Wednesday, May 18, 2022

Hammond Power Solutions Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is probably expensive. Debt Ratios are good and this is a positive. The Dividend Payout Ratios (DPR) are currently good. See my spreadsheet on Hammond Power Solutions Inc.

Is it a good company at a reasonable price? The current price is probably relatively expensive. The company seems to be doing much better than it has in the past, but it has not yet passed the stock price it had in 2008. It has done well over the past two years, but it has done better for a couple of years before in the past and then not much for a while. However, I have no current plans to sell my shares.

I own this stock of Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF). I bought this stock as my main purchase for the TFSA in 2013 and 2014. I picked Hammond initially in 2013 as my main buy because it has good growth and reasonable dividend. Also, I think that it important to try out newer smaller companies for investment purposes. Companies on the TSX are always changing and it is good to get into new industries and new companies. The problem of this, of course, is you do not always know what industries and companies will be long lasting.

When I was updating my spreadsheet, I noticed I done mediocre on this stock. After 9 years, my total return is 7.86% per year with 5.13% from capital gains and $2.73% from dividends. I obvious did not buy it at a good time. If you look at the return over time, people who bought this stock 10 to 15 years ago, have not done well.

I note that analysts expected Sales to increase by 3%, but they instead increased by 18%. Analysts also expected the EPS to drop 25%, but EPS increased by 7%.

If you had invested in this company in December 2011, $1000.00 you would have bought 125 shares at $8.00 per share. In December 2021, after 10 years you would have received $330.00 in dividends. The stock would be worth $1,498.75. Your total return would have been $1,282.75.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$8.00 $1,000.00 125 10 $330.00 $1,498.75 $1,828.75

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 2.68%. The 5, 10 and historical dividend yields are also moderate at 3.65%, 3.25% and 3.05%. The dividends have increased at a low rate (below 8%) over the past 5 years. The growth has been 7.21% per year. The last dividend increase was in 2022 and it was for 17.6%, but this was after no dividend increase in 2021.

The Dividend Payout Ratios (DPR) are currently good. The DPR for EPS for 27% with 5 year coverage at 50%. The DPR for Cash Flow per Share (CFPS) for 2021 is 13% with 5 year coverage at 13%. The DPR for Free Cash Flow (FCF) for 2021 is 28% with 5 year coverage at 37%. The sites, more or less, agree on FCF.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2021 is quite low and good at 0.05. The Liquidity Ratio for 2021 is currently good at 1.57. The Debt Ratio for 2021 is good at 2.15. The Leverage and Debt/Equity Ratios are also good at 1.87 and 0.87.

The Total Return per year is shown below for years of 5 to 20 to the end of 2021. 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.
2016 5 7.21% 18.21% 14.62% 3.59%
2011 10 8.53% 6.86% 4.13% 2.73%
2006 15 10.74% 5.76% 3.72% 2.04%
2001 20 17.02% 14.15% 2.88%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 5.76, 7.61 and 9.45. The corresponding 10 year ratios are 8.62, 10.41 and 12.20. The corresponding historical ratios are 6.51, 8.06 and 9.52. The corresponding historical ratios are 6.51, 8.06 and 9.52. It would seem that this stock has always had rather low P/E Ratios. The current P/E Ratio is 9.20 based on a stock price of $14.90 and EPS estimate for 2022 of $1.62. The current ratio is between the low and the 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 Graham Price of $20.34. The 10 year low, median, and high median Price/Graham Price Ratios are 0.52, 0.66 and 0.81. The current P/GP Ratio is 0.73 based on a stock price of $14.90. This ratio, although low, is between the median and high of the 10 year median 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 0.81. The current P/B Ratio is 1.31 based on a Book Value of $134M, Book Value per Share of $11.35 and a stock price of $14.90. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.10. The current P/CF Ratio is 6.31 based on Cash Flow for the last 12 months of $27.8M, Cash Flow per Share of $6.31 and a stock price of $14.90. The current ratio is 24% 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 3.05%. The current dividend yield is 2.68% based on a stock price of $14.90 and dividends of $0.40. The current dividend yield is 12% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median dividend yield of 3.25%. The current dividend yield is 2.68% based on a stock price of $14.90 and dividends of $0.40. The current dividend yield is 17% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.30. The current P/S Ratio is 0.38 based on a stock price of $14.90, Revenue estimate for 2022 of $460M and Revenue per Share of $39.02. The current ratio is 26% 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 on the expensive side at the moment. The dividend yield tests are saying the stock price is above the median and the P/S Ratio test is saying it is expensive. The P/B Ratio and P/CF Ratio tests are also saying the stock price is expensive. The P/GP Ratio test says it is above the median. Currently, the Revenue is growing, but we may be heading into a recession so it is anyone guess if estimates will hold up in 2022.

Last year I said that the results of stock price testing were that the stock price was probably on the expensive side. I know the dividend yield tests are showing the stock price as reasonable, but the P/S Ratio test does not confirm this. The problem is lack of growth in Revenue. There also seems to be a lack of growth in cash flow too. The testing results is a mixed bag as some show the stock price as reasonable and other as expensive.

When I look at analysts’ recommendations, I find only a Strong Buy. The consensus would be a Strong Buy. The 12 month stock price consensus is $19.25. This implies a total return of 31.88% with 29.19% from capital gains and 2.68% from dividends.

When I looked at analysts’ recommendations last year, I found only one recommendation and it was a Buy. The consensus would be a Buy. I can find a target price of $9.50. This implies a total loss of 9.56%, with a capital loss of 12.68% and dividends of 3.13% based on a stock price of 10.88. The recommendation and the target price do not match up. What happened a price increase to $14.90 was a total return of 40.08% with 36.95% from capital gains and 3.13% from dividends.

There have been no analysts’ comments on Stock Chase since 2019. It is a small company that has not been doing well, so analysts lost interest. Stock Chase gives this company 1 star out of 5. The last comments on this stock via Motley Fool was even longer at 2013. Their fourth quarterly results are on Newswire. Their first quarter results are also on Newswire. A report by Simply Wall Street talks on Yahoo Finance about the increasing dividend. This is true, but their comment on decreasing EPS over the next year is not what I picked up. Analysts I looked at say EPS will increase in 2022 by 27%.

