Friday, October 19, 2018

Medtronic PLC

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. The stock price is from reasonable to expensive. It is probably on the high side without being too expensive to buy. See my spreadsheet on Medtronic PLC.

I do not own this stock of Medtronic PLC (NYSE-MDT). In 2009 I was looking for a good US stock for my US dollar account. I had heard good things about this stock and also it is in Health Care sector which is a weak sector in Canada. This is one of the few US stocks that I follow.

When I was updating my spreadsheet, I noticed that the financial year ends in April 30 each year. I also noticed shares have increased by 5.92% and 1.87% per year over the past 5 and 10 years. Most of the increase was in 2015 due to an acquisition. So, to see what the real growth is you have to look at the per share values.

I see that revenue per share growth over the past 5 years is about the same as over the past 10 years, but EPS growth is much lower and negative. The Revenue per share for the past 5 and 10 years is 6.26% and 6.29% per year. EPS are down by 7.60% per year over the past 5 years, but up by 1.53% over the past 10 years. Because EPS are volatile, the 5 year running averages are probably a better measure. Over the past 5 years, the 5 year running average shows EPS are down by 1.86% and the over the past 10 year, the 5year running average is up by 3.21%.

Currently the dividend yield is moderate. However, it used to be a lot lower. The current dividend yield, 5 year median and 10 year medians are 2.09%, 2.06% and 2.11%. These are moderate dividend yields. However, the historical median dividend yield is low at 0.74%.

Dividend growth is moderate currently, but it used to be high. For the 5 to 15 years, dividend growth is from 12% to 14% growth per year. Prior to this it was 15% to 17% per year. See chart below.

They can cover their dividends with earnings, but for the financial year ending in April 2018 it is high for this sort of company. I would like to see it 60% or lower. For 2018 Dividend Payout Ratio for EPS is 81% with 5 year cover at 57%. The 5 year coverage is what counts really so on this basis the coverage is fine. The DPR for CPFS for 2018 is also high at 51% where I would like to see it at 40% or lower. The 5 year coverage is fine at 37%.

All the debt ratios on this stock are quite good. The Long Term Debt/Market Cap Ratio is good at 0.22. the Liquidity Ratio for 2018 is 2.28 and the Debt Ratio is 2.25. The Leverage and Debt/Equity Ratios for 2018 are good at 1.80 and 0.80 respectively.

The Total Return per year is show below for years of 5 to 28. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

In most years, this stock has been a good investment for shareholders. For shareholders to bought this stock exactly 10, 15 and 20 years ago, P/E Ratios were high and yields low. These were years of 2008, 2002 and 2098. P/E Ratios were 25.78, 35.08 and 54.17 and Yields were 1.01%, 0.51% and 0.43%. Although the P/E Ratios and yields were not that bad 10 years ago, it was just before the last recession and it took the stock awhile to recover.

This stock was often overvalued of high ratios and low yields, but if you bought it when the price was at least reasonable, I think you would have made money.

Years Div. Gth Tot Ret Cap Gain Div.
5 12.09% 17.22% 14.51% 2.71%
10 13.92% 6.69% 4.85% 1.84%
15 14.23% 5.30% 3.88% 1.41%
20 15.13% 7.17% 5.83% 1.34%
25 17.17% 14.21% 12.17% 2.03%
28 17.03% 18.01% 15.30% 2.72%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 26.02, 29.02 and 32.17. The corresponding 10 year ratios are 14.04, 19.50 and 24.95. The corresponding historical ratios are 21.91, 26.57 and 31.72. The current P/E Ratio is 25.29 based on a stock price of $95.86 and 2019 EPS estimate of $3.79. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $56.29. The 10 year low, median, and high median Price/Graham Price Ratios are 1.19, 1.51 and 1.73. The current P/GP Ratio is 1.70 based on a stock price of $95.86. This stock price testing 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 2.28. The current P/B Ratios is 2.58 based on a Book Value of $50,244M, Book Value per Share of $37.16 and a stock price of $95.86. The current ratio is some 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 0.74. The current dividend yield is 2.09% based on dividends of $2.00 and a stock price of $95.86. The current dividend yield is some 182% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

However, the yields have been much higher over the past 10 years. Sometime companies increase their Dividend Payout Ratios and yields as they mature. Certainly, the paying of dividends has changed over the past 10 years. The 10 year dividend yield is 2.11%. The current yield is some 1% above the current dividend yield. This stock price testing suggests that the stock price is relatively reasonable and around the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.15. The current P/S Ratio is 4.25 based on 2019 Revenues of $30,472M, Revenue per Share of $22.54 and a stock price of $95.86. The current ratio is some 35% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

It would seem from my stock price testing that the stock price might be reasonable, but it is above the median. Certainly, the P/S Ratio is a good one and it is showing the stock as expensive. Even though my favourite test is the dividend yield, I think that using historical dividend yield is probably not a good measure of where the current yield is at now.

When I look at analysts’ recommendations I find Strong Buy (6), Buy (8) and Hold (12). The consensus would be a Buy. The 12 month stock price is $103.90. This implies a total return of 10.47% with 8.39% from capital gains and 2.09% from dividends.

Gemma Cottrell on Fairfield Current talks about recent institutional buying and selling of this stock. Kenneth on Wall Street Morning talks about this stocks moving averages and relative strength index. Wealth Insights blogger on Seeking Alpha does a review of this stock. Brian Feroldi on Motley Fool talks about why you should buy this stock. See what analysts are saying about this stock on Stock Chase. they mostly like this company.

Medtronic Public Limited Company, headquartered in Dublin, Ireland, is among the world's largest medical technology, services, and solutions companies - alleviating pain, restoring health, and extending life for millions of people around the world. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together. Its web site is here Medtronic PLC.

The last stock I wrote about was about was Canadian Pacific Railway (TSX-CP, NYSE-CP) ... learn more. The next stock I will write about will be Equitable Group Inc. (TSX-EQB, OTC-EQGPF) ... learn more on Monday, October 22, 2018 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, October 17, 2018

Canadian Pacific Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. I would think that the stock price is probably currently too high to make this stock a buy at the present time. See my spreadsheet on Canadian Pacific Railway.

I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list. It is a stock I held from 1987 to 1999 so I am following it. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock.

When I was updating my spreadsheet, I noticed earnings and stock prices are up nicely (green). Revenue is up, but not as much (blue) and cash flow is mixed (green and blue). Remember that values in my spreadsheets are colour coded. The 5 year total return on this stock is an astonishing 51%.

