I do not own this stock of Bank of Nova Scotia (TSX-BNS, NYSE-BNS). I have been following this bank for some time even though I do not own it. I do not own this bank because I already own Bank of Montreal (TSX-BMO), Royal Bank (TSX-RY) and Toronto-Dominion Bank (TSX-TD). I initially built my portfolio on bank and utility stock.
Dividend growth over the past 5 and 10 years was at 3.63% and 11.11% per year. Dividends were increased twice in 2012 for a total increase of 9.6%. Not quite as good as the 10 year growth rate, but still a good increase. This bank also had level dividends in 2009 and 2010. This is why the 5 year dividend growth rate is so low.
The Dividend Payout Ratios are fine with the 5 year median at 50% for earnings and 34% for cash flow. The DPRs for 2012 came in at 40% and 34% and the DPR for earnings is expected to be at 42% in 2013 so there is some room for more increases. (See my site for information on Dividend Payout Ratios).
The total return for this stock over the past 5 and 10 years was at 6.47% and 12.36% per year. The capital gain portion of this total return was 2.71% and 8.12% per year over the past 5 and 10 years. The dividend portion of this total return was 3.76% and 4.25% per year over the past 5 and 10 years.
The outstanding shares have increased by 3.78% and 1.62% per year over the past 5 and 10 years. Increases have been due to DRIP, stock options and public offerings (for some acquisitions).
This bank has not had much in revenue or revenue per share growth. The revenue has declined over the past 5 by 4.9% per year. The revenue has grown by just 1.2% per year over the past 10 years. Revenue per Share has declined over the past 5 years by 8.4% per year. It has also declined over the past 10 years by 0.4%.
Other growth is better with Earnings per Share grown at 5.4% and 12.2% per year over the past 5 and 10 years. Cash Flow per Share has also grown at 8.5% and 7.6% per year and Book Value per Share at 11.3% and 8.3% per year over the past 5 and 10 years.
The return on equity is good for this stock. The ROE for the 2012 financial year was 18.3% and the 5 year median ROE is 17.1%. The ROE on comprehensive income is similar with the ROE for 2012 at 19.6% and the 5 year median ROE slightly lower at 16.7%.
The debt ratios are normal for a bank with the Debt Ratio at 1.07 and the Leverage and Debt/Equity Ratios at 18.95 and 17.78.
Investing in this bank for the long term would get you a very nice yield on your original investment. After some 20 years you might be looking at the over 30% range. Banks are very good at providing increasing dividend income over time. (See my site for information on dividend yields on original investments.)
As far as dividend increases go over the past 5 years, this stock was only better than BMO. Both RBC and TD did better, as did the National Bank. (I do not follow CIBC.) Their dividend increases were at, 3.6%, at least better than inflation.
You would buy this for dividends and capital appreciation. It would be a long term buy. However, it has not been good at growing revenue.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is here Scotia Bank. See my spreadsheet at bns.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 or StockTwits.
Friday, January 18, 2013
Thursday, January 17, 2013
Toronto Dominion Bank 2
I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). I bought this stock in 2000 because the price was good. I have made 13.81% per year on this stock with 10.41% from capital gain and 3.40% from dividends. However, I have followed this stock for a long time, not just since when I bought it.
When I look at insider trading I find $72.5M of insider selling and $69.5M of net insider selling. There was $3M of insider buying by directors. The CEO’s insider selling was at $16.9M and the CFO was at $3.3M. It would seem that the insider selling was of options. There are not only options for this bank but options like vehicles like Rights Deferred Share Units, Rights Performance Share Units, and Rights Vesting Share Units.
The CEO has shares worth $22.3M and options worth $228.5M. The CFO has shares worth $1.3M and options worth $31.7M. An officer has shares worth $0.3M and options worth $0.7M. A director has no shares but has options worth $3M. This is just to give you an idea on insider share ownership and option values.
According to the NASDAQ site, in the 3 months prior to the year end there are 384 institutions holding 53% of the outstanding shares. They have increased their shares marginally by 0.4%.
The 5 year low, median and high median Price/Earnings Ratios are 10.71, 13.05 and 15.09. The current P/E Ratio of 10.48 based on stock price of $81.82 and a 2013 EPS of $7.81 suggests a relatively low stock price. The Graham Price is $91.90. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.00 and 1.20. The current P/GP Ratio is 0.89 and this suggests that the stock price is relatively low.
The 10 year Price/Book Value per Share Ratio is 1.99. The current P/B Ratio is 1.70 a value of only 85% of the 10 year Ratio. This low ratio suggests that the stock price is on the low side (but to be low, you would want the current Ratio to be only 80% or less of the 10 year median ratio.)
The last thing to look at is the dividend yield. The 5 year median dividend yield is 3.82% and the current dividend yield is 3.76%. The current yield is higher than the 5 year median by 1.5%. This current dividend yield suggests that the stock price is at a relatively average level. However, the dividends have not been increasing over the past 5 year at normal levels.
The stock price testing suggests that the current stock price is relatively low.
When I look at the analysts’ recommendations I find Strong Buy, Buy, Hold and Sell. The consensus recommendation is a Buy. (Most of the recommendations are in the first 3 categories and there is only 1 sell.) The 12 month consensus stock price is $89.80. This implies a total return of 13.64% with 9.88% from capital gains and 3.76% from dividends.
One site thought that the Price/Sales Ratios was high. The 5 year P/S Ratio was 3.14 and the one for 2012 was 3.23. Based on current price it is at 3.10. The trailing P/S is 3.25. The 5 year trailing P/S is 3.39. (With this ratio, lower is better.)
The Passive Income Earner blogger had a good review of this stock. I agree that a good way to buy Canadian Banks is to look at the yields and buy the highest yielding bank. Although I must admit, that CIBC generally has the highest yield or is close to that and this has never been a favourite of mine. This is the only of the big 5 that I do not follow. I think that if you want to hold a bank for the long term, what you need is a bank with a relatively historically low stock price.
Huffington Post has an interesting recent article on this bank. The blog entry at Fully Informed on this bank might also be of interest. This bank was also a top pick for RBC Capital Market for 2013.
I do not know why this bank got one Sell recommendation. I know that one analyst said that the Canadian banks currently are at the high end of their stock price ranges and he suggests waiting for a pull back. However, my analysis in stock price testing shows stock price is at relatively low level. I check relative stock prices rather than absolute stock prices. (Of course, we are in a secular bear market and relative prices will go lower before we get into the next secular bull market. The problem is, we do not know when this will happen.)
The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD. See my spreadsheet at td.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 or StockTwits.
When I look at insider trading I find $72.5M of insider selling and $69.5M of net insider selling. There was $3M of insider buying by directors. The CEO’s insider selling was at $16.9M and the CFO was at $3.3M. It would seem that the insider selling was of options. There are not only options for this bank but options like vehicles like Rights Deferred Share Units, Rights Performance Share Units, and Rights Vesting Share Units.
The CEO has shares worth $22.3M and options worth $228.5M. The CFO has shares worth $1.3M and options worth $31.7M. An officer has shares worth $0.3M and options worth $0.7M. A director has no shares but has options worth $3M. This is just to give you an idea on insider share ownership and option values.
According to the NASDAQ site, in the 3 months prior to the year end there are 384 institutions holding 53% of the outstanding shares. They have increased their shares marginally by 0.4%.