Hammond Power Solutions Inc is engaged in designing and manufacturing of custom electrical magnetics, cast resin, custom liquid filled distribution and power transformers and standard electrical transformers, serving the electrical and electronic industries. The company has manufacturing plants in Canada, the United States, Mexico, and India. Its web site is here Hammond Power Solutions Inc.

The last stock I wrote about was about was Ag Growth International (TSX-AFN, OTC-AGGZF) ... learn more. The next stock I will write about will be Mullen Group Ltd (TSX-MTL, OTC-MLLGF) ... learn more on Friday, May 20, 2022 around 5 pm. Tomorrow on my other blog I will write about DIY Investors.... learn more on Thursday, May 19, 2022 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, May 16, 2022

Ag Growth International

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. Stock price seems cheap at the present. It will be a dividend growth stock again but expect dividends yields in the moderate range. Debt Ratios are a risk, but improved in first quarter. Dividend Payor Ratios are expected to improve. See my spreadsheet on Ag Growth International.

Is it a good company at a reasonable price? The stock price seems cheap at the present. I bought this stock for diversification and will continue to hold it. I am not planning on buying more at the present time. I worry about the debt ratios, especially the Liquidity Ratio.

I own this stock of Ag Growth International (TSX-AFN, OTC-AGGZF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yields. Its median yield in 2009 was 7.9%. It was on the Canadian Dividend Aristocrats and this is why I first investigated this company. By 2011 when I bought this stock, I have been interested in AFN for some time. This stock is a play on the agricultural sector.

When I was updating my spreadsheet, I noticed that debt ratios are getting worse since 2019. The Liquidity Ratio for 2021 is 1.23. If you added in Cash Flow after Dividends, it is still low at 1.29. The Debt Ratio for 2021 is also very low at 1.20. I prefer both these ratios to be at least at 1.50. The problem with low ratios, especially for Liquidity Ratio is that if you need to raise cash and there is a recession going on, it can be difficult. You may have to sell assets at fire sale prices and this is never good.

If you had invested in this company in December 2011, $1,011.96 you would have bought 27 shares at $37.48 per share. In December 2021, after 10 years you would have received $855.36 in dividends. The stock would be worth $855.36. Your total return would have been $1,418.31.

If you had invested in this company in December 2016, $1,050.40 you would have bought 20 shares at $52.52per share. In December 2021, after 5 years you would have received $177.00 in dividends. The stock would be worth $633.60. Your total return would have been $810.60.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$37.48 $1,011.96 27 10 $562.95 $855.36 $1,418.31
$52.52 $1,050.40 20 5 $177.00 $633.60 $810.60

The dividend yields are low with dividends have been declining. The current dividend yield is low (below 2%) at 1.88%. The 5 and 10 year median dividend yields are moderate (2% to 4% ranges) at 4.38% and 4.81%. The historical median dividend yield is good (5% to 6% ranges) at 5.82%. The dividends flat between 2011 and 2019 and then they declined. This is another income trust company that is having a hard time getting its dividend right with the change to a corporation.

The Dividend Payout Ratios (DPR) are moving to good values. The DPR for EPS for 2021 is 120% with 5 year coverage at 518%. Analysts expect the DPR for EPS to be around 18% this year (because of the lower dividend, and increase in EPS). The DPR for CFPS for 2021 is 14% with 5 year coverage at 47%. I also have Adjusted Earnings per Share (AEPS), and its DPR for 2021 is 21% with 5 year coverage also at 21%. There is also Funds from Operations (FFO). Its DPR for 2021 is 46% with 5 year coverage at 20%. The DPR for Free Cash Flow (FCF) for 2021 is negative because of negative FCF. Analysts expect the DPR for 2022 is be 13%.

Debt Ratios are generally awful and this could get the company into difficulties. The Liquidity Ratio is 1.23 and if you add in cash flow after dividends, it is still low at 1.29. The Debt Ratio is low at 1.20. I prefer both these to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 5.93 and 4.93. I prefer these to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 18 to the end of 2021. 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.
2016 5 -24.21% -5.62% -9.62% 4.00%
2011 10 -12.94% 4.44% -1.67% 6.11%
2006 15 -6.09% 16.28% 5.11% 11.17%
2003 18 -1.54% 19.31% 6.50% 12.82%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 28.62, 34.82 and 41.02. The corresponding 10 year ratios are 21.56, 28.61 and 35.82. The corresponding historical ratios are 14.42, 21.36 and 26.57. The historical ratios are a better judge of stock price. The others are weird due to low and negative earnings. The current P/E Ratio is 9.59 based on a stock price of $31.95 and EPS for 2022 of $3.30. The current P/E Ratio is below the low of the historical median ratio. This stock price testing suggests that the stock price is relatively cheap. Also, a P/E Ratio below 10 is looked as a good price.

I get a Graham Price of $33.03. The 10 year low, median, and high median Price/Graham Price Ratios are 1.63, 2.23 and 3.01. The current P/GP Ratio is 0.97 based on a stock price of $31.95. This is below the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. the P/GP Ratios are high, but any ratio below 1.00 is suggestive of a cheap stock price.

I get a 10 year median Price/Book Value per Share Ratio of 2.55. The current ratio is 2.19 based on a Book Value of $274M, Book Value per Share of $14.57 and a stock price of $31.95. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I also have a Book Value per Share Ratio estimate for 2022. This gives a current ratio of 1.97 based on a Book Value of $305M, Book Value per Share estimate of $16.20 for 2022 and a stock price of $31.95. 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 15.57. The current P/CF Ratio is 5.34 based on Cash Flow per Share estimate for 2022 of $5.98, Cash Flow of $112.39 and a stock price of $31.95. The current ratio is 66% below the 10 year median ratio. I get a 10 year median Price/Book Value per Share Ratio of 2.55. This stock price testing suggests that the stock price is relatively cheap. I sort of wonder about the CFPS estimates, since the estimate for 2022 is an increase CFPS by 187% over the CFPS for 2022 and is also higher than any CFPS in the past. However, CFPS in the past has fluctuated a lot.

