensus would be a Buy. The 12 month stock recommendation is $15.80 US$ or $19.17 CDN$. This implies a total return of 39.52% with 3.96% from dividend and 35.56% from capital gains.

This press release on Cision talk about Henry Demone again becoming the company's CEO. Demone was chairman and CEO but then a couple of years ago Keith Decker being appointed CEO. Now effective August 2017 Henry Demone is again Chairman and CEO.

During the first half of 2017 this company had to recall products because they contained milk products that were not on the label. James Risdon writes about this in the Chronicle Herald of Halifax. There is an article on this stock by Patrick Pritchard on Seeking Alpha. See what analysts are saying about this stock on Stock Chase. They mostly like the company.

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.

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 Wednesday, September 13, 2017 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017... learn more on Tuesday, September 12, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, September 8, 2017

ATCO Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is reasonable to cheap using the good measures of P/B Ratio and Dividend yield. This stock has a long history of yearly dividend increases. My spreadsheet goes back to 1993 and they have increased dividends every year since then. 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 was on the Dividend Achievers list, the Dividend Aristocrats list and also was on Mike Higgs’ list. ATCO (TSX-ACO-X) owns 88% Canadian Utilities (TSX-CU) so you would not buy both these stocks.

The dividends are moderate which I consider in the 2% and 3% range. The current dividend is 2.92% and this stock has a 5 year median of 1.88% (which is low) but an historical median that is moderate at 2.10%. The dividend growth is also moderate with growth of 14.9% and 10.8% per year over the past 5 and 10 years. I think moderate growth is in the 8% to 15% range.

The Dividend Payout Ratios are good with the DPR for EPS in 2016 at 38.5% and the 5 year coverage at 30%. The DPR for CFPS for 2016 is low at 6.6% with 5 year coverage of 5.4%.

What I do not like is that the Long Term Debt/Market Cap Ratio is over 1.00. For this stock the ratio is 1.62. This means that the outstanding long term debt is higher than the stock’s market cap. Unfortunately this is common with utility stocks.

The other debt ratios are fine with a Liquidity Ratio of 1.40 (which is on the low side) but if you include cash flow after dividends it is 3.08 for 2016. The Debt Ratio for 2016 is 1.57 and the Leverage and Debt/Equity Ratios are 2.74 and 1.74.

The Return on Equity is fine with the one for 2016 at 9.6% with a 5 year median of 13.4%. The ROE has been at or above 10% 3 times over the past 5 years and 8 times over the past 10 years. The ROE on comprehensive income for 2016 is low at 8.6% with a 5 year median of 11.7%. When the Comprehensive Income ROE being lower, it means that the ROE may not be quite as good as it appears.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.55, 13.62 and 15.16. The corresponding 10 year values are 10.09, 11.57 and 13.10. The historical values are 9.29, 10.67 and 12.34. The current P/E Ratio is 14.76. This is based on a stock price of $44.86 and 2017 EPS estimate of $3.04. This is a utility stock, so P/E Ratio should be on the low side. This stock price testing suggests that the stock price is relatively expensive.

The P/E Ratio is going up because price is going up but EPS is not. The 5 and 10 year growth in EPS is 1% and 5.6% per year. The stock price has gone up by 8.2% and 5.9% per year over the same periods. The EPS is expected to grow by 2.7% this year. So far the stock price has grown by 0.5% this year.

I get a Graham Price of $46.26. The 10 year low, median and high median Price/Graham Price Ratios are 0.78, 0.91 and 1.07. The current P/GP Ratio is 0.97 based on a stock price of $44.86. 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 1.53. The current P/B Ratio is 1.43 based on Book Value of $3,587M, BVPS of $31.29 and a stock price of $44.86. The current P/B Ratio is 6.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The historical median dividend yield is 2.10%. The current dividend yield is 2.92% based on dividends of $1.31 and a stock price of $44.86. The current dividend yield is some 39% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Sales (Revenue) Ratio of 1.00. The current P/S Ratio is 1.17 based on a stock price of $44.86, Revenue estimate for 2017 of 44,407M and Revenue per Share of $38.44. The current P/S Ratio is some 16.8% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts’ recommendations, I find Buy (1), Hold (3) and Underperform (1). Most are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $49.00. This implies a total return of 12.13% with 9.23% from capital gains and 2.92% from dividends based on a current stock price of $44.86.

