I own this stock (TSX-ENB, NYSE-ENB). I have also done very well on this pipeline. I bought stock in 2005, 2008 and 2009. My total return is 20% per year. The portion attributable to dividends would be 3.48% per year or 17% of my total return.
They on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). My spreadsheet tells me that they have raised their dividends every year since 1997.
The 5 and 10 year growth in dividends over the past 5 and 10 years is 11.3% and 10.8% per year. The 5 year median dividend yield is 3.26%. The current dividend yield is almost 10% lower at 2.95%. For the stock I bought in 2005, 7 years ago, my dividend yield on my original purchases price is 6.3%.
If you had invested in this stock 5 and 10 years ago, you total return would probably have been around 16.5% and 16.6% per year, respectively. The return attributed to dividends over the past 5 and 10 years would probably be around 2.9% and 3.2% respectively. The portion of the return attributed to dividend over the past 5 and 10 years would probably be 17.7% and 18.9%, respectively.
The Dividend Payout Ratios are good. The 5 year median DPRs for earnings is 63% and for cash flow is 33%. The DPRs for 2011 were 75% and 28%. For 2012, they are expected to be 68% and 33%.
Growth is quite good for this company. The growth in revenue per shares was 10.3% and 14.7% per year over the past 5 and 10 years. The growth in EPS was 7.8% and 6% per year over the past 5 and 10 years. The growth in Cash Flow was 12.8% and 16.9% per year over the past 5 and 10 years. The growth in Book Value was 9.4% and 9.7% per year over the past 5 and 10 years.
The Return on Equity for 2011 was 12.7%. The 5 year median ROE was 13.6%. The ROE based on comprehensive income was lower at 10% with a 5 year median also at 10%. This ROE was still within the good range of 10% to 15%.
This utility company has lots of debt which is very common for utility companies. The Liquidity Ratio is the worse coming in at 0.88 with a 5 year median value of 0.93. The Company was in compliance with all debt covenants at the end of December 2011. Asset/Liability Ratios are a bit low with a ratio of 1.39 at the end of 2011 and a 5 year median value of 1.40.
The current Leverage ratio at 4.41 is higher than the 5 year median value of 4.00. The current Debt/Equity Ratio at 3.17 is also higher than the 5 year median value of 2.77. Both these current ratios are rather high. I would be happier with this stock if debt ratios were lower.
I have had very good returns with this stock, I certainly cannot complain. I am concerned about debt, but I find no other analyst that is worried. However, one did suggest that maybe raising money soon and one of the options would be to issue more shares.
Enbridge is focused on three core businesses of crude oil and liquids pipelines, natural gas pipelines, and natural gas distribution. They operate in Canada and US. Its web site is here Enbridge. See my spreadsheet at enb.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.
Thursday, March 1, 2012
Wednesday, February 29, 2012
Pembina Pipelines Corp 2
I own this stock (TSX-PPL). This is a stock I have done very well with. I bought shares a couple of times in December of 2001 and have made a total return of 18% per year. The dividend portion of my return is 7.5% per year. That means that some 41% of my return is in dividends.
When I look at insider trading, I find insider buying of $2.4M and a net of insider buying at $2.3M. There is a bit of insider selling. The insider trading report does not mention any stock options, but the company does issue them. Insiders are also holding convertible debentures. A lot of the insiders do have substantial amounts of shares. Both the CEO and CFO own millions of dollars in shares.
Institutions own some 15% of the shares. They have bought and sold shares over the past 3 months and currently hold 21% more shares than they had 3 months ago.
I get 5 year median low and high Price/Earnings Ratios of 12.6 and 17.0. The current P/E ratio of 25.8 shows a rather high current stock price. And I am using today’s price. The day before the P/E was 26.4 at a price of $28.75. The 10 year median low and high P/E ratios are higher, with ratios of 19.0 and 22.2. Still the current P/E ratio is high for a utility stock.
I get a Graham Price of $8.90. The current stock price of $28.15 is some 223% higher. The 10 year median high difference between the Graham Price and the Stock price is the Stock price being 35% higher. This shows a relatively high stock price.
I get a 10 year Price/Book Value Ratio of 2.38 and a current P/B Ratio of 8.91. The current one is some 373% above the 10 year median ratio and also points to a relatively high stock price. I know that the book value has been going down, but this is a really high P/B Ratio. I get a current Dividend yield 5.63. The 5 year median Dividend yield is 8.81%, which is some 36% lower. I know the dividends have been rather flat, but even the 10 year low dividend yield is higher at 7.7%.
When I look at the analysts’ recommendations, I find that they are all over the place. Recommendations include Strong Buy, Buy, Hold, Underperform (or Reduce) and Sell. The highest number of recommendations is a Buy and the consensus recommendation is a buy.
One analyst with a Reduce recommendation gave a 12 month stock price of $22. A number of analysts giving Reduce and Sell recommendations gave the reason that the stock is overpriced. No one says anything bad about the company. There are more Reduce or Underperform recommendations than sell. (There is only one Sell). All like the recent purchase of Provident.
In fact the Buy recommendations come with comments that the stock should continue to grow with Provident purchase. One analyst says that the most recent dividend increase of 3.8% reflects management's confidence in the significant operational and financial strength of the combined entity going forward.
I think this is a very good company and I am glad to hold this stock. However, I was considering selling some of my shares. The stock is definitely overpriced. However, utility type stocks tend to be high at the moment because they have nice dividends and are relatively safe.
Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina. See my spreadsheet at ppl.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.
When I look at insider trading, I find insider buying of $2.4M and a net of insider buying at $2.3M. There is a bit of insider selling. The insider trading report does not mention any stock options, but the company does issue them. Insiders are also holding convertible debentures. A lot of the insiders do have substantial amounts of shares. Both the CEO and CFO own millions of dollars in shares.
Institutions own some 15% of the shares. They have bought and sold shares over the past 3 months and currently hold 21% more shares than they had 3 months ago.
I get 5 year median low and high Price/Earnings Ratios of 12.6 and 17.0. The current P/E ratio of 25.8 shows a rather high current stock price. And I am using today’s price. The day before the P/E was 26.4 at a price of $28.75. The 10 year median low and high P/E ratios are higher, with ratios of 19.0 and 22.2. Still the current P/E ratio is high for a utility stock.
I get a Graham Price of $8.90. The current stock price of $28.15 is some 223% higher. The 10 year median high difference between the Graham Price and the Stock price is the Stock price being 35% higher. This shows a relatively high stock price.
I get a 10 year Price/Book Value Ratio of 2.38 and a current P/B Ratio of 8.91. The current one is some 373% above the 10 year median ratio and also points to a relatively high stock price. I know that the book value has been going down, but this is a really high P/B Ratio. I get a current Dividend yield 5.63. The 5 year median Dividend yield is 8.81%, which is some 36% lower. I know the dividends have been rather flat, but even the 10 year low dividend yield is higher at 7.7%.
