TECSYS Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. I think it is currently on the expensive side, but others disagree. The Chairman is selling off shares, but the company rising their dividends shows confidence in the future. See my spreadsheet on TECSYS Inc.

I own this stock of TECSYS Inc (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

When I was updating my spreadsheet, I noticed that they had an earnings loss because their cost of operations went up faster than their revenue. Between 2018 and 2019 their revenue increased by 8.10% but their cost of operations was up 28.14%. Sales & marketing increased 18.68%; General Admin by 47.82% and Research and Development by 29.44%.

Chairman has been selling off shares and his shares have decline by 40% since 2010. They were down another 6.6% between last year and this year. The chairman is the only one I can see that has a substantial number of shares and he currently has 16% of outstanding shares. Note that he also holds shares through his holding company, Dabre Inc. Their financial year ends at April 30 each year. The last financial year is April 30, 2019.

They started to pay dividends in 2008 and have been increasing the dividends nicely ever since. The growth is good (at 15% or over) for the past 5, 10 and 11 year periods. The dividend yields are low (under 2%) and a current yield at 1.73% and 5, 10, and historical yields at 1.24%, 1.53% and 1.57%.

The Dividend Payout Ratios are currently too high. The DPR for 2019 for EPS is not calculable as there was an earnings loss but 5 year coverage at 57%. Analyst do not expect the DPR for EPS is improve until 2021. The DPR for 2019 for CFPS is 458% with 5 year coverage at 44%. Analysts are not giving estimates for Cash Flow.

Debt Ratios are fine, but all have deteriorated this year. Even though they have greatly increased their long term debt, the Long Term Debt/Market Cap s just 0.06, a very low value. The Liquidity Ratio is low and lower than it has been for some time at just 1.24. It has fluctuated in the past, but the 5 year median is 1.61. The Debt Ratio is fine with a current ratio of 1.86 and 5 year median at 2.09. Leverage and Debt/Equity Ratios are a little high at 2.16 and 1.16 with 5 year ratios at 1.91 and 0.91.

The Total Return per year is shown below for years of 5 to 20 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	22.87%	18.71%	16.95%	1.76%
2008	10	18.04%	28.80%	26.06%	2.74%
2003	15	16.27%	13.28%	12.19%	1.08%
1998	20		7.60%	6.99%	0.61%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.67, 20.68 ad 24.69. The Corresponding 10 year ratios are 18.17, 22.62 and 27.07. The corresponding historical ratios are 9.47, 11.88 and 15.83. The current P/E Ratio is 634.50 based on current stock price of $12.69 and 2019 EPS of $0.02. The P/E Ratio for 2020 is 24.88 based on a stock price of $12.69 and 2020 EPS estimate of $0.51. This stock price testing suggests that the stock price is relatively expensive in 2019. This stock price testing suggests that the stock price is relatively reasonable but above the median for 2020.

I get a Graham Price of $1.17. The 10 year low, median, and high median Price/Graham Price Ratios are 1.45, 1.85 and 2.30. The current P/GP Ratio is 10.89 based on a stock price of $12.69. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 3.47. The current P/B Ratio is 4.20 based on a stock price of $12.69, Book Value of $39.5M and Book Value per Share of $3.02. The current ratio is 21% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.57%. The current dividend yield is 1.73% based on dividends of $0.22 and a stock price of $12.69. The current yield is some 10.4% higher than the historical yield. This stock price testing suggests that the stock price is relatively reasonable and below the median

The 10 year median Price/Sales (Revenue) Ratio is 1.33. The current P/S Ratio is 1.73 based on a stock price of 12.69, 2019 Revenue estimate of $95.7M, and Revenue per Share of $7.32. The current ratio is 31% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is that the stock is probably expensive. The P/S Ratio is a good test and it shows the stock as expensive. The thing is that the stock price over the past 10 years has been rising faster than the revenue. The P/B Ratio is also a good test and it also shows the stock as expensive. (Interestingly, if you use the median P/S Ratio for the past 5 years, the ratio is 1.74 and close to the current ratio.)

The only test that shows that the stock as reasonable, is the Dividend Yield test. This is because of the steady increase in dividends. Companies tend to raise the dividends when they are confident of the future. This company is obviously confident of the future.

On the other hand, the Chairman has been steadily selling off his shares and he is the only one with a substantial stake in the company. He could also be selling so that all his investments are not in one company, which is a wise move. Here is a relevant article about this on Global Newswire.

Is it a good company at a reasonable price? I still think this is a good company and I will be holding on to my shares. However, note that I have a relatively small investment in this company. I will not be buying anymore at present because I think it might be on the expensive side at the moment. Gabriel Leung of Beacon Securities on CanTech Newsletter disagrees.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (2) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus s $16.75. This implies a total return of 33.73% with 31.99% from capital gains and 1.73% from dividends.

See what analysts are saying on Stock Chase. They are not well followed, but analysts like this company. Kris Knutson of Motley Fool likes this company. A writer on Simply Wall Street talks about recent insider buying. What I have notice is chairman selling off shares. A writer on Simply Wall Street talks about the company’s increased debt, but it is still within prudent limits. Elaine Iseri of Trent Times talk about what analysts have been saying about this company recently.

TECSYS Inc is a provider of supply chain solutions. The company's solution is built on supply chain platform and includes warehouse management, distribution management, transportation management, supply management at point-of-use as well as complete financial management and analytics solutions. Its web site is here TECSYS Inc.

The last stock I wrote about was about was Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF) ... learn more. The next stock I will write about will be Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more on Friday, August 2, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Income and Volatility.... learn more on Thursday, August 1, 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.

Pulse Seismic Inc

Sound bite for Twitter and StockTwits is: Industrial stock. This stock is an industrial service stock, serving the Oil and Gas industry. Testing shows that it is reasonable, but above the median. This may not be far off as it is just above the median closing price of this stock over the past 10 years. So, the stock is not cheap and the company has problems. See my spreadsheet on Pulse Seismic Inc.