Dividend yields are low. The current dividend yield is low at just 0.96%. The 5 year median is also low at 0.95%. The 10 year dividend yield and historical dividend yield are also low at 1.28% and 1.43%. The dividend growth is moderate with the 5, 10 and 15 year growth at 10.33%, 8.97% and 9.98% per year.

They have no problem paying for the dividends. The Dividend Payout Ratio for 2017 is 12.93% with 5 year coverage at 16.41%. The DPR for CFPS is 13.27% with 5 year coverage at 11.515.

The debt ratios are fine and not a concern at the present time. The Long Term Debt/Market Cap Ratio is low at 0.23 in 2017. For this ratio, the lower the better. The Liquidity Ratio is low at 0.64 in 2017 with 5 year median of 0.91. When this ratio is below 1.00, it means that the current assets cannot cover the current liabilities. If you add in cash flow after dividends, the ratio is 1.59. This means that to pay current liabilities, the company depends on cash flow.

The Debt Ratio is a little low at 1.47 in 2017 with 5 year median of 1.47. I prefer this ratio to be 1.50. The Leverage and Debt/Equity Ratios are a little high at 3.13 and 2.13 in 2017. The 5 year median values are a bit better at 2.93 and 1.93, respectively.

The Total Return per year is show below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

The shareholders of this stock have done well, especially in the past 5 years.

Years Div. Gth Tot Ret Cap Gain Div.
5 10.33% 51.10% 48.60% 2.50%
10 8.97% 14.76% 13.59% 1.17%
15 9.98% 15.57% 14.24% 1.34%
20 14.18% 13.20% 0.99%
23 15.32% 14.39% 0.94%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 18.54, 23.55 and 28.57. The 10 year corresponding ratios are 13.97, 17.01 and 20.06. The corresponding historical ratios are 11.47, 13.64 and 15.98. The current P/E Ratio is 20.00 based on a stock price of $270.01 and 2018 EPS estimate of $13.50. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $116.97. The 10 year low, median, and high median Price/Graham Price Ratios are 1.52, 1.82 and 2.08. The current P/GP Ratio is 2.31 based on a stock price of $270.01. 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 3.12. The current P/B Ratio is 6.00 based on Price Book Value of $6,574M, Book Value per Share of $45.00 and a stock price of $270.01. The current ratio is some 92% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.43%. The current dividend yield is 0.93% based on dividends of $2.60 and a stock price of $270.01. The current yield is some 33% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 3.55. The current P/S Ratio is 5.49 based on 2018 Revenue estimate of $7,192M, Revenue per share of $49.23 and a stock price of $270.01. The current ratio is 54% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

All the testing I have done shows that the stock price is relatively expensive. Even on an absolute basis, the current ratios I have looked at are high. For example, on an absolute basis a P/B Ratio is 6.00 is very high and the P/E Ratio of 20 is on the high side. The stock price would have to be below $200 before you get into the reasonable, but still high stock price range.

When I look at analysts’ recommendations I find Strong Buy (7), Buy (14) and Hold (3). The consensus would be a buy. The 12 month stock price is $297.33. This implies a total return of 11.08% with 10.12% from capital gains and 0.96% from dividends.

The company reports via the Canadian Press on Cape Breton Post a response about the threat from the Amazon effect. Samuel Prince on Market Realist talks about CP being a top gainer in carload traffic growth. Karen Thomas on Motley Fool thinks there is a lot of growth yet for railway. See what analysts are saying about this stock on Stock Chase. They like this stock and feel that there is still growth to come, especially with Canada\s lack of pipelines.

Canadian Pacific Railway Ltd is engaged in rail transportation. It provides freight transportation services, logistics solutions, and supply chain expertise in Canada and the United States. Its web site is here Canadian Pacific Railway.

The last stock I wrote about was about was Trigon Metals Inc. (TSX-TM, OTC-PNTZF) ... learn more. The next stock I will write about will be Medtronic PLC (NYSE-MDT) ... learn more on Friday, October 19, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – David Rosenberg.... learn more on Thursday, October 83, 2018 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, October 15, 2018

Trigon Metals Inc

Sound bite for Twitter and StockTwits is: Penny Mining Stock. There is no way to value this stock. A positive is that there is lots of insider buy at 0.09% of market cap (where this value is usually 0.01% to 0.02%). Awful debt ratios. See my spreadsheet on Trigon Metals Inc.

I own this stock of Trigon Metals Inc (TSX-TM, OTC-PNTZF). I originally brought this stock in 2000 as Tathacus Resources Ltd. because it was doing interesting things. There was a reverse takeover (RTO) of this company on April 28, 2011 by Pan Terra Industries Inc. Symbol PNT. On May 2, 2012 there was a name change from Pan Terra Industries (PNT) to Kombat Copper Inc. (KBT). On December 22, 2016, stock changed its name and TSX symbol from Kombat Copper Inc. (TSX-KBT, OTC-PNTZF) to Trigon Metals Inc. (TSX-TM, OTC-PNTZF)

When I was updating my spreadsheet, I noticed they are burning through their cash quickly. They sold more shares to raise money but cash went down by 92%. They issued more shares in the first quarter and now cash is up by 859% or only down by 31% since the prior year. Also, note that the financial year ends at March 31 each year. Insiders are buying that includes Chairman, CEO and CFO.

This stock has no dividends and never did. When I bought this stock in 2000, it was part of a basket of small caps that I was buying at that time. With all the changes my shares went from 300 to 60 to currently 6 shares. With the changes listed above there were to consolidations of stocks, one in 2009 and one in 2016.

They did not have any long term debt until 2018. Currently the Long Term Debt/Market Cap Ratio is 0.28. The other debt ratios are not good. The Liquidity Ratio is 0.26. If this ratio is below 1.00, it means that current assets cannot cover current liabilities. The Debt Ratio is 0.87. When this ratio is below 1.00, it means that assets cannot cover liabilities. Because equity is negative, Leverage and Debt/Equity Ratios cannot be calculated.

The Total Return per year is show below for years of 5 to 20. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

This certainly has been a loser for me. It is worth to me is less than what it would cost to sell the shares I have.

Years Tot Ret Cap Gain Div.
5 -29.31% -29.31% 0.00%
10 -35.69% -35.69% 0.00%
15 -31.63% -31.63% 0.00%
20 -13.12% -13.12% 0.00%


There are no Price/Earnings per Share Ratios for this stock has it does not have revenue, let alone earnings. With no earnings I cannot calculate a Graham Price. Since the Book Value is now negative, I can do not stock price testing using Price/Book Value per Share Ratio. There are no dividends, so no dividend yield price testing cannot be done. I also cannot do any Price/Sales (Revenue) Ratio testing as the company has no revenue.

