Element Fleet Management Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price is probably reasonable. See my spreadsheet on Element Fleet Management Corp.

I do not own this stock of Element Fleet Management Corp (TSX-EFN, OTC-ELEEF). I was looking for stocks to follow and I found this stock in 100 best Dividend Stocks Money Sense for 2018. It was also on Raymond James' top 19 Canadian stocks for 2019 list.

When I was updating my spreadsheet, I noticed that they are growing their Revenue quite well, but not their EPS. However, analyst expect better EPS in the future. Revenue grew by 24% per year over the past 5 years and Revenue per share by 13% per year. Revenue also grew by 90% per year over the past 8 years and Revenue per Share by 50% per year over the past 8 years. EPS is down by 4% per year over the past 5 years. Eight years ago, EPS was negative. However, analyst expect EPS growth of 417% in 2020 to EPS at $0.62. In 2021 EPS is expected to be $0.82 and then $0.91 in 2022.

The dividend yields are low with dividend growth good. The current dividend yield is low (below 2%) at 1.97. The 3 year median dividend yields are moderate (2% to 4% ranges) at 2.08%. Dividends have only been paid since 2016. The dividend growth rate is 21.6% per year over the past 3 years. Although dividends have increased for 2 years and decreased for 1 year in the past 3 years. The last dividend increase occurred in 2020 and it was for 44%.

The Dividend Payout Ratios (DPR) are fine, or will be. The DPR for EPS for 2019 was 150% with 3 year coverage at 371%. Analysts expect the DPR for EPS to be around 42% in 2020. The DPR for CFPS for 2019 was 8% with 3 year coverage at 27%. The DPR for Free Cash Flow for 2019 was 11% with 5 year coverage at 247%. (But here again sites do not agree with each other about the FCF for each year.)

Debt Ratios need improvement. The Long Term Debt/Market Cap is high at 2.48. However, the company has assets to coverage the debt. The Assets to Debt Ratio is 0.96. This is a financial company, so Assets to Debt Ratio is what counts. The Liquidity Ratio for 2019 is 0.73. However, if you added in Cash Flow after dividends, the ratio is good at 1.71. The Debt Ratio is lower than what I like at 1.28. I prefer this to be at 1.50 or higher, but this is a financial company, so there is more leeway in this. The Leverage and Debt/Equity Ratios are too high at 5.56 and 4.35. I prefer these to be low than 3.00 and 2.00, but finance companies tend to have higher ratios.

The Total Return per year is shown below for years of 5 to 8 to the end of 2019. 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.
2014	5	21.64%	8.27%	0.02%	8.26%
2011	8		18.22%	11.26%	6.96%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.11, 29.17 and 28.89. The corresponding 8 year ratios are 9.72, 11.61 and 13.50. The current P/E Ratio is 21.24 based on a stock price of $13.17 and EPS estimate for 2020 of $0.62. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $9.92. The 8 year low, median, and high median Price/Graham Price Ratios are 1.12, 1.45 and 1.71. The current P/GP Ratio is 1.33 based on a stock price of $13.17. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an 8 year median Price/Book Value per Share Ratio of 1.18. The current P/B Ratio is 1.87 based on a stock price of $13.17, Book Value per Share of $7.05 and a Book Value of 43,054M. The current P/B Ratio is 58% above the 8 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an 8 year median Price/Cash Flow per Share Ratio of 8.91. The current P/CF Ratio is 16.88 based on a stock price of $13.17, Cash Flow per Share estimate for 2020 of $0.78 and Cash Flow of 338M. The current ratio is some 89% above the 8 year ratio. This stock price testing suggests that the stock price is relatively expensive.

Analysts expect that Cash Flow per Share would decrease by some 67% in 2020. The Cash Flow per Share estimate for 2021 is $0.78 and Cash Flow of 455M. Based on a stock price of $13.17m this gives a P/CF Ratio of 12.54. The 9 year P/CF Ratio for 2021 is 10.18. This P/CF Ratio is 23% above the 9 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical and 3 year median dividend yield of 2.08%. The current dividend yield is 1.97% based on dividends of 0.26 and a stock price of $13.17. The current dividend yield is 5% below the 3 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 8 year median Price/Sales (Revenue) Ratio is 6.77. The current P/S Ratio 5.99 based on Revenue estimate for 2020 of $953, Revenue per Share of $2.20 and a stock price of $13.17. The current ratio is 12% below the 8 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. The P/S Ratio testing suggests that the stock is reasonable. The dividend yield test says the same thing. Although, I must admit most of the other rest show that the stock price is relatively expensive. However, I take the view that Revenue is what ultimately drives EPS and Cash Flow.

Is it a good company at a reasonable price? I think that this is an interesting company, but it is rated as risky. The price would seem to be current reasonable. It has only been paying dividends since 2016, but they have been inconsistent in dividend increases, but will probably be a dividend growth company.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (8) and Underperform (1). The consensus is a Buy. The 12 month stock price consensus is $15.88. This implies a total return of 22.55% with 20.58% from capital gains and 1.97% from dividends

There are few entries on Stock Chase, but the last on March 2020 is positive. Amy Legate-Wolfe on Motley Fool thinks this company is a strong buy if you have little money. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and 4 points of risk analysis. A writer on Simply Wall Street says the rise in total shareholder return over the past year points to the company doing better recently. Global New Wire on Yahoo Finance talks about the company’s Third Quarter.

Element Fleet Management provides management services and financing for commercial vehicle and equipment fleets. The company's suite of fleet management services deals with acquisition and financing, to program management and remarketing. Its web site is here Element Fleet Management Corp.

The last stock I wrote about was about was Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more. The next stock I will write about will be Metro Inc (TSX-MRU, OTC-MTRAF) ... learn more on January 1, 2021 around 5 pm. Tomorrow on my other blog I will write about Pembina Pipelines.... learn more on Thursday, December 31, 2020 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.

Bird Construction Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. Stock price is relatively cheap. When it gets its DPR for EPS under control it probably will become a dividend growth company again. Insiders are buying. Analysts expect that the company will have better years in 2021 and 2022. Debt ratios need to be improved. See my spreadsheet on Bird Construction Inc.

I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock.

When I was updating my spreadsheet, I noticed this company is in a cyclical business, but they have not done well over the past 10 years and then 2018 was a losing year because of higher costs. Things seem to be improving in 2019 and analysts expect a better year in 2020 and in the future. However, they do not see the dividend improving over the near term. This stock used to be an Income Trust. A lot of the previous income trust stocks have had a hard time getting their DPR for EPS under control.

