Hydro One Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The current stock price is relatively expensive. Debt Ratios are mostly fine, but the company should improve their Liquidity Ratio. The Dividend Payout Ratios (DPR) are fine with the one AEPS being probably the most important. The dividend yields are moderate with dividend growth low. See my spreadsheet on Hydro One Ltd.

Is it a good company at a reasonable price? This will probably be a good utility to invest in. They are growing their dividends and intend to continue to do that. However, I think that the current stock price is relatively expensive.

I do not own this stock of Hydro One Ltd (TSX-H, OTC-HRNNF). It is a utility stock and has been recommended by various persons. It is on the Money Sense list with a C. Rating. It appeared in the Stable Dividend Portfolio when Norman Rothery originally wrote about it in December 21, 2022.

When I was updating my spreadsheet, I noticed that the Liquidity Ratios are very low. The current ratio is 0.51. The 9 year median is 0.51. Even add in cash flow after dividends it does not even get it to 1.00 (only 0.96). Only adding back in the current portion of the current debt do you get past 1.00. In 2022 this gets you to a low ratio of 1.15. It is best at 1.50. When this ratio is under 1.00, it means that current assets cannot cover current liabilities. Having very low Liquidity Ratios can cause problems in bad economic times. This can occur if debt holders cannot roll over the current debt. (I guess you can assume this will not happen as long as the Ontario government owns shares in this company.)

If you had invested in this company in December 2015, for $1,003.05 you would have bought 45 shares at $22.29 per share. In December 2022, after 7 years you would have received $308.90 in dividends. The stock would be worth $1,632.15. Your total return would have been $1,941.05.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$22.29	$1,003.05	45	7	$308.90	$1,632.15	$1,941.05

The current dividend yield is moderate (2% to 4% ranges) at 3.90%. The 5, 6 and historical dividend yields are also moderate at 3.91%, 3.91% and 3.91%. The dividends are increased at a low rate (below 8%) at 2.9% per year for the past 5 years. The last dividend increase was in 2022 and it was for 5%.

The Dividend Payout Ratios (DPR) are fine with the one AEPS being probably the most important. The DPR for EPS for 2022 is 63% with 5 year coverage at 67%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 if 63% with 5 year coverage at 65%. The DPR for Funds from Operations (FFO) for 2022 is 30.22% with 5 year coverage at 33%. The DPR for Cash Flow per Share (CFPS) for 2022 is 29% with 5 year coverage at 30%. The DPR for Free Cash Flow for 2022 could be 380% with 5 year coverage at 663% according to one site.

Debt Ratios are mostly fine, but the company should improve their Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2022 is 0.60 and is fine. The Debt Ratio for 2022 is good at 1.57. The Debt/Equity and Shareholders' Equity Ratios are 2.78 and 1.77 respectively and these are fine.

The Liquidity Ratio is 0.51. Even adding in Cash Flow after dividends gets you to 0.96. You must add back in the Current Portion of the Long Term Debt to get to 1.15 and even this is low because I like the ratio to be 1.50 or higher. A problem to adding back the Current Portion of The Long Term Debt is that in bad times, the company might not be able to just rollover their debt. Although, I must admit utilities do not seem to have had a problem with this traditionally and the Ontario government owns lots of shares in this company.

The Total Return per year is shown below for years of 5 to 08 to the end of 2022. 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.
2017	5	4.90%	13.83%	10.12%	3.56%
2015	8	2.20%	9.71%	6.68%	3.69%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 15.45, 17.80 and 20.15. The corresponding 7 year ratios are 16.04, 18.16 and 20.30. The current P/E Ratio is 21.65 based on a stock price of $38.54 and EPS estimate for 2023 of $1.78. The current ratio is above the high ratio of the 7 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 14.02, 16.99 and 20.7. The corresponding 8 year ratios are 16.60, 18.52 and 20.07. The current P/AEPS Ratio is 21.65 based on a stock price of $38.54 and AEPS estimate for 2023 of $1.78. The current ratio is above the high ratio of the 8 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/FFO Ratios are 7.82,8.74 and 9.89. The corresponding 8 year ratios are 7.83, 8.77 and 9.77. The current P/FFO Ratio is 10.54 based on a stock price of $38.54 and FFO for the last months 12 months of $3.66. The current ratio is above the high ratio of the 8 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $27.27 . The 8-year low, median, and high median Price/Graham Price Ratios are 1.02, 1.07 and 1.16. The current P/GP Ratio is 1.33 based on a stock price of $38.54. The current ratio is above the high ratio of the 8 year median ratios. 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 1.41. The current P/B Ratio is 2.04 based on a stock price of $38.54, Book Value of $11,306M and a Book Value per Share of $18.88. The current ratio is 45% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I also have an estimate for the Book Value per Share for 2023 of $19.40. This implies a P/B Ratio of 1.99 with a stock price of $38.54 and Book Value of $11,615M. This ratio is 41% above the 10 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 8.10. The current P/CF Ratio is 10.25 based on an Cash Flow per Share estimate for 2023 of $3.76, Cash Flow of $2,251M and a stock price of $38.54. The current ratio is 27% above the 8 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an 8-year median dividend yield of 3.91%. The current dividend yield is 2.90% based on a stock price of $38.54 and dividends of $1.1184. The current yield is 26% below the 8 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 8-year median Price/Sales (Revenue) Ratio is 2.13. The current ratio is 2.89 based on Revenue estimate for 2023 of $7,995M. The current ratio is 35% above the 8 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. I know that there is not much data on this stock because it has only been on the TSX for a limited period. However, the dividend yield test and the P/S Ratio tests agree that the stock price is relatively expensive. In fact, all the tests agree the stock price is relatively expensive. Even the analysts seem to say this when the 12 month stock price given is below the current stock price.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (1), Hold (9) and Underperform (1). The 12 month stock price consensus is $37.77. This implies a total return of $0.90% with a capital loss of 2.00% and dividends of $2.90%.

