Monday, February 28, 2022

Russel Metals Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. The stock price seems reasonable at this time. They have good debt ratios. Analysts think that earnings are going to go down over the short term, but they were quite wrong about estimates for 2021 for Revenue and EPS. See my spreadsheet on Russel Metals Inc.

Is it a good company at a reasonable price? The stock price is currently reasonable. Analysts are right about the dividend yield being good. Personally, I think dividend growth companies that have much lower yields. This company has raised it dividends only 11 times in the past 31 years. It has decreased by 4 times over this period. Also, analysts were off by a lot with their estimates for Revenue and EPS for 2021. They estimated Revenue of $3,110M and EPS of $1.77. Revenue was $4,209M and EPS was $6.89. Earnings seems to be high because of higher Revenue and lower relative cost to Revenue of Cost of Materials.

I own this stock of Russel Metals Inc (TSX-RUS, OTC-RUSMF). In 2007 I needed to reduce my holdings of Loblaws and buy something to help replace the dividends I had been earning. With Russel Metals, both Mike and TD recommend buying at this time. However, I should keep a watch on this stock as it has had some troubles in the past.

When I was updating my spreadsheet, I noticed that I have had a poor return from this stock. My total return per year over the almost 14 year I have held the stock is 6.56% with 1.70% from capital gains and 4.86% from dividends.

The dividend yields are moderate with dividend growth is currently non-existent. The current dividend yield is moderate (2% to 4% ranges) at 4.81%. The 5, 10 and historical dividend yields are good (5% and 6% ranges) at 5.87%, 5.75% and 5.10%. The dividends have gone up in the past, but they have been 2015 and analysts do not expect to see any raise of dividends in the near future.

I seemed to have invested in this stock at the wrong time. The worse total return for this stock when looked at every five years is year 15 with a total return of 6.44%.

If you had invested in this company in December 2011, $1008.90 you would have bought 45 shares at $22.42 per share. In December 2021, after 10 years you would have received $668.25 in dividends. The stock would be worth $1,513.35. Your total return would have been $2,181.60.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$22.42 $1,008.90 45 10 $668.25 $1,513.35 $2,181.60

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 22% with 5 year coverage at 54%. The DPR for EPS is expected to be 48% in 2022. The CPR for Cash Flow per Share for 2021 is 15% with 5 year coverage at 29%. The DPR for 2021 for Free Cash Flow is 34% with 5 year coverage at 61%. The DPR for FCF for 2022 is expected to be 39%.

Debt Ratios are good. The Long Term Debt /Market Cap Ratio for 2021 is low and good at 0.14. The Liquidity Ratio for 2021 is high and good at 2.69. The Debt Ratio is high and good at 2.17. The Leverage and Debt/Equity Ratios are low and good at 1.85 and 0.85.

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% 11.00% 5.62% 5.37%
2011 10 2.83% 9.74% 4.14% 5.60%
2006 15 -0.34% 6.44% 1.55% 4.89%
2001 20 5.87% 26.18% 11.82% 14.36%
1996 25 9.04% 17.39% 9.80% 7.59%
1991 30 6.99% 8.83% 5.19% 3.65%
1990 31 4.85% 9.41% 5.62% 3.79%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.00, 13.35 and 14.71. The corresponding 10 year ratios are 13.39, 15.90 and 18.41. The corresponding historical ratios are 11.92, 9.93 and 14.71. The current P/E Ratio is 9.91 based on a stock price of $31.60 and EPS estimate for 2022 of $3.19. 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 Graham Price of $37.68. The 10 year low, median, and high median Price/Graham Price Ratios are 0.95, 1.13 and 1.38. The current P/GP Ratio is 0.84 based on a stock price of $31.60. 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 1.73. The current P/B Ratio is 1.60 based on a Book Value of $1,248M, Book Value per Share of $19.78 and a stock price of $31.60. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Analysts are putting out an estimate for the Book Value per Share for 2022. This Book Value per Share estimate for 2022 is $21.70, Book Value is $1,369M and with a stock price of $31.60, the P/B Ratio would be 1.46. This ratio is 16% 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 6.89. The current P/CF Ratio is 9.38 based on Cash Flow per Share estimate for 2022 of $3.37, Cash Flow of $213M and a stock price of $31.60. The current ratio is 36% 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 5.10%. The current dividend yield is 4.81% based on a stock price of $31.60 and dividends of $1.52. The current ratio is 6% 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 5.75%. The current dividend yield is 4.81% based on a stock price of $31.60 and dividends of $1.52. The current ratio is 16% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.52. The current P/S Ratio is 0.49 based on Revenue estimate for 2022 of $4,043M, Revenue per Share of $64.07 and a stock price of $31.60. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests are pointing to a reasonable price, but above the median. The P/S Ratio test is point to a reasonable price and below the median. Except for the P/CF Ratio test, the other tests are showing a reasonable or cheap price. The problem with the dividend yield tests are the flat dividends. This test works before for dividend growth stock.

When I look at analysts’ recommendations, I find Buy (4), and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $39.54. This implies a total return of 29.94% with 25.13% from capital gains and 4.81% from dividends based on a current stock price of $31.60.

When I looked at analysts’ recommendations last year, I found Buy (5) and Hold (2) recommendations. The consensus was Buy. The 12 month stock price consensus was $26.86. This implied a total return of 14.53% with 8.39% from capital gains and 6.13% from dividends based on a stock price of $24.78. What happened was a movement in stock price from $24.78 to $31.60. This was a total return of 33.65% with 27.52% from capital gains and 6.13% from dividends.

Last year I said that based on the results of stock price testing is that the stock price is probably reasonable.

Analysts on Stock Chase like this company but note that it is a cyclical business. Christopher Liew on Motley Fool likes the high dividend yield. Andrew Walker on Motley Fool thinks this stock is cheap with a good dividend. The company has published a news release in PDF format about their fourth quarterly results. A Simply Wall Street Report on Yahoo Finance talks about the risk of a declining EPS over the short term.

