Monday, January 31, 2022

Shaw Communications Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Telecom. The stock price is currently relatively expensive. See my spreadsheet on Shaw Communications Inc.

Is it a good company at a reasonable price? If I held this stock I would sell. The price is high because of the potential buy-out. I do not know when it will happen or if it will happen. The buy-out price is not much high than the current price. If the buy-out does not occur the stock price will take a dive. I have been in this position before on a stock that this is what I did. The current stock price is on the expensive side.

I do not own this stock of Shaw Communications Inc (TSX-SJR.B, NYSE-SJR). I am following this stock because it was a stock on Investment Reporter’s list, a MPL Communications Publication.

When I was updating my spreadsheet, I noticed that analyst in 2020 expected this company to raise dividends in August 1921. Last year analysts expected that his company would start to raise the dividends after August 2022. This year, analysts expect that dividends will be raised after August 2022. Dividends have been flat for 6 years. This company has a financial year ending August 31 each year.

If you had invested in this company in December 2005, for $1004.00 you would have bought 80 shares at $12.62 per share. In December 2021, after 15 years you would have received $1,221.60 in dividends. The stock would be worth $2970.40. Your total return would have been $4192.00.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$12.62 $1,004.00 80 10 $1,221.60 $2,970.40 $4,192.00

The dividend yields are moderate with current dividend growth non-existent. The current dividend yield is moderate (2% to 4% ranges) at 3.12%. The 5 and 10 year median dividend yields are moderate at 4.39% and 4.35%. This historical dividend yield is low (below 2%) at 1.43%. Prior to 2006, the dividend yield was always low. Dividends have been flat for the past 6 years.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 61% with 5 year coverage at 91%. Going forward, analysts expect DPR for EPS to be in the 70% range. The DPR for CFPS for 2021 is 31% with 5 year coverage at 35%. The DPR for Free Cash Flow (FCF) for 2021 is 66% with 5 year coverage at 123%. Different site varies on what the FCF is. Analysts expect DPR for FCF to be in the 50% and 60% ranges.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is 0.25. The Liquidity Ratio for 2021 is 0.79. If you had in Cash Flow after dividends, it is fine at 1.64. The Debt Ratio is good at 1.62. The Leverage and Debt/Equity Ratios for 2021 are fine at 2.61 and 1.61.

The Total Return per year is shown below for years of 5 to 31 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% 11.20% 7.34% 3.86%
2011 10 2.79% 10.84% 6.61% 4.24%
2006 15 11.31% 8.78% 5.00% 3.78%
2001 20 21.28% 6.83% 4.19% 2.64%
1996 25 18.37% 17.97% 13.44% 4.53%
1991 30 16.38% 13.42% 10.50% 2.92%
1990 31 15.82% 14.96% 11.77% 3.19%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.09, 17.22 and 19.88. The corresponding 10 year ratios are 13.18, 15.36 and 17.69. The corresponding historical ratios are 14.06, 16.52 and 19.02. The current P/E Ratio is 24.54 based on a stock price of $38.03 and EPS of 1.55. The current ratios are above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. Note that the proposed buy-out price is $40.50.

I get a Graham Price of $20.66. The 10 year low, median, and high median Price/Graham Price Ratios are 1.14, 1.30 and 1.46. The current P/GP Ratio is 1.84 based on a stock price of $38.03. The current P/GP 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 2.42. The current P/B Ratio is 3.11 based on a Book Value of $6,110M, Book Value per Share of $12.24 and a stock price of $38.03. 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 a 10 year median Price/Cash Flow per Share Ratio of 7.64. The current P/CF Ratio is 10.01 based on Cash Flow per Share estimate for 2022 of $3.80, Cash Flow of $1,896M and a stock price of $38.03. The current ratio is 31% 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 1.43%. The current dividend yield is 3.12% based on a stock price of $38.03 and dividends of $1.185. The current dividend yield is 118% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 4.35%. The current dividend yield is 3.12% based on a stock price of $38.03 and dividends of $1.185. The current dividend yield is 28% below the 10 year dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 2.46. The current P/S Ratio is 3.41 based on a stock price of $38.03, Revenue estimate for 2022 of $5,570M and Revenue per Share of $11.16. The current ratio is 39% above the 10 year median ratio.

Results of stock price testing is that the stock price is probably expensive. The 10 year median dividend yield test says this and it is confirmed by the P/S Ratio test. The problem with the historical dividend yield test is that the dividend yields, of which I have some 31 years of data, started at under 1% and started to increase in 2005 and ending up some in the 5 and 6% ranges by 2000. So, they have been higher for some 15 years. All the other tests are showing the stock price as relatively expensive

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (5). The consensus would be a Buy. The 12 months stock price consensus is $40.17. This implies a total return of 8.74% with 5.63% from capital gains and 3.12% from dividends based on a current price of $38.03. (I find it interesting that the high price is $40.50, which is the buy-out price).

The big news is that Rogers is buying out Shaw as detailed in the newsroom of Shaw on Shaw Communications. This was announced in March 2021. Pete Evens on CBC in November 2021 says that the CRTC hearings on this deal is just beginning. One analyst on Stock Chase is worried that the drama at Rogers will shift to Shaw. Christopher Liew on Motley Fool discusses the protentional take-over of Shaw by Rogers. Zacks Equity Research via Yahoo Finance discusses the first quarterly results for this company. They think that this stock is currently a Hold.

Shaw Communications is a Canadian cable company that is one of the biggest providers of Internet, television, and landline telephone services in British Columbia, Alberta, Saskatchewan, Manitoba, and northern Ontario. Its web site is here Shaw Communications Inc.

The last stock I wrote about was about was Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more. The next stock I will write about will be Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more on Wednesday, February 2, 2022 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2022 .... learn more on Tuesday February 01, 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, January 28, 2022

Enghouse Systems Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. The stock price would seem to be reasonable at the present time. The company did not meet analysts’ expectations in 2022. It has good Dividend Payout Ratios and good Debt Ratios. See my spreadsheet on Enghouse Systems Ltd.

