Monday, April 29, 2019

WSP Global Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. Stock price is reasonable to expensive. Dividend Payout Ratios are going down. I will be happier with this stock when dividends are increased but so far I have had a great total return. See my spreadsheet on WSP Global Inc.

I own this stock of WSP Global Inc (TSX-WSP, OTC-WSPOF). In Sept 2011 I rationalized my portfolio. I sold stocks that did not make it into my core and bought stocks that could of the same type. In this case selling Stantec and buying Genivar. In October 2011 I wanted to sell Enerflex because it is not a company I bought, but a distribution from Toromont. I bought more Genivar, now called WSP Global.

When I was updating my spreadsheet, I noticed they still have not increase the dividends. This company used to be an income trust. Income Trust have higher possible distributions available for dividends. As an income trust they increased their dividends. Since becoming a corporation there has been no dividend increases.

So, the dividend has been flat since 2009. In 2009 they were paying more than their EPS in dividends, but the Dividend Payout Ratio have been coming down and for 2018, it was 63% and is expected to be 45% in 2019. On their site they say that dividend is appropriate based on the Company’s current earnings and financial requirements for the Company's operations.

The current dividend yield is moderate. It has mostly been moderate, but as an income trust the yield, in the past, went as high as 7.9%. The current yield is 2.07%. The 5, 10 and historical yields are all moderate at 3.56%, 4.86% and 4.74%. Since becoming a corporation, the median yield is 4.04%. If they do not raise the dividends, the yield will probably continue to drop.

The current Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 63% with 5 year coverage at 79%. The DPR for EPS has been dropping since this company changed into a corporation. The DPR for 2018 for CFPS is 285 with 5 year coverage at 38%. This DPR is dropping also.

Debt Ratios are fine with some vulnerability concerning the Liquidity Ratio. The Long Term Debt/Market Cap Ratio is good at 0.24. The Liquidity Ratio is low at 1.24 with 5 year ratio at 1.26. If you add in cash flow after dividends it is still low at 1.44 with 5 year median ratio at 1.36. I prefer this ratio to be at least 1.50 for the sake of safety. The Debt Ratio is good at 1.72 with a 5 year median at 1.83. Leverage and Debt/Equity Ratios are fine at 2.38 and 1.38 respectively. The 10 year median ratios are 2.04 and 1.04.

The Total Return per year is shown below for years of 5 to 13 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 have made a total return of 21.74% on this stock with 17.62% from capital gains and 4.12% from dividends. The dividend portion of the total return will go down in the future.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 0.00% 17.02% 13.22% 3.80%
2008 10 2.21% 13.45% 8.82% 4.64%
2005 13 9.28% 21.44% 14.58% 6.86%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 20.97, 24.87 and 28.77. The corresponding 10 year median ratios are 16.01, 20.03 and 23.99. The corresponding historical ratios are 15.50, 19.46 and 23.42. The current P/E Ratio is 21.50 based on a stock price of $72.46 and 2019 EPS estimate of $3.37. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $48.64. The 10 year low, median, and high median Price/Graham Price Ratios are 0.95, 1.13 and 1.33. The current P/GP Ratio is 1.49 based on a stock price of $72.46. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.53. The current P/B Ratio is 2.32 based on a stock price of $72.46, Book Value of $3,259M, and Book Value per Share of $31.20. The current ratio is some 51% higher than the 10 year ratio. This stock price testing suggests that the stock is relatively expensive.

I get an historical median dividend yield of 4.74% and a median yield of $4.04% since it changed to a corporation. The current dividend yield is 2.07% based on dividends of $1.50 and a stock price of $72.46. The current yield is some 56% and 49% below these medians. This stock price testing suggests that the stock is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.09. The current P/S Ratio is 1.10 based on a stock price of $72.46, 2019 Revenue estimate of $6,872M and Revenue per Share of $65.80. The current ratio is 1.2% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and around the median.

Results of stock price testing is reasonable to expensive. As always, you cannot ignore the P/S Ratio and this is showing that the stock price is relatively reasonable and around the median. This is also showing up in the P/E Ratio test, but the P/E Ratios are rather high. The one to be concerned about is the P/B Ratio. Book Value is basically increased by retained earnings. A good P/B Ratio is 1.50 and this stock has one of 2.32. It is not that high but it is getting high.

When I look at analysts’ recommendations, I find Buy (7) and Hold (5) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $77.79. This implies a total return of $9.43% with 7.36% from capital gains and 2.07% from dividends based on a current stock price of $72.46.

See what analysts are saying on Stock Chase. They like the company but some think the price is currently too high. Christopher Liew on Motley Fool has a positive view of this stock. A writer on Simply Wall Street thinks that the ROCE for this company looks good. There is some interesting information on future trends for this tock on Wallet Investor. The company released its three year Global Strategic Plan on Global Newswire.

WSP Global Inc provides engineering and consulting services for transportation, buildings, energy, and other end markets. It operates in four business areas: transportation and infrastructure (approximately half of total sales), property and buildings; environment; and industrial and energy. The company designs and manages networks for rail, aviation, roads, ports, and other systems related to transportation. Its web site is here WSP Global Inc.

The last stock I wrote about was about was Fortis Inc. (TSX-FTS, OTC-FRTSF) ... learn more. The next stock I will write about will be Thomson Reuters Corp. (TSX-TRI, NYSE-TRI) ... learn more on Wednesday, May 1, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Yield Testing.... learn more on Tuesday, April 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.

Friday, April 26, 2019

Fortis Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Revenue per Share is not currently growing well. Results of stock price testing is that the stock price is probably on the high side but not at an excessive price. There is vulnerability with some debt ratios. See my spreadsheet on Fortis Inc.

I own this stock of Fortis Inc (TSX-FTS, OTC-FRTSF). I bought this stock as Newfoundland Light and Power Co. Ltd. Class A shares in 1987. I bought more in 1995 and 1998. In 2005 I sold some Fortis from my RRSP account as I needed to get $20,000 in this account and I was concerned about the debt liquidity of this stock. However, this stock continues to be one of my big stock holdings.