Most analysts like this stock on Stock Chase. However, one analyst, Michael Sprung does not like it because he thinks it is politicized. Stock Chase gives this stock 4 stars out of 5. Amy Legate-Wolfe on Motley Fool says to buy for income and growth. Joey Frenette on Motley Fool says this dividend stock is selling at a fair price. The company gives a press release via Newswire about their fourth quarter of 2022.

Simply Wall Street on Yahoo Finance says this stock is selling 34% above its intrinsic value. Simply Wall Street gives 2 warnings on this stock of debt is not well covered by operating cash flow; and dividend of 2.87% is not well covered. Simply Wall Street gives this stock 3 stars out of 5.

Hydro One operates regulated transmission and distribution assets in Ontario. The province of Ontario holds an approximate 47% common equity stake. Its web site is here Hydro One Ltd.

The last stock I wrote about was about was AltaGas Ltd (TSX-ALA, OTC-ATGFF) ... learn more. The next stock I will write about will be BCE Inc (TSX-BCE, NYSE-BCE) ... learn more on Monday, April 3, 2023 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.

AltaGas Ltd

Yesterday, I bought some more Emera Inc Shares at $55.15 per share. This is for my Trading Account. This is my dividend growth account and is a core stock for me.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Results of stock price testing is that the stock price is probably reasonable and maybe cheap. Debt Ratios need to be improved. The Dividend Payout Ratios (DPR) is good with the important one for AEPS. The dividend yields are good with dividend growth restarted. See my spreadsheet on AltaGas Ltd.

Is it a good company at a reasonable price? I plan to hold the shares I have, but I will not be buying anymore because I have enough. I still believe I will do fine with this stock. It is encouraging that the company has restarted dividend growth. The stock price is reasonable and is probably cheap.

I own this stock of AltaGas Ltd (TSX-ALA, OTC-ATGFF). When I bought this stock in 2009 it was on many dividend growth stock lists. In 2009, I saw that this stock also had good growth in Revenues, Earnings, Dividends, and Stock Prices over the last 5 and 10 years. The stock had a strong balance sheet. I took a small position in this stock, and planned to wait and see how things go with this stock before buying more. I bought more in 2010 and 2012.

When I was updating my spreadsheet, I noticed that this year, this company has a much better Liquidity Ratio than in past years. The Liquidity Ratio for 2022 is 1.36 and the company has a 5 year median of 0.98. In 2022 this ratio is getting close to the safety on of 1.50 at 1.43.

If you had invested in this company in December 2012, for $1,007.10 you would have bought 30 shares at $33.57 per share. In December 2022, after 10 years you would have received $462.24 in dividends. The stock would be worth $701.40. Your total return would have been $1,163.64.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$33.57	$1,007.10	30	10	$462.24	$701.40	$1,163.64

You can see from the following chart that this company has mostly been doing better over the past 5 years than over the past 10 years. The exceptions are dividends and Cash Flow.

Year	Item	Tot. Growth	Per Year
5	Revenue Growth	451.09%	40.68%
5	AEPS Growth	57.14%	9.46%
5	Net Income Growth	1216.83%	168.16%
5	Cash Flow Growth	-1.15%	-0.23%
5	Dividend Growth	-98.82%	-12.84%
5	Stock Price Growth	-22.41%	150.38%
10	Revenue Growth	871.34%	25.53%
10	AEPS Growth	62.61%	4.98%
10	Net Income Growth	291.76%	26.11%
10	Cash Flow Growth	268.28%	13.92%
10	Dividend Growth	-31.13%	-2.67%
10	Stock Price Growth	-43.58%	-3.55%

The dividend yields are good with dividend growth restarted. The current dividend yields are good (5% to 6% ranges) at 5.07%. The 5, 10 and historical dividend yields are also good at 5.62%, 5.25% and 5.80%. The dividends were cut in 2019. The company then started to raise them again in 2021. The last dividend increase was in 2023 and it was for 5.7%. The dividends are still 49% below the 2018 dividends.

The Dividend Payout Ratios (DPR) is good with the important one for AEPS. The DPR for EPS for 2022 is 75% with 5 year coverage at 139%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 57% with 5 year coverage at 88%. The DPR for Funds from Operations (FFO) is 25% with 5 year coverage at 34%. The DPR for Cash Flow per Share (CFPS) is 25% with 5 year coverage at 38%. There is a lot of disagreement on what the Free Cash Flow (FCF) is with some site showing the FCF negative.

Debt Ratios need to be improved. The Long Term Debt/Market Cap Ratio is too high 1.32. This means that the market cap is lower than the Long Term Debt. If you look at Long Term Debt/Covering Assets, the ratio is 0.70 and this is fine. The Liquidity Ratio at 1.36 is a bit low. If you add in Cash Flow after dividends it is still low at 1.43. I prefer this to be at 1.50 or higher. The Debt Ratio is a bit low at 1.47 and I would prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 3.15, and 2.15. I prefer these to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 23 to the end of 2022. 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.
2017	5	-12.84%	0.78%	-3.96%	4.74%
2012	10	-2.67%	1.84%	-3.55%	5.39%
2007	15	-4.33%	5.80%	-0.82%	6.61%
2002	20	6.98%	17.71%	4.66%	13.05%
1999	23	9.76%	17.80%	6.09%	11.71%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.51, 9.24 and 12.97. The corresponding 10 year ratios are 22.49, 26.26 and 30.03. The corresponding historical ratios are 13.02, 15.83 and 18.70. The current ratio is 11.38 based on a stock price of $22.07 and EPS estimate for 2023 of $1.94. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 11.50, 14.25 and 16.57. The corresponding 10 year ratios are 17.91, 24.11 and 28.16. The current P/AEPS Ratio is 11.38 based on a stock price of $22.07 and AEPS estimate for 2023 of $1.94. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This is an important test for this section.