Is it a good company at a reasonable price? The current stock price seems relatively reasonable. This company has provided shareholders with great returns over long periods of time. With the combination of low dividend yields but high dividend growth, dividends will do well for shareholders over time.

As with all Tech stocks, the ratios have been getting higher and higher as this bull market goes on. For example, the P/E Ratio is high at 25.62. A reasonable P/E is considered around 15. But Tech stocks tend to have higher P/E Ratios. The Tech stocks that died in the 2000 bear market generally had not earnings and some had no revenue.

One of the things I look at, using current data, is dividend yield on original investments after 5 to 15 years. I am also looking at how much of the stock cost would be covered by dividends after 5 to 15 years. In the chart below I show the numbers for this stock. For example, if you bought this stock now at the current price, you could have yield on your investment of 7.70% and 79% of your cost could be paid by dividends in 15 years’ time. This is based on the current dividend growth.

Years Yield Cost Cov
5 2.08% 10.66%
10 3.39% 31.46%
15 7.70% 78.65%

I do not own this stock of Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividend.

When I was updating my spreadsheet, I noticed that the company did not meet analyst’s expectations. Analysts expected Revenue of $549M, an increase of 9%, but Revenue came in at $467M, and decrease of 7%. Analysts expected EPS of $1.77, the same as in 2020, but EPS came in at $1.66, a decrease of 6%.

If you had invested in this company in December 2000, $1001.53 you would have bought 413 shares at $2.43 per share. In December 2021, after 20 years you would have received $1,364.97 in dividends. The stock would be worth $20,001.59. Your total return would have been $21,366.56.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$2.43 $1,001.53 413 20 $1,364.97 $20,001.59 $21,366.56

The dividend yields are low with dividend growth good. The current dividend is low (under 2%) at 1.50%. The 5, 10 and historical dividend yields are also low at 0.98%, 1.03% and 1.12%. The dividend growth is good (15% and above) with the dividends being raised by 17.8% per year for the past 5 years. The last increase was in 2021 and it was for 18.5%.

The Dividend Payout Ratios (DPR) are good. The DPR for 2021 is 36% with 5 year coverage at 54%. The DPR for CFPS for 2021 is 20% with 5 year coverage at 30%. The DPR for Free Cash Flow is 23% with 5 year coverage at 21%.

Debt Ratios are good. They have no Long Term Debt. The Liquidity Ratio is good at 1.74. The Debt Ratio is good at 3.06. The Leverage and Debt/Equity Ratios are good at 1.48 and 0.48.

The Total Return per year is shown below for years of 5 to 26 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 17.81% 13.46% 11.61% 1.85%
2011 10 20.69% 25.09% 22.98% 2.11%
2006 15 20.91% 19.51% 18.09% 1.42%
2001 20 17.71% 16.73% 0.98%
1996 25 19.31% 18.47% 0.85%
1995 26 13.54% 12.91% 0.63%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 25.42, 32.85 and 40.24. The corresponding 10 year ratios are 24.94, 31.39 and 37.25. The corresponding historical ratios are 17.72, 22.48 and 28.52. The current P/E Ratio is 25.62 based on a current stock price of $42.79 and EPS estimate for 2022 of $1.67. 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 Graham Price of $17.53. The 10 year low, median, and high median Price/Graham Price Ratios are 2.16, 2.69 and 3.15. The current P/GP Ratio is 2.44 based on a stock price of $42.79. 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. These P/GP Ratios are high. Generally, an acceptable P/GP Ratio is between 1.00 and 1.50. A ratio below 1.00 says the stock is cheap.

I get a 10 year median Price/Book Value per Share Ratio of 5.17. The current P/B Ratio is 5.23 based on a stock price of $42.79, Book Value of $454M and Book Value per Share of $8.18. The current ratio is 1% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 19.25. The current P/CF Ratio is 17.12 based on a stock price of $42.79, Cash Flow per Share of $2.50 and Cash Flow of $138.89M. The current 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 an historical median dividend yield of 1.12%. The current dividend yield is 1.50% based on a stock price of $42.79 and Dividends of $0.64. The current dividend yield is 34% 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 1.03%. The current dividend yield is 1.50% based on a stock price of $42.79 and Dividends of $0.64. The current dividend yield is 46% 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 4.89. The current P/S Ratio is 4.90 based on Revenue estimate for 2022 of $485M, Revenue per Share of $8.73 and a stock price of $42.79. The current ratio is 0.3% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

Results of stock price testing is that the stock price is probably relatively reasonable. The dividend yield tests are showing the stock price as cheap, but the P/S Ratio test is only showing the stock price as reasonable. Most of the other testing is showing the stock price as reasonable and around the median.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $60.25. This implies a total return of 42.30% with 40.80% from capital gains and 1.50% from dividends based on a current stock price of $42.79.

When I looked at analysts’ recommendations last year, I found Strong Buy (1), Buy (3) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $79.20. This implies a total return of 28.63% with 27.76% from capital gains and 0.87% from dividends based on a stock price of $61.99. What happened was a loss of 30.10% with a capital loss of 30.97% and dividends of 0.87. Stock price moved from $61.99 to $42.79.

Last year, I said that I thought the stock price was on the expensive side. I said that both the dividend yield tests show the stock price as expensive and it is confirmed by P/S Ratio test. There is nothing wrong with any of the tests and they all show that the stock price is expensive. Whether or not I was right, the stock price did move down. The pandemic has affected a lot of companies.

A number of analysts are saying on Stock Chase to buy on weakness. Kay Ng on Motley Fool thinks this stock is currently undervalued. Puja Tayal on Motley Fool thinks this is a good growth stock to buy. The company talks about their fourth quarterly results on Newswire. A Simply Wall Street Report on Yahoo Finance says that the annual increase in share price is reasonably close to the annual rise in EPS.

Enghouse Systems Ltd is a Canada-based provider of software and services to a variety of end markets. The firm's operations are organized in two segments namely, the Interactive Management Group and the Asset Management Group. The firm has operations in Canada, the United States, the United Kingdom, France, Germany, Sweden, Israel, Croatia, Denmark, Norway, India, Japan, Hong Kong, Singapore, and Australia etc. Its web site is here Enghouse Systems Ltd.