When I was updating my spreadsheet, I noticed that Revenue has been increasing well, but not Revenue per Share. For example, Revenue is up by 15.70% and 7.95% per year over the past 5 and 10 years. However, it is up by only 0.62% and is down by 1.63% per year over the past 5 and 10 years for Revenue per share.

For Revenue if, you look at 5 year running averages over the past 5 and 10 year, it is up by 13.72% and 12.81% per year. However, if you look at Revenue per Share and 5 year running averages, but it is down by 0.07% and up by 2.15% per year.

The above shows that revenue is not really growing. The difference between Revenue and Revenue per Share is because of the increase in shares over the past 5 and 10 years. The outstanding shares have increased by 14.99% and 9.745 per year over the past 5 and 10 years. There is nothing wrong with a company issuing new shares to raise money. But when you look for growth on this companies, you need to refer to per share values to see if there is growth.

The dividend yield for this company is moderate (2% to 4% range) and the increase in dividends is generally low (below 8%). The current dividend yield is 3.65%. The 5, 10 and historical median dividend yields are 3.34%, 3.38% and 4.04%. The dividend growth rates are shown in the table below.

The Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 66.6% with 5 year coverage at 70%. The DPR for CFPS for 2018 is 24.5% with 5 year coverage at 28%.

Some debt ratios make the stock vulnerable. The Long Term Debt/Market Cap Ratio is too high at 1.19 for 2018. It has been above 1.00 for the last 4 years. This is a vulnerability. The Debt Ratio is fine at 1.53 with 5 year median at 1.53 also. The Leverage and Debt/Equity Ratios are fine at 2.87 and 1.87 with 5 year medians at 2.89 and 1.89. These are typical for utilities.

The Liquidity Ratio for 2018 is 0.77. This means that the current assets cannot cover the current liabilities. If you add in cash flow after dividends, it rises to 1.21. If you want a good one you have to add back in the current portion of the long term debt. This is a vulnerability for the company. It depends on cash flow to pay current liabilities. This is common with a lot of utility stocks. However, I would be happier if the ratio after adding in cash flow after dividends was at least 1.50.

On the other hand, the current liabilities are very low when compared to the assets of the company. The Asset/Current Liability ratio is 12.48. This is a good ratio.

The Total Return per year is shown below for years of 5 to 37 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 6.83% 12.57% 8.37% 4.20%
2008 10 5.60% 10.17% 6.15% 4.02%
2003 15 8.32% 12.11% 7.81% 4.29%
1998 20 6.95% 12.47% 8.11% 4.36%
1993 25 6.18% 12.11% 7.66% 4.45%
1988 30 5.78% 12.56% 7.62% 4.94%
1983 35 5.93% 12.45% 7.32% 5.13%
1981 37 6.22% 13.47% 7.69% 5.78%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.69, 19.36 and 21.03. The corresponding 10 year ratios are 16.97, 18.61 and 20.50. The corresponding historical ratios are 11.70. 13.23, and 14.76. The current P/E Ratio is 18.56 based on a stock price of $49.37 and 2019 EPS estimate of $2.66. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $49.37. The 10 year low, median, and high median Price/Graham Price Ratios are 0.99, 1.20 and 1.20. The current P/GP Ratio is 1.08 based on a stock price of $49.37. 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 1.41. The current P/B Ratio is 1.42 based on Book Value of $14,910M, Book Value per Share of $34.80 and a stock price of $49.37. The current ratio is 0.5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get an historical median dividend yield of 4.04%. This current dividend yield is 3.65% based on a stock price of $49.37 and dividends of $1.80. The current yield is 9.8% below the historical 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 1.72. The current ratio is 2.29 based on a stock price of $49.37, Revenue estimate for 2019 of $9,246M, and Revenue per share of $21.58. The current ratio is 33% higher 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 on the high side but not at an excessive price. The P/S Ratio cannot be ignored and it is showing that the stock price is relatively expensive. The dividend yield is also saying that the stock price is above the median. The P/B Ratio testing is showing that the stock price is around the median.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (6), and Hold (6). The consensus would be a buy. The 12 month stock price consensus is $51.54. This implies a total return of 8.04% with 4.40% from capital gains and 3.65% from dividends.

See what analysts are saying about this stock on Stock Chase. Some said they liked AQN better. Joey Frenette on Motley Fool thinks this is a good stock to hold forever. Kay Ng on Motley Fool thinks that at 20 times earnings Fortis price is too high. A writer on Simply Wall Street says that ROCE for Fortis is normal for other utilities, it is too low for an investment. Michael Massai on Hermann Herald says that the company has a Piotroski F-Score of 7 which is good. The Blogger Dividend Earner likes this stock as a safe investment.

Fortis owns and operates utility transmission and distribution assets in Canada and the United States, serving more than 2.5 million electricity and gas customers. The company has smaller stakes in electricity generation and several Caribbean utilities. ITC operates electric transmission in eight U.S. states, with more than 16,000 miles of high-voltage transmission lines in operation. Its web site is here Fortis Inc.

The last stock I wrote about was about was SNC-Lavalin Group Inc (TSX-SNC, OTC-SNCAF) ... learn more. The next stock I will write about will be WSP Global Inc. (TSX-WSP, OTC-WSPOF) ... learn more on Monday, April 29, 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, April 24, 2019

SNC-Lavalin Group Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is probably cheap to reasonable. It is obvious that the company see problems in the future, especially in the short term because of the cutting of the dividend. See my spreadsheet on SNC-Lavalin Group Inc.

I own this stock of SNC-Lavalin Group Inc (TSX-SNC, OTC-SNCAF). I had this stock on a hit list as it was on Mike Higgs' Canadian Dividend Growth stock list and on the other dividend lists that I followed. I have made money because I bought this stock in 1998 and sold a chunk of it in 2008. Since 2008, it has only gone up and down and that is all.

