Friday, November 30, 2018

Quarterhill Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Telecom. They seem to be changing direction so it is hard to know what the future holds. A lot of analysts are positive and there is insider buying. The company does have positive Revenue and CF. See my spreadsheet on Quarterhill Inc.

I do not own this stock of Quarterhill Inc. (TSX-QTRH, NASDAQ-QTRH), but I used to. I am still following stock because I once owned it. I held it from 2000 to 2006 and basically lost all my investment.

When I was updating my spreadsheet, I noticed this company has very good debt ratios. However, because of the big drop in the stock price the Intangibles and Goodwill/Market Cap Ratio is over 1.00 at 1.10. There is also a lot of insider buying in the past year. The Net Insider Buying (NIB) is 0.06% for past 12 months, which is lower than last year when it was 0.11%. This is a percentage of the market cap and of course, the market cap has fallen with the stock price. The stock price is down by 40% in 2018.

One thing that is quite good is the cash flow. They do have positive cash flow over the past 5 years and this has been growing with Cash Flow up by 8.92% per year and CFPS up by 9.435 per year over the past 5 years.

They started to pay dividends in 2009 some 8 years ago. Dividends are paid in CDN$ even though the reporting is in US$. Dividends were increasing until 2016 and in 2017 they were cut over 76%. They cannot afford their current dividend so they certainly cannot grow them. The company is expected to have an EPS loss this year and basically have no EPS in 2019.

Dividends needed to be cut because the company could not afford them. The Dividend Payout Ratios for 2016 was 172% with 5 year coverage 1907%. The DPR improved in 2017 after the cut with DPR for EPS at 44% and 5 year coverage at 284%. Their DPR for CFPS was acceptable in 2017 at 8.5% with 5 year coverage at 34%. However, most years in the past the DPR for CFPS was above 40%.

The company has so little debt that the Long Term Debt/Market Cap Ratio is 0%. The other debt ratios are really good, with the Liquidity Ratio for 2017 at 3.32 and the Debt Ratio at 6.23. What I look for is for these ratios to be 1.50 or better, so these are really good. The Leverage and Debt/Equity Ratios for 2017 are 1.19 and 0.19. Since these ratios are under 2.00 and 1.00 respectively, they are very good also.

The Total Return per year is show below for years of 5 to 19 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 charts below.

As you can see from this chart, shareholders have not done well in the long term in this stock.

Years Div Gth Tot Ret Cap Gain Div
5 -16.06% -8.04% -12.53% 4.49%
8-10 9.05% 1.92% -2.07% 3.99%
15 5.55% 2.51% 3.04%
19 4.66% 2.32% 2.34%


The Total Return per year is show below for years of 5 to 16 in US$. The US shareholders have done even worse than the CDN ones.

Years Div Gth Tot Ret Cap Gain Div
5 -19.81% -12.63% -16.53% 3.90%
8-10 6.65% 0.43% -3.58% 4.02%
15 6.10% 2.78% 3.33%
16 0.44% -2.09% 2.53%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.75. 21.68 and 31.61 CDN$. The corresponding 10 year ratios are 0.22, -0.81 and -2.35 CDN$. The corresponding historical ratios are -4.29, -11.17 and -19.44 CDN$. The reason they make no sense is they were mostly EPS losses for the years before 2013.

We cannot do current testing with the P/E Ratio as analysts expect an earning loss in 2018 with a negative 6.57 P/E Ratio CDN$. The company is expected to earn a minimum amount in 2019 so the P/E Ratio is quite high at 105 CDN$. The P/E Ratio for 2020 is expected to be a more reasonable 9.55 CDN$.

I get a Graham Price of 0.87 CDN$. The 10 year low, median, and high median Price/Graham Price Ratios are 0.68, 1.06 and 1.45 in CDN$. The current P/GP Ratio is 1.60 based on a stock price of $1.39 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.52 US$. The current P/B Ratio is 0.57 based on Book Value of $227M US$, Book Value per Share of $1.92 US$ and a stock price of $1.09 US$. The current ratio is some 63% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 2.29% CDN$. The current dividend yield is 3.60% based on dividends of $0.05 CDN$ and a stock price of $1.39 CDN$. The current yield is some 57% above the historical median. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.70 US$. The current P/S Ratio is 1.69 based on Revenue estimate for 2018 of $77M US$, Revenue per Share of $0.65 US$ and a stock price of 1.09 US$. The current P/S Ratio is some 64% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Cash Flow per Share Ratio is 18.23 US$. The Current P/CF Ratio is 4.14 US$ based on 2018 CFPS $0.26 US$ and a stock price of $1.09 US$. The current P/CF Ratio is some 76% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

In a lot of ways testing the stock price is rather silly by my normal methods. Problems are lack of positive earnings, rapidly declining dividends, and book value. The stock has some positive growth in both Revenue and Cash Flow, so this is where testing probably really counts. Both the P/S Ratio and P/CF Ratio testing is show that the stock is cheap. Note: that testing in CDN$ or US$ will basically show the same results.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (1) recommendations. The consensus would be a Buy. The 12 months stock price consensus is $1.95 US$ (or $2.58 CDN$. This implies a total return of 89.20% CDN$, with 85.60% CDN$ from capital gains and $3.60% CDN$ from dividends.

Gary James on Marea Informative compares this company and Micro Imaging Tech, a small US stock. Jenifer Prater on Simply Wall Street says this company is not really a dividend stock. Will Ashworth of Motley Fool thinks the company is a microcap worth watching. See what analysts are saying on Stock Chase. They talk about the company having no debt and new management changing the company’s strategy.

Quarterhill Inc is a diversified investment holding company focused on acquiring technology companies in the Industrial Internet of Things segment. It targets companies which capture, analyze, and interpret data. Its web site is here Quarterhill Inc.

The last stock I wrote about was about was Finning International Inc. (TSX-FTT, OTC-FINGF) ... learn more. The next stock I will write about will be Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF) ... learn more on December 3, 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, November 28, 2018

Finning International Inc

Sound bite for Twitter and StockTwits is: Dividend growth industrial. The stock price is a good one. Stock has good debt ratios. There is insider selling but not by the CEO, CFO or Chairman. In fast the CEO and CFO have increased their shares. See my spreadsheet on Finning International Inc .

I do not own this stock of Finning International Inc. (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought.

When I was updating my spreadsheet, I noticed that this company has some very good debt ratios. The Liquidity Ratio for 2017 is 2.28 with 5 year median at 2.53. The Debt Ratio is 1.63 with 5 year median of also 1.63. This company has had a hard time after 2008 bear market and recession. Dividend growth has slowed since 2012. There is lots of insider selling with NIS at 0.09% of Market Cap. Generally, this is at 0.1 to 0.2%.