I get an historical median dividend yield of 5.82%. The current dividend yield is 1.88% based on dividends of $0.60 and a stock price of $31.95. The current dividend yield is 68% 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 4.81%. The current dividend yield is 1.88% based on dividends of $0.60 and a stock price of $31.95. The current dividend yield is 61% 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 1.16. The current P/S Ratio is 0.44 based on a stock price of $31.95, Revenue estimate for 2022 of $1,357M and Revenue per Share of $72.11. The current ratio is 62% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably cheap. It is not surprising that the dividend yield tests say the stock is expensive as dividends have been cut by 75%. It is never a good sign when dividends are cut. Analysts expect a nice increase in Revenue and the P/S Ratio test shows that the stock is cheap. Most of the testing, except for the P/B Ratio test, says the stock is cheap.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (8). The consensus would be a Strong Buy. The 12 month stock price consensus is $51.20. This implies a total return of 62.32% with 60.44% from capital gains and 1.88% from dividends. Note that this company hit a high of $44.05 in March and have been falling ever since.

Analysts on Stock Chase really like this stock. Analysts expect the company to grow. One analyst says he thinks there will be a dividend increase or stock buyback within 2 years. Stock Chase gives this stock 5 stars out of 5. Amy Legate-Wolfe on Motley Fool says analysts think the stock has a great upside. Nikhil Kumar on Motley Fool takes a look at this company and talks about its business.

The company had a Press Release on their fourth quarter results. The company announces on Business Wire via Yahoo Finance new credit facility. Simply Wall Street reviews this company via Yahoo Finance. Simply Wall Street gives two warnings on this company of interest payments are not well covered by earnings and large one-off items impacting financial results. (This last item is why a number of companies, including this one, has Adjusted Earnings per Share (AEPS).

Ag Growth International Inc manufactures portable and stationary grain handling, storage, and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment, and grain drying systems. It has manufacturing facilities in Canada, the United States, Italy, Brazil, France, United Kingdom, and India. Its geographical segments are Canada, United States, and the International. Its web site is here Ag Growth International.

The last stock I wrote about was about was Power Corp of Canada (TSX-POW, OTC-PWCDF) ... learn more. The next stock I will write about will be Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF) ... learn more on Wednesday, May 18, 2022 around 5 pm. Tomorrow on my other blog I will write about A Future Worth Getting Excited About.... learn more on Tuesday, May 10, 2022 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, May 13, 2022

Power Corp of Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. The stock price seems reasonable at this time. In the future I expect the dividend yield will be in the moderate range (2% to 4%) rather than the good range (5% to 6%). Dividend Payout Ratios are good. See my spreadsheet on Power Corp of Canada.

Is it a good company at a reasonable price? The stock price seems reasonable. However, if we are in a bear market, you would want all stock price testing to point to a cheap price. A cheap price would be something close to $26.00. I plan to hold on to the shares I have in this company. I will not buy more because I have enough invested in this stock. It is just over 3% of my portfolio.

I own this stock of Power Corp of Canada (TSX-POW, OTC-PWCDF). I started following this stock because it was on the Dividend Achievers, the Dividend Aristocrats lists and also on Mike Higgs’ list. It is a stock that I notice has been recommended lately as good value (October 2008). I got shares in this company when Power Corp reorganized and gave out Power Corp Shares to replace Power Financial Shares.

When I was updating my spreadsheet, I noticed my returns have been mediocre for this stock I have had for some 20 years. I started with Power Financial, and had to convert to Power Corp in 2020 when the company was re-organized. My total return for PWF and POW is 7.80% per year. My RRSP account did better at 8.64% in Total Return and my Trading account did worse at 6.03% Total Return. Original purchase does count. However, this company hold a number of Life Insurance companies and these companies have had a hard time because of ultra-low interest rates. They will be do better with more normal interest rates.

If you had invested in this company in December 2011, $1000.44 you would have bought 42 shares at $23.82 per share. In December 2021, after 10 years you would have received $590.92 in dividends. The stock would be worth $1,755.60. Your total return would have been $2,346.52.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$23.82 $1,000.44 42 10 $590.92 $1,755.60 $2,346.52

The dividend yields are good with dividend growth low. The current dividend is good (5% to 6% ranges) at 5.67%. The 5 year median dividend yield is also good at 5.36%. The 10 and historical dividend yields are also moderate (2% to 4%) at 4.37% and 2.39%. The dividend is growing at a low rate (under 8% per year) at 4.9% per year over the past 5 years. The last dividend increase occurred in 2022 and was for 10.6% after no increase in 2021.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 is 42% with 5 year coverage at 52%. The DPR for Adjusted Earnings per Share (AEPS) for 2021 is 38% with 5 year coverage at 48%. The DPR for Cash Flow per Share for 2021 is 10% with 5 year coverage also at 10%. The DPR for Free Cash Flow is 10% with 5 year coverage also at 10%.

Debt Ratios are fine. Because this is a financial, I look at the Debt/Asset Coverage Ratio and for 2021 it is fine at 0.95. Although the Liquidity Ratio is not important for financial, I calculate it to be 2.74 for 2021. The Debt Ratio for 2021 is 1.07 and this is fine for a financial.

The Total Return per year is shown below for years of 5 to 34 to the end of 2021. 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.
2016 5 4.88% 11.50% 6.82% 4.68%
2011 10 4.43% 10.32% 5.78% 4.53%
2006 15 5.87% 4.47% 1.14% 3.34%
2001 20 8.70% 7.58% 3.89% 3.69%
1996 25 10.01% 12.25% 7.49% 4.76%
1991 30 10.58% 13.01% 8.37% 4.64%
1987 34 9.78% 11.28% 7.51% 3.76%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.54, 10.17 and 11.80. The corresponding 10 year ratios are 9.97, 11.15 and 11.98. The corresponding historical ratios are 10.55, 12.34 and 13.79. The current P/E Ratio is 9.97 based on a stock price of $34.89 and EPS estimate for 2022 of $3.50. The current is equal to the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is close to cheap.

I get a Graham Price of $52.17. The 10 year low, median, and high median Price/Graham Price Ratios are 0.63, 0.71 and 0.80. The current P/GP Ratio is 0.67 based on a stock price of $34.89. The current ratio is between the low and median of 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/Book Value per Share Ratio of 1.06. The current P/B Ratio is 1.01 based on a stock price of $34.89, Book Value of $23,385M and Book Value per Share of $34.56. The current ratio is 5% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

There is also a Book Value per Share for 2022. That P/B ratio would be 0.94 based on a Book Value per Share estimate of $37.00, Book Value of 25,034M and a stock price of $34.89. This ratio is 11% 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 2.13. The current ratio is 2.14 based on last 12 months Cash Flow per Share of $16.34, Cash Flow of $11,053M and a stock price of $34.89. The current ratio is 0.4% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but at the median.