Lester Williams on Sky News suggests that this stock may be oversold. Haris Anwar of Motley Fool recommends this stock for a TFSA. Reid Southwick of Calgary Herald talk about what is happening in Alberta towns with shutting of coal electric plants. ATCO is one of the companies that must shut these plants in Alberta.

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.

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 Monday, September 11, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, September 6, 2017

Exchange Income Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The current stock price is on the high side. Short sellers think that they cannot afford the dividends, but other analysts disagree. 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.

One thing I noticed in updating my spreadsheet is that there is a lot of insider buying. Net Insider Buying is at 0.54% of market cap. This is high as you would expect it to be no more than 0.01% or 0.02%. This is always a positive sign that insider feel confident about their company. Buying is mostly by directors.

The dividend yield is very good with a current yield of 6.45%, a 5 year median dividend yield of 7.18% and a 10 year median of 7.98%. A problem is the Dividend Payout Ratio for EPS for 2016 is high at 93%. The 5 year coverage is worse at 152%. The DPR for EPS has been above 100% since 2008. It is expected to be around 107% for this year.

The DPR for CFPS is also high. It is better for 2016 at 39%, but the 5 year coverage is 46%. The DPR for CFPS has been above 40% since 2007. The DPR for CFPS is expected to be around 37% in 2017.

Many analysts think that the dividends will not be cut and that DPR will decline over the next few years. The last increase was in 2016 and was for 4.5%. However, overall the dividends have increased between 2015 and 2016 by 10%. It would seem that management feels that they can afford the current dividends.

The Return on Equity is low. The ROE for 2016 is good at 12.7%, but the 5 year median is just 8.6%. It has had ROE at or above 10% only 3 times in last 10 years and once in last 5 years. The Comprehensive Income ROE is a bit lower but not significantly so. The Comprehensive Income ROE for 2016 is 11.2% with a 5 year median of 8.4%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 18.13, 20.58 and 23.03. The 10 year corresponding ratios are 13.66, 16.59 and 20.89. The historical ratios are 12.52, 15.72 and 18.25. Generally speaking a rising stock price and rising P/E Ratios is not sustainable. The current P/E Ratio is 16.53 based on a current price of $32.56 and 2017 EPS estimate of $1.97. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $27.91. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.13 and 1.34. The current P/GP Ratio is 1.17 based on a stock price of $32.56. 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 1.60. The current P/B Ratio is 1.85 based on a stock price of $32.56 and Book Value of $543.28 and BVPS of $17.58. The current P/B Ratio is some 16% above the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The dividend yield test is not the best for companies that used to be income trusts. That is because as income trusts the dividend yield reached heights that they would never reach again. If you look at this median dividend yield since 2011 then it is 7.30%. The current dividend is 6.45% based on a stock price of $32.56 and dividends of $2.10. The current dividend yield is some 11.7% lower than this dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.77. The current P/S Ratio is 1.01 based on 2017 Revenue estimate of $995M, Revenue per Share of $32.19 and a stock price of $32.56. The current ratio is some 32% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy (2), Buy (7) and Hold (2). Most are Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price consensus is $42.73. This implies a total return of 37.68% with 31.23% from capital gains and 6.45% from dividends.

Kenneth Searles gives some technical information on Melville Review for this stock. He is basically saying that the stock is neither overbought nor oversold. Martin Cash in July of 2017 on the Winnipeg Free Press talks about short selling on this stock because they doubt the company's ability to continue its generous dividend. They have a point as they are paying over 100% of EPS on dividends. This is not sustainable. However, Terence Corcoran on Financial Post says other analysts dispute short-seller Marc Cohodes' analysis. See what analysis are saying about this stock on Stock Chase. They mostly like it and feel the short sellers are wrong.

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 .

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 Friday, September 8, 2017 before 8:30 am. Tomorrow on my other blog I will write about Something to Buy, September 2017... learn more on Thursday, September 07, 2017around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, September 5, 2017

Alimentation Couche-Tard Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Price is probably reasonable. It is only cheap using the dividend yield method. 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 once did. 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.

In updating the spreadsheet what is noticeable is that all the growth figures are green. For example EPS has increase by 20.6% and 21.1% per year over the past 5 and 10 years. CFPS is up by 21.6% and 18.5% per year over the past 5 and 10 years. Book Value has grown by 21.2% and 18.8% per year over the past 5 and 10 years. All the figures are in US$ as this company reports in US$.