I have 30 years of data on dividends. So, they have a long history of paying dividends, but they did not increase dividends every year. They did increase dividends every year since 2002 except for 2009 and 2016. After 2009 the dividend increases were lower. You can see that in the table below. The last increase was in 2018 and it was for 5.3%. This is higher than the last 2 years with 2016 at zero, and 2017 at 4.1%.

The dividend yields are in the moderate range (2 to 3%). The current dividend is 2.97%, with the 5, and 10 historical dividend yields at 2.65%, 2.44%. The historical median yield is low at just 1.67%. Dividend yields were in the low range until 2009.

They can afford their dividends. The 2017 Dividend Payout Ratio for EPS is 57% with 5 year coverage at 77%. The DPR for CFPS is good at 16% for 2017 and 5 year coverage at 15%.

Debt ratios are very good except for the Leverage and Debt/Equity Ratios which are normal for this sort of company. The Long Term Debt/Market Cap Ratio is 0.24. As mentions above both the Liquidity and Debt Ratios are very good. The Liquidity Ratio for 2017 is 2.28 with 5 year median at 2.53. The Debt Ratio for 2017 is 1.63 with 5 year median also at 1.63. The Leverage and Debt/Equity Ratios are 2.59 and 1.59 for 2017 with 5 year medians at 2.60 and 1.60.

The Total Return per year is show below for years of 5 to 30. 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.

Shareholders did well until the 2008 bear market and recession. This company, as have others, have had a hard time since then. The last 5 year growth is just under what I consider the start of good total return at 8%.

Years Div. Gth Tot Ret Cap Gain Div.
5 6.26% 7.79% 5.24% 2.55%
10 7.54% 2.95% 1.02% 1.93%
15 11.28% 8.46% 6.25% 2.22%
20 10.56% 8.42% 6.50% 1.92%
25 12.41% 12.28% 9.81% 2.47%
30 8.76% 11.68% 9.22% 2.46%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.66, 15.54 and 18.42. The corresponding 10 year ratios are 12.47, 15.85 and 19.23. The corresponding historical ratios are 12.39. 16.00 and 19.76. These P/E Ratios are pretty consistent. The current P/E Ratio is 16.65 based on a stock price of $26.98 and 2018 EPS estimate of $1.62. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Since we are near the end of the year, I like to look at 2019 also. The 2019 EPS estimate for EPS is 2.20 with a P/E Ratio of 12.26 and stock price of $26.98. On this basis the stock price is reasonable and below the median.

I get a Graham Price of $21.40. The 10 year low median and high median Price/Graham Price Ratios are 1.15, 1.50 and 1.80. The current P/GP Ratio is 1.26 based on a stock price of $26.98. This the 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 Ratio of 2.34. The current P/B Ratio is 2.15 based on Book Value per Share of $2,114, Book Value per Share of $12.57 and a stock price of $26.98. The current ratio is some 8.2% below the 10 year median ratio. This the stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 1.67%. The current dividend yield is 2.97% based on dividends of $0.80 and a stock price of $26.98. The current dividend yield is 78% above the historical median. This the stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.67. The current P/S Ratio is 0.64 based on 2018 Revenue estimate of $7,053, Revenue per Share of $41.91 and a stock price of $26.98. the current P/S Ratio is 3.3% below the 10 year median ratio. This the stock price testing suggests that the stock price is reasonable and below the median.

Most of my testing suggests that the stock price is relatively reasonable and below the median. This is a good result. The dividend yield, on of my favourites is show stock as cheap. However, the dividend yield has not been at the historical median for some years with 5 and 10 year median yields at 2.65% and 2.44% and therefore current yield being 11.8% and 21.3% higher. It is the historical and 10 year median yield testing that shows the stock as relatively cheap.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (7) and Underperform (1) recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $36.44. This implies a total return of 38.03% with 2.97% from dividends and 35.06% from capital gains.

Shawn Clark on Simply Wall Street talks about the CEO compensation. Lisa Kingston on Marea Information talks about some recent analysts calls. Staff Writer on Canton Caller talks about some of the ratios for this stock. Ambrose O'Callaghan on Motley Fool thinks this stock is in oversold territory. See what analysts are saying about this stock on Stock Chase. They think the company will continue to do better in the future.

Finning International Inc is engaged in the sale of equipment, power & energy systems, rental of equipment & providing product support including sales of parts & servicing of equipment in three continents including Canada, South America, and UK & Ireland. Its web site is here Finning International Inc.

The last stock I wrote about was about was Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG) ... learn more. The next stock I will write about will be Quarterhill Inc. (TSX-QTRH, NASDAQ-QTRH) ... learn more on Friday, November 30, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 - Kanwal Sarai.... learn more on Thursday, November 29, 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, November 26, 2018

Crescent Point Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Resource stock. This stock is currently cheap. My preference is always for dividend growth stock and this, of course, is not one of those. I following resource stocks because they are a large part of the TSX. However, I generally have around only1% of resource stocks in my portfolio. See my spreadsheet on Crescent Point Energy Corp.

I do not own this stock of Crescent Point Energy Corp (TSX-CPG, NYSE-CPG). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.

When I was updating my spreadsheet, I noticed that the Liquidity Ratio was below 1.00 and the company depends on cash flow to cover current liabilities. The stock options granted in 2017 increased outstanding shares was by 0.74%. This is rather high. In most companies the increase is at 0.50% or less. Also, there is insider buying.

This company was an income trust between 2003 and 2009. This accounts for the high dividend yield this stock used to have. The historical dividend yield is 8.57%, but the one from 2009 is lower and is 6.96%. Income Trust companies had high yields. The range of yields on this stock ranges from 2.3% to 16.4% which is a big range. The dividend yields are often high with a current yield of 8.26% with 5 and 10 year median yields at 7.23% and 7.09%.

Since this was an income trust company in the past, the only way for the dividends to go was down. The company is also currently having a problem earnings, which have been negative for the past 3 years and is expected not to be positive until next year. They started to cut the dividends in 2015 and dividends are down some 87% since then.

The good news is that dividends are covered by cash flow. The Dividend Payout Ratio for CFPS is 11.6% in 2017 with a 5 year coverage of 43.1%. It is best when this ratio is under 40%, and the DPR for CFPS has been decreasing for a number of years. They cannot cover the dividends by EPS as the EPS has been negative for the past 3 years and is expected to be negative for 2018. However, analysts think that the DPR for EPS would be around 41% in 2019, and decrease from there.

The Long Term Debt/Market Cap Ratio has deteriorated with the falling stock market price for this stock. Long Term Debt was increasing until 2017, but then the ratio as good at 0.77. This ratio has since increased to a very high one of 1.71 because of the stock price drop in 2018 of almost 40%.

The Liquidity Ratios have always been low and the company depends on cash flow to cover current expenses. The Liquidity Ratio for 2017 was 0.59 with the 5 year median also being at 0.59. When this ratio is below 1.00 it means that the current assets cannot cover the current liabilities. If you add in cash flow after dividends the ratio is 2.35 with 5 year median of 1.99.