The dividend yields are good with dividend growth non-existent. The current yield is good (4% and 5% ranges) at 5.01%. The 5, 10 and historical dividend yields are also good at 5.93%, 5.70% and 5.93%. Dividend were decreased in 2017 and they have been flat ever since. Analysts do not expect any increases in the near future. The company used to be a dividend growth company, but it has not been one for sometime now. It however, might again be one in the future, just not the near future.

The Dividend Payout Ratios (DPR) are expected to improve. The DPR for EPS for 2019 was 177% with 5 year coverage at 173%. They have not been able to afford the dividends in connection with EPS for some time. However, analysts expect that to change in 2020 with a DPR for EPS of 68% and then going lower again in 2021. The DPR for Cash Flow per Share for 2019 at 55% with 5 year coverage at 42%. (I prefer this to be 40% or less, especially the 5 year coverage.) The DPR for Free Cash Flow for 2019 is negative, with 5 year coverage at 322%. Analysts expect this to be better in 2020 at an DPR of 41%.

Debt Ratios need improvement. The Long Term Debt/Market Cap Ratio for 2019 is 0.11 and is low and good. The Liquidity Ratio is low at just 1.12. The Debt Ratio is low also at 1.18. I prefer these last two to be 1.50 or better. The Leverage and Debt/Equity Ratios are too high at 6.71 and 5.71. I prefer them to be below 3.00 and 2.00, respectively.

The Total Return per year is shown below for years of 5 to 21 to the end of 2019. 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 there were some years of special dividends and this seems to account for the high dividend portion of the total return for 15 to 22 year dividend portion of the total return.)

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	-12.48%	-4.24%	-9.73%	5.49%
2009	10	-3.23%	2.00%	-4.61%	6.62%
2004	15	1.26%	29.54%	7.75%	21.78%
1999	20	7.22%	36.48%	12.40%	24.08%
1997	22		49.64%	18.22%	31.42%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 18.39, 23.42 and 28.43. The corresponding 10 year ratios are 14.14, 17.54 and 21.16. The corresponding historical ratios are 7.12, 10.03 and 11.38. The current P/E Ratio is 13.65 based on a stock price of $7.78 and EPS estimate for 2020 of $0.57. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $6.88. The 10 year low, median, and high median Price/Graham Price Ratios are 1.24, 1.54 and 1.83. The current P/GP Ratio is 1.13 based on a stock price of $7.78. 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 2.94. The current P/B Ratio is 2.11 based on a stock price of $7.78, Book Value of $196M and a Book Value per Share of $3.70. The current ratio is 28% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.41. However, I cannot do a test on P/CF Ratio because the Cash Flow for 2020 is expected to be negative.

I get an historical median dividend yield of 5.93%. The current dividend yield is 5.01% based on dividends of 0.39 and a stock price of $7.78. The current dividend yield is 15% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 5.70%. The current dividend yield is 5.01% based on dividends of 0.39 and a stock price of $7.78. The current dividend yield is 12% 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 0.37. The current P/S Ratio is 0.27 based on a stock price of $7.78, Revenue estimate for 2020 of $1520M and Revenue per Share of $28.66. The current ratio is 27% 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. The P/S Ratio test is showing this, as are the other tests I can do except for the dividend yield tests. There are lots of problems with the dividend yield test. For this stock used to be an income trust, and income trust had much higher yields than corporation because they could payout more than the EPS. Also, the company has been cutting dividends lately. However, lots of income trusts had to cut dividends after becoming corporations.

Is it a good company at a reasonable price? The stock price is relatively cheap. You would buy this company for diversification purposes. The long slow recovery from the 2008 recession and bear market and problems with Covid has hurt this company, but most analysts feel that it will start to do better in 2021. They are probably right.

When I look at analysts’ recommendations, I find Strong Buy (4) and Buy (2). The consensus would be a Strong Buy. The 12 months stock price consensus is $9.92. This implies a total return of 32.52% with 27.51% from capital gains and 5.01% from dividends.

Recent comments are positive on Stock Chase. Ambrose O'Callaghan on Motley Fool thinks this would be a great stock to buy for your TFSA this year. The Executive Summary on Simply Wall Street list 4 positives and 3 negatives and give it 4 out of 5 stars. A writer on Simply Wall Street talks about who owns shares in this company. Bird Constructions on Cision announced that wholly owned subsidiary, Stuart Olson Construction Ltd., has been selected as preferred proponent for the Nanaimo Correctional Centre Replacement Project.

Bird Construction Inc, through its subsidiaries, operates as a contractor in the construction market. It also provides pre-construction services, building information modeling and involves public-private partnership projects. The company focuses on commercial, institutional, retail, tenant, residential, industrial, mining, water, wastewater, energy, and civil sectors. Its web site is here Bird Construction Inc.

The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) ... learn more on Wednesday, December 30, 2020 around 5 pm. Tomorrow on my other blog I will write about One Rule in Investing.... learn more on Tuesday, December 29, 2020 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.

Sienna Senior Living Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. Stock price would seem to be reasonable. Dividends were only increased 4 times in 9 years. Liquidity Ratio is awful. Revenue per Share is going in the wrong direction. See my spreadsheet on Sienna Senior Living Inc.

I do not own this stock of Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF). When I looked in Stock Chase about Chartwell, Greg Newman; Director & Portfolio Manager, Scotia Wealth Management said he liked Sienna Senior Living Better, so I investigated it.

When I was updating my spreadsheet, I noticed Revenue is growing nicely, but Revenue per Share is down. For example, Revenue over the past 5 years is up by 8% per year, but Revenue per Share is down 4%. I do not like the Liquidity Ratios and these have never been good.

Liquidity Ratio for 2019 is 0.37 (current assets cannot cover current liabilities). Adding in Cash Flow after dividend does not help much, as ratio just goes to 0.67. You only get as high as 0.85 if you add back the current portion of the long term debt. The problem is in economic hard times, you may not be able to roll over debt.

However, if you use Cash Flow less Working Capital, in the above calculations, the Liquidity Ratio with Cash Flow after dividends is 0.89 and the Liquidity Ratio adding back the current portion of the long term debt gets you a ratio of 1.13. I do not care for manipulating the accounting to get values that are acceptable.

