Friday, July 30, 2021

Loblaw Companies Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price may be reasonable, but at the high end of reasonable. Their Dividend Payout Ratios are good, but they could improve their debt ratios. See my spreadsheet on Loblaw Companies Ltd .

I do not own this stock of Loblaw Companies Ltd (TSX-L, OTC-LBLCF), but I used to. I owned it from 1996 to 2007. It was originally a great stock. I sold it in 2007 because it was having problems with its tech upgrade to its supply system and it did not seem that it would be fixed anytime soon. When I sold this, I bought Metro and I have been happy with this stock.

When I was updating my spreadsheet, I noticed I sold this stock in 2007. They were having trouble with their tech upgrade to their supply system. The company had stopped raising the dividends. If I had kept my shares would probably had made a total return of 8.98% per year with 6.26% from capital gains and 2.72% from dividends. This is not a bad return. I like stocks that deliver at least 8% per year in Total Return.

The dividend yields are low with dividend growth low. The current dividend yield is low (below 2%) at 1.59%. The 5, 10 and historical median dividend yields are also low at 1.82%, 1.88% and 1.30%. The dividend increases have been low (below 8%) since dividend increases were restarted in 2012. The dividends were increased by 5% per year over the past 5 years. The last dividend increase was in 2020 and it was for 6.35%.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 was 42% with 5 year coverage at 41%. The DPR for CFPS for 2020 was 9% with 5 year coverage at 10%. The DPR for Free Cash Flow for 2020 was 14% with 5 year coverage at 18%

Debt Ratios are fine but could be improve. The Long Term Debt/Market Cap Ratio for 2020 is good at 0.30. The Liquidity Ratio is low at 1.32. If you add in Cash Flow after dividends it is better and good at 1.86. The Debt Ratio is a little low at 1.45. I prefer this to be at 1.50 or higher and it usually is. The Leverage and Debt/Equity Ratios are too high at 3.23 and 2.23. I prefer these to be below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 32 to the end of 2020. 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.
2015 5 5.17% 1.01% -0.79% 1.79%
2010 10 4.30% 6.61% 4.52% 2.09%
2005 15 2.85% 3.45% 0.72% 2.72%
2000 20 5.99% 2.83% 1.27% 1.56%
1995 25 10.31% 10.22% 7.50% 2.72%
1990 30 10.17% 10.62% 8.07% 2.55%
1988 32 9.67% 13.57% 10.20% 3.37%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 20.92, 23.52, and 26.13. The corresponding 10 year ratios are 20.18, 22.78 and 25.39. The corresponding historical ratios are 17.06, 19.44 and 21.85. The current P/E Ratio is 23.57 based on a stock price of $84.14 and EPS estimate for 2021 of $3.57. The current ratio is between the median and high 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $50.30. The 10 year low, median, and high median Price/Graham Price Ratios are 1.31, 1.48 and 1.64. The current P/GP Ratio is 1.67 based on a stock price of $84.14. The current ratio is above the high 10 year median ratio. 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 1.95. The current P/B Ratio is 2.67 based on a Book Value of $10,943M, Book Value per Share of $31.50 and a stock price of $84.14. The current ratio is 37% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem is a declining book value which has declined by 0.27% each year over the past 5 years. A declining book value is never a good sign.

I get a 10 year median Price/Cash Flow per Share Ratio of 8.47. The current P/CF Ratio is 7.01 based on Cash Flow per Share estimate for 2021 of $12.00, Cash Flow of $4,168M and a stock price of $84.14. The current ratio is 17% 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 1.30%. The current dividend yield is 1.59% based on dividends of $1.34 and a stock price of $84.14. The current yield is 22.5% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.88%. The current dividend yield is 1.59% based on dividends of $1.34 and a stock price of $84.14. The current yield is 15% 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 0.48. The current P/S Ratio is 0.56 based on Revenue estimate for 2021 of $52,126M, Revenue per Share of $150.06 and a stock price of $84.14. The current ratio is 17.6% 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 10 year dividend yield test says this and it is confirmed by the P/S Ratio test. The Historical dividend yield test says the stock price is cheap, but a yield is 1.59% is still a very low yield. They are not building their Book Value and this can be a problem.

Is it a good company at a reasonable price? I am happy with my grocery stock replacement of Metro Inc. However, I do like shopping at Loblaws better than at Metro. Loblaws has not be doing well recently for shareholders, although it is up some 34% year to date. If we do the Total Return per year, as is shown below for years of 5 to 32 to date, the 5 year return is better, but long term investors are still suffering. Currently I will stay invested in Metro, but I will still follow Loblaws and I will continue to shop in Loblaws.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 5.17% 5.10% 3.50% 1.60%
2010 10 4.30% 10.12% 8.14% 1.98%
2005 15 2.85% 5.28% 3.70% 1.58%
2000 20 5.99% 4.20% 2.76% 1.43%
1995 25 10.31% 9.56% 7.36% 2.19%
1990 30 10.17% 11.90% 9.36% 2.55%
1988 32 9.67% 10.13% 8.12% 2.01%

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3), Hold (4), and Underperform (1). The consensus is a Buy, but the spread of recommendations is big. The 12 month stock price consensus is $87.58. This implies a total return of 5.68% with 4.09% from capital gains and 1.59% from dividends. It is a rather low return

Recent analysts’ comments on Stock Chase are positive. Nikhil Kumar on Motley Fool says Loblaws did the right things during the pandemic and this will bear fruit for the company. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and list one risk. A writer on Simply Wall Street says why this stock should be on your watch list. Andrew Willis on Stock Insight talks about this company and George Weston.