When I look at analysts’ recommendations I find no analysts following this stock on any site I looked at.

The company announced via the Junior Mining Network some management and Board appointments. The company talks about new, short term loans via the Junior Mining Network. The company talks about a recent feasibility study on Global News Wire. You can see the feasibility study in a slide show on Seeking Alpha. There are rumors on a buyout for this company on Stock House.

Trigon Metals Inc together with its subsidiaries engages in the acquisition, exploration, development, and maintenance of mines and mineral properties in the African country of Namibia. Its web site is here Trigon Metals Inc.

The last stock I wrote about was about was Logistec Corp (TSX-LGT.B, OTC-LTKBF) ... learn more. The next stock I will write about will be Canadian Pacific Railway (TSX-CP, NYSE-CP) ... learn more on Wednesday, October 17, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Kevin Prins.... learn more on Tuesday, October 16, 2018 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, October 12, 2018

Logistec Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock has had a very good run up, but it would seem that the stock price is relatively expensive currently and this may not be the best time to buy this stock. On the other hand, insiders are buying and the latest buys were at $51.89. See my spreadsheet on Logistec Corp.

I do not own this stock of Logistec Corp (TSX-LGT.B, OTC-LTKBF). I got this stock from Dividend Growth Investing and Retirement blogger’s all-star spreadsheet for March 2017. Unfortunately currently you have to sign up for a newsletter to get these spreadsheets.

When I was updating my spreadsheet, I noticed the company, as of the second quarter has an earning loss. This is because expenses, especially Employee Benefits, increased faster than Revenue even though revenue went up almost 43%. Expense went up 49%.

Dividend yield is currently very low. The current dividend yield is 0.70% and the 5 year median dividend yield is 0.85%. The dividend yield used to be higher. The 10 year median dividend yield is 1.42% and the historical one is 2.01%.

Generally, the dividend increases were low, but they were getting bigger until 2015 with an increase of 19.9%. However, there was no increase in 2016 and the one for 2017 is 9.9%. Prior to the last 5 years, the increases were low (below8%), but over the last 5 years they have averaged 11.8% per year. See the chart below.

They can certainly afford their dividends. The DPR for 2017 for Class B shares is 15% with 5 year coverage of 21%. The Class A and Class B shares each have their own EPS and Dividends. The coverage for Class A is similar to Class B with the DPR for 2017 at 14% and 5 year coverage at 19%. The DPR for Classes A & B for CFPS for 2017 is 11% with 5 year coverage at 17%. These payout ratios are low.

All the debt ratios are good with some excellent. The Long Term Debt/Market Cap Ratio for 2017 is 0.22. The Liquidity Ratio for 2017 is 1.79 with 5 year median at 2.25. The Debt Ratio for 2017 is 1.82 with 5 year median of 2.67. The Leverage and Debt/Equity Ratios for 2017 are 2.24 and 1.23 with 5 year medians at 1.76 and 0.66.

The Total Return per year is show below for years of 5 to 21. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Shareholders have done well, especially lately on Total Return. The stock hit a peak in 2015 and has basically stalled.

Years Div. Gth Tot Ret Cap Gain Div.
5 11.77% 32.01% 29.58% 2.43%
10 7.90% 16.48% 15.06% 1.42%
15 7.09% 18.52% 16.13% 2.39%
20 5.78% 12.77% 11.13% 1.63%
21 5.75% 16.49% 12.90% 3.59%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.13, 16.87 and 19.62. The corresponding 10 year ratios are 7.08, 8.85 and 11.62. The corresponding historical ratios are 8.15, 10.44 and 12.24. The current P/E Ratio is 39.50 based on a current stock price of $51.75 and last 12 months EPS of $1.31. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $17.71. The 10 year low, median, and high median Price/Graham Price Ratios are 0.58, 0.80 and 1.07. The current P/GP Ratio is 2.92 based on a stock price of $51.75. 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 1.48. The current P/B Ratio is 2.94 based on Book Value of $225M, Book Value per Share of $17.69 and a stock price of $51.75. The current P/B Ratio is some 98% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.01%. The current dividend yield is 0.70% based on dividends of $0.36 and a stock price of $51.75. The current yield is a value some 65% below the historical median. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.75. The current P/S Ratio is 1.21 based on last 12 months Revenue of $545M, Revenue per Share of $42.98 and a stock price of $51.75. The current ratio is some 61% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When looking at ratios for determining what a good stock price is I concentrated on Class B shares as that is what the public buys. The EPS is low in the P/E Ratio test because of earning losses in the first quarter of this year. The earnings losses in 2018 also affects the Graham Price negatively. However, all the tests show that the stock is expensive.

When I look for analysts’ recommendations I find none.

The company talks about a recent acquisition on News Wire. Ambrose O'Callaghan of Motley Fool thinks this is a good dividend stock for 2018. Katie Hansen on the Stock Voice gives some ratios for this stock. She says the Piotroski F-Score is 5 showing the balance sheet is neither strengthening or weakening. Jason Fuller on Simply Wall Street talks about ownership, but seems to have missed the fact that the Paquin family owns Class A shares which are multiple voting shares and control the company.

Logistec Corp provides cargo handling and other services to marine, industrial, and municipal customers. It has facilities in 30 ports in eastern North America. Its web site is here Logistec Corp.

The last stock I wrote about was about was Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK) ... learn more. The next stock I will write about will Trigon Metals Inc. (TSX-TM, OTC-PNTZF) ... learn more on Monday, October 15, 2018 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, October 10, 2018

Teck Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. The current price is quite low and this entry point looks good. However, it certainly has been at better entry points in the past. This is a material stock and I personally do not hold such stocks for the long term. For these stocks buy low and sell high. See my spreadsheet on Teck Resources Ltd.

I do not own this stock of Teck Resources Ltd. (TSX-TECK.B, NYSE-TECK) but did for a short period. In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at. The time to buy this stock is when it cuts its dividend. For example, I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.

When I was updating my spreadsheet, I noticed that they were not doing so well until recently and then things started to look up. The dividends, which had been declining, were increased by 100% in 2017.

This stock is not a good dividend payer nor is it good at dividend growth. The current dividend yield is very low at 0.64%. Dividend yields have jumped all over the place with a high around 11.44% and low around 0.30%. The 5, 10 and historical median dividend yields are 3.05%, 1.79 and 1.58%.

