Monday, November 29, 2021

Stella-Jones Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. The stock price current seems relatively cheap. Because of good dividend increases you can make compounding work for you with this stock. The company has good Debt Ratios. See my spreadsheet on Stella-Jones Inc.

I do not own this stock of Stella-Jones Inc (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.

When I was updating my spreadsheet, I noticed that this company has done well for its shareholders over time. The recent past is not great, but a lot of companies are having trouble in the pandemic and lockdowns. However, I do like companies that actually do things or produce things. I think that this is a great stock to put in your TFSA or Trading Account for long term appreciation and increasing dividends for people building a portfolio. Let compounding work for you.

If the company increases the dividend at the same rate as they used per year over the past 5 years of 13.40%, then in 25 years’ time, the dividend yield on your original investment would be at 21.24%.

Div Yd Years At IRR Div Inc
3.22% 5 13.40% 87.50%
6.04% 10 13.40% 251.56%
11.33% 15 13.40% 559.18%
21.24% 20 13.40% 1135.96%
39.82% 25 13.40% 2217.43%

If the company increases the dividend at the same rate as they used this year of 20%, then in 25 years’ time, the dividend yield on your original investment would be at 163.93%.

Div Yd Years At IRR Div Inc
4.28% 5 20.00% 148.83%
10.64% 10 20.00% 519.17%
26.48% 15 20.00% 1440.70%
65.88% 20 20.00% 3733.76%
163.93% 25 20.00% 9439.62%

Another way to look at this information is to use past data, and look at dividend yield on original investments after 5 to 25 years. I am also looking at how much of the stock cost is covered by dividends after 5 to 20 years. In the chart below I show the numbers for this stock. For example, if you bought this stock 10 years ago at the median price, you would have a current yield on your original investment of 7.81% and 45% of your original cost would have.

Years Yield Cost Cov
5 1.60% 6.23%
10 7.81% 45.07%
15 15.48% 99.14%
20 132.41% 869.43%
25 171.94% 1133.13%

The dividend yields are low with dividend growth is currently moderate. The current dividend yield is low (below 2%) at 1.77%. The 5, 10 and historical dividend yields are also low at 1.07%, 1.00% and 1.17%. The dividend increases are currently moderate (8% to 14% ranges) at 13.40% per year over the past 5 years. The last dividend increase was for 20% and it occurred in 2021. This was after a lower than normal increase in 2020 of 7.14%. For 2020 this was rather normal as a lot of companies were cautious about dividend increases in 2020 due to the uncertainty of the pandemic and lockdowns.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 was 19% with 5 year coverage at 20%. The DPR for CFPS for 2020 was 10% with 5 year coverage at 11%. The DPR for Free Cash Flow for 2020 is 33% with 5 year coverage at 29%. The different sites do not agree on what the FCF is, but the variance is small.

Debt Ratios are all good. The Long Term Debt/Market Cap Ratio is good and low at 0.09. The Liquidity Ratio is quite high and good at 6.05. The Debt Ratio is high and good at 2.30. The Leverage and Debt/Equity Ratios are low and good at 1.77 and 0.77.

The Total Return per year is shown below for years of 5 to 26 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 13.40% -1.50% -2.49% 1.00%
2010 10 20.24% 20.48% 18.72% 1.76%
2005 15 23.60% 20.42% 18.78% 1.64%
2000 20 20.45% 26.92% 24.53% 2.38%
1995 25 21.23% 19.98% 1.25%
1994 26 16.65% 15.78% 0.87%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.83, 18.54 and 21.24. The corresponding 10 year ratios are 15.54, 18.17 and 21.44. The corresponding historical ratios are 9.05, 12.00 and 14.99. The current P/E Ratio is 11.79 based on a stock price of $40.67 and EPS estimate for 2021 of $3.45. The current P/E Ratio is lower than the 10 year median low ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $42.08. The 10 year low, median, and high median Price/Graham Price Ratios are 1.22, 1.50 and 1.77. The current P/GP Ratio is 0.97 based on a stock price of $40.67. The current ratio is below the 10 year median low ratio. This stock price testing suggests that the stock price is relatively cheap. It is also cheap on an absolute basis as any P/GP Ratio below 1.00 is signaling a cheap stock price.

I get a 10 year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 1.78 based on a Book Value of $1,471M, Book Value per Share of $22.81 and a stock price of $40.67. The current ratio is below the 10 year median ratio by 32%. 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 21.08. The current P/CF Ratio is 6.16 based on Cash Flow per Share estimate for 2021 of $6.60, Cash Flow of $426M and a stock price of $40.67. The current ratio is 71% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

An estimate for Cash Flow per Share of $6.60 seems to me to be rather high. The Cash Flow per Share estimate for 2022 seems more reasonable at $3.90. This CFPS gives a Cash Flow of $251 and based on a stock price of $40.67, gives a P/CF Ratio of 10.43. However, this ratio is still 51% above 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 1.17%. The current dividend yield is 1.77% based on dividends of $0.72 and a stock price of $40.67. 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 1.00%. The current dividend yield is 1.77% based on dividends of $0.72 and a stock price of $40.67. The current dividend yield is 77% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.55. The current P/S Ratio is 0.97 based on Revenue estimate for 2021 of $2,698M, Revenue per Share of $41.84 and a stock price of $40.67. The current ratio is 37% below the 10 year median ratio.

Results of stock price testing is that the stock price is relatively cheap. The Dividend Yield tests shows this and it is confirmed by the P/S Ratio test. All the tests are showing a relatively cheap current price and I see no problems with my testing.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. You can see from the following chart that the P/E Ratio and P/S Ratio are relatively low and the dividend yield is relatively high currently.

