Friday, March 9, 2018

Canadian Tire Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. On a number of tests this stock price is coming up expensive. This is hardly surprising since the stock have been on an upward climb since end of 2008. See my spreadsheet on Canadian Tire Corp.

I own this stock of Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF). In 2000 when I first bought this stock, it was on the Investment Reporter's list of conservative Canadian stocks. I bought stock for my trading account in 2009 because I have done well with it in my Pension Account and it was a consumer stock.

A notable item is that the Voting Common Shares are worth a lot more than the Non-Voting Class A shares. Both are traded on the TSX, but there is little trading of the Common Shares. The Common Shares are currently worth $254.50, which is some 47.82% higher than the Class A Shares at $172.17.

I have done quite well with this stock. I bought it first in 2000, then more in 2009, 2010 and then sold some in 2014. The reason for the sale was because I had to raise money in a RIF account to have cash on hand for withdrawal purposes. I have made a Total Return of 14.34% per year with 12.78% per year from capital gains and 1.56% per year from dividends.

It is interesting that dividend growth is going up on this stock. Dividend growth for 25 and 27 years is under 8% at 7.77% and 7.38% per year. Dividend growth for 5, 10, 15 and 20 years is over 8% at 16.72%, 13.39%, 13.29% and 9.81% per year.

Dividend yield on this stock is from low to moderate. The current dividend is moderate at 2.09%. The 5, 10 and historical dividend yields are low at 1.70%, 1.71% and 1.69%. This is probably because the company just raised their dividends by some 38.5%.

Total Return for the durations of 5 to 27 are all good and that means that they are 8% or higher. The 5, 10, 15, 20, 25 and 27 Total Returns are 20.82%, 9.57%, 12.89%, 9.88%, 11.60% and 8.53% per year. The portion of this return attributable to capital gains is 18.76%, 8.25%, 11.40%, 8.68%, 10.04% and 7.37%. The portion of this return attributable to dividends is 2.06%%, 1.32%%, 1.49%, 1.20%, 1.56% and 1.15%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.35, 14.27 and 15.67. The corresponding 10 year ratios are 10.00, 12.07, and 14.70. The historical ratios are 11.23, 13.63 and 15.67. The current P/E Ratio is 14.72 based on a stock price of $172.17 and 2018 EPS estimate of $11.70. This stock price testing suggests that the stock price is reasonable but above the median.

I get a Graham Price of $137.14. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.83 and 1.04. The current P/GP Ratio is 1.26 based on a stock price of $172.17. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.28. The current P/B Ratio is 2.41 based on Book Value of $5,574M, Book Value per Share of $71.45 and a stock price of $ 172.17. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.69% with the 5 and 10 year median dividend yields at 1.70% and 1.71% respectively. The current dividend yield is 2.09% based on dividends of $3.60 and a stock price of $172.17. The current dividend yield is some 24% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. However, do not forget that the company just raised the dividend by 38.5%. This is a big raise.

I get a 10 year median Price/Sales (Revenue) Ratio of 0.56. The current P/S Ratio is 0.83 based on 2018 Revenue estimate of $13,873M, Revenue per Share of $208.65 and a stock price of $172.17. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Strong Buy (1), Buy (10) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $192.17. This implies a total return of 13.71% with 11.62% from capital gains and 2.09% from dividends based on a current price of $172.17.

A DR Contributor on Danvers Record says this company has a Williams Percent Range of -42.48. This means that it is neither overbought nor oversold. Demetris Afxentiou on Motley Fool says why you should buy this stock. The Canadian Press on BNN talk about the company eyeing more brand acquisitions. See what analysts are saying about this company on Stock Chase. Mostly the analysts are positive.

Canadian Tire Corp Ltd operates a nationwide store network that sells home goods, sporting equipment, apparel, footwear, automotive parts and accessories. Its stores are branded under the name Mark's, Sport Chek, Atmosphere, and PartSource monikers. Its web site is here Canadian Tire Corp.

The last stock I wrote about was about was H & R Real Estate Trust)... learn more. The next stock I will write about will be Goodfellow Inc. (TSX-GDL, OTC-GFELF)... learn more on Monday, March 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.

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