I do not own this stock of Pulse Seismic Inc (TSX-PSD, OTC-PLSDF). I wanted to invest some extra money in a dividend paying small cap. I went to the Globe and Mail site of G&M and from Globe Investor section I selected the Stock Filter. I asked for companies that were priced between $1 and $5.50 and had a yield between 4% and 20%. Pulse Seismic Inc. was one of the companies that were returned. This is not a stock I chose to invest in but I found it of interest so I am following it.

When I was updating my spreadsheet, I noticed 2018 was not a good year for this company, but they have been doing better in 2019. For example, Revenue was down by 77% in 2019, but is up by 117% for the first two quarters of 2019. Revenue in in 2017 was 43M, for 2018 was 10M and for the 12 months ending in the second quarter of 2019 is 22M.

When I looked at it first, it was a dividend paying stock. However, dividends have gone up, down and been suspended. Currently dividends are suspended since 2016. The dividends were probably suspended as they could no longer afford them.

Debt Ratios have weakened considerably with the purchase of Seitel, but hopefully they will again improve. They had no debt from 2015 until this year. In 2019 they borrowed to buy Seitel Canada Ltd. The Long Term Debt/Market Cap Ratio is low at 0.26, currently. The current Liquidity Ratio at 0.79 is the lowest it has ever been. It has a 5 year median of 13.24, a very high value. If you add in cash flow the ratio becomes 1.72.

The current Debt Ratio is also the lowest it has ever been at just 1.84, compared to a 5 year median of 5.92. The Leverage and Debt/Equity Ratios are the highest they have ever been at 2.19 and 1.19 where the 5 year median is 1.43 and 0.43.

The Total Return per year is shown below for years of 5 to 20 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-18.52%	-20.83%	2.31%
2008	10	0.00%	3.10%	-0.20%	3.30%
2003	15	0.00%	5.38%	0.00%	5.38%
1998	20		13.54%	6.47%	7.06%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative as is the 10 year ratios. The historical corresponding ratios are 3.43, 4.81 and 6.04. The current P/E Ratio is 12.16 based on a stock price of $2.31 and 2019 EPS estimate of $0.19. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $1.68. The 10 year low, median, and high median Price/Graham Price Ratios are 1.54, 1.91 and 2.32. The current P/GP Ratio is 1.38 based on a stock price of $2.31. 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 3.31. The current P/B Ratio is 3.50 based on a Book Value of $35,238M, Book Value per Share of $0.66 and a stock price of $2.31. The current ratio is 6% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The dividend yield test cannot be done because the dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 4.45. Th current P/S Ratio is 4.97 based on 2019 Revenue estimate of $25M and a stock price of $2.31. The current ratio is 12% 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 stock price is above the median. The problem with stock price testing is that values are going down. I look at my spreadsheet and I see lots of red ink. The drop off in Revenues for 2018 was not a normal fluctuation. Revenues went down 77%. This is why the P/S Ratio test is showing the stock price is relatively high. For the P/B Ratio test, the book value has dropped 10% per year over the past 5 years. This is why this test is showing the stock price as above the median.

Is it a good company at a reasonable price? Investing in this company is a bet that it will recover and their idea of making money by selling seismic data to the energy sector will be a profitable venture. The good news is that insiders are not selling and have marginally increased their shares. The Chairman owns just over 15% of the outstanding shares and also marginally increased his position last year. The bad news is that they are taking on debt with Revenue, Earnings, Cash Flow, and stock prices declining. The good news is that they appear to started to recover in 2019. It is hard to know if price is reasonable. It does seem on the high side of reasonable.

When I look at analysts’ recommendations, I find only one recommendation and that is a Buy. The consensus would therefore be a buy. The 12 month stock price consensus is $3.40. This implies a total return of 47.19% all from capital gains.

See what analysts are saying on Stock Chase. Not much reporting on the stock because it is thinly traded. Jeff Parent discusses Pulse Seismic on BNN. Ambrose O'Callaghan on Motley Fool talks about this stock in 2017. A writer on Simply Wall Street thinks the CEO is being paid more than for other companies at the same size. A writer on Simply Wall Street discusses this stock.

Pulse Seismic Inc is a Canadian company which acts as a provider of seismic data to the energy sector in western Canada. The company is engaged in the acquisition, marketing, and licensing of 2D and 3D seismic data to the energy sector. Its web site is here Pulse Seismic Inc.

The last stock I wrote about was about was Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more. The next stock I will write about will be TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more on Wednesday, July 31, 2019 around 5 pm. Tomorrow on my other blog I will write about BRP Inc.... learn more on Tuesday, July 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.

Dorel Industries Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. They have not been growing their dividends for some time and they just cut them, so this is not a Dividend Growth Stock. A dividend cut is never a good sign. I think that debt is a but vulnerability for this company. It is cheap. See my spreadsheet on Dorel Industries Inc.

I do not own this stock of Dorel Industries Inc (TSX-DII.B, OTC-DIIBF). This was a stock recommended by Investment Reporter as a conservative investment. I sold the stock in 2006 because I had it for 7 years from 1999 and it was going nowhere. I bought this stock before I stopped working and at that time, I did not mind buying stocks with no dividends. They did start to pay dividends in 2007.

When I was updating my spreadsheet, I noticed that they cut their dividend by 50% in 2019. This is never a good sign. They have taken an impairment loss re goodwill, intangible assets, property, and equipment for 2018 and this is the reason for the big earnings loss. When I looked at this stock in 2018 the Goodwill-Intangible/Market Cap Ratio was 1.11. So, this can not come as a surprise.

With the long term debt, the Long Term Debt/Market Cap Ratio for 2018 seems fine at first at 0.55. However, this was because they just moved most of the long term debt into current portion of long term debt. If you add long term debt and current portion of the long term debt, the ratio is now 1.04. This ratio being high has a lot to do with the drop in the stock price.

The dividend increases have varied a lot over time. However, the dividends were flat between 2014 and 2018, inclusive and then they were cut by 50%. Dividends are paid in US$.

