I do not own this stock (TSX-POW), but I own a related company in Power Financial (TSX-PWF). This is a big group of companies, of which some are also on the TSX. You would not want to own separately, different companies under this group unknowingly. That is, you should check out whom or what owns companies you invest in.
I invested in Power Financial as it holds only financial companies. Others like Power Corp better as it holds more companies than just financial companies. It a much more diversified company. It all depends on what you are looking for. They are both very good companies.
As with a lot of companies, this company has not raised dividends since 2008. It would appear that they may not increase the dividend soon as the Dividend Payout Ratio for earnings over the 5 years has a median value of 61%. Prior to the recent market problems, the DPR for earnings was under 30%. The projected DPR for 2013 is at 41%. Although I must say that the DPR for Cash Flow over the past 5 years has a median value of 9%, which is much more in line with past DPR for Cash Flow.
Over the past 5 years, investors would not have made any money. The loss in capital would not have been made up in dividends, even though dividend income was at 3.7%. The loss over the past 5 years would have still be around 3.5% per year. However, investors holding this stock over the past 10 year would have made money. Total return would have probably been around 6% per year with the portion attributable to dividends being around 3.7% per year, or 65% of the return.
A large portion of this company is financial, including life insurance companies. Financial companies, especially life insurance companies have really suffered in this latest recession. They are on the mend, but it will take time.
As far as growth values go, the ones for the past 10 years are in all cases better than the ones for the past 5 years. For example, the 5 and 10 year growth in revenue per share is 4% and 6.4% per year, respectively. For cash flow the 5 and 10 year growth is 3% and 29% per year, respectively.
The Asset/Liability Ratio at 1.11 is normal for a company heavily into financial companies, as is the 5 year median Leverage and Debt/Equity Ratios at 15.07 and 12.66 respectively. Under the new IFRS accounting rules, these last two ratios jumped to 26.37 and 23.82 in the 3rd quarterly report. Unfortunately, it may take some time to sort out how the new accounting rules are going to affect how things are valued. Under the new rules some of their assets and liabilities jumped in value. This is what caused the jump in these last two ratios.
The Return on Equity Ratio for the financial year ending in 2010 is very good, as it generally is, at 14.5%. The one for the 9 months ending in September 2011 is still good, but lower, at 10.7%.
When I look at insider trading, I find insider selling at $18.3M. This selling all occurred before June 2011, when the share price was higher (around $28.00) than recent stock price (around $25). All insiders, except directors have more options than shares. There are some 128 institutions that hold some 27.5% of the shares of this company. The have bought and sold these shares over the past 3 months and marginally have fewer shares (not even 1% decrease).
When I look at analysts’ recommendations, I find Strong Buy, Buy, and Hold. The consensus would be a Hold. The Hold comes with a 12 month stock price of $26.92. A buy comes with a 12 months stock price of $28. A couple of analysts with Hold recommendations are worried about their investments in European communication and financial businesses. They feel that European outlook is not great at present.
A Buy comment was that Power Corp is a low-risk larger cap investment that is attractively valued and offer appealing dividends. Another buy says that the current stock price represents good value.
So how good is the stock price according to my spreadsheet? The 5 year median low and high Price/Earnings ratios are 10.94 and 16.41. The current one is on the low end at 10.13. The 10 year median Price/Book Value Ratio was 1.79. The current one of 1.19 is some 67% lower and points to a good price.
I get a Graham Price of $34.11 and the current stock price of $25.02 is some 62% lower. The 10 year median low between the Graham Price and stock price is the stock price lower by 20%. So this points to a good price. The current dividend yield at 4.64% is higher than the 5 year median dividend yield of 4.14% by almost 12%. Also, note that the 10 year median high dividend yield is much lower at 2.69%. Since this latest recession began, the dividend yield on this stock is much higher than the historical ones.
The problem I see with this stock as with others with Life Insurance and European properties is that the recovery of the stock could take a long time. With this stock you could collect dividends with a yield of 4.6% (much better than any current interest rates) while you wait for the stock to come back. I do not think that there is a question of this company recovery, just when it will.
T. E. Wealth picked this stock for RRSP investment in 2012. The dividend ninja review this stock recently on his site.
Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. Some of it subsidiary companies include Power Financial, the Pargesa group and Gesca and Square Victoria Digital Properties. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Corp. See my spreadsheet at pow.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
Friday, February 3, 2012
Thursday, February 2, 2012
Onex Corp
I do not own this stock (TSX-OCX), but I used to. I had mistaken this stock for a dividend paying stock. I bought the company in 2001 and sold it in 2008. I made a return of 5.9% per year, of which only .4% could be attributed to dividends. The portion that is dividends would be 7.4% of the total return. This is a lousy return considering the risk attached to this stock.
If you owned this stock over the past 5 and 10 years, you would have made 3.5% and 4.4% per year, respectively. The portion that could be attributed to dividends would be .4% per year. Why I say I mistook this stock for a dividend paying stock, is that it really is not a dividend paying stock. They have not changed the dividends paid for over 10 years. The current yield is a measly .3%.
