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.
No comments:
Post a Comment