The last stock I wrote about was about was Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more. The next stock I will write about will be Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more on Monday, January 31, 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, January 26, 2022

Sylogist Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. Stock price is probably cheap. They do have problems of increasing expenses, increase in debt and lower earnings. They have a liquidity problem. Dividends are not covered by earnings. Analysts do not see that changing in the near future, but they still think the company is a Buy. See my spreadsheet on Sylogist Ltd.

Is it a good company at a reasonable price? The price looks reasonable, if not cheap. It is a small company, so it is risky. However, it may do very well in the end. It is only a buy if you can accept the risk. Analysts are again expecting a good boost in Revenue this year. It did not happen last year, but we also have problems with the current pandemic.

I do not own this stock of Sylogist Ltd (TSX-SYZ, OTC-SYZLF). I learned about this stock from the newsletter I subscribe to.

When I was updating my spreadsheet, I noticed analysts expected the Revenue to increase by over 12% to 42.7M. However, it barely increased by 1.6% to $37.675M. It is also annoying that they do not provide financial statements on their site. Again, this year, the analysts expect a boost in Revenue by some 42%.

The debt ratios also deteriorated in 2021. The Liquidity Ratio went from 2.89 to 0.89 (and when below 1.00 it means that current assets cannot cover current liabilities). Even adding in Cash Flow after dividends the ratio is only 1.07. I like this to be at 1.50 or above. The median for the last 5 and 10 years were at 2.89 and 3.00.

The Debt Ratio, although still good at 1.91, it declined from 3.72 of the previous year. This ratio’s median for the last 5 and 10 years was at 3.88 and 3.72. Also, Leverage and Debt/Equity Ratios are worse. For 2021 they were 2.10 and 1.10. They were better in 2020 at 1.37 and 0.37. (For this ratio, lower is better.) These ratios have a median for the last 5 years at 1.37 and 0.37.

If you had invested in this company in December 1998, $1,000.35 you would have bought 117 shares at $8.55 per share. In December 2021, after 22 years you would have received $357.90 in dividends. The stock would be worth $1,508.13. Your total return would have been $1,866.03.

If you had invested in this company in December 2010, $1001.90 you would have bought 430 shares at $2.33 per share. In December 2021, after 10 years you would have received $1,294.30 in dividends. The stock would be worth $5,542.70. Your total return would have been $6,867.00.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$8.55 $1,000.35 117 22 $357.90 $1,508.13 $1,866.03
$2.33 $1,001.90 430 10 $1,294.30 $5,542.70 $6,837.00

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.12%. The 5, 10 and historical dividend yields are also moderate all at 3.02%. The dividend growth is moderate (8% to 14% ranges) at 13.54% per year for the past 5 years. Although, I do not see how this will continue because of the high DPRs.

The Dividend Payout Ratios (DPR) are too high and are unsustainable. The DPR for EPS for 2021 is 278% with 5 year coverage at 120%. This is much too high, of course. The DPR for Cash Flow per Share is 76% with 5 year coverage at 65%. This rate is too high. I prefer one of 40% or less. The DPR for Free Cash Flow is 66% with 5 year coverage at 73%. There is disagreement on FCF, but not that significant.

Debt Ratios are mixed and the Liquidity Ratio needs improving. Although the Long Term Debt has increased significantly over the past year, the Long Term Debt/Market Cap Ratio is still 0.00. The Liquidity Ratio for 2021 is 0.89. If you add in Cash Flow after dividends it is still low at 1.07. I prefer this to be 1.50 or higher. The Current Liability/Asset Ratio is now at 0.39 and I would prefer this to be 0.20 or less. The Debt Ratio is good at 1.91. The Leverage Debt/Equity Ratios are fine at 2.10 and 1.10.

The Total Return per year is shown below for years of 5 to 22 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 13.54% 8.05% 4.51% 3.54%
2011 10 18.71% 29.32% 21.76% 7.56%
2006 15 20.55% 25.41% 20.46% 4.95%
2001 20 16.83% 14.30% 2.53%
1998 23 2.97% 1.80% 1.17%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 24.55, 29.03, and 34.13. The corresponding 10 year ratios are 24.24, 30.17 and 37.33. The corresponding historical ratios are 13.95, 19.5 and 23.66. The current P/E Ratio is 67.50 based on a stock price of $12.15 and EPS estimate for 2022 of $0.18. This ratio is above the 10 year high median ratio. This stock price testing suggests that the stock price is relatively expensive. Problem is lack of estimated earnings. Analysts do not expect this company will make much in earnings this year and next.

I get a Graham Price of $2.81. The 10 year low, median, and high median Price/Graham Price Ratios are 2.15, 2.58 and 3.39. The current ratio is 4.32 based on a stock price of $12.50. The current ratio is above 10 year high median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 4.84. The current P/B Ratio is 6.22 based on a Book Value of $46,.69M, Book Value per Share of $1.95 and a stock price of $12.15. The current ratio is 29% 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 18.21. The current P/CF Ratio is 15.59 based on stock price of $12.15, Cash Flow per Share for the last 12 months of $0.78 and Cash Flow of $18.62M. 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 get an historical median dividend yield of 3.02%. The current dividend yield is 4.12% based on a stock price of $12.50 and dividends of $0.50. The current ratio is 36% 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 also of 3.02%. The current dividend yield is 4.12% based on a stock price of $12.50 and dividends of $0.50. The current ratio is 36% 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 7.13. The current P/S Ratio is 5.27 based on a stock price of $12.15, Revenue estimate for 2021 of $55.1 and Revenue per Share of $2.31. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. The Dividend Yield tests are showing the stock price as cheap and this is confirmed by the P/S Ratio test. Some of the other tests are showing the stock price as expensive. Although, they have problem with increasing expenses and covering their dividends with earnings, the company will probably be fine in the end.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2). The consensus would be a Strong buy. The 12 month stock price is $17.31. this implies a total return of 46.58% with 42.47% from capital gains and 4.12% from dividends based on a stock price of $12.15.