I get an historical median dividend yield of 2.39%. The current dividend yield is 5.67% based on a stock price of $34.89 and a Dividends of $1.98. The current dividend yield is 137% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 4.63%. The current dividend yield is 5.67% based on a stock price of $34.89 and a Dividends of $1.98. The current dividend yield is 23% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.33. The current ratio is 0.33 based Revenue estimate for 2022 of $70,178M, Revenue per Share of $104.15 and a stock price of $34.89. The current P/S Ratio is the same as 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 stock price is probably reasonable. The dividend yield tests say it is cheap, but the P/S Ratio test is saying it is reasonable. The other tests vary from cheap to reasonable. If we are again in a bear market, I would not buy until all the tests are pointing to a cheap price.

When I look at analysts’ recommendations, I find Buy (3) and Hold (6). The consensus would be a Hold. The 12 month stock price consensus is $43.17. This implies a total return of 29.41% with 23.73% from capital gains and 5.67% from dividends.

Some analyst on Stock Chase say buy and others say hold. Stock Chase gives this stock 5 stars out of 5. Andrew Walker on Motley Fool thinks this stock is now oversold. Kay Ng on Motley Fool likes the 5% plus dividend yield. The company has put out a Press Release on its 2021 results. The company has put out a press release on Newswire for its first quarter results of 2022. Simply Wall Street on Yahoo Finance talks about who owns stock in this company. Simply Wall Street has one warning of earnings are forecast to decline by an average of 4.5% per year for the next 3 years. Analyst expect EPS to drop 18% next year, but this is after an 39% rise in 2021.

Power Corp. of Canada is a diversified holding company with interests in financial services, communications, and other business sectors through its controlling interests in Power Financial. Power Financial in turn holds controlling interests in Great-West Life (an insurance conglomerate), IGM Financial (Canada's largest nonbank asset manager), and Pargesa (a holding company with interests in European companies). Its web site is here Power Corp of Canada.

The last stock I wrote about was about was McCoy Global Inc (TSX-MCB, OTC-MCCRF) ... learn more. The next stock I will write about will be Ag Growth International (TSX-AFN, OTC-AGGZF) ... learn more on Monday, May 16, 2022 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, May 11, 2022

McCoy Global Inc

Sound bite for Twitter and StockTwits is: Small Cap Industrial. The stock price could be cheap. The debt ratios for this company are great. This helps companies survive the bad times. Both the CEO and CFO have bought shares in the past year. The company has been having problems, so this stock is a high risk. See my spreadsheet on McCoy Global Inc.

Is it a good company at a reasonable price? The stock price testing is mixed, but it could be cheap. The one thing that this company has going for it is its very good debt ratios. This means that the company had survive a lot of adversity. I am going to hold on to my shares, but I realize the risk is high.

I own this stock of McCoy Global Inc (TSX-MCB, OTC-MCCRF). I decided to try out McCoy in 2011. They had just restored their dividend. I want to use it as a fuller stock in my TFSA account. For me a fuller stock is one that uses up bits of extra money in an account. I review all my stocks once a year to determine if I will continue to hold them or not. I only review them more often if something big happens to one of the stocks I own.

When I was updating my spreadsheet, I noticed my Total Return to the end of April this is less bad that last year. Last year my Total Return was 17.9% loss. This year, to the end of April 2022, my loss is 9.4%. I bought this stock out of my fooling around money. Both the CEO and CFO bought more shares in the past year. This is a positive. The Chairman did not buy or sell during the past year.

The company has a high (and therefore good) Liquidity Ratio (4.12) and Debt Ratio (3.64). I look for these ratios to be 1.50 or higher. These very good ratios help companies survive bad times. I also noted that the CEO, CFO, and the other major officer of this company have increased their shares over the past year. The Chairman has not. I see that few of the directors have any shares in the company.

If you had invested in this company in December 2011, $1001.30 you would have bought 323 shares at $3.10 per share. In December 2021, after 10 years you would have received $219.64 in dividends. The stock would be worth $213.18. Your total return would have been $432.82.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$3.10 $1,001.30 323 10 $219.64 $213.18 $432.82

They cut their dividend for a second time in 2015. There is no indication from the company as to when they might restart dividends.

Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2021 is 0.20 and current is at 0.10. The Liquidity Ratio for 2021 is 4.12 and currently at 3.56. The Debt Ratio for 2021 is 3.64 and is currently at 3.49. The Leverage and Debt/Equity Ratios for 2021 are 1.38 and 0.38 and are currently at 1.40 and 0.40. Yes, they have slightly deteriorated with the first quarter of 2022, but they are still great.

The Total Return per year is shown below for years of 5 to 24 to the end of 2021. 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.
2016 5 0.00% -19.64% -19.64% 0.00%
2011 10 0.00% -11.32% -14.33% 3.01%
2006 15 0.00% -11.28% -13.78% 2.50%
2001 20 0.00% 4.24% -2.10% 6.34%
1997 24 0.00% -3.43% -6.54% 3.11%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and therefore unusable. The corresponding 10 year ratios are 1.21, 1.74 and 2.27. The corresponding historical ratios are 3.29, 8.11 and 10.18. The current P/E Ratio is 6.13 based on a stock price of $0.98 and EPS for last 12 months of $0.16. The 10 year ratios are really too low. The historical ones are more reasonable and compared to them, the stock price is between the low and median of the historical median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. Also, any P/E Ratio below 10.00 is considered low.

I get a Graham Price of $2.25. The 10 year low, median, and high median Price/Graham Price Ratios are 0.51, 0.72 and 0.93. The current P/GP Ratio is 0.44 based on a stock price of $0.98. The current ratio is below the low 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 0.94. The current P/B Ratio is 0.70 based on a Book Value of $39.63, Book Value per Share of 1.40 and a stock price of $0.98. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 7.87. The current P/CF Ratio is 12.77 based on a stock price of $0.98, Cash Flow for last 12 months of $1.3M and Cash Flow per Share of $0.05. The current ratio is 62% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

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

The 10 year median Price/Sales (Revenue) Ratio is 0.69. The current P/S Ratio is 0.81 based on a stock price of $0.98, Revenue for last 12 months of $34M and Revenue per Share of $1.22. The current ratio is 31% 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 mixed. The problem is that this company is not doing well in cash flow and revenue. The Graham Price test gives it a stock price of cheap as does the Price/Book Value test. The P/E ratio is very low. Because the company has not been doing well, analysts are not following this stock.