The dividend yields are good with dividend growth very low. The current dividend yield is good (5% to 6% ranges) at 6.75%. The 5 and 9 year median dividend yield are also good at 5.34% and 6.31%. The dividend growth over the past 5 years is 0.53% per year. This is because there was just there was just 2 low increases over the past 5 years. The last dividend increase was in 2020 and it was at 2%. Analysts expect no increase in 2021 and a 1% increase in 2022. There is a tradeoff between dividend growth and yield. If you get a high yield, you should expect a low growth. Another problem with high dividend yields is that these companies often get into financial difficulties.

The Dividend Payout Ratios (DPR) are too high. They certainly cannot cover the dividends with EPS and the DPR for Cash Flow is also high, but not as bad. The DPR for EPS for 2019 is 840% with 5 year coverage at 384%. The DPR for CFPS is 47% with 5 year coverage at 52%. The DPR for 2019 is 74% with 5 year coverage at 83%. The DPR for Free Cash Flow for 2019 is 69% with 5 year coverage at 78%.

This stock is sort of like a REIT, (or at least being treated like a real estate company) with its FFO and AFFO usage but the payouts are dividends not distributions. Analysts seemed to have gone along with DPR for FFO which for 2019 is fine at 67% and with the DPR for AFFO which is also fine at 66%.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2019 is high at 0.93. What is really high is coverage of Long Term Debt by Cash Flow and this is at 11 years and is high. (However, this score is typical of REITs.) I dealt with the awful Liquidity Ratio above. The Debt Ratio is lower than what I like at 1.46 where I would rather it be at 1.50 or above. The 5 year median Debt Ratio is lower at 1.40. The Leverage and Debt/Equity Ratios are 3.19 and 2.19 and I would like to see them below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 10 to the end of 2019. 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.
2014	5	0.53%	8.02%	1.75%	6.26%
2009	10	2.36%	12.36%	4.78%	7.58%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 69.55, 79.85, 90.15. The corresponding 9 year ratios are 9.47, 9.84 and 10.20. The corresponding historical ratios are 9.47, 9.84 and 10.20. The current P/E Ratio is negative and is based a stock price of $13.87 and EPS loss estimated at $0.25. This test cannot be done.

The EPS for 2021 is expected to positive, but it is low at $0.05. This gives a P/E Ratio for 2021 of 277.40 based on a stock price of $13.87. This stock price testing suggests that the stock price is relatively expensive.

This company does give out Funds from Operations (FFO) values. The 5 year low, median, and high median Price/ Funds from Operations Ratios are 11.42, 13.79 and 13.83. The corresponding 9 year ratios are 11.31, 12.40 and 13.30. The current P/FFO Ratio is 14.01 based on a stock price of $13.87 and FFO estimate for 2020 of $0.99. This stock price testing suggests that the stock price is relatively expensive.

This company does give out Adjusted Funds from Operations (AFFO) values. The 5 year low, median, and high median Price/ Funds from Operations Ratios are 10.74, 11.75 and 12.68. The corresponding 9 year ratios are 9.69, 10.89 and 12.10. The current P/AFFO Ratio is 13.73 based on a stock price of $13.87 and FFO estimate for 2020 of $1.01. This stock price testing suggests that the stock price is relatively expensive.

For both the P/FFO and P/AFFO, if we look at the ratios for 2021, (and we are very close to 2021) we get a slightly different story. For P/FFO, the 2021 P/FFO Ratio is 11.56 based on FFO for 2021 of $1.20 and a stock price of $13.87. This stock price testing suggests that the stock price is relatively reasonable and below the median. For P/AFFO, the 2021 P/AFFO Ratio is 11.19 based on AFFO for 2021 of $1.24 and a stock price of $13.87. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $12.54. The 9 year low, median, and high median Price/Graham Price Ratios are 0.94, 1.05 and 1.15. The current P/GP Ratio is 1.11 based on a stock price of $13.87. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 9 year median Price/Book Value per Share Ratio of 2.12. The current P/B Ratio is 1.97 based on a Book Value of $472M, Book Value per Share of $7.06 and a stock price of $13.87. The current ratio is 7% below the 9 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 9 year median Price/Cash Flow per Share Ratio of 14.99. The current P/CF Ratio is 13.54 based on last 12 months of Cash Flow of $68.5M, Cash Flow per Share of $1.02 and a stock price of $13.87. The current ratio is 9.7% below the 9 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 6.31%. The current dividend yield is 6.75% based on a stock price of $13.87 and dividends of $0.94. The current dividend yield is 7% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 9 year median dividend yield of 6.31%. The current dividend yield is 6.75% based on a stock price of $13.87 and dividends of $0.94. The current dividend yield is 7% above the 9 year dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 9 year median Price/Sales (Revenue) Ratio is 1.26. The current P/S Ratio is 1.40 based on a stock price of $13.87, Revenue estimate for 2020 of $663M and Revenue per Share of $9.92. The current ratio is 11% above the 9 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. (The P/S Ratio for 2021 is 1.39, so this does not change anything.)

Results of stock price testing is that the stock price is probably reasonable. The dividend yield testing is showing the stock price reasonable and below the median and the P/S Ratio testing is showing the stock price as reasonable and above the median. Most of the other testing is showing the stock price to be reasonable and either above and below the median. The P/B Ratio test is a good clear test and shows the stock price reasonable and below the median.

Is it a good company at a reasonable price? The stock price is probably reasonable. However, the combination of a high dividend yield and awful Liquidity Ratios would not be the sort of stock I would like to buy. It is just not the current Liquidity Ratio; the company has a history of awful Liquidity Ratios.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $14.53. This implies a total return of 11.51% with 4.76% from capital gains and 6.75% from dividends.

Analysts on Stock Chase seem to like this stock. Ambrose O'Callaghan on Motley Fool likes the yield on this stock. The executive review on Simply Wall Street gives it 2 stars out of 5 and 3 risks and no positives. A writer on Simply Wall Street says that at least the dividend was covered by FCF but this is not a stock for long-term buy and hold.. A writer on Press Progress certainly does not like this company.

Sienna Senior Living Inc is one of the largest owners of seniors' housing, the largest licensed long-term care operator in Ontario, and a provider of services across the full continuum of care. The firm operates solely within Canada. Its web site is here Sienna Senior Living Inc.

The last stock I wrote about was about was Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more. The next stock I will write about will be Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more on Monday, December 28, 2020 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.