When I looked at analysts’ recommendations last year, I found Strong Buy (1) and Buy (1). The consensus was a Strong Buy. The 12 month stock price consensus is $15.38. This implies a total return of 35.13% with 30.89% from capital gains and 4.26% from dividends based on a stock price of $11.75. What happened was a current stock price of $12.15 with a total return of 7.66% with 3.40% from capital gains and 4.26% from dividends.

Last year I thought that the stock price was probably reasonable, but they needed to get their DPR for EPS under control and analysts thought that they would in the short term. That was because they thought the company’s EPS would be increasing, but this did not happen. Of course, it has been a rough year because of the pandemic.

Most analysts on Stock Chase think this stock is a buy. Kay Ng on Motley Fool says with the new CEO the stock price is heading in the right direction. Christopher Liew on Motley Fool says that the company is a niche player and with the new CEO, long-term growth is on the horizon. The company talks about the fourth quarterly results for 2021 on Newsfile via Yahoo Finance. A Simply Wall Street Report on Yahoo Finance looks at the company’s debt. They have one warning sign of dividends not well covered by earnings.

Sylogist Ltd is a software company that provides Enterprise Resource Planning solutions, including fund accounting, grant management, and payroll to public service organizations. The only segment is Public Sector. Geographically, the company offers its services to the United States of America, Canada, and the United Kingdom region. The majority of the revenue comes from the United States of America. Its web site is here Sylogist Ltd.

The last stock I wrote about was about was Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) ... learn more. The next stock I will write about will be Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more on Friday, January 28, 2022 around 5 pm. Tomorrow on my other blog I will write about Banks and Ratios.... learn more on Thursday, January 27, 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, January 24, 2022

Transcontinental Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price seems to be reasonable and around the median. Total returns have been lower than I like to see. I think that the minimum total return for a dividend stock should be 8% per year. However, dividend yield is good. See my spreadsheet on Transcontinental Inc.

Is it a good company at a reasonable price? The stock price seems at a relatively reasonable level at present. The dividend yield is not the highest it has been in the past, but it is relatively high. Shareholders have, since around 2009, received a good dividend yield. This company is never going to give you a high return, but the dividend yield is nice. I have made a total return of 8.63% per year with 3.95% from dividends and 4.68% from capital gains over the 7 year period I have held this stock.

I own this stock of Transcontinental Inc (TSX-TCL.A, OTC-TCLAF). This is a dividend growth stock. It was on a number of dividend lists. However, it fell on hard times after 2008, but currently seems to be recovering. It is was on the Canadian Dividend Aristocrats Index when I bought it in 2015.

When I was updating my spreadsheet, I noticed when looking at the above charts on total return to the end of December 2021 and the end of October 2021, you can see that the total return to the end of October 2021 is better, but the pattern of returns is the same. That is the 15 year total return is the low around 3%. For the 5 year total return, the total return to October 2021 is much better. See chart below.

The Total Return per year is shown below for years of 5 to 33 to the end of October 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 4.42% 6.38% 1.79% 4.59%
2011 10 6.27% 10.07% 4.43% 5.63%
2006 15 3.79% 3.41% 0.07% 3.34%
2001 20 11.61% 6.15% 2.87% 3.29%
1996 25 11.44% 9.06% 5.59% 3.47%
1991 30 9.55% 12.03% 8.09% 3.94%
1988 33 9.90% 6.89% 3.01%

The dividend yields are moderate with dividend growth currently low. The current dividend yield is moderate (2% to 4% range) at 4.50%. The 5 and 10 year median dividend yields are also moderate at 4.34% and 4.22%. The historical dividend yield is low (below 2%) at 1.43%. The dividend growth is low (below 8%) per year. The dividend growth over the past 5 years is 4.42% per year. The last dividend increase was in 2020 and it was for 2.27%

The Dividend Payout Ratios (DPR) are fine, but the DPR for EPS is a bit high. The DPR for EPS for 2021 is 60%, with 5 year coverage age 42%. Analyst expect the DPR for EPS to decline over the next little while even if they raise the dividend rate. The DPR for CFPS for 2021 is 17% with 5 year coverage at 18%. The DPR for Free Cash Flow for 2021 is 44% with 5 year coverage at 27%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is fine at 0.46. The Intangibles and Goodwill/Market Cap Ratio is 0.94 and that is a bit higher than I like to see. The Liquidity Ratio is good at 1.93. The Debt Ratio is good at 1.95. The Leverage and Debt/Equity Ratios are fine at 2.05 and 1.05.

The Total Return per year is shown below for years of 5 to 33 to the end of December 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 4.42% 2.23% -1.75% 3.99%
2011 10 6.27% 10.46% 4.88% 5.58%
2006 15 3.79% 3.00% -0.17% 3.17%
2001 20 11.61% 5.10% 2.11% 2.99%
1996 25 11.44% 9.18% 5.77% 3.41%
1991 30 9.55% 12.09% 8.22% 3.87%
1988 33 9.97% 7.00% 2.96%


The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.03, 8.74 and 10.49. The corresponding 10 year ratios are 6.70, 8.59 and 10.02. The corresponding historical ratios are 10.30, 13.12 and 15.38. The current P/E Ratio is 11.75 based on a stock price of $19.98 and EPS estimate for 2022 of $1.70. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $32.48. The 10 year low, median, and high median Price/Graham Price Ratios are 0.58, 0.65 and 0.77. The current P/GP Ratio is 0.62 based on a stock price of $19.98. 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 1.35. The current P/B Ratio is 0.99 based on a Book Value of $1,759M, Book Value per Share of $20.21 and a stock price of $19.98. The current ratio is 27% 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 4.20. The current P/CF Ratio 4.18 based on Cash Flow per Share estimate for 2021 of $4.78. The current ratio is 0.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get an historical median dividend yield of 1.43%. The current dividend yield is 4.50% based on dividends of $0.90 and a stock price of $19.98. The current dividend yield is 215% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. The dividend yields on this company were low until 2007.