Dividend yields have also varied a lot with a high of 9.7% and a low of 1.3%. The current dividend yield is 8.26% and this is because the stock price has gone down a lot. The 5, 10 and historical dividend yields are 4.59%, 3.36% and 3.00%.

The Dividend Payout Ratios were too high for EPS, but fine for CFPS. In 2017 the DPR for EPS was 143% with 5 year coverage at 250%. I cannot calculate the DPR for EPS for 2018 because of the high earnings loss for 2018. The DPR for EPS is expected to be 75% in 2019. The DPR for CFPS for 2018 is 31% with 5 year coverage at 25%.

Debt Ratios are a vulnerability. The Long Term Debt/Market Cap Ratio is was at 1.04 for 2018. I have included the current portion of the long term debt into this because they have not decreased their long term debt, but merely made it current. The current ratio is 1.92. The increase in the first quarter of 2019 has more to do with declining stock price that debt rise. This is a vulnerability.

Because they made the long term debt a current debt, their Liquidity Ratio fell to 1.06. This is a very low value. If you add in cash flow after dividends, it is still low at 1.13. This is a vulnerability. The Debt Ratio is fine at 1.50, however, it has been falling steadily since 2012 when it was 2.46. This is also a vulnerability because if it keeps on this track this is not good. The Debt Ratio for the first 3 months of 2019 is 1.40.

The Leverage and Debt/Equity Ratios are a little high at 2.98 and 1.98 but not particularly unusual for this sort of company. However, they have been climbing also. In 2012 they were 1.69 and 0.69 respectively and have been climbing ever since.

The Total Return per year is shown below for years of 5 to 26 to the end of 2018 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	5.10%	-9.86%	-15.30%	5.44%
2008	10	10.33%	0.54%	-4.52%	5.05%
2003	15	11.51%	-1.15%	-4.55%	3.41%
1998	20		1.08%	-1.73%	2.81%
1993	25		7.63%	4.68%	2.96%
1992	26		7.40%	4.58%	2.82%

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

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-14.49%	-19.45%	4.96%
2008	10	9.15%	-0.27%	-5.69%	5.43%
2003	15	8.28%	-1.00%	-4.80%	3.80%
1998	20		2.14%	-1.13%	3.27%
1993	25		7.92%	4.57%	3.35%
1992	26		8.88%	5.52%	3.36%

The 5 year low, median, and high median Price/Earnings per Share Ratios are -0.82, -1.28 and -1.75. The corresponding 10 year ratios are 7.00, 8.77 and 10.41. The corresponding historical ratios are 8.91, 11.32 and 14.52. They are low because of earnings losses. The current P/E Ratio is 9.08 based on a stock price of $9.48 and 2019 EPS estimate of $0.80. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in CDN$.

I get a Graham Price of $22.83. The 10 year low, median, and high median Price/Graham Price Ratios are 0.69, 0.87 and 0.99. The current P/GP Ratio is 0.42 based on a stock price of $9.48. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 0.80. The current P/GP Ratio is 0.43 based on Book Value of $950M, Book Value per Share of $16.94 and a stock price of $7.25. The current ratio is 47% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$.

I get an historical median dividend yield of 3.00%. The current dividend yield is 8.26% based on dividends of $0.78 and a stock price of $9.48. The current yield is 175% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.36. The current P/S Ratio is 0.09 based on 2019 Revenue estimate of $2,656M, Revenue per share of $81.88 and a stock price of $7.25. The current ratio is 75% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$.

Results of stock price testing is mostly that the stock price is relatively cheap. Both the P/S Ratio and the P/B Ratio tests are very good tests. The P/E Ratio test is not good as there are lots of earnings losses years.

Is it a good company at a reasonable price? You have to wonder if the company will ever be making money for the shareholders. I held this company from 1999 to 2006 and has a loss of 1.21% with a capital loss of 1.22% and dividends of 0.01%. Dividends have often been very low in the past. It is cheap.

When I look at analysts’ recommendations, I find only a Hold (3) recommendation. The 12 month stock price is $13.53 CDN$ ($10.35 US$). This implies a total return of 50.68% with 42.41% from capital gains and 8.26% from dividends.

See what analysts are saying on Stock Chase. There are few entries and the last two are negative. Christopher Liew on Motley Fool is positive about this stock. A writer on Simply Wall Street says the interest payments for debt is covered 3.07x by earnings and this is fine. Robert Smith on Valliant News says that the Bok to Market value is 2.35. This could indicate that the stock is underpriced. Donna Dao on Mak Daily talks about the increase in shorting of the stock.

Dorel Industries Inc is a Canadian company that sells juvenile products, bicycles, and furniture. The company operates across North America, East and South Asia, Europe, Oceania, Israel, and South America. Its web site is here Dorel Industries Inc.

The last stock I wrote about was about was Obsidian Energy Ltd TSX-OBE, NYSE-OBE) ... learn more. The next stock I will write about will be Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF) ... learn more on Monday, July 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.

Obsidian Energy Ltd

Sound bite for Twitter and StockTwits is: Resource Stock. It is probably cheap, but it does continue to do poorly and debt is continuing to rise. The recent consolidation is also bad news. I would personally not take a chance on it at the present time. See my spreadsheet on Obsidian Energy Ltd.

I do not own this stock of Obsidian Energy Ltd (TSX-OBE, NYSE-OBE). I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and the stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006. The company changed its name from Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE) to Obsidian Energy Ltd TSX-OBE, NYSE-OBE) in 2017.

When I was updating my spreadsheet, I noticed that the Liquidity Ratio is too low for 2018 and has not improved in the first quarter. For 2018 the ratio is 0.40 and for the first quarter it is 0.46. After considering the cash flow and current portion of debt the ratios are 1.01 and 0.62. They cannot cover their current liabilities and this is a vulnerability. The Debt Ratios are very good for 2018 and the first quarter they are 3.39 and 3.09. So, they can probably work this out, but it is a vulnerability.