In the following chart the total return for the 10 years to December 31, 2020 is 20.48% per year. The beginning yield was at 1.14%, and the P/E Ratio and the P/S Ratio were at 14.73 and 0.83. Does this chart change my opinion of the stock price? No, it does not as the current ratios are relatively good for a good return.

# Years Total Ret Beg P/E Beg P/S Beg Yield
5 -1.50% 25.74 1.90 0.61%
10 20.48% 14.73 0.83 1.14%
15 20.42% 12.96 0.69 0.71%
20 26.92% 6.76 0.26
25 21.23% 9.07 0.32
26 16.65% 16.40 0.64
current 11.79 1.12 1.77%

Is it a good company at a reasonable price? I think that the stock price is reasonable, if no cheap. I also think this is a good company that has done well for their shareholders. I like that the Debt Ratios are very good also.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $52.06.

Analysts on Stock Chase think this stock is a good buy at present. Ambrose O'Callaghan on Motley Fool talks why it may not be too late to buy this stock. Jitendra Parashar on Motley Fool say these shares rise after upgrades from Scotiabank and TD. A writer on Simply Wall Street via Yahoo Finance talks about how strong the financials look for this company. The company talks about their third quarterly results via Yahoo Finance.

Stella-Jones Inc produces and sells lumber and wood products. The company sells products in five main customer categories. The firm organizes itself into two segments based on geography: the United States and Canada. The majority of revenue comes from the United States. Its web site is here Stella-Jones Inc.

The last stock I wrote about was about was First Capital Realty (TSX-FCR.UN, OTC- FCXXF) ... learn more. The next stock I will write about will be Wild Brain Ltd (TSX-WILD, OTC-WLDBF) ... learn more on Wednesday, December 01, 2021 around 5 pm. Tomorrow on my other blog I will write about Top Canadian Blogs.... learn more on Tuesday, November 30, 2021 around 5 pm.

Also, on my book blog I have put a review of the book Has the West Lost It by Kishore Mahbubani 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, November 26, 2021

First Capital REIT

Sound bite for Twitter and StockTwits is: Dividend Paying REIT. The stock price might be currently reasonable. Yield is low for a REIT. Generally, REITs have high yields and little growth. These REIT has a low yield and no growth. See my spreadsheet on First Capital REIT.

I do not own this stock of First Capital REIT (TSX-FCR.UN, OTC-FCXXF). Myowneradvistor.com asked me to look into this stock. In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.

When I was updating my spreadsheet, I noticed that low EPS for 2020 was due to decrease in value of investment properties, mostly. By the third quarter of 2021, the EPS was good due an increase in investment properties, mostly. EPS for 2020 was $0.01. For the third quarter of 2021, EPS was $1.95 compared to the third quarter of 2020, where EPS was as loss of $0.16.

The dividend yields are moderate with dividends declining. The current dividend yield is moderate (2% to 4%) at 2.33%. The 5, 10 and historical dividend yields are also moderate at 4.21%, 4.56% and 4.95%. This used to be a dividend growth stock, all be it with very low growth. The dividends were cut by 50% in 2021. Analyst do expect the dividends to be increased again starting in 2023.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 is 8598% with 5 year coverage at 59%. The DPR for EPS is expected to fall to 46% this year. The DPR for CFPS for 2020 is 49% with 5 year coverage at 48%. There is a big difference in what different site quote for the Free Cash Flow. You have to wonder about using the FCF to judge DPR.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 1.50 and 1.00 at present. It is high, but The Debt/ Assets Ratio is 0.47 is fine. The stock price fell in March 2020 and it has been slow to recover. The Liquidity Ratio in 2020 is low at 0.87 and adding in cash flow after dividends it is still low at 0.93. Current Liabilities/Asset Ratio is very low and good at just 0.06. The Debt Ratio is good at 1.74. The Leverage and Debt/Equity Ratios are fine at 2.36 and 1.36 respectively.

The Total Return per year is shown below for years of 5 to 26 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 0.00% -0.61% -5.88% 5.28%
2010 10 0.72% 4.76% -1.08% 5.84%
2005 15 0.92% 5.61% -0.39% 6.00%
2000 20 2.17% 15.13% 4.55% 10.58%
1995 25 2.45% 11.10% 2.94% 8.15%
1994 26 6.20% 12.23% 3.44% 8.80%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.17, 12.89 and 14.60. The corresponding 10 year ratios are 11.73, 13.40 and 15.06. The corresponding historical ratios are 16.38, 19.62 and 21.11. The current P/E Ratio is 8.80 based on a stock price of $18.57 and EPS estimate for 2021 of $2.11. This stock price testing suggests that the stock price is relatively cheap.

However, the EPS for 2021, is higher than for 2022 and 2023. The EPS drops 50% to 2022. The EPS estimate for 2021 is 1.08 and for 2023 is 1.14. Using the current stock price of $18.57, we end up with P/E Ratios for 17.19 and 19.29, respectively. Both these are above the 10 year high median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $23.10. The 10 year low, median, and high median Price/Graham Price Ratios are 0.87 and 0.95 and 1.03. The current P/GP Ratio is 0.80 based on a stock price of $18.57. The current ratio is below the low 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 1.14. The current P/B Ratio is 0.88 based on a Book Value of $4,609M, Book Value per Share 20.99. 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 17.45. The current ratio is 15.84 based on last 12 month’s cash flow of $259M, Cash Flow per Share of $1.17 and a stock price of $18.57. 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 an historical median dividend yield of 4.95%. The current dividend yield is 2.33% based on dividends of $0.432 and a stock price of $18.57. The current dividend yield is 53% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is that the dividends were recently cut by 50%.