When I look at the analysts’ recommendations, I find that they are all over the place. Recommendations include Strong Buy, Buy, Hold, Underperform (or Reduce) and Sell. The highest number of recommendations is a Buy and the consensus recommendation is a buy.
One analyst with a Reduce recommendation gave a 12 month stock price of $22. A number of analysts giving Reduce and Sell recommendations gave the reason that the stock is overpriced. No one says anything bad about the company. There are more Reduce or Underperform recommendations than sell. (There is only one Sell). All like the recent purchase of Provident.
In fact the Buy recommendations come with comments that the stock should continue to grow with Provident purchase. One analyst says that the most recent dividend increase of 3.8% reflects management's confidence in the significant operational and financial strength of the combined entity going forward.
I think this is a very good company and I am glad to hold this stock. However, I was considering selling some of my shares. The stock is definitely overpriced. However, utility type stocks tend to be high at the moment because they have nice dividends and are relatively safe.
Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina. See my spreadsheet at ppl.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, February 28, 2012
Pembina Pipelines Corp
I own this stock (TSX-PPL). This is a stock I have done very well with. I bought shares a couple of times in December of 2001 and have made a total return of 18% per year. The dividend portion of my return is 7.5% per year. That means that some 41% of my return is in dividends.
If you had invested in the company 5 or 10 years ago, you have probably have earned 24% or 17.6% per year, respectively. The dividend portion of this return would be 8% or 7.5% per year, respectively. The dividend portion of the return would probably have been around 34% or 42.5% per year, respectively.
This stock had some dividend increases prior to 2009, when it decided to change from an income trust to a corporation. In 2009 it stopped any dividend increase and promised that they would maintain the current dividend until 2013. This is because they had a tax pool, so they would probably not have to pay taxes until 2014 to 2015.
Because a lot of income trusts have decreased dividends, or not increased them for a number of years, I would not consider the growth in dividends on this company to be any indication of the future. The growth in dividends by the way for this company is 7.5% per year over the past 5 years and 4% per year over the past 10 years.
They have however, with their recent purchase of Provident Energy; announced that they will increase their current dividend by 3.8%. An article on their 4th quarter report and the purchase of Provident Energy is at the Winnipeg Free Press.
Of course the other problem with dividends from income trusts was that they based it on distributable income. When they changed to a corporation, we really need to start looking at dividend payments with the same perspective we use for other corporations. That is we need to look at Dividend Payout Ratios based on earnings and cash flow.
For this company the Dividend Payout Ratios are high. The 5 year median DPRs for earnings is 137% and for cash flow is 96%. DPRs for 2011 were 158% for earnings and 93% for cash flow. The DPRs for 2012 are expected to be 146% earnings and 86% for cash flow. As you can see, the DPRs for earnings are still much too high. However, the DPRs for cash flow are coming down nicely. One thing is that we do not know what the impact of Pembina buying Provident Energy will have on these ratios.
Some of the growth figures for this company are very good, like Revenues per Share which has grown at the rate of 30% and 16% per year over the past 5 and 10 years. Also, the growth in earnings is not bad, with the growth in EPS being 8.6% and 5.4% per year over the past 5 and 10 years. Growth in Cash Flow is also ok with the 5 and 10 year growth at 9% and 4.4% per year, respectively.
Where this company falls down is the growth in Book Value. It has none. For most income trusts the book values would decline over time. This is because they paid out dividends based on distributable income not earnings. This company was no exception. Book value has declined by 3% and 2.5% per year over the past 5 and 10 years.
Pipelines often have heavy debt loads. The Liquidity Ratio for this company has always been very low. The current ratio is just 0.34. When this ratio is lower 1 it means that the current assets cannot cover the current liability. Even adding back the current portion of the debt (which has been handled) the current ratio is still low at 0.91, but the company has a 5 year median value of 1.12.
The Asset/Liability Ratio is currently lower at 1.40 than usual. The 5 year median ratio is much better at 1.73. The current Leverage and Debt/Equity Ratios are currently higher than normal at 3.47 and 2.47 respectively. The 5 year median ratios are 2.33 and 1.33, respectively. The current ones are a bit high, but the 5 year median ones are pretty typical of such companies. Pembina has been in compliance with all debt covenants during the years ending December 31, 2011 and 2010.
The Return on Equity for the year ending 2011 was 17.2% and the 5 year median ROE is 15.8%. This is a good rate. Also, the ROE based on comprehensive income is fairly close at 16.1% at the end of 2011 and with a 5 year median 16%.
This pipeline company has been a very good investment for me. It has handled the change from an income trust quite well. I have several pipelines and they have all been solid investments.
Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina. See my spreadsheet at ppl.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 had invested in the company 5 or 10 years ago, you have probably have earned 24% or 17.6% per year, respectively. The dividend portion of this return would be 8% or 7.5% per year, respectively. The dividend portion of the return would probably have been around 34% or 42.5% per year, respectively.
This stock had some dividend increases prior to 2009, when it decided to change from an income trust to a corporation. In 2009 it stopped any dividend increase and promised that they would maintain the current dividend until 2013. This is because they had a tax pool, so they would probably not have to pay taxes until 2014 to 2015.
Because a lot of income trusts have decreased dividends, or not increased them for a number of years, I would not consider the growth in dividends on this company to be any indication of the future. The growth in dividends by the way for this company is 7.5% per year over the past 5 years and 4% per year over the past 10 years.
They have however, with their recent purchase of Provident Energy; announced that they will increase their current dividend by 3.8%. An article on their 4th quarter report and the purchase of Provident Energy is at the Winnipeg Free Press.
Of course the other problem with dividends from income trusts was that they based it on distributable income. When they changed to a corporation, we really need to start looking at dividend payments with the same perspective we use for other corporations. That is we need to look at Dividend Payout Ratios based on earnings and cash flow.
For this company the Dividend Payout Ratios are high. The 5 year median DPRs for earnings is 137% and for cash flow is 96%. DPRs for 2011 were 158% for earnings and 93% for cash flow. The DPRs for 2012 are expected to be 146% earnings and 86% for cash flow. As you can see, the DPRs for earnings are still much too high. However, the DPRs for cash flow are coming down nicely. One thing is that we do not know what the impact of Pembina buying Provident Energy will have on these ratios.
Some of the growth figures for this company are very good, like Revenues per Share which has grown at the rate of 30% and 16% per year over the past 5 and 10 years. Also, the growth in earnings is not bad, with the growth in EPS being 8.6% and 5.4% per year over the past 5 and 10 years. Growth in Cash Flow is also ok with the 5 and 10 year growth at 9% and 4.4% per year, respectively.
Where this company falls down is the growth in Book Value. It has none. For most income trusts the book values would decline over time. This is because they paid out dividends based on distributable income not earnings. This company was no exception. Book value has declined by 3% and 2.5% per year over the past 5 and 10 years.
Pipelines often have heavy debt loads. The Liquidity Ratio for this company has always been very low. The current ratio is just 0.34. When this ratio is lower 1 it means that the current assets cannot cover the current liability. Even adding back the current portion of the debt (which has been handled) the current ratio is still low at 0.91, but the company has a 5 year median value of 1.12.