They also just did a consolidation in July of 2019. The consolidation is on the basis of 7 to 1. The means that for every 7 shares, shareholders now have 1 share. So, if a shareholder had 700 shares, they now have 100 shares. Consolidations are never a good sign.

When the company was an income trust, it paid distributions. It started to decrease the dividends in 2009 and kept reducing them each year until they were cancelled in 2016.

Debt Ratios are a mixed bag, but the company is vulnerable because of some awful debt ratios. The Long Term Debt/Market Cap ratio is too high. It was 1.55 in 2018, but is now 4.63. I talked above about the Liquidity Ratio and how vulnerable the company is because of it. The final ratios are good with the Debt Ratio at 3.39 in 2018 and 3.09 now (when a good ratio is 1.50 and above). The Leverage and Debt/Equity Ratios are also good at 1.42 and 0.42.

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 chart below.

In the past, this stock came from a company that was an income trust and paid very good distributions. The stock that I held between 1998 and 2010 had a total return of 8.47% per year with a capital loss of 1.96% and dividends of 10.43% per year.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-41.46%	-43.52%	2.06%
2008	10	0.00%	-13.19%	-27.97%	14.78%
2003	15	0.00%	-3.39%	-24.00%	27.76%
1998	20	0.00%	44.41%	-13.83%	44.72%
1995	23	0.00%	8.82%	-16.35%	25.33%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative as is the corresponding 10 year ratios. The historical ratios are 5.53, 8.34 and 11.24. The current P/E Ratio is negative at -0.11. So, this test cannot be done.

I get a Graham Price of $2.37 if the EPS was 0.01. I am just trying to get a figure. Since they are not expected to have a profit anytime soon this test cannot be done.

I get a 10 year median Price/Book Value per Share Ratio of 0.65. The current P/B Ratio is 0.05 based on a Book Value of $1,822M, Book Value per Share of $25.02 and a stock price of $1.27. The current ratio is 92% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

I cannot do historical median dividend yield test since the company has cancelled its dividends.

The 10 year median Price/Sales (Revenue) Ratio is 1.67. The current P/S Ratio is 0.23 based on 2019 revenue estimate of $3.75 and a stock price of $1.27. The current ratio is 85% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. Both the P/S Ratio and the P/B Ratio testing shows that the stock price is cheap. The problem with both is the Revenue and Book Value for this stock is declining strongly. Revenue has been declining at 31% per year over the past 5 years and is expected to continue to decline over the next two. The book value has declined 25% per year over the past 5 years. It declined by another 3% in the first quarter of 2019.

Is it a good company at a reasonable price? I never buy resource companies for the long term. Anytime I buy them I keep a close eye on them. I do not think resource stocks are stocks to hold for the long term. This particular company is currently in decline and who knows when that may stop. They just did a consolidation and this is never a good sign.

When I look at analysts’ recommendations, I find Hold (5) and Underperform (4). The consensus would be a Hold. The consensus stock price is $2.61. This implies a total return of 105.51% all from capital gains based on a current stock price of $1.27.

See what analysts are saying at Stock Chase. The worry is about increasing debt. Matt Smith on Motley Fool thinks this is a stock to avoid. A writer on Simply Wall Street says the concern is the ability of this company to move to positive earnings. Elephant Analytics at Seeking Alpha says that investor confidence in the company appears shaky after its reverse split. Joseph McCarthy on The Enterprise Leader says that Raymond James lowered price objective from $3.50 to $2.00 in a recent report.

Obsidian Energy Ltd is an intermediate sized oil and gas producer with strategic assets in Alberta. The company is focused on the development of its light oil Cardium asset. Its web site is here Obsidian Energy Ltd.

The last stock I wrote about was about was Atlantic Power Corp (TSX-ATP, NYSE-AT) ... learn more. The next stock I will write about will be Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more on Friday, July 26, 2019 around 5 pm. Tomorrow on my other blog I will write about Income Taxes.... learn more on Thursday, July 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.

Atlantic Power Corp

Sound bite for Twitter and StockTwits is: Utility Stock. The stock is probably cheap but it has declining sales, no dividends and debt ratios shows a big vulnerability. See my spreadsheet on Atlantic Power Corp.

I do not own this stock of Atlantic Power Corp (TSX-ATP, NYSE-AT). Because I like utility companies and in 2010, I have read two columns that recommended this particular utility company (TSX-ATP), I decided to investigate it. After investigating this stock, my first impression is that I would not touch it with a barge-pole.

When I was updating my spreadsheet, I noticed there is a large difference between basic and diluted shares outstanding. This is because of convertible debentures. They have repurchased some 7.8M shares for $16.6M. They said that they were stopping the dividends partly to use the money to buy back shares.

There are no longer any dividends being paid. The company wants to use the money it has to pay down debt (which I agree with) and to buy back shares (which they probably cannot afford to do.)

The company has a lot of preferred shares and it is because of their value that shareholders book value is negative. The company also has convertible debentures and this causes a large difference in basic and diluted EPS,

Debt Ratios are a big vulnerability. The debt level is much too high with Liquidity Ratio and Debt Ratio being too low. The Long Term Debt/Market Cap is 2.01. This is very high and you would like it below 1.00 and some analysts like it to be below 050. The Liquidity Ratio is low at 1.18 but becomes very good when you added in cash flow and then it is 2.36. The Debt Ratio is quite low at 1.23. I cannot calculate Leverage and Debt/Equity Ratios because of the negative book value.

The Total Return per year is shown below for years of 5 to 15 to the end of 2018 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

As you can see from the chart below only Canadian shareholders eked out return of 3.38% because of dividends.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-1.85%	-4.42%	2.57%
2008	10	0.00%	1.33%	-9.29%	10.62%
2003	15	0.00%	3.14%	-7.79%	10.93%

The Total Return per year is shown below for years of 5 to 15 to the end of 2018 in US$. The US shareholders have not done well.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-6.74%	-9.01%	2.28%
2008	10	0.00%	-4.59%	-13.83%	9.24%
2003	15	0.00%	-1.68%	-11.21%	9.53%

I cannot do any P/E Ratio testing because the P/E Ratios are all negative. This includes for the 5, 10 and historical periods. However, the current P/E is 8.15 based on a stock price of $3.24 and 2019 EPS estimate of $0.05 CDN$ ($0.04 US$). A P/E Ratio of 8.15 is a low P/E Ratio. This is in CDN$

I cannot calculate a Graham Price because this stock’s book value is negative.