There is not much difference in the outstanding shares so you can look at both say Revenue and Revenue per Share. Shares have increased by 1.14% per year over the past 5 years and decreased by 0.65% per year over the past 10 years. This is a bit of difference as Revenue has grown by 10.51% and 12.11% per year over the past 5 and 10 years. Revenue per Share has grown by 9.27% and 12.85% per year over the past 5 and 10 years. All these are still good growth figures.

One thing to be cautious about is that the Liquidity Ratios tend to be low. The ratio for 2017 (annual report date is April 2017) is 0.98 with a 5 year median of 1.08. That means that the current assets cannot cover the current liabilities. If you add in Cash Flow after dividends this ratio is 1.52 with a 5 year mean of 1.72. So they rely on cash flow to cover current liabilities. This could be looked at as a vulnerability.

Dividends are really low this stock. The current dividend yield is 0.60%. However, the dividend increases are good with the past 5 and 10 years of growth at 29.6% and 24.8% per year over the past 5 and 10 years. The last dividend increase was in 2017 and it was for 16.1%.

This would be a good stock for people building a portfolio in a trading account. Dividends are low so your taxes would be low. At retirement you could sell it for a stock that pays a higher dividend yield and double or triple your income.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.93, 20.44 and 23.86. The 10 year corresponding ratios are 12.26, 15.95 and 19.64. The historical ones are 12.79, 18.12 and 21.50. The current P/E Ratio is 17.16 based on a stock price of $59.74 and 2017 EPS estimate of $3.48 CDN$ ($2.81 US$). This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $33.35. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.47 and 1.81 based on CDN$. The current P/GP Ratio is 1.79 based on a stock price of $59.74 CDN$. 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 2.88. The current P/B Ratio is 4.21 based on Book Value of $8,069M, BVPS of $$14.19 and a stock price of $59.74 CDN$. The current P/B Ratio is some 46% higher than the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 0.58% CDN$. The current dividend yield is 0.60% based on dividends of $0.36 CDN$ and a stock price of $59.74 CDN$. The current dividend yield is 3.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio Close is 0.33 in US$. The current P/S Ratio is 0.58 in US$ based on 2017 Revenue estimate of $47,225M US$, Revenue per Share of $67.64 US$ and a stock price of $48.19 US$. The current P/S Ratio is some 78% higher than the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy (1), Buy (11) and Hold (1). Most are Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price consensus is $59.04US$ OR $73.15 CDN$. This implies a total return of 23.05% with 22.45% from capital gains and 0.60% from dividends.

Chris MacDonald of Motley Fool likes this stock and the recent dividend raise. Felix Olson on Simple Wall Street talks about this company's good ROE. The Herald Staff give a technical view of this stock on The Hiram Herald. See what analysts are saying about this stock on Stock Chase. They generally like this stock.

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.

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 Wednesday, September 06, 2017 around 5 pm. Today on my other blog I will write about Dividend Stocks September 2017... learn more on Tuesday, September 5, 2017 around 5 pm

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, September 1, 2017

Chemtrade Logistics Income Fund

Sound bite for Twitter and StockTwits is: Dividend paying materials. I see a number of things I do not like about this company. However, there is insider buying which is generally considered a good sign. 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.

When updating the spreadsheet what I found that I really do not like is that they restated values for 2015 without stating this in the 2016 report. For example in the 2016 statements they said Revenue for 2015 was $1,127.466M when the 2015 statement said it was $1,203.396M. They do not mention that Revenue was restated on the statements nor in the notes and they should. They should not only say a value was restated, but give the reason for it.

Bye the way, unless there is a very good reason, I do not change other year's values just because new statements do. I do not consider changing values just because a company has sold off a business. In any event that would only correct the prior year, not the others years I have.

I compare long-term debt to the company's market cap. You do not want the resulting ratio to be close or past 1.00. In the first quarter of 2017, long term debt was increased by 72% and the Long Term Debt/Market Cap Ratio was 1.10. For the second quarter of 2017 this was decreased a bit and the Long Term Debt/Market Cap retreated to 1.04. Here I have included Long Term Debt and Convertible Debentures as long term debt. This is not a good situation. Problem is that a company is vulnerable if any problems crop up.

Another thing I compare to the market cap is goodwill and intangible assets. This company has intangible assets and for the first and second quarters these were increased. For the second quarter the Intangible Assets/Market Cap Ratio is 1.07. It is not good to have intangible assets on the balance sheet worth more than the company. This is vulnerability and often leads to intangible assets being written down.