The thing is you are not always rewarded for taking more risks. The Newfound Capital Corp (TSX-NCC.A) reviewed yesterday was a solid performer. There is nothing specular about the results, but they are solid. This company, with its high risk has not produced results. That is why I got out of it when I did. I did not see that it would be a good long term investment. In fact, I did not see it producing good results for me anytime in the near future.
Because this company is buying back shares, the per share values look better than the total values. Over the past 10 years, shares are down just over 27% (just over 2% per year). For example, the revenue over the past 5 and 10 years has grown at the rate of 8% and 1% per year. The revenue per share over the past 5 and 10 years has grown at the rate of 11.4% and 4.4%.
I cannot calculate growth in earnings as they had negative earnings in 2011. Earnings have been erratic with some years with high earnings and 3 other years within the past 10 years with negative earnings. If I look at what earnings are expected this year, then growth in earnings is negative over the past 5 and 10 years at -15% and -4% per year, respectively. However, it would appear that the company has money coming into earnings from discontinued operations and that might shove up earnings for 2011 (only) to higher than it has ever been. The thing with such earnings is that they are not reproducible in other years.
The best growth is in cash flow and over the past 5 and 10 years, it is up 20% and 10% per year, respectively. Book value growth is mediocre and is up 8.5% and 3.6% per year over the past 5 and 10 years. However, with the new accounting rules it would appear that book value is going to go up a lot. It also appears that the value attributed to Non-controlling interest will go down.
Return on Equity is also erratic, with the 5 year median ROE at 12.3%, but the ROE at the end of 2010 at -3.4%. There were no earnings in 2010. With this sort of business, the erratic changes in returns or earnings each year might be acceptable if the total return was very good. But it is not.
The debt ratios are mixed. The Liquidity Ratio is the best with a very good current value of 2.05. The Asset/Liability Ratio is a bit low at 1.26. The current Leverage and current Debt/Equity Ratio are high at 13.03 and 10.35, respectively.
When I look at insider trading, I find $6.4M buying and minimal insider selling. They have paid between, approximately, $31.75 and $37.75 for these shares. There are 109 institutions that own some 39% of this company. They have bought and sold this stock over the past 3 months and have increased their shares by a minimal amount (1%).
The analysts’ recommendation on this stock covers Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (There is nothing surprising here as this is the recommendation I most often see on any stock.) One analyst says that the stock is undervalued. They point out that the company has almost $2.2B in cash.
A number of analysts like this company. They think it is trading at a discount to its NAV (Net Asset Value). A few mention that they would like it to raise the dividend. One suggested it should not be buying back so much stock. Another says that it rebuys shares at $32 to $33 as the company sees value in their shares at that that price.
I get 5 year median low and high Price/Earnings Ratios of 9.18 and 11.49. These are quite low. Problem is the number of negative earnings years which will push down median values. The current P/E ratio of 33.31 is much higher. It is quite high as P/E Ratios go.
I get a Graham price of $20.47 and the current stock price of $35.31 is some 73% higher. The high and median difference between the Graham Price and stock price is the stock price being 83% and 50% higher. So the current difference is near the high difference.
I get a 10 year median Price/Book Value Ratio of 3.61 (which is quite high). The current P/B Ratio is 1.89 which is some 52% of the 10 year value. Even the one for 2011 at 2.42 is some 67% of the 10 year value. This would point to a very good current stock price. Since they do not raise dividends, looking at dividend yield has no value.
I personally would not buy this stock again. I do not think you get rewarded for the risk taken. This stock is really a private equity fund. (Or, something like a Hedge fund.)
Onex is one of North America's oldest investment firm committed to acquiring and building high-quality businesses in partnership with talented management teams. Onex manages investment platforms focused on private equity, real estate and credit securities. Gerald Schwartz is a major owner. Its web site is here Onex. See my spreadsheet at ocx.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
If you owned this stock over the past 5 and 10 years, you would have made 3.5% and 4.4% per year, respectively. The portion that could be attributed to dividends would be .4% per year. Why I say I mistook this stock for a dividend paying stock, is that it really is not a dividend paying stock. They have not changed the dividends paid for over 10 years. The current yield is a measly .3%.
The thing is you are not always rewarded for taking more risks. The Newfound Capital Corp (TSX-NCC.A) reviewed yesterday was a solid performer. There is nothing specular about the results, but they are solid. This company, with its high risk has not produced results. That is why I got out of it when I did. I did not see that it would be a good long term investment. In fact, I did not see it producing good results for me anytime in the near future.
Because this company is buying back shares, the per share values look better than the total values. Over the past 10 years, shares are down just over 27% (just over 2% per year). For example, the revenue over the past 5 and 10 years has grown at the rate of 8% and 1% per year. The revenue per share over the past 5 and 10 years has grown at the rate of 11.4% and 4.4%.
