Monday, March 18, 2019

Melcor Developments Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. The testing is showing the stock price is cheap to reasonable. Stock is not doing particularly well currently, but it is a western Canada Real Estate stock. See my spreadsheet on Melcor Developments Inc.

I own this stock of Melcor Developments Inc (TSX-MRD, OTC-MODVF). This was one of the stocks on Mike Higgs' list of good dividend growth stocks. So, I looked into it and bought it. I bought this stock first in 2008 and then some more in 2009. It is a little followed real estate company from Western Canada.

When I was updating my spreadsheet, I noticed it has not done well in the last 5 years. The thing is that this company is in western Canada and western Canada has not done well lately. Places like Alberta have a boom and bust economy.

The dividend yields are in the moderate zone (2 to 4% ranges). The current yield is 3.87% with the 5, 10 and historical yields at 3.37%, 3.05% and 2.78%. This stock started out in the 1990’s with yields in the 1 and 2% ranges.

The changes in dividends have varied over time. Dividends have gone down as well as up at various points. The dividend growth is poor for the past 5 and 10 years because of a dividend decrease of 20% in 2016.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 27% with 5 year coverage at 29%. The DPR for FFO for 2018 is 31% with 5 year coverage at 30%. The DPR for CFPS for 2018 is 32% with 5 year coverage at 33%.

Debt Ratios are quite good except for the Long Term Debt/Market Cap Ratio. The Long Term Debt/Market Cap Ratio is high at 1.61. I think the market cap is depressed. The Liquidity Ratio is very good at 3.07 with the Debt Ratio at 2.12. The Leverage and Debt/Equity Ratios are also good at 1.90 ad 0.90.

The Total Return per year is shown below for years of 5 to 28 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 charts below.

I know that this stock has not done well lately, but I am in for the long term and I still have faith in this company. I realize it maybe a while before this company can do well again.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.79% -6.06% -9.33% 3.27%
2008 10 2.16% 17.63% 10.37% 7.25%
2003 15 10.91% 12.48% 6.77% 5.71%
1998 20 12.42% 17.38% 10.08% 7.30%
1993 25 13.92% 18.27% 9.94% 8.34%
1990 28 15.16% 17.20% 9.79% 7.42%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.45, 7.70 and 8.95. The corresponding 10 year ratios are 5.87, 7.51 and 8.69. The corresponding historical ratios are 6.28, 7.25 and 8.40. The current P/E Ratio is 8.18 based on a stock price of $13.42 and 2019 EPS estimate of $1.64. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

I get a Graham Price of $34.37. The 10 year low, median, and high median Price/Graham Price Ratios are 0.36, 0.50 and 0.55. The current P/GP Ratio is 0.39 based on a stock price of $13.42. 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 0.67. The current P/B Ratio is 0.42 based on a stock price of $13.42, Book Value of $1,068M and Book Value per Share of $32.01. The current ratio is some 37% 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 2.78. The current yield is 3.87% based on a stock price of $13.42 and dividends of $0.52. The current yield is 39% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.92. The current P/S Ratio is 1.59 based on 2019 Revenue of $262M, Revenue per Share of $8.46 and a stock price of $13.42. The current ratio is 17% 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 probably cheap to reasonable. The P/S Ratio test is, of course, a good one and we must pay attention to it. The P/GP ratio, P/B ratio and the yield tests are good test and it is showing stock price as relatively cheap. The P/E Ratio test is my least favourite. The P/E Ratios, P/GP Ratios and P/B Ratios are quite low compared to what would be normal for most stocks.

When I look at analysts’ recommendations, I find one analyst following this stock and has given a recommendation of Hold. The consensus would be a Hold. The 12 month stock price consensus is $16.00. This implies a total return of 23.10% with 3.87% from dividends and 19.25% from capital gains based on a current stock price of $13.42.

See what analysts are saying about this stock on Stock Chase. This stock is not well followed and there are few remarks. Ryan Goldsman on Motley Fool talks about this company being undervalued. A writer on Simply Wall Street says the company can comfortable service its debt. The company talks about their 2018 results on Global News Wire. Richard Conner on What’s on Thorold talks about short selling of shares is down 5%.

Melcor Developments Ltd is a real estate development and asset management company. It develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centers and golf courses. Its web site is here Melcor Developments Inc.

The last stock I wrote about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more. The next stock I will write about will be Enbridge Inc. (TSX-ENB, NYSE-ENB) ... learn more on Wednesday, March 20, 2019 around 5 pm. Tomorrow on my other blog I will write about Real Estate Stocks.... learn more on Tuesday, March 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.

Friday, March 15, 2019

Richelieu Hardware Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price is reasonable. The company has good debt ratios. Dividend yield is above 1%. I do not buy stocks when yield is below 1%. See my spreadsheet on Richelieu Hardware Ltd.

I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2007 because it was recommended by the Investment Reporter. It is not on any of the dividend lists, probably because they only started to pay dividends in 2000, they are a rather small company and they did not increase dividends in 2009. This stock has been much recommended by MPL Communications.

When I was updating my spreadsheet, I noticed most of the coloured ink is green. Dividend Payout Ratios have remained low with the DPR for 2018 at 21% with 5 year coverage at 20%. I have had this stock for almost 10 years and my total return is 16.69% per year with 15.01% from capital gains and 1.68% from dividends. The dividend yield on my original cost is 4.08%.

Both the dividend yield is low and the dividend growth is low to moderate. The current dividend yield is 1.08% with 5, 10 and historical yields at 0.88%, 1.21% and 1.13%. The dividend increases have been inconsistent. See the chart below. They had moderate dividend growth in the past but only low growth over the past 5 years.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 21% with 5 year coverage at 20%. The DPR for CFPS for 2018 is 16% with 5 year coverage at 17%.