When I was updating my spreadsheet, I noticed they had an earnings loss for 2018. I have tracked this stock since 1992 and this is the first loss that they have had. They Liquidity Ratio is very low, but unfortunately it has always been low. If you add back in cash flow after dividends and the current portion of the long term debt, they barely make it pass 1.00 with a ratio of 1.05. This is a vulnerability. They had a bad year in 2018.

The current yield is 1.17%. This is a low yield but the company always had a low yield with 5, 10 and historical yields at 2.16%, 1.98% and 1.48%. The current yield is lower than the 5 and 10 year yields because they recently cut their dividends by 65%.

The dividend growth has really slowed in the last few years as you can see from the chart below. With the recent cut to dividends, the dividend growth to date is a negative 16% per year over the past 5 years.

The Dividend Payout Ratio for EPS for 2018 is not calculable because of the earnings losses. The 5 year coverage is 66%. The DPR for EPS for 2017 was 47% and it is expected to be 12% in 2019. The DPR for CFPS for 2018 is 89% with 5 year coverage at 45%. The DPR for CFPS is high in 2018 as I prefer this to be 40% or less.

Debt Ratios are not where I would like them to be and there is a vulnerability here, especially for the Liquidity Ratio. The Long Term Debt/Market Cap ratio is fine at 0.78. I discussed the Liquidity Ratio above. The Debt Ratio for 2018 is low at 1.39, but the 5 year median is good at 1.59. The Leverage and Debt/Equity Ratios are a little high at 3.54 and 2.54 with 10 year medians at 3.98 and 2.92.

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 4.53% 1.43% -0.80% 2.22%
2008 10 9.11% 3.29% 1.19% 2.10%
2003 15 14.88% 9.21% 6.85% 2.36%
1998 20 15.01% 17.37% 13.93% 3.44%
1993 25 16.86% 16.04% 13.13% 2.91%
1992 26 13.78% 12.55% 10.41% 2.14%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.69, 15.50 and 17.31. The 10 year corresponding ratios are 15.35, 19.11, ad 23.90. The corresponding historical ratios are 14.05, 19.05 and 24.93. The current P/E Ratio is 15.51 based on a stock price of $33.51 and 2019 EPS estimate of $2.16. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $31.79. The 10 year low, median, and high median Price/Graham Price Ratios are 1.31, 1.70 and 2.04. The current P/GP Ratio is 1.05 based on a stock price of $33.51. 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 2.91. The current P/B Ratio is 1.61 based on Book Value of $3,651M, Book Value per Share of $20.80 and a stock price of $33.51. The current ratio is 45% 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 1.48%. The current yield is 1.19% based on a stock price of $33.51 and dividends of $0.40. The current yield is 1.5% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and near the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.91. The current P/S Ratio is 0.59 based on 2019 Revenue estimate of $10,000M and a stock price of $33.51. The current ratio is 35% 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 is relatively cheap. The P/S Ratio and the P/B Ratio suggests the stock is cheap. The dividend yield test suggests that it is reasonable. When companies change the dividends it generally tells you able the current future short term expectations of the company. With the cut in dividends, you know that the short term future is expected to have problems.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (6), Hold (6) and Underperform (1). This is a pretty broad spread. The consensus would be a Buy. The 12 month stock price is $45.27. This implies a total return of 36.29% based on a stock price of $33.51.

See what analysts are saying about this stock on Stock Chase. Some are saying hold if you own, but do not buy. Ambrose O'Callaghan on Motley Fool says this is a speculative buy. A writer on Simply Wall Street thinks that the CEO is being paid too much. Victor Ferreira on Financial Post says that analysts Ross Healy thinks that the company has an uncertain future.

Montreal-based SNC-Lavalin is a professional service and project management company, as well as an infrastructure owner. From offices in over 50 countries, SNC provides engineering and construction services, financing and asset management, consulting, procurement, and operations and maintenance management, plus sustaining capital services. Its web site is here SNC-Lavalin Group Inc.

The last stock I wrote about was about was Barclays PLC ADR (LSE-BARC, NYSE-BCS) ... learn more. The next stock I will write about will be Fortis Inc. (TSX-FTS, OTC-FRTSF) ... learn more on Friday, April 26, 2019 around 5 pm. Tomorrow on my other blog I will write about Montreal Gazette Portfolio.... learn more on Thursday, April 25, 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, April 22, 2019

Barclays PLC ADR

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. You would think testing would show the stock price as cheap, but it is coming up reasonable, but below the median. There is a lot of risk to this stock at present. See my spreadsheet on Barclays PLC ADR.

I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS), but I used to. I bought this stock when Barrett took over in 2000. Barrett used to run Bank of Montreal in Canada. At that time, it was a good dividend paying stock and I thought it would give me some geographical diversifications.

When I was updating my spreadsheet, I noticed that both revenue and earnings were up in 2018 and the stock price went up this year so far. They also have been increasing the dividend lately. Generally, when a company increases their dividends, especially a sizable amount, it is because the company sees good future growth.

This is a UK bank and dividends are paid and declared in British Pounds (£). This company paid two dividends a year with a larger one in the spring after the prior year results are know and one in the fall. This year, 2019, a dividend was paid in April and the next one due to be paid in September.

The April 2019 dividend is considered to the final dividend of 2018 and the September one to be an interim dividend. The Final dividend is generally greater than the interim one. For example, in 2017 the final dividend paid in April 2017 was for 2p (i.e. 2 pence) and the September 2017 interim dividend paid was for 1p. The year 2018 was untypical with a final dividend less than the interim one.

Note also that if you purchase this stock on the US market, it is purchases as an ADR (American Depositary Receipts). There is 1 ADRs for each 4 UK stock. Therefore when dividends are paid on the ADR, shareholders will get 4 times the rate. The currency exchange rate will also be taken into account.

