Wednesday, May 22, 2019

Reitmans (Canada) Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. Stock price is relatively cheap, but this should come as no surprise. They have great debt ratios. I think I will retain this stock as long as Fairfax Financial Holdings Limited does. They made two purchases, the second one in 2013 but have done nothing since. See my spreadsheet on Reitmans (Canada) Ltd .

I own this stock of Reitmans (Canada) Ltd (TSX-RET.A, OTC-RTMAF). I was following this stock as it was a stock on Mike Higgs' dividend growth stocks list. I bought this company in September 2013. It was in financial difficulties and so was quite cheap. I believed it would recover, but I am beginning to wonder now, but I have not given up hope completely. I note that Fairfax Financial Holdings Limited have not yet sold out their shares.

When I was updating my spreadsheet, I noticed that the numbers are less awful than they were. They managed a positive EPS for their past financial year.

They cut the dividend by 75% in 2014 and it has been flat ever since. This is the reason for the declining dividend growth. Dividend yield is in the 6% range so is good. The current dividend is 6.39%, with 5, 10 and historical yields at 3.69%, 4.83% and 3.16%. So, the yield has been getting higher as the recovery time lengthens.

The Dividend Payout Ratios are too high for EPS. The DPR for EPS for 2018 is 182%. I cannot calculate the 5 year coverage because they paid out more than was earned in the last 5 years. The DPR for CFPS is good at 33% in 2018 with 5 year coverage at 27%.

Debt Ratios are all good. The Long Term Debt/Market Cap is 0.15 and this is good. The Liquidity Ratio is high and therefore good at 2.84. The Debt Ratio is also high and good at 3.22. The Leverage and Debt/Equity Ratios are low and good at 1.45 and 0.45 respectively.

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

Until this company hit problems in the last recession, it was always touted as a great consumer stock to own. I bought this stock in 2013, hoping for a recovery. It is sort of recovering, but I have lost money on it. My total return is a negative 10.83% per year.

From Years Div. Gth Tot Ret Cap Gain Div.
2013 5 -21.00% -6.71% -10.39% 3.67%
2008 10 -12.02% -4.13% -10.30% 6.17%
2003 15 4.07% 6.35% -3.18% 9.53%
1998 20 5.78% 13.32% 2.48% 10.85%
1993 25 4.60% 8.55% 1.25% 7.30%
1988 30 3.82% 8.49% 1.97% 6.52%
1987 31 3.69% 8.46% 2.06% 6.40%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 22.88, 31.88 and 39.67. The corresponding 10 year ratios are 20.94, 27.06 and 32.03. The corresponding historical ratios are 10.56. 13.13 and 15.61. The current P/E Ratio is 28.45 based on a stock price of $3.13 and latest 12 month EPS of $0.11. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $3.64. The 10 year low, median, and high median Price/Graham Price Ratios are 0.96, 1.14 and 0.96. The current P/GP Ratio is 0.86 based on a stock price of $3.13. This stock price testing suggests that the stock price is cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.23. The current P/B Ratio is 0.58 based on a Book Value of $340, Book Value per Share of $5.36 and a stock price of $3.13. The current ratio is 53% below the 10 year median. This stock price testing suggests that the stock price is cheap.

I get an historical median dividend yield of 3.16%. The current dividend yield is 6.39% based on a stock price of $3.13 and Dividends of $0.20. The current yield is 102% above the historical median yield. This stock price testing suggests that the stock price is cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.48. The current P/S Ratio is 0.21 based on a stock price of $3.13 and last 12 month’s sales of $923M. The current ratio is 55% below the 10 year median ratio. This stock price testing suggests that the stock price is cheap.

Results of stock price testing is that the stock price is cheap. The P/E Ratio are high, but this is because stock price only will fall so far when a company gets into difficulties. This is not a good test. The other tests are fine. The stock price is relatively cheap. However, that does not necessarily make this stock a good buy.

When I look at analysts’ recommendations, I find no analysts recommendations. It would appear that no analysts are following this stock.

See what analysts are saying on Stock Chase. There is not much to report, but one analyst likes it. David Jagielski on Motley Fool thinks it has a good yield was possible upside. A Writer on Simply Wall Street looks at the company’s ownership. An Easton Contributor on Easton Caller says that the Williams Percent Range shows that the stock is neither overbought nor oversold.. Mario Toneguzzi on Retail Insider talks about Canadian Apparel Sales. Says that Reitmans (Canada) Ltd. Is losing market share.

Reitmans (Canada) Ltd is an apparel retailer based in Canada. Its main business is the sale of ladies' specialty apparel to consumers through its retail banners such as including Reitmans, which is a women's apparel specialty chain and fashion brand, Penningtons, RW & CO., which offers fashions for both men and women, Addition Elle, Thyme Maternity, which offers a complete line of nursing fashions and accessories and Hyba. Its web site is here Reitmans (Canada) Ltd.

The last stock I wrote about was about was Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF) ... learn more. The next stock I will write about will be HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) ... learn more on Friday, May 24, 2019 around 5 pm. Tomorrow on my other blog I will write about Enterprising Investor.... learn more on Thursday, May 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.

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