I get an historical median dividend yield of 4.56%. The current dividend yield is 2.33% based on dividends of $0.432 and a stock price of $18.57. The current dividend yield is 49% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is that the dividends were recently cut by 50%.

The 10 year median Price/Sales (Revenue) Ratio is 6.26. The current P/S Ratio is 6.00 based on Revenue estimate for 2021 of $679M, Revenue per Share of $3.09 and a stock price of $18.57. The current ratio is 4% 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 when tested against the past 10 years. The P/S Ratio test says this as does the P/CF Ratio. The P/B Ratio test says that it is cheap. The Dividend Yield tests are not good because of a dividend cut. (But dividend cuts also signal problems.)

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the P/E Ratio is relatively low compared to the past, but the P/S Ratio is high compared to the past, while the Dividend Yield is lower than in the past.

In the following chart the total return for the 10 years to December 31, 2020 is 4.76% per year. The beginning yield was at 5.29%, and the P/E Ratio and the P/S Ratio were at 58.12 and 5.04. Does this chart change my opinion of the stock price? This chart maybe telling us that the stock price might be currently expensive. Good returns in the past had much lower P/E Ratios and much higher Dividend Yields.

# Years Total Ret Beg P/E Beg P/S Beg Yield
5 -0.61% 20.16 6.30 4.69%
10 4.76% 58.12 5.04 5.29%
15 5.61% 46.00 6.05 5.22%
20 15.13% -4.60 0.92 10.07%
25 11.10% 15.90 1.66 7.16%
26 12.23% 2.49 5.88%
current 8.80 6.00 2.52%

Is it a good company at a reasonable price? Generally, you buy REITs because of the good dividend yields and for diversification into Real Estate. At least I do. With a dividend yield of 2.33% on a REIT you are not getting the yield. REITs are also not known for good increases and that is one reason you look at yield. Personally, I am not much interested in this REIT at the present time.

Say the stock price does go to $21.36, it does not change the total return in the years from 5 to 26 in the chart above much except for the 5 year total return. If the stock price goes to $21.36, the 5 year total return would be around 4.42%. The 10 year total return would be 6.49%. The 15 year total return would be 5.81%. The 20, 25 would be slightly lower.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (2) and Hold (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $21.36. This implies a total return of 17.35% with 15.02% from capital gains and 2.33% from dividends based on a current stock price of 18.57.

The last three analysts’ recommendations on Stock Chase were Top Pick, Hold and Do Not Buy. Daniel Da Costa on Motley Fool says it has recovered well from the pandemic and today offers investors some significant value. Amy Legate-Wolfe on Motley Fool thinks this is a good stock for a passive income portfolio. A Simply Wall Street article on Yahoo Finance looks at who owns shares in this company. The company talks about their third quarterly results on Newswire.

Note: I will no longer have links to Simply Wall Street as they have monetized their site. It does not help if I can get access to it. My readers would not be able to so it is now useless for my purposes.

First Capital REIT is a developer, owner, and operator of mixed-use urban real estate in Canada's populated centres. The company's focus is on creating thriving neighbourhoods that create value for businesses, residents, communities, and investors. Its web site is here First Capital REIT.

The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more. The next stock I will write about will be Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more on Monday, November 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.

Wednesday, November 24, 2021

FirstService Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. The stock price seems to be currently on the expensive side. The dividend yields are so low, you wonder about calling this a dividend stock. A number of ratios seem very high like the P/B Ratio of 12.07 when a P/B Ratio of 1.50 is lower is considered a good ratio. Even with very high 10 year median ratios, the current ratios are still a lot higher and fails all tests. See my spreadsheet on FirstService Corp.

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSV). I bought FirstService Corp in 2002 as it a good solid company that knows how to make money. At that time, I was still buying companies to earn capital gains. Their initial way of paying dividends by issuing preferred shares was interesting. However, only if you held shares at the time of the special dividend of preferred shares would you get any dividends. Preferred shares are not by favorite why of getting dividends. I held it for just over 8 years and made just over 3% per year, which is a very low return.

When I was updating my spreadsheet, I noticed that the company had a good year. Their Revenue is up 17%, with 5 year growth at 13% per year. Last year there was a loss due to special charge, but this year EPS was up by 12% over 2018 and 5 year growth is at 28% per year. Cash Flow was up in 2020 by 170% and 5 year growth is 23% per year. This is all in US$ which is their reporting currency. The Stock Price in CDN$ was up from last year or year to date by 69% with 5 year growth at 21% per year and 5 year total return at 22% per year.

The dividend yields are low with dividend growth moderate. The current dividend yield is low (below 2% at 0.36%. The 5 and 7 year median dividend yields are also low at 0.69% and 0.80%. The highest dividend yield was in 2003 and it was at 2.03%. The dividend increases are moderate (8% to 14% ranges) with the 5 year dividend increases at 10% per year.

Is this really a dividend stock? Dividend yield is very low. If the company increases the dividend at the same rate as they used per year over the past 10 years of 10.03%, then in 25 years’ time, the dividend yield on your original investment would be at 4.06%. A long time to wait for a decent yield?

