Monday, December 30, 2019

Element Fleet Management Corp

This is my last review of stocks for 2019. In 2020, I will start again mostly with the stocks that I own.

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. The stock price is probably reasonable. It is hard to know where they will go on dividends and if this will become a dividend growth stock. However, it probably will. See my spreadsheet on Element Fleet Management Corp.

I do not own this stock of Element Fleet Management Corp (TSX-EFN, OTC-ELEEF). I was looking for stocks to follow and I found this stock in 100 best Dividend Stocks Money Sense for 2018. It was also on Raymond James' top 19 Canadian stocks for 2019 list.

When I was updating my spreadsheet, I noticed that they are all over the place re dividends. The dividend cut was probably prompted by the earnings loss. They only have been giving out dividends since 2016 and they have increased and decreased them and given out a special dividend. Will this end up being a dividend growth stock? It is hard to tell at present.

Dividend yields have been low (under2%) to moderate (2 to 4% ranges). The current dividend is 1.64%. The 3 year median yield is 2.23%. It has been as high as 7.75% and as low as 0.76%. It is hard to know where dividends are going to go. They started dividends in 2016. In 2017 they were increased 150%, in 2018 they were increased by 20% and then in 2019 they were decreased by 40%. Does management know what they are doing?

The Dividend Payout Ratios are not what would like. The DPR for 2018 cannot be calculated because the company had an earnings loss. The 3 year DPR coverage for EPS is 348%. The DPR for CFPS for 2018 is 15% with 5 year coverage at 29%. They cannot cover the dividend via Free Cash Flow. FCF coverage cannot be calculated because of negative FCF.

Debt Ratios are fine for a financial firm. This is considered to be a financial stock, so you want to know how well the assets are coverage the debt. For this company, the ratio for 2018 is 0.96. So, this is fine. The Liquidity Ratio is 1.13 and the Debt Ratio is 1.29 for 2018. The Leverage and Debt/Equity Ratios for 2018 is 5.40 and 4.19. These are fine for a financial firm.

The Total Return per year is shown below for years of 5 to 7 to the end of 2018. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 73.21% -4.85% -12.43% 7.58%
2011 7 14.71% 5.98% 8.72%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.11, 28.89 and 34.67. The 7 year corresponding ratios are 1.82, 208 and 2.34. The current P/E Ratio is 18.97 based on a stock price of $11.00 and 2019 EPS estimate of $0.58. The current P/E ratio of 18.97 is probably high, so making this stock on the expensive side. I really cannot do any testing based on P/E Ratios of the past.

I get a Graham Price of $9.12. The 10 year low, median, and high median Price/Graham Price Ratios are 1.04, 1.30 and 1.35. The current P/GP Ratio is 1.21 based on a stock price of $11.00. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 7 year median Price/Book Value per Share Ratio of 1.17. The current P/B Ratio is 1.73 based on Book Value of $2,772M, Book Value per Share of $6.37 and a stock price of $11.00. The current ratio is 47% above the 7 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.23%. The current dividend yield is 1.64% based on dividends of $0.18 and a stock price of $11.00. The current yield us 37% below the historical (or 3 year) yield. This stock price testing suggests that the stock price is relatively expensive.

The 7 year median Price/Sales (Revenue) Ratio is 7.74. The current P/S Ratio is 4.87 based on 2019 Revenue estimate of $984M, Revenue per Share of $2.26 and a stock price of $11.00. The current ratio is 37% below the 7 year median. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably reasonable. The best test is the P/S Ratio testing and this is showing the stock price as cheap. The P/B Ratio testing is worrisome as it is showing the stock price as expensive because the Book Value has been falling sine 2016. The P/GP Ratio test is probably where the price is.

Is it a good company at a reasonable price? The price seems reasonable. However, this is a financial small cap and it is risky. It is also hard to say where they are going with dividends. It might be of interest in the future.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $13.78. This implies a total return of 26.91% with 25.27% from capital gains and 1.64% from dividends.

See what analysts are saying on Stock Chase. There are various opinions, but it is risky. David Jagielski on Motley Fool says he is uncertain about its long term outlook. A writer on Simply Wall Street says you could view the recent improvements as indicating that the business itself is getting better with time. Phillip Gast on Modern Readers says there have been a couple of Buy ratings recently.

Element Fleet Management is a global fleet management company, Element Fleet Management provides management services and financing for commercial vehicle and equipment fleets. Its web site is here Element Fleet Management Corp.

The last stock I wrote about was about was Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more. The next stock I will write about will be Metro Inc (TSX-MRU, OTC-MTRAF) ... learn more on Thursday, January 2, 2020 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Vialoux.... learn more on Tuesday, December 31, 2019 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, December 27, 2019

Bird Construction Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. The stock price is probably cheap. There is not much in the way of a margin of safety with the debt ratios. It was sensible for the company to cut dividends as they cannot currently afford them. I would like to see better debt ratios. See my spreadsheet on Bird Construction Inc.

I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock.

When I was updating my spreadsheet, I noticed that a great deal of the total return on this stock in the past came from dividends. With the dividends going down, this can no longer be the case. It I never a good sign when a stock cuts their dividends. On the other hand, this stock had cut dividends in the past.

The dividend yield on this stock has very greatly, but it has mostly been in the good range (5% over 5%), but has sometimes been in the moderate range (2% to 4% ranges). The current dividend is 5.62% with 5, 10 and historical yields at 5.69%, 5.70% and 5.86%. The dividends had a lot of nice increases at different points in time, but in 2015 and 2016 they were flat and then in 2017 they were decreased by 48.7%. They were flat in 2018 and 2019.

The Dividend Payout Ratios are problematic at present and therefore a dividend cut. The company is acting sensibly. There is obviously a current problem with the coverage for the dividends and so they have cut them. The DPR for EPS for 2018 cannot be determined due to an earnings loss. The 5 year coverage is 140%. The DPR for CFPS for 2018 is 136% with 5 year coverage at 36%. DPR for Free Cash Flow for 2018 is 64% with 5 year coverage at 131%.

Debt Ratios are low. I like to see a margin of safety in debt ratios. I like the Liquidity Ratio and the Debt Ratio to be at 1.50 or higher. The Long Term Debt/Market Cap Ratio for 2018 is 0.10 which is a good ratio. The Liquidity Ratio for 2018 is 1.15 with a 5 year median of 1.19. If you add in cash flow after dividends the ratio is 1.33 with a 5 year median of 1.32. The Debt Ratio is 1.26 with 5 year median of 1.28. The Leverage and Debt/Equity Ratios for 2018 is 4.79 and 3.79 with 5 year median at 4.54 and 3.54. These are a bit high.