I have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 4.47, 6.17 and 7.27. The corresponding 10 year ratios are 6.79, 7.90 and 9.94. The current ratio is 5.56 based on AFFO estimate for 2023 of $3.97 and a stock price of $22.07. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $32.04. The 10-year low, median, and high median Price/Graham Price Ratios are 0.96, 1.21 and 1.50. The current P/GP Ratio is 0.73 based on a stock price of $22.07. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a 10-year median Price/Book Value per Share Ratio of is 1.28. The current P/B Ratio is 1.01 based on a stock price of $22.07, Book Value of $6,870M and Book Value per Share of $24.40. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I also have a Book Value per Share estimate of $25.20. This analyst calculate the Book Value differently that I do and their calculation gets a 10 year median ratio of 1.08. The Book Value per Share estimate gets a P/B Ratio of 0.88, Book Value $7,095M with a stock price of $22.07. This P/B 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 10.60. The current P/CF Ratio is 5.38 based on a Cash Flow per Share estimate for 2023 of $4.10, Cash Flow of $1,154M and a stock price of $22.07. This ratio is 49% 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 5.80%. The current dividend yield is 5.07% based on a dividend of $1.12 and a stock price of $22.07. This dividend yield is 13% 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 5.25%. The current dividend yield is 5.07% based on a dividend of $1.12 and a stock price of $22.07. This dividend yield is 3% 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 1.73. The current P/S Ratio is 0.46 based on a stock price of $22.07, Revenue estimate for 2023 of $13,443 and Revenue per Share of $47.75. The current ratio is 73% below the 10 year median ratio.

Results of stock price testing is that the stock price is probably reasonable and maybe cheap. There are problems with my favourite test of dividend yield because this works best for dividend growth stocks and not well for stocks that cut their dividends. Of course, it is bad sign when companies cut dividends. The P/S Ratio test seems a reasonable test and says the stock price is cheap. Most of the tests show the stock price as relatively cheap.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (10) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $30.94. This implies a total return of $45.27% with 40.19% from capital gains and 5.07% from dividends based on a current stock price of $22.07.

One analyst on Stock Chase says it is his top pick, but another says Do Not Buy as there are better peer stocks available. Most analysts like this stock. Stock Chase give this stock 4 stars out of 5. It is not on the Money Sense list. Karen Thomas on Motley Fool reviews this stock and has an optimistic view. Robin Brown on Motley Fool says to buy this stock for passive income. The company put out a Press Release on their 2022 results.

Simply Wall Street on Yahoo Finance talks about this company’s dividend. Simply Wall Street gives this stock 3 stars out of 5. Simply Wall Street puts out 2 warnings on this stock of debt is not well covered by operating cash flow; and Dividend of 5.11% is not well covered.

AltaGas Ltd owns and operates a diversified basket of energy infrastructure businesses. Business is conducted through four segments: Midstream, power, utilities and corporate. Revenue is derived from customers in both Canada and the United States, with United States customers contributing the most. Its web site is here AltaGas Ltd.

The last stock I wrote about was about was TC Energy Corp (TSX-TRP, NYSE-TRP) ... learn more. The next stock I will write about will be Hydro One Ltd (TSX-H, OTC-HRNNF) ... learn more on Friday, March 31, 2023 around 5 pm. Tomorrow on my other blog I will write about PC Optimum Points .... learn more on Thursday, March 30, 2023 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.

TC Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Results of stock price testing is that the stock price is reasonable and judging by the dividend yield tests probably cheap. Debt Ratios need to be improved. The Dividend Payout Ratios (DPR) for AEPS is important and good. The dividend yields are high with dividend growth low. See my spreadsheet on TC Energy Corp.

Is it a good company at a reasonable price? There are some worries about this company, but overall, I think that it is a good utility company to hold. I will not be buying anymore because I have enough of my portfolio invested in this company. The price is reasonable and is probably cheap.

I own this stock of TC Energy Corp (TSX-TRP, NYSE-TRP). I bought the stock in 2000 at an opportune time. The company had been cutting their dividend payments in order to re-organize and get the company into shape for long term profitability. This company’s stock fell hard because of this. People who depend on dividends for their income can be an unforgiving lot and can get really upset at company when a trusted company cuts its dividends.

When I was updating my spreadsheet, I noticed I have had this stock for 23 years and I have made 9.42% per year with 3.65% from capital gains and 5.77% from dividends. I also noticed that the stock price this year in is $54.31 compared to a year ago when it was $68.10 when I updated my stock price for February 28, 2023.

One interesting thing is that TD Securities stock reports on Utilities used to include Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). For this stock, they have stopped reporting on this. They are now focused on Adjusted Earnings per Share (AEPS). This item has become very popular lately.

If you had invested in this company in December 2012, for $1,034.44 you would have bought 22 shares at $47.02 per share. In December 2022, after 10 years you would have received $577.83 in dividends. The stock would be worth $1,187.56. Your total return would have been $1,765.39.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$47.02	$1,034.44	22	10	$577.83	$1,187.56	$1,765.39

The dividend yields are high with dividend growth low. The current dividend yield is high (7% and above) at 7.10%. The 5 year dividend yield is good (5% and 6% ranges) at 5.11%. The 10 year and historical dividend yields are moderate at 4.61% and 4.32%. The dividend growth is low (below 8%) at 7.91% per year over the past 5 years. The last dividend increase was in 2023 and it was for 3.3%. Over the past 34 years, dividends have increased 31 times and decreased 2 times. The last dividend decrease was in 2000.

The Dividend Payout Ratios (DPR) for AEPS is important and good. The DPR for EPS for 2022 is 558% with 5 year coverage at 102%. The DPR for EPS is expected to be 87% in 2023. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 83% with 5 year coverage at 76%. This is an important one. The DPR for 2022 for Funds from Operations (FFO) is 48% with 5 year coverage at 43%. The DPR for Cash Flow per Share (CFPS) for 2022 is 52% with 5 year coverage at 43%. The DPR for CFPS for 2023 is also expected to be 52%. This is high and a DPR for 40% or lower is better. Analysts cannot agree to the Free Cash Flow (FCF) and there are huge differences.