Because the company is increasing the number of share outstanding, the true check to see if they are growing is the per share values. This company has increased outstanding shares by 10.7% and 7.5% per year over the past 5 and 10 years. In Revenue, there is growth of 3.9% and 6.8% per year over the past 5 and 10 years. However, Revenue per Share is down by 6.1% and 0.7% per year over the past 5 and 10 years. This shows that revenue is declining not growing.

However, a positive note is that the Net Insider Buying is on the high side. NIB for 2017 is at 0.04%. Last year it was at 0.06%. A more normal value would be closer to 0.1% or 0.02%. When people are buying it is because they have a positive view of their company. In selling, people can sell for all sorts of reasons including they just need some money.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.40, 16.79 and 18.17. The corresponding 10 year values are 8.05, 10.33 and 13.13. The Historical values are 13.16, 14.88 and 16.60. Current P/E Ratio is 35.65 based on a stock price of $18.54 and 2017 EPS estimate of $0.52. This stock price testing suggests that the stock is relatively expensive.

It is rather unusual to have higher historical values than 10 year values. However, between 2008 and 2011, the P/E Ratios got quite low. In this period revenue went down but earnings went up but share prices did not keep pace.

I get 10 year low, median and high median Price/Graham Price Ratios of 0.98, 1.11 and 1.27. The current P/GP Ratio is 1.33 based on a stock price of $18.54. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.66. The current P/B Ratio is 1.12 based on a stock price of $18.54, Book Value of $1,143M and BVPS of $16.53. The current P/B Ratio is some 32% lower than the 10 year median ratio. This stock price testing suggests that the stock is relatively cheap.

The reason why both the P/E Ratio and P/GP Ratio tests show the stock expensive is because EPS is low. EPS is negative in 2016 and has a low estimate in 2017. Also the EPS for the 5 year running average is down over the past 5 and 10 years at negative 15.7 % and 37.9%. However, comprehensive income up if you look at the 5 year running average over the past 5 and 10 years at 8.5% per year for both periods.

If you look at comprehensive income to the end of the second quarter, it is up by 6.5% and 33% per year over the past 5 and 10 years. This is mostly why the Book Value is up. BVPS is up by 6.2% and 4.2% per year over the past 5 and 10 years. If EPS is temporarily depressed there will not be a good showing on tests that rely on EPS.

The above explains why this stock shows well in the P/B Ratio test. That is comprehensive income is going up and book value is going up. Because increasing comprehensive income and increasing book value is a better measure of how the company is doing, this explains why this might be a better test.

This company used to be an income trust. Therefore the historical dividend yields are much higher than they could ever be in the future. Another problem is that the dividends have been flat since 2007. This dividend yield median for the past 6 years makes for a better test. That dividend median is 6.93%. The current dividend yield is 6.47% based on dividends of $1.20 and stock price of $18.54. The current dividend yield is some 6.6% below the above median dividend yield. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.70. The current P/S Ratio is 0.85 a value some 20.4% higher. The current P/S Ratio is based on 2017 Revenue estimate of $1517M, Revenue per Share of 21.93 and stock price of $18.54. This stock price testing suggests that the stock price is relatively expensive.

The expensive level comes in when the current P/S Ratio is 20% higher than the 10 years median. So this test shows the stock just coming into an expensive level. P/S Ratio testing is important because revenue is what ultimately drives earnings. Earnings or the hope of them drives stock price.

When I look at analysts' recommendations I see Buy and Hold recommendations. Most are a Buy recommendations and the consensus recommendation is a Buy. The 12 months stock price consensus is $21.19. This implies a total return of 20.775 with 14.295 from capital gains and 6.47% from dividends. It is what people expect in share price in the future that in the short term future pushes a stock price up.

There is a news release on Cision that talks about this company's second quarterly results and recent sells and purchases of companies. Andy Nguyen on Simply Wall Street talks about the fact that the company's EPS cannot cover their dividends. This is true. See what analysts are saying about this company on Stock Chase. They like it and feel that the dividend is sustainable.

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.

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 Tuesday, September 5, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, August 30, 2017

Badger Daylighting Ltd

Sound bite for Twitter and StockTwits is: Dividend growth industrial. It would appear on a number of tests that the stock price seems rather high. There is lots of insider buying and this has to be a plus. See my spreadsheet on Badger Daylighting Ltd.