Russel Metals Inc is a Canada-based metal distribution company. The company conducts business primarily through three metals distribution segments: metals service centers; energy products; and steel distributors. The company generates all of its revenue from the North American market. Its web site is here Russel Metals Inc.

The last stock I wrote about was about was ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more. The next stock I will write about will be Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more on Wednesday, March 2, 2022 around 5 pm. Tomorrow on my other blog I will write about Tyler Cowen Interview.... learn more on Tuesday, March 1, 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, February 25, 2022

ARC Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Resource. The stock price is cheap. This company has spent approximately the last 13 year cutting dividends. But dividends were too high when they changed from an income trust to a corporation. Dividends have been increasing lately. See my spreadsheet on ARC Resources Ltd .

Is it a good company at a reasonable price? I think that this company is selling at a cheap rate. It could again become a dividend growth company, but it is a resource stock and has a history of cutting and increasing dividends. Resource stocks are cyclical stocks.

I do not own this stock of ARC Resources Ltd (TSX-ARX, OTC-AETUF). When TFSA first came out, this stock was recommended for this account as it was an income trust at that point and most of the distributions were taxable. This stock is no longer an income trust and the distributions are now dividends and taxed as normal Canadian dividends.

When I was updating my spreadsheet, I noticed the dividends, since hitting a bottom in 2020 are now up some 67% in two dividend increases, one in 2021 and one in 2022. This company used to be an income trusts, and as such could afford high dividends. When income trusts were forced to become corporations, they could not afford the same dividends. With dividend cuts and flat dividends, this company, since becoming a corporation in 2011, was not able to get their Dividend Payout Ratios for EPS at a good level. Going forward at the current level of dividends, the DPR for EPS looks doable.

If you had invested in this company in December 2011, $1004.00 you would have bought 40 shares at $25.10 per share. In December 2021, after 10 years you would have received $311.44 in dividends. The stock would be worth $460. Your total return would have been $771.44.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$25.10 $1,004.00 40 10 $311.44 $460.00 $771.44

The dividend yields are moderate with dividends currently increasing. The current dividend yield is moderate (2% to 4% ranges) at 2.62%. The 5 and 10 year median dividend yields are also moderate at 4.38% and 4.45%. The historical median dividend yield is high (7% and over) at 8.36%. This stock had high dividend yields when it was an Income Trust. A lot of income trusts are having a hard time adjusting their dividends to an appropriate level after become corporations.

Over the past 25 years this company has raised the dividends 8 times and decreased them 8 times. The company started as an Income Trust in 1996 and because a corporation in 2011 because of changing legislation. Dividends hit a low in 2020. In 2021 they increased the dividend by 10% and in 2022 they increased the dividend again and by 51%. So, they are probably back to being a dividend growth stock.

The Dividend Payout Ratios (DPR) are currently fine. The DPR for EPS for 2021 is 20% with 5 year coverage at 173%. The expected DPR for 2022 is 38%. The DPR for Cash Flow per Share for 2021 is 7% with 5 year coverage at 19%. The DPR for Free Cash Flow for 2021 is 14% with 5 year coverage at 76%. The DPR for 2022 is expected to be 28%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is 0.21 and is low and good. The Liquidity Ratio is low at 0.48. If you add in Cash Flow after dividends it is fine at 1.70. The Debt Ratio is 2.09 and is good. The Leverage and Debt/Equity Ratios are good at 1.92 and 0.92.

The Total Return per year is shown below for years of 5 to 25 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 -18.87% -10.52% -13.03% 2.51%
2011 10 -14.66% -3.31% -7.51% 4.20%
2006 15 -14.09% 2.55% -4.32% 6.87%
2001 20 -10.59% 14.11% -0.10% 14.21%
1996 25 -7.26% 12.49% -0.44% 12.93%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 4.73, 7.62 and 10.52. The corresponding 10 year ratios are 12.78, 18.14 and 23.49. The corresponding historical ratios are 10.41, 12.18 and 14.38. The current P/E Ratio is 7.15 based a stock price of $15.24 and EPS estimate for 2022 of $2.13. 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 Graham Price of $20.24. The 10 year low, median, and high median Price/Graham Price Ratios are 1.10, 1.41 and 1.68. The current P/GP Ratio is 0.75 based on a stock price of $15.24. The current ratio is below the 10 year low median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.89. The current ratio is 1.78 based a Book Value of $5,927.5M, Book Value per Share of $8.55 and a stock price of $15.24. 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 a 10 year median Price/Cash Flow per Share Ratio of 8.85. The current P/CF Ratio is 3.26 based on Cash Flow per Share estimate for 2022 of $4.68, Cash Flow of $3,245.7M and a stock price of $15.24. The current ratio is 63% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 8.36%. The current dividend yield is 2.62% based on a stock price of $15.24 and dividends of $0.40. The current ratio is 69% 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 4.45%. The current dividend yield is 2.62% based on a stock price of $15.24 and dividends of $0.40. The current ratio is 41% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 4.56. The current P/S Ratio is 2.08 based on Revenue estimate for $5,093, Revenue per Share of $7.34 and a stock price of $15.24. The current ratio is 54% 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. First the dividend yield tests do not work well with old Income Trust stock and should be discounted. The P/S Ratio stock test is showing the stock as cheap as is most of the other tests.

When I look at analysts’ recommendations, I find Strong Buy (6), and Buy (9). The current consensus is a Strong Buy. The 12 month stock price of $19.93. This implies a total return of 33.40% with 30.77% from capital gains and 2.62% from dividends based on a stock price of $15.24.

When I looked at analysts’ recommendations last year, I found Strong Buy (6), Buy (8) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $10.72. This implies a total return of 34.98% with 32.03% from capital gains and 2.96% from dividends based on a stock price of $8.12. What happened is a stock move to $15.24, which was a total return of 90.64% with 87.68% from capital gains and 2.96% from dividends based on a starting price of $8.12. So, they were not even close.