Debt Ratios are very good. This company currently has no long term debt. They did have some at various points in the past. The Liquidity Ratio for 2018 is 4.64 with 5 year median of 4.40. The Debt Ratio for 2018 is 5.95 with 5 year median of 5.42. The Leverage and Debt/Equity Ratios for 2018 are 1.20 and 0.20 with 5 year medians at 1.22 and 0.22.

The Total Return per year is shown below for years of 5 to 25 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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 6.72% 10.43% 9.21% 1.22%
2008 10 8.45% 16.19% 14.56% 1.63%
2003 15 9.68% 10.02% 8.87% 1.15%
1998 20 12.46% 17.31% 15.67% 1.64%
1993 25 15.99% 14.80% 1.19%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.44, 22.71 and 25.98. The corresponding 10 year ratios are 15.72, 18.50 and 21.27. The corresponding historical ratios are 13.05, 14.80 and 18.35. The current P/E Ratio is 18.58 based on a stock price of $23.23 and 2019 EPS estimate of 1.25. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $15.22. The 10 year low, median, and high median Price/Graham Price Ratios are 1.33, 1.56 and 1.80. The current P/GP Ratio is 1.53 based on a stock price of $23.23. 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 2.97. The current P/B Ratio is 2.82 based on a Book Value of $470M, Book Value per Share of $8.23 and a stock price of $23.23. The current ratio is 5% 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 $1.13. The current dividend yield is 1.08% based on Dividends of $0.24 and a stock price of $23.23. The current dividend is 4.8% below the historical median dividend 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 1.44. The current P/S Ratio is 1.27 based on 2019 Revenue estimate of $1,044M, Revenue per Share of $18.28 and a stock price of $23.23. The current ratio is 12% 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 probably reasonable and below the median. The P/S Ratio test is important on Consumer stocks. Most of the other tests, except for the dividend yield one agree. At least the current yield is above 1% as I do not buy a stock with dividend yield below 1%.

When I look at analysts’ recommendations, I find only one analyst following this stock and the recommendation is a Buy, so the consensus would be a Buy. The 12 months stock price consensus is $29.00. This implies a total return of 25.91% with 24.84% from capital gains and 1.08% from dividends based on a current stock price of $23.23.

See what analysts are saying about this stock on Stock Chase. It is generally well thought of but some think it is a bit pricey. Nelson Smith on Motley Fool thinks this is a great stock. A writer on Simply Wall Street talks about this stock’s low Beta. Hazel Jackson on Thorold News talk about expected EPS for the next quarter.

Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company's sales are derived from its operations in Canada. Its web site is here Richelieu Hardware Ltd.

The last stock I wrote about was about was Goodfellow Inc. (TSX-GDL, OTC-GFELF) ... learn more. The next stock I will write about will be Melcor Developments Inc. (TSX-MRD, OTC-MODVF) ... learn more on Monday, March 18, 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, March 13, 2019

Goodfellow Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. This small cap seems to be cheap. It has very good debt ratios. However, it is also relatively risky. Reinstating their divided is a good sign. See my spreadsheet on Goodfellow Inc.

I own this stock of Goodfellow Inc. (TSX-GDL, OTC-GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.

When I was updating my spreadsheet, I noticed that they have reinstated their dividend. This is a good sign that the company is optimistic about the future. After two years of earnings losses, they made a profit again in 2018. Sales were down in 2017 and 2018, but analysts expect an increase in sales for 2019.

The company cancelled dividends in 2017 and paid none in 2018. However, they were reinstated for this year with a dividend of $0.10 in March. They do not say how often dividends will not be paid, but they were paid semi-annually before in August and November in past years. I am assuming that this will be a semi-annual dividend. I could be wrong.

Even assuming that dividends will be paid semi-annually, dividends growth is a negative 8% over the past 5 years. The last dividend paid was for $0.15, and in 2016 the total dividends paid was $0.30.

They probably stopped paying a dividend because of the EPS losses in 2016 and 2017. They made $0.30 EPS in 2018. If they end up paying out $0.20 in dividends, the Dividend Payment Ratio might be 67%.

Debt Ratios are generally very good. They do not have much in Long Term Debt, so Long Term Debt/Market Cap is very low at 0.03. On the other hand, they do have a lot of short term bank loans and in a ratio re Market Cap, it would be 0.84. The Liquidity Ratio for 2018 is very good at 2.04 with 5 year median also at 2.04.

The Debt Ratio is also very good at 2.43 for 2018 with5 year median at 2.45 also. Leverage and Debt/Equity Ratios are also very good at 1.69 and 0.69, respectively. The 5 year medians are 1.62 and 0.62 respectively.

The Total Return per year is shown below for years of 5 to 22 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 charts below.

Only very long term investors have made money currently on this stock. Recent investors have not done well and I also have a loss of 6.32% with capital loss of 8.61% and dividends of 2.29%.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% -8.00% -10.21% 2.21%
2008 10 0.00% 2.09% -3.28% 5.38%
2003 15 0.00% 5.13% -2.07% 7.19%
1998 20 0.00% 9.10% 1.11% 7.99%
1996 22 0.00% 10.56% 2.25% 8.32%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.26, 10.02 and 10.78. The corresponding 10 year ratios are 9.81, 10.65 and 11.49. The corresponding historical ratios are 7.05, 8.40 and 9.33. The current P/E Ratio is 21.40 based on a stock price of $6.42 and latest 12 month’s EPS of $0.30. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $9.48. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.59 and 0.65. The current P/GP Ratio is 0.68 based on a stock price of $6.42. 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 0.66. The current P/B Ratio is 0.48 based on Book Value of $112.86, Book Value per Share of $13.27 and a stock price of $6.42. the current ratio is 26% 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 3.55%. The current dividend yield is 3.12% based on dividends of $0.20 and a stock price of $6.42. The current dividend is 12% below the historical median 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 0.16. The current P/S Ratio is 0.09 based on last 12 month Revenue, Revenue per Share of $61.76 and a stock price of $6.42. The current ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing should probably focus on the P/S Ratio test. It is sales that push all other values in the longer term. The P/E Ratio is unreliable when you have earnings losses. On an absolute level, a Price/Graham Price Ratio of less than 1.00 points to a cheap price. A P/B Ratio under 1.00 also points to a cheap price.