Debt Ratios need to be improved. The Long Term Debt/Market Cap is 0.72 and this is fine. The Liquidity Ratio is 0.43, add in cash flow after dividends it is 0.47 and the add back the current portion of the long term debt and it is just 0.92. It means that current assets cannot cover current liabilities and can be a problem. It needs to be above 1.00 and much better at 1.50. The Debt Ratio is 1.43 and this is low and is best at 1.50 or higher. The Leverage and Debt/Equity Ratios are 3.35 and 2.35 and these are too high and are best below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 34 to the end of 2022. 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.
2017	5	7.91%	2.93%	-2.47%	5.40%
2012	10	7.45%	6.46%	1.39%	5.07%
2007	15	6.65%	6.55%	1.93%	4.62%
2002	20	6.57%	9.71%	4.38%	5.34%
1997	25	4.53%	6.04%	2.13%	3.91%
1992	30	5.20%	8.69%	3.75%	4.94%
1988	34	5.00%	9.29%	4.10%	5.18%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.34, 13.95 and 16.48. The corresponding 10 year ratios are 17.80, 18.85 and 19.91. The corresponding historical ratios are 12.32, 14.04 and 16.05. The current P/E Ratio is 12.32 based on a stock price of $52.38 and EPS estimate for 2023 of $4.25. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. However, the 10 year median ratios seem high for a utility.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 12.22, 14.35 and 16.95. The corresponding 10 year ratios are 13.89, 16.92 and 19.54. The current P/AEPS Ratio is 12.18 based on a stock price of $52.38 and AEPS estimate for 2023 of $4.30. The current ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $54.39. The 10-year low, median, and high median Price/Graham Price Ratios are 1.05, 1.25 and 1.43. The current ratio is 0.96 based on a stock price of $52.38. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a 10-year median Price/Book Value per Share Ratio of 2.11. The current P/B Ratio is 1.69 based on a stock price of $52.38, Book Value of $31,491M and a Book Value per Share of $30.94. The current ratio is -19.8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I also have an Book Value per Share (BVPS) estimate of $32.60. The analyst calculated the Book Value differently from me and their 10 year median P/BV Ratio is 1.87. This estimate leads to a ratio of 1.61 with Book Value of $33,186M, and stock price of $52.38. This P/B 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 a 10-year median Price/Cash Flow per Share Ratio of 8.77. The current P/CF Ratio is 7.33 based on Cash Flow per Share (CFPS) estimate of $7.15, Cash Flow of $7,278M and a stock price of $52.38. This P/CF 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 an historical median dividend yield of 4.32%. The current dividend yield is 7.10% based on dividends of $3.72 and a stock price of $52.38. The current dividend yield is 64% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 4.61%. The current dividend yield is 7.10% based on dividends of $3.72 and a stock price of $52.38. The current dividend yield is 54% 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 3.94. The current P/S Ratio is 3.41 based on Revenues of $15,659M, Revenue per Share of $15.38 and a stock price of $52.38. 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.

Results of stock price testing is that the stock price is reasonable and judging by the dividend yield tests probably cheap. The dividend yield tests say that the stock price is cheap. The P/S Ratio tests say the stock price is reasonable and below the median. All the testing says the stock price is either cheap or reasonable and below the median.

When I look at analysts’ recommendations, I find strong Buy (4), Buy (7), Hold (7), Underperform (1), and Sell (3). The consensus would be a Hold. The 12 months stock price consensus is $60.79. This implies a total return of 23.16% with 16.06% from capital gains and 7.10% from dividends. Michael Sprung on Stock Chase says we may not see dividend increases going forward. Barry Schwartz on Stock Chase says inexcusable cost overruns on Coastal Gas Link Pipeline. John O’Connell agrees. See Stock Chase.

The last 3 analysts on Stock Chase say Hold and Do not Buy. Stock Chase gives this stock 5 stars out of 5. This is number 19 on Money Sense list. Joey Frenette on Motley Fool says this stock is too cheap to avoid. Rajiv Nanjapla on Motley Fool thinks this stock is undervalued. The company put out a Press Release on their 2022 results.

Simply Wall Street has a report on Yahoo Finance about this stock. Simply Wall Street has Interest payments are not well covered by earnings; dividend of 7.15% is not well covered by earnings or cash flows; large one-off items impacting financial results; profit margins (4.3%) are lower than last year (13.6%); and Shareholders have been diluted in the past year.

TC Energy operates natural gas, oil, and power generation assets in Canada and the United States. The firm operates more than 60,000 miles of oil and gas pipelines. Its web site is here TC Energy Corp.

The last stock I wrote about was about was TransAlta Corp (TSX-TA, NSYE-TAC) ... learn more. The next stock I will write about will be AltaGas Ltd (TSX-ALA, OTC-ATGFF) ... learn more on Wednesday, March 29, 2023 around 5 pm. Tomorrow on my other blog I will write about Keyera Inc .... learn more on Tuesday, March 28, 2023 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.

TransAlta Corp

Yesterday, I bought 100 shares of Neighbourly Pharmacy Inc (TSX-NBLY) with my fooling around money. Today, I bought another 100 shares of Neighbourly Pharmacy Inc (TSX-NBLY) with my fooling around money.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Debt Ratios need to be improved. The Dividend Payout Ratios (DPR) are good when considering the DPR for FFO and AFFO. The dividend yields are moderate with dividend growth restarting. See my spreadsheet on TransAlta Corp.

Is it a good company at a reasonable price? I am not currently interested in buying this stock. It has lots of debt and a weak balance sheet. The price probably is reasonable. Although some people thinks that it is turning things around.

I do not own this stock of TransAlta Corp (TSX-TA, NSYE-TAC), but I used to. I bought this stock in 1987. It was a utility stock and utility stocks were good investments. I sold some in 2000 as the stock price was below what I had paid for it. I bought some more in February 2009 because it was relatively cheap and it seemed to be recovering. I sold more in August 2012 as this company was doing poorly again. By September 2019, I had finally had enough and saw no hope in this stock doing better. I noticed that MPL Communications had given up hope in 2014.

When I was updating my spreadsheet, I noticed analysts expected revenues to go down 18% to $2,721M instead they went up 9% to $2,976M. However, analysts thought that the company would have EPS of $0.36 and increase of 117% (from earnings loss of $2.13), but the EPS came in at $0.01(increasing 100%). The company had a good year in 2022, but analysts expect Revenue, EPS, Cash Flow and Net Income to deteriorate in 2024 and 2025.