The Total Return per year is shown below for years of 5 to 21 to the end of 2018. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -12.25% -8.24% -14.41% 6.16%
2008 10 -2.13% 9.04% -0.87% 9.91%
2003 15 2.29% 27.62% 6.98% 20.64%
1998 20 7.67% 47.94% 16.46% 31.48%
1997 21 49.67% 18.28% 31.39%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.92, 19.37 and 23.83. The corresponding 10 year ratios are 13.01, 15.64 and 18.27. The corresponding historical ratios are 6.91, 9.98 and 11.30. The current P/E Ratio is 33.05 based on a stock price of $6.94 and 2019 EPS estimate of $0.21. This stock price testing suggests that the stock price is relatively expensive.

Since we are near to the end of the year, I want to look at the P/E Ratio for 2020. It is 11.97 based on a stock price of $6.94 and 2020 EPS estimate of $0.58. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $3.91. The 10 year low, median, and high median Price/Graham Price Ratios are 1.24, 1.54 and 1.83. The current P/GP Ratio is 1.87 based on a stock price of $6.94. This stock price testing suggests that the stock price is relatively expensive.

Since we are near the end of the year, we should also look at the Graham Price for 2020. It is $6.16. The P/GP Ratio would be 1.13 based on a stock price of $6.94. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 2.94. The current P/B Ratio is 2.39 based on a Book Value of $124M, Book Value per Share of $2.91 and a stock price of $6.94. The current ratio is 19% 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 5.86%. The current dividend yield is 5.62% based on dividends of $0.39 and a stock price of $6.94. The current yield is 4% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median dividend yield is 5.70%. The current dividend yield of 5.62% is 1.4% below this yield. 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 0.40. The current P/S Ratio is 0.22 based on 2019 Revenue estimate of $1,358M, Revenue per Share of $31.94 and a stock price of $6.94. The current ratio is 46% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Since this is near the end of the year, we should probably also look at the estimated revenue and P/S Ratio for 2020. The P/S Ratio for 2020 is 0.20 based on 2020 Revenue estimate of $1,484M, Revenue per Share of $34.90 and a stock price of $6.94. This P/S Ratio is 50% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. The best test is the P/S Ratio test. It is showing the stock a relatively cheap. I am surprised that the dividend yield test is showing as cheap considering the fact the dividends have been cut lately. The P/B Ratio test is a good one. It is showing the stock as almost cheap.

Is it a good company at a reasonable price? Long term holders of this stock if bought at a reasonable price, could probably do well in this stock. However, it will be volatile, so you would have to be able to put up with this volatility. The current price is cheap.

When I look at analysts’ recommendations, I find Buy (3) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $8.25. This implies a total return of 24.30% with 18.88% from capital gains and 5.6% from dividends.

See what analysts are saying on Stock Chase. There are few analysts following this stock. The last one said that construction is a tough business. Chris MacDonald on Motley Fool thought it was a good buy in 2017, but the stock is down around 30% since then.. A writer on Simply Wall Street say the P/E Ratio for this stock is higher than its peers, so it is probably relatively expensive. A writer on Simply Wall Street does not think that this is a good dividend stock.. Amanda Harley on Slater Sentinel says Raymond James gives this stock a price target of $9.00. Click somewhere outside the central message box on the page to see the report.

Bird Construction Inc, through its subsidiaries, operates as a contractor in construction market. It also provides pre-construction services, building information modeling and involves in public-private partnership projects. The company focuses on commercial, institutional, retail, tenant, residential, industrial, mining, water, wastewater, energy, and civil sectors. It operates its business in Canada. Its web site is here Bird Construction Inc.

The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-ENF, OTC-ELEEF) ... learn more on December 30, 2019 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.

Thursday, December 26, 2019

Sienna Senior Living Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Health Care. Stock price is probably reasonable to expensive. See my spreadsheet on Sienna Senior Living Inc.

I do not own this stock of Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF). When I looked in Stock Chase about Chartwell, Greg Newman; Director & Portfolio Manager, Scotia Wealth Management said he liked Sienna Senior Living better, so I investigated it.

When I was updating my spreadsheet, I noticed that they do not have a history of raising dividends. The dividends have been mostly flat until 2018. In both 2018 and 2019 dividends were increased by 2%.

The current dividend yield is 5.12%. The 5 year and 9 year median dividend yields are 5.55% and 6.98%. The stock only went public in 2010. There was no growth in dividends until 2018 and then another increase in 2019. Both increases were 2%. In the first year of 2010, there were only 10 dividend payments.

The Dividend Payout Ratios are too high in some instances. The DPR for EPS for 2018 is 604% with 5 year coverage at 715%. There has been two many years of EPS losses. The DPR for CFPS for 2018 is 49% with 5 year coverage at 55%. These are too high and I prefer them at 40% or lower. The DPR for FCF for 2018 is 96% with 5 year coverage at 88%. I prefer DPR for FCF to be 60% or less.

The DPR for Funds from Operation (FFO) for 2018 is 65% with 5 year coverage at 64%. The DPR for Funds from Adjusted Funds from Operation (AFFO) for 2018 is 69% with 5 year coverage also at 69%. These payout Ratios are acceptable.

I believe that the Debt Ratios are a problem. The Long Term Debt/Market Cap Ratio for 2018 is 0.87, so it is fine. The Liquidity Ratio, no matter what you do, does not rise to even 1.00. They cannot cover their short term liabilities. If you compare current liabilities to the company’s asset, the ratio is quite high at 8.04. However, I do not like situations where the current liabilities cannot be covered by current assets.

The Debt Ratio at 1.48 is a bit low as I prefer this to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2018 are 3.09 and 2.09. These are also a bit too high.

The Total Return per year is shown below for years of 5 to 9 to the end of 2018. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.13% 13.65% 6.63% 7.02%
2009 9 2.40% 13.14% 5.68% 7.46%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 54.07, 60.09 and 66.11. The 9 year corresponding ratios are negative as are the historical ratios. That is because negative earnings from 2010 to 2014 inclusive. The current P/E Ratio is 182.90 based on a stock price of $18.29 and latest 12 month EPS of $0.10.

