Friday, September 18, 2020

Trican Well Service Ltd

Sound bite for Twitter and StockTwits is: Industrial Sector Stock. The stock price is relatively cheap. They suspended dividends in 2016, so I am considering to stop following this stock. I have my doubt it will be a dividend growth stock again or at least not within the next few years. See my spreadsheet on Trican Well Service Ltd.

I do not own this stock of Trican Well Service Ltd (TSX-TCW, OTC-TOLWF). I was following Canyon Services Group Inc. and Trican Well Services Ltd. had a plan of arrangement with Canyon Shareholders. I used to get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19, 2012 and I was impressed with it so I did a spreadsheet. Their site is now here.

When I was updating my spreadsheet, I noticed that the dividend was suspended in 2016. I wonder if I should still be following stocks without dividends. Analysts do not seem to think there will be any dividends in the short term. However, Analysts have not yet lost interest in this firm. Perhaps I should follow only Trican Well Services as they went public in 1996 and Canyon Services only went public in 2006. However, without a dividend, this seems not worth while at the moment.

The company suspended their dividends in 2016. They have only made a profit one year since 2014 and that was in 2017. They are not expected to make a profit over the next three years. They do have a positive cash flow, but it can vary a lot. Mostly the Free Cash Flow is positive, but it was negative for 2019. However, it is expected to be positive again in this year and over the next two years.

Debt Ratios are all good. The Long Term Debt/Market Cap Ratio for 2019 is low and good at just 0.15. The Liquidity Ratio is high and good at 2.50 for 2019. The Debt Ratio is also high a good at 5.00. The Leverage and Debt/Equity Ratios are low and good at 1.25 and 0.25.

The Total Return per year is shown below for years of 5 to 13 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 0.00% -25.41% -26.43% 1.02%
2009 10 0.00% 9.16% -1.91% 11.07%
2006 13 -1.66% -6.96% 5.30%

The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and unusable. The corresponding 10 year ratios are 0.58, 1.92 and 2.26 and so low you wonder about using them. The corresponding historical ratios are again negative and unusable. The current P/E Ratio is negative. This testing cannot be done.

I calculate a Graham Price of $1.51, but because of all the earnings losses, it is only my best guess. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 1.03 and 1.31. The current P/GP Ratio is 0.76 based on a stock price of $1.15. 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 1.59. The current P/B Ratio is 0.57 based on a stock price of $1.15, a Book Value of $552M, and a Book Value per share of $2.03. The current ratio is 64% 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 9.72. The current P/CF Ratio is 2.98 based on 2020 Cash Flow per Share estimate of $0.40, Cash Flow of $108.6M and a stock price of $1.15. The current ratio is 69% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do dividend yield testing because the dividend has been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 1.72. The current P/S Ratio is 0.93 based on Revenue estimate for 2020 of $337M, Revenue per Share of 1.24 and a stock price of $1.15. The current ratio is 46% 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 relatively cheap. The one test not showing this is the P/GP Ratio test and it is hard to know how good my estimate is for the Graham Price. All the other test that I can do is pointing to a relatively cheap stock price.

Is it a good company at a reasonable price? This stock has not paid dividends for a few years. I was tracing this company from their purchase of Canyon Services Group Inc so do not have much history for just this company. This is not a dividend growth company, so I feel I need to replace it with another company that is at least paying dividends.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (1) and Hold (8). The consensus would be a Buy. The 12 month stock price consensus is $1.20. This implies a total return of 4.35% all from capital gains.

Analysts mostly like this stock on Stock Chase. Nelson Smith on Motley Fool says smart money is buying unloved Oil companies. A writer on Simply Wall Street would like to see some improvement in the company’s business before buying this stock. A writer on Simply Wall Street says analysts are reducing their forecasts for this stock.

Trican Well Service Ltd is an equipment services company. It provides products, equipment, services, and technology for use in the drilling, completion, stimulation, and reworking of oil and gas wells primarily through its continuing pressure pumping operations in Canada. Its web site is here Trican Well Service Ltd.

The last stock I wrote about was about was Wajax Corp (TSX-WJX, OTC-WJXFF) ... learn more. The next stock I will write about will be Great-West Lifeco Inc (TSX-GWO, OTC-GWLIF) ... learn more on Monday, September 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.

Wednesday, September 16, 2020

Wajax Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. This stock price is relatively cheap. This stock might be good to get some capital gains and dividends, but I do not see this stock has a buy and Hold type stock. See my spreadsheet on Wajax Corp.

I do not own this stock of Wajax Corp (TSX-WJX, OTC-WJXFF). TD Waterhouse put out a report on good dividend paying stocks to own in November 2011. This was a stock they named. I had not heard of it before, so I decided to investigate it.

When I was updating my spreadsheet, I noticed that the company seemed to have a peak in 2013 and has not done as well since then. This is true for EPS, Dividends and Stock Price. The peak in Revenue seems to have been in 2014. They had dividends 33 years ago, but between 1992 and 2003 there were no dividends.

I have data going back some 33 years and their record is quite mixed. Some periods shareholders have done well and, in some periods, not so much. If you look at the chart for this stock, it was at a low in 1994, 1999 and 2004. It is at a low point currently. See chart below.

The dividend yields are currently high with dividend growth non-existent. The current dividend yield is high (7% and over) at 7.99%. The 5 and historical median dividend yields are moderate (2% to 4% ranges) at 4.49% and 4.40%. The 10 year median dividend yield is good (5% and 6% ranges) at 5.87%. They have been decreasing their dividends since 2013 and changed the dividend payments from monthly to quarterly in 2015. Dividends have been flat since 2016.

They had restated the dividends in 2004. They dividends were increased by 678% and changed to monthly when they became an income trust in 2005. Income Trust had to change to corporations and they did so in 2009 and decreased the dividends. Income trusts could pay a lot more in dividends that corporations can.

The Dividend Payout Ratios (DPR) are fine except for the one for FCF. A lot of companies that changed from Income Trust to corporation had a hard time getting their DPR for EPS down under 100%. This company did so by 2017. The DPR for EPS for 2019 is 52% with 5 year coverage at 99.9%. The DPR for CFPS for 2019 is 16% with 5 year coverage at 24%. The DPR for Free Cash Flow cannot be calculated for 2019 because the FCF is negative. The 5 year coverage is at 403%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2019 is 0.76. The Liquidity Ratio for 2019 is good at 2.25. The Debt Ratio is a bit low at 1.44, but the 5 year median is fine at 1.69. The Leverage and Debt/Equity Ratios are fine at 3.30 and 2.30 with 5 year medians at 2.67 and 1.67.