The 5 year low, median and high median Price/Earnings Ratios are 10.71, 13.05 and 15.09. The current P/E Ratio of 10.48 based on stock price of $81.82 and a 2013 EPS of $7.81 suggests a relatively low stock price. The Graham Price is $91.90. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.00 and 1.20. The current P/GP Ratio is 0.89 and this suggests that the stock price is relatively low.
The 10 year Price/Book Value per Share Ratio is 1.99. The current P/B Ratio is 1.70 a value of only 85% of the 10 year Ratio. This low ratio suggests that the stock price is on the low side (but to be low, you would want the current Ratio to be only 80% or less of the 10 year median ratio.)
The last thing to look at is the dividend yield. The 5 year median dividend yield is 3.82% and the current dividend yield is 3.76%. The current yield is higher than the 5 year median by 1.5%. This current dividend yield suggests that the stock price is at a relatively average level. However, the dividends have not been increasing over the past 5 year at normal levels.
The stock price testing suggests that the current stock price is relatively low.
When I look at the analysts’ recommendations I find Strong Buy, Buy, Hold and Sell. The consensus recommendation is a Buy. (Most of the recommendations are in the first 3 categories and there is only 1 sell.) The 12 month consensus stock price is $89.80. This implies a total return of 13.64% with 9.88% from capital gains and 3.76% from dividends.
One site thought that the Price/Sales Ratios was high. The 5 year P/S Ratio was 3.14 and the one for 2012 was 3.23. Based on current price it is at 3.10. The trailing P/S is 3.25. The 5 year trailing P/S is 3.39. (With this ratio, lower is better.)
The Passive Income Earner blogger had a good review of this stock. I agree that a good way to buy Canadian Banks is to look at the yields and buy the highest yielding bank. Although I must admit, that CIBC generally has the highest yield or is close to that and this has never been a favourite of mine. This is the only of the big 5 that I do not follow. I think that if you want to hold a bank for the long term, what you need is a bank with a relatively historically low stock price.
Huffington Post has an interesting recent article on this bank. The blog entry at Fully Informed on this bank might also be of interest. This bank was also a top pick for RBC Capital Market for 2013.
I do not know why this bank got one Sell recommendation. I know that one analyst said that the Canadian banks currently are at the high end of their stock price ranges and he suggests waiting for a pull back. However, my analysis in stock price testing shows stock price is at relatively low level. I check relative stock prices rather than absolute stock prices. (Of course, we are in a secular bear market and relative prices will go lower before we get into the next secular bull market. The problem is, we do not know when this will happen.)
The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD. See my spreadsheet at td.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 or StockTwits.
Wednesday, January 16, 2013
Toronto Dominion Bank
On my other blog I am today writing about a dividend spreadsheet to track dividend payments...continue...
I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). I bought this stock in 2000 because the price was good. I have made 13.81% per year on this stock with 10.41% from capital gain and 3.40% from dividends. However, I have followed this stock for a long time, not just since when I bought it.
This stock also kept dividends level for a couple of years because of the 2008 bear market and following recession. The dividend growth over the past 5 and 10 years is at 6.49% and 9.94% per year. The 5 year dividend increase is quite good for a Canadian bank.
The 5 year median Dividend Payout Ratios are good coming in at 50% for earnings and 31% for cash flow. The DPRs for 2012 were 43% and 31% for earnings and cash flow. If dividends remain level in 2013 the DPRs would be 39% and 32% for earnings and cash flow and shows that there is room for more growth in dividends.
The 5 and 10 year total return to the end of 2012 was 7.19% and 13.34% per year with 3.8% and 9.43% from capital gains per year. The dividend portion of this return was 3.39% and 3.91% per year, respectively.
The outstanding dividends have been growing at the rate of 5.1% and 3.6% per year over the past 5 and 10 years. Growth is from DRIP, stock options and issuance of new shares.
Revenue is up by 3.77% and 6.16% per year over the past 5 and 10 years. Revenue per share is down over the past 5 years by 1.22% per year and is up over the past 10 years at 2.48% per year. Earnings per Share is up by 4.29% and 18.12% per year over the past 5 and 10 years.
Cash Flow per Share is up by 6.88% and 3.95% per year over the past 5 and 10 years and Book Value per Share is up 10.5% and 10.4% per year over the past 5 and 10 years. By far, BV is up the best.
The Return on Equity is good for this stock as it came in at 13.3% for the 2012 financial year and the 5 year median rate is 12.7%. The ROE on comprehensive income confirms the ROE on net income by coming in at 12.3% for the 2012 financial year and having a 5 year median rate of 12.5%.
The debt ratios are not bad for a bank and are quite typical with the Debt Ratio at 1.06% and the Leverage and Debt/Equity Ratios at 18.38 and 17.27.
I have owned this stock for around 13 years and I am earning on my original investment a yield of 8.6%. At this rate after holding this stock for 20 years, I would expect to earnings over 13% on my original investment. (I talk about dividend yields on original investments on my site.)
However, I would expect to do better under this stock as the dividends were stalled for a few years in the time I held this stock. In 20 years' time I could possibly be getting 23 to 25% yield on my original investment. However, no one really knows what will happen in the future.
I am pleased this investment and I will continue to hold this stock. However, I will not be buying any more for the simple fact I have too much of this stock already in my portfolio.
The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD. See my spreadsheet at td.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 or StockTwits.
I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). I bought this stock in 2000 because the price was good. I have made 13.81% per year on this stock with 10.41% from capital gain and 3.40% from dividends. However, I have followed this stock for a long time, not just since when I bought it.
This stock also kept dividends level for a couple of years because of the 2008 bear market and following recession. The dividend growth over the past 5 and 10 years is at 6.49% and 9.94% per year. The 5 year dividend increase is quite good for a Canadian bank.
The 5 year median Dividend Payout Ratios are good coming in at 50% for earnings and 31% for cash flow. The DPRs for 2012 were 43% and 31% for earnings and cash flow. If dividends remain level in 2013 the DPRs would be 39% and 32% for earnings and cash flow and shows that there is room for more growth in dividends.
The 5 and 10 year total return to the end of 2012 was 7.19% and 13.34% per year with 3.8% and 9.43% from capital gains per year. The dividend portion of this return was 3.39% and 3.91% per year, respectively.
The outstanding dividends have been growing at the rate of 5.1% and 3.6% per year over the past 5 and 10 years. Growth is from DRIP, stock options and issuance of new shares.
Revenue is up by 3.77% and 6.16% per year over the past 5 and 10 years. Revenue per share is down over the past 5 years by 1.22% per year and is up over the past 10 years at 2.48% per year. Earnings per Share is up by 4.29% and 18.12% per year over the past 5 and 10 years.
Cash Flow per Share is up by 6.88% and 3.95% per year over the past 5 and 10 years and Book Value per Share is up 10.5% and 10.4% per year over the past 5 and 10 years. By far, BV is up the best.
The Return on Equity is good for this stock as it came in at 13.3% for the 2012 financial year and the 5 year median rate is 12.7%. The ROE on comprehensive income confirms the ROE on net income by coming in at 12.3% for the 2012 financial year and having a 5 year median rate of 12.5%.