Loblaw is one of Canada's largest grocery, pharmacy, and general merchandise retailers. It operates the most expansive store footprint in Ontario and maintains sizable presences in provinces like Quebec and British Columbia. In addition to its retail operations, Loblaw oversees a financial-services business, which provides credit card services and guaranteed investment certificates, and also operates its PC Optimum loyalty program. Its web site is here Loblaw Companies Ltd .

The last stock I wrote about was about was Ballard Power Systems Inc (TSX-BLDP, NASDAQ-BLDP) ... learn more. The next stock I will write about will be Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE) ... learn more on Tuesday, August 3, 2021 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, July 28, 2021

Ballard Power Systems Inc

Sound bite for Twitter and StockTwits is: Industrial Sector Stock. The stock price would seem to be on the expensive side. The debt ratios are good, but they just raised a lot of cash selling shares. They have negative earnings and cash flow. When these might turn positive is anyone guess. People keep hoping for this. See my spreadsheet on Ballard Power Systems Inc.

I do not own this stock of Ballard Power Systems Inc (TSX-BLDP, NASDAQ-BLDP), but I used to. Back in 1997, I read about Ballard and fell in love with the idea of cars running with fuel cells. I could help save the environment and also make some money. It was very attractive. I sold this stock in 2006 because it had lost its attraction. It did not seem that Ballard fuel cells would be in any car anytime soon. I was ahead in 2000, but the stock started to fall in October 2000 and never recovered.

When I was updating my spreadsheet, I noticed in February 2021 the stock price soared. Seems to be because it was an alternative fuel stock. It has lost a lot since then. This is a company that has only made a profit in 3 of the past 26 years. It has not made a profit in the last 10 years. Balance sheet has a big increase due to the company having a lot more cash and cash equivalents. This is due to the company selling shares. Shares outstanding increase some 20% in 2020.

Note that any green or blue ink is generally showing results that are less bad. These colours are not showing any increases in most items. Only Revenue and Stock Price are showing positive results. For such things as EPS, the 10 year positive result of 6.70% per share is showing EPS going from a -$0.42 to a -$0.21. That is the EPS has a lower loss.

This stock has never paid a dividend.

Debt Ratios are good because the company just issued shares to raise money. Long Term Debt/Market Cap Ratio is 0.00 (because debt level is so low). The Liquidity Ratio for 2020 is 16.40. The Debt Ratio for 2020 is 13.06. The Leverage and Debt/Equity Ratios are 1.08 and 0.08.

The Total Return per year is shown below for years of 5 to 25 to the end of 2020 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.
2015 5 0.00% 69.16% 69.16% 0.00%
2010 10 0.00% 34.83% 34.83% 0.00%
2005 15 0.00% 12.77% 12.77% 0.00%
2000 20 0.00% -5.61% -5.61% 0.00%
1995 25 0.00% 7.40% 7.40% 0.00%

The Total Return per year is shown below for years of 5 to 25 to the end of 2020 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.
2015 5 0.00% 71.88% 71.88% 0.00%
2010 10 0.00% 31.62% 31.62% 0.00%
2005 15 0.00% 11.89% 11.89% 0.00%
2000 20 0.00% -4.76% -4.76% 0.00%
1995 25 0.00% 7.71% 7.71% 0.00%

The stock has gone down some 33% year to date. So, the Total Return to the present time is lower. For the years of 5 to 25 to the present in CDN$ is shown below. Note that it is more resent shareholders who have great returns. If I had held on to my shares from 23 years ago, I would have a gain of just 0.73% per year.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 0.00% 54.97% 54.97% 0.00%
2010 10 0.00% 33.54% 33.54% 0.00%
2005 15 0.00% 7.55% 7.55% 0.00%
2000 20 0.00% -4.28% -4.28% 0.00%
1995 25 0.00% 1.68% 1.68% 0.00%

The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are also negative and unusable. The corresponding historical ratios are also negative. In the past 26 years, this company has only had earnings for 3 of those years. There are 23 years of earnings losses. The current year is expected to have an earnings loss also, as is 2022. We cannot do any P/E Ratio testing for the company.

I estimate the Graham Price to be 1.19. All my graham Prices are gross estimates. The 10 year low, median, and high median Price/Graham Price Ratios are 3.34, 5.30 and 7.27. The current P/GP Ratio is 17.36 based on a stock price of $20.63. This stock price testing suggests that the stock price is relatively expensive. However, since I am only guessing at the Graham Price, this cannot be good test. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 2.78. The current P/B Ratio is 3.28 based on a Book Value of $1,408M, Book Value per Share of $4.99 and a stock price of $16.36. The current ratio is 18% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$.

In CDN$ the difference in P/B ratios is 25%, with the 10 year median P/B Ratio at 2.62 and the current P/B Ratio at 3.29. The current P/B Ratio is based on a Book Value of $1,771M, Book Value per Share of $6.28 and a stock price of $20.63. This stock price testing would imply a stock price that is relatively expensive. Such different results are due to the currency exchange and also the stock is traded more on the US Stock Exchange than the Canadian one.

I get a 10 year median Price/Cash Flow per Share Ratio that are all negative so these ratios are unusable. And, since there are no dividends, I cannot do any dividend yield testing.

The 10 year median Price/Sales (Revenue) Ratio is 6.47. The current P/S Ratio is 29.97 based on Revenue estimate for 2021 of $154M, Revenue per Share of $0.55 and a stock price of $16.36. The current ratio is 636% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. In CDN$ the difference in ratio is 453%, so the result is the same with the stock price being relatively expensive.