Div Yd Years At IRR Div Inc
0.60% 5 10.03% 61.25%
0.97% 10 10.03% 160.02%
1.56% 15 10.03% 319.28%
2.52% 20 10.03% 576.08%
4.06% 25 10.03% 990.18%
6.55% 30 10.03% 1657.92%

The Dividend Payout Ratios (DPR) are currently fine. The DPR for EPS for 2020 is 32%. I cannot calculate the 5 year coverage because of EPS losses. The DPR for CFPS for 2020 is 14% with 5 year coverage at 15%. The DPR for Free Cash Flow for 2020 is 9% with 5 year coverage at 18%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is good and very low at 0.09. The Liquidity Ratio is good at 1.51. The Debt Ratio is good at 1.64. The Leverage and Debt/Equity Ratios are fine at 2.57 and 1.57.

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 8.19% 22.28% 21.37% 0.91%
2010 10 8.63% 26.62% 25.47% 1.15%
2005 15 17.12% 16.61% 0.51%
2000 20 17.42% 17.03% 0.39%
1995 25 21.89% 21.52% 0.38%

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 10.03% 28.42% 27.60% 0.82%
2010 10 7.06% 25.20% 24.49% 0.70%
2005 15 17.67% 17.32% 0.35%
2000 20 19.61% 19.33% 0.28%
1995 25 22.95% 22.69% 0.26%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 32.98, 42.62 and 50.41. The corresponding 10 year ratios are 31.11, 39.56 and 46.76. The corresponding historical ratios are 13.99, 18.67 and 23.23. The current P/E Ratio is 68.80 based on a stock price $253.90 and EPS estimate for 2021 of $3.69 ($2.92 US$). The current P/E Ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a Graham Price of $41.74. The 10 year low, median, and high median Price/Graham Price Ratios are 3.16, 4.04 and 5.09. The current P/GP Ratio is 6.08 based on a stock price of $253.90. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 8.18. The current P/B Ratio is 12.09 based on a stock price of $200.64, Book Value of $724M and Book Value per Share of $16.60. The current ratio is 48% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 13.80. The current P/CF Ratio is 34.47 based on Cash Flow per Share estimate for 2021 of $5.82, Cash Flow of $254M and a stock price of $200.64. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.

I get a 7 year and historical median dividend yield of 0.90%. The current dividend yield is 0.36% based on dividends of $0.73 and a stock price of $200.64. The current dividend yield is 60% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.98. The current P/S Ratio is 2.70 based on Revenue estimate for 2021 of $3,234M, Revenue per Share of $74.20 and a stock price of $200.64. The current ratio is 175% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is relatively expensive. All the testing shows this. The dividend yield over the short period of dividends shows this and it is confirmed by the P/S Ratio test. The P/S Ratio test is probably the most important one, but there were no problems in the other tests except for the ratio being high.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below it would seem that the P/S Ratio is most important and the current one is high relative to past ones. The P/E Ratio are very high and have been very high lately. They have not paid dividends for long.

In the following chart the total return for the 10 years to December 31, 2020 is 28.67% per year. There is no yield as dividend have only been paid for 7 years. The P/E Ratio and the P/S Ratio were at 274.00 and 0.46. Does this chart change my opinion of the stock price? No, stock price still looks relatively expensive.

# Years Total Ret Beg P/E Beg P/S Beg Yield
5 26.39% 68.42 1.15 0.91%
10 28.67% 274.00 0.46
15 18.39% 11.23 0.69
20 18.37% 17.85 0.51
25 22.67% 10.35 0.28
current 68.80 2.70 0.36%

Is it a good company at a reasonable price? This company has done very well for its shareholders lately. I did not do well with this stock which I held for over 8 years from 2002 to 2010 making just over 3% per year. Now 10 years after I got rid of it, it is doing well. I think at present the stock price is on the expensive side.

When I look at analysts’ recommendations, I find Strong Buy (1), Hold (5). The consensus would be a Hold. The 12 month consensus stock price is $199.06. This implies a loss of 21.24 with a capital loss of $21.60 and dividends of 0.36%.

Analysts on Stock Chase think this company is a buy. Adam Othman on Motley Fool thinks that investing in growth stocks like this one is the way to go with your TFSA. Adam Othman on Motley Fool says some companies that are Dividend Aristocrats, you do not buy for Dividends. The executive summary on Simply Wall Street gives this stock 3 stars out of 5 and lists two risks of Has a high level of debt and Significant insider selling over the past 3 months. There is a Zack report of this company’s third quarterly earnings on Yahoo Finance.

FirstService Corp operates in two business divisions: FirstService Residential and FirstService Brands. The company earns the majority of its revenue in the United States, with the remaining revenue generated in Canada. Its web site is here FirstService Corp.

The last stock I wrote about was about was Northland Power Inc (TSX-NPI, OTC-NPIFF) ... learn more. The next stock I will write about will be First Capital REIT (TSX-FCR.UN, OTC- FCXXF) ... learn more on Friday, November 26, 2021 around 5 pm. Tomorrow on my other blog I will write about My Investing Adventure.... learn more on Thursday, November 25, 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, November 22, 2021

Northland Power Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Utility. The stock price seems high to me. All the ratios are higher than what you would expect, especially for a utility stock. Analysts suggest that they may raise dividends again in the near future. Debt Ratios are need improving. See my spreadsheet on Northland Power Inc.

I do not own this stock of Northland Power Inc (TSX-NPI, OTC-NPIFF). This company is into generating electric power. I have a lot invested in pipelines and I would like to have more invested in electric power as part of my utility’s investments. I read a report on this stock that said it was a good defensive stock to buy. That is, it is a good stock to hold in a stock market correction. I can certainly see the logic of using utility stocks as defensive stocks.

When I was updating my spreadsheet, I noticed that EPS is expected to be much lower in 2021. That is because the company has taken an impairment charge. The EPS in the past has been quite volatile. Also, Revenue is lower, but expenses are up in the first 9 months of 2021.

