Friday, April 20, 2018

SNC-Lavalin Group Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Except for the P/E Ratio test this stock is showing mostly as relatively cheap. See my spreadsheet on SNC-Lavalin Group Inc.

I own this stock of SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF). Why I bought this stock. This stock was one from Mike Higgs' list of dividend growth stocks. I liked the idea of low dividends and high dividend increases. By 2008 this stock had grown so much it was too high a percentage of my portfolio. I sold 1/3 of my stock.

In 2012 I bought 100 shares for my trading account. I was selling low paying dividend stocks from my Pension RRSP and I still wanted SNC as part of my portfolio. In the end SNC was not one of the low paying dividend stocks I sold, but I still bought some shares for my Trading Account.

For some reason, different sites give different EPS for 2017 than the financial statements. TD WebBroker gives $2.15 as does Reuters. The 4-Traders site says $1.08. If you dividend the Net Income of $382,035T by the Diluted Number of Shares of 163.029M you get $2.34 which is what the financial statements say. WebBroker, Reuters, 4-Traders are close on 2018 EPS Estimate with WebBroker and Reuters at $2.74 and 4-Traders at $2.73. 4-Traders have Net Income for 2017 as $176M and TD WebBroker has $382,035T .

The recovery from the last recession has been hard on a lot of companies. It has been a long slow recovery. As EPS increases declined, the company properly decreased the dividend increases. The dividend growth over the past 5, 10, 15, 20 and 25 years are 4.41%, 10.84%, 15.65%, 15.00% and 14.14%.

Yes they can afford their dividends. The Dividend Payout Ratio for 2017 was 47% with 5 year coverage of 32%. The DPR for CFPS is 22% with 5 year coverage of 41%. The 41% is a bit high as generally you do not want it above 40%. However, should be lower next year.

The Liquidity Ratio is low at 1.02. I like to see this at 1.50. The ratio shows that the current assets can barely cover the current liabilities. Cash Flow after dividends is not much help as it raises the ratio to just 1.03. If you take into account the current portion of long term debt then the ratio becomes 1.11. The Debt Ratio is good at 1.61.

The Leverage and Debt/Equity Ratios are fine at 2.63 and 1.63. These are rather normal for this sort of company. The Long Term Debt/Market Cap Ratio at 0.36 is also fine.

The Total Return 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.

As you can see the Total Return has been very good for shareholders except for the 10 year duration. There was a scandal about SNC contracts in Libya from 2001. See Bertrand Marotte article in the Globe and Mail. Because of the sandal the stock price fell and they had some financial difficulties. This is why the 10 year Total Return is low.

Years Div Gth Tot Ret Cap Gain Div
5 4.41% 9.35% 7.19% 2.16%
10 10.84% 3.32% 1.71% 1.61%
15 15.65% 13.66% 11.37% 2.29%
20 15.00% 17.46% 14.84% 2.62%
25 14.14% 13.60% 11.81% 1.79%


The 5 year low, median and high median Price/Earnings per Share Ratios are 21.61, 23.39 and 25.16. The 10 year corresponding ratios are 15.35, 20.77 and 25.05. The historical ratios are 14.34, 19.77 and 25.05. The current P/E Ratio is 20.52 based on a stock price of $56.03 and 2018 EPS estimate of $2.73. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $42.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.34, 1.80 and 2.21. The current P/GP Ratio 1.31 based on a stock price of $56.03. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share of 3.32. The current P/B Ratio is 1.88 based on Book Value of $5,225M, Book Value per Share of $29.77 and a stock price of $56.03. The current P/B Ratio is some 43% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.47%. The current dividend yield is 2.05% based on dividends of $1.15 and a stock price of $56.03. The current yield is some 39% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.91. The current P/S Ratio is 0.84 based on 2018 Revenue estimate of $11,466M, Revenue per Share of $65.34 and a stock price of $56.03. The current P/S Ratio is 6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Strong Buy (2) and Buy (9). The consensus would be a Buy. The 12 month stock price consensus would be $70.25. This implies a total return of 27.43% with 25.38% from capital gains and 2.05% from Dividends based on a current price of $56.03.

Becky Mayes on Simply Wall Street has concerns about the balance sheet of this company. SBN Contributor on Stanley Business News gives this stock a Piotroski F-Score of 4 for financial strength where 1 is low and 9 is high. See what analysts are saying about this stock on Stock Chase. They have varying views.

SNC-Lavalin Group Inc. is a global engineering and construction company offering engineering, construction and commissioning services in international markets. It serves the oil and gas, mining and metallurgy, infrastructure, and power sectors. Its web site is here SNC-Lavalin Group Inc.

The last stock I wrote about was about was Barclays PLC ADR (LSE-BARC, NYSE:-BCS)... learn more. The next stock I will write about will be Fortis Inc. (TSX-FTS, OTC-FRTSF)... learn more on Monday, April 23, 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, April 18, 2018

Barclays PLC ADR

Sound bite for Twitter and StockTwits is: Dividend Paying Bank. On a number of stock price tests this stock comes off as relatively expensive. This is not surprising as the bank is doing poorly. Looking at my spreadsheet there is lots of red. See my spreadsheet on Barclays PLC ADR.

I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS), but I used to. I would not buy this bank again and certainly not as an ADR. I have to track 3 currencies to do any analysis on this stock as a Canadian. I bought this stock when Barrett took over in 2000. Barrett used to run Bank of Montreal in Canada. At that time it was a good dividend paying stock and I thought it would give me some geographical diversifications.

I noticed that Revenue is still declining. They also had an earnings loss for 2017. The analysts seem to keep thinking revenue and earnings will go up, but they have not yet. For example last year the median estimates for EPS was £0.137, but there was an earnings loss of £.101in 2017. Revenue estimate was £22175M a 3.4% increase, but Revenue was instead down by 1.7% at £21076M

Until 2008, dividends were growing. Since 2008 dividends have been going south. For the past 5, 10, 15, 20 and 24 years dividends have declined by 14.33%, 21.08%, 11.37%, 5.47% and 0.98%.

The simply answer to can they afford their dividends is no. The Dividend Payout Ratio for 2017 is not calculable as there was an earnings loss. The 5 year coverage is 2076.92%. This is not a mistake, as coverage is over 2000%. The last time the DPR for EPS was below 100% was in 2011 when it was at 22.92%. The last time the 5 year coverage was below 100% was in 2014 when it was 62.77%.