I cannot calculate growth in earnings as they had negative earnings in 2011. Earnings have been erratic with some years with high earnings and 3 other years within the past 10 years with negative earnings. If I look at what earnings are expected this year, then growth in earnings is negative over the past 5 and 10 years at -15% and -4% per year, respectively. However, it would appear that the company has money coming into earnings from discontinued operations and that might shove up earnings for 2011 (only) to higher than it has ever been. The thing with such earnings is that they are not reproducible in other years.
The best growth is in cash flow and over the past 5 and 10 years, it is up 20% and 10% per year, respectively. Book value growth is mediocre and is up 8.5% and 3.6% per year over the past 5 and 10 years. However, with the new accounting rules it would appear that book value is going to go up a lot. It also appears that the value attributed to Non-controlling interest will go down.
Return on Equity is also erratic, with the 5 year median ROE at 12.3%, but the ROE at the end of 2010 at -3.4%. There were no earnings in 2010. With this sort of business, the erratic changes in returns or earnings each year might be acceptable if the total return was very good. But it is not.
The debt ratios are mixed. The Liquidity Ratio is the best with a very good current value of 2.05. The Asset/Liability Ratio is a bit low at 1.26. The current Leverage and current Debt/Equity Ratio are high at 13.03 and 10.35, respectively.
When I look at insider trading, I find $6.4M buying and minimal insider selling. They have paid between, approximately, $31.75 and $37.75 for these shares. There are 109 institutions that own some 39% of this company. They have bought and sold this stock over the past 3 months and have increased their shares by a minimal amount (1%).
The analysts’ recommendation on this stock covers Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (There is nothing surprising here as this is the recommendation I most often see on any stock.) One analyst says that the stock is undervalued. They point out that the company has almost $2.2B in cash.
A number of analysts like this company. They think it is trading at a discount to its NAV (Net Asset Value). A few mention that they would like it to raise the dividend. One suggested it should not be buying back so much stock. Another says that it rebuys shares at $32 to $33 as the company sees value in their shares at that that price.
I get 5 year median low and high Price/Earnings Ratios of 9.18 and 11.49. These are quite low. Problem is the number of negative earnings years which will push down median values. The current P/E ratio of 33.31 is much higher. It is quite high as P/E Ratios go.
I get a Graham price of $20.47 and the current stock price of $35.31 is some 73% higher. The high and median difference between the Graham Price and stock price is the stock price being 83% and 50% higher. So the current difference is near the high difference.
I get a 10 year median Price/Book Value Ratio of 3.61 (which is quite high). The current P/B Ratio is 1.89 which is some 52% of the 10 year value. Even the one for 2011 at 2.42 is some 67% of the 10 year value. This would point to a very good current stock price. Since they do not raise dividends, looking at dividend yield has no value.
I personally would not buy this stock again. I do not think you get rewarded for the risk taken. This stock is really a private equity fund. (Or, something like a Hedge fund.)
Onex is one of North America's oldest investment firm committed to acquiring and building high-quality businesses in partnership with talented management teams. Onex manages investment platforms focused on private equity, real estate and credit securities. Gerald Schwartz is a major owner. Its web site is here Onex. See my spreadsheet at ocx.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
Wednesday, February 1, 2012
Newfoundland Capital Corp
I do not own this stock (TSX-NCC.A). I started to follow this stock as it was suggested as a decent dividend paying stock for investment purposes. It is not only any dividend lists that I follow. The dividends have been a bit erratic. It started to pay dividends in 1997and stopping them in 2000. They also paid a special dividend in 1998. They paid no dividends from 2000 to 2002 and then restarted them in 2003.
The company increased the dividends by 200% in 2005 and then there was no increase until 2010. In 2010 there was a 20% dividend increase in and 2011 there was a 50% dividend increase. The company is clearly paying only dividends that they feel that they can afford. So if you invest in this company, you will have to be able to manage such inconsistencies. The company is clearly hit by recessions as they had negative profits in 2001 and in 2008.
The current dividend yield of 2.25% is higher than the company’s historical norm, which seems to be closer to 1.5%. However, they have made money for their shareholders as the total return over the past 5 and 10 years is at 8.2% and 12.5% per year, respectively. The portion of the total return attributable to dividends would be around 1.6% and 1.7% per year, respectively.
This company has solid growth in revenues, earnings, book value and cash flow. There is nothing spectacular about this company’s growth, but it is solid.
A weakness would be in debt ratios. They are fine, but usually when an individual or family has majority voting rights debt ratios are very good.
The current Liquidity Ratio is 0.90 with a 5 year median ratio of 1.18. (A prudent ratio is 1.50 or better and if less than 1.00, it means that current assets cannot cover current liabilities. The current Asset/Liability Ratio is much better at 1.91 with a 5 year median of 1.78. The current Leverage Ratio is 2.09 with a 5 year median of 2.22 and the current Debt/Equity Ratio is 1.09 with a 5 year median ratio of 1.22.