The debt ratios are not bad for a bank and are quite typical with the Debt Ratio at 1.06% and the Leverage and Debt/Equity Ratios at 18.38 and 17.27.
I have owned this stock for around 13 years and I am earning on my original investment a yield of 8.6%. At this rate after holding this stock for 20 years, I would expect to earnings over 13% on my original investment. (I talk about dividend yields on original investments on my site.)
However, I would expect to do better under this stock as the dividends were stalled for a few years in the time I held this stock. In 20 years' time I could possibly be getting 23 to 25% yield on my original investment. However, no one really knows what will happen in the future.
I am pleased this investment and I will continue to hold this stock. However, I will not be buying any more for the simple fact I have too much of this stock already in my portfolio.
The TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD. See my spreadsheet at td.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 or StockTwits.
Tuesday, January 15, 2013
Royal Bank of Canada 2
I own this stock of Royal Bank of Canada (TSX-RY, NYSE-RY). I have had this stock since 1995, which is some 18 years. I have made a total return 18.35% per year, with 13.06% per year coming from capital gains and 5.29% per year coming from dividends. This is what long term investing can get you.
When I look at the insider trading report I find insider selling at $23.4M and insider net selling at $22.4M. The insider selling by the CEO is at $14M and by the CFO at $6.9M. Insider options are not quite as extensive as BMO was (with some 40 pages of insiders with options.) The whole insider report for Royal Bank is just 12 pages long. Since stock options are considered part of salary you tend to get insiders cashing in stock options.
However, as is the case for many companies nowadays, there are not only options, but Rights - Deferred Performance Share Plans, Rights Deferred Share Units, and Rights Performance Deferred Share Units and Rights RBC Share Units.
The CEO has $43.5M in shares and $91M in options. The CFO has $0.8M in shares and $48M in options. An officer has $0.3M in shares and $13.5M in options. A director has $1M in shares and $3.3M in options. This is just to give you an idea of what the options and insider ownership is like.
According to NASDAQ, there are some 327 institutions that own 45% of the outstanding stock. For the 3 months prior to the 2012 year end, institutions increased their shares by 2.2%.
The 5 year low, median and high median Price/Earnings Ratios are 11.55, 16.09 and 18.04. The current P/E Ratio is 11.40 based on 2013 earnings of $5.34 and a stock price of $60.88. This low P/E ratio suggests that the stock price is low.
I get a current Graham Price of $57.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.08, 1.23 and 1.41. The current P/GP Ratio is 1.06. This low ratio suggests that the stock price is low.
The 10 year Price/Book Value per Share Ratio is 2.27 and the current ratio is 2.23, a ratio that is 98% of the 10 year ratio. This ratio suggests that the stock price is at a relatively normal price.
The current dividend yield is 3.94% and the 5 year median dividend yield 6% higher at 4.19%. What you want is a current yield significantly higher than the 5 year median to show a cheap stock price. However, the current yield shows the relatively stock price to be around normal. Mitigating circumstance is that the bank did not raise the dividends in 2009 and 2010.
When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. The 12 month consensus stock price is $63.00. This implies a total return of 7.44% with 3.94% from dividends and 3.5% from capital gain.
A business blog says that RBC Leads in Canada as takeovers hit a 5-year high. Royal Bank of Canada was the top investment-banking adviser on Canadian deals for the second straight year as mergers surged to a five-year high, led by energy.
Dale Roberts has an interesting take on Canadian banks at Seeking Alpha. He talks about using banks as a one stock portfolio. I have a similar return on this bank as he does.
There is article in the Financial Post dated in November 2012 that talks about RBC posting the biggest profit in Canadian history. There is an article in Daily Finance that gives 3 reasons to buy this stock.
Analysts do not seem particularly excited by this stock as you can see by the 12 months total return at 7.4%. You can see some comments at Stock Chase. Their recommendations are all over the place.
I think that the stock price is relatively low to average. To do well in a stock for the long term, this is where you want the current price to be. I will continue to hold on to this stock and I expect to do well in it over the long term.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here RBC. See my spreadsheet at ry.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 or StockTwits.
When I look at the insider trading report I find insider selling at $23.4M and insider net selling at $22.4M. The insider selling by the CEO is at $14M and by the CFO at $6.9M. Insider options are not quite as extensive as BMO was (with some 40 pages of insiders with options.) The whole insider report for Royal Bank is just 12 pages long. Since stock options are considered part of salary you tend to get insiders cashing in stock options.
However, as is the case for many companies nowadays, there are not only options, but Rights - Deferred Performance Share Plans, Rights Deferred Share Units, and Rights Performance Deferred Share Units and Rights RBC Share Units.
The CEO has $43.5M in shares and $91M in options. The CFO has $0.8M in shares and $48M in options. An officer has $0.3M in shares and $13.5M in options. A director has $1M in shares and $3.3M in options. This is just to give you an idea of what the options and insider ownership is like.
According to NASDAQ, there are some 327 institutions that own 45% of the outstanding stock. For the 3 months prior to the 2012 year end, institutions increased their shares by 2.2%.
The 5 year low, median and high median Price/Earnings Ratios are 11.55, 16.09 and 18.04. The current P/E Ratio is 11.40 based on 2013 earnings of $5.34 and a stock price of $60.88. This low P/E ratio suggests that the stock price is low.
I get a current Graham Price of $57.27. The 10 year low, median and high median Price/Graham Price Ratios are 1.08, 1.23 and 1.41. The current P/GP Ratio is 1.06. This low ratio suggests that the stock price is low.
The 10 year Price/Book Value per Share Ratio is 2.27 and the current ratio is 2.23, a ratio that is 98% of the 10 year ratio. This ratio suggests that the stock price is at a relatively normal price.
The current dividend yield is 3.94% and the 5 year median dividend yield 6% higher at 4.19%. What you want is a current yield significantly higher than the 5 year median to show a cheap stock price. However, the current yield shows the relatively stock price to be around normal. Mitigating circumstance is that the bank did not raise the dividends in 2009 and 2010.
When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. The 12 month consensus stock price is $63.00. This implies a total return of 7.44% with 3.94% from dividends and 3.5% from capital gain.
A business blog says that RBC Leads in Canada as takeovers hit a 5-year high. Royal Bank of Canada was the top investment-banking adviser on Canadian deals for the second straight year as mergers surged to a five-year high, led by energy.
Dale Roberts has an interesting take on Canadian banks at Seeking Alpha. He talks about using banks as a one stock portfolio. I have a similar return on this bank as he does.
There is article in the Financial Post dated in November 2012 that talks about RBC posting the biggest profit in Canadian history. There is an article in Daily Finance that gives 3 reasons to buy this stock.
Analysts do not seem particularly excited by this stock as you can see by the 12 months total return at 7.4%. You can see some comments at Stock Chase. Their recommendations are all over the place.
I think that the stock price is relatively low to average. To do well in a stock for the long term, this is where you want the current price to be. I will continue to hold on to this stock and I expect to do well in it over the long term.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here RBC. See my spreadsheet at ry.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 or StockTwits.
Monday, January 14, 2013
Royal Bank of Canada
On my other blog I am today writing about Bear Markets. Is one coming in 2013...continue...
I own this stock of Royal Bank of Canada (TSX-RY, NYSE-RY). I have had this stock since 1995, which is some 18 years. I have made a total return 18.35% per year, with 13.06% per year coming from capital gains and 5.29% per year coming from dividends. This is what long term investing can get you.