Dividend growth is negative over the past 5 and 10 years and for longer periods there is a modest increase. However, but this mask big changes in the dividends. The lowest dividend increase was in 2013 at 12.5% and the highest increase was in 2011 at 200%. See growth rates in the table below under Dividend Growth (Div. Gth.)

They mostly can afford their dividends. Last year the Dividend Payout Ratio for EPS was 4.67% with a 5 year coverage of 2.26%. Last year the DPR for EPS was 5.62% with 5 year coverage at 284%. This is because of a big earnings loss in 2015. The DPR for CFPS is better with the one for 2017 at 2.31% with 5 year coverage at 12.07%. The DPR for CFPS has always been quite low.

The debt ratios for this stock are good. The Long Term Debt/Market Cap Ratio for 2017 is 0.34. The Liquidity Ratio has mostly been good and the one for 2017 is 1.81 with 5 year median at 2.16. The Debt Ratio is good at 2.11 for 2017 with 5 year median at 2.05. The Leverage and Debt/Equity Ratios are also good with the ones for 2017 at 1.90 and 0.90 respectively and the 5 year medians being 1.94 and 0.94 respectively.

The Total Return per year is show below for years of 5 to 24. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

This stock reached a peak in 2011 that it has not yet come close to since. The long term Total Return is not bad, but shareholders have not made much on this stock lately.

Years Div. Gth. Tot Ret Cap Gain Div.
5 -24.21% -0.10% -1.88% 1.78%
10 -14.87% 1.05% -0.63% 1.67%
15 4.73% 16.85% 12.21% 4.64%
20 3.53% 8.10% 5.94% 2.17%
24 2.93% 6.20% 4.50% 1.70%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 4.61, 10.93 and 19.67. the corresponding 10 year ratios are 5.49, 12.79 and 19.68. The Historical ratios are 9.41, 11.72 and 19.67. The current P/E Ratio is 6.36 based on a stock price of $31.10 and 2018 EPS estimate of $4.89. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $63.78. The 10 year low, median, and high median Price/Graham Price Ratios are 0.43, 0.85 ad 1.13. The current P/GP Ratio is 0.49. 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 0.90. The current P/B Ratio is 0.84 based on a stock price of $31.10 and Book Value of $21,245M and Book Value per share of $36.97. The current P/B Ratio is some 6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 1.58%. The current dividend yield is 0.64% based on dividends of $0.20 and a stock price of $31.10. The current yield is some 59% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.74. The current P/S Ratio is 1.44 based on 2018 Revenue of $12,372, Revenue per Share of $21.53 and a stock price of $31.10. The current ratio is some 17% below the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The low P/E Ratios are very low because the stock has a lot of volatility and the stock has hit some really low lows in the past. A P/E of 6.36 is a low P/E Ratio. You wonder how much faith to put into the dividend yield test because of the past fluctuations in dividends and therefore dividend yield. The P/S Ratio test is often a good one because it is revenue that ultimately drives earnings, cash flow and dividends. It would seem that the stock is on the cheap side, although it has been cheaper in the past and it may be half way to its top.

When I look at analysts’ recommendations I find Strong Buy, (6), Buy (12), Hold (2) and Underperform (1). The consensus would be a Buy. The 12 month stock price is 41.13. This implies a total return of 32.89% with 0.64% frim dividends and 32.25% from capital gains based on a current price of $31.10.

Dan Healing on the Financial Post talks about Teck’s involvement with Frontier oilsands. Jason Phillips on Motley Fool thinks this stock is trading at a favorable valuation.. See what the analysts are saying about this company on Stock chase. Some think that now is a good time to buy or to start to buy.

Teck Resources Ltd is a mining company whose activities include exploration, development, processing, smelting, refining, and reclamation. It has operations in Canada, United States, Chile, and Peru. The company's products are coal, copper, zinc, and lead. Its web site is here Teck Resources Ltd.

The last stock I wrote about was about was Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more. The next stock I will write about will be Logistec Corp (TSX-LGT.B, OTC-LTKBF) ... learn more on Friday, October 12, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Deborah Fuhr.... learn more on Thursday, October 11, 2018 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.

Tuesday, October 9, 2018

Linamar Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. If you like this stock, now might be a good time to buy as the stock has fallen a lot this year. If you are building a portfolio for future income you want stocks that have good capital gains, which this stock has. See my spreadsheet on Linamar Corporation.

I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought would fit my current investment philosophy. The dividend yield is generally lower than 1%. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock.

When I was updating my spreadsheet, I noticed that his company has been doing very well. There is a lot of green on my spreadsheet.

This is a dividend growth stock, but both the dividends and the dividend growth are generally low. The current dividend yield is 0.83%. The 5, 10 and historical dividend median yields are 0.70%, 1.13% and 1.22%. the dividend growth is generally below 8% as you can see in the chart below. Usually when there are low dividend yields, there is high dividend growth. This is an exception to that rule.

Dividend yields after holding this stock for 5 to 25 years is at 1.44% for 5 years, 4.64% for 10 years, 4.43% for 15 years, 1.82% for 20 years and 12.72% for 25 years. Note here again that the yield was exceptionally low 20 years ago when the stock was at the top of the market. 20 years ago, it would not have been a good time to buy this stock.

There is no question that they can afford their dividends. The Dividend Payout Ratio for EPS for 2017 is 5.8% with 5 year coverage at 6.4%. The DPR for CFPS for 2017 is 3.5% with year coverage at 3.7%.

All debt ratios are fine. Although long term debt has been increasing lately with increases of 129% last year and 98% so far this year, the Long Term Debt/Market Cap Ratio is still good currently at 0.67. The Liquidity Ratio for 2017 is good at 1.91 with 5 year median of 1.72. The Debt Ratio is also quite good for 2017 at 2.14 with 5 year median at 2.14. The Leverage and Debt/Equity Ratios are also good with ratios of 1.88 and 0.88 for 2017 with 5 year median at 1.98 and 0.98.

The Total Return per year is show below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

The investors that had this stock for 20 years would have paid too much, as the stock was at a high 20 years ago and would not be an appropriate time to buy. This is one of things I talk about. If you pay too much for a stock it can badly affect your long term results.