The Total Return is show below for years of 5 to 22. 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 -14.33% -2.74% -4.99% 2.26%
10 -21.08% -6.53% -8.69% 2.15%
15 -11.37% 0.93% -4.00% 4.93%
20 -5.47% 0.99% -3.62% 4.61%
24 -0.98% 9.22% 1.36% 7.86%


The 5 year low, median and high median Price/Earnings per Share Ratios are unusable as they are negative. The 10 year corresponding ratios are all unusable as they are extremely low. The historical low, median and high median Price/Earnings per Share Ratios are 8.40, 10.04 and 12.11. The current P/E Ratio 17.21 based on a stock price of £2.13 and 2018 EPS estimate of £0.124. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of £3.00. The 10 year low, median and high median Price/Graham Price Ratios are 0.47, 0.63 and 0.79. The current P/GP Ratio is 0.71 based on a stock price of £2.13. 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 of 0.67. The current P/B Ratio is 0.66 based on a Book Value of £54,964, Book Value per Share of £3.22 and a stock price of £2.13. The current P/B Ratio is some 1.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The thing is that when the P/B Ratio is below 1.00, it means that the stock is selling below the theoretical breakup value of the company. This, of course, suggests that the stock price is cheap. Normally a cheap P/B Ratio is 1.50 and below.

I get an historical median dividend yield of 2.96%. The current dividend yield is 1.41% based on dividends of £0.030 per year with a stock price of £2.13. The current dividend yield is some 52.5% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The problem with using a dividend yield compared to an historical median dividend yield when dividends are going down is not a good test. You would expect lower dividend yield with declining dividends. Of course, it does depend on fast dividends are declining.

The 10 year median Price/Sales (Revenue) Ratio is 1.33. The current P/S Ratio is 1.67 based on 2018 Revenue estimate of £21,786, Revenue per Share of £1.28 and a share price of £2.13. The current ratio is some 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy (8), Buy (5), Hold (6), Underperform (1) and Sell (1). The consensus would be a Buy. The 12 month stock price is £2.27. This implies a total return of $7.80% with 6.40% from capital gains and 1.41% from dividends based on a current stock price of £2.13.

Lawrence White and Makini Brice in an article on Reuters talk about this bank paying $2B in Fraud Fine over US Mortgage Backed Securities. Julie Verhage, Stephen Morris and Sonali Basak of Bloomberg talks about Barclays PLC trying gauging clients' interest in the British bank starting a cryptocurrency trading desk. Maria Brooks on Frisco Fastball talks about recent analysts' rating. An Analyst on Post Analyst sees an opportunity in buying this stock. See what analysts are saying about this stock on Stock Chase. One analyst complained that European banks did not repaired themselves after the financial crisis which is unlike the American banks.

Barclays PLC operates in commercial and investment banking, insurance, financial and other related services. Barclays' subsidiary, Barclays Bank PLC maintains 2500 branches in the United Kingdom and 1000 branches in over 75 other countries. Its web site is here Barclays PLC ADR.

The last stock I wrote about was about was Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)... learn more. The next stock I will write about will be SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF)... learn more on Friday, April 20, 2018 around 5 pm. Tomorrow on my other blog I will write about Passion and Retirement.... learn more on Thursday, April 19, 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, April 16, 2018

Canadian Natural Resources

Sound bite for Twitter and StockTwits is: Dividend Growth Energy. Price is probably reasonable. EPS must grow faster for continued high dividend growth. See my spreadsheet on Canadian Natural Resources.

I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I started to follow this stock in 2008 because it was on the dividend growth lists that I followed. I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%. In April 2013 I bought more shares of this stock because the yield is now at 1.54%.

Long Term Debt is currently increasing.by 26% per year over the past 4 years. However, the Debt/Market Cap Ratio is still good as it is at 0.37. The Liquidity Ratio is low at 0.78 which means the current Assets cannot cover the current Liabilities. However, this Ratio has always been low. It is at an acceptable level of 1.73 when you add in Cash Flow after dividends.

The Debt Ratio has always been fine. For 2017 it is at 1.75 and has a 5 year median of 1.85. The Leverage and Debt/Equity Ratios at 2.33 and 1.33 in 2017 are normal for this sort of company.

The dividends tend to be low to moderate. The historical median dividend yield is just 0.88% but the 5 and 10 year median dividend yields are higher at 2.59% and 1.35% and with a current dividend yield of 3.02%.

The dividend growth is good for this stock. The dividends have grown by 21.56%, 20.61%, 21.30% and 23.33% over the past 5 to 16 years. The problem is that they are increasing their dividends without increasing their earnings.

The Dividend Payout Ratio is high compared to the past. The DPR for EPS for 2017 is 53% with 5 year coverage at 62%. Compared this to the 10 year median DPR for EPS at 16% or to the median of the first 10 years of dividends at 7%.

You have the same problem with DPR for CFPS which while not high is higher than it has been with the one for 2017 at 19% and a 5 year median at 15%. This compared unfavorably with 10 year median of 7%.

There is a tradeoff between giving shareholders dividends and using cash for development. Also, the dividend cannot keep rising at 20% per year when earnings are not. EPS was just up by 3.4% per year over the past and are down by 2% over the past 10 years. The 5 and 10 year 5 year running bases are worse at a decline over the past 5 years of 10% and a decline over the past 10 years of 2%.