I get a 10 year median dividend yield of 4.22%. The current dividend yield is 4.50% based on dividends of $0.90 and a stock price of $19.98. The current dividend yield is 7% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.63. The current P/S Ratio is 0.64 based on Revenue estimate for 2022 of $2,728M, Revenue per Share of $31.35 and a stock price of $19.98. The current ratio is 1% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and above the median.

Results of stock price testing is that the stock price is probably reasonable and around the median. The 10 year dividend yield test points to this as does the P/S Ratio test. The other test varies a lot from cheap to expensive and in between.

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 you can see that the company has not returned much in Capital gains for some durations. The P/S Ratio and Dividend yields are both higher than in the past. However, the company has changed a lot over the years, so this might not tell us anything useful.

In the following chart the capital gains for the 10 years to December 31, 2021 is 4.88% per year. The beginning yield was at 3.86%, and the P/E Ratio and the P/S Ratio were at 13.14 and 0.50. Does this chart change my opinion of the stock price? Not really. You have to wonder how valid old values are.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 -1.75% 11.80 0.68 4.04%
10 4.88% 13.14 0.50 3.86%
15 -0.17% 13.44 0.73 1.29%
20 2.11% 51.46 0.52 0.90%
25 5.77% 166.67 0.34 1.19%
30 8.22% 0.19
33 7.00% 0.27
current 11.75 0.64 4.50%


When I look at analysts’ recommendations, I find Strong Buy (1), Buy (3) and Hold (2). The consensus would be a Buy. The 12 month stock price is $26.50. This implies a total return of 37.14% with 32.63% from capital gains and 4.50% from dividends.

When I looked at analysts’ recommendations last year, I found Strong Buy (2), Buy (4) and Hold (2). The consensus was a Buy. The 12 month stock price consensus was $24.25. This implies a total return of 20.80% with 16.47% from capital gains and 4.32% from dividends based on a stock price of 20.82. What happened was a price decline to $19.98 and a gain of 0.29% with a capital loss of 4.03% and dividends of $4.32%. Last year I thought it was at a reasonable price and that long term it would earn a total return of 8% a year.

A number of analysts on Stock Chase think this company is a buy. Christopher Liew on Motley Fool thinks this is a good stock for an inflationary period. Ambrose O'Callaghan Motley Fool thinks it is cheap with a great dividend yield. The company talks about its fourth quarterly results on Newswire. A Simply Wall Street report on Yahoo Finance talks about the company’s dividends. Their only warning is a high debt level.

Transcontinental Inc or TC Transcontinental, is a Canadian printer and flexible packaging provider that operates in three segments: packaging, printing, and other. Its web site is here Transcontinental Inc.

The last stock I wrote about was about was Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more. The next stock I will write about will be Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more on Wednesday, January 26, 2022 around 5 pm. Tomorrow on my other blog I will write about Four REITs to Buy .... learn more on Tuesday, January 25, 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, January 21, 2022

Canadian Imperial Bank of Commerce

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. The stock price is probably on the expensive side. This is because of the high P/S Ratio. It has delivered value in the form of increasing dividends over a long period of time. See my spreadsheet on Canadian Imperial Bank of Commerce.

Is it a good company at a reasonable price? The stock price is probably on the expensive side. I think this is a good dividend growth stock as are all the Canadian Banks.

I do not own this stock of Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM). This was the only major Canadian Bank I was not following. I think it is about time I did.

I have three calculations on investing at around $1,000 and what would stock be worth today:
  • If you had invested in CIBC in December 1983, $1,003.60 you would have bought 135 Shares. In December 2021, after 37 years you would have received $11,750.70 in dividends. The stock would be worth $21,463.00. Your total return would have been $33,213.70.

  • If you had invested in CIBC in December 1988, $1,002.78 you would have bought 81 Shares. In December 2021, after 32 years you would have received $7,101.27 in dividends. The stock would be worth $13,373.10. Your total return would have been $20,474.37.

  • If you had invested in CIBC in December 2011, $1033.06 you would have bought 14 shares at $73.79 per share. In December 2021, after 10 years you would have received $672.84 in dividends. The stock would be worth $1,033.06. Your total return would have been $2,912.
Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$7.72 $1,003.60 $135.00 37 $11,750.70 $21,463.00 $33,213.70
$12.38 $1,002.78 $81.00 32 $7,101.27 $13,373.10 $20,474.37
$73.79 $1,033.06 $14.00 10 $672.84 $1,033.06 $2,912.98

When I was updating my spreadsheet, I noticed that analysts expected the EPS to go up 27% to $10.40, however, the EPS went up 69% to $13.93.

The dividend yields are moderate with dividend growth low. The current yield moderate (2% to 4% ranges) at 4.02%. The 5 year median dividend yield is good (5% to 6% ranges) at 5.00%. The 10 year and historical median dividend yields are moderate at 4.81% and 4.58%. The dividend growth is currently low (below 8%) at 4.22% per year over the past 5 years. The last dividend increase was in 2021 at 10.3%. However, the bank went a fully year with no increases.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 42% with 5 year coverage at 49%. The DPR for Cash Flow per Share is 31% with 5 year coverage at 42%. The DPR for Free Cash Flow is negative for 2021 with5 year coverage at 13%. However, sites disagree on what the FCF is and differences are sometimes large.

Debt Ratios are fine. Because this is a bank, I am looking at Long Term Debt/Covering Assets Ratio, which for 2021 is good at 0.83. Although Liquidity Ratio is not important for banks, I did calculate this to be 7.44. The Debt Ratio (which is the important one) is 1.06. For banks any ratio of 1.04 or higher is fine.