Results of stock price testing is that the stock price is probably expensive. This is showing in the P/S Ratio test, which is probably the best test. There are mixed results from the P/B Ratio testing, but both with US$ and CDN$ testing, the difference in ratios is rather high.

Is it a good company at a reasonable price? I think the current price is on the expensive side. It would seem that cars running by fuel cells are always a future dream. I am still following this stock, but I will not buy it again.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (7), Hold (7) and Sell (1). The consensus would be a Buy. Most consensus are a Buy, but the interesting thing is that there is a sell recommendation. This very seldom happens. The 12 month stock price consensus is $23.23 ($18.47 US$). This implies a total return of 12.58%, all from capital gains.

Analysts have very mixed views of this company on Stock Chase. Vineet Kulkarni on Motley Fool thinks the pressure on Ballard will continue. The executive summary on Simply Wall Street gives this stock 3 stars out of 5 and lists 2 risks. A writer on Simply Wall Street talks about the company’s cash burn. This is an important subject for a company with no earnings. A writer on Simply Wall Street talks about insider selling. There really hasn’t been insider selling, it is just that insiders are not taking up the stock options they have.

Ballard Power Systems Inc is a clean energy growth company. The company is engaged in proton exchange membrane fuel cell development and commercialization. Geographically, it derives a majority of revenue from China and also has a presence in Germany; Belgium; Japan; Denmark; the UK and other countries. Its web site is here Ballard Power Systems Inc.

The last stock I wrote about was about was Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more. The next stock I will write about will be Loblaw Companies Ltd (TSX-L, OTC-LBLCF) ... learn more on Friday, July 30, 2021 around 5 pm. Tomorrow on my other blog I will write about Dividend Portfolio .... learn more on Thursday, July 29, 2021 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, July 26, 2021

Savaria Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price would seem on the pricey side. This company has done very well in the past and analysts expect it to do well in the future. The Dividend Payout Ratios are improving. Debt Ratios are good. See my spreadsheet on Savaria Corporation.

I do not own this stock of Savaria Corporation (TSX-SIS, OTC-SISXF). I got this stock off the Dividend Blogger site that no longer exists. I am always interested in dividend growth small cap stock. The first few years of accounting were rather confusing, but I think I figured them out in the end.

When I was updating my spreadsheet, I noticed that this stock has done very well. I see all sorts of green ink. This has been a great dividend growth stock for its shareholders.

The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.38%. The 5, 10 and historical dividend yield is also moderate at 2.49%, 3.43% and 3.62%. The dividend growth is good (15% and over) at 22.28% per year over the past 5 years. However, the last increase was in 2020 and it was for 4.4%. There has been no increase in 2021.

The Dividend Payout Ratios (DPR) need improving. The DPR for EPS for 2020 is 89% with 5 year coverage at 78%. The DPR for EPS is increasing faster than EPS. The DPR for CFPS is 42% with 5 year coverage at 43%. The DPR for Free Cash Flow is 50% with 5 year coverage 75%.

Debt Ratios are very good. The Long Term Debt/Market Cap Ratio or 2020 is 0.07. This is good and low. The Liquidity Ratio for 2020 is 2.67. The Debt Ratio for 2020 is 2.61. The Leverage and Debt/Equity Ratios are 1.62 and 0.62.

The Total Return per year is shown below for years of 5 to 19 to the end of 2020. 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.
2015 5 22.28% 25.50% 21.28% 4.21%
2010 10 18.66% 30.21% 24.78% 5.42%
2005 15 21.51% 17.13% 14.29% 2.84%
2001 19 18.21% 15.74% 2.47%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 20.19, 25.40 and 36.53. The corresponding 10 year ratios are 14.54, 21.05 and 26.14. The corresponding historical ratios are 14.29, 18.19 and 21.64. The current P/E Ratio is 28.84 based on a stock price of $20.19 and EPS estimate for 2021 of $0.70. The current P/E Ratio is above the 10 year high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $11.82. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.55 and 1.96. The current ratio is 1.71 based on a stock price of $20.19. The current ratio is between the median and high 10 year median P/GP Ratios. 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 2.74. The current P/B Ratio is 2.28 based on a Book Value of $452.7M, Book Value per Share of $8.87 and a stock price of 20.19. The current ratio is 17% 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 $13.03. The current ratio is 24.62 based on a stock price of $20.19, Cash Flow per Share estimate for 2021 of $0.82 and Cash Flow of $41.9M. The current ratio is 89% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

For the P/CF Ratio testing, analyst seem to expect the Cash Flow per Share to drop by 15% in 2021 and then rise by 78% in 2022. If we use the Cash Flow per Share estimate for 2022 of $1.46, Cash Flow of $74.5M and a stock price of $20.19, the P/CF Ratio becomes 13.83. This ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 3.62%. The current dividend yield is 2.38% based on a stock price of $20.19 and dividends of $0.48. The current dividend yield is 34% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 3.43%. The current dividend yield is 2.38% based on a stock price of $20.19 and dividends of $0.48. The current dividend yield is 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.72. The current P/S Ratio is 1.59 based on Revenue estimate for 2021 of $647M, Revenue per Share of $12.68 and stock price of $20.19. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

For estimate for 2021, analysts expect a big leap in Revenue to $647M or up 86%. This is a big increase and you have to wonder. In the past they have overestimated Revenue. See chart below. For example, in 2019 and 2020, the estimates for 2020 were $430 and $368. The actual revenue came in at $354, which is lower than both estimates.