If you had invested in this company in December 2012, for $1,013.04 you would have bought 67 shares at $15.12 per share. In December 2022, after 10 years you would have received $271.35 in dividends. The stock would be worth $811.37. Your total return would have been $1,082.72.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$15.12	$1,013.04	67	10	$271.35	$811.37	$1,082.72

But, if you had invested in this company in December 2017, for $1,005.75 you would have bought 135 shares at $7.45 per share. In December 2022, after 5 years you would have received $116.78 in dividends. The stock would be worth $1,634.85. Your total return would have been $1,751.63.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$7.45	$1,005.75	135	5	$116.78	$1,634.85	$1,751.63

You can see from the following chart, that this company is doing much better over the past 5 years than the past 10 years.

Year	Item	Tot. Growth	Per Year
5	Revenue Growth	29.00%	5.22%
5	FFO Growth	78.14%	12.24%
5	Net Income Growth	102.11%	15.11%
5	Cash Flow Growth	40.10%	6.98%
5	Dividend Growth	25.00%	4.56%
5	Stock Price Growth	62.55%	10.20%
10	Revenue Growth	31.56%	2.78%
10	FFO Growth	48.36%	4.02%
10	Net Income Growth	100.65%	7.21%
10	Cash Flow Growth	68.65%	5.37%
10	Dividend Growth	-487.50%	-16.23%
10	Stock Price Growth	-24.86%	-2.20%

The dividend yields are moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 2.06%. The 5 and 10 year median dividend yields are also moderate at 2.00% and 2.25%. The historical median dividend yield is good (5% to 6% ranges) at 5.39%. The dividend increases are low and being increased at the rate of 4.6% per year over the past 5 years. This number is low because of a decrease and flat dividends over part of this 5 year period. The last dividend increase was in 2023 and it was for 10%.

The historical median dividend yield is higher is because dividend yields were higher before the company started to cut dividends in 2014. The company’s track record for dividends is not great with 10 dividend increases and 4 dividend decreases over the past 35 years. This implies that most of the time, dividends were flat. The company decreased dividends from 2014 to 2017 inclusive and began to raise them again in 2021

The Dividend Payout Ratios (DPR) are good when considering the DPR for FFO and AFFO. The DPR for EPS for 2022 is 2000% (because EPS is just $0.01). I cannot calculate the 5 year coverage because EPS was negative for most of those years. The DPR for Funds from Operations (FFO) is 4% with 5 year coverage at 5%. The DPR for Adjusted Funds from Operations (AFFO) is 6% with 5 year coverage at 8%. The DPR for Cash Flow per Share is 5% with 5 year coverage at 6%. For Free Cash Flow (FCF) sites mostly agree and because of a negative FCF for 2022, I cannot calculate the ratio. The 5 year coverage is 14%.

Debt Ratios need to be improved. The Long Term Debt/Market Cap Ratio for 2022 is too high at 1.07. This means the market values the company lower than the debt level. The Liquidity Ratio for 2022 is 1.29 and if you add in Cash Flow after dividends, the ratio is good at 1.57. The Debt Ratio is too low at 1.23 and I prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 5.40 and 4.40. I prefer them to be below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 35 to the end of 2022. 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.
2017	5	4.56%	12.12%	10.20%	1.91%
2012	10	-16.23%	0.80%	-2.20%	3.00%
2007	15	-10.17%	-3.70%	-6.53%	2.83%
2002	20	-7.73%	3.71%	-1.71%	5.42%
1997	25	-6.16%	2.32%	-2.46%	4.78%
1992	30	-5.16%	6.61%	-0.42%	7.03%
1987	35	-4.27%	6.41%	-0.49%	6.90%

The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and therefore unusable. The corresponding 10 year ratios are negative and unusable. The corresponding historical ratios are 14.90, 15.26 and 21.19. The current P/E Ratio is 14.07 based on $10.69 and EPS estimate for 2023 of $0.76. This is lower than the low ratio of the historical median ratios. This stock price testing suggests that the stock price is relatively cheap.

I have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 2.16, 2.92 and 3.74. The corresponding 10 year ratios are 2.19, 3.02 and 3.89. The current P/FFO is 2.15 based on a stock price of $10.69 and FFO estimate for 2023 of $4.97. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 3.63, 5.06 and 6.49. The corresponding 10 year ratios are 4.48, 6.14 and 7.91. The current P/AFFO is 4.51 based on a stock price of $10.69 and AFFO estimate for 2023 of $2.37. This ratio is between the low and median ratio 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 $8.37. The 10-year low, median, and high median Price/Graham Price Ratios are 0.31, 0.43 and 0.60. The current P/GP Ratio is 1.28 based on a stock price of $10.69. The current ratio is above the high ratio of 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 1.30. The current P/B Ratio is 17.06 based on a Book Value of $168M, Book Value per Share of $0.63 and a stock price of $10.69. The current P/B Ratio is 1212% above the 10 year median value. This stock price testing suggests that the stock price is relatively expensive.

I also have a Book Value per Share estimate for $2.09. The 10 year P/B Ratio here is 0.84 (because they calculate the Book Value differently than I do). The current P/B Ratio is 5.11 based on a stock price of $10.69, and Book Value of $560.3M. This ratio is 506% 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 3.40. The current P/CF Ratio is 2.75 based on Cash Flow per Share estimate for 2023 of $3.89, Cash Flow of $1,043M and a stock price of $10.69. The current ratio is 19% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 5.39%. The current dividend yield is 2.06% based on a dividend of $0.22 and a stock price of $10.69. The current ratio is 62% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 median dividend yield of 2.25%. The current dividend yield is 2.06% based on a dividend of $0.22 and a stock price of $10.69. The current ratio is 7% 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 1.05. The current P/S Ratio is 1.14 based on Revenue estimate for 2023 of $2,517M, Revenue per Share of $9.39 and a stock price of $10.69. The current ratio is 8% 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 might be reasonable. There are problems with the testing. The dividend yield works best for dividend growth companies, but it is bad when companies cut their dividends. The P/B Ratio test says that the stock is expensive, because the current book value is low.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (6) and Hold (3). The consensus is a Buy. The 12 month consensus stock value of $15.54. This implies a total return of 47.73% with 45.37% from capital gains and 2.06% from dividends based on a current stock price of $10.69.