The Total Return is show below for years of 5 to 27. 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 21.56% 11.85% 9.42% 2.43%
10 20.61% 3.51% 2.16% 1.35%
15 21.30% 16.54% 14.56% 1.99%
16-20 23.33% 14.52% 13.11% 1.42%
25 13.88% 12.78% 1.09%
27 23.59% 21.77% 1.82%


The 5 year low, median and high median Price/Earnings per Share Ratios are 8.90, 11.32 and 13.74. The corresponding 10 year ratios are 12.28, 15.96 and 18.99. The historical ratios are 11.46, 16.56 and 18.64. The 5 year ratios are depressed due to earning losses. The current P/E Ratio is 20.80 based on a stock price of $44.30 and 2018 EPS estimate of $2.13. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of$35.22. The 10 year low, median and high median Price/Graham Price Ratios are 0.81, 1.09 and 1.37. The current P/GP Ratio is 1.26 based on a stock price of $44.30. 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 of 1.57. The current P/B Ratio is 1.71 based on Book Value of $31,633M, Book Value per Share of $25.89 and a stock price of $44.30. The current P/B Ratio is some 9% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The historical dividend yield is 0.88%. The current dividend yield is 3.02% based on dividends of $1.34 and a stock price of $44.30. The current dividend yield is some 244% above the historical median. However, the dividend is growing much higher than EPS. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.80. The current P/S Ratio is 2.19 based on 2018 Revenue of $20,752M, Revenue per Share of $18.01 and a stock price of $44.30. The current P/S Ratio is some 12% lower than the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Strong Buy (6), Buy (16) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $53.02 which implies a total return of $22.71% with 19.68% from capital gains and 3.02% from dividends.

Maddox Falkner on Analyst Recom says that analysts expect this company to grow at around 10% per year over the next five years. Geoffrey Morgan on the Financial Post expects only this company and Tourmaline Oil Corp. to report growing production and cash flow on a quarter-over-quarter basis. Grover Beam on Nasdaq Journal says this company's PEG is 2.12 and therefore high. (Stock price is high.) See what analysts are saying about this stock on Stock Chase. Analysts tend to like this stock.

Canadian Natural Resources Ltd is an oil and natural gas producers in Western Canada. Its portfolio includes light and medium oil, heavy oil, bitumen, synthetic oil, natural gas liquids, and natural gas. Its web site is here Canadian Natural Resources.

The last stock I wrote about was about was Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA)... learn more. The next stock I will write about will be Barclays PLC ADR (LSE-BARC, NYSE:-BCS)... learn more on Wednesday, April 18, 2018 around 5 pm. Tomorrow on my other blog I will write about 50 Best Stocks.... learn more on Tuesday, April 17, 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, April 13, 2018

Pembina Pipelines Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price could be relatively reasonable. They have increased their shares to help pay for buying Veresen. See my spreadsheet on Pembina Pipelines Corp.

I own this stock of Pembina Pipelines Corp (TSX-PPL, NYSE-PBA). In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock it was an Income Trust company.

I bought this stock in 2001 and again in 2009. I have done well with total return at 16.95% with 9.23% from capital gains and 7.72% from dividends. On the stock I bought in 2001, I am earnings over 19% on my original investment after some 16 years. Dividends have paid 202% of the cost of my purchases.

The long term debt is increasing rapidly. The median annual increase in long term debt is 29% per year over the past 5 years. The Long Term Debt/Market Cap Ratio is still low at .32. The other low debt ratio is the Liquidity Ratio at 0.89. This means that current assets cannot cover current liabilities. The 5 year median for this ratio is 0.89. For 2017 you have to add back in the current portion of long term debt and cash flow after dividends to get an acceptable ratio at 1.55.

The other debt ratios are good. The Debt Ratio is 2.18. What you want is a ratio of 1.50 and above so this is a very good ratio. This one looks at Assets and Liabilities. The other debt ratios are fine which are the Leverage and Debt/Equity Ratios. These are good at 1.85 and 0.85 respectively.

Dividends are good with low dividend growth. The current dividend yield is 5.41% with 5, 10 and historical median dividends of 4.97%, 4.08% and 8.14%. Dividends yields were quite high while this stock was an Income Trust. Old Income Trust companies are never going to have the high yields they did as Income Trust. This company's median dividend yield after converting to a corporation is 5.21%. Dividend growth is shown in the table below.

Income Trusts could pay higher dividends than corporation because of the trust structure. For a couple of years after becoming a corporation this company kept the dividends flat and then started to increase them again. This company is still using Funds from Operations and Adjusted Funds from Operations to measure their dividend payouts against.

The company is in the process of bringing the dividend within the EPS and CFPS limits. The Dividend Payout Ratio for 2017 was 107% and is expected to be 98.6% in 2018. The Dividend payout Ratio for Cash Flow per Share is also high at 62% with 5 year coverage at 62%. This is better to be at 40% or lower.

The DPR for FFO for 2017 is 56.9% with 5 year coverage at 69%. The DPR for AFFO for 2017 is 62% with 5 year coverage at 69%.

The Total Return is show below for years of 5 to 20. This company has done very well for its shareholders with Total Return above 15% for all durations. 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 4.64% 15.12% 9.83% 5.29%
10 3.88% 16.59% 10.00% 6.59%
15 4.46% 17.51% 9.99% 7.52%
20 6.62% 21.38% 10.70% 10.67%


The 5 year low, median and high median Price/Earnings per Share Ratios are 26.93, 35.56 and 42.20. The 10 year corresponding P/E Ratios are 23.47, 27.90 and 32.33. The corresponding historical P/E Ratios are 20.16, 23.04 and 26.15. I must say I find them rather high for a utility company. The current P/E Ratio is 18.24 based on a stock price of 39.94 and 2018 EPS estimate of $2.19. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $36.8. The 10 year low, median and high median Price/Graham Price Ratios are 1.29, 1.61 and 1.83. I find these ratios also high for a utility company. The current P/GP Ratio is 1.08 based on a stock price of $39.94. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share of 1.78. The current P/B Ratio is 1.45 based on Book Value of $11,365M, Book Value per Share of $27.33 and a stock price of $39.94. The current P/B Ratio is rather low at 1.45 as generally a P/B Ratio is 1.50 is considered a low one. The current P/B Ratio is some 18.6% 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 20% below the 10 year median, the stock price would be relatively cheap. So it is close to cheap.

I get an historical median dividend yield of 8.14% and a historical median dividend yield of 5.21% since the company became a corporation. The current dividend yield is 5.41% based on dividends of $2.16 and a stock price of $39.94. The current yield is some 33.6% below the historical median dividend yield but some 3.8% above the one since being a corporation. The second one may count more and suggest that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.74. The current P/S Ratio is 2.58 based on 2018 Revenue estimate of $7,772M, Revenue per Share of $15.45 and a stock price of $39.94. The current ratio is some 7.8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find Strong Buy (2), Buy (12) and Hold (1). The consensus is a Buy. The 12 month stock price is $52.06. This implies a total return of 32.75% with 30.35% from capital gains and 5.41% from Dividends. This is based on a current stock price of $39.94.