The Total Return per year is shown below for years of 5 to 33 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 -16.06% -9.10% -13.62% 4.52%
2009 10 -9.39% 6.99% -3.81% 10.80%
2004 15 12.99% 20.68% 0.28% 20.40%
1999 20 0.00% 21.61% 5.37% 16.24%
1994 25 0.00% 10.49% 2.12% 8.37%
1989 30 1.95% 7.43% 1.15% 6.28%
1986 33 1.77% 5.55% 0.06% 5.48%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.76, 12.23 and 15.69. The corresponding 10 year ratios are 9.38, 11.99 and 14.61. The corresponding historical ratios are 8.74, 11.39 and 13.87. The current P/E Ratio 9.14 based on a stock price of $12.52 and EPS 2020 estimate of $1.37. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $22.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.92, 1.14 and 1.34. The current P/GP Ratio is 0.57 based on a stock price of $12.52. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.98. The current P/B Ratio is 0.79 based on a stock price of $12.52, Book Value of $317M and Book Value per Share of 15.83. The current ratio is 60% 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 6.83. The current P/CF Ratio is 5.84 based on the last 12 months of Cash Flow of $42.9M, Cash Flow per Share of $2.14 and a stock price of $12.52. The current ratio is 15% 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 4.40%. The current dividend yield is 7.99% based on dividends of $1.00 and a stock price of $12.52. The current dividend yield is 81% above the historical median dividend. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 5.87%. The current dividend yield is 7.99% based on dividends of $1.00 and a stock price of $12.52. The current dividend yield is 36% above the historical median dividend. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.37. The current P/S Ratio is 0.18 based on Revenue estimate for 2020 of $1,394, Revenue per Share of $69.58 and a stock price of $12.52. The current P/S Ratio is 52% 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 relatively cheap. Bothe the dividend yield tests show this and it is confirmed by the P/S Ratio test. The other tests show the same thing except for the Price/Cash Flow Test which is showing the stock is reasonable and below the median.

Is it a good company at a reasonable price? Certainly, this stock is at a good price. However, it has had a very mixed past as far as results go. If I where inclined to buy this stock, I would keep an eye on it and not be buying for the long term. I cannot see this stock as a buy and hold.

When I look at analysts’ recommendations, I find Buy (1). The consensus would be a Buy. The 12 month stock price target is $13.50. This implies a total return of 15.81% with 7.83% from capital gains and 7.99% from dividends.

There are no recent analysts’ comments on Stock Chase, but old comments are negative.. Christopher Liew on Motley Fool thinks this high dividend stock would be good for your TFSA. The site Simply Wall Street gives this stock 3 stars out of 5 and an executive overview. A writer on Simply Wall Street says they do not like this dividend stock because earnings are declining. Ostrich Investing has a video analyzing this stock on YouTube. He says the stock is underperforming. He also says it is a cyclical stock. The video is just over 9 minutes long. This video was done when the stock hit a low in March 2020.

Wajax Corp is a Canadian distributor of industrial components. Its core business is the sale of parts and service support of equipment, power systems, and industrial components through a network of branches in Canada. Its web site is here Wajax Corp.

The last stock I wrote about was about was Telus Corp (TSX-T, NYSE-TU) ... learn more. The next stock I will write about will be Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) ... learn more on Friday, September 18, 2020 around 5 pm. Tomorrow on my other blog I will write about Pipelines and a Strong Recovery.... learn more on Thursday, September 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.

Monday, September 14, 2020

Telus Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Telecom. The stock is probably relatively reasonable. The Dividend Payout Ratios and Debt Ratios are acceptable, but it would be nice to see some improvement. However, this stock has delivered good returns over the longer term for shareholders. See my spreadsheet on Telus Corp.

I do not own this stock of Telus Corp (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from KeyStone Financial Publishing Corp talked about having recommended this stock. Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets and compelling valuations.

When I was updating my spreadsheet, I noticed that this stock has been a good long term investment for Shareholders. See the chart below, but except for the last 5 years, the other periods I cover show a total return of over 8% per year. I would like to see better debt ratios. However, no stock is perfect and they have been delivering a good return over the long term.

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.91%. The 5, 10 and historical yields are also moderate at 4.41%, 4.22% and 3.95%. The dividend growth is currently moderate (8% to 14% ranges) at 8.40% per year for the last 5 years. The most recent dividend increase was in 2020 and it was for 3.6%. However, this company has a habit of doing two increases each year.

The Dividend Payout Ratios (DPR) are fine without the FCF. The DPR for EPS for 2019 is 76% with 5 year coverage at 78%. The DPR for CFPS for 2019 was 31% with 5 year coverage also at 31%. According to anything I can find on the internet, the Free Cash Flow is not covering the dividends. Using the values from Morningstar and Wall Street Journal, the DPR for FCF for 2019 is 3481% with 5 year coverage at 394%.

Debt Ratios are acceptable. The Long Term Debt/Market Cap Ratio for 2019 is 0.56. The Liquidity Ratio for 2019 is 0.78. If you add in Cash Flow after Dividends, it is 1.25. If you also add back the current portion of the Long Term Debt, it is 1.64. The Debt Ratio for 2019 is 1.39 and this is low and it has always been on the low side with a 5 year median of 1.40. The Leverage and Debt/Equity Ratios are acceptable at 3.56 and 2.56. they have always been high with 5 year medians at 3.16 and 2.16.

The Total Return per year is shown below for years of 5 to 29 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 8.40% 7.98% 3.72% 4.26%
2009 10 18.56% 16.92% 11.42% 5.50%
2004 15 14.26% 10.99% 7.04% 3.95%
1999 20 5.93% 8.56% 5.40% 3.16%
1994 25 5.33% 9.61% 5.90% 3.71%
1990 29 10.91% 9.78% 5.87% 3.92%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.29, 18.51 and 19.64. The corresponding 10 year ratios are 15.75, 17.05 and 18.51. The corresponding historical ratios are 13.82, 16.75 and 18.51. The current P/E Ratio is 22.18 based on a stock price of $23.73 and EPS estimate for 2020 of 1.07. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $15.06. The 10 year low, median, and high median Price/Graham Price Ratios are 1.37, 1.45 and 1.54. The current P/GP Ratio is 1.58 based on a stock price of $23.73. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.76. The current P/B Ratio is 2.52 based on Book Value of $12,046M, Book Value per Share of $9.43 and a stock price of $23.73. The current ratio is 9% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.88. The current P/CF Ratio is 6.82 based on a stock price of $23.73, Cash Flow per Share estimate for 2020 of $3.48 and a Cash Flow of $4.447M. The current ratio is 1% 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 3.95%. The current dividend yield is 4.91% based on dividends of $1.17 and a Stock Price of $23.73. The current yield is 24% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 4.22%. The current dividend yield is 4.91% based on dividends of $1.17 and a Stock Price of $23.73. The current yield is 16% 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 1.90. The current P/S Ratio is 1.99 based on a stock price of $23.73, Revenue estimate for 2020 of $15,247M, and Revenue per Share of $11.93. The current ratio is 5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable above the median.