Last year I thought that the stock price was cheap, but I was not interested in it because it was not a dividend growth stock.

The analysts on Stock Chase quite like this company. Vishesh Raisinghani on Motley Fool thinks it is time to buy this company that had very solid fourth quarterly results for 2021. Robin Brown on Motley Fool thinks this company is currently cheap. A report for Simply Wall Street on Yahoo Finance thinks that oil will push beyond $100 and this company will benefit. Canadian Press published on CBC merger of ARC and Seven Generations Energy Ltd.

ARC Resources is an independent energy company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. The company produces light, medium, and heavy crude, condensate, natural gas liquids, and natural gas. Its web site is here ARC Resources Ltd.

The last stock I wrote about was about was Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more. The next stock I will write about will be Russel Metals Inc (TSX-RUS, OTC-RUSMF) ... learn more on Monday, February 28, 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, February 23, 2022

Choice Properties REIT

Sound bite for Twitter and StockTwits is: Dividend Paying REIT. The stock price seems in the reasonable range, but would be at the top end. Dividends are good, but there is no dividend growth. Dividend Payout Ratios are fine. Some Debt Ratios need improving. See my spreadsheet on Choice Properties REIT.

Is it a good company at a reasonable price? The price is reasonable but at the top end of the reasonableness range. I have no plans of selling this REIT. The feature I do not like is that it cannot grow its dividends.

I own this stock of Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF). I got this stock when CDN REIT was acquired by Choice Properties. Choice was originally a spin off from Loblaws. Later George Weston Limited (TSX-WN) in a reorganization received Loblaw’s share of Choice (61.6% interest) and Loblaws minority shareholders got George Weston Limited shares. The Weston Family owns a majority share in George Weston Ltd and George Weston Limited has a controlling interest in Loblaws.

When I was updating my spreadsheet, I noticed that I have done well with the stock. I got shares because Choice bought out Canadian REIT which I had held. I have made a total return since buying Canadian REIT of 10.64% per year with 5.87% from capital gains and 4.77% from dividends. Since having Choice Properties REIT, I have a total return of 11.43% with 5.43% from capital gains and 5.48% from dividends.

If you had invested in this company in December 2013, $1,009.92 you would have bought 96 shares at $10.52 per share. In December 2021, after 8 years you would have received $544.56 in dividends. The stock would be worth $1,458.24. Your total return would have been $2,002.80.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$10.52 $1,009.92 96 8 $544.56 $1,458.24 $2,002.80

The dividend yields are good with dividend growth currently flat. The current dividend yield is good (5% to 6% ranges) at 5.15%. The 5 and 8 year median dividend yields are also good with both at 5.66%. The dividend growth over the past 5 years is low at 1.56% per year. However, dividend increases were stopped in 2019 and there is no indication that they intend to increase them in the short term.

The Dividend Payout Ratios (DPR) are fine since for REITs the important DPRs are for FFO and AFFO. The DPR for EPS for 2021is 2325% with 5 year coverage at 192%. Because this is a REIT, we need to look at the DPR for Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). The DPR for FFO for 2021 is 78% with 5 year coverage at 74%. The DPR for AFFO for 2021 is 91% with 5 year coverage at 88%. The DPR for Free Cash Flow for 2021 is 92% with 5 year coverage at 79%. However, the various sites that I looked at all disagreed and disagreed a lot on the FCF.

Debt Ratios could improve. The Long Term Debt/Market Cap Ratio for 2021 is good at 0.57. The Liquidity Ratio for 2021 is good at 2.13. The Debt Ratio is 1.26. This is low and I would prefer it to be 1.50 or higher. The Leverage and Debt/Equity Ratios are 4.89 and 3.89 respectively. These are high and I would prefer them to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 8 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 1.56% 7.66% 2.43% 5.23%
2013 8 1.63% 10.48% 4.70% 5.78%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.12, 13.85 and 14.58. The corresponding 8 year and historical ratios are 13.12, 13.85 and 14.58. The current P/E Ratio is 451.95 based on a stock price of $14.38 and EPS for last 12 months of $0.03. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Because this is a REIT, we need to look at Price/Adjusted Funds from Operations Ratios. The 5 year low, median, and high median P/AFFO Ratios 13.54, 15.46 and 17.28. The corresponding 8 year ratios are 13.79, 15.46 and 17.28. The current P/AFFO Ratio is 16.53 based on AFFO for 2022 of $0.87 and a stock price of $14.38. The current ratio is between the median and high of the 8 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Because this is a REIT, we need to look at Price/ Funds from Operations Ratios. The 5 year low, median, and high median P/FFO Ratios 11.56, 13.24 and 14.93. The corresponding 8 year ratios are 11.54, 12.94 and 14.65. The current P/FFO Ratio is 14.67 based on FFO for 2022 of $0.98 and a stock price of $14.38. The current ratio is above the high of the 8 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $13.56. The 8 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.88 and 0.99. The current P/GP Ratio is 1.06 based on a stock price of $14.38. The current ratio is above the 8 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an 8 year median Price/Book Value per Share Ratio of 1.31. The current ratio is 1.72 based on a Book Value of $3,302M, Book Value per Share of $8.34 and a stock price of $14.38. The current ratio is 31% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an 8 year median Price/Cash Flow per Share Ratio of 4.56. The current P/CF Ratio is 8.50 based on Cash Flow for last 12 months of $669.4M, Cash Flow per Share of $1.69 and a stock price of $14.38. The current ratio is 87% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an 8 year and historical median dividend yield of 5.66%. The current dividend yield is 5.15% based on dividends of $0.74 and a stock price of $14.38. The current dividend yield is 9% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 8 year median Price/Sales (Revenue) Ratio is 7.10. The current P/S Ratio is 7.64 based on Revenue estimate for 2022 of $1,362M, Revenue per Share of $1.88 and a stock price of $14.38. The current ratio is 7.6% above the 8 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 still at a reasonable level, but probably at the high end of it. Both the dividend yield test and the P/S Ratio test shows that the stock price is reasonable but above the median. However, a number of other tests is showing the stock price as expensive.