Luis Baughman on Simply Wall Street likes this company but says it is no cheap. Adrian McCoy on Pembina Pipelines Corp. Ian Bicki of The Canadian Press talks about the takeover of Veresen on CTV News Site. MPL Communications also talk about this stock on their Buy Sell Adviser Report. See what analysts are saying about this stock on Stock Chase. Most like it, but some have different views.

Pembina Pipeline Corp caters to the oil & gas industry. Its services include transportation of oil & gas through its pipelines. Its web site is here Pembina Pipelines Corp.

The last stock I wrote about was about was Barrick Gold Corp (TSX-ABX, NYSE-ABX)... learn more. The next stock I will write about will be Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)... learn more on Monday, April 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.

Wednesday, April 11, 2018

Barrick Gold Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. It would appear the stock is cheap, but whether there is money to be made with this is probably up in the air. See my spreadsheet on Barrick Gold Corp.

I own this stock of Barrick Gold Corp (TSX-ABX, NYSE-ABX). I bought some of this stock in April 2013 because its stock price had fallen hard. I believed the market over reacted. I just bought 100 shares as I am living off my portfolio and do not have much to invest. I bought another 100 shares in 2016.

Last year at this time I had a profit of 19.21% per year. This year when I checked I had a profit of 0.13%. The stock price has come down a lot over the past year.

Dividends are paid in US$ and this company reports in US$. Dividends have been all over the place for this stock. They are increased, decreased and flat Of course the problem is that some years the company makes money and some years it does not. As you can see from the charts below, the dividends have been declining lately.

In 2017 the Dividend Payout Ratio for EPS is 9.8%. The 5 year coverage is a negative 7.8%. The DPR for CFPS is 6.8% with 5 year coverage of 8.6%. It would seem that there is not much trouble in the paying of dividends. The 5 year coverage is the most important, but the negative cover at 7.8% is not high.

The price of the stock has been falling since 2011. It looks like it has done slightly better in US$ than in CDN$ but in either currency it seems to at a price it was some 25 years ago. The Total Return is show below for years of 5 to 27. 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 CDN$
5 -27.45% -11.35% -12.19% 0.84%
10 -6.55% -6.72% -7.98% 1.26%
15 -5.43% -0.30% -1.93% 1.62%
20 -2.07% -0.37% -1.89% 1.52%
25 2.43% 1.25% -0.31% 1.55%
30 8.51% 5.52% 3.36% 2.16%


Years Div Gth Tot Ret Cap Gain Div US$
5 -30.69% -15.44% -16.20% 0.76%
10 -8.76% -8.86% -10.12% 1.26%
15 -3.96% 1.68% -0.42% 2.10%
20 -1.43% 0.40% -1.32% 1.72%
25 2.48% 1.35% -0.27% 1.62%
30 8.64% 5.62% 3.48% 2.14%


The 5 year low, median and high median Price/Earnings per Share Ratios are negative and are of no use. The corresponding 10 year ratios are 3.94, 4.13 and 4.32 and are not much better. The historical ratios are 14.38, 16.63 and 18.74. The current P/E Ratio is 16.06 based on a current price of $16.19 CDN$ and 2018 EPS estimate of $1.01 CDN$ ($0.79 US$). This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $15.05 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.21 and 1.46 CDN$. The current P/GP Ratio is 1.08 based on a stock price of $16.19 CDN$. 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 2.12 US$. The current P/B Ratio is 1.59 a values some 25% lower. The current P/B Ratio is based on Book Value of $9,286M US$, Book Value per Share of $7.96 and a stock price of $12.69 US$. This stock price testing suggests that the stock price is relatively cheap. There tends not to be much difference if I test in CDN$ or US$. They do report in US$.

I get an historical median dividend yield of 0.96% CDN$. The current dividend yield is 0.95% just 1.4% lower. This stock price testing suggests that the stock price is relatively reasonable and at the median. This is not a good test because dividends have been decreasing.

The 10 year median Price/Sales (Revenue) Ratio is 2.59 US$. The current P/S Ratio is 1.86 a value some 28% lower. The current P/S Ratio is based on 2018 Revenue estimate of $7,974M US$, Revenue per Share of $6.84 US$ and a stock price of $12.69 US$. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Strong Buy (2), Buy (4), Hold (14) and Underperform (1). The consensus is a Hold. The 12 month stock price is $17.21 US$ or $21.97 CDN$. This implies a total return of 36.63% with 35.68% from capital gains and 0.95% from Dividends.

Austin Wood on Simply Wall Street thinks that the outlook for this stock is not good. Andrew Walker on Motley Fool has hope for this stock. An article on Post Analyst says that this stock is trending higher. See what analysts are saying about this stock on Stock Chase. They vary greatly in their views of this stock

Barrick Gold Corp is engaged in the production and sale of gold and copper, as well as related activities such as exploration and mine development. Its mining projects are located in North America, South America, Australia, and Africa. Its web site is here Barrick Gold Corp.

The last stock I wrote about was about was Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF)... learn more. The next stock I will write about will be Pembina Pipelines Corp. (TSX-PPL, NYSE-PBA)... learn more on Friday, April 13, 2018 around 5 pm. Tomorrow on my other blog I will write about Robin Speziale.... learn more on Thursday, April 12, 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, April 9, 2018

Leon's Furniture Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumers. When I do stock price testing this stock is coming up cheap. I have bought this stock several times since 2006 but currently my total return is subpar at just 6.92% with 2.95% from dividends and 3.97% from capital gains. I think longer term this will go up to my acceptable ratio of 8% Total Return. See my spreadsheet on Leon's Furniture Ltd.

I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.

There is a big difference between the EPS Basic and EPS Diluted. The difference is 12%. The company says this is due to potential effects of the convertible debentures and Management share purchase plan.

The company stopped raising their dividends after 2012. A lot of consumer companies have had a hard time with the long slow recover from 2008. After 2012 the first increase came in 2017 with a very good 20% increase in dividends. This is why in the chart below the growth in dividends over the past 5 and 10 years is lower than for other durations.