Chartwell Retirement Residences

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. The stock price seems reasonable and around the median. Dividend yield is good, but over past 15 years, dividends have gone up 6 times and down 4 times. So, not a great dividend growth stock. They do not seem to have their debt under control. They have cash flow but not much in earnings or growth in revenue. See my spreadsheet on Chartwell Retirement Residences.

I do not own this stock of Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF). I saw this stock on a dividend investing blog and looked it up on Stock Chase. It is an unincorporated income trust.

When I was updating my spreadsheet, I noticed that they had some awful debt ratios. As I understand why we should invest in such companies is because the proportion of older people in our society is growing. So, we should invest in companies that sell to that population. However, I like companies that have their debt under control. I am inclined to like companies that can make money. I also, like companies that grow their dividends.

With this company, they are not making money, but they are growing their cash flow. Cash flow grew by 5% per year over the past 5 years, but Revenue is not growing. Revenue per Share is down 4% per year over the past 5 years. Even if you just look at revenue, it is up by 0% per year over the past 5 years. To continue to grow the Cash Flow, Revenue also has to grow. With this company, dividends are up by 2% per year over the past 5 years, but are down by 1.2% per year over the past 10 years. See chart below. No matter how you look at it, the Liquidity Ratios are awful. See below.

The dividend yields are good with dividend growth low. The current dividend yield is good (5% and 6% ranges) at 5.24%. The 5 and 10 year median yields are moderate (2% to 4% ranges) at 3.99% and 4.80%. The historical median dividend yield is good at 6.27%. The dividends have grown by 2% per year over the past 5 years. However, they do not have a good record for dividend growth. Over the past 15 years they had an increased in the dividend 6 times, but had a decreased 4 times.

The Dividend Payout Ratios (DPR) results depend on how you look at the company. The DPR for EPS for 2019 is 11,921%. Since the company is sort of like a REIT, (at least analysts and the company are looking at this way), I did look at the DPR for Funds from Operations (FFO) which for 2019 is 65%. The DPR for Adjusted Funds from Operations (AFFO) for 2019 is 69%. For FFO and AFFO, these ratios are fine. The DPR for 2019 for Free Cash Flow is not calculable because of negative FCF. The 5 year coverage for FCF is 263%.

Debt Ratios are mostly awful. The Long Term Debt/Market Cap is high but fine at 0.75. However, it would take the company some 11 years to pay back their long term debt. (Generally, analysts like the number of years to pay long term debt to be 2 to 3 years. Although, I must admit, this stock is sort of like, but it not, a REIT.). The Liquidity Ratios are awful. The Liquidity Ratio for 2019 is 0.22. When it is below 1.00 it means that current assets cannot cover current liabilities. If you add in Cash Flow after dividends it is just 0.55. Even with adding back the part of the Long Term Debt due this year, it is still low at 0.91. The problem with using current portion of long term debt in this calculation, is that in tough times, it may not be possible to roll the debt over.

The Debt Ratio is too low. The Debt Ratio for 2019 is 1.32, with a 5 year median of 1.39. I prefer this to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2019 are 4.17 and 3.17. I prefer these to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 16 to the end of 2019. 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.
2014	5	2.03%	8.36%	3.76%	4.60%
2009	10	-1.20%	13.53%	7.36%	6.17%
2004	15	-3.83%	5.32%	0.10%	5.22%
2003	16		6.72%	0.79%	5.93%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 230.43, 245.40, 260.37. The Corresponding 10 year ratios are 111.48, 124.40 and 137.32. The corresponding historical ratios are all negative. The current P/E Ratio is negative with a stock price of $11.68 and EPS loss estimate for 2020 of $0.03. They have never had any meaningful EPS.

This company does give out Funds from Operations (FFO) values. The 5 year low, median, and high median Price/ Funds from Operations Ratios are 14.94, 16.08 and 17.48. The corresponding 10 year ratios are 12.61, 14.12 and 15.82. The current P/FFO Ratio is 15.37 based on a stock price of $11.68 and FFO estimate for 2020 of $0.76. This stock price testing suggests that the stock price is relatively reasonable but above the median.

This company does give out Adjusted Funds from Operations (AFFO) values. The 5 year low, median, and high median Price/ Funds from Operations Ratios are 15.82, 17.30 and 18.87. The corresponding 10 year ratios are 13.74, 15.46 and 17.08. The current P/FFO Ratio is 16.93 based on a stock price of $11.68 and FFO estimate for 2020 of $0.69. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $7.77. The 10 year low, median, and high median Price/Graham Price Ratios are 1.26, 1.45 and 1.60. The current P/GP Ratio is 1.50 based on a stock price of $11.68. 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 3.20. The current P/B Ratio is 3.31 based on a current Book Value of $752M, Book Value per share of $3.53 and a stock price of $11.68. The current ratio is 3.4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 15.25. The current P/CF Ratio is 13.11 based on last 12 months Cash Flow of $189.8M, Cash Flow per Share of $0.89 and a stock price of 11.68. The current ratio is 14% 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 6.27%. The current dividend yield is 5.24% based on a stock price of $11.68 and dividends of $0.61. The current dividend yield is 16% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median dividend yield of 4.80%. The current dividend yield is 5.24% based on a stock price of $11.68 and dividends of $0.61. The current dividend yield is 9% above the historical median 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 2.62. The current P/S Ratio is 2.67 based on Revenue estimate for 2020 of $932M, Revenue per Share of $4.37 and a stock price of $11.68. The current ratio is 1.9% 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 probably reasonable, but above the median. The dividend yield tests show the stock price as reasonable and above and below the median. The P/S shows the stock price as slightly above the median. Most of the testing shows the stock price as above the median except for the P/CF Ratio tests which shows it below the median.

Is it a good company at a reasonable price? This stock is selling at a reasonable price. However, I would not personally buy it because of the debt ratios.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $12.46. This implies a total return of 11.92% with 6.68% from capital gains and 5.24% from dividends based on a stock price of $11.68.

Mostly analysts still like this company on Stock Chase but there are some negative comments because of elevated expenses re Covid. Karen Thomas on Motley Fool likes this stock for the safe 6% dividend. The executive summary on Simply Wall Street give this stock 2 stars out of 5 and the risk is all about debt. A writer on Simply Wall Street talks about the company being highly leveraged and its interest payments not being well covered. Ben Hobson on Stockopedia is negative on the company’s ability to make dividend payments.

Chartwell Retirement Residences is an unincorporated open-ended trust. The company is engaged in the ownership, operation, and management of retirement and long-term care communities in Canada. Its web site is here Chartwell Retirement Residences.

