Is it a good company at a reasonable price? I still like this company for a long term hold. I have enough, so I will not buy more. Analysts are all over the place in their recommendations and there are a lot of them. The final consensus of a Hold makes sense considering the 12 month stock price consensus price has a modest total loss. My testing is showing the stock price as expensive.
I own this stock of Thomson Reuters Corp (TSX-TRI, NYSE-TRI). I am following it because I own it. This is a dividend growth stock. Its performance has always been rather mediocre, but it is a diversification.
When I was updating my spreadsheet, I noticed I have had this stock for 38 years and I have made a total return of 9.42% with 7.04% from capital gains and 2.38% from dividends. This stock has really done well lately. This is showing up in the stock price which went up some 25% last year and is up 16% so far this year on the TSX.
If you had invested in this company in December 2013, for $1,004.25 you would have bought 25 shares at $40.17 per share. In December 2023, after 10 years you would have received $702.53 in dividends. The stock would be worth $4,483.75. Your total return would have been $5,546.28. This would be a total return of 20.02% per year with 17.04% from capital gain and 2.98% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $40.17 | $1,004.25 | 25 | 10 | $702.53 | $4,843.75 | $5,546.28 |
The current dividend yield is low with dividend growth low. The current dividend yield is low (below 2%) at just 1.29%. The 5 year dividend yield is also low at 1.69%. The 10 year and historical median dividend yields are moderate (2% to 4% ranges) at 2.73% and 2.83%. The dividend increases are low (below 8% per year) at 7.2% per year over the past 5 years. He last dividend increase was in 2024 and it was for 10.2%. So the increase level is going up. This stock is on all my dividend lists.
The Dividend Payout Ratios (DPR) are often too high. The DPR for 2023 for Earnings per Share (EPS) is too high at 114% with 5 year coverage fine at 51%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is fine at 56% with 5 year coverage at 80%. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 159% with 5 year coverage still too high at 83%. I prefer this rate to be 40% or less. The DPR for 2023 for Free Cash Flow (FCF) is good at 49% with 5 year coverage fine at 67%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 114.31% | 51.12% |
| AEPS | 55.84% | 80.45% |
| CFPS | 159.40% | 83.01% |
| FCF | 49.36% | 67.15% |
An important debt ratio of Liquidity is often too low, but rest of ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.04. The Liquidity Ratio for 2023 is too low at 0.90 and 0.97 currently. If you added in Cash Flow after dividends, the ratio is still too low at 0.70 and better currently at 1.37. If you add back the current portion of the long term debt, the ratio is still too low at 0.90 but good currently at 1.63. The Debt Ratio for 2023 is good at 2.45 and 2.42 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.69 and 0.69 and currently at 1.71 and 0.71.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.04 | 0.04 |
| Intang/GW | 0.08 | 0.14 |
| Liquidity | 0.90 | 0.97 |
| Liq. + CF | 0.70 | 1.37 |
| Liq. + CF+D | 0.90 | 1.63 |
| Debt Ratio | 2.45 | 2.42 |
| Leverage | 1.69 | 1.71 |
| D/E Ratio | 0.69 | 0.71 |
The Total Return per year is shown below for years of 5 to 38 to the end of 2023 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 8.03% | 27.30% | 24.06% | 3.24% |
| 2013 | 10 | 7.18% | 20.02% | 17.04% | 2.98% |
| 2008 | 15 | 5.69% | 14.48% | 11.96% | 2.52% |
| 2003 | 20 | 5.13% | 9.16% | 7.33% | 1.83% |
| 1998 | 25 | 4.26% | 9.09% | 7.05% | 2.03% |
| 1993 | 30 | 5.14% | 11.50% | 8.61% | 2.88% |
| 1988 | 35 | 5.33% | 9.68% | 7.31% | 2.37% |
| 1985 | 38 | 6.01% | 9.41% | 7.11% | 2.29% |
The Total Return per year is shown below for years of 5 to 38 to the end of 2023 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 7.19% | 27.81% | 24.79% | 3.02% |
| 2013 | 10 | 4.19% | 17.11% | 14.49% | 2.61% |
| 2008 | 15 | 4.05% | 14.04% | 11.37% | 2.67% |
| 2003 | 20 | 5.10% | 9.80% | 7.20% | 2.61% |
| 1998 | 25 | 4.66% | 10.45% | 7.71% | 2.74% |
| 1993 | 30 | 5.01% | 11.94% | 8.63% | 3.31% |
| 1990 | 33 | 4.97% | 9.96% | 7.22% | 2.74% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 19.71, 22.27 and 24.83. The corresponding 10 year ratios are 17.68, 20.97 and 24.19. The corresponding historical ratios are 19.63, 19.68 and 31.02. The current P/E Ratio is 49.52 based on a stock price of $229.21 and ESP estimate for 2024 of $4.63 ($3.39 US$). This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 36.16, 41.10 and 46.99. The corresponding 10 year ratios are 31.05, 37.68 and 43.84. The current ratio is 45.61 based on a stock price of $166.95 and AEPS estimate for 2024 of $3.66. The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$.