The company has not had a policy of increasing dividends every year but do increase them most years. This company's dividend policy is also interesting as every once in a while they do a special dividend when they can afford to do so. The last 5 special dividends were paid in 2002, 2006, 2008, 2009 and 2012.

Dividends yields are low to moderate with current, 5, 10, and historical dividend yields at 2.89%, 2.54%, 2.63% and 1.94. The dividend increases are also low to moderate with the lowest as discussed above for years 5 and 10. The other durations had dividend growth above 8% and less than 15%.

They can afford their dividends. In 2017 the Dividend Payout Ratio for EPS was 38% with 5 year coverage at 41%. The DPR for CFPS for 2017 is 24% with 5 year coverage at 25%.

The Total Return is show below for years of 5 to 27. 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.

Years Div Gth Tot Ret Cap Gain Div
5 2.83% 10.11% 7.27% 2.84%
10 5.39% 6.53% 3.64% 2.89%
15 9.37% 9.06% 6.01% 3.05%
20 11.20% 9.42% 6.31% 3.11%
25 10.55% 11.41% 8.01% 3.40%
27 10.12% 12.74% 9.05% 3.70%


The 5 year low, median and high median Price/Earnings per Share Ratios are 13.45, 15.17 and 16.90. The 10 year corresponding ratios are 13.43, 14.95 and 17.01. The corresponding historical ratios are 12.37, 14.74 and 16.90. The current P/E Ratio is 12.23 based on a stock price of $16.63 and 2018 EPS estimate of $1.36. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $16.63. The 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.16 and 1.35. The current P/GP Ratio is 0.95 based on a stock price of 16.63. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 1.92. The current P/B Ratio is 1.65 based on Book Value of $769M, Book Value per Share of $10.10 and a stock price of $16.63. The current P/B Ratio is some 14% lower than 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 1.94%. The current dividend is 2.89% based on dividends of $0.48 and a stock price of $16.63. The current yield is some 49% below 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 0.77. The current P/S Ratio is 0.56 based on 2018 Revenue estimate of $2,279M, Revenue per Share of $29.91 and a stock price of $16.63. The current ratio is some 28% 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 Buy (1) and Hold (2). The consensus would be a Hold. The 12 month stock price is $20.67. This implies a total return of 27.18% with 24.29% from capital gains and 2.89% from dividends based on a current price of $16.63.

Ambrose O'Callaghan of Motley Fool thinks Leon's is currently a good buy. Paula Ricardo on The Lincolnian New and Analysis talks about insider buying at Leon's. This company was charged with Deceptive Sales practices and agreed to make $750,000 donation to Charity by The Competition Bureau. An article on the Huffington Post talks about this. This is not good for a company I have invested in. See what analysts are saying about this stock on Stock Chase. They mostly like the company.

Leon's Furniture Ltd is a retailer of home furnishings, mattresses, appliances and electronics in Canada. Its retail banners include Leon's, The Brick, The Brick Outlet and The Brick Mattress Store. Its web site is here Leon's Furniture Ltd.

The last stock I wrote about was about was Russel Metals Inc. (TSX-RUS, OTC- RUSMF)... learn more. The next stock I will write about will be Barrick Gold Corp (TSX-ABX, NYSE-ABX)... learn more on Wednesday, April 11, 2018 around 5 pm. Tomorrow on my other blog I will write about Montreal Gazette Portfolio.... learn more on Tuesday, April 10, 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, April 6, 2018

Russel Metals Inc.

First I would like to say that I just bought a few board lots of Atrium Mortgage Investment Corp for my Locked-in LIF account. I reviewed Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF)... here on Wednesday, February 28, 2018.

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The price testing is show the price to be reasonable. This company has very good debt ratios with Liquidity Ratio at 2.38 and Debt Ratio at 1.89. See my spreadsheet on Russel Metals Inc..

I own this stock of Russel Metals Inc. (TSX-RUS, OTC-RUSMF). This was a stock on Mike Higgs' Canadian Dividend Growth List. This is a dividend paying industrial stock. You would buy for diversification purposes.

This stock has done ok for me, but not one of my winners. I have had this stock for almost 11 years and my Total Return is 5.91% per year with 0.89% from capital gains and 5.02% from dividends. Not all stocks are winners and some will do better in different economic situations.

The Dividend Payout Ratio for 2017 is 76% for EPS. However 5 year coverage is at 151%. They could not cover their dividends with EPS in 2013, 2015 and 2016. The DPR for CFPS is better at 29% for 2017 and 5 year coverage 62%.

I have information on this stock going back to 1990. Between 1993 and 1999 the stock paid no dividends. That is why the dividend growth for 20 years is n/a. Dividends were also decreased in 2008. That is why the dividend growth for 10 years is a decline of 1.4% per year. See the chart below on dividend growth.

The Total Return is show below for years of 5 to 27. 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. The stock price tends to fluctuate a lot and that is why some period really outperforms other periods.

Years Div Gth Tot Ret Cap Gain Div
5 2.40% 6.39% 1.13% 5.26%
10 -1.40% 6.45% 1.37% 5.08%
15 14.48% 24.86% 12.33% 12.53%
20 n/a 16.99% 10.05% 6.95%
25 11.50% 10.39% 6.55% 3.84%
27 5.59% 7.07% 4.04% 3.03%


The 5 year low median and high median Price/Earnings per Share Ratios are 12.98, 16.09 and 19.21. The corresponding 10 year ratios are 12.49, 14.53 and 16.16. The historical corresponding ratios are 8.22, 9.93 and 12.11. The current P/E Ratio is 12.46 based on a stock price of $27.54 and 2018 EPS estimate 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 $25.77. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.10 and 1.29. The current P/GP Ratio is 1.07 based on a stock price of $27.54. 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 1.83. The current P/B Ratio is 2.06 based on Book Value of $827M, Book Value per Share of 13.36 and a stock price of $27.54. 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 4.91%. The current dividend yield is 5.52% based on a stock price of $27.54 and dividends of $1.52. The current yield is some 12% above the historical median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Sales (Revenue) Ratio of 0.54. The current P/S Ratio is 0.48 based on 2018 Revenue estimate of $3,542M, Revenue per Share of $57.23 and a stock price of $27.54. The current ratio is below the 10 year median by 11%. This stock price testing suggests that the stock price is relatively reasonable and below the median.