The last stock I wrote about was about was Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more. The next stock I will write about will be Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more on Thursday, December 24, 2020 around 5 pm. Tomorrow on my other blog I will write about Future of Dividends.... learn more on Thursday, December 24, 2020 around 5 pm.

Also, on my book blog I have put a review of the book The Wake by Linden MacIntyre learn more...

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.

Richards Packaging Income Fund

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Dividend growth is however inconsistent. Over the past 15 years they have raised the dividend 7 times and decreased it once. The current stock price would seem to be on the expensive side. The stock price is up some 44% this year. See my spreadsheet on Richards Packaging Income Fund.

I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment club suggested this stock.

When I was updating my spreadsheet, I noticed that distribution tax is changing from a Capital Dividend to Return of Capital in 2019. For more information on Capital Dividends in Canada see site at Welch LLP.

The dividend yields are currently moderate with dividend growth moderate but inconsistent. The current dividend yield is moderate (2% to 4%) range at 2.00%. The 5 year median dividend yield is moderate at 4.76%. The 10 year median dividend yield is good (5% to 6% ranges) at 6.38%. The historical median dividend yield is high (7% or above) at 7.76%. The company started out as an Income Trust and these sorts of companies had very high dividend yields. The dividend growth over the past 5 years is moderate (8% to 14% ranges) at 8.6% per year. However, dividend growth has been inconsistent. There was no dividend increase in 2020.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 67% with 5 year coverage at 80%. However, analyst expect the DPR for EPS to drop and be around 28% in 2020. The DPR for CFPS for 2019 is 28% with 5 year coverage at 31%. The DPR for Free Cash Flow for 2019 is 41% with 5 year coverage at 52%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2019 is very low and good at 0.02. The Liquidity Ratio for 2019 is 1.59. It has dropped to 1.27 for 2020, but if you add in cash flow after dividend it is 1.64. The Debt Ratio for 2019 is 2.04. This also dropped in 2020 and it is currently at 1.76. However, this is still a good ratio. The Leverage and Debt/Equity Ratio

The Total Return per year is shown below for years of 5 to 15 to the end of 2019. 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.
2014	5	8.60%	33.53%	27.96%	5.57%
2009	10	16.36%	26.92%	20.35%	6.57%
2004	15	4.73%	15.35%	10.01%	5.34%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.46, 17.92 and 20.37. The corresponding 10 year Ratios are 13.98, 16.47 and 19.07. The corresponding historical ratios are 13.69, 15.82 and 18.19. The current P/E Ratio is 15.81 based on a stock price $66.00 and EPS estimate for 2020 of $4.78. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $36.89. The 10 year low, median, and high median Price/Graham Price Ratios are 0.96, 1.12 and 1.28. The current P/GP Ratio is 1.79 based on a stock price of $66.00. 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 1.65. The current P/B Ratio is 5.22 based on a stock price of $66.00, Book Value of $142M and Book Value per Share of $12.85. The current P/B Ratio is 215% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 8.42. The current P/CF Ratio is 10.92 based on last 12 month Cash Flow of $67.9M, Cash Flow per Share of $6.05 and a stock price of $66.00. The current ratio is 30% 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 7.76%. The current dividend yield is 2.00% based on dividends of $1.32 and a stock price of $66.00. The current dividend yield is 74% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 6.38%. The current dividend yield is 2.00% based on dividends of $1.32 and a stock price of $66.00. The current dividend yield is 69% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 5 year median dividend yield of 4.76%. The current dividend yield is 2.00% based on dividends of $1.32 and a stock price of $66.00. The current dividend yield is 58% below the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.65. The current P/S Ratio is 1.59 based on Revenue estimate for 2020 of $467M, Revenue per Share of $41.59 and a stock price of $66.00. The current ratio is 143% 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 probably expensive. All the dividend yield tests say this and it is confirmed by the P/S Ratio test. (As the stock price goes up, the dividend yield goes down. The stock price is up some 44% this year.) Basically, the only test to show the stock price is reasonable is the P/E Ratio test. Analysts expect that the EPS will be up some 143% this year to $4.78. The last 12 months EPS is low at $2.93 and increase of 49%.

Is it a good company at a reasonable price? This is an interesting Dividend Growth Stock. It has rising Revenue, Earnings and Cash Flow. I think that it is a good company. The problem is that it would seem to be expensive currently.

When I look at analysts’ recommendations, I find one Buy (1) recommendation. The consensus would be a Buy. The 12 month stock price consensus is $86.00. This implies a total return of 32.30% with 2% from dividends and 30.30% from capital gains based on a stock price of $66.00.

Analysts like this stock on Stock Chase. Adam Othman on Motley Fool likes the company but feels it is currently overpriced. A writer on Simply Wall Street says the fair market price for this stock is $60.59 CDN$. A writer on Simply Wall Street says the dividend is well covered and the company is growing its earnings. This makes the stock attractive. The Blogger Dividend Girl says this stock was her best Canadian stock investment.

Richards Packaging Income Fund is involved in packaging distribution businesses. The company principally distributes plastic and glass containers and associated closures. It is used in packaging for cosmetics, healthcare, food, beverage, and other products. Geographically, it derives a majority of revenue from the United States. Its web site is here Richards Packaging Income Fund.

The last stock I wrote about was about was Magna International Inc (TSX-MG, NYSE-MGA) ... learn more. The next stock I will write about will be Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more on Tuesday, December 23, 2020 around 5 pm. Tomorrow on my other blog I will write about Barrick Gold.... learn more on Tuesday, December 22, 2020 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.

Magna International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price seems to be reasonable to expensive. It is a cyclical stock. There is insider buying. The dividends increase for 2020 does show that management has confidence in the future. However, so far they have not increased the dividend for 2021 and analyst expect a very small increase of 1%. See my spreadsheet on Magna International Inc.

I do not own this stock of Magna International Inc (TSX-MG, NYSE-MGA). Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy. They can be cyclical.

When I was updating my spreadsheet, I noticed that 2019 was not a good a year as the company had in 2018. The first 9 months of this year is not as good as they had in the first 9 months of 2019. However, the company raised their dividends in 2020, so at that time management would seem to be optimistic. It will be interesting to see if they again raise their dividends in 2021.

In 2019, Revenue was down by 3.4% and EPS was down by 15%. For the first 9 months or third quarterly report, Revenue is down by 20% and EPS is down by 73%. In 2020, the dividends were increased by 9.6% which is lower than for the last 5 years where dividend increases were 13.9% per year. Analysts expect a small increase in dividends in 2021 of just over 1%, but a better one, over 10% in 2022. Dividend increases give you an idea on how the management of a company feels about the near future.