I do not own this stock of Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF). I started to follow this stock after reading a couple of articles in February 2012 in the G&M that talked about the company. The first article looked at what the pros who manage small-cap funds are buying. Badger was one of 10 stocks mentioned and it looked like an interesting stock. It is a dividend paying small cap. The second article looked at why stocks might appeal to a conservative investor looking for income.

What is worthwhile to mention is the amount of insider buying. In the past year the Net Insider Buying was at 0.23% of market cap. For 2016 it was 0.08% of market cap and for 2015 it was 0.07% of market cap. This is a lot. Generally you would not expect more that 0.01% or 0.02% of market cap in NIB. This certainly is a positive sign.

This company was an income trust from 2004 to December 2010. For 2011, the dividends were decreased by some 19%. There was a 5.9% increase in dividends in 2012, then a 10% increase in 2016. They increased the dividends again this year by 15.2%. Is this stock a dividend growth stock? It is looking like it might become one.

It looks like this stock will be paying a low dividend but have moderate dividend growth. The current dividend is 1.63%. The 5 year median dividend is 1.50%. The last two increases were 10% and 15% and I consider dividend growth between 8 and 15% to be moderate.

They can afford their dividends. The Dividend Payout Ratio for EPS is 49% in 2016. It is expected to be lower in 2017 and 2018. The 5 year coverage is at 35%. The DPR for CFPS is 14% with 5 year coverage at 17%.

The debt ratios are very good. The Liquidity Ratio for 2016 is 3.76 and the 5 year median is 2.86. The Debt Ratio for 2016 is 2.56 with a 5 year median of 2.50. The Leverage and Debt/Equity Ratios are good also at 1.64 and 0.64 with 5 year medians of 1.92 and 0.92, respectively.

The Return on Equity is good with none under 10% over the past 10 years. The ROE for 2016 was 10.4% and the 5 year median is 20.1%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.31, 23.06 and 28.78. The 10 year values are much lower at 8.99, 11.27 and 13.79. The historical values are similar to the 10 year ratios at 8.99, 10.98 and 13.79. The price part of this ratio has risen much faster than the earnings part over the past few years. The current P/E Ratio is 23.45. The current P/E Ratio is based on a stock price of $27.90 and EPS estimate for 2017 of $1.19. It would seem that the current stock price is still on the high side or relatively expensive. A P/E Ratio of 23.45 is on the high side but not exceptionally so.

I get a Graham Price of $14.35. The 10 year low, median and high median price/Graham Price Ratios are 0.93, 1.25 and 1.56. The current P/GP Ratio is 1.94 based on a stock price of $27.90. This stock price testing suggests that the stock price is relatively expensive. On an absolute basis a P/GP Ratio of 1.94 is high.

The 10 year median Price/Book Value per Share Ratio is 3.18. The current P/B Ratio is 3.63 based on Book Value of $285.3M, BVPS of $7.69 and a stock price of $27.90. The current P/B Ratio is some 14% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Since this was an income trust company and because when these companies became corporations their dividend policies had to change. This means that the historical median dividend yield is not very useful. However, this company changed to a corporation in 2011 about 6 years ago. The 6 year median dividend yield is 1.66%. The current dividend yield is 1.63% based on dividends of $0.456 and a stock price of $27.90. The current dividend yield is some 1.5% below the 6 year median. This stock price testing might suggest that the stock price is reasonable and just above the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.50. The current P/S Ratio is 2.13 based on 2017 Revenue estimate of $485M, Revenue per Share of $13.07 and a stock price of $27.90. The current ratio is some 42% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find that they are all over the place. There are recommendations of Strong Buy, Buy, Hold and Underperform. Most recommendations are a Buy and the consensus recommendation is a buy. The 12 months stock price is $34.25. This implies a total return of 24.39% with 22.76% from capital gains and 1.63% from dividends. This is based on a current stock price of $27.90.

There is an interesting article by Geoffrey Morgan in the Financial Post about this company being targeted by short sellers and a sharp drop in the stock price ending in mid-May 2017. Bay Street staff have put out a report on Bay Street Canada. They said stock has gone up because of an improved quartet and a higher dividend. Joseph Solitro of Motley Fool says why he likes this stock. See what analysts are saying about this stock on Stock Chase. Some like the company and some are shorting it.

Badger is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Badger's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Its web site is here Badger Daylighting Ltd.