This is really sort of a REIT, so the P/FFO ratios can be used. The 5 year P/FFO Ratios are 11.20, 12.45 and 13.70. The corresponding 8 year ratios are 11.20, 12.35 and 13.05. The current P/FFO Ratio is 13.35 based on a stock price of $18.29 and 2019 FFO estimate of $1.37. This stock price testing suggests that the stock price is relatively expensive.

Since it is close to the end of the year, I have also looked at the P/FFO Ratio for 2020. For 2020, the P/FFO Ratio is 12.88 based on 2020 FFO estimate of $1.42 and a stock price of $18.29. This stock price testing suggests that the stock price is reasonable but above the median.

This is really sort of a REIT, so I also looked at the P/AFFO ratios. The 5 year P/AFFO Ratios are 10.24, 11.70 and 12.66. The corresponding 8 year ratios are 9.37, 10.68 and 11.98. The current P/AFFO Ratio is 12.61 based on a stock price of $18.29 and 2019 AFFO estimate of $1.45. This stock price testing suggests that the stock price is relatively expensive.

Since it is close to the end of the year, I have also looked at the P/AFFO Ratio for 2020. For 2020, the P/AFFO Ratio is 12.44 based on 2020 AFFO estimate of $1.47 and a stock price of $18.29. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $5.39. The 10 year low, median, and high median Price/Graham Price Ratios are 2.61, 2.87 and 3.12. The current P/GP Ratio is 4.27 based on a stock price of $18.29. This stock price testing suggests that the stock price is relatively expensive.

If we used a Graham Price based on FFO, we get a Graham Price of $16.51. The 10 year low, median, and high median Price/Graham Price Ratios are 0.94, 1.03 and 1.11. The current P/GP Ratio is 1.15 based on a stock price of $18.29. 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 1.97. The current P/B Ratio is 2.22 based on a Book Value of $539M, Book Value per Share of $8.14 and a stock price of $18.29. The current P/B Ratio is some 14% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 6.98%. The current dividend yield is 5.12% based on dividends of $0.92 and a stock price of $18.29. The current yield is 27% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.20. The current ratio is 1.82 based on 2019 Revenue estimate of $669M, Revenue per Share of $10.09 and a stock price of $18.29. The current ratio is 52% above the 9 year ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably reasonable to expensive. Here again, I like the P/S Ratio test and it is showing the stock price as relatively expensive. However, the P/B Ratio test is showing the stock price as relatively reasonable but above the median. This is a fair test. If we use the FFO for 2020 we get the same results.

Is it a good company at a reasonable price? I took a look at this stock because I wanted to buy a Canadian stock in the Health Care sector. I decided again the stock because of the debt ratios. The stock price is on the high, if not expensive side. I might make another decision in the future if it got better debt ratios and continued to raise dividends.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2) and Hold (6). The consensus would be a Buy. The 12 month stock price is $19.98. This implies a total return of 15.87% with 8.75% from capital gains and 5.12% from dividends based on a stock price of $18.29.

See what analysts are saying on Stock Chase. There are quite mixed views, but most like this stock. Jason Phillips on Motley Fool says that the company is in a good position to take advance of the growing senior population and in the meantime pays a high dividend. A writer on Simply Wall Street thinks that this company which has institutional ownership of 18% give this stock some credibility as an investment. A writer on Simply Wall Street says the ROE at 1.4% is a lot lower than others in the sector which have a ROE average of 8.7%. Matthew Tipps on Slater Sentinel says this company has an average rating of Hold from four analysts.

There is an article about a suit against this company on CTV News. There is also an article on CTV News saying that the Class Action has been discontinued.

Sienna Senior Living Inc is one of the largest owners of seniors' housing, the largest licensed long-term care operator in Ontario, and a provider of services across the full continuum of care. The firm operates solely within Canada. Its web site is here Sienna Senior Living Inc.

The last stock I wrote about was about was Chartwell Retirement Residences (TSX- CSH.UN, OTC- CWSRF) ... learn more. The next stock I will write about will be Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more on Friday, December 27, 2019 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.

Chartwell Retirement Residences

I have been working on the spreadsheet for Chartwell Retirement Residences and Sienna Senior Living Inc which are two Canadian Health Care stocks. I decided to publish on them today.

Sound bite for Twitter and StockTwits is: Dividend Paying Healthcare. The stock price is probably reasonable to expensive. A company that has lowered the dividends as much as raised them is not a good dividend stock to buy. I do not like their debt ratios. See my spreadsheet on Chartwell Retirement Residences.

I do not own this stock of Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF). I saw this stock on a dividend investing blog and looked it up on Stock Chase.

When I was updating my spreadsheet, I noticed that this company does not have a great track record on paying dividends. Dividends have been decreased as much as increased and they have been flat most years. Interestingly, the tax treatment of the dividends for distributions are currently very good. 2018 was the first year when part of the distributions was taxable and only 3% of the distributions were.

The current dividend yield is in the moderate range (2% to 4% ranges), but for most of this stock’s life the dividend yield was much higher. The current dividend yield is 4.22%. The 5, 10 and historical dividend yields are 3.99%, 4.20% and 6.78%. From when dividends were started in 2004, dividend were only decreased. Dividend increases started in 2015 at very low rates. The most recent increase was in 2019 and it was for 2%.

The Dividend Payout Ratios are fine for FFO and AFFO. This company is sort of a REIT, but not really and it is classified as Health Care. Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are provided. The DPR for FFO for 2018 is 65% with the 5 year coverage is 64%. The DPR for AFFO for 2018 is 69% with 5 year coverage at 70%.

The Dividend Payout Ratios in other calculations are not so fine. The DPR for CFPS is high and for FCF is over 100%. They have never come close to covering their dividends with earnings. The DPR for CFPS for 2018 is 47% with 5 year coverage at 46%. The DPR for FCF for 2018 is 254% with 5 year coverage at 194%.

I would like to see better Debt Ratios. The Long Term Debt/Market Cap is 0.69 and this one is fine. The Liquidity Ratio for 2018 is 0.18. The Liquidity Ratio just gets over 100% at 105% if you add back in cash flow after distributions and the current portion of the long term debt. There is no safety margin. The Debt Ratio is low but fine at 1.39 with a 5 year median at 1.39 also. The Leverage and Debt/Equity Ratios for 2018 are 3.56 and 2.56 with 5 year median ratios at 3.56 and 2.56 also. These are a little high.

