Monday, April 30, 2018

Ag Growth International

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. Price is probably reasonable. This stock gives diversification into the agricultural sector. See my spreadsheet on Ag Growth International.

I own this stock of Ag Growth International (TSX-AFN, OTC-AGGZF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yields. It was on the Canadian Dividend Aristocrats and this is why I first investigated this company. By 2011 when I bought this stock, I have been interested in AFN for some time. This stock is a play on the agricultural sector.

This was am income trust company. They kept their dividends level since 2011. See dividend growth in the chart below. They still cannot cover their dividends with earnings, but they are getting close. The Dividend Payout Ratio for 2017 is 110%. The DPR for 2018 is expected in the range of 54%. Their 5 year coverage is still very high at 323% in 2017.

Yields on income trust companies were very high. This company used to have a median yield of over 7%. It was though with a combination of dividend decreases or level dividends plus stock price raises the yields on old income trust companies would be in a 4 to 5% range. Current this company's yield is at 4.58%. It seems that analysts do not see any dividend increases in the near future.

Currently the company is still comparing the dividend payouts to Funds from Operations (FFO) to prove they can afford their dividends. They also talks about the difference between what they pay in cash and what is declared. They have a Dividend Reinvestment Plan so they are paying in cash less than the declared dividend. In 2017 they paid almost 13% less in cash than the declared dividend.

The Total Return is show below for years of 5 to 14. Shareholders have done well with this stock in total returns. 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 0.00% 17.54% 11.21% 6.33%
10 3.63% 10.63% 4.93% 5.69%
13-14 9.02% 22.87% 12.54% 10.33%


The 5 year low, median and high median Price/Earnings per Share Ratios are 19.20, 25.14 and 27.49. The corresponding 10 year ratios are 15.86, 21.36 and 26.57. The historical ones are 13.02, 18.86 and 24.27. It would seem that some capital gains are due to increases in these ratios. The current P/E Ratio is 18.09 based on a stock price of $52.45 and 2018 EPS of $2.90. This stock price testing suggests that the stock price is reasonable and below the median.

I get a Graham Price of $33.76. The 10 year low, median and high median Price/Graham Price Ratios are 1.19, 1.60 and 2.01. The current P/GP Ratio is 1.55 based on a stock price of $52.45. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 10 year median Price/Book Value per Share of $2.65. The current P/B Ratio is 3.00 based on a Book Value of $282.3M, Book Value per Share of $17.47 and stock price of $52.45. The current P/B Ratio is some 13% higher than the 10 year median ratio. This stock price testing suggests that the stock price is reasonable but above the median.

I get an historical median dividend yield of 6.60%. The current dividend yield is 4.58% based on dividends of $2.40 and a stock price of $52.45. The current dividend yield is some 31% below the historical median. This stock price testing suggests that the stock price is expensive. However, this is not a good test for old income trust companies as these companies had much higher yields that corporations will.

The 10 year median Price/Sales (Revenue) Ratio is 1.40. The current P/S Ratio is 0.99 based on 2018 Revenue estimate of $859M, Revenue per Share of $53.15 and a stock price of $52.45. The current P/S Ratio is some 30% lower than the 10 year ratios. This stock price testing suggests that the stock price is cheap.

When I look at analysts' recommendations I find Strong Buy (1) and Buy (7) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $65.75. This implies a total return of 29.93% with 25.36% from capital gains and 4.58% from dividends.

Alexis Guardo on Simple Wall Street in his dividend analysis misses the fact that dividends have been flat for over 5 years. Vernon Prom on The Casual Smart talks about first quarter of 2018 EPS being lower than in 2017. However, the second and third quarters of 2018 are expected to be higher than for 2017. Silas Weatherspoon on Park City Caller talks about some quant stats on this company. Ivanka Thompson on Bangalore Weekly is interesting as article says prices are CDN$, but seem to be in US$. I have seen a number of US sites confuse the two. See what analysts are saying about this stock on Stock Chase . The most recent entries are positive on this company.

Ag Growth International Inc. manufactures portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. Its web site is here Ag Growth International .

The last stock I wrote about was about was Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more. The next stock I will write about will be McCoy Global Inc. (TSX-MCB, OTC-MCCRF)... learn more on Wednesday, May 2, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks May 2018... learn more on Tuesday, May 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.

Friday, April 27, 2018

Thomson Reuters Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. On a relative basis this stock has a rather high stock price currently. See my spreadsheet on Thomson Reuters Corp.

I own this stock of Thomson Reuters Corp. (TSX-TRI, NYSE-TRI). I bought this stock in 1985 as Thomson Newspapers Ltd. so I have had it for a very long time, almost 33 years. I bought stock to give my portfolio some balance as I had too many financial stocks. Performance has been mediocre since 2007 with total returns in the 7% range.