The Total Return per year is shown below for years of 5 to 38 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. check
2015 5 4.22% 10.61% 6.12% 4.49% 10.61%
2010 10 5.22% 11.89% 7.17% 4.72% 11.89%
2005 15 5.12% 6.29% 2.74% 3.55% 6.29%
2000 20 7.25% 9.10% 5.07% 4.04% 9.10%
1995 25 8.01% 10.95% 6.54% 4.41% 10.95%
1990 30 7.54% 12.03% 7.43% 4.61% 12.03%
1985 35 7.04% 13.02% 7.95% 5.07% 13.02%
1982 38 6.57% 13.45% 8.07% 5.37% 13.44%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.41, 9.04 and 10.67. The corresponding 10 year ratios are 8.47, 9.63 and 10.73. The corresponding historical ratios are 7.95, 9.70 and 10.87. The current P/E Ratio is 11.68 based on a stock price of $160.01 and EPS estimate for 2022 of $13.70. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $168.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.75, 0.82 and 0.93. The current P/GP Ratio is 0.95 based on a stock price of $160.01. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.62. The current P/B Ratio is 1.75 based on a stock price of $160.01, Book Value per Share of $91.66 and Book Value of $41,323. 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.

I can also the P/B ratio test based on estimate for 2022. I get a 10 year median Price/Book Value per Share Ratio of 1.62. The current P/B Ratio is 1.63 based on a stock price of $160.01, Book Value per Share estimate for 2022 of $98.30 and Book Value of $44,316M. The current ratio is at the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.01. The current P/CF Ratio is negative as the cash flow for the last 12 months is negative. However, I can do a test based on Cash Flow less Working Capital. The 10 year median ratio is 9.19. The current P/CF Ratio is 8.62 based on last 12 month cash flow less working capital of 11,700M, Cash Flow per Share of $18.56 and a stock price of $160.01. 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.

I get an historical median dividend yield of 4.58%. The current dividend yield is 4.02% based on a stock price of $160.01 and dividends of $6.44. The current dividend yield is 12% below the historical median 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 4.81%. The current dividend yield is 4.02% based on a stock price of $160.01 and dividends of $6.44. The current dividend yield is 16% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 2.64. The current P/S Ratio is 3.36 based on Revenue estimate for 2022 of 21,450M, Revenue per Share of $47.58 and a stock price of $160.01. The current ratio is 27% 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. The dividend testing is showing the stock price as reasonable and above the median, but the P/S Ratio test is showing the stock price as expensive. Most of the other testing is showing the stock price as reasonable and above the median or expensive.

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/S Ratio is quite high. The P/E Ratio is probably a bit high. The dividend yield is probably fine.

In the following chart the capital gains for the 10 years to December 31, 2021 is 7.17% per year. The beginning yield was at 4.67%, and the P/E Ratio and the P/S Ratio were at 10.09 and 2.46. Does this chart change my opinion of the stock price? Not Really. The P/S Ratio is quite high. To bring the current P/S Ratio to the beginning P/S for the last 5 years (2.65), the Revenue would have to increase by 36% and this seems unlikely.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 6.12% 10.24 2.65 4.73%
10 7.17% 10.09 2.46 4.67%
15 2.74% 13.23 2.60 3.15%
20 5.07% 13.48 1.76 2.95%
25 6.54% 10.01 1.67 3.05%
30 7.43% 8.73 1.29 4.27%
35 7.95% 10.18 1.18 5.76%
35 8.07% 15.60 1.19 6.96%
current 11.68 3.36 4.02%

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (6) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $165.43. This implies a total return of 7.41% with 4.02% from dividends and 3.39% from capital gains based on a stock price of $160.01. The 12 month consensus stock price ranges from $176.00 to 148.41. That would be a range for total return from 14.02% to a capital loss of 3.22% based on a current stock price of $160.61.

Analysts on Stock Chase seem to like this bank and think it is a buy. Jitendra Parashar on Motley Fool likes this bank for sustainable passive income. Adam Othman on Motley Fool thinks this bank is undervalued. The bank talks about their fourth quarterly results on Newswire. Simply Wall Street reports on dividends at this bank via Yahoo Finance. They feel that the cash flow is unstable, but I when I look at cash flow without working capital, the cash flow is fine. I have 38 years of data for dividends and they have never missed a dividend. Over that period, dividends were raised 28 times and never cut.

Canadian Imperial Bank of Commerce is Canada's fifth- largest bank, operating three business segments: retail and business banking, wealth management, and capital markets. It serves approximately 11 million personal banking and business customers, primarily in Canada. Its web site is here Canadian Imperial Bank of Commerce.

The last stock I wrote about was about was National Bank of Canada (TSX-NA, OTC-NTIOF) ... learn more. The next stock I will write about will be Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) ... learn more on Monday, January 24, 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, January 19, 2022

National Bank of Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. The stock price is probably expensive. The current P/S Ratio seems quite high. This is the smallest bank of the big 6, but it has done fairly well for shareholder over time. See my spreadsheet on National Bank of Canada.

Is it a good company at a reasonable price? The stock price is probably expensive as the 10 year dividend yield test and the P/S Ratio test do agree on this. This is the smallest Canadian Bank of the top 6, but it has done well by shareholders in the past. I like all Canadian Banks.

I do not own this stock of National Bank of Canada (TSX-NA, OTC-NTIOF). I thought I should follow one of the smaller Canadian Banks. This seems like a good choice.

If you had invested in NA in December 1988, $1,000.50 you would have bought 174 Shares. In December 2021, after 32 years you would have received $6,205.71 in dividends. The stock would be worth $16,780.56. Your total return would have been $22,986.27.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$5.75 $1,000.40 174 32 $6,205.71 $16,780.56 $22,986.27

When I was updating my spreadsheet, I noticed that analysts expected an EPS for 2021 of $6.58 an 15% increase but EPS came in at $8.96, an 57% increase.

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.49%. The 5, 10 and historical dividend yields are also moderate at 4.53%, 4.17% and 3.95%. The current dividend growth is low (below 8%) at 7.04% per year over the past 5 year. The last dividend increase was in 2021 and it was for 22.5%. However, this bank, like the others, went one year without any increases.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 was 32% with 5 year coverage at 40%. The DPR for Cash Flow per Share for 2021 was 16% with 5 year coverage at 10%. The DPR for Free Cash Flow for 2021 is 20% with 5 year coverage at 13%. Site do not agree what the FCF is, but all the coverage values are fine.

Debt Ratios are fine. Because this is a bank, I am looking at the Long Term Debt/ Covering Assets Ratio for 2021 and it is good at 0.73. The other important debt ratio for banks is the debt ratio. For this bank it is 1.06 and for banks a value at or above 1.04 is fine.