The last entry dated November 2022 on Stock Chase says Do Not Buy because the company trashed it balance sheet (Ross Healy). Ambrose O'Callaghan on Motley Fool says to buy as the stock is in oversold territory. Andrew Walker on Motley Fool says the company has done a good job getting its balance sheet in order. Personally, I agree with Ross Healy that this company does have a weak balance sheet. The company put out a Press Release on their fourth quarter of 2022.

Simply Wall Street reports on this stock via Yahoo Finance and says that the extremely negative double-digit change in profits expected does not drive a buy decision. EPS for 2024 is expected to be a loss of $0.20. Simply Wall Street gives 3 warnings of earnings are forecast to decline by an average of 48.9% per year for the next 3 years; dividend of 2.04% is not well covered by earnings or cash flows; and has a high level of debt.

TransAlta is an independent power producer based in Alberta, Canada. The company operates a diverse and growing fleet of electrical power generation assets in Canada, the United States, and Australia consisting of hydro, wind, solar, battery storage, gas, and energy transition facilities. Most of the company's revenues are derived from the sale of generation capacity, electricity, thermal energy, environmental attributes, and byproducts of power generation. Its web site is here TransAlta Corp.

The last stock I wrote about was about was Enbridge Inc (TSX-ENB, NYSE-ENB) ... learn more. The next stock I will write about will be TC Energy Corp (TSX-TRP, NYSE-TRP) ... learn more on Monday, March 27, 2023 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.

Enbridge Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is reasonable, it may even be cheap. Debt Ratios are mostly fine, but Liquidity Ratio is low. The Dividend Payout Ratios (DPR) are generally too high but their DPR Distributable Cash Flow is fine. The dividend yields are high with dividend growth low. See my spreadsheet on Enbridge Inc.

Is it a good company at a reasonable price? I still like this company and plan to keep the shares I have. I have enough in this company so I will not be buying any more. It does have a lot of debt. The dividend yield is very high currently at around 7%. The price currently seems reasonable by most of the testing. The Dividend Yield tests are saying the stock price is cheap.

I own this stock of Enbridge Inc (TSX-ENB, NYSE-ENB). I first bought this stock in 2005 and then bought more in 2008 and 2009. This stock was on the Dividend Achievers, the Dividend Aristocrats list and on Mike Higgs’ list of Canadian Dividend Growth stocks. Enbridge is a low risk stock.

When I was updating my spreadsheet, I noticed that I have had this stock for 17.6 years, I made several purchases and I have made a total return of 12.18% per year with 6.64% from capital gains and 5.54% from dividends. Dividend payments have paid 151% of my stock’s original price.

From the chart below, it looks like growth has slowed down over the past 5 years, except for AEPS growth.

Year	Item	Tot. Growth	Per Year
5	Revenue Growth	20.12%	3.74%
5	AEPS Growth	43.37%	7.47%
5	Net Income Growth	2.37%	0.47%
5	Cash Flow Growth	70.57%	11.27%
5	Dividend Growth	42.56%	7.35%
5	Stock Price Growth	7.65%	1.48%
10	Revenue Growth	110.66%	7.74%
10	AEPS Growth	73.46%	5.66%
10	Net Income Growth	324.43%	15.55%
10	Cash Flow Growth	290.74%	14.60%
10	Dividend Growth	204.42%	11.78%
10	Stock Price Growth	23.01%	2.09%

If you had invested in this company in December 2012, for $1,032.48 you would have bought 24 shares at $43.02 per share. In December 2022, after 10 years you would have received $593.02 in dividends. The stock would be worth $1,270.88. Your total return would have been $1,863.10.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$43.02	$1,032.48	24	10	$593.02	$1,270.08	$1,863.10

The dividend yields are high with dividend growth low. The current dividend yield is high (7% and above) at 7.01%. The 5 and 10 year dividend yields are good (5% to 6% ranges) at 6.32% and 5.17%. The historical dividend yield is moderate (2% to 4% ranges) at 3.62%. The dividend growth over the past 5 years is low (below 8%) at 7.4% per year over the past 5 years. The last dividend increase was in 2022 and it was for 3.2%. In 2019 and earlier, dividend growth was moderate (8% to 14% ranges), but since then it has been low, in the 3% range.) They have raised their dividends 27 years out of the 32 years I have followed.

The Dividend Payout Ratios (DPR) are generally too high but their DPR Distributable Cash Flow (DCF) is fine. The DPR for EPS for 2022 is 269% with 5 year coverage at 161%. This DPR has been over 100% since 2012. The DPR for Adjusted Earnings per Share (AEPS) for 2023 is 122% with 5 year coverage at 118%. This DPR has been above 100% since 2017. The DPR for Distributable Cash Flow is 63% with 5 year coverage at 65%. The DPR for Cash Flow per Share (CFPS) for 2022 is 74% with 5 year coverage also at 74%. This is too high and is better at 40% or lower. The DPR for Free Cash Flow (FCF) for 2022 is either 109% or 95% depending on where you look.

Debt Ratios are mostly fine, but Liquidity Ratio is low. The Long Term Debt/Market Cap is 0.68 and is fine. The Liquidity Ratio is 0.60 and is too low. If you add in Cash Flow after dividends, it is 0.81. If you add back current portion of the debt is just over 1.15 and is acceptable. The Debt Ratio is fine at 1.55. The Leverage (A/BK) and Debt/Equity Ratios are fine at 2.83 and 1.83.