When I look at analysts' recommendations I find just Buy (4) recommendations. The consensus would be a Buy. The 12 months stock price consensus is $35.67. This implies a total return of 35.04% with 29.52% from capital gains and 5.52% from dividends based on a current stock price of $27.34.

Ajay Mannan on Simply Wall Street talks about the company's P/E Ratio. A Herald Staff Writer on The Herald gives some statistics on this stock. Ambrose O'Callaghan of Motley Fool talks about the threat of US tariff and this company. See what analysts are saying about this stock on Stock Chase. Opinions vary on this stock.

Russel Metals Inc. is a metals distribution and processing company. It distributes steel products and conducts its distribution business in three business segments that are Metals Service Centers; Energy Products, and Steel Distribution. Its web site is here Russel Metals Inc..

The last stock I wrote about was about was Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more. The next stock I will write about will be Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF)... learn more on Monday, April 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, April 4, 2018

Toromont Industries Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. In a lot of tests this stock is showing as expensive, but some show it as reasonable but above the median. See my spreadsheet on Toromont Industries Ltd.

I own this stock of Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF). This is one of the stocks I bought after selling Loblaws in 2008. This was a stock on Mike Higgs' Canadian Dividend Growth Stock list. I bought more in 2008 after selling Onex and AGF Management.

There is a fair bit of insider selling at 0.14%. However, it is because insiders are not picking up all the stock options that they can. I have done very well with this stock. I first bought it in 2008 and then some more in 2011. I have made a Total Return of 12.60% with 10.76% from Capital Gains and 1.84% from Dividends.

Dividends have tended to be low to moderate with increases that are moderate. The current dividend yield is low 1.66% with an historical median dividend yield also low at 1.91%. The 5 and 10 year median dividend yield are moderate, but just in the moderate range at 2.06% and 2.10%.

I considerate dividend increases in the 8% to 14% range to be moderate. The 5, 10, 15, 20, 25 and 27 year dividend increases for this company are 9.80%, 9.82%, 13.64%, 13.34%, 12.82% and 14.73%.

They can afford their dividends. The 2017 Dividend Payout Ratio is 34% with 5 year coverage also at 34%. The DPR for CFPS is also good 23% for 2017 with 5 year coverage at 28%.

The Total Return is show below for years of 5 to 27. 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.

Years Div Gth Tot Ret Cap Gain Div
5 9.80% 23.24% 21.16% 2.08%
10 9.82% 13.99% 12.28% 1.71%
15 13.64% 17.66% 15.52% 2.14%
20 13.34% 14.35% 12.69% 1.66%
25 12.82% 23.37% 19.72% 3.65%
27 14.73% 23.68% 19.77% 3.91%


The 5 year low, median and high median Price/Earnings per Share Ratios are 14.45, 17.19 and 19.92. The corresponding 10 year values are 13.80, 15.46, and 16.88. The Historical ratios are 13.04, 14.70 and 18.55. The current P/E Ratio is 19.53 based on a stock price of $55.28 and 2018 EPS estimate $2.83. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $29.74. The 10 year low, median and high median Price/Graham Price Ratios are 1.28, 1.48 and 1.66. The current P/GP Ratio is 1.86 based on a stock price of $55.28. 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 3.19. The current P/B Ratio is 3.98 based on Book Value of $1,124M, Book Value per Share of $13.89 and a stock price of $55.28. The current P/B Ratio is some 25% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.91%. The current dividend yield is 1.66% based on dividends of $0.92 and a stock price of $55.28. The current dividend yield is some 13% below the historical median yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year Price/Sales (Revenue) Ratio of 1.14. The current P/S Ratio is 1.28 based on 2018 Revenue estimate of $3,501M, Revenue per Share of $43.25 and a stock price of $55.28. The current ratio is some 12% 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 Strong Buy (1), Buy (2) and Hold (5). The consensus recommendations would be a Buy. The 12 month stock price consensus is $63.13. This implies a total return of 15.86% with 14.20% from capital gain and 1.66% from dividends based on a current price of $55.28.

This is an Market Wired notice about Toromont acquisition of Hewitt Group. Joseph Solitro on Motley Fool talks about this acquisition. See what analysts are saying about this stock on Stock Chase. They like the company.

Toromont Industries Ltd is engaged in the caterpillar dealerships, design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Its web site is here Toromont Industries Ltd.

The last stock I wrote about was about was Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more. The next stock I will write about will be Russel Metals Inc. (TSX-RUS, OTC- RUSMF)... learn more on Friday, April 6, 2018 before 11 am. Tomorrow on my other blog I will write about Something to Buy April 2018... learn more on Thursday, April 5, 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, April 3, 2018

Alaris Royalty Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. I just bought some 70 shares of this stock for my TFSA. It is all the cash I had in my account and I only have this stock in my TFSA. All the stock price testing I did showed this stock as relatively cheap. Of course, stocks are often cheap for a reason and that makes them of higher risk. See my spreadsheet on Alaris Royalty Corp .

I own this stock of Alaris Royalty Corp (TSX-AD, OTC-ALARF). This is a stock that Dividends In Hand Blogger has bought in July 2016. It was also recommended by Acumen Capital report in a report by Brian Pow and Oliver Shao via Investor's Digest. See the article here .

Insiders are buying to the tune of 0.05%. This is relatively a lot as you would expect Net Insider Buying or Net Insider Selling to be around 0.01% to 0.02%. Also insider buying is by all that is CEO, CFO, Officers and Directors.

Currently the dividend yield is very high at 9.88%. The dividends have been all over the place with the high being over 21% and low being 3.66%. The historical median is 6.61% with 5 year median at 5.30% and 9 year median at 6.61%. Dividends have been level since an increase in 2015. Some analysts expect the company to raise their dividends again in 2019.

I do not have any long term dividend growth because this company was started at the end of 2007. It went public in December 2008. It started to pay dividends at the end of 2009. The growth in dividends over the past 5 and 8 years is at 6.72% and 6.35% per year.

The Dividend Payout Ratio for EPS for 2017 is 506% with 5 year coverage at 117%. EPS dropped by 82% in 2017, but is expected to recover in 2018. The company says that they are fine with current dividends and it is covered by cash flow. The DPR for CFPS in 2017 is 81% with 5 year coverage with 5 year coverage at 88%.