When I look at analysts’ recommendations, I find that no analysts follow this stock.

Benjamin Sinclair on Motley Fool wrote about this stock in 2014. The stock was a bargain, but he said we should be careful about bargains. John Newcomb on Stock Digest wrote about this stock this month. He said that investors have shown an interest in this stock. Saundra Reilly via Simply Wall Street says the company’s Return on Capital Employed is low. The company reported its fourth quarterly results on Globe News Wire.

Goodfellow Inc is engaged in remanufacturers and distributors of lumber products and hardwood flooring products. It is engaged in the wholesale distribution of wood products, and remanufacturing, distribution, and brokerage of lumber. Its web site is here Goodfellow Inc.

The last stock I wrote about was about was Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) ... learn more. The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more on Friday, March 15, 2019 around 5 pm. Tomorrow on my other blog I will write about A Portfolio.... learn more on Thursday, March 14, 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, March 11, 2019

Canadian Tire Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. It would seem that the stock price is reasonable and around the median. A problem is the lack of adequate growth in book value. Dividend Payout Ratio is increasing, but good increases in dividends suggest that management see a good future. See my spreadsheet on Canadian Tire Corp.

I own this stock of Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF). In 2000 when I first bought this stock, it was on the Investment Reporter's list of conservative Canadian stocks. I bought stock for my trading account in 2009 because I have done well with it in my Pension Account and it was a consumer stock.

When I was updating my spreadsheet, I noticed that the Dividend Payout Ratio has been increasing since 2008. DPR has grown from 18% to 34%. The dividends did not change between 1991 and 2003.

The dividend yield is low to moderate. The current dividend is moderate at 2.85%. The 5, 10 and historical median yields are all low at 1.71%, 1.73 % and 1.70% respectively. Long term dividend growth is moderate, but it has been good for the good for the last 15 years. Moderate growth is over 8% to 14% range and good is 15% and over.

The Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 33.8% with 5 year coverage at 26.7%. The DPR for CFPS is 13.5% with 5 year coverage at 12.8%.

Debt Ratios are acceptable. The Long Term Debt/Market Cap Ratio for 2018 is 0.65. The Liquidity Ratio is good at 1.76. The Debt Ratio is a little low at 1.46, but 5 year median is 1.60. I like this ratio at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2018 are 3.19 and 2.19. The 5 year median ratios are better at 2.63 and 1.63. It would be nice if these ratios were under 3.00 and under 2.00, respectively.

The Total Return per year is shown below for years of 5 to 28 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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 20.79% 9.61% 7.49% 2.13%
2008 10 15.67% 14.79% 12.63% 2.16%
2003 15 15.78% 10.62% 8.95% 1.67%
1998 20 11.61% 7.71% 6.44% 1.27%
1993 25 9.19% 12.44% 10.41% 2.03%
1990 28 8.36% 7.88% 6.57% 1.31%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.65, 14.32 and 15.89. The 10 year corresponding ratios are 10.75, 12.59 and 14.70. The corresponding historical ratios are 11.23, 13.68 and 15.55. The current P/E Ratios 11.01 based on a stock price of $145.38 and 2019 EPS estimate of $13.20. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $145.58. The 10 year low, median, and high median Price/Graham Price Ratios are 0.78, 0.92 and 1.07. The current P/GP Ratio is 1.01 based on a stock price of $145.38. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.51. The current ratio is 2.09 based on a stock price of $145.38, Book Value of $,5415 and Book Value per Share of $69.41. The current ratio is 39% 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 1.70%. The current dividend yield is 2.83% based on dividends of $4.15 and a stock price of $145.38. The current yield is 68% above the historical median yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.62. The current P/S Ratio is 0.62 based on a stock price of $145.38, 2019 Revenue estimate of $14,795M, and Revenue per Share of $235.21. The current ratio is the same and the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and around the median.

Results of stock price testing is I think is that the stock price is reasonable and around the median, which is what the P/S Ratio testing is showing. It is interesting that tests are all over the place. The problem with the P/B Ratio is that Book Value is not growing much. This seems to be the results of share buybacks and new accounting rules.

When I look at analysts’ recommendations, I find Buy (7), Hold (5) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $175.17. This implies a total return of 23.35%, with 20.49% from capital gains and 2.85% from dividends.

See what analysts are saying on Stock Chase. The company is liked but many mentioned that retail is tough and everyone is having trouble with Amazon. Andrew Button on Motley Fool says the company is long term market beater. A writer at Simply Wall Street says this stock is undervalued. The Canadian Press via the Financial talks about the company’s fourth quarterly results.. Dividend Earner on Seeking Alpha has a positive view on this stock.

Canadian Tire sells home goods, sporting equipment, apparel, footwear, automotive parts and accessories, and vehicle fuel through a 1,700-store network of company, dealer, and franchisee-operated locations across Canada. Aside from the namesake banner, stores operate primarily under the Mark's, SportChek, Atmosphere, and PartSource monikers. The firm also operates and holds majority ownership of a financing arm (Canadian Tire Financial Services. Its web site is here Canadian Tire Corp.

The last stock I wrote about was about was H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more. The next stock I will write about will be Goodfellow Inc. (TSX-GDL, OTC-GFELF) ... learn more on Wednesday, March 13, 2019 around 5 pm. Tomorrow on my other blog I will write about Canadian Dividend Stocks.... learn more on Tuesday, March 12, 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, March 8, 2019

H & R Real Estate Trust

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price is relatively reasonable and around the median. Some tests show the stock price above the median and some below the median. Outstanding shares have grown faster than Revenue, which is not good. See my spreadsheet on H & R Real Estate Trust.

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.