The Total Return per year is shown below for years of 5 to 15 to the end of 2018. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 1.61% 12.18% 7.10% 5.07%
2008 10 -3.34% 17.79% 10.06% 7.73%
2003 15 -4.24% 6.75% 0.73% 6.02%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 156.36, 174.38 and 192.40. The 10 year corresponding ratios are 32.25, 35.77 and 39.29. The historical ratios are all negative. There is nothing I can do with this.

The 5 year low, median, and high median Price/FFO Ratios are 13.28, 15.38 and 17.47. The corresponding 10 year ratios are 11.98, 13.42 and 15.13. The current P/FFO Ratio is 15.37 based on 2019 FFO estimate of $0.92 and a stock price of $14.14. This stock price testing suggests that the stock price is relatively expensive.

Since this is near the end of the year, we should look at the P/FFO Ratio for 2020. The P/FFO ratio for 2020 is 14.73 based on 2020 AFFO estimate of $0.96 and a stock price of $14.14. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 5 year low, median, and high median Price/AFFO Ratios are 14.35, 16.46 and 18.87. The corresponding 10 year ratios are 13.26, 14.86 and 16.45. The current P/AFFO Ratio is 16.64 based on 2019 AFFO estimate of $0.85. This stock price testing suggests that the stock price is relatively expensive.

Since this is near the end of the year, we should look at the P/AFFO Ratio for 2020. The P/AFFO ratio for 2020 is 15.71 based on 2020 AFFO estimate of $0.90 and a stock price of $14.14. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $2.88. The 6 year low, median, and high median Price/Graham Price Ratios are 4.73, 5.25 and 5.77. I do not have a good history for the Graham Price because of all the years of earnings losses. The current P/GP Ratio is 4.90 based on a stock price of $14.14. This stock price testing suggests that the stock price is relatively expensive.

If I do the Graham Price based on FFO, I get 10 year low, median, and high median Price/Graham Price Ratios are 1.25, 1.40 and 1.46. The current P/GP Ratio is 1.53 based on a stock price of $14.14. 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 3.04. The current P/B Ratio is 3.44 based on a Book Value of $873M, Book Value per Share of $4.11 and a stock price of $14.14. The current ratio is 13% above 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 6.76%. The current dividend yield is 4.22% based on dividends of $0.60 and a stock price of $14.14. The current yield is 38% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 5.20. With a current dividend yield of 4.22%, the 10 year median yield is 19% higher. 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 2.08. The current P/S Ratio is 3.28 based on 2019 Revenue estimate of $917M, Revenue per Share of $4.31 and a stock price of $14.14. The current ratio is 58% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive. Since analysts estimate for Revenue in 2020 is lower than for 2019, we cannot get a better ratio for P/S using 2020 estimates.

Results of stock price testing is that the stock price is probably reasonable to expensive. The best test is the P/S Ratio testing. A problem with the dividend yield testing is that the dividends have mostly been declining. The P/B Ratio testing is showing the stock price is reasonable but above the median as is the P/AFFO Ratio and the P/FFO Ratio test and these for 2020 is showing the stock price above the median.

Is it a good company at a reasonable price? Because people are talking about buy stock that cater to seniors, I took a look at both this company and Sienna Senior Living. I was looking for stocks to buy. However, I decided not to invest in either because I did not like their debt ratios. I do not think that the current price is reasonable.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3) and Hold (3). The consensus would be a Buy. The 12 month stock price is 15.89. This implies a total return 16.60% with 12.38% from capital gains and 4.22% from dividends based on a current stock price of $14.14.

See what analysts are saying on Stock Chase. They think that is currently a Buy. Cindy Dye on Motley Fool thinks this company is well suited to take advantage of the coming boom of aging seniors . A writer on Simply Wall Street thinks this company is too highly leveraged. A writer on Simply Wall Street thinks this company is overvalued.

Chartwell Retirement Residences is an unincorporated open-ended trust. The company is engaged in ownership, operation and management of retirement and long-term care communities in Canada. It operates its retirement and long-term care facilities separately. Its web site is here Chartwell Retirement Residences.

The last stock I wrote about was about was Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more. The next stock I will write about will Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more today.

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, December 23, 2019

Richards Packaging Income Fund

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably expensive. I do not think that yields will go as high as in the past, but they are at the lowest level ever now. It is not a well followed stock as it appears that only one analyst is following it. See my spreadsheet on Richards Packaging Income Fund.

I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment club suggested this stock.

When I was updating my spreadsheet, I noticed they have no information that I can find on their site that shows the Board of Trustee Members and Chief Officers of the company. I believe public companies should make this information easy to find. I could not even google this information, but finally found what I was looking for in the latest Notice of Annual Meeting of Unitholders and Management Information Circular.

The distributions are either not taxable or return of capital, so not taxable. I do not know why. I would like to know why.

Dividend yields used to very high, but have lately been in the moderate range (2% to 4% ranges). The current dividend 2.79%. The 5, 10 and historical dividend yields are 5.13%, 6.63% and 8.20%. The yield hit a high of almost 20% in 2008. Since then, the yield has steadily declined.

Dividends have grown nicely lately because of 3 increases in the last 5 years. The one in 2018 was for 21.7%. There have been no increases since. This company has never increased the dividends on any regular basis.

The Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 60% with 5 year coverage of 89%. The DPR for CFPS is 31% with 5 year coverage at 33%. The DPR for Free Cash Flow for 2018 is 53% with 5 year coverage at 58%. All the DPRs have gone up and own but have basically been declining for some time.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.07. The current one is 0.04. This ratio has been steadily declining since hitting a peak of 1.04 in 2008. The Liquidity Ratio for 2018 is 1.48 is low. The 5 year median is 1.51. If you add in cash flow after dividend is hits just 1.52. The Debt Ratio for 2018 is 2.05 with a current one at 2.12 and 5 year median at 1.95. The Leverage and Debt/Equity Ratios for 2018 are 1.95 and 0.95 with 5 year medians at 2.05 and 1.05.

The Total Return per year is shown below for years of 5 to 14 to the end of 2018. 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 10.93% 33.69% 27.18% 6.52%
2008 10 1.64% 26.30% 19.49% 6.81%
2009 14 5.07% 14.45% 8.69% 5.76%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.10, $16.71 and 19.77. The 10 year corresponding ratios are 13.81, 16.08 and 18.19. The corresponding historical ratios are 13.64, 15.70 and 18.00. The current P/E Ratio is 18.36 based on 2019 EPS estimate of $2.58 and a stock price of $47.38. This stock price testing suggests that the stock price is relatively expensive.