When I look at analysts’ recommendations, I find a Strong Buy (1) on Yahoo Finance. A Hold (1) on WSJ Alpha Spread give a Discounted Cash Flow (DCF) Value of $1.46 CDN$ on Alpha Spread. I get a 12 month Stock Price on Alpha Spread of $1.25. This implies a total return of 27.6% all from capital gains based on a stock price of $0.98.

Analysts last made remarks on this stock in 2016 on Stock Chase. Stock Chase gives this stock 1 star out of 5. Simply Wall Street on Yahoo Finance talks about this company’s balance sheet. The company has a news release on Newswire announcing their first quarter results for 2022. The company has a news release on Newswire announcing their fourth quarter results for 2021. Simply Wall Street on Yahoo Finance says the company’s ROCE is improving, but from a very low level. Simply Wall Street lists 2 risks for this stock as high level of non-cash earnings and does not have a meaningful market cap (CA$30M).

McCoy Global Inc is a provider of equipment and technologies to support tubular running operations, enhance wellbore integrity and assist with collecting critical data for the global energy industry. It is engaged in the design, production, and distribution of capital equipment to support tubular running operations, enhance wellbore integrity and to support capital equipment sales through aftermarket products and services such as technical support, consumables, and replacement parts. Its web site is here McCoy Global Inc.

The last stock I wrote about was about was Thomson Reuters Corp (TSX-TRI, NYSE-TRI) ... learn more. The next stock I will write about will be Power Corp of Canada (TSX-POW, OTC-PWCDF) ... learn more on Friday, May 13, 2022 around 5 pm. Tomorrow on my other blog I will write about Payday Loans and Alternatives.... learn more on Thursday, May 12, 2022 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, May 9, 2022

Thomson Reuters Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price seems current still expensive. The low Liquidity Ratio is a risk. The current dividend yield is quite low and I would personally like to see the dividend yield higher the historical yield of 2.86% before buying. See my spreadsheet on Thomson Reuters Corp.

Is it a good company at a reasonable price? I still like this company, although it has gone through a number of reorganizations over the years. I bought it for diversification and I keep it for that reason. I have found that purchase price does matter for long term investments returns, so I do like to pay at least a reasonable price.

I own this stock of Thomson Reuters Corp (TSX-TRI, NYSE-TRI). I bought this stock in 1985 so I have had it for a very long time, almost 30 years. I bought this stock to give portfolio some balance as I had too many financial stocks. I plan to hold on to my shares, but I have enough and will not be buying anymore.

When I was updating my spreadsheet, I noticed I have had this stock for 35 years and I have made a total return of 8.78% per year with 6.19% from capital gains and 2.59% from dividends. I like long term stock hold that produced a total return of 8% or more per year.

If you had invested in this company in December 2011, $1007.51 you would have bought 37 shares at $27.23 per share. In December 2021, after 10 years you would have received $628.77 in dividends. The stock would be worth $5,596.99. Your total return would have been $6,225.76.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$27.23 $1,007.51 37 10 $628.77 $5,596.99 $6,225.76

The dividend yields are low with dividend growth low. The current dividend yield is low (below 2%) at 1.84%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 2.38%, 3.16% and 2.86%. Dividend growth is low (below 8% per year) at 3.56% per year over the past 5 years.

The Dividend Payout Ratios (DPR) could be improved. The DPR for EPS for 2021 is 14.09% with 5 year coverage at 30%. The company also provides an Adjusted Earnings per Share (AEPS). The DPR for AEPS for 2021 is 83% with 5 year coverage at 103%. The DPR for Cash Flow per Share (CFPS) is 84% with 5 year coverage at 47%. This is high and I would prefer the DPR for CFPS be 40% or less. The DPR for Free Cash Flow (FCF) for 2021 is 57% with 5 year coverage at 70%.

Debt Ratios are fine, but Liquidity Ratio should be improved. The Long Term Debt/Market Cap Ratio for 2021 is good and low at 0.07. The Liquidity Ratio for 2021 is 0.95. If you add in Cash Flow after dividends it is still low at 1.33. This is a vulnerability. The Debt Ratio for 2021 is 2.66. The Leverage and Debt/Equity Ratios are good at 1.60 and 0.60.

The Total Return per year is shown below for years of 5 to 36 to the end of 2021 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.
2016 5 2.37% 23.08% 20.81% 2.27%
2011 10 5.09% 21.79% 18.71% 3.09%
2006 15 4.75% 9.73% 7.90% 1.83%
2001 20 3.11% 7.59% 5.87% 1.72%
1996 25 3.94% 9.40% 7.14% 2.27%
1991 30 4.62% 10.50% 7.78% 2.73%
1986 35 5.35% 8.37% 6.28% 2.10%
1985 36 5.54% 9.12% 6.79% 2.33%

The Total Return per year is shown below for years of 5 to 31 to the end of 2021 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.
2016 5 3.56% 24.58% 22.27% 2.31%
2011 10 2.71% 19.05% 16.15% 2.90%
2006 15 4.15% 9.27% 7.31% 1.96%
2001 20 4.28% 9.76% 7.11% 2.65%
1996 25 4.36% 10.24% 7.45% 2.79%
1991 30 4.35% 10.26% 7.42% 2.83%
1990 31 5.68% 9.80% 7.01% 2.79%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.64, 19.68, and 23.72. The corresponding 10 year ratios are 14.63, 17.61 and 20.59. The corresponding historical ratios are 16.62, 19.63 and 23.72. The current P/E Ratio is 26.69 based on a stock price of $123.61 and EPS estimate for 2022 of $4.63 ($3.62 US$). The current P/E is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I also have Adjusted Earning Per Share. The 5 year low, median, and high median P/AEPS Ratios are 36.33, 46.37 and 54.40. The corresponding 10 year ratios are 19.19, 22.18 and 25.17. The current P/AEPS Ratio is 39.02 based on AEPS estimate for 2022 of $2.44 and a stock price of $95.20. This ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$.

I get a Graham Price of $61.07. The 10 year low, median, and high median Price/Graham Price Ratios are 1.19, 1.34 and 1.53. The current P/GP Ratio is 2.02 based on a stock price of $123.61. The current ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 2.46. The current P/B Ratio is 3.37 based on a Book Value of $13,834M, Book Value per Share of $28.23 and a stock price of $95.20. The current ratio is 37% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$.