When I was updating my spreadsheet, I noticed outstanding shares have grown but revenue has not. Shares have grown by 1% and 7% per year over the past 5 and 10 years. Because of uneven growth in revenues, I am looking at 5 and 10 year Running Averages. The 5 and 10 year running averages show growth of 9%. And 8.5%. If you Look at Revenue per Share, 5 year running averages show growth of 0.2% and 0.5%. This shows that no real progress has been made on revenue.

The 5 year running averages for the past 5 years show average growth for the 5 years ending in 2018 compared to the 5 year average growth to 2013. The 5 year running averages for the past 10 years show average growth for the 5 years ending in 2018 compared to the 5 year average growth to 2008.

Dividend yield are good. The current dividend is 5.97% with 5, 10 and historical median dividend yields at 6.21, 6.01% and 6.47%. The dividend growth is low. See the table below. Nine years ago, the dividends were cut by 50%. They are not quite back to were they were in 2008. In 2008, dividends were at $1.44 and current they are at $1.38.

The Dividend Payout Ratios are probably fine. The DPR for EPS for 2018 is 1285 with 5 year coverage at 103%. Since this is a REIT, the DPR is usually calculated using FFO and AFFO. The DPR for 2018 for FFO is 80% with 5 year coverage at 73%. The DPR for 2018 for AFFO is $98% with 5 year coverage at 91%.

Debt Ratios are not what I would like to see and there is some vulnerability here. The Long Term Debt/Market Cap Ratio for 2018 is 0.98. The Liquidity Ratio for 2018 is 0.99, but if you add in cash flow after dividends the ratio is 1.32. The Debt Ratio is good at 1.96. Leverage and Debt/Equity Ratios for 2018 are 2.04 and 1.04.

The Total Return per year is shown below for years of 5 to 22 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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.44% 5.74% -0.71% 6.45%
2008 10 -0.42% 20.77% 10.73% 10.04%
2003 15 0.80% 8.75% 1.76% 6.98%
1998 20 1.47% 12.92% 3.59% 9.34%
1996 22 3.43% 12.24% 3.35% 8.89%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.51, 16.71 and 18.91. The corresponding 10 year ratios are 13.53, 15.96 and 18.21. The corresponding historical ratios are 11.53, 14.25 and 16.23. The current P/E Ratio is 13.06 based on a stock price of $23.12 and 2019 EPS estimate of $1.77. This stock price testing suggests that the stock price if relatively cheap.

Since this is a REIT, we need to repeat this test using FFO. The 5 year Price/Funds from Operations Ratios are 10.96, 11.66 and 12.69. The corresponding 10 year ratios are 11.68, 11.98 and 12.87. The current P/FFO Ratio is 12.70 based on 2010 FFO estimate of 1.82 and a stock price of $23.12. This stock price testing suggests that the stock price if relatively reasonable but above the median.

I get a Graham Price of $32.23. The 10 year low, median, and high median Price/Graham Price Ratios are 0.65, 0.70 and 0.79. The current P/GP Ratio is 0.72 based on a stock price of 23.12. This stock price testing suggests that the stock price if relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 0.96. The current P/B Ratio is 0.96. The current P/B Ratio is 0.92 based on a Book Value of $7,200M, Book Value per Share of $25.20 and a stock price of $23.12. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price if relatively reasonable and below the median.

I get an historical median dividend yield of 6.57%. The current dividend yield is 5.97% based on dividends of $1.38 and a stock price of $23.12. The current yield is 7.8% above the historical median yield. This stock price testing suggests that the stock price if relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 5.16. The current P/S Ratio is 5.08 based on 2019 Revenue estimate of $1,299M, Revenue per Share of $4.55 and a stock price of $23.12. The current ratio is 1.5% below the 10 year median ratios. This stock price testing suggests that the stock price if relatively reasonable and below the median.

Results of stock price testing is that the stock price is relatively reasonable and around the median. Some tests show the stock price above the median and some below the median.

When I look at analysts’ recommendations, I find Buy (6) and Hold (3). The consensus would be a Buy. The 12 month stock price is $24.78. This implies a total return of 13.15% with 7.18% from capital gains and 5.97% from dividends.

See what analysts are saying about this stock on Stock Chase. One analyst said that the dividends are safe, but growth will be modest. Nelson Smith on Motley Fool thinks the 6% dividend is great. A writer on Simply Wall Street says this company has recently had positive investor sentiment. Caroline Biscotti on Brookville Times says Piotroski F-Score of 5 where 9 is financial strength and 1 is financial weakness. Cheyenne Larson on Press Oracle about recent analysts ratings.

H&R Real Estate Investment Trust is a real estate investment trust principally involved in the ownership of properties in Canada and the U.S. H&R owns and manages a real estate portfolio rather equally divided between property in the Canadian provinces of Ontario and Alberta and in the U.S. Its web site is here H & R Real Estate Trust.

The last stock I wrote about was about was Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more. The next stock I will write about will be Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) ... learn more on Monday, March 11, 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, March 6, 2019

Allied Properties Real Estate Investment Trust

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. It would seem to be pricey at the present and not a good time to buy. Revenue has not been increasing as fast as the number of shares. There has been insider selling. See my spreadsheet on Allied Properties Real Estate Investment Trust.

I do not own this stock of Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF). Since several stocks that I followed in 2015 were deleted from the stock exchange, I was looking for other stocks to follow. I am sure that I got this from a Canadian Dividend site called Think Dividends, but I cannot find it at present.

When I was updating my spreadsheet, I noticed that shares have increased by 8.67% and 12.77% per year over the past 5 and 10 years. The per share growth in revenue, which are the ones that count when shares are increase, is low to negative. The Revenue growth looks good at 7.64% and 12.66% per year over the past 5 and 10 years, but the real growth is Revenue per Share and it is negative. Revenue per Share is now by 0.93% and 0.09% per year over the past 5 and 10 years.