The Debt Ratio is good and has always been good. The Debt Ratio for 2017 is 2.23 with 5 year median at 2.46. The Leverage and Debt/Equity Ratios are good with the ones for 2017 at 1.75 and 0.75 with 5 year medians at 1.56 and 0.56.

The Total Return per year is show below for years of 5 to 17. 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 from the chart below that very long term shareholders have done fine, but most of the return was in dividends. However, in the future the dividend part of the total return will not be as good in the future as in the past. This used to be an income trust company and income trusts have much higher dividend yields than corporation.

Years Div. Gth Tot Ret Cap Gain Div.
5 -33.46% -16.97% -23.93% 6.97%
10 -17.28% 4.24% -9.08% 13.32%
15 -4.44% 18.99% -0.74% 19.73%
17 37.86% 6.36% 31.50%


The 5 year low, median, and high median Price/Earnings per Share Ratios are negative at 6.95, 9.89 and 12.71. The corresponding 10 year ratios are positive at 11.60, 11.54 and 11.48. The corresponding historical ratios are 9.47, 14.43 and 11.81. The problem with P/E Ratio is that a lot are negative. The current P/E Ratio is a negative 15.03. The P/E Ratio for 2019 is expected to be 4.95. This is based on stock price of $4.36 and 2019 EPS estimate of $0.88. The P/E Ratio for 2019 is very low and would suggest that the stock price is relatively cheap.

I get a Graham Price of $17.97. This calculation can be affected by negative EPS also. The 10 year low, median, and high median Price/Graham Price Ratios are 1.48, 1.82 and 2.25. The current P/GP Ratio is 0.24. The stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.68. The current P/B Ratio is 0.27 based on Book Value of $8,899M, Book Value per Share of $16.31 and a stock price of $4.36. The stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 8.57%. However, since this company used to be an income trust until 2009, we should use the median dividend yield since then which is 6.96%. The current dividend yield is 8.26% based on dividends of $0.36 and a stock price of $4.36. The current yield is some 19% above the median yield since 2009. This stock price testing suggests that the stock price is relatively reasonable and below the median and almost relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.20. The current P/S Ratio is 0.62 based on 2018 Revenue estimate of $3, 829M, Revenue per Share of 7.02 and a stock price of $4.36. The current ratio is some 85% below the 10 year ratio. The stock price testing suggests that the stock price is relatively cheap.

You have to wonder what help the P/E Ratio or Graham Price is because of all the EPS losses. However, P/B Ratio, Dividend Yield and P/S Ratio testing is all pointing to a cheap price. This is hardly surprising as the stock has fallen a lot since hitting highs in 2010.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (8) and Hold (9). The consensus would be a Buy. The 12 month stock price consensus is $11.58. This implies a total return of 173.85% with 165.60% from capital gains and 8.26% from dividends.

Alan Tambosso on BOE Report says this company has engaged Sayer Energy Advisors to assist in the sale of its Duvernay oil rights. Cation Capital Inc reported on Financial Post the need for new leadership for this company. Richard Addington on Financial Mercury says analysts at Raymond James rated this stock at Market Perform. (See this about halfway into the article.) Kris Knutson on Motley Fool likes this stock. See what analysts are saying about this stock on Stock Chase. Some analysts think it is cheap and some do not care for this stock.

Crescent Point Energy Corp is in the business of acquiring, developing, and holding interests in petroleum and natural gas properties and other related assets. Its web site is here Crescent Point Energy Corp.

The last stock I wrote about was about was Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more. The next stock I will write about will be Finning International Inc. (TSX-FTT, OTC-FINGF) ... learn more on Wednesday, November 28, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 - Peter Ashton.... learn more on Tuesday, November 27, 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, November 23, 2018

Innergex Renewable Energy

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Sales and cash flow are important and necessary for making a profit. The company has sales and cash flow, but not much in the way of profit. Its debt ratios are not to my liking either. See my spreadsheet on Innergex Renewable Energy.

I do not own this stock of Innergex Renewable Energy (TSX-INE, OTC-INGXF) but I used to. In 2006 I bought Innergex Power on a buy rating and favorable report from TD although it has only been going from 2003. In 2008 I sold Innergex as I did not think that it is a stock I want to hold as dividends increased less than the rate of inflation.

When I was updating my spreadsheet, I noticed debt ratios were not good. The Long Term Debt/Market Cap Ratio for 2017 is 1.95 moving to a current 1.87. Any time this ratio is over 1.00 it is a problem. It means that the company’s debt is above the market value of the stock. The Liquidity Ratio is 0.90. This means that the current assets cannot cover the current liabilities and with cash flow after dividends, the ratio is still low at 1.39. The preferred ratio is 1.50.

The other debt ratios are no better with the Debt Ratio low at just 1.12 in 2017 moving to a current one of 1.21. It is preferred to have this ratio at 1.50 also for safety sake. The Leverage and Debt/Equity Ratios are higher than what would be preferred. In 2017 they were 9.31 and 8.31.

This stock used to be an income trust until 2010. As an income trust the dividend yields would have been higher than a corporation. As an income trust median dividend yield was 7.75% and since 2010 median dividend yield has been 5.51%. This is not a big of a difference as was the case on other income trusts that became corporations.

The dividend yields are high with the current dividend yield at 4.72% and 5, 10 and historical medians at 5.56%, 5.74% and 6.08%. The median dividend yield since 2010 is 5.57%. Dividend growth has been low with the 5 year dividend growth at just 2.46% per year. Part of the reason dividend growth is low as there were no dividend increases in 2012 and 2013. But the increases that occurred with low in 2% and 3% ranges with the last increase in 2018 at 3%.

The Dividend Payout Ratio for 2017 is 298%. I cannot calculate 5 year coverage as there has been too many years of earning losses. The DPR for 2018 is expected to be higher at 450%. The DPR for cash flow is better with the 2017 DPR for CFPS at 24% and 5 year coverage at 36%. The DPR for CFPS is expected to rise to 49% in 2018 and this is too higher. The preferred DPR for CFPS is 40% or less.

The Total Return per year is show below for years of 5 to 14. 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.

There is not much in dividend growth but shareholders have had good total returns.

Years Div. Gth Tot Ret Cap Gain Div.
5 2.46% 12.06% 6.83% 5.23%
10 -0.41% 11.97% 5.87% 6.10%
14 0.34% 10.25% 4.03% 6.22%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.53, 22.20 and 24.86. The corresponding 10 year ratios are -15.48, -16.81 and -18.13. The historical ratios are 9.78, 10.73 and 11.69. We are talking about a Utility Stock here, so the ones that make some sense are the historical ratios. The current P/E Ratio is 96.00 based on a stock price of $14.40 and 2018 EPS estimate of $0.15. This stock price testing suggests that the stock price is relatively expensive.