The Asset/Liability Ratio is currently lower at 1.40 than usual. The 5 year median ratio is much better at 1.73. The current Leverage and Debt/Equity Ratios are currently higher than normal at 3.47 and 2.47 respectively. The 5 year median ratios are 2.33 and 1.33, respectively. The current ones are a bit high, but the 5 year median ones are pretty typical of such companies. Pembina has been in compliance with all debt covenants during the years ending December 31, 2011 and 2010.
The Return on Equity for the year ending 2011 was 17.2% and the 5 year median ROE is 15.8%. This is a good rate. Also, the ROE based on comprehensive income is fairly close at 16.1% at the end of 2011 and with a 5 year median 16%.
This pipeline company has been a very good investment for me. It has handled the change from an income trust quite well. I have several pipelines and they have all been solid investments.
Pembina transports crude oil and natural gas liquids produced in Western Canada. It owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors. Pembina holds a 50% interest in the Fort Saskatchewan Ethylene Storage Facility. Its web site is here Pembina. See my spreadsheet at ppl.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, February 27, 2012
Shoppers Drug Mart 2
I own this stock (TSX-SC). I had followed this stock for a number of years before I bought it for the TFSA account in January 2009. I bought more in January 2010 and January 2011. By May of 2011 I started to feel that I should be investing differently for my TFSA so I sold some shares in May of 2011. Basically, I have broken even on this stock.
Everyone, including Directors have more options than stocks. This is unusual as under most companies, directors tend to have more shares than options. There has been a bit of insider buying, but nothing like insider selling which is $3.6M and net insider selling at $3.4M. Selling has all been by officers of the company and they seem to be cashing in on options.
There are 162 institutions that own some 41% of the shares of this company. They had bought and sold shares over the past 3 months and during this time they have decreased their shares in this company by 3.1%.
I get 5 year median low and high Price/Earnings ratios of 14.45 and 18.58. The current P/E ratios of 13.64 would appear to be relatively low. However, as I noted yesterday, P/E ratios are declining on this stock. I get a Price/Book Value Ratio of 2.02 which is only 60% of the 10 year median P/B Ratio of 3.31. This shows a good relative price. However, P/B ratios have also generally been declining.
I get a Graham price of $36.63 and the current stock price of $40.50 is some 10% higher. The 10 year median low difference between the Graham Price and the stock price is the stock price being some 48% higher than the Graham Price. However, this difference between the Graham Price and Stock price has also been declining.
The current Dividend yield at 2.62% is almost 40% higher than the 5 year median Dividend yield of 1.88%. Dividend yields have been going up and dividend increases have been going down. Even though the 5 year growth in dividend is 15%, the most recent increase was for 6%. I do not think that the past growth in dividends reflects the future growth.
The tests that I look at are meant to help me determine if the current stock price is relatively reasonable compared to the past. This can give you a good idea about what is a reasonable price for a stock. However, this assumes that, say a growth stock is still a growth stock. The problem with this stock is that it is clearly transitioning from a growth stock to a non-growth or more stable stock.
Personally, I think that the stock price is between a mid and high price. For example, I think that the P/E range for this stock would be between 10 and 15. So a P/E at 13.64 would be between mid and high, because a mid-point would be at 12.5. However, one analyst I read thought that a P/E of 14 was a reasonable one for this stock.
Jean Coutu Group has 5 year median low and high P/E ratio of 10.6 and 13.2. Loblaws has 5 year median low and high of 13.2 to 17.8. The Price/Book Value Ratio of 2.02 is a reasonable one. The Dividend yield is quite good for a consumer stable stock.
When I look at analysts’ recommendations, I find Strong Buy (few), Buy and Hold (lots). The consensus recommendation would be a Hold. One analysts with a Buy recommendation said that you should buy for raising dividends and great cash flow. He goes on to say that it is long-term buy. One hold said that the stock was overpriced and a good current price would be in the low $30’s.
The dividend watchdog blogger recently blogged about this company. The Dividend Ninja also blogged about this company recently. The Blogger Martailer also had an interesting blog on this stock at martailer.com. He talks about how Target and Shoppers will be completing for in Canadian pharmacists for its franchise system.
There has been no end to trouble at Shoppers. See Shoppers Drug Mart shares fall after generic drugs ruling at the G&M. Also, an earlier one titled Shoppers results still hit by drug rules at the G&M. The same sort of story is repeated as Shoppers downgraded as independent pharmacies stay afloat at the Financial Post.
I have not yet decided what I will do about this stock. However, it has been a disappointing buy so far.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers. See my spreadsheet at sc.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.
Everyone, including Directors have more options than stocks. This is unusual as under most companies, directors tend to have more shares than options. There has been a bit of insider buying, but nothing like insider selling which is $3.6M and net insider selling at $3.4M. Selling has all been by officers of the company and they seem to be cashing in on options.
There are 162 institutions that own some 41% of the shares of this company. They had bought and sold shares over the past 3 months and during this time they have decreased their shares in this company by 3.1%.
I get 5 year median low and high Price/Earnings ratios of 14.45 and 18.58. The current P/E ratios of 13.64 would appear to be relatively low. However, as I noted yesterday, P/E ratios are declining on this stock. I get a Price/Book Value Ratio of 2.02 which is only 60% of the 10 year median P/B Ratio of 3.31. This shows a good relative price. However, P/B ratios have also generally been declining.
I get a Graham price of $36.63 and the current stock price of $40.50 is some 10% higher. The 10 year median low difference between the Graham Price and the stock price is the stock price being some 48% higher than the Graham Price. However, this difference between the Graham Price and Stock price has also been declining.
The current Dividend yield at 2.62% is almost 40% higher than the 5 year median Dividend yield of 1.88%. Dividend yields have been going up and dividend increases have been going down. Even though the 5 year growth in dividend is 15%, the most recent increase was for 6%. I do not think that the past growth in dividends reflects the future growth.
The tests that I look at are meant to help me determine if the current stock price is relatively reasonable compared to the past. This can give you a good idea about what is a reasonable price for a stock. However, this assumes that, say a growth stock is still a growth stock. The problem with this stock is that it is clearly transitioning from a growth stock to a non-growth or more stable stock.
Personally, I think that the stock price is between a mid and high price. For example, I think that the P/E range for this stock would be between 10 and 15. So a P/E at 13.64 would be between mid and high, because a mid-point would be at 12.5. However, one analyst I read thought that a P/E of 14 was a reasonable one for this stock.
Jean Coutu Group has 5 year median low and high P/E ratio of 10.6 and 13.2. Loblaws has 5 year median low and high of 13.2 to 17.8. The Price/Book Value Ratio of 2.02 is a reasonable one. The Dividend yield is quite good for a consumer stable stock.
When I look at analysts’ recommendations, I find Strong Buy (few), Buy and Hold (lots). The consensus recommendation would be a Hold. One analysts with a Buy recommendation said that you should buy for raising dividends and great cash flow. He goes on to say that it is long-term buy. One hold said that the stock was overpriced and a good current price would be in the low $30’s.