Because it is near the end of the year, we should also look at the P/E Ratio for 2020. The P/E Ratio of 15.59 based on a stock price of $47.38 and 2020 EPS estimate of $3.04. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $26.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.92, 1.08 and 1.20. The current P/GP Ratio is 1.82 based on a stock price of $47.38. This stock price testing suggests that the stock price is relatively expensive.

Because it is near the end of the year, lets look at the Graham Price of 2020 which is 28.32. The P/GP Ratio is 1.67 based on a stock price of $47.38. 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 1.43. The current P/B Ratio is 4.04 based on a Book Value of $128M, Book Value per Share of $11.72 and a stock price of $47.38. The current P/B Ratio is 182% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 8.20. The current dividend yield is 2.79% based on dividends of $1.32 and a stock price of $47.38. The current yield is 66% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 6.63%. The current dividend yield at 2.79% is some 58% below the 10 year median yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.56. The current P/S Ratio is 1.32 based on 2019 Revenue estimate of $339M, and a stock price of $47.38. The current ratio is 172% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. On a whole range of tests, this stock is coming up relatively expensive. I must admit that the P/E Ratios are pretty consistent and on one test the stock price is showing as relatively reasonable and below the median. However, I would not accept this test above all others.

Is it a good company at a reasonable price? Without knowing why the distributions are non-taxable, it is hard to know if this will change or not in the future. Increases in distribution occur erratically so a unit holder would not know when an increase will take place. Distributions have been cut in the past as well as increased. This is the reason for the very low increases over the past 10 and 14 years. Shareholders have done well, but there is also the saying that you should only invest in what you understand.

When I look at analysts’ recommendations, I find one Strong Buy (1), recommendation. The 12 month stock price is $50.00. This implies a total return of $8.32% with 5.53% from capital gains and 2.79% from dividends.

See what analysts are saying on Stock Chase. They like it, but one talks about it being illiquid sometimes. Mat Litalien, on Motley Fool thinks the company has plenty of room to raise the distributions. An writer on Simply Wall Street says the return on capital employed (ROCE) is good for this company. David Cockfield on BNN talks about this company. Ryan Modesto, Chief Executive Officer, 5I Research on BNN talks about this company.

Richards Packaging Income Fund is a Canada-based company involved in packaging distribution businesses throughout North America. The company principally distributes plastic and glass containers and associated closures. The business of the group is primarily spread across the market of Canada and United States of which the United States accounts the larger source of revenue. Its web site is here Richards Packaging Income Fund.

The last stock I wrote about was about was Magna International Inc. (TSX-MG, NYSE-MGA) ... learn more. The next stock I will write about will be Chartwell Retirement Residences (TSX- CSH.UN, OTC- CWSRF) ... learn more on Thursday, December 26, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Innovation and Disruption.... learn more on Tuesday, December 24, 2019 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, December 20, 2019

Magna International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably reasonable. The dividend yield and growth are good. Debt ratios are ok. Shareholders have done well in the past. See my spreadsheet on Magna International Inc.

I do not own this stock of Magna International Inc (TSX-MG, NYSE-MGA) but I used to. I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.

When I was updating my spreadsheet, I noticed that the EPS came in a bit lower than expected. The expected was $6.85 and the EPS was $6.61. Last year the EPS for 2019 and 2020 were $7.14 and $8.30. However, the current estimates are a lot lower at $4.97 and $6.73.

Dividends have been paid in US$ since 1999. The current dividend yield is in the moderate arrange (2% to 4% ranges) at 2.60%. The 5, 10 and historical yields are low (below 2%) to moderate (2% to 4% ranges) at 2.08%, 1.99% and 1.84% respectively. These are in US$. The dividend growth is in the moderate (8% to 14% ranges) to good (15% and above). The last dividend increase was for 10.6%. It is different in Canada and US due to the changes in the exchange rate.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 in US$ is 20% with 5 year coverage at 18%. The DPR for CFPS in 2018 in US$ is 11% with 5 year coverage also at 11%. The DPR for Free Cash Flow in 2018 in CDN$ is 22% with 5 year coverage at 27%. I am getting my FCF values from Wall Street Journal which gives them CDN$.

Debt Ratios are fine except for the Liquidity Ratios which are a bit low. The Long Term Debt/Market Cap Ratio for 2018 is 0.21 with a current one at 0.17. The Liquidity Ratio for 2018 is 1.15 with 5 year median at 1.26. If you add in cash flow after dividends the ratio becomes 1.47 with a 5 year median at 1.58. The ratios are a bit low and I prefer ratios to be at 1.50 or higher. The Debt Ratio for 2018 is 1.75 with 5 year median at 1.86. The Leverage and Debt/Equity Ratios for 2018 are 2.42 and 1.38. The 5 year medians at 1.98 and 0.98.

The Total Return per year is shown below for years of 5 to 27 to the end of 2018 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 21.93% 9.81% 7.31% 2.50%
2008 10 16.66% 24.08% 21.03% 3.05%
2003 15 9.86% 7.53% 6.16% 1.37%
1998 20 11.34% 6.43% 5.02% 1.41%
1993 25 12.73% 8.08% 6.53% 1.55%
1991 27 11.22% 14.72% 11.66% 3.06%


The Total Return per year is shown below for years of 5 to 27 to the end of 2018 US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 15.58% 4.41% 2.07% 2.34%
2008 10 15.41% 23.21% 19.77% 3.44%
2003 15 9.46% 7.40% 5.62% 1.78%
1998 20 11.98% 6.75% 5.04% 1.71%
1993 25 12.60% 8.02% 6.28% 1.74%
1988 27 16.38% 6.94% 5.46% 1.48%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.13, 8.55, and 9.96. The corresponding 10 year ratios are 6.86, 9.04 and 10.45. The corresponding historical ratios are 8.13, 11.83 and 12.56. The current P/E Ratio 7.87 based on a stock price of $73.93 and 2019 EPS Estimate of $9.40 ($7.14 US$). This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$.