Compare the above debt ratios with Lassonde which I reviewed lately and that has the same company structure. The 5 year median ratios are 2.05 for Liquidity, 2.22 for Asset/Liability, 1.84 for Leverage and 0.84 for Debt/Equity.
When I look at insider trading, I find only insider buying of $1.7M and no insider selling. Insider buying was at $7.25 and $8.00. There are 2 institutional holders of these shares with only just 1% of outstanding shares owned. There was no buying or selling of shares within the last 3 months.
When I look at analysts’ recommendations, I find few followers (only 2) of these shares and their recommendation is a Hold. Basically, it is felt that the share price is too high and that there is a lack of liquidity for the shares. (Liquidity has to do with the number of shares traded daily.) Analysts seem to feel that the share price on this stock has always been too high. The 12 months stock price given for Hold recommendations are $9.00 and $9.50.
I get a 5 year median low and high Price/Earnings Ratios of 10.43 and 14.65. (This range is not low, but it is not particularly high either as a low P/E ratio is consider below 10.) The current P/E Ratio for this company at 12.12 shows a relatively reasonable stock price. The 10 year Price/Book Value Ratio is 1.93. The current P/B Ratio at 2.29 is 18% higher therefore shows a higher than median stock price.
I get a Graham Price of $7.20 and the current stock price of $8.00 is some 11% higher. The median and low difference between the Graham Price and the stock price is the stock price being 24% and 7% higher than the Graham Price. This puts the current price between a relatively median and relatively low price, so makes it a relative reasonable stock price.
Lastly, the current dividend yield at 2.25% is some 44% above the 5 year median dividend yield of 1.56%. So this shows a relatively good stock price. So, my stock price tests show a mixed bag, but generally show a reasonable relative stock price.
This is a consumer discretionary stock. I am not in the market for any stock at this time, but I find this stock interesting and will continue to follow it. Insiders have bought this stock at $8.00, so it would seem that they do not feel that the stock price is too high.
Newfoundland Capital Corporation Limited also owns and operates Newcap Radio. Newcap Radio is one of Canada's leading radio broadcasters with 79 licenses across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. The Company has 58 FM and 21 AM licenses spanning the country employing over 800 radio professionals in Canada. Newfoundland Capital Corporation Limited also owns and operates the Glynmill Inn, Corner Brook, Newfoundland and Labrador. Its web site is here Newfoundland Capital. See my spreadsheet at ncc.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
The company increased the dividends by 200% in 2005 and then there was no increase until 2010. In 2010 there was a 20% dividend increase in and 2011 there was a 50% dividend increase. The company is clearly paying only dividends that they feel that they can afford. So if you invest in this company, you will have to be able to manage such inconsistencies. The company is clearly hit by recessions as they had negative profits in 2001 and in 2008.
The current dividend yield of 2.25% is higher than the company’s historical norm, which seems to be closer to 1.5%. However, they have made money for their shareholders as the total return over the past 5 and 10 years is at 8.2% and 12.5% per year, respectively. The portion of the total return attributable to dividends would be around 1.6% and 1.7% per year, respectively.
This company has solid growth in revenues, earnings, book value and cash flow. There is nothing spectacular about this company’s growth, but it is solid.
A weakness would be in debt ratios. They are fine, but usually when an individual or family has majority voting rights debt ratios are very good.
The current Liquidity Ratio is 0.90 with a 5 year median ratio of 1.18. (A prudent ratio is 1.50 or better and if less than 1.00, it means that current assets cannot cover current liabilities. The current Asset/Liability Ratio is much better at 1.91 with a 5 year median of 1.78. The current Leverage Ratio is 2.09 with a 5 year median of 2.22 and the current Debt/Equity Ratio is 1.09 with a 5 year median ratio of 1.22.
Compare the above debt ratios with Lassonde which I reviewed lately and that has the same company structure. The 5 year median ratios are 2.05 for Liquidity, 2.22 for Asset/Liability, 1.84 for Leverage and 0.84 for Debt/Equity.
When I look at insider trading, I find only insider buying of $1.7M and no insider selling. Insider buying was at $7.25 and $8.00. There are 2 institutional holders of these shares with only just 1% of outstanding shares owned. There was no buying or selling of shares within the last 3 months.
When I look at analysts’ recommendations, I find few followers (only 2) of these shares and their recommendation is a Hold. Basically, it is felt that the share price is too high and that there is a lack of liquidity for the shares. (Liquidity has to do with the number of shares traded daily.) Analysts seem to feel that the share price on this stock has always been too high. The 12 months stock price given for Hold recommendations are $9.00 and $9.50.
I get a 5 year median low and high Price/Earnings Ratios of 10.43 and 14.65. (This range is not low, but it is not particularly high either as a low P/E ratio is consider below 10.) The current P/E Ratio for this company at 12.12 shows a relatively reasonable stock price. The 10 year Price/Book Value Ratio is 1.93. The current P/B Ratio at 2.29 is 18% higher therefore shows a higher than median stock price.