The Total Return per year is shown below for years of 5 to 35 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 7.04% 17.13% 12.08% 5.05%
2011 10 8.52% 15.49% 10.90% 4.58%
2006 15 8.47% 11.06% 7.43% 3.63%
2001 20 10.67% 13.93% 9.81% 4.13%
1996 25 11.15% 15.62% 11.11% 4.51%
1991 30 6.71% 13.55% 9.77% 3.78%
1986 35 7.22% 10.78% 7.70% 3.08%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.31, 9.70 and 11.64. The corresponding 10 year ratios are 8.45, 9.83 and 11.64. The corresponding historical ratios are 8.38, 9.82 and 11.64. The current P/E Ratio is 11.06 based on a stock price of $99.75 and EPS estimate for 2022 of $9.02. 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 get a Graham Price of $97.73. The 10 year low, median, and high median Price/Graham Price Ratios are 0.76, 0.87 and 1.02. The current ratio is 1.02 based on a stock price of $99.75. The current ratio is at the high ratio 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 1.76. The current P/B Ratio is 2.12 based on a Book Value of $15,903M, Book Value per Share of $47.06 and a stock price of $99.75. The current P/B Ratio is 21% 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/Book Value per Share Ratio of 1.76. A current P/B Ratio is 1.89 based on a Book Value per Share estimate for 2022 of $52.70, Book Value of $17,808M, and a stock price of $99.75. The current P/B Ratio is7.7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.68. The current P/CF Ratio is 5.51 based on last 12 months Cash Flow of $6,113M, Cash Flow per Share of $18.09 and a stock price of $99.75. The current ratio is 50% 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 3.95. The current dividend yield is 3.49% based on a stock price of $99.75 and dividends of $3.45. The current dividend yield is 12% below the historical median ratio. 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 4.17. The current dividend yield is 3.49% based on a stock price of $99.75 and dividends of $3.45. The current dividend yield is 20.1% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 2.82. The current P/S Ratio is 3.55 based on a stock price of $99.75, Revenue estimate for 2022 of $9,499M and Revenue per Share of $28.11. 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 expensive. The 10 year median dividend yield test points to an expensive stock price and so does the P/S Ratio. All the tests point to a stock price above the median or expensive.

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 it would seem that the current P/E Ratio and P/S Ratios are a bit high and the dividend yield rather low. You can see that the current P/S Ratio is quite high comparatively.

In the following chart the capital gains for the 10 years to December 31, 2021 is 10.90% per year. The beginning yield was at 3.73%, and the P/E Ratio and the P/S Ratio were at 10.00 and 2.49. Does this chart change my opinion of the stock price? Not really. The current ratios seem on the high side and the dividend yield on the low side.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 12.08% 16.57 2.77 4.49%
10 10.90% 10.00 2.49 3.73%
15 7.43% 12.83 2.57 3.10%
20 9.81% 10.68 1.48 3.30%
25 11.11% 8.98 0.96 3.64%
30 9.77% 7.34 0.67 11.22%
35 7.70% 3.47%
Current 11.06 3.55 3.49%

When I look at analysts’ recommendations, I find Buy (2) Hold (7) and Underperform (2). The consensus would be a Hold. The 12 month stock price consensus is $107.55. This implies a total return of 11.31% with 7.82% from capital gains and 3.49% from dividends based on a current stock price of 99.75.

When I looked at analysts’ recommendations last year, I found Buy (3) and Hold (9). The consensus would be a Hold. The 12 month stock price consensus is $77.88. This implies a total return of 10.24% with 6.36% from capital gains and 3.88% from dividends based on a stock price of $73.22. What happen was a total return of 40.11% with 36.23% from capital gains and 3.88% from dividends as stock price moved to $99.75. I said last year that the stock price was reasonable, but at the high end of the reasonableness range.

Most, but not all analysts on Stock Chase like this bank. Adam Othman on Motley Fool thinks this bank is relatively undervalued. Chris MacDonaldMotley Fool says this is the bank he has his eye on right now. The bank reports on its fourth quarter via Newswire. Simply Wall Street talks about dividends by this bank via Yahoo Finance.

National Bank of Canada is the sixth-largest Canadian bank. The bank offers integrated financial services, primarily in the province of Quebec as well as the city of Toronto. Operational segments include personal and commercial banking, wealth management, and a financial markets group. Its web site is here National Bank of Canada.

The last stock I wrote about was about was Bank of Nova Scotia (TSX-BNS, NYSE-BNS) ... learn more. The next stock I will write about will be Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more on Friday, January 21, 2022 around 5 pm. Tomorrow on my other blog I will write about Reviewing Last Year .... learn more on Thursday, January 20, 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, January 17, 2022

Bank of Nova Scotia

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. The stock price could be reasonable, but it also could be on the expensive side. It certainly is not cheap. I worry about the current high P/S Ratio. See my spreadsheet on Bank of Nova Scotia.

Is it a good company at a reasonable price? The stock price could be reasonable, but it also could be on the expensive side. It certainly is not cheap. I like all Canadian Banks. However, I do not think this one has done as well over time as other Canadian Banks. It has however a good history of dividends and dividend increases.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (5) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $94.15. This implies a total return of 5.53% with 1.23% from capital gains and 4.30% from dividends.

The range for the 12 month price consensus is $104.00 to $84. With the top range you would expect a total return of 16.13% with 11.83% from capital gain and 4.30% from dividends. With the $84 price, you would expect a loss of 5.38%, with a capital loss of 9.68% and dividends of 4.30%.

When I look at analysts’ recommendations last year, I found Strong Buy (2), Buy (6), Hold (4) and Underperform (3). The consensus would be a Buy. The 12 months stock price is $69.25. This implies a total return of 3.77% with a capital loss of 1.35% and dividends of 5.13%, based on a stock price of $70.20. What happened was a rise of the stock price to $93.00 with a total return of 37.61% with 32.48% from capital gains and 5.13% from dividends. Last year I said that the stock price was cheap to reasonable.