Estimates 2018 2019 2020 2021 2022
2018 $281M $450M
2019 $395M $430M
2020 $368M $396M
2021 $647M $757M
Actuals $286M $374M $354M

Results of stock price testing is that the stock price is could be reasonable, but on the expensive side. The dividend yield tests are showing the stock price as expensive. The P/S Ratio test is not, but I wonder if analysts are right about the big Revenue increase for 2021. Revenues are most likely going up, but by 83%? The results of the other testing are mixed. It is interesting that the P/B Ratio test shows the price as reasonable and below the median.

Is it a good company at a reasonable price? This company has done very well and I expect it will continue to do very well. However, at this point in time I think the stock is on the pricey side

When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (7). The consensus would be a Buy. The 12 month stock price consensus is $23.69. This implies a total return of 19.71%, with 17.34% from capital gains and 2.38% from dividends.

Analysts on Stock Chase think that now is the time to buy this stock. Rajiv Nanjapla on Motley Fool says this is one of his top picks for July 2021. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and lists 4 risks. A writer on Simply Wall Street talks about ownership of the shares of this company. Richard De Sousa, a blogger on Rich Picks Daily says this is a stock to add to your buy list.

Savaria Corp designs, engineers, and manufactures products for personal mobility. Its products include home elevators, wheelchair lifts, commercial elevators, ceiling lifts, stair lifts, and van conversions. Its web site is here Savaria Corporation.

The last stock I wrote about was about was TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more. The next stock I will write about will be Ballard Power Systems Inc (TSX-BLDP, NASDAQ-BLDP) ... learn more on Wednesday, July 28, 2021 around 5 pm. Tomorrow on my other blog I will write about Algonquin Power.... learn more on Tuesday, July 27, 2021 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, July 23, 2021

TECSYS Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. I think that the company is essentially a Tech company. The stock price would seem to be relatively expensive at the present time. Debt Ratio is very good. There has been insider selling in the past year but insider still has a significant investment in this company. See my spreadsheet on TECSYS Inc.

I own this stock of TECSYS Inc (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. This is a small cap dividend paying stock that I like. The financial year for this company ends at April 30 each year, so I have reviewing the April 30, 2021 financial year.

When I was updating my spreadsheet, I noticed there was insider selling last year. It had hard to know why. But CEO still owns shares worth some $15M and the Chairman owns shares worth $74M. This stock has great debt ratios. The Long Term Debt/Market Cap is just 0.01, Liquidity Ratio is 1.72, Debt Ratio is 2.08 and Leverage and Debt/Equity Ratios are 1.93 and 0.93, respectively.

The dividend yields are low with dividend growth good. The current dividend yield is low (less than 2%) at 0.53%. The 5, 10 and historical median dividend yields are also low at 1.28%, 1.32% and 1.49%. The current dividend growth is good with growth at 19% per year over the past 5 years. The last increase was in lower at 8.3% and it was made in the 2022 financial year.

The Dividend Payout Ratios (DPR) currently fine. The DPR for EPS for 2021 is 49% with 5 year coverage at 71%. The DPR for CFPS for 2021 is 27% with 5 year coverage at 44%. The DPR for Free Cash Flow for 2021 is 21% with 5 year coverage at 33%. Some of the DPRs got high between 2018 and 2020, but are under control and analysts expects this to continue.

Debt Ratios are all good. The Long Term Debt/Market Cap Ratio is very low and good at just 0.01. The Liquidity Ratio for 2021 is 1.72. The Debt Ratio is 2.08. The Leverage and Debt/Equity Ratios for 2021 are good at 1.93 and 0.93

The Total Return per year is shown below for years of 5 to 22 to the end of 2020. 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.
2015 5 19.14% 44.15% 42.83% 1.32%
2010 10 15.87% 39.23% 37.48% 1.74%
2005 15 14.78% 24.72% 23.73% 0.99%
2000 20 15.53% 15.12% 0.41%
1998 22 10.85% 10.57% 0.28%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 38.13, 49.72 and 61.30. The corresponding 10 year ratios are 24.03, 32.95 and 41.88. The corresponding historical ratios are 13.00, 15.21 and 17.08. The current P/E Ratio is 109.18 based on a stock price of $49.13 and EPS estimate for 2022 of $0.45. The current ratio is above the high 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I know that the EPS expected in 2022 is low at $0.45 that the EPS for 2021 which was $0.49. The EPS estimate for 2023 is higher at $0.74. However, that does not help with this test. With a stock price of $49.13, the P/E Ratio for 2023 is 66.39. This is still a very high ratio and higher than the high 10 year median ratio. This test also shows the stock price is relatively expensive.

I get a Graham Price of $6.84. The 10 year low, median, and high median Price/Graham Price Ratios are 1.97, 2.63 and 3.29. The current P/GP Ratio is 7.18 based on a stock price of $49.13. The current ratio is higher than the high 10 year median ratio. 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 4.04. The current P/B Ratio is 10.62 based on a stock price of $49.13, Book Value of $67M and a Book Value per Share of $4.63. The current ratio is 163% 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 26.63. The current P/CF Ratio is 37.29 based on a stock price of $49.13, Cash Flow for the last 12 months of $19M, and Cash Flow per Share of $1.32. The current ratio is 40% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.49%. The current dividend yield is 0.53% based on dividends of $0.26 and a stock price of $49.13. The current yield is 64% 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 1.32%. The current dividend yield is 0.53% based on dividends of $0.26 and a stock price of $49.13. The current yield is 60% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.74. The current P/S Ratio is 5.16 based on Revenue estimate for 2022 of $138M, Revenue per Share of $9.51 and a stock price of $49.13. The current ratio is 197% 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. The dividend yield tests show this and it is confirmed by the P/S Ratio test. However, all the testing points to that fact that the stock price is relatively expensive.