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% range) at 3.06%. The 5 year median dividend yield is also moderate at 4.80%. The 10 year median dividend yield is good (5% and 6% ranges) at 5.62%. The historical median dividend yield is high (at or above 7% range) at 7.60%. This used to be an income trust company and it changed to a corporation in 2009. The historical median dividend yield since 2009 is good at 6.18%. Income Trust companies had much higher dividends than corporations and also much higher dividend yields.

The dividend growth over the past 5 years is low (under 8%) at just 2.13% per year. However, there was just one dividend increase in the past 5 years and that was in 2008 and it was for 11.1%. Companies have a hard time increasing dividends when they go from Income Trusts to Corporations. This company only had 8 increases in the past 23 years and they decreased the dividends twice. Analysts expect perhaps a small dividend increase in 2023.

The Dividend Payout Ratios (DPR) are improving. The DPR for EPS for 2020 is 69% with 5 year coverage at 90%. They are making an effort to get their DPR for EPS under control, but it is still quite high. The DPR for CFPS for 2020 is 18% with 5 year coverage at 20%. This is a good rate. The DPR for Free Cash Flow for 2020 is 20% with 5 year coverage at 62%. However, none of the sites I looked at agree on what the FCF is and the disagreement on this figure is big.

Debt Ratios are need improving. The Long Term Debt/Market Cap Ratio for 2020 is 0.76. This is the first time it is below 1.00 since I started to look at it 6 years ago. The ratio for the third quarter is higher at 0.83. The Liquidity Ratio for 2020 is low at 1.02. If you had in cash flow after dividends it is 2.03 and this is fine. The Debt Ratio is low at 1.21. I prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 are 5.69 and 4.69. I prefer these to be under 3.00 and under 2.00, respectively.

The Total Return per year is shown below for years of 5 to 23 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 2.13% 24.05% 19.60% 4.45%
2010 10 1.06% 16.01% 11.30% 4.71%
2005 15 1.04% 12.60% 7.75% 4.86%
2000 20 1.12% 15.73% 8.55% 7.18%
1997 23 3.06% 13.11% 6.83% 6.28%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.68, 19.14 and 26.46. The corresponding 10 year ratios are 12.45, 15.26 and 14.14. The corresponding historical ratios are 13.13, 15.65 and 17.89. The current P/E Ratio is 47.28 based on a stock price of $39.24 and EPS estimate for 2021 of $0.83. This stock price testing suggests that the stock price is relatively expensive. Note that the P/E Ratios look sort of normal, but they are they way because there was a lot of negative P/E Ratios.

The EPS estimate for 2021 is a drop in EPS from 2020 of 53%. There is this drop because of an impairment charge in 2021. The EPS estimate for 2022 is more reasonable at $1.52. With a stock price of $39.24, it produces a P/E Ratio for 2022 of 25.82. However, this is above the high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. The P/E Ratio for 2023 is not of any help as it is also high at 24.68.

I get a Graham Price of $14.26. The 10 year low, median, and high median Price/Graham Price Ratios are 1.93, 2.20 and 2.69. The P/GP Ratio for 2021 is 2.75 based on a stock price of $39.24. This P/GP Ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

The P/GP Ratio is affected by the EPS. The Graham Price for 2022 is higher at 19.30. The P/GP Ratio for 2022 is 2.03. This is between the low and median 10 year median P/GP Ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. However, the P/GP Ratios for this stock are quite high. You normally expect 10 year median P/GP Ratios to be 90, 1.00, 1.15 or something like that. Basically, it is recommended that you do not buy stocks with P/GP Ratios about 1.15 or 1.20 and a stock with a ratio below 1.00 is considered cheap.

I get a 10 year median Price/Book Value per Share Ratio of 5.01. The current P/B Ratio is 3.60 based on a Book Value of $2,202M, Book Value per Share of $10.89 and a stock price of $39.24. The current ratio is 28% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. However, the current ratio is high at 3.60 and the 10 year median ratio is very high at 5.01. A good P/B Ratio is around 1.50.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.01. The current P/CF Ratio is 7.80 based on Cash Flow per Share estimate for 2021 of $5.03 and a stock price of $39.24. The current ratio is 30% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 7.60%. The current dividend yield is 3.06% based on a stock price of $39.24 and dividends of $1.20. The current yield is 60% 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 5.62%. The current dividend yield is 3.06% based on a stock price of $39.24 and dividends of $1.20. The current yield is 46% below the 10 year dividend yield. This stock price testing suggests that the stock price is relatively expensive. These dividend yield tests do not work that well on stocks that used to be Income Trusts. That is because Income Trusts could have much higher dividends (and therefore much high dividend yields) than corporations.

The 10 year median Price/Sales (Revenue) Ratio is 3.30. The current P/S Ratio is 3.93 based on Revenue estimate for 2021 of $2,019, Revenue per Share of $9.99 and a stock price of $39.24. The current ratio is 19% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. It is very close to expensive.

Results of stock price testing is that the stock price is that the stock price is probably expensive. The P/S Ratio test shows that it is very close to expensive as expensive would be a current ratio 20% above the 10 year median ratio and it tested at 19%. Most, but not all testing is showing the stock price as relatively expensive. The ratios on this stock are above normal. Look at the 10 year median P/B Ratio at 5.01 when a more normal P/B Ratio would be 1.50.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the beginning P/S Ratios for good returns are higher than today. The P/E Ratios are mixed and the Dividend Yields are higher in the past.

In the following chart the total return for the 10 years to December 31, 2020 is 16.01% per year. The beginning yield was at 6.90%, and the P/E Ratio and the P/S Ratio were at 313.20 and 5.26. Does this chart change my opinion of the stock price? The P/S Ratio test looks the best and it does show that a relatively low current P/S Ratio. So, stock might be reasonable.