However, what is more important is the 5 year running averages. The Revenue growth using 5 year running averages is very good at 12.23% and 17.93%. Revenue per Share using 5 year running average is over the 5 and 10 years is 1.83% and 3.01%. This is still a lot lower than Revenue Growth.

The dividend yield runs from moderate to good. Most are in the moderate range. The current dividend yield is 3.31%, with 5, 10 and historical median dividend yields at 4.05%, 4.39% and 5.69%. The stock started with higher yields and that is why the historical median is much higher than other median yields.

As is usual for REITs the dividend growth is low. As with other REITs they do not increase their dividends every year, but the record for this REIT is not bad with increases in 11 of the past 15 years.

The Dividend Payout Ratio coverage looks fine to me. The DPR for EPS for 2018 is 28% with 5 year coverage at 39%. Generally, for REITs the coverage by Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are looked at. The DPR for 2018 for FFO is 72% with 5 year coverage at 70%. The DPR for 2018 for AFFO is 87% and 5 year coverage at 85%.

The debt ratios are fine but with some vulnerability with the Liquidity Ratio. There is always the possibility that they cannot rollover their debt. The Long Term Debt/Market Cap Ratio for 2018 is 0.40. The Liquidity Ratio is low. If you look at the Liquidity Ratio and add in Cash Flow after Dividends and Debt due currently and Prepaid Items it is 1.22. The Debt Ratio is 2.88. Leverage and Debt/Equity Ratios are 1.53 and 0.53.

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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 2.04% 10.30% 6.23% 4.06%
2008 10 1.80% 20.63% 13.54% 7.10%
2003 15 4.34% 15.01% 8.60% 6.41%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.20, 9.29 and 10.38. The corresponding 10 year ratios are 8.31, 9.27 and 10.22. The corresponding historical ratios are 11.06, 12.64 and 14.22. The current P/E Ratio is 21.40 based on a stock price of $48.15 and 2019 EPS estimate of $2.25. This stock price testing suggests that the stock price is relatively expensive.

Because this is a REIT, we should redo the above using FFO. The 5 year low, median, and high median P/FFO Ratios are 15.27, 16.73 and 18.99. The corresponding 10 year P/FFO Ratios are 14.74, 16.67 and 18.24. The current P/FFO Ratio is 21.50 based on a stock price of $48.15 and FFO estimate for 2019 of $2.24. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $46.07. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.98. The current P/GP Ratio is 1.05 based on a stock price of $48.15. 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 1.07. The current P/B Ratio is 1.14 based on Book Value of $4,375M, Book Value per Share of $42.12 and a stock price of $48.15. This stock price testing suggests that the stock price is relatively reasonable and above the median.

I get an historical median dividend yield of 5.69%. The current yield is 3.31% based on dividends of $1.60 and a stock price of $48.15. The current yield is 42% 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 7.43. The current P/S Ratio is 10.73 based on Revenue estimate for 2019 of $466M, Revenue per Share of $4.49 and a stock price of $48.15. The current ratio is 44% 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 in the relatively expensive range. The one exception is the P/B Ratio test and it still shows a price above the median. In any case, it would seem that now is not a good time to buy this REIT.

When I look at analysts’ recommendations, I find Buy (8) and Hold (2). The consensus would be a Buy. The 12 month stock consensus is $50.50. This implies a total return of 8.20% with 4.88% from capital gains and 3.31% from dividends.

See what analysts are saying about this stock on Stock Chase. They like the REIT but feel its price is too high. Kay Ng on Motley Fool thinks this REIT is currently too expensive. A writer on Simply Wall Street talks about the FFO to Debt Ratio. A writer on What’s on Thorold talks about recent analysts ratings. Joseph Taylor on K Reviewer talks about analysts target prices.

Allied Properties Real Estate Investment Trust is a real estate investment trust engaged in the development, management, and ownership of primarily urban office environments across Canada's major cities. Most of the total square footage in the company's real estate portfolio is located in Toronto and Montreal. Its web site is here Allied Properties Real Estate Investment Trust.

The last stock I wrote about was about was RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) ... learn more. The next stock I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more on Friday, March 8, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy March 2019.... learn more on Thursday, March 07, 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, March 4, 2019

RioCan Real Estate

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price seems to be current good. Good yield, but low dividend growth. See my spreadsheet on RioCan Real Estate.

I own this stock of RioCan Real Estate (TSX-REI.UN, OTC-RIOCF). I first bought this stock 1998 because I wanted to diversify my portfolio into REITs. It was a stock covered and recommended by MPL Communications in their Income Trust coverage. Over the years I have made several more purchases of this REIT.

When I was updating my spreadsheet, I noticed that my overall return was good, but it really mattered with each account on when I bought this stock. Overall my total return is 11.75% per year with 2.85% from capital gains and 8.90% from distributions. This is a REIT so you expect to earn most from distributions.

For my trading account, I bought this stock in 2000, 2002, 2011 and 2014. For this account, my total return is 15.21% per year with 4.93% from capital gains and 10.28% from distributions. For my Pension account, I bought stock in 2006, and 2010. My total return for this account is 7.87% per year with 1.70% from capital gains and 6.17% from distributions. For my RRSP account I bought stock in 1998 and 2013. On this account I have a total return of 9.32% per year with 1.11% from distributions and 8.21% from capital gains.

I have read articles that if you are buying long term, you need not worry about the cost of the stocks because that over the long term you will make the same on stocks. The above shows something different. I think time of purchase really counts for the long term. Or, maybe this is pointing to that it would be best to buy shares of what you want to own over a period of time.

As with most REITs, this one has a good dividend yield. The current dividend yield is 5.76% with 5, 10 and historical yields at 5.37%, 5.47% and 7.47%. If you had purchased this stock at a median price 5, 10, 15 or 20 years ago, you would be making a yield on your original price of 5.48%, 9.22%, 8.75% or 15.65%. If you buy dividend growth stock in a portfolio for retirement, a lot of the growth will be growth in income.