Is it a good company at a reasonable price? I still like this company and would not sell just because it is expensive. I also do not think now is the time to start to lock in my profit on this stock. However, now is probably not the time to buy this company. Also, I generally do not buy dividend stock when the yield is below 1%.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4). The consensus would be a Buy. The 12 month stock price consensus is $61.00. This implies a total return of $24.69% with 0.53% from dividends and 24.16% from capital gains.

This stock is not well covered by Stock Chase analysts. Kay Ng on Motley Fool says this is a Canadian growth stock to buy now. The executive summary on Simply Wall Street list two positives about this stock and no risks. A writer on Simply Wall Street talks about recent insider selling. A writer on Simply Wall Street has a current negative view of this stock, but notes that the company’s growth rate is expected to see huge improvements. A writer on Simply Wall Street recently had a positive view of this company.

Tecsys Inc is engaged in the development and sale of enterprise supply chain management software for distribution, warehousing, transportation logistics, point-of-use, and order management. It also provides related consulting, education, and support services. The company serves healthcare systems, services parts, third-party logistics, retail, and general wholesale distribution industries. Geographically, it derives a majority of revenue from the United States and also has a presence in Canada and Other Countries. Its web site is here TECSYS Inc.

The last stock I wrote about was about was Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more. The next stock I will write about will be Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more on Monday, July 26, 2021 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, July 21, 2021

Pulse Seismic Inc

Sound bite for Twitter and StockTwits is: Industrial Sector Stock. The stock price would seem to be on the cheap side. Insiders have recently been increasing their shares in this company. This is a good sign. Debt Ratio are good. See my spreadsheet on Pulse Seismic Inc.

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

When I was updating my spreadsheet, I noticed most of the insiders that I tracked increased their shares in this company. This included the CEO, CFO, an officer, and a director. The Chairman did not. However, the Chairman has over 8M shares worth some 17M.

The dividend was suspended in 2015.

The Dividend Payout Ratios (DPR) in the last year of dividends needed improvement re EPS. The last year of dividends, they had an earnings loss. In the last 10 years, they had 6 years of earnings loss and only 4 years of positive earnings. The DPR for EPS the past 5 years to 2015 was 176%. The DPR in 2015 for CFPS was a lot better at 18% with 5 year coverage at 10%. The DPR for Free Cash Flow for 2015 was also fine at 25%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.54. It is lower currently at 0.27 because of the increase in the stock price. The Liquidity Ratio for 2020 is good at 3.58, however, the Liquidity Ratio for the first quarter is much lower at 0.83. For the first quarter, if you add in Cash Flow after dividends it is good at 5.31. The Debt Ratio for 2020 is good at 1.80. The Leverage and Debt/Equity Ratios for 2020 are fine at 2.25 and 1.25.

The Total Return per year is shown below for years of 5 to 22 to the end of 2020. 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. Under the Dividend Growth column is average dividend growth. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -20.00% -13.25% -15.44% 2.18%
2010 10 -15.57% -1.97% -5.77% 3.80%
2005 15 6.05% -1.57% -5.79% 4.23%
2000 20 9.22% 8.62% 1.24% 7.37%
1998 22 12.12% 3.77% 8.35%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and are therefore unusable. The corresponding 10 year ratios are also all negative and unusable. The corresponding historical ratios are 2.24, 4.17 and 5.50. These are very low ratios. Anything below the ratio of 10 is low. The current P/E Ratio is 6.79 based on a stock price of $1.90 and EPS estimate for 2021 of $0.28. This current ratio is above the historical high and therefore shows the stock price is relatively expensive by the P/E Ratio test. However, a P/E Ratio of 6.79 is a low ratio which would point to the stock price as being relatively cheap.

I get a Graham Price of $1.72. The 10 year low, median, and high median Price/Graham Price Ratios are 1.08, 1.27 and 1.57. The current P/GP Ratio is 1.10 based on a stock price of $1.90. The current ratio is between the low and median 10 year ratio. 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 3.40. The current P/B Ratio is 4.03 based on a stock price of $1.90, Book Value of $25M and a Book Value per Share of $0.47. The current P/B Ratio is 19% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem with the book value is that is has been declining by 10.47% per year over the past 5 years.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.33. The current P/CF Ratio is 9.67 based on Cash Flow for the past 12 months of $10.6M, Cash Flow per Share of $0.20 and a stock price of $1.90. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. Cash Flow per Share has been declining by 25% per year over the past 5 years.

I cannot do any dividend yield testing because the dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 5.76. The current P/S Ratio is 2.70 based on Revenue estimate for 2021 of 38M, Revenue per Share of $0.70 and a stock price of $1.90. The current ratio is 53% 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 testing is showing this. The P/E Ratio is nominally a very low ratio showing the stock is cheap. Problem with the P/B Ratio test and the P/CF Ratio test is the decline in earnings and cash flow over the past 5 years.

Is it a good company at a reasonable price? The stock price would seem to be a reasonable one, if not a cheap one. The P/S Ratio testing is showing this. However, the company has not shown that it can make a profit. I know that Analysts expect the company to make a profit this year, but they have been expecting the company to be profitable since 2017 and it has yet to happen. However, in the first quarter of 2021 they did make a small profit which is much less than $0.01 per share. So, they basically broke even.

When I look at analysts’ recommendations, I find a Buy (1) recommendation. The consensus would therefore be a Buy. The 12 month stock price consensus is $2.40. This implies a total return of 26.32%, all from capital gains.

Analysts on Stock Chase lost interest in this stock in 2018. Ambrose O'Callaghan on Motley Fool commented on this stock in 2017. Executive Summary on Simply Wall Street gives this stock 2 stars out of 5 and list 2 risks. A writer on Simply Wall Street thinks that the company should have no debt. Travis Johnson, a blogger on Stock Gum Shoe reviews this stock.

