Monday, May 1, 2017

Thomson Reuters Corp

Sound bite for Twitter and StockTwits is: Buy for Diversification. On my stock price testing the stock price is expensive except for the dividend yield test and there is it reasonable and around the median. I did testing in CDN$, but testing with US$ will produce similar results. I will continue to hold this stock as my need for diversification is the same. After all the reason I do my yearly review of stocks is to decide if a still want to hold a stock. See my spreadsheet on Thomson Reuters Corp.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, almost 30 years. I bought stock to give portfolio some balance as I had too many financial stocks. Performance has always been mediocre.

I have made a total return of 7.86% with 4.64% from capital gains and 3.22% from dividends. I like as a minimum for the long term stocks, over the long term to have a total return of 8%. This stock does not quite make that, but it is not quite awful either. The dividends have paid some 216% of the cost of my stock.

The dividends are paid in US$. They have a moderate dividend yield with low dividend growth in US$. The current dividend yield is 3.12%. The historical median dividend yield is 3.28%. The 5 and 10 year median dividend yields are 3.59% and 3.57%. The dividends growth is at 1.9% and 4.5% in US$.

I have done better in CDN$ terms as far as dividend growth goes. My dividend growth is at 7.1% and 5.6% per year over the past 5 and 10 years. There is some variation in median dividend yields in CDN$ with the historical one at 3.18% and the 5 and 10 year median dividends at 3.43% and 3.47%.

The only place where this stock has good growth over the past 5 and 10 years is in EPS. However, here the company puts forward an Adjusted EPS value. If you look at the growth of the Adjusted EPS over the past 5 and 10 years, it is non-existent, mediocre or low. This is the same with growth in Revenue and Cash Flow. I am looking at this in US$ terms as the company does report in US$.

On a brighter side the Return on Equity (ROE) has been over 10% for 4 out of the past 5 years and it has a 5 year median ROE of 12.2%. However, the ROE on comprehensive income has only been above 10% in 2 of the past 5 years and the 5 year median is just 5.8%. This is in US$ terms.

The outstanding shares have gone up over the past 10 years, but they are down over the past 5 years. They are down by 2.55% over the past 5 years and up by 1.28% over the past 10 years. So if you are looking at growth over the past 5 years, you should be looking at things like Revenue rather than per share values like Revenue per Share. The Revenue over the past 5 years is down by 4.16% and Revenue per Share is down by 1.65%. The real decline in Revenue is the 4.16% value. This is in US$. The company currently reports in US$.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.61, 15.54 and 17.47. The corresponding 10 year values are 12.64, 15.18 and 17.73. The historical values are 20.02, 22.36 and 24.67. I have not seen a stock with higher historical P/E Ratios very often. The current P/E Ratio is 25.59 based on a stock price of $60.50 and 2017 EPS estimate of $2.36. This is in CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $35.26 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.29 and 1.49. The current P/GP Ratio is 1.72 based on a stock price of $60.50 CDN$. 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 1.69 CDN$. The current P/B Ratio is 2.59 based on BVPS of $23.37 CDN$ and a stock price of $60.50 CDN$. The current ratio is some 53% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The current dividend yield is 3.12% based on dividend of $1.89 CDN$ and a stock price of $60.50 CDN$. The historical median dividend yield is 3.18%. This stock price testing suggests that the stock price is relatively reasonable. It is around the median.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Sell. However the vast majority are a Hold and the consensus recommendation is a Hold. The 12 month stock price is $44.22 US$ or $60.40 CDN$. This implies a total return of 2.95% with 3.12% from dividends and a capital loss of 0.17% based on a current stock price of $60.50 CDN$.

James Bradshaw recently published an upbeat article on this company at the Globe and Mail. Brent Sawyer was also upbeat on the first quarter for this company at Sports Perspectives. However, it seems that there are a number of Hold ratings on this stock. See what analysts are saying about this company at Stock Chase. They are positive about the company but do not feel it is a buy at present.

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

The last stock I wrote about was about was WSP Global Inc. (TSX-WSP, OTC- WSPOF)... learn more. The next stock I will write about will be Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more on Wednesday, May 3, 2017 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks May 2017... learn more on Tuesday, May 2, 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.

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