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.
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