I get a 10 year median Price/Book Value per Share Ratio of 1.32. However, I cannot calculate a new P/B Ratio because the book value is negative.

I cannot do a dividend yield test because they have cancelled the dividends.

The 10 year median Price/Sales (Revenue) Ratio is 0.80. The current P/S Ratio is 0.87 based on 2019 Revenue estimate of $311M, Revenue per Share of $2.84 and a stock price of $2.48. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$.

Results of stock price testing is that the stock price is probably cheap. Most tests cannot be run because of problems like a negative book value and no past P/E Ratios that I can use in testing.

Is it a good company at a reasonable price? Personally, I would not buy this stock. Not only is it not a dividend growth company, its revenue is falling and it has a negative book value. It also has a high debt load. It is also a utility and even if it recovers, how much would you make on a recovering utility stock?

When I look at analysts’ recommendations, I find Buy (1) and Hold (3). The 12 months stock price consensus is $3.13. This implies a total return of 26.10% with it all from capital gains.

See what analysts are saying on Stock Chase. There are few analysts writing on this stock and over the years most do not like it. Rich Smith on Motley Fool talks about this tock dropping in May with positive news. Matt Smith on Motley Fool thinks the company will be unable to unlock value for investors at any time soon. A writer on Simply Wall Street says it is cheap but not posed to produced positive earnings in the new future. A writer on Zacks via Nasdaq talks about this stock being undervalued..

Atlantic Power Corp owns and operates a fleet of power generation assets in the United States and Canada. Its power generation projects sell electricity to utilities and other commercial customers. Atlantic Power's segments include Eastern U.S., Western U.S., and Canada. Its web site is here Atlantic Power Corp.

The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more. The next stock I will write about will be Obsidian Energy Ltd TSX-OBE, NYSE-OBE) ... learn more on Wednesday, July 24, 2019 around 5 pm. Tomorrow on my other blog I will write about 20 American Dividend Stocks.... learn more on Tuesday, July 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.

Artis REIT

Sound bite for Twitter and StockTwits is: Dividend Paying REIT. Stock price is reasonable and below the median. It is not a dividend growth stock. Insiders are buying and that is positive. However, they just cut their distributions by 50% and this is a negative. See my spreadsheet on Artis REIT.

I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. It is also not a dividend growth stock.

When I was updating my spreadsheet, I noticed was that there is a lot of insider buying. The Net Insider Buying (NIB) is at 0.14% of market cap over the past year. You would expect it to be around 0.01% or at the most 0.02%. The other thing is that this company just cut their dividends (or distributions) by 50%.

Most past yields are all good (5% and higher). The current yield, after the recent cut in dividends is lower in the moderate range (2% to 4% ranges) at 4.62%. This is lower than the yield has been in the past. The 5, 10 and historical dividend yields are 8.21%, 8.28% and 8.02%.

There were a few increases to the dividend before 2010 and none since. The most recent change is a dividend cut of 50%. If you look at dividends to date rather than to 2018, they are much worse at -12.94%, -6.70% and -2.28% for durations of 5, 10 and 14 years.

The Dividend Payout Ratios are fine. When you area dealing with REITs the Distribution Payout Ratios are based on Funds From Operations (FFO) or Adjusted Funds From Operations (AFFO). The DPR for FFO for 2018 is 83% with 5 year coverage at 73%. The DPR for AFFO for 2018 is 113% with 5 year coverage at 91%. The DPR for AFFO for 2018 is too high but the 5 year coverage is fine. This DPR is expected to fall in 2019.

Debt Ratios are fine, but the Liquidity Ratio is a vulnerability. The Long Term Debt/Market Cap for 2018 is 0.92. The Liquidity Ratio appears low at first at 0.63. However, if you add in Cash Flow after the distribution and also add back in the current portion of the long term debt you get to 1.64. It is a vulnerability. You need to be assured that the company can rollover any current debt due each year. The Debt Ratio for 2018 is good at 1.92. The Leverage and Debt/Equity Ratios are fine at 2.09 and 1.09.

The Total Return per year is shown below for years of 5 to 14 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	-0.85%	-0.42%	-9.07%	8.64%
2008	10	-0.31%	15.85%	2.30%	13.55%
2004	14	2.55%	17.20%	2.95%	14.25%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.06, 11.35 and 12.30. The corresponding 10 year ratios are 6.50, 7.10 and 7.70. The corresponding historical ratios are 3.18, 3.59 and 4.01. If you eyeball the ratios, they are all over the place and have negative values also. That is probably why they are low. The current P/E Ratio is 16.24 based on a stock price of $11.24 and last 12 months EPS of 0.72. This stock price testing suggests that the stock price is relatively expensive.

Since this is a REIT, we should us P/AFFO. The 5 year ratios are 9.62, 12.27 and 13.30. The corresponding 10 year ratios are 10.15, 12.15 and 13.34. The current P/AFFO Ratio is 11.57 based on 2019 AFFO estimate of 1.01 and a stock price of 11.24. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $15.91. The 10 year low, median, and high median Price/Graham Price Ratios are 0.58, 0.66 and 0.76. The current P/GP Ratio is 0.73 based on a stock price of $11.24. 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 0.88. The current P/B ratio is 0.75 based on a stock price of $11.24, Book Value of $2,260M, and Book Value per Share of $15.62. The current P/B Ratio is some 16% 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 8.02%. The current yield is 4.62% based on dividends of $0.54 and a stock price of $11.24. The current yield is some 42% above the historical median yield. This stock price testing suggests that the stock price is relatively expensive.