I get a Graham Price of $7.20 and the current stock price of $8.00 is some 11% higher. The median and low difference between the Graham Price and the stock price is the stock price being 24% and 7% higher than the Graham Price. This puts the current price between a relatively median and relatively low price, so makes it a relative reasonable stock price.
Lastly, the current dividend yield at 2.25% is some 44% above the 5 year median dividend yield of 1.56%. So this shows a relatively good stock price. So, my stock price tests show a mixed bag, but generally show a reasonable relative stock price.
This is a consumer discretionary stock. I am not in the market for any stock at this time, but I find this stock interesting and will continue to follow it. Insiders have bought this stock at $8.00, so it would seem that they do not feel that the stock price is too high.
Newfoundland Capital Corporation Limited also owns and operates Newcap Radio. Newcap Radio is one of Canada's leading radio broadcasters with 79 licenses across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. The Company has 58 FM and 21 AM licenses spanning the country employing over 800 radio professionals in Canada. Newfoundland Capital Corporation Limited also owns and operates the Glynmill Inn, Corner Brook, Newfoundland and Labrador. Its web site is here Newfoundland Capital. See my spreadsheet at ncc.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
Tuesday, January 31, 2012
Loblaw Companies
Currently, I am trying to review all the stocks I follow that I did not review in 2011. I will only be putting out one entry per stock until I finish this list off.
I do not own Loblaw Companies (TSX-L) but I used to. This is an interest stock to look at. It got into trouble back in 2005 and it has yet to recover. I bought this company in 1996 and 1998 and then sold in 2007. I made 10.14% per year on this stock. The portion of my return attributable to dividends would be 1.92% per year or 18.8% of my return. I sold because I did not see the company improving any time soon.
This company used to have a very good record of increasing their dividends. The model was low dividend yield (1% or lower), low Dividend Payout Ratios (20% for earnings, 10% for cash flow), and high dividend increases (20%). Model values are to give you an idea of what they would be aiming for, they are not meant to be exact figures.
They got into difficulties and the dividends have not changed from 2005. The 5 year median DPRs are 35% for earnings and 15% for Cash Flow. The DPRs for 2011 is expected to be some 29.5% for earnings and 14.4% for Cash Flow. DPRs are certainly improving recently, but I doubt if they have come down far enough for any dividend increases.
If you had held this stock over the past 5 and 10 years, you would not have made any money. The portion of the total return from dividends is around 1.8%, but they do not cover the capital loses. The stock has been improving since 2005, but the current stock price is still around 50% less than the high made in 2005.
Generally speaking with growth rates, the 10 year growth rate is better than the 5 year one. For example, for earnings, the 5 year growth rate is a negative 2% per year. The 10 year growth rate is 3.6% per year. The thing is the 10 year growth rate starts before 2005 (that is in 2001) when the company still had growth. There really has been not much growth over the past 5 years, which starts in 2006.
The company still has earnings and cash flow. They only had one year, in 2006 with negative earnings and no years of negative cash flow. However earnings are not what they used to be and they are not increasing like they used to.
As far debt ratios, they are fine and have generally been fine. The current Liquidity Ratio is 1.45, the current Asset/Liability Ratio is 1.54, the current Leverage Ratio is 2.84 and the current Debt/Equity Ratio is 1.84.
The return on equity ratios since 2005 is not like those prior to that year. The one ROE for the financial year ending in 2010 is 9.9%, on the edge of being good. The one for 2011 is expect to be good at 12.5%.
When looking at insider trading, I find insider selling of $2.3M and minimal insider buying. All insiders, but directors have more stock options than shares. Some 126 institutions hold around 11% of the outstanding shares. Over the past 3 months there has been lots of buying and selling and they have marginally decreases their shares.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus is a Buy. The reason for Loblaws problems was their IT spending on a new supply chain. I had given up in 2007 that it would be finished anytime soon. Now the analysts with Buys recommendations feel that IT expenses will start to decline in 2013and that the new supply chain system will be finished at the end of 2011. (I have heard this before.) The Buy recommendation comes with a 12 months stock price of $42.90 and a Strong Buy comes with a 12 months stock price of $50.
I get a 5 year median low and high Price/Earnings Ratio of 13.20 and 17.79. The current P/E ratio of 12.2 is therefore low on a stock price of $36.45. I get a 10 year median Price/Book Value Ratio of 2.54 and a current one of 1.73. This is some 67% of the 10 year median ratio and points to a low stock price.
I get a Graham Price of $37.75 and the stock price of $36.45 is some 3.4% lower. Over median difference between the Graham Price and the stock price over the past 10 years shows the stock price way above the Graham Price. (This is typical of growth stocks, which Loblaws was.) This has changed over the past 5 years. The median difference between the stock price and Graham Price over the past 5 years is the stock price being 4% higher than the Graham Price. The low difference between the stock price and Graham Price is the stock price being 8.8% lower. This shows a better than reasonable stock price.
