National Bank of Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. Price wise it would see that the bank's stock price is relatively reasonable but above the median. So the price is a little high, but not overly so. It is a smaller bank, but has provided shareholders with good long term returns. See my spreadsheet on National Bank of Canada.

I do not own this stock of National Bank of Canada (TSX-NA, OTC-NTIOF). I thought I should follow one of the smaller Canadian Banks. This seems like a good choice.

There seems to be a lot of insider selling as the selling as a percentage of the market cap is at 0.20%. You expect a percentage closer to 0.02%. However, it seems that insiders are selling off their stock options rather than selling share that they already own.

The dividend yield is moderate to good with dividend growth low to moderate. The current dividend yield is 3.83% with the 5, 10 and historical median yields at 4.17%, 4.17% and 3.95%. The dividend growth over the past 5 and 10 years is low to moderate at 8.25% and 7.42%. I have the same comment for longer term growth which over the past 15, 20, 25 and 30 years is at 11.26%, 10.98%, 7.11% and 7.26%.

I consider a moderate dividend yield to be in the 2% and 3% range and good to be in the 4% and 5% range. For dividend growth, growth below 8% is low and between 8% and 15% is moderate.

The Dividend Payout Ratio for this bank for 2017 is 41.5% and the 5 year coverage is 45.09%. Generally you expect the DPR for banks to be in the 40% to 55% range. So they can afford their dividends.

The Total Return for this bank over the past 30 years is quite decent at 12.28% per year. The total return includes capital gains and dividends paid. This is a compounded return. The total return for the past 5, 10, 15, 20, 25 and 30 years is at 14.35%, 13.28%, 13.62%, 12.24%, 16.17% and 12.28%.

The 5 year low, median and high median Price/Earnings per Share Ratio are 9.04, 10.62 and 12.21. The corresponding 10 year ratios are 9.07, 10.29 and 11.76. The historical ratios are 8.38, 9.82 and 11.88. The current P/E Ratio is 10.87 based on a stock price of $62.61 and 2018 EPS estimate of $5.76. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $69.64. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 0.86 and 1.02. The current P/GP Ratio is 0.98 based on a stock price of $62.61. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Book Value per Share Ratio is 1.66. The current P/B Ratio is 1.99 based on Book Value of $10,700M, Book Value per Share of $31.51 and a stock price of $62.61. The current P/B Ratio is some 19.7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median and very close to expensive.

The historical median dividend yield is 3.95%. The current dividend yield is 3.83% based on dividends of $2.40 and a stock price of $62.61. The current yield is some 2.96% below the historical median yield. This stock price testing suggests that the stock price is relatively reasonable but above the median (just).

The 10 year median Price/Sales (Revenue) Ratio is 2.55. The current P/S Ratio is 2.96 based on 2018 Revenue estimate of $7,190M, Revenue per Share of $21.17 and a stock price of $62.61. The current P/S Ratio is some 16.06% 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 Strong Buy (1), Buy (2), Hold (9) and Underperform (1). This consensus would be a Hold. The 12 month stock price consensus is $66.08. This implies a total return of 9.38% with 5.54% from capital gains and 3.83% from dividends based on a current stock price of $62.61.

The bank on Cision talks about their new website. Jonathon Baker on Simply Wall Street talks about this bank's debt. Nicole Wilson on Ledger Gazette talks about recent ratings for this bank. See what analysts think of this stock on Stock Chase. They mostly like this bank.

National Bank of Canada is a financial service provider for consumers, small and medium-sized enterprises, and large corporations. The company's segments include Personal and Commercial, Wealth Management and Financial Markets. Its web site is here National Bank of Canada.

The last stock I wrote about was about was Bank of Nova Scotia (TSX-BNS, NYSE-BNS)... learn more. The next stock I will write about will be Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM)... learn more on Friday, January 19, 2018 around 5 pm. Tomorrow on my other blog I will write about Tangerine and Meridian.... learn more on Thursday, January 18, 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.

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