When I look at analysts’ recommendations, I find Strong Buy (1) and Hold (7). The consensus would be a hold. The 12 month stock price is $16.03. This implies a total return of 16.62% with 11.47% from capital gains and 5.15% from dividends based on a stock price of $14.38.

When I looked at analysts’ recommendations last year, I found Buy (1) and Hold (7). The consensus was a hold. The 12 month stock price is $13.81. This implied a total return of 13.94% with 8.34% from capital gains and 5.79% from dividends based on a current price of $12.77. What happened was a total return of 18.40% with 12.61% from capital gains and 5.79% from dividends based on a starting price of $12.77.

TD Securities says that give it a Hold because of its current valuation in relation to its peers. I thought that the stock price last year was reasonable. This year, TD Securities is still given this stock a Hold rating with a 12 month stock price of $16.00.

One analyst on Stock Chase calls this stock a good income play. Kay Ng Motley Fool thinks this stock is a great way to become a passive landlord. Christopher Liew on Motley Fool says that this stock is a pure dividend play. The company reports on the 2021 year end in a Press Release. A report from Simply Wall Street on Yahoo Finance talks about insider trading. Simply Wall Street lists 4 risks of (1) Interest payments are not well covered by earnings, (2) Unstable dividend track record (3) Large one-off items impacting financial results and (4) Profit margins (1.7%) are lower than last year (34.1%). They seem wrong about unstable dividend track record. This site often confuses dividends paid in Canadian Dollars with fluctuating dividends, but only the exchange rate is fluctuating.

Choice Properties Real Estate Investment Trust invests in, manages, and develops retail and commercial properties across Canada. The company's portfolio primarily consists of shopping centers anchored by supermarkets and stand-alone supermarkets. The properties are mostly located in Ontario and Quebec, followed by Alberta, Nova Scotia, British Columbia, and New Brunswick. Its web site is here Choice Properties REIT.

The last stock I wrote about was about was Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more. The next stock I will write about will be ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more on Friday, February 25, 2022 around 5 pm. Tomorrow on my other blog I will write about My Portfolio.... learn more on Thursday, February 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.

Tuesday, February 22, 2022

Manulife Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. The stock price seems cheap to reasonable. It has a good dividend yield. See my spreadsheet on Manulife Financial Corp.

Is it a good company at a reasonable price? I think that the stock price is reasonable, if not cheap. I still have hopes for this stock, but it would appear that I bought it at the wrong time. It did have problems in the past, but it now seems to be recovering.

I own this stock of Manulife Financial Corp (TSX-MFC, NYSE-MFC). This company was demutualized in 1999 and it turned into a dividend growth stock. I bought this company for the first time in 2005. Analysts liked it and it was a dividend growth stock.

When I was updating my spreadsheet, I noticed that I have not done well in my investment in this stock. Neither have other long term investors who invested in this stock 15 to 20 years ago. My total return to the end of January 2021, some 17 years, is 3.10% per year with 0.34% from capital gains and 2.76% from dividends. Long term investors of 15 years have made loss 0.71% per year with a capital loss of 3.21% and dividends of 2.50%. Investors of 20 years have made 3.81% per year, with capital gain of 0.74% and dividends of 3.07%.

If you had invested in this company in December 2006, $1023.10 you would have bought 26 shares at $39.35 per share. In December 2021, after 15 years you would have received $157.66 in dividends. The stock would be worth $626.86. Your total return would have been $784.52. Part of the problem was the dividend decrease in 2009.

If you had invested in this company in December 2011, $1009.05 you would have bought 93 shares at $17.15 per share. In December 2021, after 10 years you would have received $748.65 in dividends. The stock would be worth $2,242.23. Your total return would have been $2,990.88.

If you had invested in this company in December 2016, $1171.59 you would have bought 49 shares at $20.74 per share. In December 2021, after 5 years you would have received $431.84 in dividends. The stock would be worth $1,181.39. Your total return would have been $1,613.23.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$39.35 $1,023.10 26 15 $157.66 $626.86 $784.52
$17.15 $1,009.05 93 10 $748.65 $2,242.23 $2,990.88
$20.74 $1,171.59 49 5 $431.84 $1,181.39 $1,613.23

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) 4.82%. The 5, 10 and historical median dividend yields are moderate at 4.37%, 3.90% and 3.10%. Dividends are currently being increased at a moderate rate (8% to 14% ranges) at 9.60% per year over the past 5 years. The last increase was in 2021 and it was a 17.9% increase.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 is 33% with 5 year coverage at 40%. The DPR for Cash Flow per Share for 2021 is 10% with 5 year coverage also at 10%. The DPR for Free Cash Flow for 2021 is 6% with 5 year coverage at 8%.

Debt Ratios are fine. This is a financial stock, so you want to look at Debt/Covering Assets Ratio. For 2021, this ratio is 0.97, which is fine. The Liquidity Ratio is not important, but I calculate it anyway and for 2021 it is 1.26. If you add in Cash Flow after dividends, it is 2.26. Also, the Assets/Current Liability Ratio for 2021 is quite high at 43.75. The Debt Ratio for 2021 is 1.07. This is within the normal range for a financial stock.