The last 5 and 10 years to December 2012 have not been as good as total return was 7.19% and 11.71% per year respectively. Over these periods the capital gain return was 3.37% per year and 7.76% per year respectively. Also, over these periods the dividend return was 3.82% per year and 3.95% per year, respectively.
This bank along with other Canadian banks stopped dividend increases in 2008. The 10 year growth in dividend is at 11.61% per year and this is not far from what I have experienced over the past 18 years at 12.24% per year. However, the 5 year increase in dividends has only been at 5.8% per year, a much lower figure. This is not the first time this bank has stopped dividend increases. It did this from 1990 to 1994.
Current Dividend Payout Ratios are good. The DPR for earnings was 46% in 2012 and is expected to be around 45% in 2013. The DPR for Cash Flow was around 32.7% in 2012 and is expected to be around 37.5% in 2013.
The number of shares outstanding has been increasing over the past 5 and 10 years at the rate of 2.52% per year and 0.83% per year respectively. Increases have been for acquisitions, because of DRIP, Employee ownership plans and stock options and they have been reduced because of share buy backs.
Revenue is up 5.8% and 5.6% per year over the past 5 and 10 years. Revenue per Share is up by 3.2% and 4.7% per year over the past 5 and 10 years. EPS are up by 3.3% and 9.6% per year over the past 5 and 10 years. CFPS is up by 6.5% and 7.9% per year over the past 5 and 10 years. Book Value per Share is up by 9.2% and 7.7% per year.
The growth is generally better over the past 10 years than over the past 5. Growth is generally ok, but there is nothing spectacular in any of it.
The Return on Equity is generally quite good. The ROE for the financial year ending in October 2012 was 19.1% and the 5 year median ROE is 15.3%. The ROE based on comprehensive income is close to that on the net income with ROE for October 2012 at 20% and the 5 year median ROE at 14.4%. (A good ROE is one consistently over 10% and this stock manages that.)
The debt ratios are rather normal for a bank with the Debt Ratio at 1.06 and Leverage and Debt/Equity Ratios at 20.91 and 19.75, respectively.
This bank is doing better than it has since 2008 bear market. The dividend increases for 2012 was at 11.1% which is good. I think that there is room for dividend increases this year also, because the DPRs are good. I am invested in this bank for the long term and I intend to hold on to the shares I have. I will not be buying more for the simple reason that I have enough of this stock already in my portfolio.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here RBC. See my spreadsheet at ry.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 or StockTwits.
I own this stock of Royal Bank of Canada (TSX-RY, NYSE-RY). I have had this stock since 1995, which is some 18 years. I have made a total return 18.35% per year, with 13.06% per year coming from capital gains and 5.29% per year coming from dividends. This is what long term investing can get you.
The last 5 and 10 years to December 2012 have not been as good as total return was 7.19% and 11.71% per year respectively. Over these periods the capital gain return was 3.37% per year and 7.76% per year respectively. Also, over these periods the dividend return was 3.82% per year and 3.95% per year, respectively.
This bank along with other Canadian banks stopped dividend increases in 2008. The 10 year growth in dividend is at 11.61% per year and this is not far from what I have experienced over the past 18 years at 12.24% per year. However, the 5 year increase in dividends has only been at 5.8% per year, a much lower figure. This is not the first time this bank has stopped dividend increases. It did this from 1990 to 1994.
Current Dividend Payout Ratios are good. The DPR for earnings was 46% in 2012 and is expected to be around 45% in 2013. The DPR for Cash Flow was around 32.7% in 2012 and is expected to be around 37.5% in 2013.
The number of shares outstanding has been increasing over the past 5 and 10 years at the rate of 2.52% per year and 0.83% per year respectively. Increases have been for acquisitions, because of DRIP, Employee ownership plans and stock options and they have been reduced because of share buy backs.
Revenue is up 5.8% and 5.6% per year over the past 5 and 10 years. Revenue per Share is up by 3.2% and 4.7% per year over the past 5 and 10 years. EPS are up by 3.3% and 9.6% per year over the past 5 and 10 years. CFPS is up by 6.5% and 7.9% per year over the past 5 and 10 years. Book Value per Share is up by 9.2% and 7.7% per year.
The growth is generally better over the past 10 years than over the past 5. Growth is generally ok, but there is nothing spectacular in any of it.
The Return on Equity is generally quite good. The ROE for the financial year ending in October 2012 was 19.1% and the 5 year median ROE is 15.3%. The ROE based on comprehensive income is close to that on the net income with ROE for October 2012 at 20% and the 5 year median ROE at 14.4%. (A good ROE is one consistently over 10% and this stock manages that.)
The debt ratios are rather normal for a bank with the Debt Ratio at 1.06 and Leverage and Debt/Equity Ratios at 20.91 and 19.75, respectively.
This bank is doing better than it has since 2008 bear market. The dividend increases for 2012 was at 11.1% which is good. I think that there is room for dividend increases this year also, because the DPRs are good. I am invested in this bank for the long term and I intend to hold on to the shares I have. I will not be buying more for the simple reason that I have enough of this stock already in my portfolio.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. They are one of Canada's largest banks as measured by assets and market capitalization, and are among the largest banks in the world, based on market capitalization. They provide diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. They have personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. Its web site is here RBC. See my spreadsheet at ry.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 or StockTwits.
Friday, January 11, 2013
Bank of Montreal 2
I own this stock (TSX-BMO, NYSE-BMO). This was the first bank stock that I bought and I have had it since 1983. Since 1987 my return has been 15.86% per year with 6.42% from dividends and 9.44% from capital gains.
When I look at insider trading, I find $24.2M of insider selling and $24M of net insider selling. There is a small amount of insider buying by a director. Most of the insider selling is by officers (around $21.2M). The selling seems to be option related. There are lots of options outstanding. There are not only options, but Deferred Share Units, Restricted Share Units and Performance Share Units. The list of insiders with options just goes on and on as there are some 40 pages of this.
The CEO has $13.9M in shares and $102M in options. The CFO has $0.4M in shares and $34.6M in options. An officer has $0.4M in shares and $2.3M in options. A director has $0.7M in shares and $1.7M in options. CEO, CFO, other officers, subsidiary executives and directors all have options.
The 5 year low, median and high median Price/Earnings Ratios are 9.91, 12.14 and 13.77. The current P/E ratio is 10.5 and that is lower than the median value. This is based on a stock price $62.24 and a 2013 EPS of $5.93. (Analysts seem to be expecting earnings to trend down this year before trending up again next year.)
I get a Graham Price of $75.26. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.01 and 1.19. The current P/GP Ratio is 0.83 based on a stock price of $62.24. This suggests the stock price is relatively low.
The 10 year Price/Book Value per Share Ratio is 1.97 and the current P/B Ratio is 1.47. The current ratio is some 74% of the 10 year ratio and this suggests that the stock price is relatively cheap. The stock price is considered relatively cheap is the current ratio is 80% or less of the 10 year value.
The current dividend yield is 4.63% and the 5 year median dividend yield is 4.92% a value some 6% higher. For a stock to show a relatively cheap price, the current dividend yield needs to be significantly higher than the 5 year median. This test shows that the stock price is relatively towards the high side. However, the company has not been raising the dividend lately as it has in the past.