I also have an estimate for the Book Value per Share for 2022. I get a 10 year median Price/Book Value per Share Ratio of 2.46. The P/B Ratio for 2022 is 3.10 based on a Book Value of $14,923, Book Value per Share estimate for 2022 of $30.70 and a stock price of $95.20. The current ratio is 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 12.89. The current P/CF Ratio is 25.05 based on Cash Flow per Share estimate for 2022 of $3.80, Cash Flow of $1,847M and a stock price of $95.20. The current ratio is 94% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$.

I get an historical median dividend yield of 2.86%. The current dividend yield is 1.84% based on a dividend of $2.28 ($1.78 US$) and a stock price of $123.61. The current dividend yield is 36% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get an historical median dividend yield of 3.22%. The current dividend yield is 1.87% based on a dividend of $1.78 and a stock price of $95.20. The current dividend yield is 41% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$. (The slight difference in CDN$ and US$ yield is because of the exchange rate and the US and CDN markets are not always exactly in sync.)

The 10 year median Price/Sales (Revenue) Ratio is 2.72. The current P/S Ratio is 6.92 based on Revenue estimate for 2022 of $6,687M, Revenue per Share of $13.76 and a stock price of $95.20. The current P/S Ratio is 155% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get similar results in CDN$.

Results of stock price testing is that the stock price probably relatively expensive. All the tests, including the dividend yield and P/S Ratio tests are showing the stock price as expensive.

Last year I also said that the results of stock price testing were that the stock price was probably relatively expensive. All the testing I have done is saying the same thing. Even looking at analysts estimates for 2022 and 2023, the stock price is still showing a relatively expensive.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (7) and Sell (1). The consensus would be a Buy. The 12 month target price is $152.66 ($119.34 US$). This implies in CDN$ a total return of 25.34% with 23.50% from capital gains and 1.84% from dividends based on a stock price of $123.61.

When I looked at analysts’ recommendations last year, I found Strong Buy (3), Buy (5), Hold (7), Underperform (1) and Sell (1). The consensus would be a Buy, but the recommendations seem to be all over the place. The 12 month stock price is $123.38 ($100.43 US$). This implies a total return of 5.46% with 3.78% from capital gains and 1.67% from dividends based on a stock price of $118.80. What happened was a stock price increase to the current level of $123.61 which implies a total return of 5.72% with 4.05% from capital gains and 1.67% from dividends. However, the stock was much higher at year end at $151.27 and has dropped by 18% so far this year. All indexes are down this year.

Analysts on Stock Chase like this company, but one says hold because of recent restructuring. Stock Chase gives this stock 4 stars out of 5. Christopher Liew on Motley Fool says while TRI isn’t a high flyer, the dividend should be safe and sustainable. Adam Othman on Motley Fool thinks that if you own this stock, it would be a great time to add to your stake. The company, in a Press Release talk about their fourth quarter. The company, in a Press Release talk about their first quarter of 2022. There is a Simply Wall Street report on this company on Yahoo Finance.

Thomson Reuters Corp is a provider of business information services. It operates through five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News and Global Print. Its web site is here Thomson Reuters Corp.

The last stock I wrote about was about was WSP Global Inc (TSX-WSP, OTC-WSPOF) ... learn more. The next stock I will write about will be McCoy Global Inc (TSX-MCB, OTC-MCCRF) ... learn more on Wednesday, May 11, 2022 around 5 pm. Tomorrow on my other blog I will write about Stocks for May.... learn more on Tuesday, May 10, 2022 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, May 6, 2022

WSP Global Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. I think that the stock price is currently expensive. The stock price has been growing faster than Revenue and EPS. Stock prices always look to an expected future. The low Liquidity Ratio is a risk. See my spreadsheet on WSP Global Inc.

Is it a good company at a reasonable price? I think that the stock price is expensive. I will not be buying any more as I have enough of the stock. I am happy with this stock for now. It is paying a dividend, but it is flat. I am earning 6% on my original investment. For now, the company is growing and hopefully, in the future they will increase the dividends.

I own this stock of WSP Global Inc (TSX-WSP, OTC-WSPOF). In Sept 2011 I rationalized my portfolio. I sold stocks that did not make it into my core and bought stocks that could of the same type. In this case selling Stantec and buying Genivar. In October 2011 I wanted to sell Enerflex because it is not a company I had bought, but a distribution from Toromont. I bought more Genivar, now called WSP Global.

When I was updating my spreadsheet, I noticed I have done well with this stock. My total return, to the end of March 2022 is 26.45% with 23.37% from capital gains and 3.08% from dividends. Yes, I know that the stock price has fallen lately as it has for most stocks. However, for my purposes, I am looking at my value at the end of March 2022.

We may or may not be in a bear market, but I do not care. I have been through them before. What happens to good dividend paying stock portfolio like mine is that my dividend increases go down.

Is the following on Total Return useful information for anyone? Send Feedback

If you had invested in this company in 25 November 2016, $1,000.00 you would have bought 100 shares at $10 per share. In December 2021, after 10 years you would have received $570 in dividends. The stock would be worth $6,977.94. Your total return would have been $7,547.94.

If you had invested in this company in December 2011, $1,000.16 you would have bought 38 shares at $26.32 per share. In December 2021, after 16 years you would have received $2,296.90 in dividends. The stock would be worth $18,296.90. Your total return would have been $20,659.90.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$10.00 $1,000.00 100 16 $2,296.90 $18,363.00 $20,659.90
$26.32 $1,000.16 38 10 $570.00 $6,977.94 $7,547.94

The dividend yields are Low with dividend growth non-existent. The current dividend yield is low (below 2%) at 1.05%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.04%, 2.32% and 4.39%. However, these really do not matter has dividends have been flat since 2009. This company used to be an income trust and income trusts have high yields. Since dividends have been flat for so long, there is no dividend growth and currently you cannot expect any. It is disappointing that management has no plans to raise the dividend.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 37% with 5 year coverage at 55%. DPRs have been coming down for some time. As an income trust, the company could pay out more then its EPS in dividends. However, as a corporation it should not. So DPR for EPS has been declining and they would probably feel better if it was lower. However, it is expected to be around 29% in 2022. The DPR for Adjusted Earnings per Share (AEPS) for 2021 is 29% with 5 year coverage at 48%. The DPR for Cash Flow per Share for 2021 is 36% with 5 year coverage at 51%. The DPR for Free Cash Flow (FCF) for 2021 is 9% with 5 year coverage at 11%.