# Years Total Ret Beg P/E Beg P/S Beg Yield
5 24.05% -266.57 4.37 5.79%
10 16.01% 313.20 5.26 6.90%
15 12.60% 17.14 5.75 6.89%
20 15.73% 14.27 4.43 10.85%
23 13.11% 43.48 7.97 6.00%
current 47.28 3.93 3.06%

Is it a good company at a reasonable price? I think that the stock price is rather expensive. Also, for a utility, this company has unusually high ratios. However, I must admit that shareholders have done very well in capital gains on this stock. Investors seem to be betting that the future for this company is very bright.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (5) and Hold (3). The consensus is a Strong Buy. The 12 month stock price consensus is $48.55. This implies a total return of 26.78% with 23.73% from capital gains and 3.06% from dividends.

Analysts on Stock Chase think that this company is a buy. Chris MacDonald on Motley Fool likes the company for its green assets. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list 4 risks. A writer on Simply Wall Street says the ROE for this company is at its industry normal level. A writer on Simply Wall Street thinks the company can handle its debt because of it FCF. The company reports on its third quarterly results on Globe Newswire.

Northland Power Inc is a Toronto-based renewable energy company that develops, builds, owns, and operates the infrastructure for sustainable power production. Its offshore wind operations are located in Germany and the Netherlands, while the efficient natural gas and other onshore renewable operations are located predominantly in Ontario, Canada. The company plans to expand operation in the Baltics and North America with the acquisitions of offshore wind projects located in the Baltic Sea and offshore New York state, respectively. Its web site is here Northland Power Inc.

The last stock I wrote about was about was Chesswood Group Ltd (TSX-CHW, OTC-CHWWF) ... learn more. The next stock I will write about will be FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more on Wednesday, November 24, 2021 around 5 pm. Tomorrow on my other blog I will write about Rule of 30 .... learn more on Tuesday, November 23, 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, November 19, 2021

Chesswood Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price seems expensive currently. Dividends after a cut, have started to grow again. Dividend yield will be much lower going forward so the difference would have to be made in capital gains. This company might do that, but it is a risky stock. See my spreadsheet on Chesswood Group Ltd.

I do not own this stock of Chesswood Group Ltd (TSX-CHW, OTC-CHWWF). A reader wrote me in 2012 that he was researching and found a company that he hoped I could give him a brief outlook on. He said that the company is Chesswood Group and they are basically a financial leasing company. From 2009 to 2012 they increased their dividends from 2.5 cents to 5.5 cents per month. This is a 120% increase.

When I was updating my spreadsheet, I noticed that they had an earnings loss due to restructuring and goodwill and intangible asset impairment charges. They are expected to do much better going forward. The last three years of EPS were $1.37, $0.71, and -$0.48. The next three years are expected to be $1.54, $1.61, and $2.00.

The dividend yields are moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 2.54%. The 5, 10 and historical dividend yields are high (7% and above) at 7.52%, 7.35% and 8.02%. This used to be an income trust and this explains the very high dividend yields of the past. They just recently cut the dividend by some 60% in 2020. The last increase was in 2021 and it was for 50%. Dividends are paid monthly.

The Dividend Payout Ratios (DPR) are fine and improving. The DPR for EPS for 2020 can not be calculated because of an earnings loss. The 5 year coverage was 85%. The DPR for EPS is expected to be 20% with 5 year coverage at 70%. The DPR for CFPS for 2020 was 6% with 5 year coverage at 13%. The DPR for 2020 for Free Cash Flow was 8% but 5 year coverage cannot be calculated due to negative cash flows. Different sites disagree about the FCF, but not by much.

Debt Ratios are fine. Because this is in the Finance sector, we need to look at how debt is covered by assets. The Long Term Debt/Asset ratio is 0.86 and this is fine. The Current Liabilities/Asset Ratio is very good and low at 0.02. Debt/Cash Flow Ratio is a little high at 7.24. The Liquidity Ratio is good at 2.75, but it is not an important one for Financials. The Debt Ratio is fine at 1.21 for a financial.

The Total Return per year is shown below for years of 5 to 14 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.

Note that in the future, the percentage of dividends for total return will be much lower. The current rate is moderate at 2.54%. My guess is that it will now stay in the moderate range of 2% to 4%.

From Years Div. Gth Tot Ret Cap Gain Div.
2015 5 -15.55% 7.12% -1.75% 8.87%
2010 10 -2.91% 14.49% 3.92% 10.57%
2006 14 -6.36% 10.52% 1.59% 8.92%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.53, 7.85 and 9.37. The corresponding 10 year ratios are 8.15, 9.72 and 11.65. The corresponding historical ratios are 7.43, 9.36 and 11.29. The current P/E Ratio is 9.22 based on a stock price of $14.20 and EPS estimate for 2021 of $1.54. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $18.60. The 10 year low, median, and high median Price/Graham Price Ratios are 0.67, 0.79 and 0.92. The current P/GP Ratio is 0.76 based on a stock price of $14.20. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.32. The current P/B Ratio is 1.42 based on a Book Value of $165M, Book Value per Share of $9.99 and a stock price of $14.20. The current ratio is 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. A risk is that the Book Value per Share is going down. That is why the current ratio is higher than the median.

I cannot do any Price/Cash Flow Ratio testing because the 10 year median ratio is negative and the current P/CF Ratio is negative. This is not unusual for financials however.