I think my tests by and large suggest that the stock price is relatively on the cheap side.
When I look at analysts' recommendations I find Buy, Hold, Underperform and Sell. The most recommendations are in the Hold category and the consensus recommendation would be a Hold. The 12 month consensus stock price is $63.70. This implies a total return of 7.97%, with 5.63% from dividends and 2.35% from capital gain.
Although analysts with a Buy recommendation has a 12 month stock price of $71 and this implies a 12 months total return of 18.7% with 5.63% from dividends and 14.07% from capital gains. There are lots of analysts following this stock and it is obvious they are of different opinions.
One analyst mentioned this was the worst performing Canadian bank last year and I have to agree with this assessment. However, other analysts see Canadian banks in great shape (compared to banks of other countries) and would buy any of the big 5 Canadian bank. The Seeking Alpha blog has a good item on this stock.
The Bank of Montreal is still dealing with their purchase of Marshall & Ilsley. The financial post has a recent article on this subject.
Personally, I intend to continue to hold this stock. Most of what I own is in my Trading Account, but I also have a small number of shares in my Locked-In RRIF.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here BMO. See my spreadsheet at bmo.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 or StockTwits.
When I look at insider trading, I find $24.2M of insider selling and $24M of net insider selling. There is a small amount of insider buying by a director. Most of the insider selling is by officers (around $21.2M). The selling seems to be option related. There are lots of options outstanding. There are not only options, but Deferred Share Units, Restricted Share Units and Performance Share Units. The list of insiders with options just goes on and on as there are some 40 pages of this.
The CEO has $13.9M in shares and $102M in options. The CFO has $0.4M in shares and $34.6M in options. An officer has $0.4M in shares and $2.3M in options. A director has $0.7M in shares and $1.7M in options. CEO, CFO, other officers, subsidiary executives and directors all have options.
The 5 year low, median and high median Price/Earnings Ratios are 9.91, 12.14 and 13.77. The current P/E ratio is 10.5 and that is lower than the median value. This is based on a stock price $62.24 and a 2013 EPS of $5.93. (Analysts seem to be expecting earnings to trend down this year before trending up again next year.)
I get a Graham Price of $75.26. The 10 year low, median and high median Price/Graham Price Ratios are 0.87, 1.01 and 1.19. The current P/GP Ratio is 0.83 based on a stock price of $62.24. This suggests the stock price is relatively low.
The 10 year Price/Book Value per Share Ratio is 1.97 and the current P/B Ratio is 1.47. The current ratio is some 74% of the 10 year ratio and this suggests that the stock price is relatively cheap. The stock price is considered relatively cheap is the current ratio is 80% or less of the 10 year value.
The current dividend yield is 4.63% and the 5 year median dividend yield is 4.92% a value some 6% higher. For a stock to show a relatively cheap price, the current dividend yield needs to be significantly higher than the 5 year median. This test shows that the stock price is relatively towards the high side. However, the company has not been raising the dividend lately as it has in the past.
I think my tests by and large suggest that the stock price is relatively on the cheap side.
When I look at analysts' recommendations I find Buy, Hold, Underperform and Sell. The most recommendations are in the Hold category and the consensus recommendation would be a Hold. The 12 month consensus stock price is $63.70. This implies a total return of 7.97%, with 5.63% from dividends and 2.35% from capital gain.
Although analysts with a Buy recommendation has a 12 month stock price of $71 and this implies a 12 months total return of 18.7% with 5.63% from dividends and 14.07% from capital gains. There are lots of analysts following this stock and it is obvious they are of different opinions.
One analyst mentioned this was the worst performing Canadian bank last year and I have to agree with this assessment. However, other analysts see Canadian banks in great shape (compared to banks of other countries) and would buy any of the big 5 Canadian bank. The Seeking Alpha blog has a good item on this stock.
The Bank of Montreal is still dealing with their purchase of Marshall & Ilsley. The financial post has a recent article on this subject.
Personally, I intend to continue to hold this stock. Most of what I own is in my Trading Account, but I also have a small number of shares in my Locked-In RRIF.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here BMO. See my spreadsheet at bmo.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 or StockTwits.
Thursday, January 10, 2013
Bank of Montreal
I own this stock (TSX-BMO, NYSE-BMO). This was the first bank stock that I bought and I have had it since 1983. Since 1987 my return has been 15.86% per year with 6.42% from dividends and 9.44% from capital gains. Since the year end has past, I would like to start first on my bank stocks, which have financial reporting years ending October 31st each year.
This was the last of the big banks to raise their dividends and they raised them only 2.9% at the end of 2012 financial year. There was no rise in dividends since 2008 and that means no dividend rises for almost 4 years. Dividends have increased over the past 5 and 10 years by 0.8% and 8.9% per year, respectively.
Over the long term there is nothing like banks in providing good dividends and good dividend increases. (See my article on my site dividend yields on original investments for an explanation of this concept.) I have had this stock for 29 years and my yield on my original investment is 40%.
The Dividend Payout Ratios are good for this bank as far as earnings go. The 5 year median DPR for earnings is 59%. However, for this bank cash flows have varied and have often been negative. You cannot get a fix on DPR for cash flow for this bank.
The total returns over the past 5 and 10 years to the end of December 2012 are 6.39% and 8.51%. The dividend portion of these returns is 4.83% and 4.66% per year and the capital gain portion is 1.56% and 3.86% per year over the past 5 and 10 years, respectively. The recent economic situation has not be good for banks.
The outstanding shares have been increasing at the rate of 5.47% and 2.83% per year over the past 5 and 10 years. They have increased due to business acquisitions, stock options and DRIPs.
The revenue for this bank has increased by 11.1% and 6.2% per year over the past 5 and 10 years. The revenue per share has increased by 5.3% and 3.3% per year over the past 5 and 10 years.
Earnings per share have grown quite nicely over the past 5 and 10 years at 8.4% and 8.7% per year. It is hard to get a fix on cash flow, but they have grown well over the past few years. (The 5 year running average CFPS has grown at 32% over the past 3 years.) However, both CF and CFPS have fluctuated over the years. The book value per share has grown well over the past 5 and 10 years at 8.5% and 7.3% per year.
Return on Equity has generally been very good. The ROE for the last financial year in October 2012 was 15.2% and it has a 5 year median value of 12.9%. The ROE on comprehensive income at 14.5% generally confirms the quality of the ROE on net income.
The Debt Ratio is 1.06, and this is normal for a bank. Their cash flow may fluctuate, but they seem to have enough cash to cover current liabilities and including dividends.
I must confess that I initially built my stock portfolio on bank and utility stocks. Banks have not been great since the 2008/2009 bear market, but I expect to earn good money from banks over the longer term. As far as BMO is concerned I would probably pick some other bank today if I was looking for a bank to invest in.
My main concern with BMO is their inability to generate positive cash flow.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here BMO. See my spreadsheet at bmo.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 or StockTwits.
This was the last of the big banks to raise their dividends and they raised them only 2.9% at the end of 2012 financial year. There was no rise in dividends since 2008 and that means no dividend rises for almost 4 years. Dividends have increased over the past 5 and 10 years by 0.8% and 8.9% per year, respectively.