The other thing with dividends on REITs is the low growth in dividends. Growth in dividends has been low as you can see in the chart below. However, over a long period, you are still making a very good yield. When you have REITs in your portfolio, a big part of your total return is in dividends.

When you look at EPS to judge if they can afford their dividends, the Dividend Payout Ratio is 86% in 2018 with 5 year coverage at 80%. For REITs, it is generally acceptable to look at DPR in connection with Funds from Operations (FFO). For 2018, the DPR for FFO is 78% with 5 year coverage at 79%.

The Long Term Debt/Market Cap Ratio for 2018 is 0.68. This is fine. I do calculate a Liquidity Ratio, but this ratio is not considered important for REITs. The Debt Ratio is good at 2.21. The Leverage and Debt/Equity Ratios are also good at 1.83 and 0.83.

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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.42% 5.00% -0.80% 5.80%
2008 10 0.56% 14.04% 5.71% 8.33%
2003 15 1.56% 10.46% 2.99% 7.47%
1998 20 2.09% 14.38% 4.75% 9.63%
1994 24 5.16% 21.29% 7.19% 14.11%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.67, 12.51 and 13.36. The corresponding 10 year ratios are 11.25, 12.06 and 13.12. The corresponding historical ratios are 11.64, 12.82 and 13.36. The current P/E Ratio is 14.22 based on a stock price of $25.02 and 2019 EPS estimate of $1.76. This stock price testing suggests that the stock price is relatively expensive.

Because this is a REIT, we should repeat this testing using FFO. The 5 year P/FFO Ratios are 13.18, 14.13 and 15.43. The corresponding 10 year ratios are 13.35, 14.92 and 16.77. The current P/FFO Ratio is 13.05 based on a stock price of $25.02 and 2019 FFO estimate of $1.92. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $32.63. The 10 year low, median, and high median Price/Graham Price Ratios are 0.81, 0.91 and 1.02. The current P/Graham Price Ratio is 0.77 based on a stock price of $25.02. 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 1.42. The current P/B Ratio is 1.01 based on a stock price of $25.02, Book Value of $7,522M and Book Value per Share of $24.65. The current P/B Ratio is some 28% 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 7.47%. The current dividend yield is 5.76% based on dividends of $1.44 and a stock price of $25.02. The current yield is some 23% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 7.14. The current P/S Ratio is 6.88 based on 2019 Revenue estimate of $1,110M, Revenue per Share of $3.64 and a stock price of $25.02. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is probably cheap to reasonable. Most analysts put a lot of stock in testing using FFO and these tests show the stock as cheap. However, you cannot ignore the P/S Ratio testing that says the stock price is reasonable and below the median. So, it looks like the price, in any case, is relatively good.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $27.33. This implies a total return of 14.99 based on a stock price of $25.02 and having 9.23% from capital gains and 5.76% from dividends.

See what analysts are saying about this stock on Stock Chase. Analysts seem to like this company. Nelson Smith on Motley Fool says this REIT is one of the top REITs. A Simply Wall St writer on Simply Wall Street talks about insider trading. A Lakeland Staff Writer on Lakeland Observer say the Williams Percent Range is -67 which means the stock is neither overbought or oversold, but closer to oversold. Trina Covell on Press Oracle says Royal Bank has raised this REIT’s target price.

RioCan Real Estate Investment Trust is a Canadian real estate investment trust which owns, develop, and operate Canada's portfolio of retail-focused, increasingly mixed-use properties. The REIT's property portfolio includes shopping centers and mixed-use developments, with most of its properties located in Ontario, Canada. RioCan's tenants consist of grocery stores, supermarkets, restaurants, cinemas, pharmacies, and corporates. By geography, the company operates in Canada, which generates the majority of total revenue, and in the United States. Its web site is here RioCan Real Estate.

The last stock I wrote about was about was Bombardier Inc. (TSX-BBD.B, OTC-BDRBF) ... learn more. The next stock I will write about will be Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more on Wednesday, March 6, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks March 2019.... learn more on Tuesday, March 5, 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, March 1, 2019

Bombardier Inc

Sound bite for Twitter and StockTwits is: Cheap Industrial Stock. It would appear that the stock price is relatively cheap. The company has a huge vulnerability because of awful debt ratios. There is minimal insider buying. See my spreadsheet on Bombardier Inc.

I do not own this stock of Bombardier Inc (TSX-BBD.B, OTC-BDRBF) but I used to. The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I did not sell. I lost hope by 2017, so I sold. I made 11.08% per year.

When I was updating my spreadsheet, I noticed the company still is not doing well. Analysts still have hope that revenue, earnings, and cash flow will improve.

This company has had dividends during some periods. In fact, I made half my return in dividends. I did make a total return of 11.08% per year, but 5.69% was in capital gains and 5.39% was in dividends.

The Long Term Debt/Market Cap Ratio is really high at 2.60. Any ratio about 1.00 is really high. The Liquidity Ratio for 2018 is 1.00. If you had in cash flow it becomes 1.04. Current assets just barely cover current liabilities. The Debt Ratio is worse at 0.86. This means that assets cannot cover liabilities and book value is negative. Leverage and Debt/Equity Ratios cannot be calculated because of the negative book value. This is a huge vulnerability for the company.

The Total Return per year is shown below for years of 5 to 32 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 charts below.