Since we are getting near to 2019, it is of some interest to look at P/E Ratio for 2019. That P/E Ratio is 38.92 based on a current stock price of $14.40 and 2019 EPS of $0.37. This ratio is still high and this stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $4.57. The 10 year low, median, and high median Price/Graham Price Ratios are 1.40, 1.51 and 1.62. These are high ratios for a utility. The current P/GP Ratio is 3.15 based on a stock price of $14.40. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.15. The current P/B Ratio is 2.32 based on Book Value of $829M, Book Value per Share $6.20 and a stock price of $14.40. The current ratio is some 8% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 6.08% and a median dividend yield since 2010 of 5.57%. The current dividend yield is 4.72% based on dividends of $0.68 and a stock price of $14.40. The current yield is some 15% below the median yield since 2010. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 4.78. The current P/S Ratio is 3.48 based on 2018 Revenue estimate of $554, Revenue per Share of $4.14 and a stock price of $14.40. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The stock price testing using P/E Ratio is probably not the best one for this, but the company does not seem to know how to make a profit. This is a problem for stock price testing. Most of my testing involves EPS except for the dividend yield test and P/S Ratio test. These are the only tests were the stock price is showing as reasonable.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3), Hold (5) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $15.19. This implies a total return of 10.21% with 5.49% from capital gains and 4.72% from dividends based on a current price of $14.40.

LNR Staff on Lake Norman Review likes this company’s growing cash flow. I wished they could grow EPS too. Renee Jackson on Marea Informative talks about recent price target downgrades. . Ambrose O'Callaghan on Motley Fool likes this for its growing revenue. Again, I just wished it could grow EPS too. See what analysts are saying about this stock on Stock Chase.

Innergex Renewable Energy Inc develops, owns, and operates renewable power generating facilities, essentially focused on the hydroelectric, wind power sectors and solar photovoltaic sectors. Its web site is here Innergex Renewable Energy.

The last stock I wrote about was about was PFB Corp. (TSX-PFB, OTC-PFBOF) ... learn more. The next stock I will write about will be Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG) ... learn more on Monday, November 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.

Wednesday, November 21, 2018

PFB Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Price seems to be reasonable and below the median. Insiders are buying. Business seems to be picking up. The company has great debt ratios. See my spreadsheet on PFB Corp.

I do not own this stock of PFB Corp (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.

When I was updating my spreadsheet, I noticed it has done well over the past 5 year, but the past 10 years for earnings and cash flow. Earnings are volatile so looking at 5 year running average is better. The EPS for the 5 year running average to 2017 compared to the 5 year running average to 6 years ago (2012) is up by 15.50% per year. If you compare the 5 year running average to 2017 to the one 10 years ago (2007), EPS is flat. I also noticed over the stock price since mid-2015 has gone up and down but has gone nowhere.

There is insider buying this year. There was no insider buying last year, but there was in 2016.

The dividend yield on this stock are moderate with low growth in dividends. The current dividend yield is 3.53% with 5, 10 and historical median yields at 3.29%,3.94% and 2.95%. The dividend growth is low, especially for the past 10 years at just 1.91%. the growth for the past 5 years is higher at 3.86%. The last dividend increase was at the end of last year and it was for 14.3%. Note that there were no dividend increases for years of 2005 to 2015 inclusive.

The current Dividend Payout Ratio for EPS is 85% with 5 year coverage at 77%. However, the DPR was over 100% as recently as 2014. It has been a long slow recovery for stocks since the 2008 bear market and following recession. They have a better track records for covering dividends with CFPS under 40% in most years. The DPR for CFPS for 2017 is 27% with 5 year coverage at 37%.

They have a history of good debt ratios. The Long Term Debt/Market Cap Ratio is low at just 0.14. The Liquidity Ratio is good in 2017 at 2.30 with 5 year median at 2.60. The Debt Ratio is good at 2.82 with 5 year median at 2.61. The Leverage and Debt/Equity Ratios for 2017 are 1.55 and 0.55 with 5 year medians of 1.51 and 0.51. The company has a strong balance sheet and this is important for small companies and it gets them through the bad times.

The Total Return per year is show below for years of 5 to 23. 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.

Exactly 10 years ago, the company was just coming down after hitting a stock price high the year before. Stock price does not seem that high 10 years ago relatively with a P/E Ratio of 15.32 and Yield of 2.61 (11% below the historical median).

Years Div. Gth Tot Ret Cap Gain Div.
5 3.86% 19.98% 11.65% 8.33%
10 1.91% 3.68% -0.09% 3.76%
15 4.49% 8.18% 3.68% 4.50%
20 5.47% 7.67% 2.15% 5.51%
23 13.78% 6.09% 7.69%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.13, 13.06 and 15.00. The Corresponding 10 year P/E Ratios are 15.06, 17.31 and 19.55. The corresponding historical P/E Ratios are 9.59, 12.51 and 15.00. The current P/E Ratio is 10.79 based on a stock price of $9.06 and 2018 EPS estimate of $0.84. This stock price testing suggests that the stock price is relatively cheap to relatively reasonable and below the median.

I get a Graham Price of $12.34. The 10 year low, median, and high median Price/Graham Price Ratios are 0.70, 0.88 and 0.99. The current P/GP Ratios is 0.73 based on a stock price of $9.06. 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 Ratio of 0.93. The current P/B Ratio is 1.13 based on a stock price of $9.06, Book Value of $54M and Book Value per Share of $8.05. The current P/B Ratio is some 21% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.95%. The current dividend yield is 3.53% based on a stock price of $9.06 and Dividends of $0.32. The current dividend yield is 19.7% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and below the median and getting near cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.51. The current P/S Ratio is 0.50 based on 2018 Revenue estimate of $122M, Revenue per Share of $18.17 and a stock price of $9.06. the current ratio is 1.4% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and around the median.

As in many cases, my stock price testing of different ratios puts up different results. My favourite tests, when there are no problems with the data, is P/S Ratio and Dividend yield. This testing would suggest that the stock price is reasonable and below the median. The P/GP Ratio also says that the stock price is reasonable and below the median. The P/B Ratio testing shows the stock price expensive, but the P/B Ratio is quite low, but then the P/B Ratio seems to have been low since 2008.

When I look at analysts’ recommendations, I find Buy (3) recommendations. The consensus would be a buy. The 12 month stock price consensus is $12.08. This implies a total return of 36.87% with 33.33% from capital gains and 3.53% from dividends based on a current price of $9.06.

Yahoo Finance reprints an Simply Wall Street article saying the Free cash Flow is unattractive. Ruchi Gupta on What’s on Thorold before third quarter reporting said analysts expected $ .30 EPS. However, company beat this number with $0.48 EPS for that quarter.

PFB Corp through its wholly-owned subsidiaries is engaged in manufacturing insulating building products made from expanded polystyrene materials and marketing those products in North America. Its web site is here PFB Corp.