I get an historical median dividend yield of 8.02. The current dividend yield is 2.54% based on dividends of $0.36 and a stock price of $14.20. The current dividend yield is 68% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. Using the historical dividend yield since 2009 and change to a corporation does not help as that Dividend Yield is 7.68% and 67% below the historical dividend yield.

I get an historical median dividend yield of 7.35. The current dividend yield is 2.54% based on dividends of $0.36 and a stock price of $14.20. The current dividend yield is 66% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is the declining dividends, but since it is no longer an income trust, but a now a corporation, the dividends will probably stay low.

The 10 year median Price/Sales (Revenue) Ratio is 1.44. The current P/S Ratio is 1.73 based on Revenue estimate for 2021 of $136M, Revenue per Share of $8.19 and a stock price of $14.20. The current ratio is 21% 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 relatively expensive. This is what the P/S Ratio testing shows. I also wonder about the Revenue estimate of $136M because the 12 months to the end of the third quarter only get to a Revenue of $106. Even if the fourth quarter is a good and the third quarter, the Revenue only gets to $114M. The Dividend Yield test are not good as dividends are declining. The P/E Ratio and P/GP Ratio testing does say that the stock price is reasonable.

Is it a good company at a reasonable price? I think that the stock price is on the high side, or in other words, expensive. This company has not made much in capital gains lately. Going forward, the dividend yields are going to be much lower in the past because it is now a corporation. If shareholders are to have a reasonable return, higher capital gains would be required. This is a small company and therefore risky.

The stock price did go up well year to date with an 56% gain. However, the 5, 10 and 15 year capital gains to date only gives capital gains of 3.51%, 8.47% and 4.54%. It would seem to me that only the 10 year capital gains to date is good, the others are rather low. I expect total return from my investments of a minimum of 8%. This stock could possible do that, but it is a small cap and therefore risky.

When I look at analysts’ recommendations, I find Buy (2) and Hold (1). The consensus would be a Buy. The 12 months stock price is 18.00. this implies a total return of 29.30% with 26.76% from capital gains and 2.54% from dividends based on a stock price of $14.20.

Last year when I look at analysts’ recommendations, I found a Buy (1) recommendation. The consensus would be a Buy. The 12 month stock price was $8.25. This implied a total loss of 0.12% with a capital loss of 2.94% and dividends of 2.82% based on a current stock price of $8.50. What happened was a total return of $69.88% with 67.06% from capital gains and 2.82% from dividends as current price is $14.20.

Last year I thought that the stock price seemed reasonable. Until 2020, this company was making money for its shareholders. It is a small cap. It is also rather risky. The stock price is down just 17% in 2020. This is not bad considering how other companies have fared.

The last entries were in 2019 so analysts on Stock Chase are not interested in this company at the moment. Nikhil Kumar on Motley Fool thinks Chesswood is well positioned to benefit from a boom in equipment financing opportunities. Jason Hoang on Motley Fool thinks you should buy this stock well it is cheap. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list 3 risks: of debt is not well covered by operating cash flow; high level of non-cash earnings; and unstable dividend track record. Newsfile Corp on Yahoo Finance talks about Chesswood Group Limited to Acquire Rifco Inc. A writer on Simply Wall Street says that even though the stock has dropped recently, shareholders have done well over the past year.

Chesswood Group Ltd is a Canada-based company focused on commercial equipment finance for small and medium-sized businesses. The company's operations consist of Equipment Financing- US; and Equipment Financing-Canada. Its web site is here Chesswood Group Ltd.

The last stock I wrote about was about was Quarterhill Inc (TSX-QTRH, OTC-QTRHF) ... learn more. The next stock I will write about will be Northland Power Inc (TSX-NPI, OTC-NPIFF) ... learn more on Monday, November 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.

Wednesday, November 17, 2021

Quarterhill Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Tech. The stock price seems reasonable, but based only the P/S Ratio test. Revenue, EPS, Book Value and Cash Flow is dropping and Dividends are declining and then flat. Debt Ratios are fine, but deteriorated a lot in the third quarter with higher debt and less cash. See my spreadsheet on Quarterhill Inc.

I do not own this stock of Quarterhill Inc (TSX-QTRH, OTC-QTRHF). I am still following stock because I once owned it. I held it from 2000 to 2006 and basically lost all my investment. It was called Wi-Lan (TSX-WIN, NASDAQ-WILN) at that time.

When I was updating my spreadsheet, I noticed that they have changed their accounting currency back to CDN$ from US$. I get very different values from their currently reported in CDN$ for 2019. For example, I get $190.56M for Revenue in CDN$ for 2019 and they get $172.925M. I noticed that my Revenue in CDN$ dropped some 24% between 2019 and 2020. If I translate the current Revenue into US$, I get in US$ a drop in Revenue between 2019 and 2020 of 23%. I am not changing my spreadsheet to what they now report in CDN$.

The dividend yields are low with dividend growth stopped. The current dividend yield is low (under 2%) at 1.92. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.78%, 3.00% and 2.59%. The dividends were decreased in 2017 and they have been flat ever since. Analysts do not seem to expect any change in this in the near future.

The Dividend Payout Ratios (DPR) are probably fine. The DPR for EPS for 2020 is 31%. I cannot calculate the 5 year coverage because of earning losses. In 2021 the company is expecting an earnings loss, so both the DPR for EPS and the 5 year coverage cannot be calculated. For 2022, the DPR for EPS is expected to be 83%. The DPR for CFPS for 2020 is 21% with 5 year coverage at 24%. The DPR for Free Cash Flow for 2020 is 17% with 5 year coverage at 19%.