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 9.60% 4.32% 0.17% 4.15%
2011 10 8.45% 13.26% 8.31% 4.95%
2006 15 3.24% -0.71% -3.21% 2.50%
2001 20 8.02% 3.81% 0.74% 3.07%
1999 22 8.36% 8.77% 4.46% 4.31%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.01, 8.27 and 9.52. The corresponding 10 year ratios are 9.13, 11.25 and 12.86. The corresponding historical ratios are 11.22, 13.78 and 15.90. The current P/E Ratio is 6.96 based a stock price of $27.41 and EPS estimate for 2022 of $3.94. The current P/E Ratio is below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $48.72. The 10 year low, median, and high median Price/Graham Price Ratios are 0.58, 0.77 and 0.89. The current P/GP Ratio is 0.49 based on a stock price of $27.41. The current ratio is 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/Book Value per Share Ratio of 1.04. The current P/B Ratio is 1.02 based on a stock price of $27.41, Book Value of $52,072M for last 12 months, and Book Value per Share $26.78. The current P/B Ratio is 1.2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

There is also an estimate for Book Value per Share for 2022. The Book Value per Share estimate for 2022 is $29.20. This gives a P/B Ratio is 0.94 based on a stock price of $27.41, Book Value per Share $29.20, and Book Value of $57,175M. This P/B Ratio of 0.94 is 9% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 2.30. The current P/CF Ratio is 2.30 based on Cash Flow per Share for last 12 months of $11.92, Cash Flow of $23,155M and a stock price of $27.41. 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 an historical median dividend yield of 3.10%. The current dividend yield is 4.82% based on dividends of $1.32 and a stock price of $27.41. The current dividend is 55% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 3.90%. The current dividend yield is 4.82% based on dividends of $1.32 and a stock price of $27.41. The current dividend 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 0.78. The current P/S Ratio is 0.70 based on Revenue estimate for 2022 of $76,125M, Revenue per Share of $39.18 and a stock price 27.41. The current ratio is 9.9% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is cheap to reasonable. The dividend yield tests say it is cheap and P/S Ratio test says it is reasonable but below the median. The other tests range from cheap to at the median.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4), Hold (6) and Sell (1). That is quite a range. The consensus would be a Buy. The 12 month stock price is $31.57. This implies a total return of 19.99%, with 15.18% from capital gains and 4.82% from dividends based on a stock price of $27.41.

When I looked at analysts’ recommendations last year, I found Strong Buy (4), Buy (4) and Hold (7). The consensus was a Buy. The 12 month stock price was $27.17. This implies a total return of 13.71%, with 9.20% from capital gains and 4.50% from dividends based on a stock price of $24.88. What happened was a price increase to date at $27.41. That would be a total return of 14.67% with 10.17% from capital gains and 4.50% from dividends. So, they were quite close.

Last year, I thought that the stock price was reasonable. I had not made much money on this stock, but I expected that the stock would do better in the long run.

Analysts on Stock Chase says it is cheap because it had issues. Chris MacDonald on Motley Fool thinks it is a great pick for the long term. Kay Ng on Motley Fool says that Manulife recent results prove it is capable to maintain a safe dividend. The company reports on its fourth quarter via Newswire. A report from Simply Wall Street on Yahoo Finance gives a warning that earnings are expected to drop over the short term for this company.

Manulife provides life insurance and wealth management products and services to individuals and group customers in Canada, the United States, and Asia. Its web site is here Manulife Financial Corp.

The last stock I wrote about was about Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more. The next stock I will write about will be Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more on Wednesday, February 23, 2022 around 5 pm. Today on my other blog I will write about Saving.... learn more on Tuesday, February 22, 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, February 18, 2022

Intact Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. The stock price might be reasonable but it may also be a bit on the expensive side. It has good Dividend Payout Ratios and reasonable debt ratios. It has done well for shareholders in the past. See my spreadsheet on Intact Financial Corp.

Is it a good company at a reasonable price? The price maybe reasonable and it may be a bit on the expensive side. You have to wonder when the dividend yield is below 2% and it has seldom been below 2%. This surely points to the stock being on the expensive side. It is a good company and has provided good value for its shareholders.

I do not own this stock of Intact Financial Corp (TSX-IFC, OTC-IFCZF). I am following this stock because in November 2011, the TD Bank put out a special report on the merits of dividend investing. At the end of the report, they listed a number of Canadian stocks as Equity Yield ideas. This was one stock listed that I did not follow. This and Wajax are from TD Report on dividend investing.

When I was updating my spreadsheet, I noticed that EPS increased by 72%, Revenue by 43% and Net Premiums by 44%. One of their biggest expenses is Claims and they only increased by 30%. So, we have higher EPS because of increased revenue, and decrease in relatively claims. They recently made the acquisition of RSA Insurance group.

If you had invested in this company in December 2011, $1,053.54 you would have bought 18 shares at $58.53 per share. In December 2021, after 10 years you would have received $447.12 in dividends. The stock would be worth $2,959.56. Your total return would have been $3,406.68.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$58.53 $1,053.54 18 10 $447.12 $2,959.56 $3,406.68

The dividend yields are low with dividend growth low. The current dividend yield is low (below 2%) at 1.98%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.55%, 2.56% and 2.62%. The current dividend growth is low (below 8%) at 7.94% per year over the past 5 years. The last dividend increase was moderate (8% to 14% ranges) at 9.64% and it occurred in 2021.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 is 27% with 5 year coverage at 43%. The DPR for Cash Flow per Share for 2021 is 22% with 5 year coverage at 29%. The DPR for Free Cash Flow is 17% with 5 year coverage at 28%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is 0.40 and is good. The Liquidity Ratio is 1.50. The Debt Ratio is low at 1.34 with 5 year median at 1.37. The Leverage and Debt/Equity Ratios are 3.95 and 2.95. This is fine.