Over the long term there is nothing like banks in providing good dividends and good dividend increases. (See my article on my site dividend yields on original investments for an explanation of this concept.) I have had this stock for 29 years and my yield on my original investment is 40%.
The Dividend Payout Ratios are good for this bank as far as earnings go. The 5 year median DPR for earnings is 59%. However, for this bank cash flows have varied and have often been negative. You cannot get a fix on DPR for cash flow for this bank.
The total returns over the past 5 and 10 years to the end of December 2012 are 6.39% and 8.51%. The dividend portion of these returns is 4.83% and 4.66% per year and the capital gain portion is 1.56% and 3.86% per year over the past 5 and 10 years, respectively. The recent economic situation has not be good for banks.
The outstanding shares have been increasing at the rate of 5.47% and 2.83% per year over the past 5 and 10 years. They have increased due to business acquisitions, stock options and DRIPs.
The revenue for this bank has increased by 11.1% and 6.2% per year over the past 5 and 10 years. The revenue per share has increased by 5.3% and 3.3% per year over the past 5 and 10 years.
Earnings per share have grown quite nicely over the past 5 and 10 years at 8.4% and 8.7% per year. It is hard to get a fix on cash flow, but they have grown well over the past few years. (The 5 year running average CFPS has grown at 32% over the past 3 years.) However, both CF and CFPS have fluctuated over the years. The book value per share has grown well over the past 5 and 10 years at 8.5% and 7.3% per year.
Return on Equity has generally been very good. The ROE for the last financial year in October 2012 was 15.2% and it has a 5 year median value of 12.9%. The ROE on comprehensive income at 14.5% generally confirms the quality of the ROE on net income.
The Debt Ratio is 1.06, and this is normal for a bank. Their cash flow may fluctuate, but they seem to have enough cash to cover current liabilities and including dividends.
I must confess that I initially built my stock portfolio on bank and utility stocks. Banks have not been great since the 2008/2009 bear market, but I expect to earn good money from banks over the longer term. As far as BMO is concerned I would probably pick some other bank today if I was looking for a bank to invest in.
My main concern with BMO is their inability to generate positive cash flow.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is here BMO. See my spreadsheet at bmo.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 or StockTwits.
Wednesday, January 9, 2013
Penn West Petroleum Ltd
Penn West Petroleum Ltd
On my other blog I am today writing about Tax Free Savings Accounts...continue...
I have more stocks to cover than I have time this year if I do a double report on each stock. So, for the first part of the year, I will do short reports on some of the stocks that I track. This is one stock for the short report.
I do not own this stock of Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE). The stock I bought was Maximum Trust. My spreadsheet shows some values from Maximum Trust to Petrofund to Penn West and other values of Petrofund to Penn West. I decided to sell Penn West in 2010 because the company changing to a corporation and they are also getting back into exploration, rather than just selling oil from their wells.
I made a return of 8.5% per year on this stock. I made 10.4% per year in dividend income and had a capital loss of 1.9% per year. When this company changed to a corporation, it reduced its dividends from $.15 to $.09 per month, a reduction of 40% (2010). They had also reduced their dividends in 2009 by 35%. However, this company is an oil and gas company and you would expect dividends to fluctuate.
Another way to look at this company is that it is another previous income trust that cannot cover its dividends with its earnings. The 5 year median Dividend Payout Ratio for EPS is 126%. The DPR expected for 2012 is 263% and for 2013 is 720%. This does not give me any confidence that dividends will remain at the current value. The 5 year median DPR for CF is better at 61%.
The current Liquidity Ratio is low at 0.93. The 5 year median ratio is even lower at just 0.62. The cash flow brings this ratio generally up above 1.00. However, since cash flow fluctuates this is rather cold comfort. The current Debt Ratio is strong at 2.32. The current Leverage and Debt/Equity Ratios are also good at 1.76 and 0.76. I do not like low Liquidity Ratios because companies that can survive in the long term should have good Liquidity ratios to survive the bad times.
There is generally no growth in revenue, earnings, cash flow or book value per share. Outstanding shares have increased greatly and are up by 15% per year over the past 5 years and 34% per year over the past 10 years. Outstanding shares are increasing due to acquisitions, stock options and the DRIP plan. The company has also bought back some shares for cancellations. In 2011, shares increased by 2.5% in total and by 1.5% due to stock options.
The 5 year low, median and high median Price/Earnings Ratios are 10.56, 15.65 and 20.65. The current one based on stock price of $10.85 and EPS of $0.15 for 2013 is 72.33, a very high P/E. If you use the expected EPS for 2012 of $0.41, you still get a rather high P/E at 26.46.
Using current the Price/Graham Price Ratio of 1.36, the price also looks high. However, using the current dividend yield of 9.95% against the 5 year median of 7.73%, price is relatively low. Also, using the current Price/Book Value Ratio 0.56 against the 10 year median P/B Ratio of 1.35, the stock price looks low.
Over the past year there was insider buying of $1.8M and insider selling of $0.7M. Net insider buying is at $1.1M. All insiders but directors have more options than shares. There are not only options, but Deferred Share Unit, Rights (CSRIP) and Incentive Award (Cash Based - LTRIP). For example the CEO has $1.6M in shares and $16.3M in options and the CFO has $0.6M in shares and $11.9M in options.
There are some 356 institutions that hold some 47% of the outstanding shares. Over the past 3 months they have decreased their shares marginally.
When I look at the analysts' recommendations I find Buy, Strong Buy, Hold and Underperform. Most of the recommendations are a Hold recommendation and this is the consensus recommendation. The 12 month stock price consensus is $15.50. That implies a total return of 55.12% with 10.23% from dividends and 44.89% from capital gain. (The total return seems a huge return for a Hold recommendation.)
The tests on the stock price are mixed. DPRs for cash flow not bad, but very high for earnings. Oil and gas companies are risky at the best of times. I think that this company is just another previous income trust that cannot seem to get earnings higher than dividends.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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 or StockTwits.
On my other blog I am today writing about Tax Free Savings Accounts...continue...
I have more stocks to cover than I have time this year if I do a double report on each stock. So, for the first part of the year, I will do short reports on some of the stocks that I track. This is one stock for the short report.
I do not own this stock of Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE). The stock I bought was Maximum Trust. My spreadsheet shows some values from Maximum Trust to Petrofund to Penn West and other values of Petrofund to Penn West. I decided to sell Penn West in 2010 because the company changing to a corporation and they are also getting back into exploration, rather than just selling oil from their wells.
I made a return of 8.5% per year on this stock. I made 10.4% per year in dividend income and had a capital loss of 1.9% per year. When this company changed to a corporation, it reduced its dividends from $.15 to $.09 per month, a reduction of 40% (2010). They had also reduced their dividends in 2009 by 35%. However, this company is an oil and gas company and you would expect dividends to fluctuate.
Another way to look at this company is that it is another previous income trust that cannot cover its dividends with its earnings. The 5 year median Dividend Payout Ratio for EPS is 126%. The DPR expected for 2012 is 263% and for 2013 is 720%. This does not give me any confidence that dividends will remain at the current value. The 5 year median DPR for CF is better at 61%.
The current Liquidity Ratio is low at 0.93. The 5 year median ratio is even lower at just 0.62. The cash flow brings this ratio generally up above 1.00. However, since cash flow fluctuates this is rather cold comfort. The current Debt Ratio is strong at 2.32. The current Leverage and Debt/Equity Ratios are also good at 1.76 and 0.76. I do not like low Liquidity Ratios because companies that can survive in the long term should have good Liquidity ratios to survive the bad times.