The last stock I wrote about was about was Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF)... learn more. The next stock I will write about will be Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more on Friday, September 1, 2017 before 11 am. Tomorrow on my other blog I will write about Dividend Growth Stocks Part 2... learn more on Thursday, August 31, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Monday, August 28, 2017

Andrew Peller Ltd

Sound bite for Twitter and StockTwits is: Dividend growth consumer. They have done very well lately, but I think that the price is too high. It would be a good one to keep an eye on and buy when the stock market gets into some difficulties. See my spreadsheet on Andrew Peller Ltd.

I do not own this stock of Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF). This stock was on Mike Higgs' dividend growth stock list. I owned this stock as Andres Wines Ltd between 1996 and 2000.

What I noticed doing the spreadsheet is that this company has been doing quite well lately, especially from 2010. Revenue per Share growth is 4.50% and 4.65% per year over the past 5 and 10 years. The EPS growth is even better at 15.60% and 11.44% per year over the past 5 and 10 years. CFPS has grown at 6.61% and 10.28% per year over the past 5 and 10 years.

The total return for shareholders over the past 5 and 10 years is at28.65% and 15.62% per year. The portion of this total return attributable to dividends is 2.46% and 2.46% per year. The portion of this total return attributable to capital gain is 26.18% and 13.15% per year.

The company only started to increase their dividends in 2007. Before that dividends were flat for at least 18 years. My spreadsheet starts in 1988. The 5 and 10 year dividend growth rates are 3.63% and 6.61% per year. However, dividends have been higher for the past 3 years and the last dividend increase was for 10.3% in 2017.

The current dividend yield is low at just 1.67%. The dividends used to much higher. The historical median dividend yield is 3.84%. Even the 5 and 10 year median dividend yields are higher at 2.74% and 3.26%.

They can afford their dividends. The Dividend Payout Ratio for EPS was 25% in 2017. (Note that the financial year ends in March each year. So, the last annual statement is dated March 31, 2017.). It is interesting that the 5 year median DPR for EPS is higher at 34%.

The other thing was the current very good debt ratios. The Liquidity Ratio for 2017 is 1.96 with a 5 year median of 1.89. The Liquidity Ratio has been lower in the past as the 10 year median is just 1.38. The Debt Ratio for 2017 is 2.18 with a 5 year median ratio of 1.96. The Leverage and Debt/Equity Ratios for 2018 are 1.85 and 0.85. These also have been higher in the past with a 5 year median of 2.31 and 1.31.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.25, 13.08 and 14.35. The corresponding 10 year values are 10.52, 12.01 and 13.21. The historical values are 10.75, 12.78 and 14.30. The current P/E Ratio is 17.95 based on a stock price of $10.77 and 2018 EPS estimate of $0.60. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $7.61. The 10 year low, median and high median Price/Graham Price Ratios are 0.71, 0.87 and 0.99. The current P/GP Ratio is 1.42 based on a stock price of $10.77. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.38. The current P/B Ratio is 2.51 based on a Book Value of $182.6M, BVPS of $4.29 and a stock price of $10.77. The current P/B Ratio is some 83% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 1.67% based on dividends of $0.18 and a stock price of $10.77. The historical dividend yield median is 3.84% a value some 56% higher. Even the 5 year median is quite a bit higher at 2.74% and 39% higher. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I find one Buy recommendation. There seems to be only one analyst following this stock. The 12 month stock price consensus is $13.50. This implies a total return of 27.02% with 25.35% from capital gains and 1.67% from dividends.

SDR staff on Stock Daily Review says that tracking this stock's price shows a Hold signal. Will Ashworth of Motley Fool gives this stock a good review and talks about their win with Gretzky. See what analysts are saying about this stock on Stock Chase. They like this stock.

Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan and Similkameen Valleys and vineyards around the world. They also market craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company's products are sold predominantly in Canada. Class A shares are non-voting.. Its web site is here Andrew Peller Ltd.

The last stock I wrote about was about was Superior Plus Corp. (TSX-SPB, OTC-SUUIF)... learn more. The next stock I will write about will be Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more on August 30, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Growth Stocks... learn more on August 29, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, August 25, 2017

Superior Plus Corp

Sound bite for Twitter and StockTwits is: Future dividend growth industrial. This stock used to be an income trust company, and was one of the ones that had to change to a corporation. All the old income trust companies are having a hard time covering dividends as a corporation. Some cut dividends, some left them level and some did both. Only the odd ones can raise dividends. See my spreadsheet on Superior Plus Corp.