The dividend watchdog blogger recently blogged about this company. The Dividend Ninja also blogged about this company recently. The Blogger Martailer also had an interesting blog on this stock at martailer.com. He talks about how Target and Shoppers will be completing for in Canadian pharmacists for its franchise system.
There has been no end to trouble at Shoppers. See Shoppers Drug Mart shares fall after generic drugs ruling at the G&M. Also, an earlier one titled Shoppers results still hit by drug rules at the G&M. The same sort of story is repeated as Shoppers downgraded as independent pharmacies stay afloat at the Financial Post.
I have not yet decided what I will do about this stock. However, it has been a disappointing buy so far.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers. See my spreadsheet at sc.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 24, 2012
Shoppers Drug Mart
I own this stock (TSX-SC). I had followed this stock for a number of years before I bought it for the TFSA account in January 2009. I bought more in January 2010 and January 2011. By May of 2011 I started to feel that I should be investing differently for my TFSA so I sold some shares in May of 2011. Basically, I have broken even on this stock.
I must admit I have done worse on stocks, like losing money. However, you expect something better than just breaking even. I think I need to reconsider what I want to invest in for the TFSA account and get out of this stock. The problems are not really the fault of Shoppers, problems have occurred because of action taken by Ontario and other governments to reduce health costs.
Ontario, B. C. and Alberta have all big debts. We have health care costs that need to be brought under control. These provinces will have to (eventually anyway) bring health care costs under control. What has been hammering this company is Ontario changing the rules on generic drugs. Ontario did this to save money on health care. Alberta and B. C. are doing the same thing. I cannot see any of these governments changing their policies any time soon because of debt problems.
Dividends have been reasonable, with a 5 year median dividend yield of 1.89%. Increases have slowed down lately with the latest increase being just 6% compared to the 5 year growth rate of 15% per year. I certainly do not mind collecting dividends waiting for a stock to improve. Problem is will Shoppers improve?
The thing is they are not as fast growing as the 5 year dividend growth suggest. They had better growth when they started out. We are coming out of a recession and they have done better than a lot of companies over the past 5 years. However, their problems are not all caused by the recession. They are being caused by changing government policies.
So, let’s look at growth. The revenue per share has grown at the rate 6% and 11% per year over the past 5 and 10 years. EPS has grown at the rate of 7.8% and 10% per year over the past 5 and 10 years. Cash Flow has grown at the rate of 9.8% and 15.9% per year over the past 5 and 10 years. Book Value has grown at the rate of 9.7% and 11.4% per year over the past 5 and 10 years.
Now, if you had bought this stock 5 years ago, you would not have made any money. The total return is down about 2% per year. Dividends were about 1.8% per year. That gives a capital loss of 3.8% per year. If you had invested 10 years ago you would have had a total return around 9.7% per year with dividends being around 1.6% per year. This stock peaked in 2007 and has not fully recovered.
However, one does make an investment for what a stock has done in the past. One invests for what one expects a stock to do in the future. Although this company has been making money and it has been increasing their revenue, earnings and cash flow, it also appears that it probably has tough times ahead.
The other things that are good about this stock are the Return on Equity and the Debt Ratios. The ROE at the end of 2011 was very good at 14.4%. The 5 year median ROE is also very good at 15.3%. There is also no big difference between this ROE and the ROE based on comprehensive income. The ROE based on comprehensive income are 13.9% for the end of 2011and has a 5 year median of 14%.
The current Liquidity Ratio is 1.52 and this is better than it has been in the past. The Liquidity Ratios have been ok over the past 5 year, but were quite low before that. The 10 year median Liquidity Ratio is 1.15. The Asset/Liability Ratios has always been very good and it is higher also than in the past. The current one is 2.54. The current Leverage and Debt/Equity Ratios have always been good and they are currently at 1.71 and 0.67.
It is not so much that the market does not recognize that the company has continued to make money and increase its revenues, earnings and cash flow so much as it is assigning a lower price/earnings ratio to the company. When this stock was originally issued it was considered to be a growth company and got P/E ratios for a growth company. However, since the company peaked in 2007, the P/E ratios have been coming down.
The low and high median P/E ratios assigned originally were 20 to 26. The current 5 year median P/E ratios are 15 to 19. Then the P/E range in 2011 was 13 to 15. With every further bit of bad news for this company, the P/E ratios come down. One analyst thought that a good ratio for this company might be 14. But perhaps the P/E ratios will continue to come down. I do not expect the range to come lower than 10 to 15, but it could still go lower than the current range.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers. See my spreadsheet at sc.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 must admit I have done worse on stocks, like losing money. However, you expect something better than just breaking even. I think I need to reconsider what I want to invest in for the TFSA account and get out of this stock. The problems are not really the fault of Shoppers, problems have occurred because of action taken by Ontario and other governments to reduce health costs.
Ontario, B. C. and Alberta have all big debts. We have health care costs that need to be brought under control. These provinces will have to (eventually anyway) bring health care costs under control. What has been hammering this company is Ontario changing the rules on generic drugs. Ontario did this to save money on health care. Alberta and B. C. are doing the same thing. I cannot see any of these governments changing their policies any time soon because of debt problems.
Dividends have been reasonable, with a 5 year median dividend yield of 1.89%. Increases have slowed down lately with the latest increase being just 6% compared to the 5 year growth rate of 15% per year. I certainly do not mind collecting dividends waiting for a stock to improve. Problem is will Shoppers improve?
The thing is they are not as fast growing as the 5 year dividend growth suggest. They had better growth when they started out. We are coming out of a recession and they have done better than a lot of companies over the past 5 years. However, their problems are not all caused by the recession. They are being caused by changing government policies.
So, let’s look at growth. The revenue per share has grown at the rate 6% and 11% per year over the past 5 and 10 years. EPS has grown at the rate of 7.8% and 10% per year over the past 5 and 10 years. Cash Flow has grown at the rate of 9.8% and 15.9% per year over the past 5 and 10 years. Book Value has grown at the rate of 9.7% and 11.4% per year over the past 5 and 10 years.
Now, if you had bought this stock 5 years ago, you would not have made any money. The total return is down about 2% per year. Dividends were about 1.8% per year. That gives a capital loss of 3.8% per year. If you had invested 10 years ago you would have had a total return around 9.7% per year with dividends being around 1.6% per year. This stock peaked in 2007 and has not fully recovered.
However, one does make an investment for what a stock has done in the past. One invests for what one expects a stock to do in the future. Although this company has been making money and it has been increasing their revenue, earnings and cash flow, it also appears that it probably has tough times ahead.
The other things that are good about this stock are the Return on Equity and the Debt Ratios. The ROE at the end of 2011 was very good at 14.4%. The 5 year median ROE is also very good at 15.3%. There is also no big difference between this ROE and the ROE based on comprehensive income. The ROE based on comprehensive income are 13.9% for the end of 2011and has a 5 year median of 14%.