There was very little capital gain at the 15 and 20 year durations. These 15 and 20 year durations start from 1997 and 2002. There was a sharp downturn in 2008 and the stock has been recovering from then. The long slow recovery from the last bear market and recession has been hard on consumer stocks.

The dividend yields are moderate with low dividend increases. The current dividend yield is 3.45% with 5, 10 and historical dividend yields at 3.40%, 3.57% and 3.17% in US$ terms. The yields are similar in CDN$ terms at a current one of 3.46%, and 5, 10 and historical dividend yields at 3.42%, 3.47% and 3.12%.

The growth in dividends in both US$ and CDN$ is shown in the chart below. The dividends are paid in US$, so the CDN$ dividends are affected by currency exchange rates. Actual dividend growth has been very low over the past 5 years as reflected in the US$ dividend growth chart. Also dividend given in CDN$ are the actual ones I have received. Because of the exchange rate, my dividends are different each quarter.

The Dividend Payout Ratios have varied over time and were above 100% from 2009 to 2013. Currently the DPR for EPS is 71% with 5 year coverage at 66% in US$ terms. The Dividends are currently paid in US$ and the company reports in US$. Dividends were paid in CDN$ prior to 1989.

The Total Return is show below for years of 5 to 27 in US$ and 5 to 32 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See the charts below, with the first one in US$ and the second one in CDN$.

In CDN$ terms this stock has done better over the past 5 years than at any other time over the past 30 years.

Years Div Gth Tot Ret Cap Gain Div US$
5 1.52% 12.43% 8.45% 3.98%
10 3.48% 3.66% 0.68% 2.99%
15 4.58% 6.84% 3.44% 3.40%
20 4.34% 5.24% 2.36% 2.88%
25 6.02% 11.69% 6.80% 4.90%
30-27 5.39% 7.38% 4.12% 3.26%
32 6.13%


Years Div Gth Tot Ret Cap Gain Div CDN$
5 7.08% 18.06% 13.74% 4.31%
10 5.29% 6.11% 3.12% 2.99%
15 3.13% 4.51% 1.79% 2.72%
20 3.89% 4.37% 1.71% 2.65%
25 4.76% 9.62% 5.46% 4.16%
30 5.32% 7.30% 4.07% 3.23%
32 5.83% 7.57% 4.30% 3.27%


The 5 year low, median and high median Price/Earnings per Share Ratios are 20.58, 22.63 and 24.67. The corresponding 10 year ratios are 17.09, 19.08 and 21.35. The historical ratios are 17.09, 19.24 and 24.19. The current P/E Ratio is 21.11 based on a stock price of $51.34 and 2018 EPS estimate of $2.43. This stock price testing suggests that the stock price is reasonable but above the median. This testing is in CDN$ terms.

I get a Graham Price of $35.43. The 10 year low, median and high median Price/Graham Price Ratios are 1.19, 1.43 and 1.60. The current P/GP Ratio is 1.45 based on a stock price of $51.34. This stock price testing suggests that the stock price is reasonable but above the median. This testing is in CDN$ terms.

I get a 10 year median Price/Book Value per Share of 1.73. The current P/B Ratio is 2.19 based on a stock price of $40.01, Book Value of $12,967 and Book Value per Share of 18.28. The current P/B Ratio is some 27% above the 10 year median P/B Ratio. This stock price testing suggests that the stock price is expensive. This testing is in US$ terms.

I get an historical median dividend yield of 3.17%. The current dividend yield is 3.45% based on a stock price of $40.01 and dividends of $1.38. The current yield is some 8.8% above the historical median yield. This stock price testing suggests that the stock price is reasonable and below the median. This testing is in US$ terms.

The 10 year median Price/Sales (Revenue) Ratio is 2.22. The current P/S Ratio is 2.44 based on 2018 Revenue estimate of $11,630M, Revenue per share of $16.40 and a stock price of $40.01. The current ratio is some 9.8% above the 10 year median. This stock price testing suggests that the stock price is reasonable but above the median. This testing is in US$ terms.

Please note that there is little difference in the testing outcome on whether I do the test in US$ or CDN$.

When I look at analysts' recommendations I find Buy (5), Hold (8) and Sell (1). The consensus recommendations would be a Hold. The 12 month stock price consensus is $45.71 US$ or $58.82 CDN$. This implies a total return of 18.04% with 14.58% from capital gain and 3.46% from dividends based on a current stock price of $51.34 CDN$.

Ivanka Thompson on Bangalore Weekly shows recent analysts ratings for this stock. Joseph Solitro at Motley Fool talks about why this stock soared in January 2018. David Scanlan in a Financial Post article talks about the sale of the company's financial data business to Blackstone Group. See what analysts are saying about this stock on Stock Chase. They have varying views.