The Total Return per year is shown below for years of 5 to 17 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 7.94% 13.87% 11.34% 2.53%
2011 10 8.67% 13.48% 10.88% 2.59%
2006 15 8.50% 10.10% 7.92% 2.18%
2004 17 10.89% 13.37% 10.68% 2.69%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.00, 18.45 and 21.84. The corresponding 10 year ratios are 15.96, 17.94 and 20.35. The corresponding historical ratios are 13.98, 15.57 and 16.73. The current P/E Ratio is 18.01 based on a stock price of $183.10 and EPS estimate for 2022 of $10.20. The current ratio is between the median and high median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $142.93. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.31 and 1.42. The current P/GP Ratio is 1.29 based on a stock price of $183.70. 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 2.07. The current P/B Ratio is 2.06 based on a Book Value of $15,674M, Book Value per Share of $89.02 and a stock price of $183.70. The current ratio is 0.1% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

Analysts are giving out a Book Value per Share value for 2022. The 2022 P/B Ratio is 2.08 based on a Book Value per Share of $88.50, Book Value of $15,583M, and a stock price of $183.70. The current ratio is 0.5% 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 12.87. The current P/CF Ratio 10.34 based on the last 12 month Cash Flow per Share of $15.71, Cash Flow of $2,767M and a stock price of $183.70. The current ratio is 19.7% 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 2.62%. The current dividend yield is 1.98% based on dividends of $3.64 and a stock price of $183.70. The current dividend yield is 24% 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 2.56%. The current dividend yield is 1.98% based on dividends of $3.64 and a stock price of $183.70. The current dividend yield is 22% 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 1.58. The current ratio is 1.60 based on a stock price of $183.70, Revenue estimate for 2022 of $20,249M and Revenue per Share $115.00. The current ratio is 1.4% 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 the P/S Ratio is showing the price as reasonable, but the dividend yield test is showing it a bit expensive. The other tests are showing the stock price as reasonable and above and below 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 you can see that the beginning P/E Ratios is not showing anything conclusive. The P/S Ratio looks ok at 1.60. The dividend yield looks a bit too low.

In the following chart the capital gains for the 10 years to December 31, 2021 is 10.88% per year. The beginning yield was at 2.53%, and the P/E Ratio and the P/S Ratio were at 14.78 and 1.55. Does this chart change my opinion of the stock price? Not really. It is showing the dividend yield as being a bit low.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 11.34% 24.21 1.59 2.41%
10 10.88% 14.78 1.55 2.53%
15 7.92% 10.65 1.83 1.91%
17 10.68% 4.52 1.12
current 18.01 1.60 1.98%

When I look at analysts’ recommendations, I find Strong Buy (4) and Buy (8). The consensus would be a Strong Buy. The 12 month stock price consensus is $208.33. This implies a total return of 15.39% with 13.41% from capital gains and 1.98% from dividends.

When I looked at analysts’ recommendations last year, I found Strong Buy (4) and Buy (6). The consensus was a Buy. The 12 month stock price consensus was $180.60. That implies a total return of 27.80% with 25.50% from capital gains and 2.31% from dividends based on a stock price $143.91. What happen was a stock gain to $183.70 which gave this stock a total return of 29.96% with 27.65% from capital gains and 2.31% from dividends.

Last year I said the results of stock price testing is that the stock price is probably reasonable. Both the Dividend Yield tests say that the stock is reasonable but above the median. For the P/S Ratio test, the result was that the stock price is relatively reasonable and below the median. However, a number of the tests show the stock price as reasonable, but above median. You have to wonder about it being a bit on the expensive side.

Some analysts on Stock Chase like this stock and some do not. Kay Ng on Motley Fool likes the recent dividend increases by this company. Joey Frenette on Motley Fool thinks this is a high quality stock selling at a great price. The company has a Press Release on their fourth quarterly results. Intact Financial Corp made a Press Release about their recent acquisition of RSA Insurance group.

Intact Financial Corp is a property and casualty insurance company that provides written premiums in Canada. Most of the company's direct premiums are written in the personal automotive space. Its web site is here Intact Financial Corp.

The last stock I wrote about was about was Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more. The next stock I will write about will be Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more on Tuesday, February 22, 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, February 16, 2022

Allied Properties Real Estate Investment Trust

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price would seem to be reasonable and around or above the median. Decreasing Revenue per Share is worrisome. Low Liquidity Ratio could be a problem in an economic downturn. This has been a problem always and they did get a hit in stock price in 2008. See my spreadsheet on Allied Properties Real Estate Investment Trust.

Is it a good company at a reasonable price? I think that the stock price is reasonable at this time. The Liquidity Ratio is a problem. However, this has always been low and they have managed in the past. They have done well as a REIT for their shareholders in the past.

I do not own this stock of Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF). Since several stocks that I followed in 2015 were deleted from the stock exchange, I was looking for other stocks to follow. I am sure that I got this from a Canadian Dividend site called Think Dividends, but I cannot find it at present.

When I was updating my spreadsheet, I noticed that although Revenue is growing nicely, Revenue per Share is not. Revenue has increase by 8% and 11% per year over the past 5 and 10 years. Revenue per Share has decreased by 0.6% and increase by 1.65% per year over the past 5 and 10 years. This is because the growing number of outstanding shares. Shareholders should be interested in growth of both these items.

If you had invested in this company in December 2011, $1002.38 you would have bought 40 shares at $25.28 per share. In December 2021, after 10 years you would have received $607.86 in dividends. The stock would be worth $1,758. Your total return would have been $2,365.86.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$25.28 $1,011.20 40 10 $607.86 $1,758.00 $2,365.86

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.05%. The 5, 10 and historical median dividend yields are also moderate at 3.68%, 4.05% and 4.71%. The dividend increases are low (below 8%) with increases for the past 5 years at 2.08% per year. The last dividend increase was in 2022 and it was for 2.89%.

In the chart below, you can see what the potential dividend yield would be in 5 to 15 years at the current rate of 2.08. For example, in 15 years you could expect to receive a yield of 5.66% on your original investment if you bought today. The last column shows the what has happened in the past. For example, people who bought this stock 15 years ago are receiving a current yield of 7.98% on their original investment.

Div Yd Years At IRR Div Inc Act Past Inc
4.60% 5 2.08% 10.86% 4.62%
5.10% 10 2.08% 22.91% 6.04%
5.66% 15 2.08% 36.26% 7.98%

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 49% with 5 year coverage at 35%. The DPR for Cash Flow per Share for 2021 is 61% with 5 year coverage at 56%. The DPR for Free Cash Flow for 2021 is 90% with 5 year coverage at 69%.