The last stock I wrote about was about was IBI Group Inc. (TSX-IBG, OTC-IBIBF) ... learn more. The next stock I will write about will be Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more on Friday, November 23, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Landon Whaley.... learn more on Thursday, November 22, 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, November 19, 2018

IBI Group Inc

Sound bite for Twitter and StockTwits is: Recovering Industrial Stock. The stock price is probably cheap. They are making a recovery. The Debt Ratio is still low. There are always risks in investing in recovering companies. There is insider buying. See my spreadsheet on IBI Group Inc.

I do not own this stock of IBI Group Inc (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.

When I was updating my spreadsheet, I noticed that the debt ratio is still quite low at just 1.13, but they have been making progress. The Debt Ratio was below 1.00 between 2013 and 2014. When this ratio is below 1.00 it means that assets cannot cover liabilities. A good ratio is 1.50 and above. Insiders are still buying.

They started to pay dividends after listing on the stock market in 2004. However, dividends were cancelled in 2013 after earning losses in 2012. They had been paying dividends monthly and but increases were irregular. They have had positive earnings from 2015, but have not talked about resuming dividends. It would be a big positive when and if they do.

The Long Term Debt/Market Cap Ratio for 2017 is 0.25 but it rises to 0.53 in the third quarter. This mostly has to do with the drop in stock price. In any event a ratio is 0.53 is a good one because any ratio under 1.00 is good. The Liquidity Ratio for 2017 is 2.24 with a current one at 2.26 and 5 year median at 2.00. This is an important ratio and this company has a good ratio here as a good ratio is 1.50 and above.

The Debt Ratio is weak at just 1.13, rising to 1.16 current. The 5 year median is 0.94 because of past problems with seem to have been fixed. A good ratio is 1.50 and above. The Leverage and Debt/Equity Ratios for 2017 are very high and this is a problem. However, they have been coming lower and better over the past few years as the company recovers. The ones for 2017 are 8.84 and 7.84 with the current ones at 7.10 and 6.10. They probably need to be less than 2.50 and 1.50 respectively to be reasonable.

The Total Return per year is show below for years of 5 to 13. 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.

Without dividends, people having this stock since inception, 13 years ago, would not have made any money. The stock fell on hard times between 2012 and 2014 inclusive and had earnings losses. This is the reason for low to nil returns until recently.

Years Div. Gth Tot Ret Cap Gain Div.
5 0.00% 5.22% 4.79% 0.43%
10 0.00% -6.13% -10.22% 4.08%
13 0.00% 7.26% -2.45% 9.71%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 3.24, 4.84 and 6.44. The corresponding 10 year ratios are 8.57, 11.86 and 15.14. The corresponding historical ratios are 6.73, 10.04 and 13.88. The current P/E Ratio is 9.20 based on current stock price of $4.51 and 2018 EPS $0.49. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $2.99. The 10 year low, median, and high median Price/Graham Price Ratios are 0.75, 1.03 and 1.34. The current P/GP Ratio is 1.51 based on a stock price of $4.51. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 5.57 based on Book Value of $25.27, Book Value per Share of $0.81 and a stock price of $4.51. This stock price testing suggests that the stock price is relatively expensive.

I cannot do a dividend yield test as this stock has cancelled its dividends.

The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.39 based on 2018 Revenue estimate of $362, Revenue per Share of $11.59 and a stock price of $4.51. The current ratio is some 26% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

The P/S Ratios may be the best one. This ratio test is mostly always a good one. You need sales in order to make a profit and you need growing sales to have growing profits. The third quarterly results support increasing sales and earnings. They had recent trouble with earning losses so the Book Value is low. However, it has improved over the past two years. This is a good sign. The Graham Price considers both Book Value and Earnings and because book value is so low is why the Graham Price is low.

I do not always like the P/E Ratio test, but a P/E Ratio of 9.20 is a low one. These ratios show a lot a volatility and it is because of both earnings and price volatility over the past 5, 10 and historical periods. The most recent ones can be disregarded as they are extremely low due to earning losses.

When I look at analysts’ recommendations, I find Buy (4) recommendations. The 12 month stock price is $7.63. This implies a total return of 69.18% all of capital gains.

Wade Goff of Simply Wall Street thinks this stock is fairly value and therefore it is not the time to buy. Yahoo Finance reposts an Simply Wall Street article about high Beta of this company. Alexis Guardo on Simply Wall Street say the company’s high ROE is not so impressive when you consider it also high debt to equity ratio. See what analysts are saying on Stock Chase. They mostly like this company.

IBI Group Inc is a Canada based engineering services provider. The company plans, designs, implements, as well as offer other consulting services and software development for its intelligence, buildings, and infrastructure business streams. Its web site is here IBI Group Inc.

The last stock I wrote about was about was HLS Therapeutics Inc. (TSX-HLS, OTC-HLTRF) ... learn more. The next stock I will write about will be PFB Corp. (TSX-PFB, OTC-PFBOF) ... learn more on Wednesday, November 21, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 - Panel.... learn more on Tuesday, November 20, 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, November 16, 2018

HLS Therapeutics Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Healthcare. Fast growing small cap stocks are not easy to evaluate. It has no earnings, but losses are getting smaller. On the other hand, analysts do not expect the company will do as well in 2018 as it did in 2017. The second quarter supports this. I plan to hold my shares, but then I have less than 100 shares. The stock price might be reasonable. Analysts expect the stock price to go up some 30% over the next 12 months. See my spreadsheet on HLS Therapeutics Inc.

I own this stock of HLS Therapeutics Inc. (TSXV-HLS, OTC- HLTRF). I got this stock because it did a reverse takeover of Automodular Corp (TSXV-AM, OTC-AMZKF) on March 12, 2018. There was a plan of arrangement where by Automodular shareholders got 0.165834 HLS common shares and one HLS preferred share. The HLS preferred shares were a form of contingent value right allowing AMD shareholders to have an equity stake linked to the outcome of litigation that had been ongoing for several years between AMD and General Motors.

When I was updating my spreadsheet, I noticed there is only 2 to 3 years of financial data on this company, so it is not much to go on. Some sites are showing old Automodular Corp financial statements, but this is wrong. The old Automodular statements have nothing to do with what has or will happen with HLS Therapeutics. Also, even though the company is reporting in US$ the analysts estimates are in CDN$.

They decided to start paying dividends this year with a first dividend paying in December. Currently the yield is low with a yield 1.29%. The dividend is paid in CDN$ even though the company is reporting in US$. It has hard to know what the company will do in the future concerning dividends. They are currently not making any profit, but they do have cash flow.

The short answer to if they can afford their dividends is no because they have yet to earn a profit. Analysts expect them to earn one in 2020. In 2020 they are expected to earn $0.10 and the dividend is $0.20. However, for 2018, the Dividend Payout Ratio for CFPS is just 3.58%.