The Total Return per year is shown below for years of 5 to 32 to the end of 2022. 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.
2017	5	7.35%	7.63%	1.48%	6.14%
2012	10	11.78%	7.06%	2.09%	4.97%
2007	15	12.16%	11.93%	6.70%	5.23%
2002	20	11.64%	13.60%	8.33%	5.27%
1997	25	10.80%	12.44%	7.84%	4.60%
1992	30	9.13%	16.68%	10.19%	6.49%
1990	32	8.54%	11.03%	7.04%	3.99%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 23.03, 30.82 and 38.60. The corresponding 10 year ratios are 24.39, 30.88 and 36.90. The corresponding historical ratios are 18.01, 19.35 and 23.04. The current P/E Ratio is 16.71 based on a stock price of $50.63 and EPS estimate for 2023 of $3.03. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.24, 18.05, 21.19. The corresponding 10 year ratios are 17.81, 20.68 and 24.76. The current P/AEPS ratio is 16.82 based on a stock price of $50.63 and AEPS estimate for 2023 of $3.01. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I also have Distributable Cash Flow (DCF) data. The 5-year low, median, and high median Price/DCF Ratios are 8.51, 10.04 and 11.40. The corresponding 10 year ratios are 9.21, 10.58 and 12.69. The current P/DCF Ratio is 9.22 based on a stock price of $50.63 and DCF estimate for 2023 of $5.49. The current ratio is between the low and median ratio 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 $41.76 . The 10-year low, median, and high median Price/Graham Price Ratios are 1.20, 1.35 and 1.52. The current P/GP Ratio is 1.21 based on a stock price of $50.63. The current ratio is between the low and median ratio 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 1.97. The current P/B Ratio is 1.97 based on a stock price of $50.63, Book Value of $52,140M and a Book Value per Share of $25.75. This ratio at the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I also have a Book Value per Share (BVPS) value for 2023 of 28.20. However, the analyst calculates the Book Value different from me and their 10 year median Price/ Book Value per Share Ratio is 1.72. This BVPS value gives a P/B Ratio of 1.80 and Book Value of $57,105M with a stock price of $50.63. This ratio is 98% below their 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 10.81. The current P/CF Ratio is 8.76 based on a stock price of $50.63, Cash Flow per Share estimate for 2023 of $5.78 and a stock price of $50.63. 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 3.62%. The current dividend yield is 7.01% based on dividends of $3.55 and a stock price of $50.63. The current dividend yield is 94% 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 5.17%. The current dividend yield is 7.01% based on dividends of $3.55 and a stock price of $50.63. The current dividend yield 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 1.86. The current P/S Ratio is 1.95 based on revenue $52,567M, Revenue per Share of $25.96 and a stock price of $50.63. The current P/S Ratio is 5% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is probably reasonable. It could also be cheap by the dividend yield test. The dividend yield testing certainly says that the stock price is cheap. The P/S Ratio test says it is reasonable but above the median. All the other testing says the stock price is cheap or reasonable and below the median.

When I look at analysts’ recommendations, I find Strong Buy (6), Buy (5), Hold (11) and Underperform (1). The consensus would be a Buy. The 12 month stock price is $58.00. This implies a total return of 21.57% with 14.56% from capital gains and 7.01% from dividends based on a stock price of $50.63. The Holds on Stock Chase still think it will do well in the long term. Paul Harris says that growth must come from US as infrastructure is hard to get done in Canada. In an earlier post, Bill Harris says that it has too much debt and you should sell.

Even the analysts on Stock Chase that give a Hold rating, like this company. Amy Legate-Wolfe on Motley Fool likes Brookfield Renewables better than this company. I do not like the Brookfield companies and they are far to complex to understand what you are really getting. Andrew Button on Motley Fool asks if at 7% yield, should you buy? The company issued a Press Release on their 2022 results. Simply Wall Street report on Yahoo Finance talks about insider buying. They issue 4 warnings of interest payments are not well covered by earnings; dividend of 7% is not well covered by earnings or cash flows; large one-off items impacting financial results; and profit margins (4.9%) are lower than last year (12.4%).

Enbridge owns extensive midstream assets that transport hydrocarbons across the U.S. and Canada. Its pipeline network consists of the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines. The company also owns and operates a regulated natural gas utility and Canada's largest natural gas distribution company. Finally, the firm has a small renewables portfolio primarily focused on onshore and offshore wind projects. Its web site is here Enbridge Inc.

The last stock I wrote about was about was Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) ... learn more. The next stock I will write about will be TransAlta Corp (TSX-TA, NSYE-TAC) ... learn more on Friday, March 24, 2023 around 5 pm. Tomorrow on my other blog I will write about Air Miles and BMO .... learn more on Thursday, March 23, 2023 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.

Canadian Tire Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price seems relatively cheap. Some Debt Ratios could be improved. The Dividend Payout Ratios (DPR) are good. The dividend yields are moderate with dividend growth moderate. See my spreadsheet on Canadian Tire Corp.

Is it a good company at a reasonable price? I do like this company and I have had it for a long time. I think that the current stock price is relatively cheap. I probably will not buy anymore because I do have a fair bit of my portfolio in this stock.

I own this stock of Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF). In 2000 when I first bought this stock, it was on the Investment Reporter's list of conservative Canadian stocks. I bought stock for my trading account in 2009 because I have done well with it in my Pension Account and it was a consumer stock.

When I was updating my spreadsheet, I noticed I have had this stock for slightly over 23 years and I have made a total return of 11.89% per year with 9.62% from capital gains and 2.27% from dividends. I probably did better than the chart showing the returns for 20 and 25 years because I made several purchases over a period of time.

If you look at growth over the past 5 and 10 years, the fastest growth is in dividends. It is much faster than the Revenue growth, but not that much faster than earnings growth. The dividends are growing faster than cash flow. I not only looked at Cash Flow, but also Cash Flow excluding Working Capital. Even though this cannot continue, currently Dividend Payout Ratios are relatively low.

