I own this stock of Thomson Reuters Corp (TSX-TRI, NYSE-TRI). This is a dividend growth stock. Its performance has always been rather mediocre, but it is a diversification. I bought this stock in 1985 so I have had it for a very long time, almost 34 years. I bought stock to give my portfolio some balance as I had too many financial stocks.
When I was updating my spreadsheet, I noticed that done moderately well over the long period of time I have had this. I bought it in 1985, some 34 years ago. I have a total return of 8.50% with 5.48% from capital gains and 3.02% from dividends.
The dividend yields are moderate with dividend growth low. I have records going back to 1985, some 34 years. Over this time the dividend yields have varied as has the dividend growth. The current dividend yield at 2.14% is moderate (2 to 4% ranges). The 5, 10 and historical median dividend yields, although higher are also moderate at 3.09%, 3.07% and 3.07%. The dividends are paid in US$ and you can see in the charts below that growth in dividends in low (under 8%).
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 46% with 5 year coverage at 41%. The DPR for CFPS for 2019 is 64% and 37%. The DPR for CFPS is higher than what I would like to see, but it is only this year it has been over 40%. The DPR for Free Cash Flow for 2019 is 355% with 5 year coverage at 63%. The 5 year coverage is important, because a company can have a bad year. This is in US$ as the company reports in US$.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is 0.08. The Liquidity Ratio for 2019 is 0.95. If you add in cash flow after dividends and add back the current portion of the long term debt, it is 1.12. Cash Flow is low for 2019. The Debt Ratio is very good at 2.24. Leverage and Debt/Equity Ratios are also very good at 1.81 and 0.81.
The Total Return per year is shown below for years of 5 to 34 to the end of 2019 in CDN$. 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 | 5.44% | 19.25% | 14.66% | 4.59% |
| 2009 | 10 | 4.27% | 14.17% | 10.59% | 3.58% |
| 2004 | 15 | 4.42% | 8.01% | 5.39% | 2.62% |
| 1999 | 20 | 3.36% | 6.97% | 4.43% | 2.54% |
| 1994 | 25 | 4.45% | 10.54% | 6.97% | 3.57% |
| 1989 | 30 | 4.88% | 9.83% | 6.47% | 3.36% |
| 1985 | 34 | 5.70% | 8.54% | 5.67% | 2.86% |
The Total Return per year is shown below for years of 5 to 30 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 | 1.76% | 16.39% | 12.13% | 4.27% |
| 2009 | 10 | 2.54% | 11.82% | 8.24% | 3.58% |
| 2004 | 15 | 4.40% | 7.67% | 4.84% | 2.82% |
| 1999 | 20 | 4.00% | 7.93% | 5.10% | 2.83% |
| 1994 | 25 | 4.63% | 10.96% | 7.26% | 3.70% |
| 1989 | 30 | 4.26% | 8.57% | 5.62% | 2.94% |
| 1985 | 34 | 5.89% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.64, 19.68 and 23.72. The corresponding 10 year ratios are 14.63, 17.61 and 20.59. The corresponding historical ratios are 18.13, 19.63 and 23.72. The current P/E Ratio is 38.46 based on a stock price of $99.70 and 2020 EPS estimate of $2.59 (1.84 US$). This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.
I get a Graham Price of $37.92. The 10 year low, median, and high median Price/Graham Price Ratios are 1.26, 1.52 and 1.66. The current P/GP Ratio is 2.63 based on a stock price of $99.70. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.
I get a 10 year median Price/Book Value per Share Ratio of 2.20. The current P/B Ratio is 3.78 based on a stock price of $71.76, Book Value of $9,450M, and Book Value per Share of $19.00. The current ratio is 71% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$ terms. You get similar results in CDN$ terms.
I get an historical median dividend yield of 2.95%. The current dividend yield is 2.15% based on dividends of $2.14 ($1.52 US$) and a stock price of $99.70. The current dividend yield is 36% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.
I get a 10 year median dividend yield of 3.36%. The current dividend yield is 2.15% based on dividends of $2.14 ($1.52 US$) and a stock price of $99.70. The current dividend yield is 27% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$ terms.
The 10 year median Price/Sales (Revenue) Ratio is 2.45. The current P/S Ratio is 5.81 based on 2020 Revenue estimate of $6.139M, Revenue per Share of $12.34 and a stock price of $71.76. The current ratio is 139% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$ terms. You get similar results in CDN$ terms.
Results of stock price testing is that the stock price is relatively expensive. This is not surprising as the current stock price is now higher than at the end of the last year. All the tests are showing the same. Although I do like it that the P/S Ratio test confirms the results of the dividend yield test, I can find nothing wrong with the other tests.
Is it a good company at a reasonable price? I still like this company and I bought it for diversification purposes which is still valid. I think it is on the expensive side at the moment and this is perhaps not a good time to buy it.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3), Hold (7), Underperform (1) and Sell (1). The consensus would be a Hold. The 12 months stock price is $72.41 US$. This implies a total return of 3.02% with 0.91% from capital gains and 2.12% from dividends. This is in US$, but you will get a similar result in CDN$.
See what analysts are saying on Stock Chase. Surprisingly there are no recent entries. The last one talks about LSE buying Reuters, but they want to buy a Refinitiv which is a part of Thomson Reuters. Debra Ray on Motley Fool thinks this is the stock to hold after the Covid 19 crash. A Writer on Simply Wall Street complains about high Dividend Payout Ratios. The only possible way it can get their figures is including the recently payment to shareholders because the company brought back shares for shareholders. This is a onetime thing. The writers on this blog tend to do very surface analysis and sometimes they miss what is really happening. The DPR is not a problem for this company.
A writer on Simply Wall Street looks at ownership and it shows a lot is owned by private companies. (Actually it is the Thomson Family holding company of Woodbridge Company.) An item on CPS Practice Advisor talks about this company teaming up with Prime Global Partner to produce with accounting events.
Thomson Reuters is one of the world’s most trusted providers of answers, helping professionals make confident decisions and run better businesses. Our customers operate in complex arenas that move society forward — law, tax, compliance, government, and media – and face increasing complexity as regulation and technology disrupts every industry. Its web site is here Thomson Reuters Corp.
The last stock I wrote about was about was WSP Global Inc (TSX-WSP, OTC-WSPOF) ... learn more. The next stock I will write about will be McCoy Global Inc (TSX-MCB, OTC-MCCRF) ... learn more on Friday, May 1, 2020 around 5 pm. Tomorrow on my other blog I will write about Benefits, Danger with Monthly Dividends.... learn more on Thursday, April 30, 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.
No comments:
Post a Comment