The current Liquidity Ratio is 1.52 and this is better than it has been in the past. The Liquidity Ratios have been ok over the past 5 year, but were quite low before that. The 10 year median Liquidity Ratio is 1.15. The Asset/Liability Ratios has always been very good and it is higher also than in the past. The current one is 2.54. The current Leverage and Debt/Equity Ratios have always been good and they are currently at 1.71 and 0.67.
It is not so much that the market does not recognize that the company has continued to make money and increase its revenues, earnings and cash flow so much as it is assigning a lower price/earnings ratio to the company. When this stock was originally issued it was considered to be a growth company and got P/E ratios for a growth company. However, since the company peaked in 2007, the P/E ratios have been coming down.
The low and high median P/E ratios assigned originally were 20 to 26. The current 5 year median P/E ratios are 15 to 19. Then the P/E range in 2011 was 13 to 15. With every further bit of bad news for this company, the P/E ratios come down. One analyst thought that a good ratio for this company might be 14. But perhaps the P/E ratios will continue to come down. I do not expect the range to come lower than 10 to 15, but it could still go lower than the current range.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. This is a widely held company. Its web site is here Shoppers. See my spreadsheet at sc.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.
Thursday, February 23, 2012
Husky Energy Inc 2
I own this stock (TSX-HSE). I bought Husky in 2008 and some more in 2010. I have lost 8.8% per year on this stock. In this section I will discuss the current stock price and if it is reasonable or not. It is great to buy at a low price, but most of the time, reasonable will have to do.
First of all, about 75% of this company is owned by Mr. Li Ka-shing, directly or indirectly. There is not much action on Insider Trading except a very tiny amount of insider buying. The CEO, CFO and officers have more stock options than shares.
Also, some 150 institutions own just over 9% of the outstanding shares. They have bought and sold shares over the past 3 months and their investments in these shares have increased marginally (by just under ½ of 1%).
The Price/Earnings ratios have fluctuated quite a bit. The 10 year median low and high P/E Ratios are 9.37 and 13.39. So the current P/E ratio of 14.51 is a little high, relatively. (If we use 5 year median high P/E ratios, it is 20.96. However, I went to 10 years because P/E ratios do fluctuate a lot.)
I get a Graham Price of $27.27. The current stock price at $26.26 is some 3% lower. This is a good sign. The low difference between the Graham Price and Stock price is the Stock price is 22% lower. The median difference between the Graham Price and Stock price is the Stock price is 7% higher. A reasonable stock price is when the difference between the Graham price and Stock price is between the low and median values, which is where this stock falls.
I get a 10 year median Price/Book Value Ratio of 2.18 and the current one of 1.44 is 66% of the 10 year median value. This test shows a current good stock price. (A good stock price is when the current P/B Ratio is at or lower than 80% of the 10 year median P/B Ratio.)
The current Dividend Yield of 4.57% is almost the same as the 5 year median dividend yield of 4.59%. Ideally, you want the current dividend yield higher than the 5 year median dividend yield. (However, the 10 year median Dividend yield is at 4.12% and this is 10% lower than the current one.)
The stock price tests I use generally point to a reasonable stock price. The P/E ratio shows a relatively high stock price, but 14.51 P/E ratios on an absolute basis shows a reasonable stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. While the ones for other than Hold have 1 or 2 analysts, the Hold one has 10. The consensus is a Hold because so many analysts are recommending a Hold.
One analyst with a Hold recommendation gives a 12 month stock price of $28 and another said that there are better other companies to buy. One analyst with a Hold recommendation said he is concerned about the lack of growth. An analyst with a Strong Buy recommendation says that the company has good prospects for the longer-term. One with a Buy says that he feels positive about the stock and likes the good dividend yield.
Husky anticipates a difficult year is the headlines for a news article on this company in the G&M. Another article called Husky Energy Inc. a trade, not a hold in the G&M says that the company stock is not liked because “the company has failed to grow sufficiently to meet expectations. It is not that they have failed to grow, but that they have failed to meet expectations”. He goes on to say that “managing investor expectations is the toughest job in the world”.
The dividend Guy blogger recently bought this stock. See his blog for his analysis on Husky. This was also a pick for Dividend Ninja blogger.
A reason to buy a Canadian Oil and Gas producer is because such companies form a large part of the TSX. Another reason might be that you can get good dividend returns over the longer term. However, you have to be prepared to have a stock where the dividend fluctuates. I do not have much invested in this stock, but I plan to hold on to what I have.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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.
First of all, about 75% of this company is owned by Mr. Li Ka-shing, directly or indirectly. There is not much action on Insider Trading except a very tiny amount of insider buying. The CEO, CFO and officers have more stock options than shares.
Also, some 150 institutions own just over 9% of the outstanding shares. They have bought and sold shares over the past 3 months and their investments in these shares have increased marginally (by just under ½ of 1%).
The Price/Earnings ratios have fluctuated quite a bit. The 10 year median low and high P/E Ratios are 9.37 and 13.39. So the current P/E ratio of 14.51 is a little high, relatively. (If we use 5 year median high P/E ratios, it is 20.96. However, I went to 10 years because P/E ratios do fluctuate a lot.)
I get a Graham Price of $27.27. The current stock price at $26.26 is some 3% lower. This is a good sign. The low difference between the Graham Price and Stock price is the Stock price is 22% lower. The median difference between the Graham Price and Stock price is the Stock price is 7% higher. A reasonable stock price is when the difference between the Graham price and Stock price is between the low and median values, which is where this stock falls.
I get a 10 year median Price/Book Value Ratio of 2.18 and the current one of 1.44 is 66% of the 10 year median value. This test shows a current good stock price. (A good stock price is when the current P/B Ratio is at or lower than 80% of the 10 year median P/B Ratio.)
The current Dividend Yield of 4.57% is almost the same as the 5 year median dividend yield of 4.59%. Ideally, you want the current dividend yield higher than the 5 year median dividend yield. (However, the 10 year median Dividend yield is at 4.12% and this is 10% lower than the current one.)
The stock price tests I use generally point to a reasonable stock price. The P/E ratio shows a relatively high stock price, but 14.51 P/E ratios on an absolute basis shows a reasonable stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. While the ones for other than Hold have 1 or 2 analysts, the Hold one has 10. The consensus is a Hold because so many analysts are recommending a Hold.
One analyst with a Hold recommendation gives a 12 month stock price of $28 and another said that there are better other companies to buy. One analyst with a Hold recommendation said he is concerned about the lack of growth. An analyst with a Strong Buy recommendation says that the company has good prospects for the longer-term. One with a Buy says that he feels positive about the stock and likes the good dividend yield.
Husky anticipates a difficult year is the headlines for a news article on this company in the G&M. Another article called Husky Energy Inc. a trade, not a hold in the G&M says that the company stock is not liked because “the company has failed to grow sufficiently to meet expectations. It is not that they have failed to grow, but that they have failed to meet expectations”. He goes on to say that “managing investor expectations is the toughest job in the world”.
The dividend Guy blogger recently bought this stock. See his blog for his analysis on Husky. This was also a pick for Dividend Ninja blogger.