Since we are close to 2020, it might be a good idea to look at the P/E Ratio for 2020. The 2020 P/E Ratio is 6.77 based on a stock price of $73.93 and 2020 EPS estimate of $10.92 ($8.30 US$). This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a Graham Price of $96.77. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 0.79 and 0.99. The current P/GP Ratio is 0.76 based on a stock price of $73.93. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.54. The current P/B Ratio is 1.67 based on a stock price of $56.16, Book Value of $11,018M, Book Value per Share of $33.66. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 1.86%. The current dividend yield is 2.60% based on $1.46 and a stock price of $56.16. The current yield is 40% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

The 10 year median dividend yield is 2.01%. With the current dividend yield at 2.60%, the current dividend yield is 30% above the 10 year median yield. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.42. The current P/S Ratio is 0.47 based on 2019 Revenue estimate of $39,287M, Revenue per Share of 120.02 and a stock price of $56.16. The current ratio is 11% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio testing is an important one. The estimate is a bit lower than revenue for 2018 but 12 month revenue to date is lower than the 2018 revenue also. So lower revenue estimate seems reasonable. Dividends and EPS are rising faster than revenue. This is not sustainable on a long term basis. The dividend yield test shows the stock price at cheap, but the P/B Ratio shows it reasonable.

Is it a good company at a reasonable price? I would think that the current stock price is reasonable. This company has been making profits and has produced solid returns for shareholders in the past and will probably continue to do so.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3), Hold (11) and Sell (2). The consensus would be a Hold. The stock price consensus is $80.25 (60.98 US$). This implies a total return of 11.15% with 8.55% from capital gains and 2.60% from dividends.

See what analysts are saying about this stock on Stock Chase. Some see it as a buy. Joey Frenette on Motley Fool talks how this stock suffered in the last market crash but it did well once it took off again. A writer on Simply Wall Street talks about this stock price growing faster than the EPS. A writer on Simply Wall Street thinks investors in this stock should keep an eye on their debt levels. Anthony Bellafiore on Modern Readers talk about Royal Bank starting coverage of this stock.

Magna International automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contracted vehicle assembly. Roughly half of Magna's revenue comes from North America while Europe accounts for approximately 40%. Its web site is here Magna International Inc.

The last stock I wrote about was about was Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more. The next stock I will write about will be Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more on Monday, December 23, 2019 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, December 18, 2019

Methanex Corp

Sound bite for Twitter and StockTwits is: Dividend Growth. The stock has good dividend growth with low DPR. Stock price is probably cheap to reasonable. It is a cyclical stock, so it is rather high in risk. See my spreadsheet on Methanex Corp.

I do not own this stock of Methanex Corp (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid “C” grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.

When I was updating my spreadsheet, I noticed that revenue estimate for 2019 is lower than for last year. The estimates for 2019 and 2020 were $3,737M and $3,811M US$ and they are now $2,814M and $2,956M US$. There is a matched decline for the last 12 months to the end of September 2019 compared to the last 12 months to the end of December 2018 where revenue has a 22% decline to $3,062 from $3,932M US$.

There is the same decline in EPS. Last year the estimates for 2019 and 2020 were $7.52 and $7.11 for EPS US$. Now the 2019 and 2020 EPS estimates are $1.25 and $1.57 US$. There is a matched decline for the last 12 months to the end of September 2019 compared to the last 12 months to the end of December 2018 where EPS has a 60% decline to $2.80 from $6.92 US$.

The dividends are paid in US$. The dividend yields are in the moderate range (2% to 4% ranges). The current dividend yield is 3.69%, with 5, 10 and historical yields at 2.31%, 2.40% and 2.40%. The dividends are growth currently at a moderate rate (8% to 14% ranges) in US$. Some of the dividend increases are better in CDN$. See charts below. The last increase was in 2019 and it was for 9.1%.

The Dividend Payout Ratios are good The DPR for EPS for 2018 is 14% with 5 year coverage at 33%. The DPR for CFPS for 2018 is 9% with 5 year coverage at 14%. These are in US$. The DPR for Free Cash Flow for 2018 is 17% with 5 year coverage at 40.6%. FCF is in CDN$.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.29 with 5 year median at 0.36. The Liquidity Ratio for 2018 is 1.20 with 5 year median at 1.69. If you add in cash flow after dividends the rate becomes 2.03 with 5 year coverage at 2.12. The Debt Ratio is 1.65 with 5 year median at 1.66. Leverage and Debt/Equity Ratios are a little high at 3.05 and 1.85 for 2018. The 5 year median ratios are better at 2.64 and 1.50.

The Total Return per year is shown below for years of 5 to 23 to the end of 2018 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 16.62% 3.17% 0.89% 2.28%
2008 10 9.29% 20.64% 16.97% 3.68%
2003 15 13.10% 13.34% 10.58% 2.76%
1998 20 16.43% 13.50% 11.10% 2.40%
1995 23 10.18% 8.53% 1.66%


The Total Return per year is shown below for years of 5 to 23 to the end of 2018 in US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 10.95% -1.99% -4.05% 2.07%
2008 10 8.11% 19.81% 15.66% 4.15%
2003 15 12.69% 13.37% 10.19% 3.18%
1998 20 17.50% 14.89% 11.93% 2.96%
1993 25 10.45% 8.54% 1.91%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.95, 12.37 and 15.19. The corresponding 10 year ratios are 9.91, 13.25 and 16.09. The corresponding historical ratios are 8.68, 10.40 and 14.94. The current P/E Ratio is 31.03 based on a stock price of $51.14 and 2019 EPS estimate of $1.65 (1.25 US$). This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

Because it is near the end of the year, we should also check with P/E Ratio for 2020. This P/E Ratio is 24.71 based on a stock price of $51.14 and 2020 EPS estimate of $2.07 ($1.57 US$). An improvement, but still it shows by this stock price testing suggests that the stock price is relatively expensive. Problem is the drop in EPS for 2019 and later years. This is in CDN$.

Twice we this stock has had two years of losses resulting in long term capital gains. For example, the Capital gains portion of the total return for the past 10 years is 16.97% per year. 10 years ago, the 11th year and 10th year capital losses were at 14% and 50%. We just had two years of capital losses of 14% and 22%, so perhaps we are due for another rise in stock prices?

Yr Capital Gain 1st Yr Gain 2nd Yr Gain 1st Yr Loss 2nd Yr Loss
Now 14% 22%
5 0.89% 36% 98%
10 16.97% 14% 50%
15 10.58% 51% 9%
20 11.10% 9% 30%
25 8.53%


I get a Graham Price of $49.95. The 10 year low, median, and high median Price/Graham Price Ratios are 1.22, 1.54 and 1.88. The current P/GP Ratio is 1.02 based on a stock price of $51.14. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 2.18. The current P/B Ratio is 2.12 based on Book Value of $1834M, Book Value per Share of $24.07 and a stock price of $51.14. The current ratio is some 3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$.