I get a Graham Price of $60.85. The 10-year low, median, and high median Price/Graham Price Ratios are 2.08, 2.60 and 3.04. The current P/GP Ratio is 3.91 based on a stock price of $229.21. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 2.81. The current P/B Ratio is 6.89 based on a stock price of $166.95, Book Value per Share of $24.24, and Book Value of $11,035M. The current ratio is 145% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
I also have a Book Value per Share estimate for 2024 of $24.10. This implies a ratio of 6.93 with a Book Value of $10,861 and a stock price of $166.95. The current ratio is 147% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 17.85. The current P/CF Ratio is 31.56 based on Cash Flow per Share estimate for 2024 of $5.29, Cash Flow of $2384M and a stock price of $166.95. The current ratio is 77% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
I get an historical median dividend yield of 2.83%. The current dividend yield is 1.29% based on a stock price of $166.95 and dividend of $2.16. The current dividend yield is 54% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
I get a 10 year median dividend yield of 2.73%. The current dividend yield is 1.29% based on a stock price of $166.95 and dividend of $2.16. The current dividend yield is 53% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 4.56. The current P/S Ratio is 10.35 based on a stock price of $166.95, Revenue estimate for 2024 of $7,270M, and Revenue per Share of $16.13. The current ratio is 127% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You will get a similar result in CDN$.
Results of stock price testing is that the stock price is probably expensive. The 10 year dividend yield test show this and it is confirmed by the P/S Ratio test. Most of the rest of the testing is showing the same thing. I generally tested in US$ as both the accounting and the estimates are in US$.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), Hold (10), Underperform (1) and Sell (1). The consensus would be a Hold. I agree with the Hold. The 12 month stock price consensus is $224.59 ($164.40 US$) with a high of $255.19 ($186.80 US$) and low of $187.43 ($137.20 US$). The 12 month stock price consensus of $224.59 implies a total loss of 0.73% with a capital loss of $2.02% and dividends of $1.29%.
Comments on Stock Chase are positive on Stock Chase. Because of the recent run up in the stock price, on analyst suggest using dollar cost averaging to buy. Stock Chase gives this stock 3 stars out of 5. Joey Frenette on Motley Fool suggest buying this as a Canadian AI stock. Daniel Da Costa on Motley Fool says stock is high reliable and has growth potential. The company put out a press release via Newswire about their results for 2023. The company put out a press release via Newswire about their first quarter of 2024 results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has two warnings of earnings are forecast to decline by an average of 1.9% per year for the next 3 years; and significant insider selling over the past 3 months. There were sales by the Chairman (who owns a lot of shares) and a director. However, the CEO, CFO and two officers who I follow bought shares over the past year. The CEO increased his shares over the past year by 137%.
Thomson Reuters' three largest segments are its legal professionals, Tax and accounting, and corporates segments. Legal professionals are about 42% of the firm's revenue. Tax and accounting make up about 20%-25% of the firm's revenue. Corporates, which consists of legal professionals and tax and accounting products sold to corporations, also makes up about 20%-25% of the firm's revenue. Thomson Reuters' smaller segments include its Reuters news business and global print business. Its web site is here Thomson Reuters Corp.
The last stock I wrote about was about was Algoma Central Corporation (TSX-ALC, OTC-AGMJF) ... learn more. The next stock I will write about will be McCoy Global Inc (TSX-MCB, OTC-MCCRF) ... learn more on Friday, May 10, 2024 around 5 pm. Tomorrow on my other blog I will write about Simply Investing Blogger .... learn more on Thursday, May 9, 2024 around 5 pm.
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