If you cut the historical yield in half (because dividends have been cut by 50%), you get an historical yield of 4.01% and this is 15.20 below current 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 3.90. The current P/S Ratio is 3.21 based on 2019 Revenue estimate of $527M, Revenue per share of $3.64 and a stock price of $11.24. The current 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 relatively reasonable. The best tests here is the P/S Ratio and P/B Ratio tests. Both these show the stock as relatively reasonable and below the median. Since this is a REIT, the P/E Ratio tests probably tests us nothing. The P/AFFO Ratio tests shows the same results as the P/S Ratio and P/B Ratio tests.

Is it a good company at a reasonable price? It is discouraging when a stock cuts their distributions. They are making changes to the company and insiders are buying, but the last couple of years has not been profitable for the company nor the shareholders. Even when it was profitable to shareholders, most of the profit was in distributions. Capital gains has been low to non-existent and with the cut in distributions, Total Return will suffer in the future. It would not be my favourite REIT, but it is at a reasonable price.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3) and Hold (6). The consensus would be a Buy. The 12 month stock price is $12.69. This implies a total return of 13.17% with 8.55% from capital gains and 4.62% from dividends based on a current price of $11.69.

See what analysts are saying on Stock Chase. They have various views. One analyst says it is complicated because they have cut their distributions. Ryan Vanzo on Motley Fool says stocks exposures you to a diversified portfolio that isn’t dependent on one particular region, industry, or customer. A writer on Simply Wall Street talks about insider buying for this stock. A writer on Simply Wall Street thinks this stock is undervalued. A gazette writer on Addison Gazette says this company’s balance sheet is of a median strength.

Artis Real Estate Investment Trust is an unincorporated closed-end REIT based in Canada. Artis REIT's portfolio comprises properties located in Central and Western Canada and select markets throughout the United States. The properties are divided into three categories: office, retail, and industrial. Its web site is here Artis REIT.

The last stock I wrote about was about was TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more. The next stock I will write about will be Atlantic Power Corp (TSX-ATP, NYSE-AT) ... learn more on Monday, July 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.

TMX Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Price is above the median to expensive. I think there is vulnerability because of debt ratios and the Intangible/Market Cap Ratio. If you used goodwill and intangibles compared to market cap, the ratio is 1.42. The dividend growth is uneven and undependable. See my spreadsheet on TMX Group Ltd.

I do not own this stock of TMX Group Ltd (TSX-X, OTC-TMXXF). I looked at this stock in 2008 after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks. However, this has not turned out to be a dividend growth stock after all. Dividends were flat from 2008 to 2015.

When I was updating my spreadsheet, I noticed that the company has very low Liquidity Ratio. The Liquidity Ratio for 2018 is 0.99. Adding in Cash Flow after dividends just gets you to 1.00. If this ratio is below 1.00, it means current assets cannot cover current liabilities. I prefer this ratio to be 1.50 or great.

Also, the Intangible/Market Cap Ratio is high at 1.01 for 2018. If this ratio includes both goodwill and intangibles the ratio is 1.42. These are very high. This means that goodwill and intangibles is higher than the what the market values this stock at (that is the market cap).

Dividend yields have been low (under 2%) to Moderate (2 to 4% range). The current dividend is 2.68%. The 5, 10 and historical median dividend yields are 2.94%, 3.31% and 3.11%.

Dividend Growth has been very uneven. Dividends grow rapidly in the first few years, then they flat from 2005 to 2015 and then they started to do good increases again in 2017. The dividends were flat from that long period because of Dividend Payout Ratios being high, especially for EPS. The last dividend increase was for 2019 and it was for 6.9%. Individual increases were sometimes high, but the overall effect is dividends in the low range (under 8%).

The Dividend Payout Ratios are currently fine. They have been high in the past. The DPR for EPS for 2018 is 44% with 5 year coverage at 56%. The DPR for CFPS for 2018 is 28% with 5 year coverage at 27%.

Debt Ratios are a vulnerability as they are not in good ranges. The Long Term Debt/Market Cap for 2018 is low and good at 0.19. The Liquidity Ratio for 2018 is too low at just 0.99. That means that the current assets cannot coverage the current liabilities. It does not get much better adding cash flow after dividends, nor adding back in debt. That is because current assets and liabilities are high number and cash flow is relatively much lower as is current portion of the long term debt.

The Debt Ratio are low at 1.12. I prefer this to be 1.50 or higher as I prefer the Liquidity Ratio to be in that range too. The Leverage and Debt/Equity Ratios are too high at 9.36 and 8.36 respectively.

The Total Return per year is shown below for years of 5 to 16 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	6.96%	9.83%	6.75%	3.08%
2008	10	3.95%	15.26%	10.88%	4.39%
2003	15	13.17%	12.37%	8.31%	4.06%
2002	16		20.64%	12.56%	8.08%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.09, 15.18 and 17.55. The corresponding 10 year ratios are 12.75, 15.39 and 18.91. The corresponding historical ratios are 13.65, 21.08 and 25.00. The current P/E Ratio is 18.98 based on a stock price of $92.61 and 2019 estimate of $4.88. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $81.58. The 10 year low, median, and high median Price/Graham Price Ratios are 0.93, 1.07 and 1.24. The current P/GP Ratio is 1.14 based on a stock price of $92.61. 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 1.14. The current P/B Ratio is 1.53 based on a stock price of $92.61, Book Value of $3.382M, and Book Value per Share of $60.62. The current P/B Ratio is some 34% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 3.11%. The current dividend yield is 2.68% based on dividends of $1.98 and a stock price of $92.61. The current yield is 14% below 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 4.70. The current P/S Ratio is 6.28 based on 2019 Revenue estimate of $823M, Revenue per Shae of $14.75 and a stock price of $92.61. The current ratio is 34% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is above the median to expensive and probably expensive. The testing shows the stock price as relatively above the median or relatively expensive. Especially telling is the P/S Ratio and P/B Ratio tests. The dividend growth has such a checkered past that it is hard to say if this is a good test or not.