Results of stock price testing is that the stock price is probably relatively reasonable. The dividend yield tests show the stock price below the median. The P/S Ratio testing is showing it above the median, but still in a reasonable range. The P/B Ratio, which relies on no estimates is showing the stock price below the median. The P/E Ratio testing showing the stock price as expensive, but the EPS is expected to drop this year. For the 2021 year, the P/E is lower at 18.83.

Is it a good company at a reasonable price? This stock has done well for shareholders over the longer term. Dividends gone up most years. For the 29 years of dividend information I have, the stock’s dividends have gone up in 24 years and down in 2 years. This seems like a good dividend growth stock, which is the kind I like.

When I look at analysts’ recommendations, I find Strong buy (3, Buy (6) and Hold (7). The consensus would be a Buy. The 12 month stock price consensus is $25.50. This implies a total return of 12.17% based on 7.46% from capital gains and 4.91% from dividends.

Most analysts on Stock Chase like this stock. Andrew Button on Motley Fool says the company’s pass association with Huawei in the 5G space will hold them back. A writer on Simply Wall Street talks about institutional ownership of this company. A writer on Simply Wall Street thinks the dividends are not well covered. Ruth Saldanha at Morningstar mentions Telus as a top dividend pick. Nick Waddell on CanTech thinks the telecom stocks have held up well during the latest crisis of Covid.

Telus is one of the big three wireless service providers in Canada, with its 9 million mobile phone subscribers nationwide constituting almost 30% of the total market. Its web site is here Telus Corp.

The last stock I wrote about was about was Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more. The next stock I will write about will be Wajax Corp (TSX-WJX, OTC-WJXFF) ... learn more on Wednesday, September 16, 2020 around 5 pm. Tomorrow on my other blog I will write about Street Patios.... learn more on Tuesday, September 15, 2020 around 5 pm.

Also, on my book blog I have put a review of the book The Mosquito by Timothy Winegard 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.

Friday, September 11, 2020

Accord Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. Stock price is relatively cheap. The DPR Ratios are good, but the debt ratios are deteriorating. It just cut the dividend by 44%. See my spreadsheet on Accord Financial Corp.

I do not own this stock of Accord Financial Corp (TSX-ACD, OTC-ACCFF). If I was looking for a small cap financial stock, I would consider this stock. The dividend is good and it does raise the dividend regularly. It has had some problems recently, but a lot of companies are with this long drawn out recover. As with all small cap stocks there is low trading volume. Fred Poulin from StockTwits recommended this stock saying it was a small cap that pay dividends.

When I was updating my spreadsheet, I noticed that the company hit a peak in 2015 with Revenue, Earnings and Stock Price. Only the Revenue had recovered 2018. This year is filled with uncertainty with the Covid 19 and the effect of Covid 19 on the economy is why the dividend was cut.

I was looking at the total return for the last 5 years to different years. So, in this chart, the total return of the end of December 2015 for the previous 5 years (i.e. from 2010) was 8.95% and the total return to the end of December 2015 for the previous 10 years (i.e. From 2005) was 6.54%. Returns are moderate to good.

To Date 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19
5 year Total Return 8.95% 9.89% 10.03% 7.18% 5.21%
10 year Total Return 6.54% 5.02% 5.01% 9.11% 11.53%

The dividend yields are moderate with dividend growth currently non-existent. The current yield is moderate (2% to 4% range) at 3.39%. The 5,10 and historical dividend yields are also moderate at 3.86%, 3.94% and 2.63%. The dividends were flat from 2016 and in 2020, the company cut their dividends by 44%. However, this stock might again in the future become a dividend growth stock.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 is 47% with 5 year coverage at 39%. The DPR for CFPS is 33% with 5 year coverage at 18%. The DPR for Free Cash Flow for 2020 is 6% with 5 year coverage also at 6%. The Dividend Coverage Ratio 15.64 with the 5 year ratio at 16.58.

Debt Ratios are deteriorating. The Long Term Debt/Market Cap Ratio for 2020 is 2.91, but this can happen with Financials. The Long Term Debt/Asset Ratio for 2020 is 0.65. The Liquidity Ratio for 2020 is 14.73, but it is not an important ratio for Financials. The Debt Ratio is low at 1.31. It has a 5 year median of 1.47 which is also on the low side, but low ones are acceptable for Financials. The Leverage and Debt/Equity Ratios for 2020 are 4.39 and 3.35 with 5 year medians of 3.28 and 2.24.

It is not so much that the debt ratios are bad for a financial, but the real problem I see with debt ratios is that they are all been deteriorating. For example, in 2016 the Long Term Debt/Market Cap Ratio was 0.79, the Debt Ratio was 1.96 and the Leverage and Debt/Equity Ratios were 2.05 and 1.05.

The Total Return per year is shown below for years of 5 to 27 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 1.76% 5.21% 1.49% 3.72%
2009 10 3.31% 11.53% 6.73% 4.80%
2004 15 4.73% 4.01% 0.94% 3.07%
1999 20 2.98% 7.83% 3.07% 4.76%
1994 25 2.38% 11.95% 6.08% 5.86%
1992 27 10.11% 12.34% 6.58% 5.76%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.03, 11.68 and 12.34. The corresponding 10 year ratios are 8.56. 10.04 and 11.52. The corresponding historical ratios are 8.56, 10.42 and 11.75. The current P/E Ratio is 8.19 based on a stock price of $5.90 and 2020 EPS estimate of $5.90. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $12.90. The 10 year low, median, and high median Price/Graham Price Ratios are 0.63, 0.72 ad 0.79. The current P/GP Ratio is 0.46 based on a stock price $5.90. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.19. The current P/B Ratio is 0.57 based on a stock price of $5.90, Book Value of $87.9M and a Book Value per share of $10.27. The current ratio is 52% 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 1.06. The current P/CF Ratio is 0.93 based on a stock price of $5.90, last 12 months Cash Flow of $54.37M, and Cash Flow per Share of $6.35. The current 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.

I get an historical median dividend yield of 2.63%. The current dividend yield is 3.39% based on dividends of $0.20 and a stock price of $5.90. The current dividend yield is 29% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 3.94%. The current dividend yield is 3.39% based on dividends of $0.20 and a stock price of $5.90. The current dividend yield is 14% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.32. The current P/S Ratio is 0.91 based on 2020 Revenue estimate of $55.7M, Revenue per Share of $6.51 and a stock price of $5.90. The current ratio is 61% 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 cheap. The P/S Ratio says this as does a number of other tests. The historical dividend yield test confirms the stock price is cheap, but the 10 year dividend yield test does not. This is because of the recent dividend cut.