Debt Ratios are fine, but the Liquidity Ratio is low and that is a risk. The Long Term Debt/Market Cap Ratio for 2021 is low and good at 0.07. The Liquidity Ratio for 2021 is 1.14 and even adding in Cash Flow after Dividends, it is still low at 1.38. I prefer it to be at 1.50 or higher. The Debt Ratio for 2021 is good at 1.71. The Leverage and Debt/Equity Ratios are fine at 2.41 and1.41.

The Total Return per year is shown below for years of 5 to 16 to the end of 2021. 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.
2016 5 0.00% 34.74% 32.66% 2.08%
2011 10 0.00% 24.30% 21.44% 2.86%
2006 15 7.36% 23.36% 18.89% 4.47%
2005 16 24.96% 19.95% 5.01%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 24.04, 27.83 and 33.37. The corresponding 10 year ratios are 20.92, 26.00 and 30.20. The corresponding historical ratios are 16.23, 20.27 and 24.25. The current P/E Ratio is 31.12 based on a stock price of $143.46 and EPS estimate for 2022 of $4.61. The current ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I also have an Adjusted Earnings per Share (AEPS). The 5 year low, median, and high median P/AEPS are 19.13, 23.71 and 29.17. The corresponding 10 year ratios are 17.70, 23.05 and 26.05. The current P/AEPS Ratio is 25.30 based on a stock price of $143.46 and AEPS estimate for 2022 of $5.67. The current ratio is between the median and high ratios of the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $64.09. The 10 year low, median, and high median Price/Graham Price Ratios are 1.24, 1.46 and 1.66. The current P/GP Ratio is 2.24 based on a stock price of $143.46. This ratio is above the high of the 10 year median Ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 3.62 based on a Book Value of $4,665M, Book Value per Share of $39.60 and a stock price of $143.46. The current ratio is 120% 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 11.92. The current P/CF Ratio is 15.21 based on Cash Flow per Share estimate for 2022 of $9.43, Cash Flow of $1,111M and a stock price of $143.46. The current ratio is 28% 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 4.39%. The current dividend yield is 1.05% based on dividends of $1.50 and a stock price of $143.46. The current yield is 76% 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 3.23%. The current dividend yield is 1.05% based on dividends of $1.50 and a stock price of $143.46. The current yield is 68% 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 1.14. The current P/S Ratio is 1.96 based on Revenue estimate for 2022 of $8,620M, Revenue per Share of $73.19 and a stock price of $143.46. The current ratio is 72% 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 P/S Ratio test says this. The problem with the dividend yield tests is the flat dividends, so these are not valid tests. All the testing is showing the stock price as expensive except for the P/AEPS Ratio test. With that test, I supplemented the AEPS with EPS for years 2011 to 2014 as there is only 6 years of data. Since I do not believe in selling good stocks when they become expensive, I would give this stock a Hold rating.

Last year, as a results of my stock price testing, I said that the stock price was probably expensive. First, we should exclude the dividend tests because this company was an income trust that converted to a corporation. Income trusts could pay out higher dividends. The dividends have been flat since 2009. However, all the tests come back with a stock price that is expensive, including a favourite of mine of the P/S Ratio test.

When I look at analysts’ recommendations, I find Strong Buy (4), Outperform (8) and Hold (2). The consensus would be a Buy. The 12 month stock price is $195.43. This implies a total return of 37.29% with 26.25% from capital gains and 1.05% from dividends based on a current stock price of $143.46.

When I looked at analysts’ recommendations last year, I found Strong Buy (4), Buy (6) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $134.92. This implies a total return of 7.29% with 6.11% from capital gains and 1.18% from dividends based on a stock price of 127.15. What happened was a price move to $143.46 and a total return of 14.01% with 12.83% from capital gains and 1.18% from dividends. So, analysts were off last year. Also, if you consider the fact this stock reached a price of $183.63 at the 2021 year end and has been going down, with the stock market ever since, then analysts were way off.

Analysts like this stock on Stock Chase, but some think it is too expensive at present. Stock Chase gives this stock 4 stars out of 5. Robin Brown Motley Fool is impressed with the size of this company and last 10 years of returns. He says do regular investments and so current valuation does not matter so much. Adam Othman on Motley Fool admits price is high, but thinks it will keep growing at its current rate. The company talks about its fourth quarter in a Press Release. A Simply Wall Street report on Yahoo Finance talks about the share price growing faster than the EPS. They list not risks for this company.

WSP Global Inc provides engineering and design services to clients in the Transportation & Infrastructure, Property and Buildings, Environment, Power and Energy, Resources, and Industry sectors. It also offers strategic advisory services. The firm operates through four reportable segments namely, Canada, Americas (US and Latin America), EMEIA (Europe, Middle East, India, and Africa), and APAC (Asia Pacific, comprising Australia, New Zealand, and Asia). Its web site is here WSP Global Inc.

The last stock I wrote about was about was Algoma Central Corporation) ... learn more. The next stock I will write about will be Thomson Reuters Corp (TSX-TRI, NYSE-TRI) ... learn more on Monday, May 9, 2022 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, May 4, 2022

Algoma Central Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is current reasonable, if not cheap. The Debt Ratio are good. DPR Ratios are fine. They did a special dividend payment last year. Total return for most periods us good. See my spreadsheet on Algoma Central Corporation.

Is it a good company at a reasonable price? The stock price seems reasonable if not cheap. The dividends were increased by 31% last years. This would imply that the company expects to do quite well in the future. However, this is a small company, under $1B in market cap and so that is a risk in itself.

I do not own this stock of Algoma Central Corporation (TSX-ALC, OTC-AGMJF). I got the name off of the internet. The description was that Algoma Central Corporation is a Canadian shipping company. It operates Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes. The company operates its business through six segments that are Domestic Dry-Bulk, Product Tankers, Ocean Self Unloaders, Corporate, Investment Properties, and Global Short Sea Shipping. This is a new stock for me to follow.

When I was updating my spreadsheet, I noticed this company has done well over the past 5 years, and not so well over the past 10 years. For example, Revenue is up by 8.9% per year over the past 5 years but only up by 0.27% per year over the past 10 years. EPS is up by 22% per year over the past 5 years but only by 1.8% per year over the past 10 years. The Chairman is Duncan Jackman. I wonder if he is part of the Jackman family. It would seem so as he is CEO of E-L Financial.