I get an historical median dividend yield of 2.40%. The current dividend yield is 3.69% based on dividends of $1.44 and a stock price of $31.09. The current yield is 54% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$. The 10 year median dividend yield is also 2.40%. So a test using the 10 year median dividend yield will give you the same results.

The 10 year median Price/Sales (Revenue) Ratio is 1.32. The current P/S Ratio is 1.06 based on 2019 Revenue estimate of $2,814M, Revenue per Share of $36.93 and a stock price of $39.01. The current ratio is 20.1% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is cheap to reasonable. A lot of the testing is coming up with a relatively cheap stock price except for P/B Ratio test which is showing the stock price is reasonable and below the median. The P/S Ratio test is showing cheap, but just into the cheap region.

Is it a good company at a reasonable price? First, the stock price is reasonable. This stock is quite volatile so there is risk here. Risk level is rated High. However, this is the second year for a stock price decline for this stock, so the if you like this stock I think now is a good time to buy.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4), Hold (6), Underperform (1) and Sell (2). The consensus would be a Hold. The 12 month stock price consensus is $41.10 US$ or $54.18 CDN$. This implies a total return of 9.66% with 5.95% from capital gains and 3.71% from dividends. I must say that the analyst’s recommendations are all over the place. It is cyclical and probably the time to buy is now if you want to own this stock.

See what analysts are saying on Stock Chase. It is cyclical and some think now is the time to buy. Aditya Raghunath on Motley Fool expects sales to pick up and likes the current dividend yield. A writer on Simply Wall Street likes that the dividend is covered and growing. Lee McLain Broch Herald talks about recent analysts ratings. Jean Kramer on Finance Recorder talks about short interest in this stock.

Methanex Corp manufactures and sells methanol. Methanex's customers use methanol as a feedstock to produce end products including adhesives, foams, solvents, and windshield washer fluids. The firm also sells its products to the oil refining industry. Europe generates the most revenue of any geographical segment. Its web site is here Methanex Corp.

The last stock I wrote about was about was Stantec Inc (TSX-STN, NYSE-STN) ... learn more. The next stock I will write about will be Magna International Inc. (TSX-MG, NYSE-MGA) ... learn more on Wednesday, December 20, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Rob Carrick.... learn more on Thursday, December 19, 2019 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, December 16, 2019

Stantec Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price seems reasonable at present. Both the debt ratios and Dividend Payout Ratios are good. It has not done well for shareholders in total return lately and latest dividend increase has moved lower. See my spreadsheet on Stantec Inc .

I do not own this stock of Stantec Inc (TSX-STN, NYSE-STN), but I used to. I bought this stock for capital gains in April 2008. I sold in September 2011. I wanted to get rid of non-core stocks and this stock had not produced capital gains. I had a capital loss of 22.6%.

When I was updating my spreadsheet, I noticed that there was a steep dive in stock price in July. It would seem to be because of the company missing the second quarter EPS estimates. The third quarter was good and price revived. They have sold off the construction side of the business.

They started to pay dividends in 2012. They have been rising their dividends every year since. The dividend yield is low (under 2%) with a current yield of 1.59% and 5 year and historical yields both at 1.37%. The dividend growth is moderate (8% to 14% ranges). See the chart below. The last dividend increase was lower at 5.5% in 2019.

The Dividend Payout Ratios are fine. Sometimes the DPR can be high because of bad year. It is the 5 year coverage that is really important. The DPR for EPS for 2018 is 125% with 5 year coverage at 38%. The DPR for 2019 is expected to b 33%. The DPR for CFPS for 2018 is 3% with 5 year coverage at 2%. The DPR for FCF for 2018 is 128% with 5 year coverage at 29%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.26 with a current one at 0.24. The Liquidity Ratio for 2018 is 1.90 with 5 year median at 1.51 and a current one at 1.77. The Debt Ratio for 2018 is 1.91 with a current one at 1.69 and a 5 year median at 1.96. Leverage and Debt/Equity Ratio for 2018 is 2.10 and 1.10. The current ratios are 2.45 and 1.45 and the 5 year median ratios are 2.05 and 1.05.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. 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 chart below.

The to date value are similar except for the past 5 years where the return is a bit better at a total return of 4.19% and capital gains at 2.75%.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 10.24% -0.50% -1.91% 1.40%
2008 10 9.78% 8.30% 7.09% 1.21%
2003 15 12.86% 11.92% 0.94%
1998 20 17.90% 17.06% 0.84%
1994 24 16.18% 15.52% 0.66%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.13, 26.41 and 29.68. The corresponding 10 year ratios are 16.59, 20.34 and 24.12. The corresponding historical ratios are 12.46, 16.38 and 20.30. The current P/E Ratio is 20.90 based on a stock price of $36.57 and 2019 EPS $1.73. This stock price testing suggests that the stock price is relatively reasonable but above the median.

It is close to the end of the year, so I am also looked at 2020. The P/E Ratio for 2020 is 17.09 based on a stock price of $36.57 and 2020 EPS estimate of $2.14. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $25.84. The 10 year low, median, and high median Price/Graham Price Ratios are 10 year low, median, and high median P/GP Ratios are 1.17, 1.47 and 1.74. The current P/GP Ratio is 1.42 based on a stock price of $36.57. 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 2.05. The current P/B Ratio is 2.16 based on a stock price of $36.57, Book Value of $1,888M and Book Value per Share of $16.96. The current ratio is 5% above the 10 year median 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 1.37%. The current dividend yield is 1.59% based on dividends of $0.58 and a stock price of $36.57. The current dividend is some 16% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.11. The current P/S Ratio is 1.10 based on a stock price of $36.57, Revenue estimate for 2019 of $3,701M, Revenue per Share of $33.25. The current ratio is 1% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable and below the median. My favourite tests of P/S Ratio and dividend yield is showing this. The P/B Ratio test, which has nothing wrong with it, is showing the stock price as reasonable and above the median by 5%.

Is it a good company at a reasonable price? The price is currently reasonable. I noticed that some analysts said that they prefer WSP Global Inc (TSX-WSP, OTC-WSPOF). This is a stock that I have and I have done well with it. This seems like a decent stock, but sometimes investors can be hard stocks that miss estimates.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (7) and Hold (2). The consensus would be a Buy. The 12 month stock price is $39.50. This implies a total return of $9.60% with 8.01% from capital gains and .59% from dividends.