Is it a good company at a reasonable price? The stock price seems cheap at present. The problem is the company is currently not doing well and it was having problems before Covid struck. I think buying this company is risky, but it might do well once we are past the current problem.

When I look at analysts’ recommendations, I find a Buy (1) recommendation. There is not 12 month stock consensus that I can find.

There are no recent entries on Stock Chase. Old entry said it was well run, but site gives this stock a score of 1 of 5. A writer on Simply Wall Street found this stock to be an attractive dividend stock in November 2019. The Executive Summary on Simply Wall Street gave this company 2 stars out of 5 and list 5 risks and no postives. A writer on Simply Wall Street in May 2020 thought you should look for better opportunities than this stock. The company talks about its first quarter of 2020 on Newswire.

Accord Financial Corp is a provider of asset-based financial services to businesses. Its asset-based financial services include asset-based lending, including factoring, lease financing, working capital financing, credit protection and receivables management, and supply chain financing for importers. The group has a business presence in the United States and Canada. Its web site is here Accord Financial Corp.

The last stock I wrote about was about was Energy Group Inc (TSX-JE, NYSE-JE) ... learn more. The next stock I will write about will be Telus Corp (TSX-T, NYSE-TU) ... learn more on Monday, September 14, 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

Wednesday, September 9, 2020

Just Energy Group Inc

Sound bite for Twitter and StockTwits is: Utility Company in Trouble. Stock price seems to be cheap. It has cut its dividend. It is planning on a 33 to 1 consolidation and a recapitalization. I will probably stop following this stock. See my spreadsheet on Just Energy Group Inc.

I do not own this stock of Just Energy Group Inc (TSX-JE, NYSE-JE). I started to follow this is July 2010. It was one of the high yield income trusts that people were talking about, so I decided to check it out.

When I was updating my spreadsheet, I noticed that this company was doing poorly for the last couple of years, but analysts expect the company to make a profit this year. They hit a peak in 2012 and has been performing poorly since then.

This company is no longer paying dividends. On their site they say they are paying some dividends in September 2020, but it is unclear exactly what they are doing. They are recapitalizing the company. Tt appears there will be a consolidation and preferred shares and Convertible Debentures will be given shares, and some other investment entities will be the major shareholders. I will see how this works out next year, but I might decide then not to follow this stock anymore.

Debt Ratios are awful. The Long Term Debt/Market Cap Ratio in 2019 is 4.91 and 9.01 now. This is very high. The Intangible Goodwill/Market Cap Ratio is also very high at 3.45 in 2019 and 6.29 now. The Liquidity Ratio for 2019 is 0.69. If you add in cash flow and current portion of long term debt it is just 0.85. With the same calculation now, it is 0.96. When this is under 1.00 it means current liabilities cannot be covered by current assets. The Debt Ratio for 2019 is 0.71 and is now 0.73. This stock has a negative breakup value. Leverage and Debt/Equity Ratios cannot be calculated because of a negative book value.

The Total Return per year is shown below for years of 5 to 18 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 -26.56% -8.41% -18.55% 10.13%
2009 10 -20.50% -6.81% -17.15% 10.34%
2004 15 -11.93% -2.14% -13.34% 11.21%
2001 18 -4.75% 19.49% -4.08% 23.57%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 2.01, 2.64 and 3.27. The corresponding 10 year ratios are 1.85, 2.63 and 3.42. The corresponding historical ratios are 5.49, 6.78 and 8.06. The current P/E Ratio is 2.71 based on a stock price of $0.38 and 2020 EPS estimate of $0.14. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The best Graham Price that I can calculate is of $1.31. The 10 year low, median, and high median Price/Graham Price Ratios are 0.84, 1.33 and 1.11. The current P/GP Ratio is 0.29 based on a stock price of $0.38. This stock price testing suggests that the stock price is relatively cheap.

I cannot do a Price/Book Value per Share Ratio test as the book value is negative.

I get a 10 year median Price/Cash Flow per Share Ratio of 8.97. The current P/CF Ratio is 3.17 based on 2020 Cash Flow per Share estimate of $0.12 and Cash Flow of $18.2M and a stock price of $0.38. The current ratio is 65% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap

They have cancelled the dividends, so I cannot do any dividend yield test.

The 10 year median Price/Sales (Revenue) Ratio is 0.30. The current P/S Ratio is 0.02 based on 2020 Revenue estimate of $2,431M, Revenue per Share of $16.03 and a stock price of $0.38. The current ratio is 92% 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 relatively cheap. This is what the P/S Ratio testing is showing. The P/CF Ratio testing is saying this too. You have to wonder if the other testing is valid because of earning losses, and a negative book value.

Is it a good company at a reasonable price? The price is cheap. However, they are going to do a stock consolidation and a recapitalization. Shareholders will probably not fair well in this.

When I look at analysts’ recommendations, I find Hold (1), and Underperform (1). The consensus would be a Hold. The 12 month stock price is $0.40. This implies a total return of 5.26%, all from capital gains.

Analysts on Stock Chase last left entries dated in 2018 and they did not care for this company then. Vishesh Raisinghani on Motley Fool says this company has a dangerous level of debt. Nelson Smith on Motley Fool talks about when you should consider selling a stock and uses Just Energy to illustrate this. A writer on Simply Wall Street says this stock is selling at a fair value. He points out there are 5 warning signs for this company that are a bit concerning. News Release from the company talking about their recapitalization plans.

Just Energy Group Inc is a Canadian-based electricity and natural gas company that operates in various Canadian provinces, the United States, and the United Kingdom. The company mainly sells its products to residential and small community customers through its Consumer segment and to mid-sized commercial customers through its Commercial segment. Its web site is here Just Energy Group Inc.

The last stock I wrote about was about was SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) ... learn more. The next stock I will write about will be Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more on Friday, September 11, 2020 around 5 pm. Tomorrow on my other blog I will write about Utilities and Dividends.... learn more on Thursday, September 10, 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.

Tuesday, September 8, 2020

SmartCentres REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price is relatively cheap. Both Dividend Payout Ratios and Debt Ratios are fine. It is a dividend aristocrat. One problem is that we do not know how badly REITs will be affected by Covid 19. See my spreadsheet on SmartCentres REIT.

I do not own this stock of SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. Between 2009 and now it was taken from the list and added back to this list.