All the debt ratios are fine for this company. The Long Term Debt/Market Cap is fine at 0.82 with it dropping to a current ratio 0.45. The Liquidity Ratio for 2017 is good at 1.88 and increasing to a current ratio of 2.30. The Debt Ratio for 2017 is 1.88 and increasing to a current one of 2.01. The Leverage and Debt/Equity Ratios for 2017 are 2.13 and 1.13 and decreasing to current ones of 1.99 and 0.99.

The was not much change in stock price until this year. In 2018 so far, the stock is up by 29% in CDN$ and by 53% in US$. The initial private placement of this in August 2015 was for $10 a shares US$.

The 5 year low, median, and high median Price/Earnings per Share Ratios are not available because this company has had no earnings.

I get a Graham Price of $4.48 CDN$. This is the best I can do. The Price/Graham Price Ratio is 3.55 based on a stock price of $15.50 CDN$. There is nothing to compare this too, but a P/GP Ratio of 3.46 is a high one.

I get a 3 year median Price/Book Value per Share Ratio of 1.23 US$. The current P/B Ratio is 1.74 US$ based on Book Value of $184.5M US$, Book Value per Share of $6.74 US$ and a stock price of $11.70 US$. The current yield is some 41% higher than the 3 year ratio. This stock price testing would suggest that the stock price is relatively expensive.

I cannot do any testing using the dividend yield. They have only started to pay dividends this year and only one quarterly dividend. The dividends are paid in CDN$. The current yield is low at 1.29% based on dividends of $0.20 CDN$ and a stock price of $15.50 CDN$.

The 3 year median Price/Sales (Revenue) Ratio is 3.07 CDN$. It would seem that analysts expect revenues to be lower in 2018 than in 2017. The second quarterly statements support this. The current P/S Ratio is 5.05 based on 2018 Revenue estimates of $82.4M, Revenue per Share of $3.01 and a stock price of $15.50. The current P/S Ratio is some 68% higher than the 3 year ratio. This stock price testing would suggest that the stock price is relatively expensive.

A good P/B Ratio is considered to be 1.50. So, the 3 year ratio of 1.23 US$ is low and the current P/B Ratio of $1.74 is only 12% above the good P/B Ratio of 1.50. So perhaps by this reckoning the stock price may not be expensive. The P/S Ratio tells us something different. The current P/S Ratio is 3.07 CDN$ where a good ratio for a small cap is 1.00. The current P/S Ratio is therefore very high at 5.15 CDN$. On the other had the Revenue to 2017 has increased by 94% per year in US$ and 85% in CDN$.

When I look at analysts’ recommendations, I find Buy (2) recommendations. It is surprise for this small company to have 2 analysts following it. The 12 month target stock price is $20.00. This implies a total return of 30.32% with 29.03% from capital gains and 1.29% from Dividends.

Automotive put out a press release on Market Wired about their arrangement with HLS Therapeutics. Hugh Holland on What’s on Thorold says analysts expect a lower EPS loss of $0.01 for the third quarter. Brandon Baker on Bharata Press says the stock reached a recent high of $16.10. Bernadette Hatcher on Simply Wall Street asks if you should buy this stock for its dividend.

HLS Therapeutics Inc is a specialty pharmaceutical company focused on the acquisition and commercialization of branded pharmaceutical products in the North American markets. Its web site is here HLS Therapeutics Inc.

The last stock I wrote about was about was Johnson and Johnson (NYSE-JNJ) ... learn more. The next stock I will write about will be IBI Group Inc. (TSX-IBG, OTC-IBIBF) ... learn more on Monday, November 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.

Wednesday, November 14, 2018

Johnson and Johnson

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. On many tests this stock seems to have a high price and it is rather close to its 12 month analysts’ average target price. You have to wonder if it is at the top of its range and is overpriced. This might point to now is not the time to buy this stock. See my spreadsheet on Johnson and Johnson.

I do not own this stock Johnson and Johnson (NYSE-JNJ). As Canadians, we are told we should be buying US stocks for our portfolio. It is often recommended that we have at least 25% of our portfolio in US stocks. I have never followed this, although I have tried dipping into the US market, but I have never made any money there.

When I was updating my spreadsheet, I noticed is that long term debt is increasing at a fast rate. Last increase was 36.69% and in 2016 it was 74.55%. Goodwill and intangibles increase a lot last year at the rate of 71.36%. Net Income dropped mainly because of provisions for taxes on income. Most of this provision provides for taxes on previously undistributed foreign earnings, so the drop in Net Income is not a worry.

The dividend yield on this stock has been moderate (2% to 3% range). The current dividend yield is 2.48%, with 5, 10 and historical yields at 2.85%, 3.06 and 2.25%. The dividend yields were better in the past than currently. As you can see from the chart below in US$, the growth used to be in the 10 to 11% range, but over the past 10 years the yield per year was 7.44% and for the past 5 years it has been 6.71%. So, it has gone from a moderate growth to a low one.

Generally, the Dividend Payout Ratios for EPS has been in the 50% range and for CFPS in the 40% range. However, 2017 was not a good year for earnings so the Dividend Payout Ratio for 2017 was 706% with 5 year coverage at 66%. However, it should improve in 2018. The Dividend Payout Ratio was also high in 2017 at 90% with 5 year coverage at 47%. This will improve to normal next year. There was a special tax provision in 2017 that will not re-occur.

The debt ratios on this stock are fine. Even though debt has increased a lot lately, the Long Term Debt/Market Cap Ratio is low at 0.08. The Liquidity Ratio is a little low in 2017 at 1.41, but the 5 year median is 2.20 and the ratio for the third quarter of 2018 is better at 1.72. The Debt Ratio in 2017 is good at 1.62. The Leverage and Debt/Equity Ratios are normal at 2.61 and 1.61.

The Total Return per year is show below for years of 5 to 29 for Canadian Shareholders. 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 by comparing the charts below, sometimes we Canadians did better than the Americans and sometimes not. For Canadians holding this stock for the past 15 years, we did rather poorly. The difference is because of the US$ - CDN$ exchange rate.

Years Div. Gth Tot Ret Cap Gain Div.
5 11.73% 23.84% 20.19% 3.64%
10 10.03% 13.05% 10.28% 2.78%
15 8.32% 6.96% 5.03% 1.92%
20 10.11% 8.97% 6.89% 2.09%
25 10.01% 11.02% 8.71% 2.31%
30 12.44% 15.78% 12.24% 3.54%


The Total Return per year is show below for years of 5 to 29 for US Shareholders. US shareholders have had good growth rates over all the periods covered.

Years Div. Gth Tot Ret Cap Gain Div.
5 6.71% 18.01% 14.79% 3.22%
10 7.44% 10.34% 7.67% 2.67%
15 10.00% 9.02% 6.66% 2.36%
20 10.82% 9.85% 7.57% 2.27%
25 11.42% 12.80% 10.09% 2.70%
29 12.13% 15.21% 11.93% 3.28%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.15, 17.99 and 19.80. The corresponding 10 year ratios are 15.66, 17.36 and 19.27. The corresponding historical ratios are 16.33, 18.41 and 20.60. The current P/E Ratio is 22.53 based on a stock price of $145.34 and 2018 EPS estimate of $6.45. This stock price testing suggests that the stock is relatively expensive.