Debt Ratios are fine, but very low liquidity ratio can be a problem. The Long Term Debt/Market Cap Ratio for 2021 is 0.61. The Liquidity Ratio is 0.94. If you add in cash flow after dividends it is still 0.99. The company does have a lot of assets as the Asset/Current Liability Ratio is 30.58. The problem with a very low Liquidity Ratio is that a company could get into difficulties quickly in an economic downturn and have to sell assets at fire sale prices. The Debt Ratio is good at 2.62. Leverage and Debt/Equity Ratios are good at 1.62 and 0.62.

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 2.08% 8.22% 4.10% 4.12%
2011 10 2.54% 10.44% 5.69% 4.75%
2006 15 2.28% 9.05% 4.34% 4.71%
2003 18 4.09% 13.71% 7.07% 6.64%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.94, 9.29 and 10.38. The corresponding 10 year ratios are 8.07, 9.27 and 10.22. The corresponding historical ratios are 9.45, 11.43 and 13.24. The current P/E Ratio is 12.42 based on a stock price of $43.22 and EPS estimate for 2022 of $2.17. The current ratio is above the 10 year high median ratio. This stock price testing suggests that the stock price is relatively expensive.

Because this is a REIT, we need to look at the Price/Adjusted Fund from Operations Ratios. The 5 year P/AFFO Ratios are 20.99, 23.67 and 26.57. The corresponding 10 year ratios are 17.66, 20.06 and 22.68. The current P/AFFO Ratio is 20.10 based on AFFO estimate for 2022 of $2.15 and a stock price of $43.22. This 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.

Because this is a REIT, we need to look at the Price/Fund from Operations Ratios. The 5 year P/FFO Ratios are 15.67, 19.56 and 20.94. The corresponding 10 year ratios are 15.05, 16.87 and 19.08. The current P/AFFO Ratio is 17.29 based on FFO estimate for 2022 of $2.50 and a stock price of $43.22. This 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 $53.19. The 10 year low, median, and high median Price/Graham Price Ratios are 0.77, 0.90 and 0.77. The current P/GP Ratio is 0.81 based on a stock price of $43.22. The current ratio is between the low and median 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 1.03. The current P/B Ratio is 0.86 based on a Book Value of $6426M, Book Value per Share of $50.30 and a stock price of $43.22. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 17.89. The current P/CF Ratio is 22.90 based on last 12 months Cash Flow per Share of $1.89, Cash Flow of $241M and a stock price of $43.22. 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 4.71%. The current dividend yield is 4.05% based on dividends of $1.7455 and a stock price of $43.22. The current dividend yield is 14% 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 4.05%. The current dividend yield is 4.05% based on dividends of $1.7455 and a stock price of $43.22. The current dividend yield is at the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.

The 10 year median Price/Sales (Revenue) Ratio is 8.10. The current P/S Ratio is 8.93 based on a stock price of $43.22, Revenue estimate for 2022 of $627M and Revenue per Share of $4.91. The current ratio is 9% 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 and around the median or above it. The dividend yield testing is showing the stock price as around the median and above it. The P/S Ratio testing is showing the stock price as above the median. Most the of the testing is showing the stock price as reasonable and above or below the median.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (8) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $50.69. This implies a total return of 20.64% with 16.59% from capital gains and 4.05% from dividends based on a stock price of $43.22.

When I looked at analysts’ recommendations last year, I found Strong Buy (3), Buy (7) and Hold (2). The consensus was a Buy. The 12 month stock price consensus was $45.23. This implies a total return of 26.87%, with 22.28% from capital gains and 4.60% from dividends based on a stock price of $39.66. What happened was an ending stock price of $43.22 and so a total return of 12.14% with 8.08% from capital gains and 4.06% from dividends based on a stock price of $39.99. Last year I thought the stock price was reasonable.

The most recent recommendation on Stock Chase is a hold. Adam Othman on Motley Fool thinks this is a great REIT at an attractive price. Tony Dong on Motley Fool thinks REITs are a great way of owning Real Estate without the hassle. The company reports on Newswire their fourth quarterly results. A report from Simply Wall Street on Yahoo Finance looks at insider buying.

Allied Properties Real Estate Investment Trust is a real estate investment trust engaged in the development, management, and ownership of primarily urban office environments across Canada's major cities. Most of the total square footage in the company's real estate portfolio is located in Toronto and Montreal. Its web site is here Allied Properties Real Estate Investment Trust.

The last stock I wrote about was about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more. The next stock I will write about will be Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more on Friday, February 18, 2022 around 5 pm. Tomorrow on my other blog I will write about Family and Friendship .... learn more on Thursday, February 17, 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, February 14, 2022

Richelieu Hardware Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price seems reasonable. It has good Dividend Payout Ratios and good Debt Ratios. See my spreadsheet on Richelieu Hardware Ltd.

Is it a good company at a reasonable price? The stock price is probably relatively reasonable. But note the good results from the dividend yield tests are because dividends were raised about 85.7% in 2022. This is a big dividend increase. However, there were no increases in 2021 and only 3 dividends were paid in 2020. The other good thing is that the dividends are above 1%. I still like this stock and will continue to hold my shares.

I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). This company is a dividend paying stock on the Investment Reporter stock list.

When I was updating my spreadsheet, I noticed I have done very well on this stock that I have had for almost 13 years. My total return is 20.07% per year with 18.68% from capital gains and 1.39% from dividends. On my original investment, I am earning a dividend yield is 8.49%.

If you had invested in this company on December 31, 2011, $1004.85 you would have bought 105 shares at $9.57 per share. In December 2021, after 10 years you would have received $229.61 in dividends. The stock would be worth $4,581.15. Your total return would have been $8,810.76.