A reason to buy a Canadian Oil and Gas producer is because such companies form a large part of the TSX. Another reason might be that you can get good dividend returns over the longer term. However, you have to be prepared to have a stock where the dividend fluctuates. I do not have much invested in this stock, but I plan to hold on to what I have.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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 22, 2012
Husky Energy Inc
I own this stock (TSX-HSE). I bought Husky in 2008 and some more in 2010. I have lost 8.8% per year on this stock. Dividends on this stock equaled a return of 3.4% per year. I have lost some 12.1% per year in Capital gains.
This is a company in the oil and gas production business and as such the dividends fluctuate. Over the past 10 years, dividends are up 14% per year. However, over the past 5 years, dividends are down by 0.1%. Dividends have been decreasing since 2007. The last decrease occurred in 2010, when dividends were decreased by 40%.
The 5 year median Dividend Payout Ratios are 68% for earnings and 40% for cash flow. The 10 year median DPR ratios are 60% for earnings and 31% for cash flow The DPR for the end of 2011 were 52% for earnings and 23% for cash flow. These ratios are expected to be 66% for earnings and 27% for cash for 2012. From this it would not appear that the dividend will rise soon. DPR ratios for cash flow is better than that for EPS.
If you had held this stock over the past 5 years, you would have probably lost 4% per year. The dividend income would be around 4.8% per year. If you had held this stock over the past 10 years, you would have done much better. The total return over the past 10 years is 22% per year, with dividends contributing 10% per year of this total return.
The best growth for this company is in revenue. Revenue per share has grown at the rate of 11.4% and 12.5% per year over the past 5 and 10 years. The Book Value has grown at the rate of 10% and 13% per year. Both Earnings and Cash Flow tend to fluctuate, and in both the 10 year growth is much better than the 5 year growth. EPS has declined over the past 5 years by 6% per year, but has grown by 12% per year over the past 10 years. For Cash Flow, it has not grown over the past 5 years, but has grown by 8% over the past 10 years.
All the debt ratios are fine. The current Liquidity Ratio is 1.61. This is better than the 5 year median of 1.33. The Asset/Liability Ratio is very good at 2.21 and it is close to the 5 year median of 1.19. The current Leverage and current Debt/Equity Ratios are good at 1.85 and 0.84. These are very close to the 5 year median ratios.
The Return on Equity at 12.7% with a 5 year ROE also of 12.5% are both good, but not as high as it has been in the past. The ROE based on Comprehensive Income is close at 13% with a 5 year median value also of 13%.
I had, of course, wanted better results than what I got. You always want stocks to go up. However, I have very little invested in Oil and Gas production. I have around 3% of my portfolio in Oil and Gas and just less than 1% in Oil and Gas productions. I know that oil and gas are a big part of our Canadian market. However, it is not an area I feel that comfortable in investing in. However, I do like to keep an eye on this area, so I have this stock and follow a couple of other stocks.
I plan to continue to hold this stock for the time being.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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.
This is a company in the oil and gas production business and as such the dividends fluctuate. Over the past 10 years, dividends are up 14% per year. However, over the past 5 years, dividends are down by 0.1%. Dividends have been decreasing since 2007. The last decrease occurred in 2010, when dividends were decreased by 40%.
The 5 year median Dividend Payout Ratios are 68% for earnings and 40% for cash flow. The 10 year median DPR ratios are 60% for earnings and 31% for cash flow The DPR for the end of 2011 were 52% for earnings and 23% for cash flow. These ratios are expected to be 66% for earnings and 27% for cash for 2012. From this it would not appear that the dividend will rise soon. DPR ratios for cash flow is better than that for EPS.
If you had held this stock over the past 5 years, you would have probably lost 4% per year. The dividend income would be around 4.8% per year. If you had held this stock over the past 10 years, you would have done much better. The total return over the past 10 years is 22% per year, with dividends contributing 10% per year of this total return.
The best growth for this company is in revenue. Revenue per share has grown at the rate of 11.4% and 12.5% per year over the past 5 and 10 years. The Book Value has grown at the rate of 10% and 13% per year. Both Earnings and Cash Flow tend to fluctuate, and in both the 10 year growth is much better than the 5 year growth. EPS has declined over the past 5 years by 6% per year, but has grown by 12% per year over the past 10 years. For Cash Flow, it has not grown over the past 5 years, but has grown by 8% over the past 10 years.
All the debt ratios are fine. The current Liquidity Ratio is 1.61. This is better than the 5 year median of 1.33. The Asset/Liability Ratio is very good at 2.21 and it is close to the 5 year median of 1.19. The current Leverage and current Debt/Equity Ratios are good at 1.85 and 0.84. These are very close to the 5 year median ratios.
The Return on Equity at 12.7% with a 5 year ROE also of 12.5% are both good, but not as high as it has been in the past. The ROE based on Comprehensive Income is close at 13% with a 5 year median value also of 13%.
I had, of course, wanted better results than what I got. You always want stocks to go up. However, I have very little invested in Oil and Gas production. I have around 3% of my portfolio in Oil and Gas and just less than 1% in Oil and Gas productions. I know that oil and gas are a big part of our Canadian market. However, it is not an area I feel that comfortable in investing in. However, I do like to keep an eye on this area, so I have this stock and follow a couple of other stocks.
I plan to continue to hold this stock for the time being.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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, February 21, 2012
Canadian Tire Corp 2
I own this stock (TSX-CTC.A). From when I originally bought this stock in 2000 I have made a total return of 10.33% per year with 1.74% of the total return per year attributable to dividends. This is a consumer discretionary stock. It has performed as I had expected it to.
This stock is now on one of the dividend lists that I follow of Dividend Aristocrats (see indices). This stock just recently appeared on this list. For more information on this lists and how it is decided to put stocks on the list, see Passive Income Earner .
When I look at insider trading I find $18.6M of insider selling and $4.8M of insider buying. The insider selling was by officers of the company. The insider buying was by officers and directors. All insider but the directors have more options than shares.
Over all the officers have more shares than options, but that is because of a few with large amount of shares. The majority of the officers have more options than shares. However, the selling does not seem to be of options, but of shares that were owned. There are certainly a number of insiders who own millions in shares.
There are some 8 institutions that own 13% of the outstanding shares. Over the past 3 months they have increased their shares by almost 16%.
I get 5 year median low and high Price/Earnings Ratios of 9.41 and 13.95. The current P/E of 10.64 is below the median ratio and shows a relatively reasonable stock price at $65.10. I get a Graham Price of $86.34 and the current stock price is some 25% lower. The median and low difference between the Graham Price and the stock price is the stock price being 19% and 35% lower. This also shows a reasonable stock price.
The 10 year Price/Book Value Ratio is 1.35. The current P/B Ratio is 1.20. The current one is 11% below the 10 year ratio and shows a reasonable stock price. The 5 year median Dividend Yield is 1.53% and the current dividend yield of 1.84% is some21% higher. This shows a good stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold ones. The consensus would be a Buy. One Buy, says that the dual class shares is a negative, but in this case a small negative as he thinks highly of the company. One analyst says he cautious about the retail side of this business and therefore has a hold recommendation. Another with a Hold feels that the company is in a very competitive environment and they have to integrate Forzani Group.