I get a Graham Price of $59.12. The 10 year low, median, and high median Price/Graham Price Ratios are 1.41, 1.58 and 1.80. The current P/GP Ratio is 2.46 based on a stock price of $145.34. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 3.49. The current P/B Ratio is 6.03 based on Book Value of $64,626M, Book Value per Share of $24.09 and a stock price of $145.34. The current ratio is some 73% above the 10 year median ratio. This stock price testing suggests that the stock is relatively expensive.

I get an historical median dividend yield of 2.25%. The current dividend yield is 2.48% based on dividends of $3.60 and a stock price of $145.34. The current yield is some 10% higher than historical median yield. This stock price testing suggests that the stock is relatively reasonable and below the median.

The 10 year median dividend yield is 3.06%. The current dividend yield is 2.48%, a value some 19% lower. This stock price testing suggests that the stock is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.03. The current P/S Ratio is 4.79 based on 2018 Revenue estimate of $81,366, Revenue per share of $30.32 and a stock price of $145.34. The current ratio is some 58% above the 10 year median ratio.

My favourite stock price testing is using the current dividend yield against the historical median dividend yield and this shows the stock is relatively reasonable and below the median. However, if I use the 10 year median yield it becomes reasonable but above the median. I do not think that I can ignore the other tests of which all say that the stock is relatively expensive. I also quite the P/S Ratio test and this says that the stock is relatively expensive.

The stock has had momentum since May of this year and is below its January high. The other thing to mention is the price seems very close to were analysts expect it to be in a 12 month period. It would seem the price is higher on many levels than over the past 10 years. But historically may be different as the current P/E of 22.53 is not that much higher than the median high of 20.60.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (4), Hold (8) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $146.76. This implies a total return of 3.45%, with 2.48% from dividends and 0.98% from capital gains.

Thomas White on the Globe and Mail talks about the third quarter being better than expected. Daniel Ren on South China Morning Post talks about JNJ’s investment in China. Emma Wright on Western New Jersey News talks about a subsidiary of JNJ being suited over opioids. Chuck Saletta on Motley Fool says this stock likely to grow at 7.9% per year over the next 5 years. See what analysts are saying about this stock on Stock Chase. They mostly see it as a defensive stock.

Johnson & Johnson is engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The Company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Its web site is here Johnson and Johnson.

The last stock I wrote about was about was be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE) ... learn more. The next stock I will write about will be HLS Therapeutics Inc. (TSX-HLS, OTC-HLTRF) ... learn more on Friday, November 16, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Derek Foster.... learn more on Thursday, November 15, 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, November 12, 2018

Cenovus Energy Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Energy Stock. It would seem that the stock price is relatively cheap. This stock is in a volatile and syclical sector so this is a risk. The low current liquidity ratio is also a risk. But stock is cheap. You can make money in cyclical stock buying low and selling high. See my spreadsheet on Cenovus Energy Inc.

I do not own this stock of Cenovus Energy Inc. (TSX-CVE, NYSE-CVE). I do not own this stock but I used to. I had held this stock previously as Alberta Energy Company from April 2000 until August 2002 and made some 18% total returns per year.

When I was updating my spreadsheet, I noticed the Liquidity Ratio fell from 1.13 (a low value) to 0.67 (a much lower value) from the annual 2017 to the third quarterly statement. When this ratio is lower than 1.00 it means that current assets cannot cover current liabilities. Even adding in cash flow after dividends this ratio is just 0.89. This is a risk

Canadian oil and gas companies have been having problems lately. This stock is no different. As you can see from the chart below, dividend growth is negative. They have been reducing their dividends since hitting a recent high in 2014. Dividends have been decreased by some 81%.

Mostly dividends have had a low yield. The current dividend yield is 1.69%. The historical median is also low at 1.45%. The 5 and 10 year median dividend yields are moderate at 3.10% and 2.78% because yields were growing prior to the dividend cuts.

The current Dividend Payout Ratio for 2017 is 6.56% with 5 year coverage at 65.7%. They had good earnings in 2017 but they are expected to have an earnings loss in 2018. Net year the 5 year coverage of dividends is expected to be around 77% in 2018. Analysts are again expecting positive earnings in 2019 and 2020.

The only Debt Ratio problem involves the Liquidity Ratio. Their Long Term Debt/Market Cap Ratio for 2017 is 0.67 in 2018. I talked above about the problem with the Liquidity Ratio which is a negative for this stock. The Debt Ratio is good at 1.95 with 5 year median at 1.83. Leverage and Debt/Equity Ratios for 2017 are 2.05 and 1.05 which are fine.

The Total Return per year is show below for years of 5 to 25 for Canadian shareholders. 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 -25.65% -16.47% -19.18% 2.70%
10 -6.31% -6.37% -9.96% 3.58%
15 1.79% 4.46% -0.19% 4.65%
20 5.70% 9.69% 4.71% 4.99%
25 5.10% 10.61% 5.99% 4.61%


The Total Return per year is show below for years of 5 to 12 for US shareholders. I do not have as much US$ data. This company changed report currency from US$ to CDN$ in 2009.

Years Div. Gth Tot Ret Cap Gain Div.
5 -28.99% -20.55% -22.91% 2.37%
10 -8.52% -8.61% -12.10% 3.50%
15-12 3.36% -2.89% -7.05% 4.16%
20 6.39%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.68, 27.54, and 34.12. the corresponding 10 year ratios are 19.19, 23.25 and 27.17. The historical median ratios are 13.91, 16.82 and 19.85. The current P/E Ratio is negative because the company is expected to have an earnings loss this year. This means that we can not do a proper test with P/E Ratios.

However, the company is expected to have a profit in 2019. The 2019 P/E Ratio is 11.94. We are getting close to 2019. This ratio is based on a current price of $11.82 and 2019 earnings estimate of $0.99. This stock price testing would suggest that the stock price is relatively cheap.

I get a Graham Price of $18.37. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.47 and 1.70. The current P/GP Ratio is 0.64 based on a stock price of $11.82. This stock price testing would suggest that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 2.05. The current P/B Ratio is 0.78 based on Book Value of $18,624M, BV per Share of $15.16 and a stock price of $11.82. The current ratio is some 62% below the 10 year ratio. This stock price testing would suggest that the stock price is relatively cheap.

I get an historical median dividend yield of 1.45%. The current dividend yield is $1.69% based on dividends of $0.20 and a stock price of $11.82. The current dividend yield is some 17% higher than the historical median. This stock price testing would suggest that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.37. The current P/S Ratio is 0.66 based on 2018 Revenue estimate of $22,124M, Revenue per Share of $18.00 and a stock price of $11.82. The current ratio is some 52% below the 10 year median ratio. This stock price testing would suggest that the stock price is relatively cheap.