The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.48%. The 5, and 10 median dividend yields are also moderate at 2.39% and 2.21%. The historical median dividend yield is low (below 2%) at 1.92%.

Dividend growth is currently good with 5 year growth at 14% per year. The last dividend increase was in 2020 and it was lower at 9.6%. Note that the dividend growth for the past 10 years is high because exactly 10 years ago dividends were cut 85%, and then started to grow again in the following year.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2019 is 26% with 5 year coverage at 21%. The DPR for CFPS for 2019 is 12% with 5 year coverage also at 12%. The DPR for Free Cash Flow is 22% with 5 year coverage at 25%.

Debt Ratios are fine. The Long Term Debt/Market Cap is good and low at 0.18. The Liquidity Ratio is low at 1.26. However, if you add in Cash Flow after dividends, it is good at 1.67. The Debt Ratio for 2019 is fine at 1.76. The Leverage and Debt/Equity Ratios for 2019 are 2.38 and 1.35 and are also fine.

The Total Return per year is shown below for years of 5 to 31 to the end of 2019 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	17.62%	4.73%	2.49%	2.24%
2008	10	41.71%	21.34%	18.25%	3.08%
2003	15	10.14%	8.99%	7.52%	1.47%
1998	20	8.08%	9.82%	7.98%	1.84%
1993	25	11.23%	8.85%	7.20%	1.65%
1988	30	9.64%	14.36%	11.51%	2.84%
1987	31	9.31%	13.51%	10.89%	2.63%

The Total Return per year is shown below for years of 5 to 31 to the end of 2019 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	13.95%	2.28%	0.18%	2.10%
2008	10	41.62%	18.88%	15.80%	3.08%
2003	15	9.58%	8.48%	6.73%	1.75%
1998	20	8.66%	10.51%	8.36%	2.15%
1993	25	11.57%	8.55%	6.84%	1.72%
1988	30	9.29%	13.81%	11.06%	2.74%
1987	31	9.06%	13.14%	10.54%	2.60%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.13, 8.55 and 9.96. The corresponding 10 year ratios are 7.09, 9.37 and 10.69. The corresponding historical ratios are 7.97, 11.39 and 12.54. The current P/E Ratio is 32.57 based on a stock price of $82.34 and EPS estimate for 2020 of $1.98. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

However, the EPS estimate for 2020 is 65% below the EPS for 2019. The EPS is expected to recover in 2021. The P/E Ratio for 2021 is expected to be 11.39 based on a stock price of $82.34 and EPS estimate for 2021 of $7.23. This stock price testing also suggests that the stock price is relatively expensive. This 2021 P/E Ratio is a lot lower than for 2020. This is in CDN$.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, 20, 25, 30 and 31 year periods, I find the following. For example, total return over the past 15 years is 8.99% per year, the starting P/E Ratio (the one from 15 years ago) was 11.49. From this point of view, a P/E Ratio is 11.39 would be fine.

Year	Tot Return	Start P/E
5	4.73%	12.49
10	21.34%	-11.54
15	8.99%	11.49
20	9.82%	9.39
25	8.85%	20.31
30	14.36%	9.34
31	13.51%	16.97

I get a Graham Price of $49.44. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 0.78 and 0.92. The current P/GP Ratio is 1.67 based on a stock price of $82.34. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

However, the Graham Price is greatly affected by the EPS estimate for 2020. The Graham Price for 2021 is 82.34. The 2021 P/GP Ratio is 0.98. This stock price testing also suggests that the stock price is relatively expensive. This 2021 P/GP Ratio is a lot lower than for 2020. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.54. The current P/B Ratio is 1.92 based on a current Book Value of $10,206M, Book Value per Share of $33.66 and a stock price of $64.50. The current P/B Ratio is 24% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.17. The current P/CF Ratio is 8.67 based on a stock price of $64.50, Cash Flow per Share estimate for 2020 of $7.44 and Cash Flow of $2,256. The current P/CF Ratio is 68% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

However, the Cash Flow per Share is expected to drop 43% in 2020 and recover in 2021. The 2021 P/CF Ratio is 5.97. This is based on Cash Flow per Share estimate for 2021 of $10.80, Cash Flow of $3,275 and a stock price of $64.50. The 2021 P/CF Ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 1.92%. The current dividend yield is 2.48% based on a stock price of $64.50 and dividends of $1.60. The current dividend yield is 29% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

I get a 10 median dividend yield of 2.21%. The current dividend yield is 2.48% based on a stock price of $64.50 and dividends of $1.60. The current dividend yield is 14% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.42. The current P/S Ratio is 0.61 based on a stock price of $64.50, Revenue estimate for 2020 of $32,007M, and Revenue per Share of $105.55. The current P/S Ratio is 44% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

However, the Revenue is expected to fall by 19% this year and recover somewhat in 2021. The P/S Ratio for 2021 is 0.52 based on Revenue estimate for 2021 of $37,796M, Revenue per Share of $124.64 and a stock price of $64.50. The 2021 P/S Ratio is 22% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is probably reasonable to expensive. Both dividend yield tests are showing the price as being reasonable. The 2020 good dividend increase shows that management feels good about the future. However, this was not confirmed by the P/S Ratio tests which say the stock price is expensive. The P/CF Test is showing a reasonable price. All the rest are showing the price as relatively expensive. I was doing testing using US$ because this company reports in US$.

Is it a good company at a reasonable price? Price is probably reasonable to expensive. Long term returns vary, but this is a cyclical stock and so this would be expected. I think the company is good. You have to realize it is cyclical. It is a Dividend Growth company which is always something I like. There are probably lots of Buy recommendations with analysts going for momentum. The 12 month stock price consensus is low, but analysts often are conservative in the 12 month stock price.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (6), Hold (5) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $79.51 ($62.27 US$). This implies a total loss of 0.95%, with a capital loss of 3.43% and dividends of 2.48%.

Most of the analysts like this stock on Stock Chase. The one analyst that did not said it was cyclical and it is. Joey Frenette on Motley Fool thinks we are heading for a correction and this would be a good stock to downsize at present. A writer on Simply Wall Street complains about the recent ROE for this company. However, the company is having a bad year. The 5 year median ROE is quite good at 16.9%. This is a cyclical stock. A writer on Simply Wall Street says the stock’s intrinsic value is $63.74 CDN$. Recently Business Wire talked about an agreement between Fisker Inc. (NYSE: FSR) and Magna International Inc.

