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.
No comments:
Post a Comment