This stock crashed after the 2001 bear market and recession and has never recovered.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% -14.68% -15.13% 0.45%
2008 10 0.00% -4.14% -6.08% 1.94%
2003 15 0.00% -5.73% -6.96% 1.23%
1998 20 0.00% -6.99% -8.21% 1.21%
1993 25 0.00% 1.86% -1.05% 2.91%
1988 30 0.00% 7.90% 2.98% 4.92%
1986 32 0.00% 5.35% 1.71% 3.64%


The Total Return per year is shown below for years of 5 to 29 to the end of 2018 in US$.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% -19.09% -19.51% 0.41%
2008 10 0.00% -4.71% -7.08% 2.37%
2003 15 0.00% -5.66% -7.23% 1.56%
1998 20 0.00% -6.30% -7.79% 1.49%
1993 25 0.00% 1.82% -1.20% 3.02%
1989 29 0.00% 6.57% 2.10% 4.48%


The 5 year low, median, and high median Price/Earnings per Share Ratios are -2.21, -2.29 and -3.37. The corresponding 10 year ratios are 6.40, 10.28 and 13.88. The historical ratios are 11.21, 15.47 and 19.79. The current P/E Ratio is 22.72 based on a stock price of $2.79 CDN$ and 2019 EPS estimate of $0.04 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I cannot calculate a Graham Price is the Book Value is negative. I also cannot do the dividend yield test as there are no dividends. I cannot do the Price/Book Value per Share test as the Book Value is negative.

The 10 year median Price/Sales (Revenue) Ratio is 0.36 US$. The current P/S Ratio is 0.28 US$ based on 2019 Revenue estimate of $17,920 US$, Revenue per Share of $7.35US$ and a stock price of $2.12 US$. The current P/S Ratio is some 22% 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 P/S Ratio test is the only valid test and it shows the stock as relatively cheap. The only other one I did was the P/E Ratio test, but the problem with that is that there has been a lot of years of earnings losses. All other tests could not be done because the book value is negative or because there are no dividends.

When I look at analysts’ recommendations, I find Strong Buy (4) and Buy (17) recommendations. The consensus would be a Buy. The 12 month stock price is $3.39 US$ or $4.47 CDN$. This implies a total return of 60% based on a current stock price of $2.79 CDN$ all from capital gains.

See what analysts are saying about this stock on Stock Chase. Most do not like the company. Andrew Button on Motley Fool says he is looking for a good entry point.. A writer on Simply Wall Street says this stock is undervalued by 48%. The Canadian Press via CTV News has an article about Bombardier finding work for their laid off workers. Esteban Duarte and Gowri Gurumurthy on Bloomberg says that Bombardier double the size of its Bond offering as it sold into a red-hot junk bond market.

Bombardier manufactures transportation solutions, from commercial aircraft and business jets to rail transportation equipment and related services. With a home office in Montreal, it has facilities and 74,000 employees operating in 28 countries. Its web site is here Bombardier Inc.

The last stock I wrote about was about was Home Capital Group (TSX-HCG, OTC-HMCBF) ... learn more. The next stock I will write about will be RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) ... learn more on Monday, March 4, 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, February 27, 2019

Home Capital Group

Sound bite for Twitter and StockTwits is: Specialty Bank Stock. The stock price seems currently to be relatively cheap. There is insider buying and analysts expect the dividends to be resumed this year. See my spreadsheet on Home Capital Group.

I own this stock of Home Capital Group (TSX-HCG, OTC-HMCBF). I started reviewing this company in September 2009. It is a dividend growth company and was coming up on lists of good dividends paying stocks. It is on some dividend paying companies lists that I look at.

When I was updating my spreadsheet, I noticed that there is lots of insider buying this year as there was last year. This year NIB is at 0.14% with last year at 0.15%. Normal would be around 0.01% or 0.02%. The company is also buying back shares. Last year they bought back almost 23% of the outstanding shares. I do not generally agree with buybacks, but at least they are buying back shares at a low price.

After they got into trouble in 2017, they cancelled their dividends. Analysts do expect that dividends will be reinstated. Some thought it would be in 2018 but since that did not happen, they are giving 2019 as the year for dividend reinstatements.

Prior to 2017 they could afford their dividends. The Dividend Payout Ratio for 2016 for EPS was 26% with 5 year coverage at 19%. The DPR for 2016 for CFPS was 23% with 5 year coverage at 14%.

Debt Ratios are fine on this stock. As with other financials, you do not look at Long Term debt/Market Cap Ratios for at Deposit/Asset Ratios. You want to make sure that they can cover their deposits with assets. For this stock the Deposit/Asset Ratio is 0.74. This is good. I do Liquidity Ratio which is 2.62 and good. However, analysts do ignore this ratio for banks and some other financials. The Debt Ratio is 1.10. For this sort of company, you want this ratio at 1.04 or higher.

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

It would seem that long term investors have not done badly. It is just recent investors, like me, that have done poorly.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% -16.79% -18.67% 1.87%
2008 10 0.00% 7.92% 3.82% 4.10%
2003 15 0.00% 6.86% 3.73% 3.13%
1998 20 0.00% 20.36% 15.11% 5.25%
1995 23 39.95% 27.92% 12.03%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.61, 9.38 and 11.89. The corresponding 10 year ratios are 7.15, 9.15 and 11.02. The corresponding historical ratios are 7.50, 9.11 and 11.72. The current P/E Ratio is 8.09 based on a stock price of $17.15 and 2019 EPS estimate of $2.12. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $35.51. The 10 year low, median, and high median Price/Graham Price Ratios are 0.66, 0.86 and 1.07. The current P/GP Ratio is 0.48 based on a stock price of $17.15. 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 1.77. The current P/B Ratio is 0.65 based on Book Value of $1,641M, Book Value per Share of $26.45 and a stock price of $17.15. The current ratio is 63% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do an historical median dividend yield test as dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 5.31. The current P/S Ratio is 2.76 based on 2019 Revenue estimate of $386M, Revenue per Share of $6.22 and a stock price of $17.15. The current P/S Ratio is 48% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is saying that the stock is relatively cheap. The P/E Ratio test does not say this, but that is my least favourite test.

When I look at analysts’ recommendations, I find Hold Recommendations (7) only. The consensus recommendations would therefore be a Hold. The 12 month stock price consensus is $18.86. This implies a total return of 9.97% all from capital gain and based on a current stock price of $17.15.