For this bank, dividends have gone down as well as up and the dividend payment timing has changed. As you can see from the charts below dividend have been declining. The 2008 bear market and recession has been hard on banks. This bank started to rise their dividends again in 2018 and they were increased 100% in 2019 (so far). With the latest dividend increases, dividends are now back to where they were 5 years ago.

The Dividend Payout Ratios for 2018 for EPS 49% with 5 year coverage at 368% UK£. The anticipated DPR for EPS for 2019 is expected to be 30% with 5 year coverage at 85%. The DPR for 2018 for CFPS is 9% with 5 year coverage at 5%.

Debt Ratios are fine. The Deposits/Assets Ratio for 2018 is 0.68. The Deposit/Total Debt Ratio for 2018 is 0.37. Both these ratios are good. The Liquidity Ratio is generally ignored for a bank. The Debt Ratio for 2018 is 1.06 with 5 year median also at 1.06. This is a satisfactory ratio for a bank.

The Total Return per year is shown below for years of 5 to 25 to the end of 2018 in UK Pounds. 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 -7.09% -8.81% -11.10% 2.29%
2008 10 -18.31% 3.01% -0.19% 3.20%
2003 15 -9.61% -3.63% -7.65% 4.01%
1998 20 -4.26% 2.28% -3.79% 6.07%
1993 25 0.68% 8.73% 0.10% 8.64%


The Total Return per year is shown below for years of 5 to 23 to the end of 2018 in US$. This is a UK bank and the difference between the charts would reflect the difference between the currencies involved.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -11.79% -13.98% -16.09% 2.12%
2008 10 -19.40% 0.78% -2.59% 3.37%
2003 15 -10.88% -5.86% -9.96% 4.10%
1998 20 -5.41% 1.11% -5.32% 6.42%
1996 23 0.06% 7.62% -1.75% 9.37%


The 5 year low, median, and high median Price/Earnings per Share Ratios are -17.7, -20.70 and -23.69. There have been recent earning losses. The corresponding 10 year ratios are 3.28, 6.29 and 9.07. The corresponding historical ratios are 8.40, 10.08 and 12.11. The current P/E Ratio is 7.92 based on a stock price of 169.4p (UK£1.694) and 2019 EPS estimate of 21.4p (UK£0.214). This stock price testing suggests that the stock price is reasonable but above the median.

I get a Graham Price of UK£3.86. The 10 year low, median, and high median Price/Graham Price Ratios are 0.54, 0.68 and 0.84. The current P/GP Ratio is 0.44 based on a stock price of £1.694. 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 0.62. The current P/B Ratio is 0.55 based on Book Value of £52.924, Book Value per Share of £3.09 and a stock price of £1.694. The current P/B Ratio is 11% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.

I get an historical median dividend yield of 3.25%. The current dividend yield is 3.84% based on dividends of £0.065 and a stock price of £1.694. The current dividend yield is 18% above the historical median yield. This stock price testing suggests that the stock price is reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.45. The P/S Ratio is 1.34 based on 2019 Revenue estimate for 2019 of £21,722M, Revenue per Share of £1.27 and a stock price of £1.694. The current P/S Ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.

Results of stock price testing is the stock price is reasonable and below the median. You would think that the stock price would be coming up cheap on testing. Note that for P/E Ratio testing, the ratios are very low especially for 5 and 10 year periods because of earning losses and therefore negative ratios. A P/E Ratio of 7.92 is a very low ratio. It is low compared to the historical ratios.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (4), Hold (5), Underperform (1) and Sell (2). The recommendations are all over the place. The consensus would be a Buy. The 12 month stock price consensus is £2.1322. This implies a total return of 29.70% with 25.87% from capital gains and 3.84% from dividends.

See what analysts are saying about this stock on Stock Chase. One analyst says buy and another one says don’t buy. Interesting. Harvey Jones on Motley Fool likes the dividend yield and the fact that it will increase. A writer on Simply Wall Street likes this bank’s level of leverage and liquidity. There is a Porter Five Forces analysis at Fern Fort University. There is another analysis of this stock at Swot and Pestle.

Barclays PLC operates in commercial and investment banking, insurance, financial and other related services. Barclays subsidiary, Barclays Bank PLC maintains 2500 branches in the United Kingdom and 1000 branches in over 75 other countries. Its web site is here Barclays PLC ADR.

The last stock I wrote about was about was Canadian Natural Resources (TSX-CNQ, NYSE-CNQ) ... learn more. The next stock I will write about will be SNC-Lavalin Group Inc (TSX-SNC, OTC-SNCAF) ... learn more on Wednesday April 24, 2019 around 5 pm. Tomorrow on my other blog I will write about My Politics.... learn more on Tuesday, April 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.

Friday, April 19, 2019

Canadian Natural Resources

Sound bite for Twitter and StockTwits is: Dividend Growth Resource. The stock price is probably reasonable. It looks like there is lots of insider selling, but it is what is happening is that they are not taking up their options in stocks. See my spreadsheet on Canadian Natural Resources .

I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%. In April 2013 I bought more shares of this stock because the yield is now at 1.54%.

The yield is now higher than when I bought this stock, but so is the Dividend Payout Ratio for EPS. When I bought at 1.54%, the DPR for EPS was 23%. The yield is now for 2019 will be 3.48% and DPR for EPS is expected to be 67%. The 2019 yield is 3.48% because for 2019 the first dividend is $0.335 with three payments of $0.375 or $1.46. The current yield is 3.58% because the current dividend is $0.375 quarterly or $1.50.

When I was updating my spreadsheet, I noticed that this stock has not been doing well lately. The stock price over the past 5 years is down by 1.73% per year. The total return is 1.23% per year over the last 5 year period.

Current dividend yield is relatively high for this stock at a moderate 3.58%. The yield has been low (under 2%) most of the time in the past. The 5, 10 and historical median dividend yields are 2.68%, 1.82% and 0.93%. The dividend growth is good with growth per year north of 20% per year.