All the stock testing shows the stock price as being cheap except for the dividend yield test. However, there is a problem with the dividend yield test as the dividends have been cut substantially over the last while. It would seem that the stock price is current cheap.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (17) and Hold (10). The consensus would be a Buy. The 12 month stock price would be $16.43. This implies a total return of 40.69% with 39% from capital gains and 1.69% from dividends based on a current stock price of $11.82.

David Rudolf on Bharatapress about several recent analysts changes to their target price. Brandon Baker on Bharatapress talks about stock purchases by Blume Capital Management. Mary Kom on Fairfield Current talks about Beutel Goodman selling some of their holdings in this stock.. Andrew Walker on Motley Fool thinks this stock might be an interesting contrarian pick. See what analysts are saying on Stock Chase. There are both positive and negative comments.

Cenovus Energy Inc is engaged in developing, producing, and marketing crude oil, natural gas liquids and natural gas in Canada with marketing activities and refining operations in the United States. Its web site is here Cenovus Energy Inc.

The last stock I wrote about was about Keyera Corp. (TSX-KEY, OTC-KEYUF) ... learn more. The next stock I will write about will be Johnson and Johnson (NYSE-JNJ) ... learn more on Wednesday, November 14, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 - Panel.... learn more on Tuesday, November 13, 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, November 9, 2018

Keyera Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The revenue and earnings have started to move up again. It is expected that earnings will start to cover the dividends in 2018. This maybe a good time to buy then. See my spreadsheet on Keyera Corp.

I do not own this stock of Keyera Corp. (TSX-KEY, OTC-KEYUF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited.

When I was updating my spreadsheet, I noticed is that the Liquidity Ratio took a dive in the third quarter to 0.97. This means that current assets cannot cover current liabilities. This is mostly due to a Trade and Other Payables increase. It often has low Liquidity Ratios and needs cash flow to cover current liabilities. It is not the only utility to depend on cash flow this way.

This used to be an income trust company. The yields were higher before it switched to a corporation in 2010. The yields are still quite high with the current dividend yield at 5.92%, the 5 year median at 3.96%, the yield since 2010 at 4.11% and the historical median at 4.75%.

Dividend growth is in the moderate range (8% to 14% ranges). The dividend growth over the past 5, 10 and 14 years is at 13.69%, 8.37% and 8.89% per year. The last dividend increase was lower in 2018 at 5.7%. This is a low growth rate.

As an income trust company, they could afford to payout more then EPS. However, that changed when they became a corporation. It was expected that income trusts would decrease dividend yields and start to cover dividends with the earnings. The Dividend Payout Ratio for 2017 was 107% with 5 year coverage at 111%. Analysts expect that in 2018 the EPS will cover dividends. The DPR for CFPS for 2017 was at 59% with 5 year coverage at 59%. It is expected to be around 56% in 2018. They need to get this lower at 40% or below.

The Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2017 is good at 0.25. The Liquidity Ratio can be low. It was good at 1.56 for 2017 with a 5 year median at 1.15. The Liquidity Ratio for 2017, if you add in cash flow after dividend is 1.85. The company, as most utilities do, often depend on cash flow to cover current liabilities.

The Debt Ratio at 1.73 for 2017 is good. The 5 year median is also good at 1.52. The Leverage and Debt/Equity Ratios for 2017 are 2.37 and 1.37 respectively with 5 year median at 2.81 and 1.81 respectively. This are rather normal for utilities.

The Total Return per year is show below for years of 5 to 15. 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.

Shareholders have been earning a good return.

Years Div. Gth Tot Ret Cap Gain Div.
5 9.89% 12.37% 7.55% 4.82%
10 8.37% 20.54% 13.65% 6.89%
15 13.69% 21.67% 13.94% 7.73%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 26.36, 30.28 and 35.35. The Corresponding 10 year ratios are 22.41, 25.70 and 28.77. The historical ratios are 19.55, 22.98 and 26.42. The current P/E Ratio is 16.81 based on a stock price of $30.42 and 2018 EPS estimate of $1.81. This stock price testing suggests that the current stock price is relatively cheap.

I get a Graham Price of $22.47. The 10 year low, median, and high median Price/Graham Price Ratios are 1.77, 2.11 and 2.47. The current P/GP Ratio is 1.35 based on a stock price of $30.42. This stock price testing suggests that the current stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 3.86. The current P/B Ratio is 2.45 based on Book Value of $2,588M, Book Value per Share of $12.40 and a stock price of $30.42. The current ratio is some 36% below the 10 year ratio. This stock price testing suggests that the current stock price is relatively cheap.

I get an historical median dividend yield of 4.75%. The current dividend yield is 5.92% based on dividends of $1.80 and a stock price of $30.42. The current dividend yield is some 25% higher than the historical one. This stock price testing suggests that the current stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.27. The current P/S Ratio is 1.44 based on 2018 Revenue estimate of $4,421M, Revenue per Share of $21.18 and a stock price of $30.42. The current ratio is some 13% above the 10 year ratio. This stock price testing suggests that the current stock price is relatively reasonable but above the median.

It is interesting that the only test to start with a reasonable base, which is the P/S Ratio test, shows the stock to be above the median in price. The 10 year median P/S Ratio of 1.27 is reasonable. Most of the P/E Ratios are really high and certainly high for a Utility. I find the 10 year median P/B Ratio at 3.86 a really high ratio.

However, the current ratios are not that high. A current P/E Ratio of 16.81 is a bit high that is all. The P/GP Ratio of 1.35 is not bad. Also, the yield is quite high and so is pointing to a good current stock price. The stock price of this stock has been moving down since hitting a high of 2014. In 2017 both the Revenue and the earnings have moved up. They also moved up with the third quarterly report in 2018.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (10), and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $39.91. This implies a total return of $37.11% with 31.205 from capital gains and 5.92% from dividends.

The company talks about third quarter results on Newswire. Peter Morris on Simply Wall Street talks about this company’s P/E Ratio. Cole Patterson on Simply Wall Street talks about this stock dividend and high relative EPS payment, but misses history of the company being a income trust prior. Lakeland Staff Writer on Lakeland Observer say the company has a Value Composite score of 42 meaning it might be slightly undervalued. Andrew Walker on Motley Fool thinks this is a good high yield stock for your TFSA. See what analysts are saying on Stock Chase. Mostly think it is a long term hold.

Keyera Corp is a midstream energy company. It is engaged in gathering, processing, and fractionation of natural gas in western Canada; storage and transportation of crude oil and natural gas byproducts; and marketing of natural gas liquids. Its web site is here Keyera Corp .

The last stock I wrote about was about was Dollarama Inc. (TSX-DOL, OTC-DLMAF) ... learn more. The next stock I will write about will be Cenovus Energy Inc. (TSX-CVE, NYSE-CVE) ... learn more on Monday, November 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.