When I was updating my spreadsheet, I noticed they have a lot of cash on hand $532M at the end of the second quarter (compared to the end of last year of $55M) because of issuance of debt in the first and second quarters. With this new debt, they paid off $483M of old debt and have the rest sitting as cash.

The dividend yields are good to high with dividend growth low. The current dividend yield is high (above 7%) at 8.83%. The 5, 10 and historical dividend yields are in the good range (5% to 6% ranges) at 5.43%, 5.60% and 5.84%. The dividend growth is low (below 8%). Dividends have increased by 3.04% per year over the past 5 years. The last dividend increase was for 2.8% and it was for 2019.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 was 98% with 5 year coverage at 79%. Because this is a REIT, we should look at Adjusted Funds from Operations (AFFO) and Funds from Operations (FFO) Rates. The DPR for AFFO for 2019 was 86% with 5 year coverage at 82%. The DPR for FFO for 2019 was 85% with 5 year coverage at 78%. The DPR for CFPS for 2019 was 63% with 5 year coverage at 66%. The DPR for Free Cash Flow for 2019 was 55% with 5 year coverage at 53%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2019 is 0.78. Because this is a REIT, I look at Debt/Covering Assets Ratio and it is 0.45. The Liquidity Ratio for 2019 is low at 0.54. If you added in Cash Flow after cash distributions it is 1.01. If you add in Cash Flow after distributions and adding back in the current long term debt it is 1.54. The Debt Ratio is good at 2.18. This Debt Ratio drops to 1.99 currently, but this is still a good ratio. The Leverage and Debt/Equity Ratios for 2019 are good at 1.85 and 0.85. The current ones are fine at 2.01 and 1.01.

The Total Return per year is shown below for years of 5 to 22 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 3.04% 8.64% 2.71% 5.93%
2009 10 1.57% 11.69% 4.81% 6.88%
2004 15 2.67% 10.28% 3.46% 6.83%
1999 20 2.86% 12.55% 5.80% 6.75%
1997 22 27.48% 14.19% 13.29%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.99, 14.02, and 15.54. The corresponding 10 year ratios are 12.92, 13.98, and 15.29. The corresponding Historical Ratios are 13.65, 16.85, and 19.07. The current P/E Ratio is 11.38 based on a stock price of $20.96 and 2020 EPS estimate of $2.24. This stock price testing suggests that the stock price is relatively cheap.

Since this is an Income Trust, we need to look at Funds from Operations (FFO). The 5 year low, median, and high median Price/FFO Ratios are 13.23, 14.37 and 15.51. The corresponding 10 year ratios are 13.23, 14.69 and 16.19. The current P/FFO Ratio is 9.79 based on 2020 FFO estimate of 2.14 and a stock price of $20.96. This stock price testing suggests that the stock price is relatively cheap.

Since this is an Income Trust, we need to look at Adjusted Funds from Operations (AFFO). The 5 year low, median, and high median Price/AFFO Ratios are 13.93, 15.15 and 16.33. The corresponding 10 year ratios are 13.93, 15.15 and 16.35. The current P/AFFO Ratio is 12.19 based on 2020 AFFO estimate of 1.72 and a stock price of $20.96. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $33.86. The 10 year low, median, and high median Price/Graham Price Ratios are 0.81, 0.88 and 0.95. The current P/GP Ratio is 0.58 based on a stock price of $20.96. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.24. The current P/B Ratio is 0.82 based on a Book Value of $4,317, Book Value per Share of $25.52 and a stock price of $20.96. The current P/B Ratio is 34% 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 15.77. The current P/CF Ratio is 10.50 based on last 12 month Cash Flow of $337.8M, Cash Flow per Share of $2.00 and a stock price of $20.96. The current P/CF Ratio is 33% 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 5.84%. The current dividend yield is 8.83% based on a current dividend of $1.85, and a stock price of $20.96. The current dividend yield is 51% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 5.60%. The current dividend yield is 8.83% based on a current dividend of $1.85, and a stock price of $20.96. The current dividend yield is 58% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 6.57. The current P/S Ratio is 4.50 based on Revenue estimate for 2020 of $788M. The current P/S Ratio is 32% 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 relatively cheap. Both the dividend yield tests are showing this result as is the P/S Ratio test. The other rests are showing the same results. I can find no problem with any of the prices.

Is it a good company at a reasonable price? This is a Dividend Growth stock. REITs tend to have good dividend yields and low growth. This is what this company has. The problem is that with Covid 19 it is hard to know how it will affect REITs. So far, shareholders have done well with this stock. It might be a REIT to consider if you are looking to buy a REIT.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (5). The consensus would be a Buy. The 12 month stock price is $24.88. This implies a total return of 27.33%, with 18.70% from capital gains and 8.83% from dividends.

Now I want to look at stock prices and stock price testing. If I move the current price to $30.96 from $20.96 what would be the results of stock price testing? The beauty of spreadsheets is you can answer an “what if?” question. In this case what if the stock price was $10 higher at $30.96. What would be the testing result? The thing is that the way I test, the stock price would have to move a fair bit to get a different result. In this case, I am moving the stock price up 47.7%. Result is below.

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.99, 14.02 and 15.54. The corresponding 10 year ratios are 12.92, 13.98 and 15.29. The corresponding Historical Ratios are 13.65, 16.85 and 19.07. The current P/E Ratio is 13.82 based on a stock price of $30.96 and 2020 EPS estimate of $2.24. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Since this is an Income Trust, we need to look at Funds from Operations (FFO). The 5 year low, median, and high median Price/FFO Ratios are 13.23, 14.37 and 15.51. The corresponding 10 year ratios are 13.23, 14.69 and 16.19. The current P/FFO Ratio is 14.47 based on 2020 FFO estimate of 2.14 and a stock price of $30.96. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Since this is an Income Trust, we need to look at Adjusted Funds from Operations (AFFO). The 5 year low, median, and high median Price/AFFO Ratios are 13.93, 15.15 and 16.33. The corresponding 10 year ratios are 13.93, 15.15 and 16.35. The current P/AFFO Ratio is 14.79 based on 2020 AFFO estimate of 1.72 and a stock price of $30.96. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $33.86. The 10 year low, median, and high median Price/Graham Price Ratios are 0.81, 0.88 and 0.95. The current P/GP Ratio is 0.88 based on a stock price of $30.96. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.24. The current P/B Ratio is 0.82 based on a Book Value of $4,317, Book Value per Share of $25.52 and a stock price of $30.96. The current P/B Ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 15.77. The current P/CF Ratio is 10.50 based on last 12 month Cash Flow of $337.8M, Cash Flow per Share of $2.00 and a stock price of $30.96. The current P/CF Ratio is 2% 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 5.84%. The current dividend yield is 5.98% based on a current dividend of $1.85, and a stock price of $30.96. The current dividend yield is 2% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 5.60%. The current dividend yield is 5.98% based on a current dividend of $1.85, and a stock price of $30.96. The current dividend yield is 7% 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 6.57. The current P/S Ratio is 6.64 based on Revenue estimate for 2020 of $788M. The current P/S Ratio is 2% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.