The Dividend Payout Ratios are fine. They are a lot higher than in the past. The 2018 DPR for EPS is 63% with 5 year coverage at 74%. The 2018 DPR for CFPS is good at 18% with 5 year coverage at 16%.

Debt Ratios are fine but there is a vulnerability in a low Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2018 is 0.49. The Liquidity Ratio is very low at 0.63. This means that current assets cannot cover current liabilities. However, if you add in cash flow after dividends it is healthy at 2.42. The Debt Ratio is fine at 1.81. The Leverage and Debt/Equity Ratios are normal at 2.24 and 1.24 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 22.79% 1.23% -1.73% 2.96%
2008 10 21.41% 5.35% 3.06% 2.29%
2003 15 21.54% 12.17% 9.74% 2.44%
1998 20 23.41% 15.30% 12.97% 2.34%
1993 25 12.97% 11.33% 1.64%
1990 28 22.09% 19.59% 2.50%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.90, 11.32 and 13.74. The corresponding 10 year ratios are 13.17, 17.53 and 21.87. The corresponding historical ratios are 12.04, 16.56 and 20.00. The current P/E Ratio is 19.24 based on a current stock price of $41.94 and 2019 EPS estimate of $2.18. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $36.12. The 10 year low, median, and high median Price/Graham Price Ratios are 0.85, 1.12 and 1.38. The current P/GP Ratio is 1.16 based on a stock price of $41.94. 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 P/B Ratio is 1.58 based on Book Value of $31,974, Book Value per Share of $26.60 and a stock price of $41.94. The current ratio is 4.3% 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 0.93%. The current dividend yield is 3.58% based on dividends of $1.50 and a stock price of $41.94. The current dividend is some 285% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.80. The current P/S Ratio is 2.30 based on a stock price of $41.94 and 2019 Revenue estimate of 20,707M, Revenue per Share of $18.26 and a stock price of $41.94. The current P/S Ratio is 18% 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. Most of the testing is showing the stock price reasonable, but above the median with the exception of the P/S Ratio test and the dividend yield test. The problem with the dividend yield test is the growth in DPR for EPS. There is no problem with the P/S Ratio test and this is a good one. The P/B ratio test is also a good one and it show the stock price a bit above the median.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (19) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $47.40. This implies a total return of 16.60% with 13.02% from capital gains and 3.58% from dividends.

See what analysts are saying about this stock on Stock Chase. They generally like this company. Ryan Vanzo of Motley Fool does like this stock. A write on Simply Wall Street says insider have recently sold but a prices much higher than current price. Steve Brodrick on Seeking Alpha has an interesting summary of this report. R.P. Stastny on Trusted Energy Intelligence says the company is recognized in the Energy Excellence Oil and Gas Operational category of the Methane emissions reduction program.

Canadian Natural Resources Ltd is one of the largest oil and natural gas producers in western Canada, supplemented by operations in the North Sea and Offshore Africa. The company's portfolio includes light and medium oil, heavy oil, bitumen, synthetic oil, natural gas liquids, and natural gas. Its web site is here Canadian Natural Resources .

The last stock I wrote about was about was Pembina Pipelines Corp (TSX-PPL, NYSE-PBA) ... learn more. The next stock I will write about will be Barclays PLC ADR (LSE-BARC, NYSE-BCS) ... learn more on Monday, April 22, 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, April 17, 2019

Pembina Pipelines Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price seems high, but not unreasonable. See my spreadsheet on Pembina Pipelines Corp.

I own this stock of Pembina Pipelines Corp (TSX-PPL, NYSE-PBA). In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock, it was an Income Trust company.

When I was updating my spreadsheet, I noticed that they have been raising money recently for capital expenditures. Also, the outstanding shares have increased by 10% and 14% per year over the past 5 and 10 years. This means that real growth would show in the per share values.

The dividend yield is current moderate, but was good (5% or over) in the past. This company used to be an income trust and income trusts have higher yields than corporations. Yields have gone from good to moderate. The current yield is 4.56% with 5, 10 and historical median yields at 5.00%, 5.30% and 7.66%. The median yield since switching to a corporation is 5.19%.

When they switched to a corporation in 2010, they kept the dividends flat for a time, but then have gradually increase their dividends. The dividend growth is low (under8% per year). See chart below for the dividend increases over the past 5 to 21 years. The most increase was in 2018 and it was for 5.6%. However, the dividends paid in 2018 was 10.4% higher than those paid in 2017. This is because there was a dividend increase late in 2017 and another one in 2018.

The Dividend Payout Ratios are getting better. The DPR for EPS for 2018 is 98% with 5 year coverage at 133%. The DPR for EPS has been declining. The DPR for CFPS for 2018 is 43% with 5 year coverage at 56%. Both these DPRs must still decline.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.34. The Liquidity Ratio for 2018 is 0.68. If you add in cash flow after dividends it is 1.43 and if you add back in the current portion of the long term debt it is 2.12. This is a vulnerability as the company depends on cash flow to cover current liabilities.

The Debt Ratio is very good at 2.17 with 5 year median of 2.23. The Leverage and Debt/Equity Ratios are also very good at 1.85 and 0.85 respectively. The 5 year medians are also 1.85 and 0.85, respectively.

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 charts below.