Thomson Reuters Corp is a leader in the global information services industry. It provides information for businesses and professionals. The company allows market participants to connect, access content, and trade in a secure environment. Its web site is here Thomson Reuters Corp.

The last stock I wrote about was about was WSP Global Inc. (TSX-WSP, OTC- WSPOF)... learn more. The next stock I will write about will be Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more on Monday, April 30, 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 25, 2018

WSP Global Inc.

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. On a number of test this stock is showing as expensive. See my spreadsheet on WSP Global Inc.

I own this stock of WSP Global Inc. (TSX-WSP, OTC-WSPOF). In Sept 2011 I rationalized my portfolio. I sold stocks that did not make it into my core and bought stocks that could of the same type. In this case selling Stantec and buying Genivar. In October 2011 I wanted to sell Enerflex because it is not a company I bought but a distribution from Toromont. I bought more Genivar, now called WSP Global.

The company is doing well. It used to be an income trust. Income trust companies have had trouble paying the same dividends as Income Trust can afford to pay higher dividends than corporations. They can pay out more than the EPS. For this company the Dividend Payout Ratio for EPS is coming down. Hopefully in the future they can start to raise dividends again.

This company used to be an Income Trust. As Income Trust companies could afford to payout a higher rate than EPS because of the tax situation, they often had very good dividends. When I bought this stock in 2011, the dividend yield was still quite high at 6.07%. However to get their Dividend Payout Ratio for EPS into order they stopped rising their dividends. So my dividend yield is still 6.07%.

There was dividend growth until 2009 and that is why the 10 to 11 year growth in dividends is positive, but the 5 year growth is 0%. See chart below.

Their Dividend Payout Ratio for EPS has been steadily declining and the one for 2017 was 72% with 5 year coverage at 89%. The DPR for CFPS is still a bit on the high side with a rate of 47% and 5 year coverage at 42%.

The Total Return 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.

Years Div Gth Tot Ret Cap Gain Div
5 0.00% 30.90% 25.58% 5.32%
10 4.18% 12.88% 8.58% 4.30%
11-12 10.17% 22.77% 16.09% 6.68%


For me, I have a total return of 22.10% with 17.67% from capital gains and 4.43% from dividends. Currently I am happy with the 6% dividend yield and look forward to the company again rising their dividends.

The 5 year low, median and high median Price/Earnings per Share Ratios are 18.17, 21.36 and 24.55. The 10 year corresponding ratios are 15.10, 19.04 and 23.16. The 12 year corresponding ratios are 15.10, 19.04 and 23.16 and are the same as the 10 year ratios. The current P/E Ratio is 20.97 based on a stock price of $63.34 and 2018 EPS estimate of 3.02. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $44.14. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.096 and 1.32. The current P/GP Ratio is 1.43 based on a stock price of $63.34. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share of 1.53. The current P/B Ratio is 2.21 based on Book Value of $2.58M, Book Value per Share of $28.67 and a stock price of $63.34. The current ratio is some 44% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 4.96%. The current dividend yield is 2.37% based on dividends of $1.50 and a stock price of $63.34. The current dividend yield is some 52% lower than the historical one. This stock price testing suggests that the stock price is relatively expensive.

There are problems with the dividend yield test. First Income Trust companies pay much higher dividend yields than corporations. The other thing is that the dividends have not changed since 2009. I therefore do not feel that this is a good test for this company.

The 10 year median Price/Sales (Revenue) Ratio is 1.05. The current P/S Ratio is 1.09 based on 2018 Revenue estimate of $5,988M, Revenue per Share of $58.05 and a stock price of $63.34. The current ratio is some 3.5% higher than 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 (6) and Hold (4) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $63.36. This implies a total return of $2.40% with 0.03% from capital gains and 2.40% from dividends based on a current stock price of $63.34.

Rowena Monahan on Simply Wall Street expects this company to have good growth in the future. But Isabel Galloway also on Simply Wall Street see poor future growth. Vivian Park on Money Making Articles says that 75% of analysts are positive about this stock. See what analysts are saying about this stock on Stock Chase. They like the stock, but some think it is expensive.

WSP Global Inc. is a professional services firm, working with governments, businesses, architects & planners & providing solutions. It operates in different market sectors: property & buildings, transportation & infrastructure, industry & resources. Its web site is here WSP Global Inc.

The last stock I wrote about was about was Fortis Inc. (TSX-FTS, OTC-FRTSF)... learn more. The next stock I will write about will be Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more on Friday, April 27, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Income.... learn more on Thursday, April 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.

Monday, April 23, 2018

Fortis Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth utility. It is probably selling at a fair price. See my spreadsheet on Fortis Inc.