The last thing to look at is the Dividend yield. The current yield of 2.3% is some 5.4% higher than the 5 year median dividend yield of 2.19%. This shows a reasonable stock price. So my stock price tests shows the stock price ranging from low to reasonable.
I have other stocks in Consumer Staples, including Metro and Alimentation Couche-Tard Inc., so I do not need any stock in this area. I am not considering Loblaws at the time as an investment. I might look again when it restarts raising their dividends again.
Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. W. Galen Weston and George Weston Ltd own 63% of this company. Its web site is here Loblaw. See my spreadsheet at lob.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
I do not own Loblaw Companies (TSX-L) but I used to. This is an interest stock to look at. It got into trouble back in 2005 and it has yet to recover. I bought this company in 1996 and 1998 and then sold in 2007. I made 10.14% per year on this stock. The portion of my return attributable to dividends would be 1.92% per year or 18.8% of my return. I sold because I did not see the company improving any time soon.
This company used to have a very good record of increasing their dividends. The model was low dividend yield (1% or lower), low Dividend Payout Ratios (20% for earnings, 10% for cash flow), and high dividend increases (20%). Model values are to give you an idea of what they would be aiming for, they are not meant to be exact figures.
They got into difficulties and the dividends have not changed from 2005. The 5 year median DPRs are 35% for earnings and 15% for Cash Flow. The DPRs for 2011 is expected to be some 29.5% for earnings and 14.4% for Cash Flow. DPRs are certainly improving recently, but I doubt if they have come down far enough for any dividend increases.
If you had held this stock over the past 5 and 10 years, you would not have made any money. The portion of the total return from dividends is around 1.8%, but they do not cover the capital loses. The stock has been improving since 2005, but the current stock price is still around 50% less than the high made in 2005.
Generally speaking with growth rates, the 10 year growth rate is better than the 5 year one. For example, for earnings, the 5 year growth rate is a negative 2% per year. The 10 year growth rate is 3.6% per year. The thing is the 10 year growth rate starts before 2005 (that is in 2001) when the company still had growth. There really has been not much growth over the past 5 years, which starts in 2006.
The company still has earnings and cash flow. They only had one year, in 2006 with negative earnings and no years of negative cash flow. However earnings are not what they used to be and they are not increasing like they used to.
As far debt ratios, they are fine and have generally been fine. The current Liquidity Ratio is 1.45, the current Asset/Liability Ratio is 1.54, the current Leverage Ratio is 2.84 and the current Debt/Equity Ratio is 1.84.
The return on equity ratios since 2005 is not like those prior to that year. The one ROE for the financial year ending in 2010 is 9.9%, on the edge of being good. The one for 2011 is expect to be good at 12.5%.
When looking at insider trading, I find insider selling of $2.3M and minimal insider buying. All insiders, but directors have more stock options than shares. Some 126 institutions hold around 11% of the outstanding shares. Over the past 3 months there has been lots of buying and selling and they have marginally decreases their shares.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus is a Buy. The reason for Loblaws problems was their IT spending on a new supply chain. I had given up in 2007 that it would be finished anytime soon. Now the analysts with Buys recommendations feel that IT expenses will start to decline in 2013and that the new supply chain system will be finished at the end of 2011. (I have heard this before.) The Buy recommendation comes with a 12 months stock price of $42.90 and a Strong Buy comes with a 12 months stock price of $50.
I get a 5 year median low and high Price/Earnings Ratio of 13.20 and 17.79. The current P/E ratio of 12.2 is therefore low on a stock price of $36.45. I get a 10 year median Price/Book Value Ratio of 2.54 and a current one of 1.73. This is some 67% of the 10 year median ratio and points to a low stock price.
I get a Graham Price of $37.75 and the stock price of $36.45 is some 3.4% lower. Over median difference between the Graham Price and the stock price over the past 10 years shows the stock price way above the Graham Price. (This is typical of growth stocks, which Loblaws was.) This has changed over the past 5 years. The median difference between the stock price and Graham Price over the past 5 years is the stock price being 4% higher than the Graham Price. The low difference between the stock price and Graham Price is the stock price being 8.8% lower. This shows a better than reasonable stock price.
The last thing to look at is the Dividend yield. The current yield of 2.3% is some 5.4% higher than the 5 year median dividend yield of 2.19%. This shows a reasonable stock price. So my stock price tests shows the stock price ranging from low to reasonable.
I have other stocks in Consumer Staples, including Metro and Alimentation Couche-Tard Inc., so I do not need any stock in this area. I am not considering Loblaws at the time as an investment. I might look again when it restarts raising their dividends again.
Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. W. Galen Weston and George Weston Ltd own 63% of this company. Its web site is here Loblaw. See my spreadsheet at lob.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
Monday, January 30, 2012
Lassonde Industries
I do not own this stock (TSX-LAS.A). I started to follow this stock in 2010 because of a favorable report I read on this stock. The dividends are low, with a current dividend yield of just 1.7%. However, they have a fairly good record of dividend increases with dividend growth over the past 5 and 10 years at 15% and 14% per year, respectively.
With such a low dividend yield, you have to hold this stock for at least 10 years to get a decent return on your original investment. In the past, after 10 years you got a return on original investment of between 4% and 8.7%, but with a median return of just 4.28%. After 15 years, the median return on your original investment moves up to 9.45%.
As far as total return is concerned, the 5 and 10 year return is at 14.6% and 16.6% per year respectively. The portion of the total return that would be attributable to dividends is just over 2% per year. This stock would be considered to be a dividend growth stock. It is not on the dividend lists I follow, and this is probably because they cut the dividend in 2007 by 10%. It quickly recovered and the dividend increase in 2008 was 45%. However, investors do not generally like to see dividend cuts.
Since the annual statement is not out on this stock for the year ending in 2011, my other growth figures are to the latest annual statement of December 2010. For this company, the per share values are better than the total values. This is because they have been buying back shares, not a lot, but some most years. The number of shares outstanding has been decreasing by around 1.8% per year.
So revenues are up over the past 5 and 10 years at the rate of 10.6% and 8.5% per year, respectively. Revenue per share is up over the past 5 and 10 years at the rate of 11.5% and 8.7% per year, respectively. The earnings per share are also up nicely over the past 5 and 10 years, with growth at 14% per year over these two periods.
Cash Flow is up by 15% and 10% per year over the past 5 and 10 years. Book Value is up12.5% and 10% per year over the past 5 and 10 years. As you can see, growth in this stock is very good, no matter what you are looking at.
You have two classes of shares for this company. The Category B shares, not sold on the TSX are multiple voting shares. The Category A shares, on the TSX, are subordinate voting shares. As is common with owner controlled companies, the debt ratios are quite good. All the debt ratios are good, but the current ones for the 9 months period ending in September 2011 are not as good as usual.
The current Liquidity Ratio at 2.01 is lower than the 5 year median of 2.05. The Asset/Liability Ratio at 1.55 is lower than the 5 year median of 2.22. Also the current Leverage and Debt/Equity Ratios at 2.82 and 1.82 are higher than the 5 year median of 1.84 and 0.82. The reason is an increase in long term debt to financial a recent acquisition (Clement Papas). See news story at G&M.
The return on equity has always been good on this stock, with a ROE at the end of 2010 of 15.9% and a 5 year median ROE at the end of 2010 of 16.4%. It would appear that the ROE will be in the same neighborhood in 2011. The ROE on comprehensive income is also good with a 5 year median ROE of 16%.
When I look at insider trading, I find minimal insider buying by a director. There is no insider selling. There are 8 institutions that own some 34% of the outstanding stock of this company. Over the past 3 months there have been no sells and no buys by institutions.
When I look at analysts’ recommendations, I find a couple of Buy and one Hold recommendation. The consensus would be a Buy. The analyst with the Hold recommendation just says the company is a long term hold. The ones with Buy recommendations really like the recent US acquisitions. Feel that it has a good clean balance sheet and the current increase in debt is only temporary. This stock is a buy for long term gains and rising income.
I get 5 year median low and high Price/Earnings ratios of 9.66 and 11.88. The current P/E ratio of 10.61 would place the stock price of $68.99 at a reasonable level. I get a Graham Price of $78.68 and the current price is some 12% lower. The median difference between the Graham Price and stock price is the stock price some 7% lower. This also shows a reasonable current stock price.
I get a 10 year median Price/Book Value Ratio of 1.71 and a current one of 1.51. This current one at 88% of the 10 year ratio shows a reasonable to good stock price. The only test not to show a good current price is the dividend yield which at 1.71 is some 10% below the 5 year median dividend yield of 1.95%. The reason for this is that the most recent dividend increase is just 4.3%, one that is lower than usual for this company.
I am not in the market for a consumer staples type stock, but if I was I would certainly consider this stock. It has done well over the years. I will continue to follow this stock.
Lassonde Industries Inc. is a leading manufacturer of pure fruit juices and fruit drinks in Canada, and the largest manufacturer and distributor of apple juice in Eastern Canada. Through its subsidiaries, Lassonde is active in the processing, packaging and marketing of food products such as pure fruit juices, fruit and citrus drinks, the canning of corn on the cob for foreign markets as well as dipping sauces, fondue bouillon, meat marinades, barbecue sauces and baked beans. The Company also markets its know-how in Canada and abroad. Its web site is here Lassonde. See my spreadsheet at las.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
With such a low dividend yield, you have to hold this stock for at least 10 years to get a decent return on your original investment. In the past, after 10 years you got a return on original investment of between 4% and 8.7%, but with a median return of just 4.28%. After 15 years, the median return on your original investment moves up to 9.45%.