One analyst with a buy recommendation said that Canadian Tire is a good company, with a strong balance sheet and improving margins. CTC is a buy for both income and gains.
There is an interesting article about Canadian Tire money on G&M. This newspaper also had an article on 4th quarterly results and a jump in sales. I realize there is an Canadian Tire sucks site. However, I have shopped at my local Canadian Tire store for almost 40 years and I have never had a problem. I have also taken my car there for servicing and never had a problem. I would imagine that any retail store would have some dissatisfied customers.
I am satisfied with my investment in this stock and I intend to hold on to the shares I have.
Canadian Tire Corp engages in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products. The company is controlled by the Billes family who own most of the voting shares. Its web site is here Canadian Tire. See my spreadsheet at ctc.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.
This stock is now on one of the dividend lists that I follow of Dividend Aristocrats (see indices). This stock just recently appeared on this list. For more information on this lists and how it is decided to put stocks on the list, see Passive Income Earner .
When I look at insider trading I find $18.6M of insider selling and $4.8M of insider buying. The insider selling was by officers of the company. The insider buying was by officers and directors. All insider but the directors have more options than shares.
Over all the officers have more shares than options, but that is because of a few with large amount of shares. The majority of the officers have more options than shares. However, the selling does not seem to be of options, but of shares that were owned. There are certainly a number of insiders who own millions in shares.
There are some 8 institutions that own 13% of the outstanding shares. Over the past 3 months they have increased their shares by almost 16%.
I get 5 year median low and high Price/Earnings Ratios of 9.41 and 13.95. The current P/E of 10.64 is below the median ratio and shows a relatively reasonable stock price at $65.10. I get a Graham Price of $86.34 and the current stock price is some 25% lower. The median and low difference between the Graham Price and the stock price is the stock price being 19% and 35% lower. This also shows a reasonable stock price.
The 10 year Price/Book Value Ratio is 1.35. The current P/B Ratio is 1.20. The current one is 11% below the 10 year ratio and shows a reasonable stock price. The 5 year median Dividend Yield is 1.53% and the current dividend yield of 1.84% is some21% higher. This shows a good stock price.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold ones. The consensus would be a Buy. One Buy, says that the dual class shares is a negative, but in this case a small negative as he thinks highly of the company. One analyst says he cautious about the retail side of this business and therefore has a hold recommendation. Another with a Hold feels that the company is in a very competitive environment and they have to integrate Forzani Group.
One analyst with a buy recommendation said that Canadian Tire is a good company, with a strong balance sheet and improving margins. CTC is a buy for both income and gains.
There is an interesting article about Canadian Tire money on G&M. This newspaper also had an article on 4th quarterly results and a jump in sales. I realize there is an Canadian Tire sucks site. However, I have shopped at my local Canadian Tire store for almost 40 years and I have never had a problem. I have also taken my car there for servicing and never had a problem. I would imagine that any retail store would have some dissatisfied customers.
I am satisfied with my investment in this stock and I intend to hold on to the shares I have.
Canadian Tire Corp engages in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products. The company is controlled by the Billes family who own most of the voting shares. Its web site is here Canadian Tire. See my spreadsheet at ctc.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 17, 2012
Canadian Tire Corp
I own this stock (TSX-CTC.A). I originally bought this stock in 2000. I also bought more in 2009 and 2010. I have made a total return of 10.33% per year with 1.74% of the total return per year attributable to dividends. I have, of course done better on the stock bought in 2000 that the stock bought later. For the stock bought in 2009 and 2010, I have made a total return of 4.33% per year with 1.6% per year attributable to dividends.
This is a consumer stock and it has not done well since the latest bear market of 2008. This is typical of consumer stocks. However, I expect this stock to do well over the long term. If you had invested in this stock over the last 5 and 10 years, your total return would probably be 0% and 11.7%. The dividends paid would have added 1.3% and 1.7% per year to your return. (The implications for 5 year investment would be that you would get dividends, but would have lost around 1.5% in capital gains.)
What is also typical of consumer stock is the low dividend yield, good dividend increases and low Dividend Payout Ratios. The 5 year dividend yield is 1.53%. The 5 and 10 year growth in dividends is at 10.8% and 10.7% per year, respectively. The 5 year median Dividend Payout Ratios for earnings is 18.3% and for Cash Flow is 16.4%. For the stock I bought in 2000, I am getting a dividend yield of 5.4% on my original investment.
This stock is not on any dividend lists I follow. Since 2004, they have had a good record of increasing their dividends. Before 2004, dividends were flat. They also did not raise their dividends in 2009 and 2010. The 10 year median Dividend Payout Ratios are lower than the 5 year ones and this is because of the years 2007 to 2009. The 10 year median DPRs are 15% and 8.8%. The DPR for 2011 is 19% for earnings and 6.4% for cash flow. The dividend increase for 2011 was quite high at 31%. The most recent dividend increase was more normal at 9.1%.
For this stock, the worse growth is in revenues, and the 5 and 10 year growth in revenue per share is 3.9% and 6.4% per year, respectively. Growth in earnings is not bad with 5 and 10 year growth at 5.8% and 9.9% per year, respectively. Growth in Book Value is good with 5 and 10 year growth at 9.6% and 8.4%. The best is growth in cash flow, with 5 and 10 year growth at 11.2% and 12.2% per year, respectively.
When I look at return on equity, I find that ROE for the end of 2011 to be 10.6% and the 5 year median ROE to be 10.6% also. The ROE based on comprehensive income is similar with the one for the end of 2011 at 10.6% and the 5 year median ROE at 11.3%.
This company has voting and non-voting shares, so that it is really controlled by one person, Martha Gardner Billes. Often such companies have good debt ratios and this company is no different. The Liquidity Ratios have always been good and the current one is 1.68. The Asset/Liability Ratio is a bit lower, but still good at 1.56. The Leverage and Debt/Equity Ratios are also good, with current ratios at 2.80 and 1.80.
The Liquidity Ratio and Asset/Liability Ratio are lower than the 5 year median ratios of 1.99 and 1.85. (With these ratios, higher is better, but good ones are 1.50 and above.) The Leverage and Debt/Equity Ratios are higher than the 5 year median ratios of 2.17 and 1.17. (With these ratios, lower is better.) With the new accounting rules, both the Assets and Liabilities have increased, but debt ratios are not as good. Problem is that we do not know what the long term effect of the new accounting rules will be.
I am pleased with the performance of this stock. It is acting as I expected. I had bought this stock for diversification purposes.
Canadian Tire Corp engages in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products. The company is controlled by the Billes family who own most of the voting shares. Its web site is here Canadian Tire. See my spreadsheet at ctc.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.