Again there is little to talk about in terms of long term returns. However, the Total Return over the past 5 and 10 years is at 4.03% and 15.22% per year. The capital loss over the past 5 years is at 2.71% and the capital gain over the past 10 years is 7.53%. The portion of the Total Return attributable to dividends is at 6.74% and 7.69% over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.18, 19.21 and 23.23. The 9 year corresponding ratios are 12.38, 15.66 and 19.54. The current P/E Ratio is 9.11 based on 2018 EPS estimate of $1.80 and a stock price of $16.39. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $25.79. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 1.01 and 1.27. The current P/GP Ratio is 0.64 based on a stock price of $16.39. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.32. The current P/B Ratio is 1.00 based on Book Value of $604M, Book Value per Share of $16.42 and a stock price of $16.39. The current P/B Ratio is some 25% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

The historical median dividend yield is 6.61%. The current dividend yield is 9.88% based on dividends of $1.62 and a stock price of $16.39. The current yield is some 50% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) is 10.81. The current P/S Ratio is 5.92 based on 2018 Revenue estimate of $102, Revenue per Share of $2.77 and a stock price of $16.39. The current ratio is some 45% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Buy (5) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $22.06. This implies a total return of 44.48% with 34.59% from capital gains and 9.88% from dividends based on a current stock price of $16.39.

Joseph Solitro of Motley Fool says why this company is a buy. See what analysts are saying about this stock at Stock Chase. Some like this company and some do not. There are differing views also on Stockhouse Bullboard on this company.

Alaris Royalty Corp provides finance to private operating entities, typically in the form of preferred limited partnership interests, preferred interest in limited liability corporations in North America, or long-term license and royalty arrangements. Its web site is here Alaris Royalty Corp.

The last stock I wrote about was about was Sun Life Financial Inc. (TSX-SLF, NYSE-SLF)... learn more. The next stock I will write about will be Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more on Wednesday, April 4, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks April 2018... learn more on Tuesday, April 3, 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, March 30, 2018

Sun Life Financial Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price is probably reasonable. All life insurance companies were having a hard time because of the ultra-low interest rates. They are just now recovering as is this company. It was a good sign when they started to raise dividends again in 2015. See my spreadsheet on Sun Life Financial Inc.

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). I first bought this stock in 2000 when it was first demutualized. It was very cheap. I bought more in 2001, 2003 and 2006. This stock was on Mike Higgs' Canadian Dividend Growth stock list and on the other dividend lists that I followed.

I know that insurance companies have had a rough time because of ultra-low interest rates. They all should do better in the future with rising interest rates. I have a total return on this stock of $7.39% per year. This is a little mediocre. I have capital gain of 3.94% per year and dividends of $3.45% per year. My dividends have paid for 65.6% of the cost of my stock. On my original purchase I am making a yield of 13.5%.

Dividends are in the moderate range and the dividend increases have been low. They used to have better dividend growth but the last recession and with extremely low dividend yields, insurance companies have not been doing well. They will do better when the interest rates get to a more normal level.

The current dividend yield is 3.46% with 5, 10 and historical rates at 3.64%, 4.18% and 3.58% respectively. The dividend growth over the past 5, 10, 15 and 18 years is 3.92%, 2.83%, 7.87% and 7.43% per year. The dividend growth is low as there were no dividend increases in the years of 2009 to 2014 inclusive.

The Dividend Payout Ratio for EPS is at 50% for 2017 with 5 year coverage of 50%. The DPR for CFPS is 54% with 5 year coverage of 38%. They can cover their dividend fine.

I have Total Returns for the past 18 years since this stock was issued. So the Total Return for the past 5, 10, 15 and 18 years are 17.66%, 2.05%, 8.10% and 12.71%. The portion of this Total Return that is attributable to capital gains is 14.49%, -0.71%, 4.53% and 8.13%. The portion of this Total Return that is attributable to dividends is 3.17%, 2.76%, 3.57% and 4.58%.

The statistics from above in chart form.

Years Div Gth Tot Ret Cap Gain Div
5 3.92% 17.66% 14.49% 3.17%
10 2.83% 2.05% -0.71% 2.76%
15 7.87% 8.10% 4.53% 3.57%
18 7.43% 12.71% 8.13% 4.58%


The 5 year low, median and high median Price/Earnings Ratios are 12.37, 13.73 and 15.09. The 10 year corresponding ratios are 11.46, 12.71 and 14.18. The historical ratios are 12.03, 13.65 and 15.09. The current P/E Ratio is 11.72 based on a stock price of $52.61 and 2018 EPS estimate of $4.49. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $56.61. The 10 year low, median and high median Price/Graham Price Ratios are 0.70, 0.91 and 1.03. The current P/GP Ratio is 0.93 based on a stock price of $52.61. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Book Value per Share Ratio is 1.35. The current P/B Ratio is 1.66 based on Book Value of $19,364M, Book Value per Share of $31.72 and a stock price of $52.61. The current P/B Ratio is some 23% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

Note that a good P/B Ratio for buying a stock is 1.50. The reason for the low P/.B Ratios is because this company has not been doing that well lately and therefore the stock price has not been growing much. I expect it to do better in the future with the rising interest rates.

The historical median dividend yield is 3.58%. The current dividend yield is 3.46% based on dividends of $1.82 and a stock price of $52.61. The current dividend is some 3.4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The reason that it is not showing a cheap price on this testing is that dividends were flat for a number of years from 2009 to 2014.

The 10 year median Price/Sales (Revenue) Ratio is 0.95. The current P/S Ratio is 1.00 based on 2018 Revenue estimate of $32,185M, Revenue per Share of $52.72 and a stock price of $52.61. The current P/S Ratio is some 5% above the 10 year median ratio. 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 (9) and Hold (5) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $58.50. This implies a total return of 14.66% with 11.20% from capital gain and 3.46% from dividends based on a current stock price of $52.61.

Fred Thornhill of Reuters published in the Globe and Mail an article about this company acquiring Excel Funds and then exited their EIFs funds. Xavier Javi on Registrar Journal talks about changes in institutional investment in this company. Winifred Garcia on Reurope Financial New talks about recent analysts ratings for this company. See what analysts are saying about this company on Stock Chase. Most like this company.