I have had this stock for 17 years and I have made a total return of 17.34% per year with 9.96% from capital gains and 7.38% from dividends. The dividend portion of the total return will decrease along with the dividend yield since they have switched from an income trust to a corporation.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 6.34% 6.56% 1.60% 4.96%
2008 10 4.06% 18.10% 10.27% 7.83%
2003 15 5.03% 15.09% 7.82% 7.27%
1998 20 4.36% 17.12% 8.28% 8.84%
1997 21 6.80% 20.83% 9.56% 11.27%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 26.93, 34.56 and 42.20. The corresponding 10 year ratios are 23.47, 27.90 and 32.33. The corresponding historical ratios are 19.92, 22.91 and 25.36. The current P/E Ratio is 21.20 based on a stock price of $50.04 and 2019 EPS estimate of $2.36. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $55.20. The 10 year low, median, and high median Price/Graham Price Ratios are 1.29, 1.61 and 1.83. The current P/GP Ratio is 1.29 based on a stock price of $50.04. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is close to cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.71. The current P/B Ratio is 1.76 based on Book Value of $11,920, Book Value per Share of $28.35 and a stock price of $50.04. The current P/B Ratio is some 3% 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 7.66%. However, since this used to be an income trust company and s not a corporation, we should probably use the yield since the change to a corporation. That yield is 5.19%. The current dividend yield is 4.56% based on a stock price of $50.04 and dividends of $2.28. The current yield is 12% lower than the one since becoming a corporation. 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 2.74. The current P/S Ratio is 3.10 based on 2019 Revenue estimate of $8,211M, Revenue per Share of $16.16 and a stock price of $50.04. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the price is above the median. The good tests for this stock are the P/B Ratio and P/S Ratio tests and it would seem from these tests that the stock price is above the median. The P/E Ratios are really high for a utility stock. The P/GP Ratios are also high for a utility stock. The problem with the dividend yield is that the stock used to be an income trust and these stocks had much higher dividend yields than corporations.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (17). The consensus would be a Buy. The 12 month stock price is $55.33. This implies a total return of 15.13% with 10.57% from capital gains and 4.56% from dividends.

See what analysts are saying about this stock on Stock Chase. They like the company but a couple says it is overvalued. Matt Smith on Motley Fool thinks this is a good defensive stock. A writer on Simply Wall Street talks about total shareholder return for this stock. Michael Lumsden at My Grand Prairie Now talks about a pipelined approved to be built under the Smoky River. Mike Billings on Hawthorn Caller gives some statistics on this stock.

Pembina Pipeline is an integrated midstream energy infrastructure company in western Canada and North Dakota, highlighted by its regional pipeline network. The company operates over 9,000 kilometers of conventional hydrocarbon pipelines, coupled with 1,650 kilometers of heavy oil and oil sands pipelines. Gas processing facilities, natural gas liquids infrastructure, and a marketing business round out the integrated value chain. Its web site is here Pembina Pipelines Corp.

The last stock I wrote about was about was Barrick Gold Corp (TSX-ABX, NYSE-ABX) ... learn more. The next stock I will write about will be Canadian Natural Resources (TSX-CNQ, NYSE-CNQ) ... learn more on Friday, April 19, 2019 around 5 pm. Tomorrow on my other blog I will write about Metro and Jean Coutu.... learn more on Thursday, April 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.

Monday, April 15, 2019

Barrick Gold Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Materials stock. The current stock price seems reasonable. Problem with low current long term returns is that the company hit a peak in 2010 and has yet to recover. It also hit a peak in 1996 in the past and it was not until 2008 that it was back to that peak. See my spreadsheet on Barrick Gold Corp.

I own this stock of Barrick Gold Corp (TSX-ABX, NYSE-ABX). This is a big gold mining company that I have followed for years. It was on some dividend growth lists at different times and covered by the Investment Reporter. I bought some of this stock in April 2013 because its stock price had fallen hard. I believed the market over reacted. I just bought 100 shares as I am living off my portfolio and do not have much to invest.

When I was updating my spreadsheet, I noticed they have again changed members in both the Board and Management. Colors are going the opposite way you might want as they are going from Green and Blue to Blue and Red.

The dividend yield is low and has mostly always been low. The current yield is 1.19% with 5, 10 and historical yields at 1.04%, 1.06% and 0.98%. Dividends have increased as well as decreased over time. Over the past 5 years, dividends are now by 21% per year. However, the last increase was for 33%. They gave out a special higher dividend in early this year, but the normal dividend going forward will be $0.04 which is an increase of 33%.

The Dividend Payout Ratios cannot be determined when there are earning losses. The DPR for EPS for 2017 was 10% and the DPR for EPS for 2019 is expected to be 22%. I cannot calculate the DPR 5 year coverage for EPS because of EPS losses. The DPR for CFPS for 2018 is low at 8% with 5 year coverage at 7%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is fine at 0.36. The Liquidity Ratio for 2018 is good 2.38 with a 5 year median at 2.68. The Debt Ratio for 2018 is fine at 1.71 with 5 year median at 1.69. The Leverage and Debt/Equity Ratios are fine at 2.98 and 1.74 for 2018 with 5 year medians at 2.75 and 1.56.

The Total Return per year is shown below for years of 5 to 31 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.

Of course, it does not matter much which currency you use, long term shareholders have not done very well in this stock for lately. The stock is some 67% off the peak of 2010.

>
From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -20.99% 0.61% -0.30% 0.91%
2008 10 -10.38% -7.40% -8.48% 1.09%
2003 15 -3.61% -1.73% -3.14% 1.41%
1998 20 -2.59% -0.97% -2.37% 1.40%
1993 25 1.75% -1.65% -2.81% 1.16%
1988 30 6.63% 7.23% 4.51% 2.72%
1987 31 8.51% 5.50% 3.29% 2.20%


The Total Return per year is shown below for years of 5 to 32 to the end of 2018 in US$. 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 -24.83% -9.05% -9.75% 0.71%
2008 10 -11.34% -8.25% -9.51% 1.26%
2003 15 -3.96% -1.68% -3.39% 1.71%
1998 20 -2.01% 0.19% -1.58% 1.77%
1993 25 1.64% -1.60% -2.92% 1.31%
1988 30 6.15% 6.75% 4.07% 2.68%
1986 32 8.35% 9.83% 6.35% 3.48%


The 5 year low, median, and high median Price/Earnings per Share Ratios are -2.34, -3.58 and -4.81. The 10 year corresponding ratios are -1.84, -2.95 and -4.05. The corresponding historical ratios are 14.38, 16.63 and 18.74. The current P/E Ratio is 38.34 based on a stock price of $17.91 and $0.47 EPS. This is in CDN$. Only the historical ratios make any sense. On this basis the stock price is relatively expensive.