Is it a good company at a reasonable price? This would not be a company I would personally buy because of the Liquidity Ratio and the Debt Ratios. I think in this case it is a vulnerability. Another negative is that the if you compare the intangibles to the market cap the ratio is 1.01. If you use goodwill and intangibles the ratio is 1.42. The positive is that there has been some good dividend increases, but the last one for 2019 is much lower at 6.9%. The increase for 2017 was 11.1% and for 2018 was 16%.

When I look at analysts’ recommendations, I find Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $102.67. This implies a total return of 13.54% with 10.86% from capital gains and 2.68% from dividends based on a current stock price of $62.61.

See what analysts are saying on Stock Chase. They think it is a good financial stock and one worthwhile buying. Vishesh Raisinghani on Motley Fool thinks that now maybe a good time to start to accumulate this stock. A writer on Simply Wall Street says that shareholders have been doing well lately in Total Shareholder Return. The company gave some statistics and compared them to past periods on News Wire. Vishesh Raisinghani on Motley Fool says that buying this company you can be on Canada’s rebounding IPO Market.

TMX Group is an integrated, multi-asset class exchange group based in Canada with global exposure and services offered to the international financial community. TMX Group's businesses operate cash and derivatives markets for equities, fixed income, and energy, among other asset classes. The company also provides clearing facilities, data products, and other related services. Its web site is here TMX Group Ltd.

The last stock I wrote about was about was Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF) ... learn more. The next stock I will write about will be Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more on Friday, July around 5 pm. Tomorrow on my other blog I will write about Boring Investing 2.... learn more on Thursday, July 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.

Inter Pipeline Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Decreasing dividend growth and high Dividend Payout Ratios. The low Liquidity Ratio is a vulnerability. Stock price is relatively cheap to reasonable. See my spreadsheet on Inter Pipeline Ltd.

I do not own this stock of Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF). In 2008, a friend had asked me about this pipeline and I had no information on it, so I investigated it. It is a utility and I follow lots of utility stocks. They used to be a Limited Partnership and they changed to a corporation in 2013.

When I was updating my spreadsheet, I noticed that dividend increases have really slowed down recently. Annual increases are since 2015 to 2019 are 13.22%, 5.92%, 3.83%, 3.54%, 1.63%. The last increase was this year and it was for 1.8%. Increases occur for the last dividend payment of the year. This generally shows how management views the future. This could also have occurred for this stock because of very high Dividend Payout Ratios.

The dividend yields have mostly been in the good range (5% and above). It had high dividend yields as a Limited Partnership stock. Dividend yields are now lower, but still in a high range. The current dividend yield is 7.68%. The 5, 10 and historical yields are 6.24%, 7.27% and 8.63%.

Dividends have gone up and down and remained flat at different times in the past. The average growth has been low (under 8%) as you can see from the chart below. The recent dividends increases have increasingly become lower and the last increase was for just 1.8% in 2019.

The Dividend Payout Ratios are much too high. They have a problem with the DPR in connection with EPS. The DPR for EPS for 2018 was 110% with 5 year coverage at 117%. It has seldom been below 100% and analysts do not see that happening in the near future. The DPR for CFPS is also too high as it should be at 40% or less. The DPR for CFPS for 2018 was 62% with 5 year coverage at 66%. Lots of companies that used to be Limited Partnerships or Income Trusts are having a hard time getting the DPR to the levels it should be.

Debt Ratios are acceptable, but the Liquidity Ratio is a vulnerability. The Long Term Debt/Market Cap Ratio is 0.56. The Liquidity Ratio is 0.18. In order to get it above 1.00, we need to add in cash flow after dividends and add back in current debt due and we get a low but acceptable ratio of 1.33. The Debt Ratio is fine at 1.53 with 5 year median of 1.53 also. The Leverage and Debt/Equity Ratios are 2.89 and 1.89 respectively with 5 year median at 3.20 and 2.20.

The Total Return per year is shown below for years of 5 to 21 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	7.81%	0.99%	-5.62%	6.62%
2008	10	7.19%	21.75%	10.62%	11.13%
2003	15	5.82%	15.14%	6.28%	8.87%
1998	20	3.99%	15.90%	6.30%	9.60%
1997	21		9.86%	3.19%	6.67%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.85, 18.72 and 22.78. The corresponding 10 year ratios are 14.90, 17.86 and 20.50. The corresponding historical ratios are 14.90, 18.16 and 20.50. The current P/E Ratio is 17.41 based a stock price of $22.28 and 2019 EPS estimate of $1.28. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $16.67. The 10 year low, median, and high median Price/Graham Price Ratios are 1.31, 1.55 and 1.82. The current P/GP Ratio is 1.34 based on a stock price of $22.28. 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 2.98. The current P/B Ratio is 2.31 based on Book Value of $3,941M, Book Value per Share of $9.65 and a stock price of $22.28. The current ratio is 23% 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 8.63%. The current dividend yield is 7.68% based on dividends of $1.71 and a stock price of $22.28. The current yield is 11% below 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 4.59. The current P/S Ratio is 3.65 based on 2019 Revenue estimate of $2,495M, Revenue per Share of $6.11 and a stock price of $22.28. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap to reasonable. You can ignore the only test that shows the stock above the median because it is a dividend yield test and this stock used to be a Limited Partnership which would have higher yields than a corporation. The good tests of P/S Ratio and P/B Ratio show it as relatively cheap and the rests as relatively reasonable and below the median.

Is it a good company at a reasonable price? It is probably a safe utility stock, but I would worry about the Liquidity Ratio which would be a vulnerability in a bear market. There is almost no total return for shareholders over the past 5 years. Five years ago, the P/E Ratio was negative because of an earnings loss but the stock price is relatively high. The trailing P/E was 22.66. There is capital gain over the past 10 years, but 10 years ago the P/E was really low at just 6.29. The 10 year capital gains at 10.62% per year.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3), Hold (8) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $24.44. This implies a total return of 17.37% with 9.69% from capital gains and 7.68% from dividends.