Year	Item	Tot. Growth	Per Year
5	Revenue Growth	32.57%	5.80%
5	AEPS Growth	75.23%	14.73%
5	Net Income Growth	42.05%	7.27%
5	Cash Flow Growth	-71.87%	-10.27%
5	CF Growth excl WC	51.11%	8.61%
5	Dividend Growth	126.92%	17.81%
5	Stock Price Growth	-15.83%	-2.90%
10	Revenue Growth	55.86%	4.54%
10	AEPS Growth	190.25%	12.62%
10	Net Income Growth	109.15%	7.66%
10	Cash Flow Growth	-31.27%	-2.68%
10	CF Growth excl WC	76.44%	5.84%
10	Dividend Growth	391.67%	17.26%
10	Stock Price Growth	103.95%	7.39%

If you had invested in this company in December 2012, for $1,040.70 you would have bought 15 shares at $69.38 per share. In December 2022, after 10 years you would have received $487.50 in dividends. The stock would be worth $2,122.50. Your total return would have been $2,610.00.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$69.38	$1,040.70	15	10	$487.50	$2,122.50	$2,610.00

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.18%. The 5 and 10 year dividend yield are moderate at 2.88% and 2.08%. The historical median dividend yield is low (below 2%) at 1.70%. The dividend growth has recently been moderate (8% to 14% ranges) at 14.9% per year. The last dividend increase was in 2023 and it was for 6.15%. However, the company raised the dividends 25% in 2021.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2022 is 34% with 5 year coverage at 32%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 28% with 5 year coverage at 27%. The DPR for Cash Flow per Share (CFPS) for 2022 is 13% with 5 year coverage at 12%. The DPR for 2022 cannot be calculated because it is negative. Everyone seems to agree that it was negative last year. The 5 year coverage is 38%.

Some Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2022 is 0.42 and is low and good. The Liquidity Ratio for 2022 is good at 1.61. The Debt Ratio for 2022 is a bit low at 1.47 and I prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2022 are a bit high at 3.14 and 2.14 and I prefer to see them below 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 34 to the end of 2022. 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.
2017	5	17.81%	0.06%	-2.90%	2.96%
2012	10	17.26%	10.57%	7.39%	3.19%
2007	15	14.84%	6.59%	4.40%	2.20%
2002	20	14.40%	9.99%	7.64%	2.34%
1997	25	11.37%	8.15%	6.26%	1.89%
1992	30	9.39%	9.98%	7.77%	2.21%
1988	34	9.88%	8.34%	6.45%	1.88%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.86, 10.22 and 12.30. The corresponding 10 year ratios are 10.85, 12.59 and 14.70. The corresponding historical ratios are 10.27, 13.04 and 14.56. The current P/E Ratio is 9.02 based on a stock price of $165.12 and EPS estimate for 2023 of $18.30. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.61, 9.93 and 11.65. The corresponding 10 year ratios are 10.64, 12.48 and 14.56. The current ratio is 9.39 based on a stock price of $165.12 and AEPS estimate for 2023 of $17.59. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $196.31. The 10-year low, median, and high median Price/Graham Price Ratios are 0.87, 0.99 and 1.13. The current P/GP Ratio is 0.84 based on a stock price of $165.12. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.

I get a 10-year median Price/Book Value per Share Ratio of 1.80. The current P/B Ratio is 1.70 based on a Book Value of $5,619M, Book Value per Share of $97.37 and a stock price of $165.12. 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 also have an estimate for the Book Value per Share for 2023 of $99.40. This implies a Book Value of $5,735M and a ratio of 1.66 with a stock price of $165.12. This 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.

I get a 10-year median Price/Cash Flow per Share Ratio of 8.96. The current P/CF Ratio is 4.89 based on a stock price of $165.12, Cash Flow per Share estimate for 2023 of $33.80 and Cash Flow of $1,950M. The current ratio is 45% 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 1.70%. The current dividend yield is 4.18% based on dividends of $6.90 and a stock price of $165.12. The current dividend yield is 146% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 2.08%. The current dividend yield is 4.18% based on dividends of $6.90 and a stock price of $165.12. The current dividend yield is 101% 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 0.68. The current P/S Ratio is 0.53 based on Revenue estimate for 2023 of $17,830M, Revenue per Share of $309.01 and a stock price of $165.12. The current ratio is 22% above 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 show the stock as very cheap, but as in a chart above, dividends are growing quite fast. The P/S Ratio test says that the stock price is cheap. Another of other tests point to the stock price as being cheap.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (7) and Underperform (1). The consensus would be a Buy. The 12 month stock price of is $198.82. This implies a total return of 24.59% with 4.18% from dividends and 20.41% from capital gains. The only negative comment is from Ross Healy saying we are heading into a recession and this will not help retailers. However, this stock has traditionally done well in recession because their products include stuff to fix your home and car. In tough times people tend towards fixing stuff.

One analyst thinks that retailers will be hurt by the coming recession, and this includes this stock he says on Stock Chase. Stock Chase gives this stock 4 stars out of 5. It is number 10 on the Money Sense list. Chris MacDonald on Motley Fool says this company has an exception year in 2022 and it will be increasing its dividend this year by 33%. Kay Ng on Motley Fool says this company has solid long term growth and is a buy at a 4.1% yield. The company put out a Press Release on their fourth quarter of 2022 results.

A Simply Wall Street report on Yahoo Finance says the current sell off is a buying opportunity. Simply Wall Street gives this stock 3 stars out of 5. It gives 3 warnings of debt is not well covered by operating cash flow; dividend of 4.12% is not well covered; significant insider selling over the past 3 months.

Canadian Tire sells home goods, sporting equipment, apparel, footwear, automotive parts and accessories, and vehicle fuel. Aside from the namesake banner, stores operate primarily under the Mark's, SportChek, Party City, Atmosphere, and PartSource monikers. Additionally, the company owns Helly Hansen, a Norwegian sportswear and workwear brand, and operates and holds majority ownership of a financing arm (Canadian Tire Financial Services; 20% owned by Scotiabank) and a REIT (CT REIT; Canadian Tire owns about 70%). Its web site is here Canadian Tire Corp.

The last stock I wrote about was about was H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more. The next stock I will write about will be Enbridge Inc (TSX-ENB, NYSE-ENB) ... learn more on Wednesday, March 22, 2023 around 5 pm. Tomorrow on my other blog I will write about Canadian Banks .... learn more on Tuesday, March 21 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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