Results of stock price testing is that the stock price is that the stock price is relatively around the 10 median. Results are showing with a price of $30.96 that that price is just below or just above the median.

Analysts on Stock Chase have mixed views on this REIT. Adam Othman on Motley Fool thinks you are better off with an aristocrat REIT. A writer on Simply Wall Street is worried about the high debt leverage of this company. A writer on Simply Wall Street looks at ownership of this REIT. Financial Nirvana Mama on YouTube talks about this stock and RIOCan.

SmartCentres Real Estate Investment Trust is a Canadian open-ended mutual fund trust. The company principally generates revenue from property leasing operations. Smart REIT comprises two groups of properties: retail and mixed-use. Its web site is here SmartCentres REIT.

The last stock I wrote about was about was High Liner Foods (TSX-HLF, OTC-HLNFF) ... learn more. The next stock I will write about will be Just Energy Group Inc (TSX-JE, NYSE-JE) ... learn more on Wednesday, September 9, 2020 around 5 pm. Today on my other blog I will write about Mini Parks.... learn more on Tuesday, September 8, 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.

Friday, September 4, 2020

High Liner Foods

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. The stock price seems cheap. This stock is no longer a dividend growth stock because of the current flat dividends after a big cut in 2019. Analysts do not see any dividend increases in the short term. A positive is that there is insider buying. A negative is the debt. See my spreadsheet on High Liner Foods.

I do not own this stock of High Liner Foods (TSX-HLF, OTC-HLNFF). This is a stock liked by the Investment Reporter and is considered to be of average risk. The MPL Communication’s site is here. Ryan Irvine of Keystone also liked this company.

When I was updating my spreadsheet, I noticed that over the long term shareholders have often not made much money with this stock. The 10, 15 and 20 year returns are not bad at 11.81%, 7.21% and 12.04% per year. The 25 year total return is ok at 5.25% per year. Shareholders that held this stock for 30, 35 and 36 years have broken even in total return. However, currently the stock has been falling since hitting a high in 2015.

The dividend yields are moderate with dividend growth currently non-existent. The current dividend yield is Moderate (2% to 4% ranges) at 2.48%. The 5, 10 and historical dividend yields are also moderate at 3.22%, 2.59% and 2.49%. The company decided to cut the dividend last year by some 66% to have been cash flow and pay down the debt. Prior to 2019 the company had been increasing the dividend since 2008. Dividends are paid in CDN$, but the company reports in US$.

The Dividend Payout Ratios (DPR) are fine. This dividend was cut in the 3 quarter of 2019 by 66%. The DPR for EPS for 2019 is 74% with 5 year coverage at 48%. The DPR for CFPS for 2019 was 17% with 5 year coverage at 15%. The DPR for Free Cash Flow for 2019 was 6% with 5 year coverage at 35%. The sites I look at seem to agree on FCF values.

Debt Ratios need improving. The Long Term Debt/Market Cap in 2019 was 1.40. Currently it is at 1.41. The Intangible and Goodwill/Market Cap Ratio for 2019 is 1.48 with a current ratio of 1.47. Both these are much too high. The Liquidity Ratio for 2019 was 1.87 and this is good. The Debt Ratio is a little low at 1.49 as I prefer this to be 1.50 or higher. Leverage and Debt/Equity Ratios for 2019 are too high at 3.06 and 2.06 as I prefer them to be less than 3.00 and 2.00. The current ratios are better at 2.81 and 1.81.

The Total Return per year is shown below for years of 5 to 36 to the end of 2019 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.
2014 5 -6.37% -15.12% -18.34% 3.22%
2009 10 8.13% 11.81% 5.93% 5.87%
2004 15 7.48% 7.21% 3.28% 3.93%
1999 20 12.04% 8.05% 3.99%
1994 25 5.15% 2.93% 2.22%
1989 30 0.84% -0.65% 1.49%
1984 35 0.79% -0.63% 1.42%
1983 36 -0.28% -1.56% 1.28%

The Total Return per year is shown below for years of 5 to 15 to the end of 2019 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.
2014 5 -8.89% -17.75% -20.71% 2.96%
2009 10 5.61% 9.24% 3.48% 5.76%
2004 15 6.77% 6.80% 2.61% 4.19%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.31, 14.66 and 20.13. The corresponding 10 year ratios are 11.05, 15.13 and 21.02. The corresponding historical ratios are 8.41, 10.88 and 13.32. The current P/E Ratio is 6.33 based on a stock price of $8.06 and 2020 EPS estimate of $1.29. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a Graham Price of $17.67. The 10 year low, median, and high median Price/Graham Price Ratios are 0.78, 1.12 and 1.47. The current P/GP Ratio is 0.46 based on a stock price of $8.06. This stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 2.07. The current P/B Ratio is 0.74 based on a Book Value of $277M, Book Value per Share of $8.31 and a stock price of $6.17. The current ratio is 64% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.10. The current P/CF Ratio is 3.01 based on 2020 Cash Flow per Share estimate of $2.05, Cash Flow of $68.4M and a stock price of $6.17. The current ratio is 41% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 2.49. The current dividend yield is 2.48% based on dividends of $0.20 and a stock price of $8.06. The current dividend yield is 0.4% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median. This is in CDN$. A problem is the big cut in dividends in 2019 of 66%.

I get a 10 year median dividend yield of 2.59. The current dividend yield is 2.48% based on dividends of $0.20 and a stock price of $8.06. The current dividend yield is 4% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and above the median. This is in CDN$. A problem is the big cut in dividends in 2019 of 66%.

The 10 year median Price/Sales (Revenue) Ratio is 0.40. The current ratio is 0.24 based on a stock price of $6.07, 2020 Revenue estimate of $842 and Revenue per Share of $25.22. The current ratio is 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is relatively cheap. This stock is showing as relatively cheap in most of the tests except for the dividend yield tests. The problem with the dividend yield tests is the 2019 dividend cut. I see no problems with the other tests.

Is it a good company at a reasonable price? The current stock price is probably cheap. This stock has had a very checkered pass. Unfortunately, the stock was falling in 2019 before the recent problems. Analysts expect it to give good EPS growth going forward and the stock has recovered a lot in August.

When I look at analysts’ recommendations, I find Buy (1) and Hold (3). The consensus would be a Hold. The 12 month stock price is $10.49 ($7.99 US$). This implies a total return of 32.57% with 30.09% from capital gains and 2.48% from dividends.