I do not own this stock of Superior Plus Corp (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Income Trust (TSX-SPF.UN) in 2009.

They still cannot afford the dividends they are paying and I would suspect that they will not increase them until they can. The Dividend Payout Ratio for 2016 looks good at 35.8% but the EPS are high because of a discontinued business. The DPR for 2017 is expected to be above 100% again in 2018 at 122%. This is better than for 2015 where the DPR was 360%. The 5 year median coverage is 148%. A lot of old trust companies are having a hard time covering dividends.

However, a number of analysts feel that this company could become a dividend growth stock in the next few years. They do not see big increases, but maybe a couple of percentage points over the next two years. Analysts seem to feel that dividends will be covered by earnings by 2019. However, the further you look out the less certain the analyst's estimates are. Analysts often do not get this year's estimate right let alone a couple of years into the future.

In the meantime, the dividend yield is very good at 6.29%. So buying this stock you could collect a good dividend while waiting for future dividend increases. Once they start to increase the dividend the dividend yield is likely to go lower permanently.

The 5 year low, median and high median Price/Earnings per Share Ratios are 25.63, 29.15 and 32.68. The corresponding 10 year values are 9.99, 12.44 and 15.35. The historical values are 14.87, 17.44 and 20.02. Mainly the 5 year ratios are high because of depressed EPS. The current P/E Ratio is 19.41 based on a stock price of $11.45 and 2017 EPS estimate of $0.59. I think that this stock price test suggests that the stock price is relatively expensive.

I get a Graham Price of $9.22. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.17 and 1.54. The current P/GP Ratio is 1.24 based on a stock price of $11.45. 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 2.40. The current P/B Ratio is 1.79 based on a Book Value of $914M, BVPS of $6.40 and a stock price of $11.45. The current ratio is some 25.6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This may be the best test for the stock price.

There are problem with doing stock price testing on old income trust companies based on dividend yields. Income trust companies had dividend yields that will never be met in the future. The historical median dividend yield is 10.25% a very high value. The 5 and 10 year median dividend yields are 5.91% and 9.37%. The current dividend yield of 6.29% is 6% higher than the 5 year median, but it is lower than the others. It was thought that Income Trusts would end up with dividend yields in the 4 to 5% range. Obviously this one is still rather high.

The 10 year median Price/Sales (Revenue) Ratio is 0.42. The current P/S Ratio is 0.72 a value some 74% higher. This current P/S Ratio is biased on 2017 Revenue estimate of $2,256M, Revenue per Share of $15.80 and a stock price of $11.45. This stock price testing suggests that the stock price is relatively expensive. It is rather worry some when revenue is declining, but they did sell off some business.

When I look at analysts' recommendations, I find Buy (3) and Hold (6) recommendations. Most are Hold recommendations and the consensus recommendation is a Hold. The 12 month stock price consensus is $13.58. This implies a total return of 24.89% with 6.29% from dividends and 18.60% from capital gains based on a stock price of $11.45.

There is a press release on Market Wired by the company announcing their second quarterly results for 2017. Ashwin Virk talks about this stock on Simply Wall Street. See what analysts are saying on Stock Chase. They like it, especially the 6% dividend.

I look at stuff on the internet about stocks that I am reviewing. Sometimes I wonder if they are talking about the right stock, this is especially true on Simply Wall Street. He gets the current dividend right of $0.06. However, this is paid monthly so the current rate is $0.72. He says in three years' time analyst think it will be $.492? Any analysts I looked at think dividends will go up and not down. Simply Wall Street reviews often seem to be rather superficial. He does not seem to recognize that the good EPS in 2016 is because of a sale of a discontinue business. Of course EPS will go down, but quotes for 3 years' time are closer to $0.90 rather than $0.57.

Superior Plus Corp. (Superior) is a Canada-based diversified business company. The Company operates through two segments: Energy Distribution and Specialty Chemicals. The Company's Energy Distribution operating segment provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels under Canadian propane division and the United States refined fuels division. The Company's Specialty Chemicals segment is a supplier of sodium chlorate and technology to the pulp and paper industry and a regional supplier of potassium and chlor-alkali products in the United States Midwest. Its web site is here Superior Plus Corp.

The last stock I wrote about was about was Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)... learn more. The next stock I will write about will be Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF)... learn more on Monday, August 28, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wednesday, August 23, 2017

Jean Coutu Group Inc

Sound bite for Twitter and StockTwits is: Dividend growth consumer. The stock price testing varies, but it would seem that the price is reasonable. See my spreadsheet on Jean Coutu Group Inc.