Years Div. Gth Tot Ret Cap Gain Div.
5 8.45% 26.95% 25.84% 1.11%
10 7.18% 14.60% 13.73% 0.87%
15 7.60% 16.32% 15.10% 1.22%
20 6.61% 5.52% 4.99% 0.54%
23 7.73% 12.22% 11.12% 1.10%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.64, 9.50 and 12.55. The corresponding 10 year ratios are 6.55, 9.68 and 12.97. The corresponding historical ratios are 8.53, 11.61 and 15.18. The current P/E Ratio is 6.33 based on current stock price of $58.07 and a 2018 EPS estimate of $9.17. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $105.27. The 10 year low, median, and high median Price/Graham Price Ratios are 0.57, 0.77 and 1.01. The current P/GP Ratio is 0.55 based on a stock price of $58.07. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.41. The current P/B Ratio is 1.08 based on Book Value of $3,510M, Book Value per Share of $53.71 and a stock price of $58.07. The current ratio is some 23% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.22%. The current dividend yield is 0.83% based on dividends of $0.48 and a stock price of $58.07. The current yield is some 32% below the historical median yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.57. The current P/S Ratio is 0.49 based on a stock price of $58.07, 2018 Revenue estimate of $7,671M and Revenue per Share of $90.58. The current ratio is some 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The stock price on this stock has fallen by some 21% this year. This is why lots of my testing is showing that the stock price is relatively cheap. The one test showing that the stock is expensive is the dividend yield test. However, the dividends have gone both up and down on this stock. Plus, they do not raise dividend each year, but increases are very good when they do. The last dividend increase was in 2017 when dividends went up 20%. On the other hand, analysts do not see any further increases in dividends over the next couple of years.

When I look at analysts’ recommendations I find Buy (7) and Hold (2) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $81.21. This implies a total return of 40.68% with 39.855 from capital gains and 0.83% from dividends.

John Irwin on Automotive News Canada says Doug Ford plans to end government funding for automakers and suppliers. Kristine Owram on Financial Post talks about auto stock going higher on Free Trade Agreement with US. John Irwin on Automotive News Canada talks about the problem with the tariffs on steel and aluminum remaining after trade deal is signed. Ambrose O'Callaghan on Motley Fool views this stock positively after the free trade deal. See what analysts are saying about this stock on Stock Chase. The analysts do like this company.

Linamar Corp is a manufacturing company of engineered products powering vehicles, motion, work, and lives. The Company is made up of two operating segments - the Powertrain / Driveline segment and the Industrial segment. Its web site is here Linamar Corporation.

The last stock I wrote about was about was K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF) ... learn more. The next stock I will write about will be Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK) ... learn more on Wednesday, October 10, 2018 around 5 pm. Today on my other blog I will write about Money Show 2018 – Nick Bontis.... learn more on Tuesday, October 9, 2018 around5 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, October 5, 2018

K-Bro Linen Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. I would expect this to be a dividend growth in the future. I would suspect that the growth would be in the low range. The current price would seem reasonable. See my spreadsheet on K-Bro Linen Inc.

I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.

When I was updating my spreadsheet, I noticed they made less in 2017 because expenses went up faster than revenue. Long Term Debt also went up substantially by some 67% in 2017 and another 65% for the first two quarters of 2018. Last year Long Term debt went up 998% (from 2.4M to 25.8M) in 2016. So, they have increased their debt substantially. However, the Long Term Debt/Market Cap is still at just 0.17 currently.

This stock used to be an income trust and as such the dividend yield would be higher than for corporations. As a corporation, a decrease in yield as expected. The current dividend yield is moderate at 3.12%. The 5 and 10 year median dividend yields are 2.83% and 3.96% with the historical at 5.56% and the yield since the change to a corporation at 2.90%. Note that this company was made public just 13 years ago.

Since Income Trusts can pay out more than earnings in dividends, most of them did just that. This company was no exception. Since going to a corporation, they did a few low increases but they have kept their dividends flat since 2014. We will probably not see any dividend increases before 2019. Analysts see them being flat into 2019.

The DPR for EPS has been coming down. For 2016 the DPR for EPS was 83% with 5 year coverage at 77%. Because of lower earnings for 2017, the DPR for EPS for 2017 was 190% with coverage at 88%. Analysts expect that DPR for EPS will improve greatly by 2019.

All Debt Ratios are good. The Long Term Debt/Market Cap Ratio is still very low even after the second quarterly increases. The one for 2017 is 0.10 with the current one at 0.17. the Liquidity Ratio for 2017 is 1.79 with 5 year median at 1.78. The Debt Ratio is 3.15 with 5 year median at 3.26. The Leverage and Debt/Equity Ratios are 1.46 and 0.46 for 2017.

The Total Return per year is show below for years of 5 to 13. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Shareholders have made a good return on this stock.

Years Div. Gth Tot Ret Cap Gain Div.
5 0.86% 11.06% 7.44% 3.62%
10 0.87% 17.44% 11.84% 5.60%
13 1.27% 16.27% 10.21% 6.07%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 25.69, 30.52 and 35.35. The corresponding 10 year ratios are 17.58, 20.52 and 23.45. The historical ratios are 16.80, 17.74 and 19.91. The ratios are increasing lately mostly due to a drop in earnings. The current P/E Ratio is 41.85 based on a current stock price of $38.50 and 2018 EPS estimate of $0.92. No matter how you look at this, the P/E Ratios are high. This stock price testing suggests that the stock price is relatively expensive.

Analysts expect the EPS to improve in 2019 and 2020 to $1.61 and $1.69, respectively. This will drop the P/E Ratios to 23.91 and 22.78 based on the current price of $38.50. These are better P/E Ratios, but they are still rather high.

I get a Graham Price of $19.90. The 10 year low, median, and high median Price/Graham Price Ratios are 1.38, 1.61 and 1.84. The current P/GP Ratio is 1.93 based on a stock price of $38.50. This stock price testing suggests that the stock price is relatively expensive. However, this ratio is expected to move to 1.45 in 2019.

I get a 10 year median Price/Book Value per Share Ratio of 2.46. The current P/B Ratio is 2.01 based on Book Value of $201M, Book Value per Share of $19.13 and a stock price of $38.50. The current ratio is some 18% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. If the current ratio was lower by 20%, the stock price would be considered to be relatively cheap.

I get an historical median dividend yield of 5.56%. However, since this used to be an income trust stock, a better yield to use is the one since the conversion to a corporation. That yield is 2.90%. The current dividend yield is 3.12% based on dividends of $1.20 and a stock price of $38.50. This stock price testing suggests that the stock price is relatively reasonable and below the median. Analysts had expected rising prices and drop in dividends would leave most old income trusts with interest rates in the 4 and 5% range. The dividend yield is lower than this range.