Magna International Inc is an independent supplier of original equipment components, assemblies, modules and systems and related tooling for cars and light trucks. The Company designs, develops and manufactures a diversified range of these products, primarily for North American and European original equipment manufacturers. Its web site is here Magna International Inc.

The last stock I wrote about was about was Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more. The next stock I will write about will be Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more on Monday, December 21, 2020 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.

Methanex Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. The stock price is reasonable. I currently do not consider this a dividend growth stock. Dividends are currently exceeding low at just 0.38%. The dividend future of this company is uncertain at present. With the dividend cut, it would imply that management does not see improvement in the near future. Some debt ratios could stand to be improved. See my spreadsheet on Methanex Corp.

I do not own this stock of Methanex Corp (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid “C” grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices. One main reason to buy this stock would be for diversification.

When I was updating my spreadsheet, I noticed Long Term Debt is Climbing. In 2019 it went up 61.05% and it has climbed 34.40% so far this year. I also noticed that Cash Flow Statement Cash is also going up. It climbed 63% in 2019 and 183% so far this year. Cash per share was up 57% in 2019 and 178% so far this year. Also, these is insider buying.

The dividend yields are currently low with dividend growth currently stopped. The current dividend yield is low (less than 2%) at 0.35%. This is because they recently cut their dividends. The 5, 10 and historical dividend yields are moderate (2% to 4%) at 2.33%, 2.40% and 2.46%. They used to rise their dividends, which they have been paying for some 17 years. See chart below. However, the company is expecting an earnings loss this year and have cut the dividends by 90%. This will point to the fact that management does not expect any improvement in the near term to earnings.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 was $107% with 5 year coverage at 45%. The DPR for CFPS for 2019 is 20% with 5 year coverage at 16%. The DPR for Free Cash Flow for 2019 is 56% with 5 year coverage at 32%.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2019 is 0.59. The Liquidity Ratio for 2019 is 1.90. The Debt Ratio for 2019 is 1.46 and this is a bit low as I would like it to be at 1.50 or higher. The 5 year median Debt Ratio is good at 1.65. The Leverage and Debt/Equity Ratios are higher than what I like at 3.90 and 2.68. I prefer these to be under 3.00 and under 2.00 respectively. The 5 year median ratios are better at 2.71 and 1.56.

The Total Return per year is shown below for years of 5 to 24 to the end of 2019 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.
2014	5	10.69%	1.86%	-1.24%	3.09%
2009	10	10.93%	12.98%	9.34%	3.64%
2004	15	11.95%	8.48%	5.68%	2.81%
1999	20	15.51%	18.19%	13.55%	4.64%
1995	24		9.02%	6.95%	2.07%

The Total Return per year is shown below for years of 5 to 24 to the end of 2019 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.
2014	5	8.22%	-0.52%	-3.36%	2.84%
2009	10	8.56%	10.64%	7.08%	3.56%
2004	15	11.38%	8.11%	5.12%	2.99%
1999	20	16.84%	19.93%	14.40%	5.53%
1995	24		9.48%	7.18%	2.30%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.70, 14.27, and 16.83. The corresponding 10 year ratios are 9.91, 13.25 and 16.09. The corresponding historical ratios are 9.55, 10.79 and 15.19. The current P/E Ratio is negative so the P/E Ratio is non-calculable. This is in CDN$.

However, the P/E Ratio for 2021, which is getting close, is 57.20 based on a stock price of $54.78 and EPS estimate for 2021 of $0.96. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

I estimate a Graham Price of $20.76. The 10 year low, median, and high median Price/Graham Price Ratios are 0.96, 1.27 and 1.22. The current P/GP Ratios is 2.64 based on a stock price of $54.78. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

Some people calculate the Graham Price using the EPS for the past 3 years. I have for this stock calculated the Graham Price on this basis. The 10 year low, median, and high median P/GPR Ratios on this basis are 1.22, 1.54 and 1.88. The current P/GP Ratio on this basis is 1.14. On this basis the 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 2.53. The current P/B Ratio is 2.74 based on a Book Value of $1,194M, Book Value per Share of $15.67 and a stock price of $42.95. The current ratio is 8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$, but you will get similar results in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.76. The current P/CF Ratio is 9.81 based on Cash Flow per Share estimate for 2020 of $4.38, Cash Flow of $334M and a stock price of $42.95. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

For this year, the cash flow is expected to drop 35%. It is expected to rise some 65% in 2021. If we use the P/CF Ratio for 2021 of 5.96, which is based on a Cash Flow per Share estimate for 2021 of $7.21, Cash Flow of $549M and a stock price of $42.95, we get a different answer. Here the ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$, but you will get similar results in CDN$.

I get an historical median dividend yield of 2.46%. The current dividend yield is 0.35% based on a stock price of $42.95 and a dividend of $0.15. The current dividend yield is 86% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

I get a 10 year median dividend yield of 2.40%. The current dividend yield is 0.35% based on a stock price of $42.95 and a dividend of $0.15. The current dividend yield is 85% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 1.32. The current P/S Ratio is 1.35 based on a stock price of $42.95, Revenue Estimate for 2020 of $2,423M and Revenue per Share of $31.80. The current ratio is 2% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$, but you will get similar results in CDN$.

However, the Revenue is expected to fall 13% in 2020 and then recover in 2021. The 10 year median Price/Sales (Revenue) Ratio is 1.32. The P/S Ratio for 2021 is 1.22 based on a stock price of $42.95, Revenue Estimate for 2021 of $2,680M and Revenue per Share of $35.17. The 2021 ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$, but you will get similar results in CDN$.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio testing shows that it is just above and below the median. The dividend yield tests are not valid because the dividends have just recently been cut by 90%. The Graham Price test using 3 years of EPS is probably a better one than the one I generally use because you get an answer without any guessing. The P/B Ratio test is a good one and that is showing the stock price as relatively reasonable.

Is it a good company at a reasonable price? The stock is selling at a reasonable price. However, the dividend future is uncertain so for now I cannot call this a dividend growth stock. It is also risky because it depends on one product only.

When I look at analysts’ recommendations, I find Buy (4), Hold (4), Underperform (1) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $48.60 ($38.06 US$). This implies a total loss of 10.93, with a capital loss of 11.28% and dividends of 0.35%.