I do not own this stock of Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF). I bought this stock first in 2000 for my RRSP account. In 2004, I bought some of this stock for my trading account. In 2007, I sold this stock in my RRSP account because I wanted money to invest in Saputo which I liked better at that time.

When updating the spreadsheet I noticed the very good current debt ratios. The Liquidity Ratio for 2017 is 2.46 and it has a 5 year median of 2.23. However, it has gone up and down a lot in the past with a low of 0.94 in 2012. It has been above 1.50 over the past 5 years. The Debt Ratio in 2017 is 4.85 with a 5 year median of 4.94. This too has gone up and down a lot in the past. Note that the current financial year end is of around March 1 each year.

The other thing I noticed with the Net Insider Selling as a percentage of the Market Cap. In this case it might as well as be called Net Insider Buying. NIB for 2017 is 0.01%. For the previous two years it was a 0.04%. There is obvious confidence in the company by insiders. Buy over the past year was by CFO and other officers.

The dividends are currently moderate but have been low in the past. The current dividend is 2.39% with a 5 and 10 year median of 1.94% and 2.11%. However, the historical median is just 0.76%. The historical median is so low because prior to 2006 the dividend yield was generally below 1%.

The current dividend increases are moderate. The 5 and 10 year dividend increases are 12.2% and 13.1% per year. The last increase occurred in this calendar year and was for 8.3%. I consider moderate increases at between 8% and 15%.

Over the past 5 and 10 years shareholders have done quite well. The total return over the past 5 and 10 years is at 11.69% and 9.34%. The total return from dividends is 3.25% and 2.43%. The portion of the total return from capital gains is at 8.43% and 6.91%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.02, 17.95 and 18.70. The corresponding 10 year values are 10.21, 11.66 and 13.10. The historical ones are 14.29, 18.51 and 22.40. The current P/E Ratio is 22.69 based on a stock price of $21.78 and 2018 EPS estimate of $0.96. (Note that this company has a financial year end of March 1 each year.) This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $12.04. The 10 year low, median and high median Price/Graham Price Ratios are 1.30, 1.52 and 1.74. The current P/GP Ratio is 1.81 based on a stock price of $21.78. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 3.69. The current P/B Ratio is 3.24 based on Book Value of $1,233M, BVPS of $$6.72 and a stock price of $21.78. The current ratio is 12.2% lower than the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The historical median dividend yield is 0.76%. The current dividend yield is 2.39% based on dividends of $0.52 and a stock price of $21.78. The 10 year dividend yield is 2.11%. The current dividend yield is some 214% higher than the historical median and some 13% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median or relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.16. The current P/S Ratio is 1.35 based on 2018 Revenue estimate of $2.954, Revenue per Share of $15.08 and a stock price of $21.78. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

When I look at analysts' recommendations, I find Buy, Hold and Underperform. Most are a Hold and the consensus recommendation is a Hold. The 12 month stock price is 20.78. This implies a total loss of 2.20% with a capital loss of $4.59% and dividend income of 2.39%.

Chris MacDonald of Motley Fool asks if a PJC and Metro merger is on the horizon. Sarah Dixon on Clayton News Review says the shareholder yield for this stock is 3.08. Richard Conner on Financial News Daily says there are 0 buy rating, 3 Sell ratings and 3 Hold ratings on this stock today. See what analysts are saying about this stock on Stock Chase . There is a divergence of opinion on this company.

When reviewing the Financial News Daily article on analysts ratings, note Reduce and Underperform are both a number 4 rating. Every site you look at will give a different number for each rating. I tend to use 4-Traders. See my blog for information on Analyst Ratings.

The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Corporation operates a network of 413 franchised stores located in the provinces of Québec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté. Furthermore, the Jean Coutu Group owns Pro Doc Ltd ("Pro Doc"), a Québec-based subsidiary and manufacturer of generic drugs. Its web site is here Jean Coutu Group Inc.

The last stock I wrote about was about was Evertz Technologies (TSX-ET, OTC-EVTZF)... learn more. The next stock I will write about will be Superior Plus Corp. (TSX-SPB, OTC-SUUIF)... learn more on Friday, August 25, 2017 around 9 am. Tomorrow on my other blog I will write about Stable Economies... learn more on Thursday, August 23, 2017 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.