Debt Ratios are fine, but deteriorated a lot in the third quarter with higher debt and less cash. Recently, the Long Term Debt/Market Cap Ratio has been almost 0.00%. However, they took on debt in 2021 and the ratio jumped to 0.20. This is still a low ratio, but the jump is big. The Liquidity Ratio for 2020 is 7.03. However, it is a lot lower, but still good in the third quarter at 2.14. The Cash went down and the debt went up.

The Debt Ratio for 2020 is 9.53. The Debt Ratio for the third quarter is a lot lower at 3.07, but still a good ratio. Debt went up. For these last two ratios I like them to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 are 1.12 and 0.12. They went up somewhat for the third quarter to 1.48 and 0.48. They are still good ratios was ratios below 2.00 and 1.00 are considered good.

The Total Return per year is shown below for years of 5 to 22 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 -24.77% 10.95% 6.71% 4.23%
2010 10 0.51% -6.15% -8.76% 2.60%
2005 15 6.50% 12.91% 7.89% 5.03%
2000 20 -10.52% -11.57% 1.06%
1998 22 4.73% 2.46% 2.27%

The Total Return per year is shown below for years of 5 to 19 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 -23.50% 13.28% 8.88% 4.40%
2010 10 -1.91% -8.59% -10.93% 2.34%
2005 15 4.66% 13.66% 8.08% 5.58%
2001 19 0.99% -1.28% 2.27%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.00, 12.94 and 17.19. The corresponding 10 year ratios are 10.56, 16.11 and 20.65. The corresponding historical ratios are 3.67, 8.45 and 11.82. The current P/E Ratio is negative so unusable. The P/E Ratio for 2022 is 43.50 based on EPS estimate for 2022 of $0.06 and a stock price of $2.61. The ratio for 2022 is above the high of the 10 year P/E Ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$

I get a Graham Price of $1.73. The 10 year low, median, and high median Price/Graham Price Ratios are 0.56, 0.98 and 1.39. The current P/GP Ratio is 1.51 based on a stock price of $2.61. The current ratio is above the 10 year high P/GP Ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$

I get a 10 year median Price/Book Value per Share Ratio of 0.95. The current P/B Ratio is 1.18 based on a stock price of $2.61, Book Value of $252M, and Book Value per Share of $2.22. The current ratio is 24% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem with this testing is the decline the book value. However, a declining book value is a risk. This testing is in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 10.99. The current P/CF Ratio is 20.58 based on a stock price of $2.61, Cash Flow for the last 12 months of $18M and Cash Flow per Share of $0.13. The current ratio is 87% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get an historical median dividend yield of 2.59%. The current dividend yield is 1.92% based on dividends of $0.05, and a stock price of $2.61. The current dividend yield is 26% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$. This test does not work well with declining and flat dividends. However, declining, and flat dividends are also a risk.

I get a 10 year median dividend yield of 3.00%. The current dividend yield is 1.92% based on dividends of $0.05, and a stock price of $2.61. The current dividend yield is 36% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$. This test does not work well with declining and flat dividends. However, declining, and flat dividends are also a risk.

The 10 year median Price/Sales (Revenue) Ratio is 2.36. The current P/S Ratio is 2.22 based on Revenue estimate for 2021 of $134M, Revenue per Share of $1.18 and a stock price of $2.61. The current ratio is 6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$

Results of stock price testing is that the stock price is probably reasonable and below the median and shown by the P/S Ratio test which is the only good test. However, all the other test point to risk in buying this stock. It is probably not the best stock to buy when Revenue, EPS, Book Value and Cash Flow is dropping and Dividends are declining and then flat.

Is it a good company at a reasonable price? The stock price would seem to be reasonable with the P/S Ratio test. I am not interested in buying a company when Revenue, EPS, Book Value and Cash Flow is dropping and Dividends are declining and then flat.

When I look at analysts’ recommendations, I find Strong Buy (3), and Buy (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $3.63. This implies a total return of 78.13% with 76.21% from capital gains and 1.92% from dividends.

Last year when I look at analysts’ recommendations, I found Strong Buy (3), Buy (1) and Hold (1). The consensus was a Buy. The 12 months stock price was $3.02 ($2.35 US$). This implied a total return of 15.62% with 13.77% from capital gains and 1.85% from dividends based on a stock price of $2.70. What happened was a loss of 1.48%, with a capital loss of 3.33% and dividends of 1.85%.

Last year I said that the current stock price of $2.70 was reasonable. I said that this company had reinvented itself a number of times. Analysts at that time expected that this company will not do as well over the next couple of years as it did in 2019. Certainly, the dividend has been cut and the stock price is down over the past 5 years and 10 years. So, this would be a risky investment.

There is nothing recent on Stock Chase but last year analysts liked the company. However, the results in 2020 were not a good as expected in the end. Christopher Liew on Motley Fool says this stock is a strong buy for good potential returns. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and lists one risk. A writer on Simply Wall Street valued this stock at 2.89 in October 2019. The company announces on Cision their third quarterly results.

Quarterhill Inc is focused on the acquisition, management, and growth of companies in the intelligent transportation systems (ITS) and innovation and licensing industries. Its geographical segments are the United States, Canada, Chile, China, Korea, Singapore, Taiwan, Thailand, Ukraine, and the Rest of the world. Its web site is here Quarterhill Inc.

The last stock I wrote about was about was Finning International Inc (TSX-FTT, OTC-FINGF) ... learn more. The next stock I will write about will be Chesswood Group Ltd (TSX-CHW, OTC-CHWWF) ... learn more on Friday, November 19, 2021 around 5 pm. Tomorrow on my other blog I will write about Blue Chips for November 2021.... learn more on Thursday, November 18, 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.