If you had invested in this company in December 1991, $1001.49 you would have bought 1512 shares at $0.66 per share. In December 2021, after 30 years you would have received $13,762.22 in dividends. The stock would be worth $26,157.60. Your total return would have been $39,919.82.

If you had invested in this company in December 2011, $1001.68 you would have bought 124 shares at $8.08 per share. In December 2021, after 10 years you would have received $874.20 in dividends. The stock would be worth $2,145.20. Your total return would have been $3,019.40.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$0.66 $1,000.49 1,512 30 $13,762.22 $26,157.60 $39,919.82
$8.08 $1,001.68 124 10 $874.20 $2,145.20 $3,019.40

The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 4.01%. The 5, 10 and historical median dividend yields are also moderate at 3.82%, 2.93% and 2.63%. The dividend increases are good (15% and above) with dividend increases at 19.4% per year over the past 5 years. Prior to this, dividend increases were moderate (8% to 14% ranges).

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 166% with 5 year coverage at 88%. Analysts expect the DPR for the future to move lower and expects it to be for EPS for 2022 to be 41%. The DPR for Adjusted EPS (AEPS) for 2021 is 51% with 5 year coverage at 38%. The DPR for Cash Flow per Share (CFPS) for 2021 is 76% with 5 year coverage at 38%. Analysts expect the DPR for CFPS to be around 35% in 2022. The DPR for Free Cash Flow (FCF) for 2021 is 94% with 5 year coverage at 413%. The company paid out a special dividend of $2.65 in 2021. This is why the DPRs for 2021 are high.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2021 is 0.60, and this is fine. Although some analysts prefer this ratio to be 0.50 or lower. The Liquidity Ratio for 2021 is 2.26. This higher than the immediate past. The 5 and 10 year median Liquidity Ratios are 1.25 and 2.69. The Debt Ratio for 2021 is 2.52. This is high and good. The Leverage and Debt/Equity Ratios for 2021 are 1.66 and 0.66. This are low and good

The Total Return per year is shown below for years of 5 to 33 to the end of 2021. 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.
2016 5 19.42% 20.19% 12.32% 7.87%
2011 10 14.22% 12.77% 7.91% 4.86%
2006 15 11.11% 6.91% 3.67% 3.23%
2001 25 10.06% 15.21% 10.73% 4.48%
1996 30 8.94% 10.72% 7.40% 3.32%
1991 35 0.00% 16.35% 11.49% 4.86%
1988 33 7.63% 10.16% 7.40% 2.76%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.91, 8.42 and 9.65. The corresponding 10 year ratios are 8.12, 9.24 and 11.39. The corresponding historical ratios are 7.11, 8.42 and 10.31. The current P/E Ratio is 10.15 based on a stock price of $16.95 and EPS estimate for 2022 of $1.67. The current ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I also have Price/Adjusted Earnings per Share Ratios (AEPS). The 5 year low, median, and high median P/AEPS Ratios are 9.41, 12.25 and 11.74. The corresponding 6 year ratios are 9.89, 11.07 and 12.57. The current P/AEPS Ratio is 10.15 based on a stock price of $16.95 and EPS estimate for 2022 of $1.67. 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 but above the median.

I get a Graham Price of $26.84. The 10 year low, median, and high median Price/Graham Price Ratios are 0.49, 0.56 and 0.65. The current P/GP Ratio is 0.63 based on a stock price of $16.95. 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 but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 0.69. The current P/B Ratio is 0.88 based on a Book Value of $725M, Book Value per Share of $19.17 and a stock price of $16.95. The current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. I know that the P/B Ratios are very low, but if you look at past history, they have been very low.

I get a 10 year median Price/Cash Flow per Share Ratio of 4.47. The current P/CF Ratio is 3.95 based on Cash Flow for the last 12 months of $162M, Cash Flow per Share of $4.30 and a stock price of $16.95. The current ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 2.63%. The current dividend yield is 4.01% based on dividends of $0.68 and a stock price of 16.95. The current dividend yield is 53% 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 2.93%. The current dividend yield is 4.01% based on dividends of $0.68 and a stock price of 16.95. The current dividend yield is 37% 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 0.94. The current P/S Ratio is 0.95 based on Revenue estimate for 2022 of $615M, Revenue per Share of $16.27 and a stock price $16.95. The current ratio is 11% above 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, if not cheap. The dividend yield tests say it is cheap, but the P/S Ratio testing is saying it is reasonable but above the median. The company, last year, increased the dividend by 31%. This would imply that they good future results. However, most of the testing is returning a result of a stock price that is reasonable, but above the median.

When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $22.83. This implies a total return of 38.70% with 34.69% from capital gains and 4.01% from dividends.

There are few comments on this stock on Stock Chase. In August 2021 one analysts said it had a good cash flow, but was not very liquid. Stock Chase gives this stock 4 starts out of 5. Ambrose O'Callaghan on Motley Fool thinks that this stock has a favourable P/E Ratio. Nikhil Kumar on Motley Fool gives an overview of this stock in May 2021. The company has put out a News Release on their site for their fourth quarter of 2021.

A Simply Wall Street report on Yahoo Finance says the intrinsic value of this stock is $18.60 CDN$. Simply Wall Street gives two warnings of has a high level of debt and unstable dividend track record. Over the past 33 years, this company has raised their dividends 12 times and decreased them 2 times. The decreases occurred in the 1990’s. Perhaps this site is again confusing CDN$ paid dividends and exchange rates as it is a US site. They have also paid special dividends.

Algoma Central Corp owns and operates the fleet of dry and liquid bulk carriers operating on the Great Lakes, St. Lawrence Waterway. The company's Canadian flag fleet consists of self-unloading dry-bulk carriers, gearless dry-bulk carriers, and product tankers. Its web site is here Algoma Central Corporation.

The last stock I wrote about was about was Fortis Inc (TSX-FTS, OTC-FRTSF) ... learn more. The next stock I will write about will be WSP Global Inc (TSX-WSP, OTC-WSPOF) ... learn more on Friday, May 6, 2022 around 5 pm. Tomorrow on my other blog I will write about Something to Buy May 2022.... learn more on Thursday, May 5, 2022 around 5 pm.

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