See what analysts are saying on Stock Chase. They think the company has challenges. Karen Thomas on Motley Fool thinks this stock is too risky to buy. Jacob Boyd on Simply Wall Street notes that analysts expect a big increase in earnings. Lisa Matthews on Fairfield Current talks about CIBC raising their target price on this stock. .

Home Capital Group Inc is a specialty finance company that offers residential and commercial mortgage lending, securitization of insured mortgage products, consumer lending, and credit card services. The company also offers deposits via brokers and financial planners, and through its direct-to-consumer deposit brand, Oaken Financial. Home Capital's mortgage lending focuses on homeowners who typically do not meet all the lending criteria of traditional financial institutions. Its web site is here Home Capital Group.

The last stock I wrote about was about was Emera Inc. (TSX-EMA, OTC-EMRA) ... learn more. The next stock I will write about will be Bombardier Inc. (TSX-BBD.B, OTC-BDRBF) ... learn more on Friday, March 1, 2019 around 5 pm. Tomorrow on my other blog I will write about Banks and Other Things.... learn more on Thursday, February 28, 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, February 25, 2019

Emera Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is cheap to reasonable. It would seem that this utility stock will grow at a lower rate than it has over the past 5 and 10 years. Debt ratios are not good, but they are set to sell off assets. See my spreadsheet on Emera Inc.

I own this stock of Emera Inc. (TSX-EMA, OTC-EMRA). I found this company in Mike Higg’s site. Mike’s site had a spreadsheet showing Dividend Paying Canadian Growth stocks. In 2005, I wanted to buy something for my Locked-In RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account.

When I was updating my spreadsheet, I noticed the debt ratios were not nice. There are none that I like. Their Long Term Debt/Market Cap ratios are over 1.00 with the one for 2018 at 1.40. The Liquidity Ratio for 2018 is 0.62. This means that the current asses cannot cover current liabilities. It is only adding back in the current portion of the long term debt and cash value after dividends that it just gets over 1.00 at 1.01. This is a big vulnerability. What if in a recession they cannot roll over their current portion of the long term debt?

The Debt Ratio is low at just 1.35. The 5 year median is 1.40. I like this at 1.50 at least. Leverage and Debt/Equity Ratios are 4.44 and 3.29 respectively and these are too high. The debt ratios have basically not been good since 2015.

Dividends are currently good with current moderate growth. The current dividend yield is 5.06% with growth over the last 5 years are 10.07% per year. The yield used to be in the moderate range with 5, 10 and historical yield at 4.35%, 4.26% and 4.82%. The last 10 year’s growth in dividend was good at 8.99% per year, but the years prior, growth was less than 8% per year. See the chart below. The last dividend increase occurred in 2018 and it was for 4%.

The Dividend Payout Ratio for 2018 is 75% with 5 year coverage at 86%. The DPR for CFPS is 42% with 5 year coverage at 38%. These are a little high, but not by much. The last two years of 2016 and 2018 the DPR for EPS was above 100%. The TD Bank looks also a DPR for AFFO which has a 2018 payout of 51% with 5 year coverage at 59%.

I covered the debt ratios above and I was not pleased with them. However, Emera is selling some assets and so this will probably help this situation. See a Business Wire item on the Financial post.

The Total Return per year is shown below for years of 5 to 26 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 charts below.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 10.07% 12.75% 7.41% 5.34%
2008 10 8.99% 12.08% 7.01% 5.07%
2003 15 6.72% 10.87% 6.16% 4.71%
1998 20 5.25% 8.70% 4.51% 4.19%
1993 25 4.55% 9.72% 4.97% 4.75%
1992 26 10.87% 5.54% 5.32%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.34, 15.88 and 17.42. The corresponding 10 year ratios are 14.31, 16.32 and 18.75. The corresponding historical ratios are 13.06, 15.5 and 16.96. The current P/E Ratio is 16.31 based on a stock price of $46.47 and 2019 EPS estimate of $2.85. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $44.66. The 10 year low, median, and high median Price/Graham Price Ratios are 1.11, 1.28 and 1.44. The current P/GP Ratio is 1.04 based on a stock price of $46.47. 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 1.84. The current P/B Ratio is 1.49 based on a Book Value of $7.283, Book Value per Share of $31.11 and a stock price of $46.47. The current ratio is 19% below the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but below the median.

I get an historical median dividend yield of 4.82%. The current dividend yield is 5.06% based on dividends of $2.35 and a stock price of $46.47. The current yield is 5% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable but below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.90. The current P/S Ratio is 1.62 based on 2019 Revenue estimate of $6,710M, Revenue per Share of $28.66 and a stock price of $46.47. The current ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but below the median.

Results of stock price testing is showing up as suggesting that the stock price is relatively reasonable but below the median. The Graham Price testing says the stock price is relatively cheap. For the P/B Ratio testing, if the difference in ratios was 20%, not 19%, the stock would be considered cheap.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5), Hold (7) and Underperform (10. The consensus would be a Buy. The 12 month stock price is $48.57. This implies a total return of 9.58% with 4.52% from capital gains and 5.06% from dividends based on a current price of 46.47.

See what analysts are saying at Stock Chase. An analyst has said they plan to cut dividend growth probably to 3 to 4% per year. Most analysts like the company. Andrew Button on Motley Fool thinks this stock is a wise investment. Kyle Sanford on Simply Wall Street thinks that this is a top dividend stock. Adrian McCoy on What’s on Thorold says some analysts are positive about this stock.

Emera is geographically diverse energy and services company investing in electricity generation, transmission, and distribution as well as gas transmission and utility energy services. Emera has operations throughout North America and in four Caribbean countries. Its web site is here Emera Inc .

The last stock I wrote about was about was Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more. The next stock I will write about will be Home Capital Group (TSX-HCG, OTC-HMCBF) ... learn more on Wednesday, February 27, 2019 around 5 pm. Tomorrow on my other blog I will write about Four Advisor Stocks.... learn more on Tuesday, February 26, 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.