There are not many entries on Stock Chase and they are mostly negative.. Aditya Raghunath on Motley Fool says this is a good stock to pick up for your TFSA, but it is high risk. A writer on Simply Wall Street says the company’s debt could be a risk. A writer on Simply Wall Street says this company’s higher than average P/E Ratio is justified because of expected future growth. Ostrich Investing on YouTube talks about the first quarterly review of 2019 when the company cut the dividend. The Blogger Dividend Gangster talks about this stock in an blog. See near the bottom of the blog entry.

High Liner Foods Inc. is North America's processor and marketer of value-added frozen seafood companies servicing the retail, food service and club store channels. The Company's retail branded products are sold in the U.S., Canada and Mexico under the High Liner, Fisher Boy, Mirabel, and Sea Cuisine labels, and are available in groceries and club stores. The Company also sells branded products to restaurants and institutions under the High Liner, Icelandic Seafood, FPI, Viking, Mirabel, Samband of Iceland, and American Pride Seafoods labels. Its web site is here High Liner Foods.

The last stock I wrote about was about was Capital Power Corp (TSX-CPX, OTC- CPRHF) ... learn more. The next stock I will write about will be SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) ... learn more on Tuesday, September 8, 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.

Wednesday, September 2, 2020

Capital Power Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. This is a dividend growth stock from the aristocrat list. It does have problems. They are paying in dividends more than they earn, but the dividends are well covered by cash flow. They also have a high debt level. See my spreadsheet on Capital Power Corp.

I do not own this stock of Capital Power Corp (TSX-CPX, OTC-CPRHF). I found this utility on the Aristocrat list. It produces mainly green energy.

When I was updating my spreadsheet, I noticed that all the financial statements from 2009 to present reduce all value to millions of dollars. They are giving the bare minimum values that they need to. Not my favourite way for company to report.

It also does not have the result that I would like for a Utility. There is too much red in the spreadsheet. The per share figures are not good. Revenue has increased in the past 5 and 10 years by 6.9% and 5.5%, but Revenue per Share is up by 2% for the past 5 years, but down by 10% for the past 10 years. This is because outstanding shares have increased by 4.8% and 17% per year over the past 5 and 10 years.

The only bright spot appears to be the dividends paid and their increases. However, in 2019 they are paying out 258% of their EPS and the 5 year coverage is 144%. They cannot afford the dividends. This is a disappointment. Although, the dividends are covered adequately by the cash flow.

The dividend yields are good with dividend growth moderate. The current dividend yield is good (5% and 6% ranges) at 6.99%. The 5, 10 and historical dividend yields are good at 6.33%, 5.99% and 5.95%. The dividend growth for the past 5 years is at 7.2% per year. The last dividend increase was in 2020 and it was for 6.8%. See chart below.

The Dividend Payout Ratios (DPR) need improving, especially the DPR for EPS. The DPR for EPS for 2019 is 258% with 5 year coverage at 144%. Analysts do not expect this DPR to get below 100% until 2022. The DPR for Cash Flow per Share is 26% and 31%. The DPR for 2019 for Free Cash Flow is 280% with 5 year coverage at 136%. Analysts expect this DPR to be 46% in 2020.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio is 0.71. This is fine. The Liquidity Ratio for 2019 is 0.60. If you add in Cash Flow after dividends you only get to 0.97. If you also add in the current portion of the long term debt, the ratio is 2.04. The Debt Ratio is 1.56. The Leverage and Debt/Equity Ratios are 4.09 and 2.62, respectively. The Leverage Ratio is too high, but the Debt/Equity Ratio is fine.

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 7.20% 11.31% 5.75% 5.55%
2009 10 3.94% 10.30% 4.87% 5.42%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 21.73, 23.18 and 26.77. The corresponding 10 year ratios are 21.89, 25.43 and 28.67. The corresponding historical ratios are 21.73, 23.44 and 26.77. The current P/E Ratio is 28.76 based on a stock price of $29.34 and 2020 EPS estimate of $1.02. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $21.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.89, 1.10 and 1.19. The current P/GP Ratio is 1.39 based on a stock price of $29.34. 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 1.02. The current P/B Ratio is 1.51 based on a Book Value of $2,034, Book Value per Share of $19.39 and a stock price of $29.34. The current ratio is 49% 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 5.08. The current P/CF Ratio is 4.81 based on 2020 Cash Flow per Share estimate of $6.10, Cash Flow of $640M and a stock price of $29.34. The current ratio is 5% 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 5.95%. The current dividend yield is 6.99% based on dividends of $2.03 and a stock price of $29.34. The current dividend yield is 17.4% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 5.99%. The current dividend yield is 6.99% based on dividends of $2.03 and a stock price of $29.34. The current dividend yield is 16.6% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.63. The current P/S Ratio is 1.71 based on 2020 Revenue estimate of $1,798M, Revenue per Share of $17.14 and a stock price of $29.34. The current ratio is 5% 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. Both the dividend yield tests say the stock price testing suggests that the stock price is relatively reasonable and below the median with the P/S Test showing that the stock price is relatively reasonable but above the median. The P/CF Ratio test shows the stock price below the median. The problem with the P/B Ratio tests is that the Book Values are declining due to the issuance of new shares. This is a problem. I do not see any problem in the other tests and both the P/E Ratio and the P/GP Ratio tests say the stock is expensive.

Is it a good company at a reasonable price? The stock price is probably reasonable. This is a dividend growth stocks and probably will continue to be one. It is getting into green energy and this is a positive for some stock holders. I am currently happy with the utilities I hold and will not be buying this one.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $34.46. This would imply a total return of 24.44% with 6.99% from dividends and $17.45% from capital gains.

Analysts on Stock Chase really like or dislike this stock. One said it was a good company with growth and another one said that they were nothing about this company that interests him. Christopher Liew on Motley Fool thinks this company is crash proof. A writer on Simply Wall Street says the CEO's compensation for this company is comparable to CEO compensations with other companies of this size. A writer on Simply Wall Street says the ROCE of this is the same as the average for Renewable Energy Industry. The Blogger Dividend Earner recently reviewed this stock. The Blogger Wealth Simple in June 2020 name this stock in his list of Best Dividend Stocks in Canada.

Capital Power Corp is a North American power producer whose principal activities are developing, acquiring, and operating power plants. Through its subsidiary, Capital Power owns and operates a portfolio of natural gas, coal, wind, solar, and solid fuel energy generating facilities. These are located throughout Western and Central Canada and the U.S. Its web site is here Capital Power Corp.