Sun Life Financial Inc. provides diversified financial services. It provides insurance, retirement, and wealth management products and services to individual and corporate customers in Canada, the United States and Asia. Its web site is here Sun Life Financial Inc.

The last stock I wrote about was about was BCE Inc. (TSX-BCE, NYSE-BCE)... learn more. The next stock I will write about will be Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Tuesday, April 3, 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, March 28, 2018

BCE Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Price seems to be cheap to reasonable. Also see my cautionary notes below. See my spreadsheet on BCE Inc.

I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). This is one of first stocks I bought, which was in 1982. At that time is was called an orphan and widow stock. It is not easy to figure out what I have earned on this stock because it has spun off shares for Nortel and Bell Aliant. In 2016 I sold Manitoba Telecom. To keep the same in Telecom category, I bought some more BCE with the proceeds.

The problem with looking at BCE long term is that they have spun off Nortel. They bought and then spun of Bell Aliant. Because I have owned BCE since 1987, my spreadsheet covers all this. What I did not like about Bell spinning off these companies is that I ended up with odd lots of stock each time. They could have organized the spin off better. Other companies do not let you end up with odd lots of shares because of spin-offs.

There are a few of cautionary notes. This first is the problem with Book Value in that it has declined over the past 10 years by 0.65% per year and has only grown by 4.47% per year over the past 5 years. The second one is that the Dividend Payout Ratio is a bit too high. The 5 year coverage is 86% and I would prefer to see this at 80% or lower.

The next cautionary is concerns comprehensive income. For this company there is a big difference between comprehensive income and net income with comprehensive income being a lot lower. In 2017 the comprehensive income is 30% lower and the 5 year median difference is 30%. This is a lot. This could point to Net Income or EPS not being of good quality.

Lastly, we should not ignore the fact that the current P/S Ratio is some 39% higher than the 10 year median P/S ratio. This by itself would not suggest an expensive stock, but it should give you pause.

Dividends have generally been in the good range (4 to 5%). The current dividend yield is 5.75% with 5, 10 and historical dividend yields at 4.73%, 5.02% and 4.63%. Dividend growth has been low (that is below 8%). I have data going back some 34 years. The dividends have grown at 5.25%, 6.86%, 5.90%, 4.39%, 3.69%, 3.34% and 3.37% per year over the past 5, 10, 15, 20, 25, 30 and 34years.

Dividend Payout Ratios are a little high. I prefer them to be 80% or lower for utility stocks and this is basically a utility stock. The DPR for 2018 was 91% with 5 year coverage of 86%. The 5 year coverage is probably the most important figure. For 2018 analysts expect the DPR to be around 86% with 5 year coverage at 85%. The DPR for CFPS for 2017 was at 27% with 5 year coverage at 35%. This is fine.

I have total return going back some 35 years. I think total return at around 8% for the long term is a good return. The total return for this stock over the past 5, 10, 15, 20, 25, 30 and 35 years is 12.45%, 8.51%, 9.17%, 9.90%, 9.63%, 9.37% and 13.45% per year.

The portion of the total return attributed to capital gains over these time periods is 7.21%, 4.30%, 5.13%, 42%, 4.89%, 4.44% and 5.67% per year. The portion of the total return attributed to dividends over these time periods is 5.24%, 4.22%, 4.04%, 4.48%, 4.74%, 4.93% and 7.79% per year.

The statistics from above in chart form.

Years Div Gth Tot Ret Cap Gain Div
5 5.25% 12.45% 7.21% 5.24%
10 6.86% 8.51% 4.30% 4.22%
15 5.90% 9.17% 5.13% 4.04%
20 4.39% 9.90% 5.42% 4.48%
25 3.69% 9.63% 4.89% 4.74%
30 3.34% 9.37% 4.44% 4.93%
35 3.37% 13.45% 5.67% 7.79%

The 5 year low, median and high median Price/Earnings per Share Ratios are 16.37, 17.72 and 19.07. The corresponding 10 year ratios are 15.67, 17.14 and 18.61. The corresponding historical ratios are 12.97, 15.62 and 16.07. The current P/E Ratios are 15.18. This stock price testing would suggest that the stock price is relatively cheap to reasonable and below the median.

I get a Graham Price of $36.19. The 10 year low, median and high median Price/Graham Price Ratios are 1.33, 1.53 and 1.74. The current P/GP Ratio is 1.45 based on a stock price of $52.51. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year Price/Book Value per Share Ratio is 3.07. The current P/B Ratio is 3.12 based on Book Value of $15,156M, Book Value per Share of $16.82 and a stock price of $52.51. The current ratio is some 2% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The historical dividend yield is 4.63%. The current dividend yield is 5.75% based on dividends of $3.02 with a stock price of $52.51. The current yield is some 24% above the historical median dividend yield. This stock price testing would suggest that the stock price is relatively cheap.

I get a 10 year median Price/Sales (Revenue) Ratio of 1.68. The current P/S Ratio is 2.02 based on Revenue of $23.371M, Revenue per Share ratio of $25.94 and a stock price of $52.51. The current P/S Ratio is some 21% higher than the 10 year median ratio. This stock price testing would suggest that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy (2), Buy (7), Hold (11) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $61.32. This implies a total return of 22.53% with 16.78% from capital gains and $5.75% from dividends based on a current stock price of $52.51.

Jacob Donnelly of Motley Fool thinks it is a good time to buy this stock with the increased yield because of the lower stock price. Interestingly Joey Frenette of Motley Fool gives his reason why not to buy this stock. Vivian Park onBZ Weekly talks about expected growth in EPS and analysts recent recommendations. See what analysts are saying about this stock on Stock Chase. They like it for the dividends but do not expect much capital growth going forward.

BCE Inc. is a telecommunication company. It caters to residential, business and wholesale customers with solutions for all their communications needs. Its web site is here BCE Inc.

The last stock I wrote about was about was Melcor Developments Inc. (TSX-MRD, OTC-MODVF)... learn more. The next stock I will write about will be Sun Life Financial Inc. (TSX-SLF, NYSE-SLF)... learn more on Friday, April 30, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Cuts... learn more on Thursday, April 29, 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.