This is a consumer stock and it has not done well since the latest bear market of 2008. This is typical of consumer stocks. However, I expect this stock to do well over the long term. If you had invested in this stock over the last 5 and 10 years, your total return would probably be 0% and 11.7%. The dividends paid would have added 1.3% and 1.7% per year to your return. (The implications for 5 year investment would be that you would get dividends, but would have lost around 1.5% in capital gains.)
What is also typical of consumer stock is the low dividend yield, good dividend increases and low Dividend Payout Ratios. The 5 year dividend yield is 1.53%. The 5 and 10 year growth in dividends is at 10.8% and 10.7% per year, respectively. The 5 year median Dividend Payout Ratios for earnings is 18.3% and for Cash Flow is 16.4%. For the stock I bought in 2000, I am getting a dividend yield of 5.4% on my original investment.
This stock is not on any dividend lists I follow. Since 2004, they have had a good record of increasing their dividends. Before 2004, dividends were flat. They also did not raise their dividends in 2009 and 2010. The 10 year median Dividend Payout Ratios are lower than the 5 year ones and this is because of the years 2007 to 2009. The 10 year median DPRs are 15% and 8.8%. The DPR for 2011 is 19% for earnings and 6.4% for cash flow. The dividend increase for 2011 was quite high at 31%. The most recent dividend increase was more normal at 9.1%.
For this stock, the worse growth is in revenues, and the 5 and 10 year growth in revenue per share is 3.9% and 6.4% per year, respectively. Growth in earnings is not bad with 5 and 10 year growth at 5.8% and 9.9% per year, respectively. Growth in Book Value is good with 5 and 10 year growth at 9.6% and 8.4%. The best is growth in cash flow, with 5 and 10 year growth at 11.2% and 12.2% per year, respectively.
When I look at return on equity, I find that ROE for the end of 2011 to be 10.6% and the 5 year median ROE to be 10.6% also. The ROE based on comprehensive income is similar with the one for the end of 2011 at 10.6% and the 5 year median ROE at 11.3%.
This company has voting and non-voting shares, so that it is really controlled by one person, Martha Gardner Billes. Often such companies have good debt ratios and this company is no different. The Liquidity Ratios have always been good and the current one is 1.68. The Asset/Liability Ratio is a bit lower, but still good at 1.56. The Leverage and Debt/Equity Ratios are also good, with current ratios at 2.80 and 1.80.
The Liquidity Ratio and Asset/Liability Ratio are lower than the 5 year median ratios of 1.99 and 1.85. (With these ratios, higher is better, but good ones are 1.50 and above.) The Leverage and Debt/Equity Ratios are higher than the 5 year median ratios of 2.17 and 1.17. (With these ratios, lower is better.) With the new accounting rules, both the Assets and Liabilities have increased, but debt ratios are not as good. Problem is that we do not know what the long term effect of the new accounting rules will be.
I am pleased with the performance of this stock. It is acting as I expected. I had bought this stock for diversification purposes.
Canadian Tire Corp engages in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products. The company is controlled by the Billes family who own most of the voting shares. Its web site is here Canadian Tire. See my spreadsheet at ctc.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.
Thursday, February 16, 2012
Canadian National Railway 2
I own this stock (TSX-CNR, TSX-CNI). I first invested in the company in 2005 and then bought more in 2009 and 2011. My purchase in 2011 included selling CP (TSX-CP) to rationalize my portfolio (i.e. have few stocks). I have made a 14.9% per year return on my investment. Of my return some 1.62% is attributable to dividends. That is just under 11% of my return is from dividends.
As is typical of stocks were insiders get options, they sell them. When I look at the insider trading, I find $39.3M of insider selling by CEO, officers and directors. There is some insider buying also, but at $2.3M it is completely dwarfed by the selling. The buying is by officers and directors. There are 472 institutions that hold 56% of the shares of this company.
I get 5 year median low and high Price/Earnings Ratio of 10.73 and 14.80. So the current P/E ratios of 14.64 would appear to be relatively high and would show a high stock price. I get a 10 year median Price/Book Value Ratio of 2.32. The current one of 3.22 is almost 40% higher and therefore shows a relatively high stock price.
I get a Graham price of $53.72 and the stock price of $77.75 is 31% higher. The high difference between the Graham Price and the stock price is the stock price being 35% higher. This would also indicate a relatively high stock price. The only place that shows a relatively low stock price is the dividend yield. The 5 year median dividend yield is 1.78% and the current one is 1.93%, which is some 8% higher. However, the dividend yield has been going up over time.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. In other words they are all over the place. However, the vast majority is in the Hold category with the other categories only having 1 or 2 analysts. The consensus recommendation would be a Hold. One analysts said it was a short term Hold, but a long term Buy.
A buy recommendation came with a 12 months stock price of $89 and a Hold at 79.68. One buy says that CNR is selling at a discount to Canadian Pacific (TSX-CP) and he is right. I get a P/E of 17.14 for CP. One Strong Buy says that CNR will continue to improving their operating ratio. He also thought it was the best railroad company in North America. (I certainly thought it was better than CP and that is why I rationalized by stock portfolio by selling CP and buying more CNR.)
The Passive Income Earner picked CNR as one of his three stocks for the Dividend Growth Index. See his site.
I am pleased with this stock and will continue to hold on to my shares in this company.
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here Metro. See my spreadsheet at cnr.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.
As is typical of stocks were insiders get options, they sell them. When I look at the insider trading, I find $39.3M of insider selling by CEO, officers and directors. There is some insider buying also, but at $2.3M it is completely dwarfed by the selling. The buying is by officers and directors. There are 472 institutions that hold 56% of the shares of this company.
I get 5 year median low and high Price/Earnings Ratio of 10.73 and 14.80. So the current P/E ratios of 14.64 would appear to be relatively high and would show a high stock price. I get a 10 year median Price/Book Value Ratio of 2.32. The current one of 3.22 is almost 40% higher and therefore shows a relatively high stock price.
I get a Graham price of $53.72 and the stock price of $77.75 is 31% higher. The high difference between the Graham Price and the stock price is the stock price being 35% higher. This would also indicate a relatively high stock price. The only place that shows a relatively low stock price is the dividend yield. The 5 year median dividend yield is 1.78% and the current one is 1.93%, which is some 8% higher. However, the dividend yield has been going up over time.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. In other words they are all over the place. However, the vast majority is in the Hold category with the other categories only having 1 or 2 analysts. The consensus recommendation would be a Hold. One analysts said it was a short term Hold, but a long term Buy.
A buy recommendation came with a 12 months stock price of $89 and a Hold at 79.68. One buy says that CNR is selling at a discount to Canadian Pacific (TSX-CP) and he is right. I get a P/E of 17.14 for CP. One Strong Buy says that CNR will continue to improving their operating ratio. He also thought it was the best railroad company in North America. (I certainly thought it was better than CP and that is why I rationalized by stock portfolio by selling CP and buying more CNR.)
The Passive Income Earner picked CNR as one of his three stocks for the Dividend Growth Index. See his site.
I am pleased with this stock and will continue to hold on to my shares in this company.
Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here Metro. See my spreadsheet at cnr.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.
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