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

The last stock I wrote about was about was Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more. The next stock I will write about will be TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more on Friday, July 23, 2021 around 5 pm. Tomorrow on my other blog I will write about Director Diversity.... learn more on Thursday, July 22, 2021 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, July 20, 2021

Dorel Industries Inc

Sound bite for Twitter and StockTwits is: Consumer Sector Stock. Stock price is probably cheap. Debt Ratio could do with improvement. Shareholders have not done well since 2017. They finally turned a profit in the first quarter of 2021. See my spreadsheet on Dorel Industries Inc.

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

When I was updating my spreadsheet, I noticed they had a loss in 2020 mainly due to an impairment loss on goodwill. Since 2016, Goodwill and Intangibles/Market Cap Ratio was over 1.00 and was 2.15 in 2019. The stock was up 155% in 2020 and is up some 5% to date this year.

There are currently no dividends being paid. They stopped the dividends because they could no longer afford them.

The Dividend Payout Ratios (DPR) were recently too high because of EPS losses. The DPR for EPS cannot be calculated as this company has had earnings losses for the last 3 years. The DPR for CFPS for 2020 is nil because there were no dividends paid in 2020. The 5 year coverage was 17%. The DPR for Free Cash Flow for 2020 was 0% because there were no dividends paid in 2020. The 5 year coverage was 39%.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio was 0.33 for 2020. The Liquidity Ratio for 2020 was 1.22 and this is low. The Debt Ratio was 1.41 and this is also low. I prefer these ratios be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 was 3.46 and 2.46. These are too high and I prefer them to be under 3.00 and under 2.00, respectively.

The Total Return per year is shown below for years of 5 to 28 to the end of 2020 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. The Dividend Growth column shows the average dividend growth. See chart below.

>
From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -33.03% -9.53% -13.78% 4.25%
2010 10 -4.07% -3.39% -8.03% 4.65%
2005 15 -1.70% 0.20% -4.02% 4.22%
2000 20 2.36% -1.20% 3.56%
1995 25 8.61% 4.69% 3.92%
1992 28 6.85% 3.63% 3.21%

The Total Return per year is shown below for years of 5 to 28 to the end of 2020 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. The Dividend Growth column shows the average dividend growth. See chart below.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -32.50% -16.25% -19.43% 3.19%
2010 10 -7.48% -6.20% -10.36% 4.15%
2005 15 -4.60% -0.29% -4.60% 4.30%
2000 20 3.72% -0.30% 4.02%
1995 25 9.30% 5.00% 4.30%
1990 30 8.45% 4.76% 3.69%

The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and so cannot be used. The corresponding 10 year ratios are 2.92, 3.67 and 4.43. The corresponding historical ratios are 8.63, 11.29 and 14.37. The current P/E Ratio is 8.80 based on a stock price of $15.73 and EPS estimate for 2021 of $1.79 ($1.42 US$). A P/E Ratio of 8.80 is a very low one. The 10 year ratios are very low because of earning losses. Compared to the historical P/E Ratio, the current ratio is between the low and median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.

I get a Graham Price of $28.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.69, 0.87 and 0.99. The current P/GP Ratio is 0.56 based on a stock price of $15.73. This is below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 0.77. The current P/B Ratio is 0.80 based on a Book Value of $506M, Book Value per Share of $15.58 and a stock price of $12.44. The current ratio is 5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$. You will get similar results with CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.94. The current P/CF Ratio is 2.89 based on Cash Flow for last 12 months of $128.5M, Cash Flow per Share of $3.96 and a stock price of $12.44. The current ratio is 55% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get similar results with CDN$.

The dividends have been suspended, so I cannot do any dividend yield testing.

The 10 year median Price/Sales (Revenue) Ratio is 0.33. The current P/S Ratio is 0.14 based on Revenue estimate for 2021 of $2,918M, Revenue per Share of $89.87 and a stock price of $12.44. The current ratio is 59% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$. You will get similar results with CDN$.

Results of stock price testing is that the stock price is probably cheap. The P/S Ratio test is saying that the stock price is cheap as is the P/GP Ratio test and the P/CF Ratio test. A P/E Ratio of 8.80 also points to a cheap price as any ratio below 10 does. The P/B Ratio test says it is reasonable, but book value has been going down the last 5 and 10 years because of earning losses.

Is it a good company at a reasonable price? I think the stock price is probably cheap. The Schwartz family no longer wants to take it private. The low analysts’ target price does not point to the company doing well in the short term. However, the company has finally turned a profit in the first quarter of 2021.

When I look at analysts’ recommendations, I find Hold (2) recommendations. The 12 month target price is $16.37 ($13.00 US$). This implies a total return of 4.07% all capital gains.

The last entry was in 2019 and it was a sell on Stock Chase. Nikhil Kumar on Motley Fool says this stock is a good buy. The executive summary on Simply Wall Street gives this company 4 stars out of 5 and list two risks. One advantage is that it has become profitable this year and this is true. A writer on Simply Wall Street is uncomfortable with the company’s debt level. A writer on Simply Wall Street talks about the ownership of this company.

Dorel Industries Inc is a Canadian company that sells juvenile products, bicycles, and furniture. Geographically, it derives a majority of revenue from the United States. Its web site is here Dorel Industries Inc.