I own this stock of Fortis Inc. (TSX-FTS, OTC-FRTSF). I bought this stock as Newfoundland Light and Power Co. Ltd. shares in 1987. I bought more in 1995 and 1998. It was on Mike's site showing Dividend Paying Canadian Growth stocks. It was also on the Dividend Growth stock lists that I follow.

Did I notice anything on doing spreadsheet? I have done quite well over the longer term on this stock as has all shareholders. You can see from the chart below that the company has been pretty consistent when it comes to capital gains and dividends over the long term.

Dividends are good with low dividend growth. The current dividend is 4.00% with 5, 10 and historical median dividend yields at 3.34%, 3.38% and 3.64%. As you can see from the chart below, dividends have grown general around the 6% mark per year over the past 36 years.

The Dividend Payout Ratios for EPS for utilities is best around 70% and 80% ranges. If you look at 5 year averages over the long term they have been in the 60 and 70% ranges. It is the 5 year averages that are important. In 2017 the DPR for EPS was 70% and the 5 year coverage was 71%.

The Total Return is show below for years of 5 to 36. 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 has been fairly consistent in capital gains and dividends over a very long term of 36 years.

Years Div Gth Tot Ret Cap Gain Div
5 6.25% 9.79% 6.15% 3.64%
10 7.08% 8.23% 4.75% 3.48%
15 8.39% 12.94% 8.74% 4.20%
20 6.75% 11.53% 7.68% 3.85%
25 6.07% 13.06% 8.41% 4.65%
30 5.73% 12.74% 7.87% 4.87%
35 6.06% 13.96% 8.12% 5.84%
36 6.22% 13.59% 7.95% 5.64%


I should address the debt level of this company. Yes, it is high, but that is not untypical for this type of company. I look at a number of debt ratios. One is Long Term Debt/Market Cap Ratio. This is high, but nothing unusual for this company. The 10 year median ratio is 1.01. The current ratio is 1.07. When this ratio is over 1.00 it means that the long term debt is greater than the stock's market cap.

Yes, I hate it that calculating the Liquidity Ratio on this stock is more complicated than most stocks. The basic Liquidity Ratio is too low at 0.63. This means that current assets cannot cover current liabilities. What you need to do is add back in the current portion of long term debt and also the cash flow after dividends. This brings you to a 2017 ratio of 1.53. The 5 year median for this is 1.39. Not great but I give it a pass.

The Debt Ratios are better with a current ratio at 1.54 and 5 year median also of 1.54. The Leverage and Debt/Equity Ratios for 2017 are 2.86 and 1.86 respectively. The 5 year median ratios are 2.91 and 1.91. These are rather typical for this type of stock.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.69, 19.36 and 21.03. The corresponding 10 year ratios are 16.97, 18.61 and 20.50. The corresponding historical ratios are 13.19, 13.07 and 17.59. The current P/E Ratio 16.67 based on a current stock price of 42.50 and 2018 EPS estimate of $2.55. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $42.70. The 10 year low, median and high median Price/Graham Price Ratios are 0.99, 1.10 and 1.20. The current P/GP Ratio is 1.00 based on a stock price of $42.50. 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 1.41. The current P/B Ratio is 1.34 based on a stock price of $42.50, Book Value of $13,380M and Book Value per Share of $31.77. The current P/B Ratio is some 5.3% 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 3.64%. The current dividend yield is 4.00% based on dividends of $1.70 and a stock price of $42.50. The current dividend yield is some 9.9% above the historical median dividend yield. 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 is.1.66. The current P/S 1.96 based on a stock price of $42.50, 2018 Revenue estimate of $9,141M and Revenue per Share of $21.71. The current ratio is almost 18% higher than 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 (9) and Hold (3) recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $47.90. This implies a total return of 16.71% with 12.71% from capital gains and 4.00% from dividends.

Andrew Walker of Motley Fool says that the company expects to be able to raise dividends by 6% per year until 2022 because of expected cash flows. Bruce Howe on Simply Wall Street worries about debt to equity and that the stock is overpriced. DR Contributor Danvers Record says this company has a Piotroski F-Score of 6 where 8 or 9 says it has a strong balance sheet and 0-2 a weak one.. See what analysts are saying about this stock at Stock Chase. The stock is an interest rate sensitive stock and interest rates and rising. This might be a problem. Most feel the stock is safe.

Fortis Inc. is an electric and gas utility holding company. The company's regulated utilities serve customers across Canada and in the United States and the Caribbean. Its web site is here Fortis Inc.

The last stock I wrote about was about was SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF)... learn more. The next stock I will write about will be WSP Global Inc. (TSX-WSP, OTC- WSPOF)... learn more on Wednesday, April 25, 2018 around 5 pm. Tomorrow on my other blog I will write about Living off Dividends.... learn more on Tuesday, April 24, 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 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 divide 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.

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