Analysts have diverging views on this stock on Stock Chase. One analyst called it a one product, commodity company, which it is. Aditya Raghunath of Motley Fool likes this stock, even after the dividend cut. Executive Summary on Simply Wall Street gives the stock 2 stars out of 5 and 2 risk items. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Investing.com talks about what analysts are saying about this stock.

Methanex Corp is the world’s largest producer and supplier of methanol to major international markets in North America, Asia Pacific, Europe, and South America. Its web site is here Methanex Corp.

The last stock I wrote about was about was Stantec Inc (TSX-STN, NYSE-STN) ... learn more. The next stock I will write about will be Magna International Inc (TSX-MG, NYSE-MGA) ... learn more on Friday, December 18, 2020 around 5 pm. Tomorrow on my other blog I will write about TFI International.... learn more on Thursday, December 17, 2020 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.

Stantec Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is reasonable, but it is at the top range of reasonable. Both DPRs and debt ratios are fine. Long term investors have done well. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc (TSX-STN, NYSE-STN), but I used to. I bought and sold this stock between 2008 and 2011 and did not make any money. It was a non-core holding. With their new policy of dividends, this stock has become more interesting.

When I was updating my spreadsheet, I noticed that 2018 was not a good year for this company. Revenue was down 17% and EPS was down 50%. However, the company seems to have recovered nicely in 2019. Both Revenue and EPS was up. This year looks like it will not be quite as good at 2019, but the company is expected to do better in 2021 and 2022. Analysts expect Net Revenue to be up by 5% in 2021 and EPS up by 22% in 2021.

The dividend yields are low with dividend growth moderate. The current dividend is low (below 2%) at 1.49%. The 5, and 7 (historical) dividend yields are also low at 1.45% and 1.41%. Dividends were started om 2012. The dividend growth is currently moderate (8% to 14% ranges) at 9.72% per year for the last 5 years. However, the last dividend increase was low (below 8%) at 6.9%. However, a lot of company’s had lower dividend increases in 2020 because of Covid.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2019 EPS was 33% with 5 year coverage at 41%. The DPR for CFPS for 2019 was 2.1% with 5 year coverage also at 2.1%. The DPR for Free Cash Flow is 16% with 5 year coverage at 26%. (There is no agreement on FCF, but they are generally not far off.)

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is good at 0.20. The Liquidity Ratio for 2019 is 1.57. The Debt Ratio for 2019 is 1.70. The Leverage and Debt/Equity Ratios are 2.43 and 1.43 respectively.

The Total Return per year is shown below for years of 5 to 25 to the end of 2019. 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.
2014	5	9.72%	4.26%	2.82%	1.43%
2009	10	9.67%	10.55%	9.21%	1.34%
2004	15		13.08%	12.10%	0.98%
1999	20		18.77%	17.85%	0.92%
1994	25		16.48%	15.80%	0.68%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.13, 26.41 and 29.68. The corresponding 10 year ratios are 16.82, 19.47 and 22.92. The corresponding historical ratios are 14.50, 16.44 ad 21.33. The current P/E Ratio is 24.96 based on a stock price of $41.68 and EPS estimate for 2020 of $1.67. The current ratio is above the 10 year high median P/E Ratio. This stock price testing suggests that the stock price is relatively expensive.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, 20 and 25 year periods, I find the following. The total return over the past 10 years is 10.55% per year, the starting P/E Ratio (the one from 10 years ago) was 24.92. I guess that a P/E Ratio of 24.96 is on the high side.

Year	Tot Return	Start P/E
5	4.26%	18.35
10	10.55%	24.92
15	13.08%	16.65
20	18.77%	9.32
25	16.48%	11.54

I get a Graham Price of $26.22. The 10 year low, median, and high median Price/Graham Price Ratios are 1.18, 1.47 and 1.72. The current P/GP Ratio is 1.39 based on a stock price of $41.68. The current ratio is between the 10 yar low and median P/GP Ratios. 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 1.98. The Current P/B Ratio is 2.28 based on a stock price of $41.68, current Book Value of $2052M, and current Book Value per Share of $18.50. The current ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 11.70. The current P/CF Ratio is 10.50 based on a stock price of $41.68, Cash Flow per Share estimate for 2020 of $3.97 and Cash Flow of $445M. The current P/CF Ratio is 10% 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 and 6 year median dividend yield of 1.41%. The current dividend yield is 1.49% based on dividends of $0.62 and a stock price of $41.68. The current dividend yield is 5.5% above the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 5 year median dividend yield of 1.45%. The current dividend yield is 1.49% based on dividends of $0.62 and a stock price of $41.68. The current dividend yield is 2.4% above the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. (I am using the 5 year median dividend yield to use what information I have.)

The 10 year median Price/Sales (Revenue) Ratio is 1.11. The current P/S Ratio is 1.26 based on Revenue estimate for 2020 of $3,702M, Revenue per Share of $33.02 and a stock price of $41.68. The current ratio is 14% 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 probably reasonable. The dividend yield testing says that the stock price is below the median, but this is not confirmed by the P/S Ratio which says it is above the median. Most of the testing is showing the stock price as above or below the median, but still in the reasonable range. The exception is the P/E Ratio test. If you notice the P/E Ratios have been climbing higher over time.

Is it a good company at a reasonable price? I like this company. It is currently a dividend growth company having started dividend payments 6 years ago. The stock price seems reasonable, although it is at the top end of the reasonable range. With the low dividend yield it would be good stock to build a portfolio with.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price is $46.00. This implies a total return of 11.85%, with 10.36% from capital gains and 1.49% from dividends based on a current stock price of $41.68.

Analysts on Stock Chase seem to like this company. Aditya Raghunath on Motley Fool does not currently like this stock and thinks they might have a tough road ahead. A writer on Simply Wall Street talks about some positive aspects to this company. A writer on Simply Wall Street thinks this is a company worth watching.. The Blogger Dividend Earner looked at this stock in May of this year.

Stantec Inc is a global engineering and construction firm. Stantec has one reportable segment: consulting services. It utilizes one common brand and operates the same systems with generally the same policies, practices, and programs. Stantec derives the substantial majority of its sales from the United States and Canada, and the company works in both the public and private sectors. Its web site is here Stantec Inc.

The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more. The next stock I will write about will be Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more on Wednesday, December 16, 2020 around 5 pm. Tomorrow on my other blog I will write about Johnson and Johnson.... learn more on Tuesday, December 15, 2020 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.