There is generally no growth in revenue, earnings, cash flow or book value per share. Outstanding shares have increased greatly and are up by 15% per year over the past 5 years and 34% per year over the past 10 years. Outstanding shares are increasing due to acquisitions, stock options and the DRIP plan. The company has also bought back some shares for cancellations. In 2011, shares increased by 2.5% in total and by 1.5% due to stock options.
The 5 year low, median and high median Price/Earnings Ratios are 10.56, 15.65 and 20.65. The current one based on stock price of $10.85 and EPS of $0.15 for 2013 is 72.33, a very high P/E. If you use the expected EPS for 2012 of $0.41, you still get a rather high P/E at 26.46.
Using current the Price/Graham Price Ratio of 1.36, the price also looks high. However, using the current dividend yield of 9.95% against the 5 year median of 7.73%, price is relatively low. Also, using the current Price/Book Value Ratio 0.56 against the 10 year median P/B Ratio of 1.35, the stock price looks low.
Over the past year there was insider buying of $1.8M and insider selling of $0.7M. Net insider buying is at $1.1M. All insiders but directors have more options than shares. There are not only options, but Deferred Share Unit, Rights (CSRIP) and Incentive Award (Cash Based - LTRIP). For example the CEO has $1.6M in shares and $16.3M in options and the CFO has $0.6M in shares and $11.9M in options.
There are some 356 institutions that hold some 47% of the outstanding shares. Over the past 3 months they have decreased their shares marginally.
When I look at the analysts' recommendations I find Buy, Strong Buy, Hold and Underperform. Most of the recommendations are a Hold recommendation and this is the consensus recommendation. The 12 month stock price consensus is $15.50. That implies a total return of 55.12% with 10.23% from dividends and 44.89% from capital gain. (The total return seems a huge return for a Hold recommendation.)
The tests on the stock price are mixed. DPRs for cash flow not bad, but very high for earnings. Oil and gas companies are risky at the best of times. I think that this company is just another previous income trust that cannot seem to get earnings higher than dividends.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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 or StockTwits.
Tuesday, January 8, 2013
Suncor Energy Inc 2
I do not own this stock of Suncor Energy Inc. (TSX-SU, NYSE-SU). I started to follow Petro-Canada in 2008. However in 2009, Petro-Canada merged with Suncor. So my spreadsheet follows Petro-Canada into Suncor. Energy companies are a large part of the TSX, but I think all resource stocks are rather risky.
According to the insider trading report, there was some $28M of insider selling and net insider selling of $27.2M. (In other words there was a little bit of insider buying.) The problem with a company that give out lots of stock options is that insider look at the options as part of their salaries and cash them in.
Although some insiders do own shares, they all have more options than shares. The CEO owns some $7M in shares and has some $84M of outstanding options. The CFO has some $0.25M in shares, but $15.8M in outstanding options. Suncor has been busy lately in buying backs shares for cancellation.
According to NASDAQ there are 510 institutions that own some 50% of the outstanding shares. In the three months to December 31, 2012, institutions increased their shares by 5%.
The 5 year low, median and high median Price/Earnings Ratios are 9.52, 13.89 and 17.37. The current P/E Ratio is 9.62 based on 2013 EPS of $3.45 and stock price of $33.20. This low P/E ratio suggests that the price is relatively low.
I get a current Graham price of $44.63. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 137 and 1.68. The current P/GP Ratio is 0.74. This low ratio suggests that the price is relatively low. When the P/GP Ratio is 1.00 or lower, it suggests that the stock price is low.
The 10 year median Price/Book Value per Share is 1.89. The current P/B Ratio is 1.29. This is some 68% of the 10 year median ratio. When the current P/B Ratio is 80% or less of the 10 year ratio, it suggests that the stock price is low, as does this low ratio suggests.
The 5 year median dividend yield is just 1.04% and the current yield of $1.57% is some 50% higher. This current high dividend yield suggests that the current stock price is low.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) The 12 month stock price is $42.70. This implies a total return of 30.18% with 1.57% from dividends and 28.61% from capital gain.
A number of analysts bought up the fact that companies in the oil sands are having a current hard time in getting the oil to market. One mentioned that this stock is inexpensive. In the blog seeking Alpha there is an article called "The Case For Investing In Suncor Energy". See blog. It is a long article and you may want to just skip to The Verdict paragraph at the end. However, the author made some interesting points along the way.
According to the Jags Report blog there were analysts' recommendation changes recently. (Note that a Neutral rating is like a Hold rating. See above for link to what analysts' recommendations mean.)
I would agree that that the stock is on the inexpensive side. There are also problems with getting our oil sands oil to market and also some economic uncertainty because of the overhanging debt problems. However, you make money long term by buying stocks that are relatively cheap.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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 or StockTwits.
According to the insider trading report, there was some $28M of insider selling and net insider selling of $27.2M. (In other words there was a little bit of insider buying.) The problem with a company that give out lots of stock options is that insider look at the options as part of their salaries and cash them in.
Although some insiders do own shares, they all have more options than shares. The CEO owns some $7M in shares and has some $84M of outstanding options. The CFO has some $0.25M in shares, but $15.8M in outstanding options. Suncor has been busy lately in buying backs shares for cancellation.
According to NASDAQ there are 510 institutions that own some 50% of the outstanding shares. In the three months to December 31, 2012, institutions increased their shares by 5%.
The 5 year low, median and high median Price/Earnings Ratios are 9.52, 13.89 and 17.37. The current P/E Ratio is 9.62 based on 2013 EPS of $3.45 and stock price of $33.20. This low P/E ratio suggests that the price is relatively low.
I get a current Graham price of $44.63. The 10 year low, median and high median Price/Graham Price Ratios are 1.07, 137 and 1.68. The current P/GP Ratio is 0.74. This low ratio suggests that the price is relatively low. When the P/GP Ratio is 1.00 or lower, it suggests that the stock price is low.
The 10 year median Price/Book Value per Share is 1.89. The current P/B Ratio is 1.29. This is some 68% of the 10 year median ratio. When the current P/B Ratio is 80% or less of the 10 year ratio, it suggests that the stock price is low, as does this low ratio suggests.
The 5 year median dividend yield is just 1.04% and the current yield of $1.57% is some 50% higher. This current high dividend yield suggests that the current stock price is low.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) The 12 month stock price is $42.70. This implies a total return of 30.18% with 1.57% from dividends and 28.61% from capital gain.
A number of analysts bought up the fact that companies in the oil sands are having a current hard time in getting the oil to market. One mentioned that this stock is inexpensive. In the blog seeking Alpha there is an article called "The Case For Investing In Suncor Energy". See blog. It is a long article and you may want to just skip to The Verdict paragraph at the end. However, the author made some interesting points along the way.
According to the Jags Report blog there were analysts' recommendation changes recently. (Note that a Neutral rating is like a Hold rating. See above for link to what analysts' recommendations mean.)
I would agree that that the stock is on the inexpensive side. There are also problems with getting our oil sands oil to market and also some economic uncertainty because of the overhanging debt problems. However, you make money long term by buying stocks that are relatively cheap.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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 or StockTwits.