I do not own this stock of Bank of Nova Scotia (TSX-BNS, NYSE-BNS). This is one of the big banks of Canada. All our big banks are dividend growth companies. Besides, my son owns shares in this bank. This company has a financial year ending at October 31 each year.

When I was updating my spreadsheet, I noticed that last year analysts expected the EPS to be up 14% to 6.03, but EPS is up 45% to $7.70.

I have two calculations on investing at around $1,000 and what would stock be worth today:
  • If you had invested in BNS in December 1995, $1,004.40 you would have bought 135 Shares. In December 2021, after 25 years you would have received $6,415.88 in dividends. The stock would be worth $9,477.00. Your total return would have been $15,892.88.

  • If you had invested in BNS in December 1988, $1,001.81 you would have bought 274 Shares. In December 2021, after 32 years you would have received $13,532.18 in dividends. The stock would be worth $19,234.80. Your total return would have been $32,766.98.
Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$7.44 $1,000.40 135 25 $6,415.88 $9,477.00 $15,892.88
$3.66 $1,001.81 274 32 $13,532.18 $19,234.80 $32,766.98

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.30%. The 5, 10 and historical dividend yields are also moderate at 4.88%, 4.37% and 4.17%. The dividend growth is currently low with growth over the past 5 years at 4.56% per year. The last dividend increase occurred in the financial year of 2022 and it was for 11.1%. This is after no increases in the financial years of 2020 and 2021.

The Dividend Payout Ratios (DPR) are fine as Cash Flow is not considered important for banks. The DPR for EPS for 2021 is 47% with 5 year coverage at 52%. The DPR for Cash Flow per Share is non-calculable for 2021 because of negative Cash Flow. The 5 year coverage is 31%. The DPR for Free Cash Flow and going with FCF from Wall Street Journal, the DPR for FCF for 2021 is 26% with 5 year coverage at 35%. Morningstar site says the FCF is negative for 2021.

Debt Ratios are fine. Because this is a bank, I am looking at the Debt/Covering Assets Ratio which for 2021 is 0.67. This is a good ratio. The debt ratio is 1.07 and this is fine for a bank.

The Total Return per year is shown below for years of 5 to 36 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 7.85% 7.90% 3.68% 4.23%
2011 10 6.53% 10.30% 5.83% 4.47%
2006 15 10.50% 7.44% 3.68% 3.77%
2001 20 10.25% 11.19% 6.70% 4.49%
1996 25 10.25% 13.45% 8.57% 4.88%
1991 30 10.25% 15.20% 9.81% 5.39%
1986 35 10.25% 13.72% 9.05% 4.66%
1985 36 10.25% 14.31% 9.37% 4.94%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.82, 10.71 and 12.44. The corresponding 10 year ratios are 9.59, 11.03 and 12.47. The corresponding historical ratios are 10.29, 11.23 and 13.20. The current P/E Ratio is 11.25 based on a stock price of $93.00 and EPS estimate for 2022 of 8.27. The current P/E 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 get a Graham Price of $99.57. The 10 year low, median, and high median Price/Graham Price Ratios are 0.76, 0.85 and 0.97. The current P/GP Ratio is 0.93 based on a stock price of $93.00. 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 get a 10 year median Price/Book Value per Share Ratio of 1.59. The current P/B Ratio is 1.75 based on a Book Value $64,750M, Book Value per Share of $53.28 and a stock price of $93.00. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

There are analysts estimate for the Book Value per Share for 2022. That estimate is a Book Value per Share of $57.80, Book Value of $70,247M. With a stock price of $93.00, you get a P/B Ratio of 1.61. This ratio is 1% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I cannot do a Price/Cash Flow per Share Ratio test as the Cash Flow for 2021 was negative and there are no estimates for 2022.

I get an historical median dividend yield of 4.17%. The current dividend yield is 4.30% based on dividends of $4.00 and a stock price of $93.00. The current dividend yield is 3% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 4.73%. The current dividend yield is 4.30% based on dividends of $4.00 and a stock price of $93.00. The current dividend yield is 2% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.08. The current P/S Ratio is 3.50 based on Revenue estimate for 2022 of $32,307M, Revenue per Share of $26.58 and a stock price of $93.00. The current P/S Ratio is 14% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is probably reasonable. It is not cheap. The dividend testing put the price as reasonable and above and below the median. The P/S Ratio test says the stock price is reasonable, but above the median. All the other tests say the price is reasonable and above the median.

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 current P/S Ratio is high for good future returns. The P/E and dividend yield would seem to be at a reasonable level

In the following chart the capital gains for the 10 years to December 31, 2021 is 5.83% per year. The beginning yield was at 3.90%, and the P/E Ratio and the P/S Ratio were at 11.00 and 3.52. Does this chart change my opinion of the stock price? You have to worry about the rather high P/S Ratio.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 3.68% 12.96 3.30 4.00%
10 5.83% 11.00 3.52 3.90%
15 3.68% 14.68 4.51 2.99%
20 6.70% 12.09 2.50 2.83%
25 8.57% 11.24 2.01 3.08%
30 9.81% 7.70 1.31 5.06%
35 9.37% 4.21%
36 9.37% 5.04%
current 11.25 3.50 4.30%

Analysts on Stock Chase seem to like this bank although they admit it has been lagging other Canadian banks. Jed Lloren on Motley Fool says his top choice for a Canadian bank is BNS. Christopher Liew on Motley Fool likes this bank for consistency of its dividends. BNS reports on their fourth quarterly results on Cision. A Simply Wall Street report on Yahoo Finance talks about insider buying at this bank.

Bank of Nova Scotia is a global financial services provider. The bank has five business segments: Canadian banking, international banking, global wealth management, global banking, and markets, and other. The bank's international operations span numerous countries and are more concentrated in Central and South America. Its web site is here Bank of Nova Scotia.

The last stock I wrote about was about was Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more. The next stock I will write about will be National Bank of Canada (TSX-NA, OTC-NTIOF) ... learn more on Wednesday, January 19, 2022 around 5 pm. Tomorrow on my other blog I will write about Best Canadian Banks.... learn more on Tuesday, January 18, 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.

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