Cost Tot. Cost Shares Years Dividends Stock Val Tot Ret
$9.57 $1,004.85 105 10 $229.61 $4,581.15 $4,810.76

The dividend yields are low with dividend growth low. The current dividend yield is low (below 2%) at 1.04%. The 5, 10 and historical median dividend yields are also low at 0.75%, 0.91% and 1.07%. The current dividend growth is low at 4.59% per year over the past 5 years. There was a decrease in dividends in 2020 because they only paid 3 dividends not 4 dividends. However, they paid a special dividend in 2021 to make up for this. They just increased the dividends by some 85.7%. Next year the 5 year dividend growth will be 18.05% per year.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2021 is 11% with 5 year coverage at 17%. Even with the big dividend increase in 2022 financial year, the DPR for EPS will only increase to 19% with 5 year coverage at 17%. The DPR for Cash Flow per Share for 2021 is 8% with 5 year coverage at 13%. The DPR for Free Cash Flow for 2021 is 22% with 5 year coverage at 19%.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.00 because this debt is so low. The Liquidity Ratio for 2021 is 3.25. The Debt Ratio is 3.27. The Leverage and Debt/Equity Ratios are 1.44 and 0.44.

The Total Return per year is shown below for years of 5 to 28 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 4.59% 12.08% 11.29% 0.79%
2011 10 6.17% 17.57% 16.38% 1.18%
2006 15 8.36% 12.89% 11.90% 1.00%
2001 20 11.01% 14.93% 13.72% 1.20%
1996 25 19.99% 18.45% 1.54%
1993 28 16.81% 15.79% 1.03%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.09, 20.19 and 26.39. The corresponding 10 year ratios are 16.53, 19.82 and 23.11. The corresponding historical ratios are 15.09, 15.75 and 19.20. The current P/E Ratio is 18.54 based on a stock price of $50.23 and EPS estimate for 2022 of $2.71. 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 $26.98. The 10 year low, median, and high median Price/Graham Price Ratios are 1.34, 1.64 and 1.97. The current ratio is 1.86 based on a stock price of $50.23. The current 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 3.22. The current P/B Ratio is 4.21 based on a current Book Value of $666M, Book Value per Share of $11.93 and a stock price of $50.23. The current ratio is 31% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

There is also an estimate of the Book Value per Share for 2022. Here the P/B Ratio is 3.67 based on a stock price of $50.23, Book Value per Share estimate for 2022 of $13.70 and a Book Value of $765. This P/B 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.

I get a 10 year median Price/Cash Flow per Share Ratio of 21.08. The current P/CF Ratio is 26.87 based upon the Cash Flow per Share of the last 12 months of $1.87, Cash Flow of $104M and a stock price of $50.23. This ratio is 27% 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 1.07%. The current dividend yield is 1.04% based a stock price of $50.23 and dividends of $0.52. The current dividend yield is 3% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 0.91%. The current dividend yield is 1.04% based a stock price of $50.23 and dividends of $0.52. The current dividend yield is 14% above the historical 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 1.52. The current P/S Ratio is 1.67 based on Revenue estimate for 2022 of $1,676M, Revenue per Share of $30.01 and a stock price of $50.23. 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.

Results of stock price testing is that the stock price is probably relatively reasonable. The dividend yield tests are showing the stock price as relatively reasonable and above or below the median. The P/S Ratio test is showing the stock price as relatively reasonable, but above the median. (The same as last year). Most of the other tests are showing the stock price as relatively reasonable and above or below the median. (Last year most of the tests were pointing to an expensive price.)

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 that P/E Ratios and P/S Ratios have been climbing higher and yields have been going lower. This happens when you have a long bull market.

In the following chart the capital gains for the 10 years to December 31, 2021 is 16.38% per year. The beginning yield was at 1.62%, and the P/E Ratio and the P/S Ratio were at 15.27 and 1.08. Does this chart change my opinion of the stock price? It could be showing that the stock is getting expensive.

# Years Cap Gains Beg P/E Beg P/S Beg Yield
5 11.29% 23.89 1.86 0.79%
10 16.38% 15.27 1.08 1.62%
15 11.90% 17.69 1.42 1.01%
20 13.72% 15.63 0.97
25 18.45% 11.52 0.48
28 15.79% 12.17 0.89
current 18.54 1.67 1.04%

When I look at analysts’ recommendations, I find Buy (1), and Hold (2). The consensus would be a Hold. The 12 month stock price is $54.50. This implies a total return of 9.54% with 8.50% from capital gains and 1.04% from dividends based on a stock price of $50.23.

When I look at analysts’ recommendations last year, I found only Hold (2) recommendations. The consensus would be a Hold. The 12 month stock price consensus was $38.25. This implies a Total Return loss of 1.15% with a capital loss of 1.87% and dividends of $0.72% based on a stock price of 38.89. What happened was the stock price increased to $50.23 which implies a total return of 29.88% with 29.16% from capital gains and 0.72% from dividends.

Last year I thought the stock price was expensive. I tend not to buy stock when the dividend yield is less than 1%. However, I had not intention of selling this stock just because it was on the expensive side at that time. The P/S Ratio test showed the stock as relatively reasonable, but above the median, but all the other were basically said it was expensive.

Analysts on Stock Chase think this company is a good pick. Ambrose O'Callaghan on Motley Fool thinks this is a good company that is currently cheap. Adam Othman on Motley Fool thinks that even though the company has been on the rise, it is still fairly priced. A Simply Wall Street report on Yahoo Finance talks about the recent analysts upgrades to estimates for this company. A report from Simply Wall Street on Yahoo Finance looks at this company’s performance and says they are pleased with it.

Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company's sales are derived from its operations in Canada. Its web site is here Richelieu Hardware Ltd.

The last stock I wrote about was about was AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. The next stock I will write about will be Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more on Wednesday, February 16, 2022 around 5 pm. Tomorrow on my other blog I will write about Stock for 2022 .... learn more on Tuesday, February 15, 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.