Monday, January 7, 2013
Suncor Energy Inc
On my other blog I am today writing about the Bond Market bubble...continue...
I do not own this stock of Suncor Energy Inc. (TSX-SU, NYSE-SU). I have always perceived that resource investing was very risky and have done very little investing in this section. I had held some resource stock at various times, but always held them for short periods. Basically make a profit and getting out. I never held any resource stock for more than a few years.
I know that a lot of the TSX market is in resources, so I do follow some resource stock. I have followed this stock since 2008. At that time, I started to follow, Petro-Canada. However in 2009, Petro-Canada merged with Suncor. So my spreadsheet follows Petro-Canada into Suncor. This is a problem when following any company, or owning any company over the long term. They can merge with other companies, be bought out, change their name (and what they do) and, of course, go out of business.
This is an energy company this is paying quite low dividends that increase very nicely. (Any energy company that pays good dividends would have to vary dividends depending on the price of oil and gas.) The 5 year median dividend yield is just 1.04%. The dividend has often been under 1%. The current dividend is 1.57%.
Dividend increases are very good. The 5 and 10 year growth in dividend is at 25% and 23% per year. Latest increase in 2012 is a bit lower at 18.2%. As would be expected the Dividend Payout Ratios and quite good for this company. The 5 year median DPR for earnings is 16.1% and the 5 year median DPR for cash flow is 6.9%.
The total return over the past 5 and 10 years for this stock has not been great. The 5 year total return is a negative 1.99% per year. Dividend returns was 1.05% per year and the capital loss was at 3.04% per year. The 10 year total return was better at 7.92% per year, with 0.96% per year from dividends and a capital gain of 6.96% per year.
The outstanding shares have decreased marginally over the past 5 and 10 years. Over the past 5 and 10 years, outstanding shares are down 0.4% per year and 0.7% per year, respectively. Shares have increased due to stock options and DRIP and have decreased because of share buy backs.
Looking at the financials for 2011, over the past 5 years revenue was down by 3.1% per year and revenue per share down by 2.7% per year. Over the past 10 years revenue is up by 6.2% per year and revenue per share up by 7% per year. Revenue is expected to be up around 1.4% for 2012.
The financials for 2011 show that Earnings per Share is up very nicely by 20% and 18% per year over the past 5 and 10 years. It is expected that EPS will be up by some 24% for 2012 but only by 4% for 2013.
As of the 2011 financials, book value is up by 8.6% and 12.6% per year over the past 5 and 10 years. The book value is up by some 7.5% to the 3rd quarter of 2012.
The Return on Equity for the financial year of 2011 is 11.9% and the 5 year median ROE is also 11.9%. ROE is up by 11.9% for the 12 months ending in September 30, 2012. The ROE on comprehensive income for the financial year of 2011 was 10.9% and for the 12 months ending in September 30, 2012 also at 10.9%. The ROE for net income and comprehensive income is close.
The current Liquidity Ratio is a little low at 1.37, but the company has generally had good cash flow. The 5 year median Liquidity Ratio is a little low at 1.23. Note, however, for oil and gas companies, the cash flow can fluctuate depending on the price of oil and gas. The current Debt Ratio is quite good at 2.07. This 5 year median Debt Ratio is also good at 2.04.
The thing is with this energy company and all energy companies are that they are heavily tied to the price of oil and/or gas or both. No one knows when the economic situation will improve worldwide. I do not see oil and gas prices taking off until the Western World does something to improve their debt overhang situation. So far all countries have just kick the can down the road. They have made no effort to deal with their debt.
One reason to invest in an oil and gas company is that they are a big part of the TSX. One reason not to investment in resource companies is that they are risky investments and I have never felt that energy companies were long term investments.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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 or StockTwits.
I do not own this stock of Suncor Energy Inc. (TSX-SU, NYSE-SU). I have always perceived that resource investing was very risky and have done very little investing in this section. I had held some resource stock at various times, but always held them for short periods. Basically make a profit and getting out. I never held any resource stock for more than a few years.
I know that a lot of the TSX market is in resources, so I do follow some resource stock. I have followed this stock since 2008. At that time, I started to follow, Petro-Canada. However in 2009, Petro-Canada merged with Suncor. So my spreadsheet follows Petro-Canada into Suncor. This is a problem when following any company, or owning any company over the long term. They can merge with other companies, be bought out, change their name (and what they do) and, of course, go out of business.
This is an energy company this is paying quite low dividends that increase very nicely. (Any energy company that pays good dividends would have to vary dividends depending on the price of oil and gas.) The 5 year median dividend yield is just 1.04%. The dividend has often been under 1%. The current dividend is 1.57%.
Dividend increases are very good. The 5 and 10 year growth in dividend is at 25% and 23% per year. Latest increase in 2012 is a bit lower at 18.2%. As would be expected the Dividend Payout Ratios and quite good for this company. The 5 year median DPR for earnings is 16.1% and the 5 year median DPR for cash flow is 6.9%.
The total return over the past 5 and 10 years for this stock has not been great. The 5 year total return is a negative 1.99% per year. Dividend returns was 1.05% per year and the capital loss was at 3.04% per year. The 10 year total return was better at 7.92% per year, with 0.96% per year from dividends and a capital gain of 6.96% per year.
The outstanding shares have decreased marginally over the past 5 and 10 years. Over the past 5 and 10 years, outstanding shares are down 0.4% per year and 0.7% per year, respectively. Shares have increased due to stock options and DRIP and have decreased because of share buy backs.
Looking at the financials for 2011, over the past 5 years revenue was down by 3.1% per year and revenue per share down by 2.7% per year. Over the past 10 years revenue is up by 6.2% per year and revenue per share up by 7% per year. Revenue is expected to be up around 1.4% for 2012.
The financials for 2011 show that Earnings per Share is up very nicely by 20% and 18% per year over the past 5 and 10 years. It is expected that EPS will be up by some 24% for 2012 but only by 4% for 2013.
As of the 2011 financials, book value is up by 8.6% and 12.6% per year over the past 5 and 10 years. The book value is up by some 7.5% to the 3rd quarter of 2012.
The Return on Equity for the financial year of 2011 is 11.9% and the 5 year median ROE is also 11.9%. ROE is up by 11.9% for the 12 months ending in September 30, 2012. The ROE on comprehensive income for the financial year of 2011 was 10.9% and for the 12 months ending in September 30, 2012 also at 10.9%. The ROE for net income and comprehensive income is close.
The current Liquidity Ratio is a little low at 1.37, but the company has generally had good cash flow. The 5 year median Liquidity Ratio is a little low at 1.23. Note, however, for oil and gas companies, the cash flow can fluctuate depending on the price of oil and gas. The current Debt Ratio is quite good at 2.07. This 5 year median Debt Ratio is also good at 2.04.
The thing is with this energy company and all energy companies are that they are heavily tied to the price of oil and/or gas or both. No one knows when the economic situation will improve worldwide. I do not see oil and gas prices taking off until the Western World does something to improve their debt overhang situation. So far all countries have just kick the can down the road. They have made no effort to deal with their debt.
One reason to invest in an oil and gas company is that they are a big part of the TSX. One reason not to investment in resource companies is that they are risky investments and I have never felt that energy companies were long term investments.
Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.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 or StockTwits.
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