The last stock I wrote about was about was ATCO Ltd (TSX-ACO.X, OTC-ACLLF) ... learn more. The next stock I will write about will be High Liner Foods (TSX-HLF, OTC-HLNFF) ... learn more on Friday, September 4, 2020 around 5 pm. Tomorrow on my other blog I will write about Something to Buy September 2020.... learn more on Thursday, August 03, 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.

Monday, August 31, 2020

ATCO Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is probably reasonable. The dividend yield tests say it is cheap. I worry about the debt level and that they value their Property, Plant and Equipment way above the market cap. Dividends are covered well by EPS and Cash Flow. See my spreadsheet on ATCO Ltd.

I do not own this stock of ATCO Ltd (TSX-ACO.X, OTC-ACLLF). I started to look at this stock in 2009 because it was a dividend paying stock that was on everyone’s list. At that time this stock was on the Dividend Achievers list, the Dividend Aristocrats list and also was on Mike Higgs’ list. ATCO (TSX-ACO-X) owns 88% Canadian Utilities (TSX-CU), so you would not buy both these stocks.

When I was updating my spreadsheet, I noticed they have a market value of $5,707M but the company values their Property, Plant and Equipment at $17,857M. This is a big discrepancy. I know that this discrepancy has been happening for some time. Their Long Term Debt/Market Ratio is very high at 1.62. It is a problem when it is above 1.00. It has been above 1.00 since 2009 that I know of. It is obvious that the market does not value the companies Property, Plant and Equipment assets at the level the company does.

Also, there is a lack of growth in EPS. When you look at growth for the past 5 years it is showing as 4.19%. The company has been buying back stock at the rate of 3.19% per year over the past 5 years. So, the increase in EPS is just 1.00 over the past 5 years. Also, if you compare the average EPS for the 5 years ending in 2014 to the average EPS for the 5 years ending in 2019, the EPS is down by 3% per year. There was a gain on Sale of Operations of $174 or equal to 17% of the EPS or 2019. The only good news about the EPS is that the company 5 year coverage of Dividends by EPS is at 49%.

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.32%. The 5, 10 and historical dividend yields are also moderate, but lower at 2.73%, 2.20% and 2.14%. The dividend growth for the last 5 years is moderate (8% to 14% ranges) at 13.5% per year. See chart below.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 36% with 5 year coverage at 49%. The DPR for CFPS is 9% with 5 year coverage at 8%. The DPR for 2019 for Free Cash Flow is problematic as the three sites I looked at had different value for FCF. I looked at Morningstar, Market Screener and Wall Street Journal. Using the value from MS, I get a DPR for FCF for 2019 at 55% with 5 year coverage at 604%

Debt Ratios are fine, but the company does have a lot of debt. The Long Term Debt/Market Cap Ratio for 2019 is 1.62. This is high and I talked about this above. The Liquidity Ratio for 2019 is very good at 2.24, but this does fluctuate a lot and has a 5 year median of 1.67. The Debt Ratio is good at 1.57. The Leverage and Debt/Equity Ratios are fine at 2.76 and 1.76.

The Total Return per year is shown below for years of 5 to 31 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 13.49% 3.56% 0.87% 2.69%
2009 10 12.47% 10.82% 7.99% 2.84%
2004 15 10.75% 11.28% 8.51% 2.78%
1999 20 11.02% 12.16% 9.26% 2.90%
1994 25 13.55% 13.84% 10.61% 3.22%
1989 30 12.29% 13.08% 10.26% 2.83%
1988 31 11.87% 14.25% 11.09% 3.16%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.29, 14.12 and 16.69. The corresponding 10 year ratios are 11.30, 13.01 and 14.45. The corresponding historical ratios are 9.54, 10.74 and 12.37. The current P/E Ratio is 14.20 based on a stock price of $40.04 and EPS estimate for 2020 of $$2.82. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $47.27. The 10 year low, median, and high median Price/Graham Price Ratios are 0.78, 0.91 and 1.07. The current P/GP Ratio is 0.85 based on a stock price of $40.04. 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 1.48. The current P/B Ratio is 1.14 based on a Book Value of $4,039M, Book Value per Share of $35.22 and a stock price of $40.04. 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 a 10 year median Price/Cash Flow per Share Ratio of 3.04. The current P/CF Ratio is 2.71 based on a stock price of $40.04, Cash Flow per Share estimate for 2020 of $14.80 and Cash Flow of $1,697M. The current ratio is 11% below the 10 year 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 2.14%. The current dividend yield is 4.35% based on a stock price of $40.04 and dividends per share of $1.74. The current dividend yield is 103% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 2.20%. The current dividend yield is 4.35% based on a stock price of $40.04 and dividends per share of $1.74. The current dividend yield is 98% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.12. The current P/S Ratio is 1.14 based on Revenue estimate for 2020 of $4,039M, Revenue per Share of $35.22 and a stock price of $40.04. The current ratio is 1% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and about the median.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio testing just says it is reasonable, even though the dividend yield tests say it is cheap. I suspect it is in the reasonable category, but I could be wrong. I like the P/S Ratio test because revenue drives, in the end, earnings and cash flow.

Is it a good company at a reasonable price? The stock price is at a reasonable price. They have done well for the shareholders overtime and they have been paying and increasing their dividends for a long time. I worry about their debt level.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3), Hold (3) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $46.56. This implies a total return of $20.63 with 16.28% from capital gains and 4.35% from dividends.

Analysts on Stock Chase think this company is a good buy and their top pick. Aditya Raghunath on Motley Fool says this dividend aristocrat has raised their dividends every year since 1993. A writer on Simply Wall Street thinks this stock is cheap as it has a P/E 8.78 compared to peer average of 17.58. (However, part of the EPS is from a Sale and current P/E is 14.20.) A writer on Simply Wall Street says this is an attractive dividend stock that increases its dividends and can cover the dividend with their earnings and cash flow. The Blogger Dividend Growth Investing and Retirement took a look at this stock and other Canadian Utility stocks.

Atco Ltd is a Canadian holding company that offers gas, electric, and infrastructure solutions. The largest subsidiary of the company is Canadian utilities, which operates natural gas, electricity, and logistical services. Atco's primary segments include electricity, pipelines and liquid, Neltume Ports and Structures and logistics. The firm mainly operates in Canada and Australia, along with some operations in the United States, the United Kingdom, and Mexico. Its web site is here ATCO Ltd.

The last stock I wrote about was about was Exchange Income Corp (TSX-EIF, OTC-EIFZF) ... learn more. The next stock I will write about will be Capital Power Corp (TSX-CPX, OTC- CPRHF) ... learn more on Wednesday, September 2, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks September 2020.... learn more on Tuesday, September 1, 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.