The 10 year median Price/Sales (Revenue) Ratio is 1.64. The current P/S Ratio is 1.70 based on 2018 Revenue estimate of $238M, Revenue per Share of $22.65 and a stock price of $38.50. The current ratio is some 3.6% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I would discount the P/E Ratio test because it is based on a temporary low EPS. This is the same reason for discounting the Graham Price as the EPS estimate goes into the formula. I like the Price/Book Ratio test as it is based on relatively recent information. It shows the price to be relatively reasonable and below the median. The P/S Ratio is also a good one because expected future revenue is important to expected future earnings. This show the stock price to be relatively reasonable but above the median, but not by that much. So, the stock price is probably reasonable.

When I look at analysts’ recommendations I find Buy (6) and Hold (1) recommendations. There are only 7 analysts following this stock. The consensus would be a Buy. The 12 month stock price consensus is $44.71. This implies a total return of 19.25% with 3.12% from dividends and 16.13% from capital gains.

Lisa Matthews on Fairfield Current talks about an insider of Ronald Graham selling shares in the company and what some brokers have said about the company recently. Lacy Summers on Simply Wall Street says the P/E Ratio is 71.8 while industry average is 17.9. Mary Kom on Fairfield Current talks about a director selling shares. Kris Knutson of Motley Fool says the company has stable long term contracts. However, she thinks the debt levels following expansion and acquisitions may be too high. See what analysts are saying about this stock on Stock Chase. They think it is a good solid business.

The insider selling by Ronald Graham might be interesting, but he is not important enough to be listed in the website. Also, people buy for one basic reason, but can sell for lots of reasons most of which may have nothing to do with the company. Ronald Graham may just need some money. With a director selling shares, you have to wonder why, but still we do not know the reason. I must admit there is a lot of insider selling over the past year and it is at 0.64% of market cap. You would expect insider buying or selling to be closer to 0.01% or 0.02%.

With the article on the P/E being very high, I say so what. It is not because their earnings are valued higher than other companies. It is because they had a bad year and investors are not stupid enough to lower the price to set a reasonable P/E Ratio. In such cases you need to look at other indicators to see what a reasonable price is. I think that P/E Ratios, although quite popular, are not that good for judging stock price reasonableness.

K-Bro Linen Inc provides linen services to healthcare institutions, hotels and other commercial accounts that include the processing, management and distribution of general linen and operating room linen. Its web site is here K-Bro Linen Inc.

The last stock I wrote about was about was Le Chateau Inc. (TSX-CTU, OTC-LCUAF)... learn more. The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more on Tuesday, October 9, 2018 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, October 3, 2018

Le Chateau Inc

Sound bite for Twitter and StockTwits is: Still cheap. This stock has not yet turned around but the EPS losses are getting lower. Revenue is still dropping. It is not good that the Book Value is negative. However, they did get credit facilities recently at decent interest rates. See my spreadsheet on Le Chateau Inc.

I do not own this stock of Le Chateau Inc. (TSX-CTU, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010 The title of the article in Investor’s Digest was Dividend Stocks: Buy,

When I was updating my spreadsheet, I noticed that they took out a loan from their Credit Facility, that their assets are decreasing and their book value continues to decrease. Between 2016 and 2018, book value declined 99% and is now just $0.01 per share. The Second Quarter of 2018 shows a negative Book Value.

The company cut their dividends in 2011 when they first got into financial difficulties. They have not made a profit since so until they do again there will be no dividends.

The long term debt increased by 95% in 2017 and the Long Term Debt/Market Cap is extremely high at 10.47. The stock went up the first part of this year so this ratio is now 6.92. Still extremely high. You do not want to see this ratio over 1.00. The Debt Ratio was 1.00 for the financial year ending January 2018. With the second quarter of 2018, the ratio is just 0.94. This means that the assets cannot cover the liabilities and therefore there is a negative Book Value.

The Liquidity Ratio is good at 3.40 and it is wise for them to have it high because they are still not making any profit. Leverage and Debt/Equity Ratios are extremely high at 615.17 and 614.17. On the other hand, they just got a new credit facility at reasonable interest rates. This is a good sign.

The Total Return per year is show below for years of 5 to 25. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

From the chart below, you can see that people who have held this stock for 15 or more years have made a return. All this return would be in dividends as the stock has capital loss for every period I covered.

Years Div. Gth Tot Ret Cap Gain Div.
5 n/a -46.53% -46.53% 0.00%
10 n/a -31.42% -36.30% 4.88%
15 n/a 11.06% -17.00% 28.06%
20 n/a 6.29% -13.49% 19.77%
25 n/a 8.18% -9.39% 17.57%


I cannot do any price testing with the Price/Earnings per Share Ratios because they are all negative except the historical ones as this company has not made any profit since 2011. The current P/E Ratio is negative also. The historical low, median, and high median P/E Ratios are 4.58, 6.61 and 9.03. It had a historical median P/E Ratio of 8.48 prior to 2011.

I cannot get a Graham Price because of the history of earnings losses since 2011. I could not test this currently either because of the negative book value.

I get a 10 year median Price/Book Value per Share Ratio of 0.99. However, I cannot do any testing using the P/B Ratio as it is now negative.

I cannot do any historical median dividend yield testing because there are no dividends.

The 10 year median Price/Sales (Revenue) Ratio is 0.36. The current P/S Ratio is 0.05 based on 12 month revenue to the end of the second quarter of $199M, Revenue per Share of $6.64 and a current stock price of $0.32. The current P/S Ratio is 86% lower than the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts’ recommendations I cannot find any analysts that is following this stock.

The company talks about the second quarter of 2018 on Global News Wire. The company talks about more store closures on the Financial Post due to e-commerce. Victor Youngblood on Simply Wall Street talks about the debt of the company but does not seem to realize the company got into financial difficulties in 2011 which have yet to be resolved. Last year Susan Portelance of Motley Fool compared this company unfavorably with Reitmans. There is nothing since 2011 on Stock Chase because analysts are no longer following this company.

Le Chateau Inc is a Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories, and footwear for style-conscious women and men. Its web site is here Le Chateau Inc.

The last stock I wrote about was about was Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more. The next stock I will write about will be K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF) ... learn more on Friday, October 5, 2018 around 5 pm. Tomorrow on my other blog I will write about Something to Buy October 2018.... learn more on Thursday, October 4, 2018 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, October 1, 2018

Granite REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. Testing show price to be reasonable and above the median to expensive. It is hoped the company will do better with new CEO. It has done quite well for a REIT in the last few years with the dividend increases. See my spreadsheet on Granite REIT.