I get a Graham Price of $9.65 CDN$. The 10 year low, median, and high median Price/Graham Price Ratios are 0.86, 1.12 and 1.40 CDN$. The current P/GP Ratio is 1.86 based on a stock price of $17.91 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.12 US$. The current P/B Ratio is 2.06 US$ based on Book Value of $16,358M, Book Value per Share of $8.87 and a stock price of $13.42 all in US$. The current ratio is some 3% below the 10 year median ratio. This the stock price testing suggests that the stock price is relatively reasonable but below the median. You will get a similar answer in CDN$.

I get an historical median dividend yield of 1.04% US$. The current dividend yield is 1.19% based on a stock price of $13.42 and dividends of $0.16 all in US$. The current dividend is 15% 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 Price/Sales (Revenue) Ratio is 2.34 US$. The current P/S Ratio is 1.88 based on 2019 Revenue estimate of $8,315M, Revenue per Share of $7.12 and a stock price of $13.42 all in US$. The current ratio is 19% below the 10 year median ratio. On this basis the stock price is relatively reasonable and below the median. You will get a similar answer in CDN$.

Results of stock price testing is showing lots of different results. However, the P/E Ratio test is suspect because of the earning losses. A problem with the dividend yield test is that dividends have been inconsistent. On the other hand, the ability to pay dividends is material, but it is hard to tell if they can afford dividends, except via the CFPS. There are no problems with the P/B Ratio or P/S Ratio tests. Both these show that the stock price is reasonable and below the median.

When I look at analysts’ recommendations, I find Buy (4), Hold (14) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $15.67 US$ or $20.89 CDN$. This implies a total return of 17.81% with 16.62% from capital gains and 1.19% from dividends.

News Release from Barrick on joint venture with Newmont Forge. See what analysts are saying about this company on Stock Chase. Most entries are negative. Ryan Vanzo on Motley Fool likes the stock but thinks it is overvalued. A writer on Simply Wall Street talks about the company being financially sound. Adam Hewison on INO Com thinks this stock is going to go higher.

Based in Toronto, Barrick Gold is one of the world's largest gold producers, operating mines in North America, South America, Australia, and Africa. In 2018, the firm produced roughly 4.5 million attributable ounces of gold and more than 380 million pounds of copper. Its web site is here Barrick Gold Corp.

The last stock I wrote about was about was Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF) ... learn more. The next stock I will write about will be Pembina Pipelines Corp (TSX-PPL, NYSE-PBA) ... learn more on Wednesday, April 17, 2019 around 5 pm. Tomorrow on my other blog I will write about Energy and Pollution.... learn more on Tuesday, April 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.

Friday, April 12, 2019

Leon's Furniture Ltd

Yesterday I bought another 1,000 shares of Supremex Inc. Please note that this is a high risk stock. Today I bought some 200 shares of Leon’s Furniture Ltd because it is cheap. Since I am living off my dividends, I do not have much money to spend on stocks. I also like to buy good stocks while they are cheap.

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The company has not been doing well lately as far as stock price goes. It is currently cheap. There is insider buying and the last dividend increase was 16.7%. This shows that manager has a positive future view. See my spreadsheet on Leon's Furniture Ltd.

I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication's Investor Reporter list for some time. It was also on Mike Higgs' Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009 and 2010.

When I was updating my spreadsheet, I noticed that it seemed that dividend increases were a lot lower lately, but this is because there were no increases from 2013 to 2016 inclusive. The most recent increase was late in 2018 and it was for 16.7%. Until recently, this stock has done well for shareholders. A total return of more than 8% is a good total return for a consumer stock.

The dividend yields have been moderate in the 2% to 4% ranges. The current yield is 3.81%, with 5, 10 and historical yields at 2.54%, 2.65% and 2.01% respectively. The dividend growth has been mostly moderate but there are some years of no dividend increases. The 5 and 10 year growth are low because of lack of increases from 2013 to 2016 inclusive.

The Dividend Payout Ratios are fine. The DPR for EPS for 2018 is 37% with 5 year coverage of 39%. Just before the stopping of dividend increases in 2012. The DPR for EPS was the highest it has ever been at 85%. The DPR for CFPS for 2018 was 44% with 5 year coverage at 41%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.04 a very low value and it has been falling over the last few years, but has always been quite good. The Liquidity Ratio has varied a lot. The current ratio for 2018 is 1.09 and has a 5 year median of 1.15 and this is low. If you added in cash flow after dividends, it because for 2018, 1.32 with 5 year median of 1.34. These are also low.

The Debt Ratio has always been good and for 2018 it is 1.99 with 5 year median at 1.69. Leverage (A/BK) Debt/Equity Ratios are fine at 2.01 and 1.01 with 5 year ratios at 2.08 and 1.08, 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 4.56% 4.51% 1.39% 3.12%
2008 10 5.97% 9.31% 5.26% 4.05%
2003 15 9.68% 9.00% 5.23% 3.78%
1998 20 10.53% 10.67% 6.41% 4.26%
1993 25 10.92% 10.39% 6.57% 3.81%
1988 28 10.07% 12.08% 7.92% 4.16%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.41, 14.74 ad 16.76. The corresponding 10 year ratios are 13.43, 14.95 and 17.01. The corresponding historical ratios are 12.37, 14.65 and 16.76. The current ratio is 10.96 based on a stock price of $14.69 and 2019 EPS estimate of $1.34. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $18.23. The 10 year low, median, and high median Price/Graham Price Ratios are 0.98, 1.16 and 1.32. The current P/GP Ratio is 0.81 based on a stock price of $14.69. 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 1.88. The current P/B Ratio is 1.35 based on Book Value of $354M, Book Value per Share of $11.02 and a stock price of $14.69. The current ratio is 29% 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 2.01%. The current dividend yield is 3.81% based on a stock price of $14.69 and dividends of $0.56. The current yield is 90% 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 0.60. The current P/S Ratio is 0.50 based on a stock price of $14.69, 2019 Revenue estimate of $2,268M and Revenue per Share of $29.27. The current ratio is 16% 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 mostly cheap except for the P/S Ratio which is reasonable and below the median. This stock is selling at a relatively low price.