See what analysts are saying at Stock Chase. Generally, it is thought of a safe stock. Joey Frenette on Motley Fool says this is his top pick for July. A writer on Simply Wall street via Yahoo Finance talks about share price being down over past 5 years.. David Burrows discusses this stock on BNN Bloomberg. Deborah Jaremko on JWN Energy talks about the company’s new pipeline.

Inter Pipeline operates crude oil pipelines, natural gas liquids extraction, and bulk liquid storage businesses in Canada and Europe. The company's oil sands pipelines cover 3,300 kilometers of pipeline and hold the capacity for 4.6 million barrels a day of delivery volumes. Conventional crude pipelines, NGL infrastructure, and 31 mmbbl of liquid storage in Europe round out the company's operations. Its web site is here Inter Pipeline Ltd .

The last stock I wrote about was about was Morneau Shepell Inc (TSX-MSI, OTC-MSIXF) ... learn more. The next stock I will write about will be TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more on Wednesday, July 17, 2019 around 5 pm. Tomorrow on my other blog I will write about Fortis by Gordon Pape.... learn more on Tuesday, July 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.

Empire Company Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably reasonable. They have had some problems recently, especially with their Safeway purchase. However, the higher dividend recent increase shows that the management has confidence in the future. See my spreadsheet on Empire Company Ltd.

I do not own this stock of Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). I have known about this stock for some time before I decided to follow it. This stock has a financial year ending in end of April or first of May each year.

When I was updating my spreadsheet, I noticed that the dividend was increased at the rate of 9.1% in 2019. This is a higher rate that it has been for the last few years. This is a sign of optimism on the part of management.

Dividend yield is low (under 2%). The yield seldom rises to the 2% range. The current dividend yield is 1.46%. The 5, 10 and historical median dividend yields are 1.64%, $1.57% and 1.45%. The dividend growth has varied a lot over the more than 30 years I have tracked this stock. You can see from the chart below it was higher in the past. However, the last dividend raise was in 2019 and it was for 9.1%. Generally, higher dividend increases suggest that the management has confidence in the future.

The Dividend Payout Ratios are low and therefore good. The DPR for EPS for 2018 is 31% with 5 year coverage at 36%. The DPR for CFPS for 2018 is 13% with 5 year coverage at 11%.

Debt Ratios are fine, but there is vulnerability with the low Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2018 is 0.24. The Liquidity Ratio is 0.98. This means that the current assets cannot cover the current liabilities. If you add in Cash Flow after dividends the rate is 1.27. It is still low. The Debt Ratio is good at 1.74. The Leverage and Debt/Equity Ratios are fine at 2.40 and 1.38.

The Total Return per year is shown below for years of 5 to 34 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	4.88%	5.13%	3.57%	1.64%
2008	10	6.55%	7.54%	5.90%	1.56%
2003	15	8.28%	9.97%	8.11%	1.86%
1998	20	12.02%	10.52%	8.76%	1.76%
1993	25	10.87%	11.44%	9.70%	1.74%
1988	30	9.79%	10.32%	8.84%	1.48%
1984	34	9.80%	15.20%	12.54%	2.66%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.99, 18.95 and 21.91. The corresponding 10 year ratios are 13.94. 17.32 and 20.70. The corresponding historical ratios are 10.54, 12.13 and 13.91. The current P/E Ratio is 15.78 based on a current stock price of $32.83 and 2020 EPS estimate of $2.08. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $26.30. The 10 year low, median, and high median Price/Graham Price Ratios are 0.88, 1.07 and 1.23. The current P/GP Ratio is 1.25 based on a stock price of $32.83. 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 1.22. The current P/B Ratio is 2.22 based on a Book Value of $4,016M, Book Value per Share of $14.78 and a stock price of $32.83. The current ratio is 82% 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 1.45%. The current dividend yield is 1.46% based on dividends of $0.48 and a stock price of $32.83. The current yield is 2.2% above the historical yield. This stock price testing suggests that the stock price is relatively reasonable around the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.25. The current P/S Ratio is 0.34 based on 2020 Revenue estimate of $26,196M, Revenue per Share of $96.37 and a stock price of $32.83. The current ratio is 35% 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 reasonable to expensive Most of the testing is showing that the stock price is relatively expensive. The major exception is the Dividend Yield test. This is generally a good test and it is showing the price as around the median. I know that the P/E Ratio testing is showing the price below the median, but this is seldom a good test.

Is it a good company at a reasonable price? This is certainly a good dividend growth company which is what I like. The reason I would not buy is because I already have grocery company stock of Metro. It is certainly not cheap but it is probably reasonable. They have had some recent problems which has suppressed some of the ratios, like P/S Ratio and P/B Ratio.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4) and Hold (4). The consensus would be a Buy. The 12 month stock price is $35.22. This implies a total return of 8.74% with a capital gain of 7.28% and dividends of $1.46%.

See what analysts are saying about this stock on Stock Chase. They think it is a well-run company, but some analysts do not like grocery companies. David Jagielski on Motley Fool likes this company for its consistency. A writer on Simply Wall Street talks about the dividend being sustainable. Aleksandra Sagan on Financial Post talks about the company opening a discount Grocery Store in Western Canada. The Canadian Press via Times Colonist talks about the company’s fourth quarterly results.

Empire Co Ltd key businesses are food retailing, investments, and other operations. The food retailing division operates through Empire's subsidiary Sobeys and represents nearly all of the company's income. Retail banners including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Lawton's Drug Stores, and multiple retail fuel locations. They have an investment in Crombie REIT. Its web site is here Empire Company Ltd.

The last stock I wrote about was about was Suncor Energy Inc (TSX-SU, NYSE-SU) ... learn more. The next stock I will write about will be Morneau Shepell Inc (TSX-MSI, OTC-MSIXF) ... learn more on July 12, 2019 around 5 pm. Tomorrow on my other blog I will write about Boring Investing.... learn more on Thursday, July 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.

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