As far as total return is concerned, the 5 and 10 year return is at 14.6% and 16.6% per year respectively. The portion of the total return that would be attributable to dividends is just over 2% per year. This stock would be considered to be a dividend growth stock. It is not on the dividend lists I follow, and this is probably because they cut the dividend in 2007 by 10%. It quickly recovered and the dividend increase in 2008 was 45%. However, investors do not generally like to see dividend cuts.
Since the annual statement is not out on this stock for the year ending in 2011, my other growth figures are to the latest annual statement of December 2010. For this company, the per share values are better than the total values. This is because they have been buying back shares, not a lot, but some most years. The number of shares outstanding has been decreasing by around 1.8% per year.
So revenues are up over the past 5 and 10 years at the rate of 10.6% and 8.5% per year, respectively. Revenue per share is up over the past 5 and 10 years at the rate of 11.5% and 8.7% per year, respectively. The earnings per share are also up nicely over the past 5 and 10 years, with growth at 14% per year over these two periods.
Cash Flow is up by 15% and 10% per year over the past 5 and 10 years. Book Value is up12.5% and 10% per year over the past 5 and 10 years. As you can see, growth in this stock is very good, no matter what you are looking at.
You have two classes of shares for this company. The Category B shares, not sold on the TSX are multiple voting shares. The Category A shares, on the TSX, are subordinate voting shares. As is common with owner controlled companies, the debt ratios are quite good. All the debt ratios are good, but the current ones for the 9 months period ending in September 2011 are not as good as usual.
The current Liquidity Ratio at 2.01 is lower than the 5 year median of 2.05. The Asset/Liability Ratio at 1.55 is lower than the 5 year median of 2.22. Also the current Leverage and Debt/Equity Ratios at 2.82 and 1.82 are higher than the 5 year median of 1.84 and 0.82. The reason is an increase in long term debt to financial a recent acquisition (Clement Papas). See news story at G&M.
The return on equity has always been good on this stock, with a ROE at the end of 2010 of 15.9% and a 5 year median ROE at the end of 2010 of 16.4%. It would appear that the ROE will be in the same neighborhood in 2011. The ROE on comprehensive income is also good with a 5 year median ROE of 16%.
When I look at insider trading, I find minimal insider buying by a director. There is no insider selling. There are 8 institutions that own some 34% of the outstanding stock of this company. Over the past 3 months there have been no sells and no buys by institutions.
When I look at analysts’ recommendations, I find a couple of Buy and one Hold recommendation. The consensus would be a Buy. The analyst with the Hold recommendation just says the company is a long term hold. The ones with Buy recommendations really like the recent US acquisitions. Feel that it has a good clean balance sheet and the current increase in debt is only temporary. This stock is a buy for long term gains and rising income.
I get 5 year median low and high Price/Earnings ratios of 9.66 and 11.88. The current P/E ratio of 10.61 would place the stock price of $68.99 at a reasonable level. I get a Graham Price of $78.68 and the current price is some 12% lower. The median difference between the Graham Price and stock price is the stock price some 7% lower. This also shows a reasonable current stock price.
I get a 10 year median Price/Book Value Ratio of 1.71 and a current one of 1.51. This current one at 88% of the 10 year ratio shows a reasonable to good stock price. The only test not to show a good current price is the dividend yield which at 1.71 is some 10% below the 5 year median dividend yield of 1.95%. The reason for this is that the most recent dividend increase is just 4.3%, one that is lower than usual for this company.
I am not in the market for a consumer staples type stock, but if I was I would certainly consider this stock. It has done well over the years. I will continue to follow this stock.
Lassonde Industries Inc. is a leading manufacturer of pure fruit juices and fruit drinks in Canada, and the largest manufacturer and distributor of apple juice in Eastern Canada. Through its subsidiaries, Lassonde is active in the processing, packaging and marketing of food products such as pure fruit juices, fruit and citrus drinks, the canning of corn on the cob for foreign markets as well as dipping sauces, fondue bouillon, meat marinades, barbecue sauces and baked beans. The Company also markets its know-how in Canada and abroad. Its web site is here Lassonde. See my spreadsheet at las.htm.
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. See my website for stocks followed and investment notes. Follow me on twitter.
Saturday, January 28, 2012
TRANSFORMATIONS 2012
Artists are:
Ethel Christensen
Kathleen Gabriel
Stephanie Ledger
Cathy McPherson
Malgorzata Pienkowski
Show runs:
January 30 – February 12
Opening Reception:
Please join us for the opening reception with jazz guitarist Lawrence Papoff and violinist Molefe Mohamid-Mitchell: Friday, February 3rd, 6-10 p.m.
ART SQUARE GALLERY
334 Dundas Street West, Toronto
(Located across from the Art Gallery of Ontario)
Gallery hours: Monday to Sunday 10am – 11pm
Subscribe to:
Posts (Atom)