The last stock I wrote about was about was Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more. The next stock I will write about will be Pulse Seismic Inc (TSX-PSD, OTC-PLSDF) ... learn more on Wednesday, July 21, 2021 around 5 pm. Tomorrow on my other blog I will write about U. S. Investing and Taxes.... learn more on Tuesday, July 20 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, July 16, 2021

Artis REIT

Sound bite for Twitter and StockTwits is: Dividend Paying REIT. Stock price seems reasonable and below the median. After two years of decreases in dividends, dividends were raised in 2021. Analysts do not expect further increases in 2022. Lots of insider buying with the company’s reorganization. They should improve the Liquidity Ratio. See my spreadsheet on Artis REIT.

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

When I was updating my spreadsheet, I noticed over the past year there was a lot of buying around the $11.00 price range. Insider buying was 1.4% of market cap. Usual insider buying and selling is 0.1% or 0.2% of market cap. The new CEO bought 18M shares worth currently around $213M. Both the new CFO and Chairman have also bought shares.

The dividend yields are good with dividend growth restarted. The dividend yield for the REIT is good (5% to 6% ranges) at 5.13%. The 5, 10 and historical median dividend yields are high (7% and over) at 8.21%, 7.49% and 7.49%. Over the past 15 years, dividends have gone up 3 times and down 2 times. Mostly they were flat. The increases were when dividends were starting to be paid and the decreases were recent, in 2018 and 2019. In 2021 dividends were increased by 11%. Analysts do not expect another increase in 2022.

The Dividend Payout Ratios (DPR) are fine as they are expected to improve in 2021. The DPR for EPS for 2020 is 2700% with 5 year coverage at 115%. The DPR for EPS is expected to be 43% in 2021. EPS was very low in 2020. The DPR for CFPS for 2020 was 41% with 5 year coverage at 59%. DPR for Free Cash Flow for 2020 was 46% with 5 year coverage at 61%.

Because this stock is a REIT, I also have DPRs for Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). The DPR for FFO for 2020 is 38% with 5 year coverage at 39%. The DPR for AFFO for 2020 is 53% with 5 year coverage at 51%.

Debt Ratios are fine, but it would be wise to improve the Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2020 is 0.78. The Liquidity Ratio for 2020 is just 0.20. You have to add back in the current portion of the long term debt and cash flow after dividends to get a value over 1.00, and in this case, it is 1.25. I like to see this ratio at 1.50 without adding the current long term loan back in. With the way we get the Liquidity Ratio, any slip up and the company could have problems paying current liabilities. The Debt Ratio is good at 1.92. The Leverage and Debt/Equity Ratios are 2.08 and 1.08 and are fine.

The Total Return per year is shown below for years of 5 to 16 to the end of 2020. 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.
2015 5 -12.94% 3.66% -3.59% 7.26%
2010 10 -6.70% 6.05% -2.12% 8.17%
2005 15 -2.13% 6.74% -1.56% 8.31%
2000 20 17.32% 3.50% 13.83%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.82, 15.28 and 17.74. The corresponding 10 year ratios are 10.23, 12.27 and 13.54. The corresponding historical ratios are 4.53, 5.00 and 5.48. The current P/E Ratio is 8.54 based on a stock price of $11.70 and EPS for the last 12 months of $1.37. The current P/E Ratio is below the low 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

Since this is a REIT, we should look at P/FFO also. The 5 year P/FFO Ratios are 7.08, 7.19 and 9.70. The 10 year P/FFO Ratios are 8.21, 9.28 and 11.04. The current P/FFO ratio is 8.48, based on a stock price of $11.70 and FFO estimate for 2021 of 1.38. The current ratio is between the low and median P/FFO Ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Since this is a REIT, we should look at P/AFFO also. The 5 year P/AFFO Ratios are 8.92, 10.48 and 13.40. The 10 year P/AFFO Ratios are 9.46, 11.33 and 13.34. The current P/FFO ratio is 11.47 based on a stock price of $11.70 and AFFO estimate for 2021 of $1.02. The current ratio is between the median and high P/FFO Ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $21.66. The 10 year low, median, and high median Price/Graham Price Ratios are 0.55, 0.65 and 0.74. The current P/GP Ratio is 0.54 based on a stock price of $11.70. The current ratio is below the low ratio of the 10 year median ratios. 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 0.86. The current P/B Ratio is 0.77 based on a stock price of $11.70, Book Value of $2,341M and Book Value per Share of $15.23. The current 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 a 10 year median Price/Cash Flow per Share Ratio of 8.98. The current P/CF Ratio is 8.30 based on Cash Flow for the last 12 months of $189.9M, Cash Flow per Share of $1.41 and a stock price of $11.70. The current ratio is 7.6% 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 7.49%. The current dividend yield is 5.13% based on a stock price of $11.70 and dividends of $0.60. The current yield is 32% 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 also of 7.49%. The current dividend yield is 5.13% based on a stock price of $11.70 and dividends of $0.60. The current yield is 32% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 3.71. The current P/S Ratio is 3.42 based on a stock price of $11.70, Revenue estimate for 2021 of $461M and Revenuer per Share of $3.42. The current ratio is 7.9% 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 reasonable and below the median. This is the test result of the P/S Ratio test and a number of other tests. The dividend yield tests are questionable because of the history of flat dividends and recent dividend declines.

Is it a good company at a reasonable price? The stock price is probably reasonable. The past history of dividends is not good. I like dividend growth stocks and this has not been one. However, the company has recently reorganized. The new CEO, CFO and Chairman have bought shares in the company, so this is a good indicator.

When I look at analysts’ recommendations, I find Buy (2), and Hold (6). The consensus would be a Hold. The 12 month stock price consensus is $12.25. This implies a total return of 9.83% with 4.70% from capital gains and 5.13% from dividends. Since this is a REIT, you would expect a large portion of the total return to be from dividends. Also note that since it is a REIT, the dividend can be taxed as different sorts of income and probably not as a dividend.