I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U) but I used to own it as MI Developments. I first bought some of this stock in 2003. TD bank also had an Action Buy Call (Strong Buy) on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold it in 2009; being discourage it would ever do well again.

When I was updating my spreadsheet, I noticed they do not tell you directly anywhere how many units are outstanding and how it has changed from last year. This is a rather simply thing to do and I do not see why they cannot simply put that information on the report rather than make you figure it out from the verbiage on the report. This company used to report in US$, but switched to CDN$ in 2012.

The dividend yield is good (4% and higher) and the dividend are increasing. The increases are getting lower than before. See the chart below. The current dividend yield is 4.91%. The 5, 10 and historical median dividend yields are 5.61%, 5.55% and 3.78%. Dividend growth has been lower since the change to a REIT in 2012.

The Dividend Payout Ratio for 2017 for EPS is 30% with 5 year coverage at 50%. The DPR for CFPS for 2017 is 67% and 5 year coverage at 68%. The DPR for AFFO for 2017 is 84% with 5 year coverage at 74%. The DPR for FFO for 2017 is 80% with 5 year coverage at 71%. It would seem that they can cover their dividends.

The Long Term Debt/Market Cap Ratio is 0.28 for 2017. The Liquidity Ratio for 2017 is 2.82 with 5 year median at 1.25 (and 5 year median is low). The Debt Ratio for 2017 is 3.00 with 5 year median at 3.03. The Leverage and Debt/Equity Ratios for 2017 are 1.50 and 0.50. All these are good debt ratios. The only problem is with the Liquidity Ratios are few years ago but when you add in cash flow after dividends, the 5 year median is 1.75, a good ratio.

The Total Return per year is show below for years of 5 to 15. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Years Div. Gth Tot Ret Cap Gain Div.
5 5.43% 10.97% 5.46% 5.51%
10 15.95% 10.00% 5.90% 4.10%
15 13.09% 7.23% 4.14% 3.09%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.92, 10.01 and 11.10. The corresponding 10 year ratios are 6.69, 7.72 and 8.75. The corresponding historical Ratios are 7.30, 8.60 and 9.91. The current P/E Ratio is 4.64 based on a current stock price of $55.47 and last 12 month for EPS of $11.96. This stock price testing suggests that the stock price is relatively cheap.

Since this is a REIT, we should also do testing using Funds from Operations (FFO). The 5 year low median and high median P/FFO Ratis are 11.34, 12.61 and 13.57. The corresponding 10 year ratios are 11.06, 12.68 and 13.87. The current P/FFO Ratio is 15.45 based on a stock price of $55.47 and 2018 FFO estimate of $3.59. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $62.77. The 10 year low, median, and high median Price/Graham Price Ratios are 0.69, 0.76 and 0.83. The current P/GP Ratio is 0.88 based on a stock price of $55.47. 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 1.05. The current P/B Ratio is 1.14 based on Book Value of $2,288M, Book Value per Share of $48.79 and a stock price of $55.47. The current ratio is some 8.8% above the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 3.78%. The current dividend yield is 4.91% based on dividends of $2.72 and a stock price of $55.47. The current dividend yield is some 30% higher than the historical yield. This stock price testing suggests that the stock price is cheap.

The 10 year median Price/Sales (Revenue) Ratio is 8.57. The current P/S Ratio is 8.65 based on 2018 Revenue estimate of $261M, Revenue per Share of $5.56 and a stock price of $55.47. The current ratio is 1% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and slightly above the median.

In doing the stock price testing we should note that using EPS says that the stock is cheap, but FFO says it is not. The thing is that for REITs, the FFO counts more than EPS. Dividend testing says that the stock is cheap, but this company changed from a corporation to an REIT and here you would expect the dividends (or distributions) to go up. The best tests for this company looks to be the P/B Ratio and the P/S Ratio. Both these say the stock price is reasonable, but above the median.

When I look at analysts’ recommendations I find Buy (1) and Hold (5). The consensus recommendations would be a Hold. The 12 month stock price is $55.10. this implies a total return of 4.24% with a capital loss of 0.67% and dividends of 4.92% based on a current stock price of $55.47.

Ploutos Investing on Seeking Alpha analyses this stock and approves the move into warehouses. Trapping Value on Seeking Alpha likes this REIT because of low leverage. Barry Critchley on Financial Post talks about COO assaulting the CFO. There is an Granite REIT announcement on Canadian Newswire about selling of properties and a new credit facility. See what analysts are saying about this stock on Stock Chase. There was a recent buy recommendation by Joshua Varghese, but few follow this company.

Granite Real Estate Investment Trust is a real estate investment trust. The Company is engaged in the ownership and management of industrial, warehouse and logistics properties in North America and Europe. Its web site is here Granite REIT.

The last stock I wrote about was about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) ... learn more. The next stock I will write about will be Le Chateau Inc. (TSX-CTU, OTC-LCUAF)... learn more on Wednesday, October 03, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks October 2018.... learn more on Tuesday, October 2, 2018 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 28, 2018

Gluskin Sheff + Associates Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. If you want to buy this stock, it would seem that now is the time as it is cheap. The company has a habit of paying special dividends. Yield on special dividends for 2018 financial year was 8.76%. CEO and CFO are buying stock. See my spreadsheet on Gluskin Sheff + Associates Inc.

I own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now working at the Globe and Mail and she used to be a Portfolio Manager for Manulife Asset Management Limited.

When I was updating my spreadsheet, I noticed that they spend a lot of cash during the financial year ending in June 2018. They settled the suit of the Founders costing $11M and they paid two special dividends of which totaled $44M. Results were that the book value when down around 29%. Also, there is inside buying of 0.25% of Market Cap. This is high as generally it would be around 0.01 or 0.02% at most. The CEO and CFO are buyers.

Dividend yields are moderate to good. The current yield is 6.72%. The 5, 10 and historical dividend yields are 4.68%, 3.45% and 3.81%. There has been no dividend increase since 2017. However, they paid $1.45 in two special dividends in financial year ending 2018.

The Dividend Payout Ratio for 2018 financial year is 202% with 5 year coverage of 111%. It is not as bad as it seems. Because they were being sued by the founders, money was set aside for these claims. Now these claims have been settled by the courts, they paid out special dividends. The regular dividend had coverage in 2017 of 82%.

The Debt Ratios are good. The Long Term Debt/Market Cap Ratio is very low at 0.02. The Liquidity Ratio for 2018 is 1.69 with 5 year median at 1.81. The Debt Ratio for 2018 is 3.23 with 5 year median at 3.23 also. The Leverage and Debt/Equity Ratios for 2018 are 1.45 and 0.45 with5 year medians at 1.40 and 0.40.