See what analysts are saying on Stock Chase. Most do not like this company. Brian Pacampara, on Motley Fool likes this company’s leadership position in the design space fiscal discipline, and proven track record. Stantec announces via Reuters their three year strategic plan. John Adams on Modern Readers talk about Desjardins lowing EPS estimate for 2019. A writer on Simply Wall Street talks about insider trading. Note Theresa Jang is a newly appointed CFO.

Stantec Inc is a global engineering and construction firm. The company provides its services under fee-for-service agreements with clients. Stantec derives the substantial majority of its sales from the United States and Canada, and the company works in both the public and private sectors. Its web site is here Stantec Inc .

The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more. The next stock I will write about will be Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more on Wednesday, December 18, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Kevin Bidner.... learn more on Tuesday, December 17, 2019 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, December 13, 2019

FirstService Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. Stock price is probably expensive. There is some insider buying and the last buy by a director was at $102.08 US$. A positive is the 2019 dividend increase of 11.1%. A negative is the yield below 1%. See my spreadsheet on FirstService Corp.

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSV), but I used to. I bought FirstService Corp in 2002 as it looked like a good solid company that knows how to make money. By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends.

When I was updating my spreadsheet, I noticed even though the company reports in US$, analysts insist and site insist on doing estimates in CDN$. However, this year I had a hard time getting any estimates at all. Last year I at least got estimates for the following 3 years.

They started to pay dividends 5 years ago. The dividends are paid in US$. This company also reports in US$. The dividend yield is in the low category (under 2%). The current dividend yield is 0.65%. The 5 year median dividend is 1.00%. The 5 year growth rate is low at 5.69%, however this is because they did not increase the dividends at first. However, the last 3 increases have been over 10% with the latest dividend increase in 2019 at 11.1%.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 29% with 5 year coverage at 42%. The CPR for CFPS for 2018 is 13% with 5 year coverage at 16%. The DPR for FCF for 2018 is 32% with 5 yar coverage at 19%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.13. The Liquidity Ratio for 2018 is 1.83 with 5 year median at 1.66. The Debt Ratio for 2018 is 1.63 with 5 year median at 1.62. Leverage and Debt/Equity Ratios for 2018 are 2.60 and 1.60 with 5 year median at 3.04 and 2.04.

The Total Return per year is shown below for years of 5 to 23 to the end of 2018 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 chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 9.36% 33.85% 32.22% 1.63%
2008 10 28.79% 27.73% 1.05%
2003 15 18.57% 18.07% 0.50%
1998 20 16.12% 15.78% 0.35%
1995 23 21.55% 21.19% 0.36%


The Total Return per year is shown below for years of 5 to 23 to the end of 2018 in US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 5.69% 27.04% 25.71% 1.33%
2008 10 27.02% 26.24% 0.78%
2003 15 18.16% 17.76% 0.40%
1998 20 16.67% 16.38% 0.29%
1995 23 21.48% 21.19% 0.29%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 32.48, 42.62 and 50.41. The corresponding 10 year ratios are 31.11, 39.56 and 46.76. The corresponding historical ratios are 13.99, 18.67 and 23.23. The current P/E Ratio is 29.23 based on a stock price of $119.93 and 2019 EPS estimate of $4.10 ($3.10 US$). This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

The P/E Ratio for 2020 is 26.97 based on a stock price of $119.93 and 2020 EPS estimate of $4.45 ($3.36 US$). This stock price testing suggests that the stock price is relatively cheap. This is in CDN$. All the P/E Ratio is extremely high with the exception of the historical ratios.

The high capital gains for the past 5 and 10 years started with negative P/E Ratios. The 15, 20 and 23 year capital gains started from P/E Ratios of 19.62, 21.24 and 10.35. These are closer in line with the historical median P/E Ratios.

I get a Graham Price of $26.75. The 10 year low, median, and high median Price/Graham Price Ratios are 2.57, 3.22 and 4.06. The current P/GP ratio is 4.48 based on a stock price of $119.93. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 8.88. The current P/B Ratio is 15.70 based on a Book Value of $230M, Book Value per Share of $6.57 and a stock price of $91.94. The current ratio is 77% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 1.00%. The current yield is 0.65% based on dividends of $0.60 and a stock price of $91.94. The current ratio is 35% below the historical yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$. Note that this is also the 5 year median dividend yield. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.59. The current P/S Ratio is 1.50 based on 2019 Revenue estimate of $2,400M, Revenue per Share of $61.16 and a stock price of $91.94. The current ratio is 157% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is probably expensive. Some of the 10 year ratios are extremely high. This is true of the P/E Ratios, P/GP Ratios, and the P/B Ratios. Most of this testing is still showing the current stock price is relatively expensive. The best test is probably the P/S Ratio test, but there is nothing wrong with the P/B Ratio test or the P/GP Ratio test.

Is it a good company at a reasonable price? I think that the current price is probably expensive. It is a good company, but I do not buy companies when their dividend yields are below 1%. Five years ago, the yields were above 1%. A positive is the nice dividend increases lately with the one for 2019 at 11.1%. Shareholders have done well with capital gains but these gains have started from P/E Ratios that were negative or much lower than for the median P/E Ratios of the 5 and 10 year durations.

When I look at analysts’ recommendations, I find only Hold (5) recommendations. The 12 month stock price is $103.00 US$ (or $136.22 CDN$). This implies a total return of 12.68% with 12.03% from capital gains and 0.65% from dividends.

See what analysts are saying on Stock Chase . They like the company and say it is growing organically as well as by acquisition. Will Ashworth on Motley Fool talks about the company doing away with its dual-class structure. A writer on Simply Wall Street thinks that the company is overpriced. A writer on Simply Wall Street says the stock’s current price reflects it optimistic future. Steph Klass on Mitchell Messenger talks about recent analysts recommendations.

FirstService Corp operates in two business divisions: FirstService Residential and FirstService Brands. FirstService Residential has service contracts to manage thousands of residential communities. FirstService Brands provides property services to residential and commercial customers. The company earns the majority of its revenue in the United States, with the remaining revenue generated in Canada. Its web site is here FirstService Corp .

The last stock I wrote about was about was Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more. The next stock I will write about will be Stantec Inc (TSX-STN, NYSE-STN) ... learn more on Monday, December 16, 2019 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.