When I look at analysts’ recommendations, I find Buy (1) and Hold (2) recommendations. The consensus would be a Hold. The 12 month stock price is $18.00. This implies a total return of 26.34% with 22.53% from capital gains and 3.81% from dividends based on a current stock price of $14.69.

See what analysts are saying about this company on Stock Chase. A couple talk about the amount of Real Estate they own. Ambrose O'Callaghan on Motley Fool likes this stock. A writer on Simply Wall Street talks about ownership. Darrin Black on What’s on Thorold talks about a slight increase in shorted shares of this company. The company talks on Newswire Canada about teaming up with Shopify.

Leon's Furniture Ltd is one of Canada's largest retailers that sells furniture, major appliances, and home electronics. The company primarily operates across the Canadian provinces of Ontario, Quebec, and Alberta. Its operations are divided between corporate and franchise stores, where the majority of revenue is derived from corporate store sales. Its web site is here Leon's Furniture Ltd.

The last stock I wrote about was about was Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more. The next stock I will write about will be Barrick Gold Corp (TSX-ABX, NYSE-ABX) ... learn more on Monday, April 15, 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, April 10, 2019

Supremex Inc

Sound bite for Twitter and StockTwits is: Dividend Group Materials. I was looking for another stock to follow and looking for something for my TFSA. This is a risky small cap stock but with a good price. I like stocks to follow that I might consider buying and I am considering this for the TFSA. There is insider buying. I bought 1000 shares for the TFSA today. See my spreadsheet on Supremex Inc.

I do not own this stock of Supremex Inc (TSX-SXP, OTC-SUMXF). I read about it in Money Sense article of 15 Stocks to help investors ride market swings by Michael Pe of Mar 4, 2018. This link to the article is here. They were an envelope company, but are diversifying into packaging.

When I was updating my spreadsheet, I noticed that they were an income trust that changed into a corporation. The change occurred in 2010 and they decreased the dividend by almost 90%. They started to increase the dividend again in 2011. They are buying back shares, but not a lot. The buy backs are around 0.5% per year. So, there is not much difference between per share values and other value.

Dividends were very high to begin with. The top was in 2008 with a yield of 50%. The dividend yields came down with the dividend cuts, but dividends are back to being quite high. The current dividend yield is 7.98% with 5, 10 and historical yields at 5.23%, 6.46% and 7.21%. Note that income trust companies have higher yields that corporations.

The Dividend Payout Ratios are fine. I cannot calculate a DPR for EPS for 2018 as they had an earnings loss. However, the 5 year coverage is 63%. The DPR for 2019 for EPS is expected to 50% this year. The DPR for CFPS for 2018 is 46% with 5 year coverage at 26%.

Debt Ratios are fine. Long Term Debt/Market Cap Ratio for 2018 is 0.78. The Liquidity Ratio for 2018 is 2.35 with 5 year median of 2.03. These are good ratios. The Debt Ratio is 1.90 for 2018 with 5 year median of 2.38. These are fine. Leverage and Debt/Equity Ratios for 2018 are 2.11 and 1.11 respectively, with 5 year ratios of 1.72 and 0.72. This Leverage and Debt/Equity Ratios have varied over time for are currently rather normal.

The Total Return per year is shown below for years of 5 to 12 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 14.87% 13.04% 3.43% 9.61%
2008 10 -13.81% 5.51% -2.54% 8.06%
2006 12 -11.65% -2.61% -9.82% 7.21%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.83, 9.20 and 10.58. The current P/E Ratio is 6.27 based on a stock price of $3.26 and 2019 EPS estimate of $0.52. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $ 5.59. The 10 year low, median, and high median Price/Graham Price Ratios are 0.45, 0.60 and 0.78. The current P/GP Ratio is 0.58 based on a stock price of $3.26. 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 1.21. The current P/B Ratio is 1.22 based on Book Value of $75,661, Book Value per Share of $2.68 and a stock price of $3.26. The current P/B Ratio is 1% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get an historical median dividend yield of 7.21%. The current dividend yield is 7.98% based on a stock price of $3.26 and dividends of $0.26. The current dividend is 11% above the historical dividend 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 0.49. The current P/S Ratio is 0.46 based on 2019 Revenue estimate of $199M, Revenue per share of $7.04 and a stock price of $3.26. The current P/S Ratio is some 6% 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 current reasonable and probably below the median. It is only the P/E Ratio test that shows the stock as cheap and this is not be best of testing for stock price.

When I look at analysts’ recommendations, I find only one analyst following this stock and giving it a recommendation of Buy. The consensus would therefore be a Buy. The 12 month stock price is $4.25. This implies a total return of 38.34% with 30.37% from capital gains and 7.98% from dividends.

A few analysts follow this stock on Stock Chase. Kris Knutson on Motley Fool thinks this company is worth a look at, but it is risky. A writer on Simply Wall Street says that the balance sheet is adequate and the stock has a good dividend. Alfredo Boyd on Augusta Review gives some metrics on this stock. Joe Cepeda on Z Tribune says there has been a decrease in shorted shares of this company.

Supremex Inc is engaged in manufacturer and marketer of a broad range of custom envelopes and packaging products. The company operates in one business segment that is Manufacturing and Sale of Envelopes, Packaging, and Specialty Products. Its web site is here Supremex Inc.

The last stock I wrote about was about was Russel Metals Inc. (TSX-RUS, OTC-RUSMF) ... learn more. The next stock I will write about will be Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF) ... learn more on Friday, April 11, 2019 around 5 pm. Tomorrow on my other blog I will write about Investing and Stress.... learn more on Thursday, April 11, 2019 around 5 pm.

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