The Total Return per year is show below for years of 5 to 12. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Capital gains have been very low. Dividends have been quite good.

Years Div. Gth Tot Ret Cap Gain Div.
5 7.78% 15.59% 2.15% 13.44%
10 9.00% 2.35% -4.58% 6.93%
12 12.36% 6.53% -0.87% 7.41%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.74, 13.67 and 15.61. The corresponding 10 year ratios are 10.94, 14.07 and 16.59. The corresponding historical ratios are 11.35. 14.46 and 17.58. The current P/E Ratio is 9.66 based on a current stock price of $14.88 and 2019 EPS estimate of $1.54. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $10.32. The 10 year low, median, and high median Price/Graham Price Ratios are 1.48, 1.91 and 2.29. The current P/GP Ratio is 1.44 based on a stock price of $14.88. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 5.83. The current P/B Ratios is 4.84 based on Book Value of $96M, Book Value per Share of $3.08 and a stock price of $14.88. The current ratio is some 17% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.45%. The current dividend yield is 6.72% based on dividends of $1.00 and a stock price of $14.88. The current yield is some 95% above the historical median. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.43. The current P/S Ratio is 2.92 based on 2019 Revenue estimate of $159M, Revenue per Share of $5.09 and a stock price of $14.88. The current ratio is below the 10 year median by some 34%. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts’ recommendations I find only Hold (6) recommendations. The consensus would be a Hold. The 12 month stock price consensus is $17.42. This implies a total return of 23.79% with 17.07% from capital gains and 6.72% from dividends.

Mary Kom on Fairfield Current talks about recent analysts’ ratings. Business Wire on Financial Post highlights some of the company’s fourth quarterly results. Karen Thomas on Motley Fool liked this stock last year. See what analysts are saying about this stock on Stock Chase. There are some worries.

Gluskin Sheff & Associates Inc provides discretionary investment management services to high net worth private clients and institutional investors in Canada and abroad. Its web site is here Gluskin Sheff + Associates Inc.

The last stock I wrote about was about was Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... learn more. The next stock I will write about will be Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more on Monday, October 1, 2018 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 26, 2018

Great-West Lifeco Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Stock is selling at a good price and last few dividend increases were above 6%. If you want to hold this stock, it would seem like a good time to buy. 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).

When I was updating my spreadsheet, I noticed that this company did get hit hard by the last recession. Most insurance companies did. There were no dividend increases for 5 years from 210 to 2014 inclusive.

This stock had lower yields until the 2008 bear and then they went from low (1% and lower) and moderate (2 and 3%) to good (4% and higher). The current dividend yield is 4.92%, with 5, 10 and historical dividend yields at 4.06%, 4.33% and 3.37%. Dividend growth is low at the present time with the 5 and 10 year growth at 3.60% and 3.31%. Pass growth was higher, see chart below. The last dividend increase was in 2018 and it was for 6%.

The Dividend Payout Ratio for EPS for 2017 was at 68% with 5 year coverage at 53%. The DPR for CFPS for 2017 was at 42% with 5 year coverage at 42%. The coverage for EPS is fine, but I would prefer the coverage for CFPS to be 40% or less.

Life Insurance companies generally have lots of debt because of their contracts. So, for them, the Long Term Debt/Market Cap is not the measure you want. You want the Long Term Debt to be covered by cash and investments. For this company the Debt/Investment Ratio is 0.95.

The Total Return per year is show below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Except for 10 year returns, shareholders have done well. Make sure that you are not overpaying when buying stocks because if you do it can affect your long term results. 10 years ago, the stock hit a high. It was probably not a good time to buy.

Years Div. Gth Tot Ret Cap Gain Div.
5 3.60% 12.29% 7.59% 4.70%
10 3.31% 3.45% -0.13% 3.58%
15 7.85% 8.35% 4.09% 4.26%
20 10.91% 11.19% 6.68% 4.50%
23 12.39% 18.67% 11.67% 7.00%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.37, 12.53 and 13.91. the corresponding 10 year corresponding ratios are 11.34, 12.48 and 14.21. The historical ratios are 12.27, 13.47 and 15.32. The current P/E Ratio is 10.30 based on a current stock price of $31.61 and 2018 EPS estimate of $3.07. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $39.29. The 10 year low, median, and high median Price/Graham Price Ratios are 0.89. 1.00 and 1.16. The current P/GP Ratio is 0.83 based on a stock price of $31.61. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.82. The current P/B Ratio is 1.49 based on a Book Value of $20,989M, Book Value per Share of $21.22 and a stock price of $31.61. The current P/B Ratio is some 18% below the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.37%. The current Dividend yield is 4.92% based on dividends of $1.556 and a stock price of $31.61. The current dividend yield is some 46% 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 0.75. The current P/S Ratio is 0.66 based on 2018 Revenue estimate of $47,705M, Revenue per Share of $48.24 and a stock price of $31.61. The current ratio is some 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I see no reason to say that any of these tests are invalid. So, it would seem that the stock price is running from relatively cheap to relatively reasonable and below the median. The P/B Ratio test shows the price close to cheap as the stock price is considered cheap if the current ratio is 20% below the 10 year median ratio. This test shows the stock price close to cheap. So, 3 of 5 test show stock is cheap and one shows it nearly cheap. Certainly, the stock is selling at a good price.

When I look at analysts’ recommendations I find Strong Buy (1), Buy (1) and Hold (8). The consensus would be a Hold. The 12 month stock price consensus is $36.40. This implies a total return of 20.08% with 15.15% from capital gains and $4.92% from dividends based on a current price of $31.61.

David French and John Tilak on Reuters talk about this company selling off some Life Insurance contracts. Hector Vargas on Simply Wall Street talks about ownership and seems to have missed the ownership by Power Corp. Maria Luz-Campos on X News Press talks about recent analyst’s reports. Jason Phillips on Motley Fool talks about Yield Curve and Insurance Companies. See what analysts are saying about this company on Stock Chase. Some are no keen on this company.

Great-West Lifeco Inc is a life insurance company that also offers health insurance, retirement and investment services, asset management and reinsurance businesses. It operates in Canada, U.S. and Europe. Its web site is here Great-West Lifeco Inc..

The last stock I wrote about was about was Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) ... learn more. The next stock I will write about will be Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) ... learn more on Friday, September 28, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Steven Hawkins.... learn more on Thursday, September 26, 2018 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.