Analysts have mixed feelings about this company on Stock Chase. Chris MacDonald on Motley Fool thinks this stock is attractive at the present time. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and list one risk. The company announces its transformation plan on Newswire. This is one of three Canadian REITs to buy on Advice for Investors.

Artis Real Estate Investment Trust is an unincorporated closed-end REIT based in Canada. Artis REIT's portfolio comprises properties located in Central and Western Canada and select markets throughout the United States, including regions such as Alberta, British Columbia, Manitoba, Ontario, Saskatchewan, Arizona, Minnesota, Colorado, New York, and Wisconsin. The properties are divided into three categories: office, retail, and industrial. The industrial properties account for most of the portfolio, followed by the office properties and the retail properties. Its web site is here Artis REIT.

The last stock I wrote about was about was Obsidian Energy Ltd (TSX-OBE, OTC-OBELF) ... learn more. The next stock I will write about will be Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more on Monday, July 19, 2021 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, July 14, 2021

Obsidian Energy Ltd

Sound bite for Twitter and StockTwits is: Resource Sector Stock. The stock price would seem to be relatively cheap. However, this company is in the oil and gas industry and therefore is a risky investment. Analysts do not see much upside in the short term. Debt Ratios were awful in 2020 but have greatly improved in the first quarter of 2021. No dividend is paid currently. See my spreadsheet on Obsidian Energy Ltd.

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

When I was updating my spreadsheet, I noticed that this stock’s price is still some 97% off it high. However, it has increased this year by 420%.

This stock has not paid a dividend since 2015. As you can see from above this stock has gone through a number of changes over the years. It used to be an Income Trust company and therefore in the past has quite high yields. However, oil and gas companies have not done well for awhile and it is hard to know what the future holds in dividends for this company in the future. I am curious what will happen to this company, so I am still tracking it.

Debt Ratios are awful for 2020, but are greatly improved in the first quarter of 2021. The Long Term Debt/Market Cap for 2020 is far to high at 7.11. It improves greatly at present at 1.32 because of the increase in the stock price. The Asset/Current Liabilities Ratio for 2020 is too low in 2020 at 1.76 but is a lot better currently at 9.75. This is because the majority of their debt was classified in 2020 as short term and now is classified as long term.

The Liquidity Ratio for 2020 is just 0.11 and if you add in cash flow after dividends it is still just 0.25. If this not 1.00 at least it means that current assets cannot coverage current liabilities. The current Liquidity Ratio is much better at 0.66 with cash flow after liabilities it is 2.50. The Debt Ratio for 2020 is fine at 1.50.

The Total Return per year is shown below for years of 5 to 25 to the end of 2020. 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.
2015 5 -20.00% -36.14% -36.14% 0.00%
2010 10 -24.72% -36.20% -40.88% 4.68%
2005 15 -19.49% -12.79% -31.23% 19.41%
2000 20 -16.51% 4.25% -24.20% 44.02%
1995 25 -7.86% 8.79% -19.81% 29.05%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative. The corresponding 10 year ratios are also all negative. The corresponding historical ratios are 4.66, 9.39 and 9.81. The current P/E Ratio is 5.55 based on a stock price of $4.22 and EPS estimate for 2021 of $0.76. The current ratio is between the low and median historical P/E Ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. However, a P/E Ratio of 5.55 is a very low P/E Ratio.

I guessed at too many Graham Prices so I cannot do a valid Graham Price test on this stock.

I get a 10 year median Price/Book Value per Share Ratio of 0.40. The current P/B Ratio is 0.90 based on a stock price of $4.22, Book Value of $347M, and a Book Value per Share of $4.71. The current ratio is 126% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, the P/E Ratio of 0.90 is a very low one. Also, the BVPS has been declining by 36% per year over the past 5 years. This calls into question how valid this test is.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.27. The current P/CF Ratio is 1.67 based on a stock price of $4.22, Cash Flow per Share estimate for 2021 of $2.52 and Cash Flow of $185M. The current ratio is 73% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do any dividend yield test because this stock does not currently have a dividend.

The 10 year median Price/Sales (Revenue) Ratio is 1.06. The current P/S Ratio is 0.84 based on a stock price of $4.22 and Revenue estimate for 2021 of $370M. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. I think that there is only two valid tests of the P/B Ratio and the P/S Ratio and both these say that the stock is current relatively cheap.

Is it a good company at a reasonable price? First the stock price is reasonable if not cheap. This company is into oil and gas and therefore the stock price is always going to be volatile and any investment would be at risk.

When I look at analysts’ recommendations, I find Hold (1), and Underperform (1). The consensus would be Underperform. The 12 months stock price consensus is $3.63. This implies a total loss of 13.98% all from a capital loss.

Analysts on Stock Chase have not been interested in this company since 2019. You know a company is in trouble when analysts are no longer interested in it. The executive summary on Simply Wall Street gives this stock 2 stars out of 5 and list one risk. The company puts out information on its second quarter on Newsfile. The latest news on this company is on CBC where the company let their hostile takeover offer for Bonterra Energy to expire. John Zechner on BNN Bloomberg talks about Canadian Energy and value traps.

Obsidian Energy Ltd is an intermediate-sized oil and gas producer with strategic assets in Alberta. Its web site is here Obsidian Energy Ltd.

The last stock I wrote about was about was TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more. The next stock I will write about will be Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more on Friday, July 16, 2021 around 5 pm. Tomorrow on my other blog I will write about Maxar Technologies Ltd.... learn more on Thursday, July 15, 2021 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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