I do not own this stock ARC Resources Ltd. (TSX-ARX, OTC-AETUF). I first reviewed this stock in January 2009 when it was an Income Trust and it was a recommended stock for TFSA accounts. The stock converted to a corporation in January 2011.
This is an oil and gas company. These sorts of companies, if they paid good dividends, tend to have fluctuating dividends. Over time you can make good dividends, but you have to be prepared for fluctuations. Current the dividend yield is 4.45% and the 5 year median dividend yield is 5.43%.
This company has always paid out more in dividends or distributions than its earnings. The 5 year median Dividend Payout Ratio for earnings is 121%. However, the DPR for cash flow is much better at 52%. There are some 15 analysts following this stock and the consensus is an expected decrease in dividend by 7.4% to $1.11 this year.
The Liquidity Ratio has always been quite low and the current one is 1.08. However, this company does have strong cash flows. The Debt Ratio has always been good and the current one is 2.52. The current Leverage and Debt/Equity Ratios are good at 1.66 and 0.66.
The outstanding shares have increased by 8% and 9.6% per year over the past 5 and 10 years. The shares have increased due to stock options and the issuance of shares. Shares issues have been used for capital expenditures and acquisitions. When looking at growth, the 10 year growth figures are better than the 5 year figures.
The 10 year growth figures are in the 2% to 3% range, and the 5 year figures are negative. For example, the 5 year growth in Revenue per Share is a negative 4.8% per year. The 10 year growth in Revenue per Share is 2.6% per year.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy and most analysts are recommending a Buy. The 12 month stock price consensus is $26.80. This is just slightly less than the current stock price of $26.95. This implies that the total return over the next 12 months will all be from dividends.
A recommendation of a Buy and little total return over the next 12 months does not really match up. The high stock price given for the next 12 months is $31 which would suggest a total return of $19.48% with 15.03% from capital gains and 4.45% from dividends. The low 12 month stock price is $24.00 and this implies a loss over the next year.
There is a positive report on this sock from Utility Forecaster via MPL Communication Buy-Sell Adviser email. This report recommends paying no more than $25 a share for this company.
Some analysts like the yield and feel that this should be a core oil and gas stock holding in any portfolio. Some mention that the stock is expensive. It currently has a Price/Earnings Ratio of 46.47 based on a stock price of $26.95 and earnings for 2013 of $0.58. The Price/Graham Price Ratio at 2.25 is also very high.
The relative price moderates a bit looking at dividend yield and P/B Ratios, but does not moderate that much. The current dividend yield is 4.45% is 18% lower than the 5 year median 5.43%. The 10 year Price/Book Value per Share Ratio is 2.21 and the current P/B Ratio at 2.25 is 11% higher.
However, if you look at Price/Cash Flow per Share I get a 5 year median P/CF Ratio of 8.25 and a current P/CF Ratio of 11.67. The current one is based on the current stock price of $26.95 and a 2013 CFPS of $2.13. The current ratio is 42% higher than the 5 year median ratio. The stock price, no matter how you look at it is rather pricey.
So, it would appear that this is a good solid company. However, again, no matter how I look at the stock price, the stock price is relatively high.
ARC Resources Ltd. is one of Canada's leading conventional oil and gas companies. Its focus is on acquiring and developing long-life oil and gas properties across western Canada. Its web site is here ARC. See my spreadsheet at arx.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, March 15, 2013
Thursday, March 14, 2013
Russel Metals Inc 2
I own this stock of Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
When I look at insider trading, I find insider buying at $2M and insider selling at $3.1M with net insider selling at $1.1M. Some options were kept and some were sold. There is also buying under the company plan. Nothing of this tells us anything. There are options and options like vehicles call Rights Deferred Share Units and Rights Restricted Share Units.
The CEO has shares worth $2.9M and has options are worth $18M. The CFO has shares worth $2.5M and has options worth $9.3M. An officer has some shares and has options worth $0.6M. A director has shares worth $0.5M and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values. A number of insiders also hold Convertible Debentures.
The 5 year low, median and high median Price/Earnings Ratios are 10.22, 12.30 and 14.38. The current P/E Ratio would be12.71 based on a stock price of $28.22 and 2013 earnings of $2.22. I get a Graham Price of $25.75. The 10 year low, median and high Price/Graham Price Ratios are 0.62, 0.82 and 1.07. The current P/GP Ratio would be 1.10.
I get a 10 year Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 2.13 a value some 22% higher. A potential problem with the PB Ratio is that the Book Value has been declining over the past 5 years. The current dividend yield is 4.96% and the 5 year median is 5.24%. The current yield is some 5% lower than the 5 year median yield.
Well, none of the tests says the stock is cheap. Mostly we see that the stock is a bit higher than the median, which would suggest it is reasonable. Other tests show the price is bit higher than the median high, relatively speaking. So the price is on the high side, but it is not unreasonable.
One analysts thought that the current EPS consensus was too high because most analysts are too optimistic about the companies Energy Products segment. They also thought the current stock price was too high. (The implications of a too high of EPS consensus is that, if the earnings are lower, then we would expect the P/E Ratio would go higher.)
When I look at the analysts' recommendations I find only Buy and Hold. The consensus recommendation would be a Buy (but it is getting close to a Hold). The consensus 12 months stock price is $31.20. This implies a total return of 15.52% with 4.96% from dividends and 10.56% from capital gains.
This company is well thought of. Everyone seems to feel that the current dividend is safe. One analyst suggested that investors should wait for a pull-back in stock price before buying. Most think that the price is a bit too high.
The blogger, the Happy Capitalism commented on this stock late last year. One interesting comment he made is that the stock price has been helped by the quarterly dividend increases in 2011 and 2012. I must admit that I have found that over time, the capital gain on dividend stocks is greatly affected by the dividend increases.
The Jags Report comments on several recent analysts rating modifications on this stock. Mostly analysts are raising the 12 months stock price.
I will continue to hold the stock I have. When I have more money to invest, I might buy more as I do not have that much of this stock. It would seem that the price is relatively high, but then the TSX is relatively high at the moment. I expect it to do well in the long term.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 insider buying at $2M and insider selling at $3.1M with net insider selling at $1.1M. Some options were kept and some were sold. There is also buying under the company plan. Nothing of this tells us anything. There are options and options like vehicles call Rights Deferred Share Units and Rights Restricted Share Units.
The CEO has shares worth $2.9M and has options are worth $18M. The CFO has shares worth $2.5M and has options worth $9.3M. An officer has some shares and has options worth $0.6M. A director has shares worth $0.5M and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values. A number of insiders also hold Convertible Debentures.
The 5 year low, median and high median Price/Earnings Ratios are 10.22, 12.30 and 14.38. The current P/E Ratio would be12.71 based on a stock price of $28.22 and 2013 earnings of $2.22. I get a Graham Price of $25.75. The 10 year low, median and high Price/Graham Price Ratios are 0.62, 0.82 and 1.07. The current P/GP Ratio would be 1.10.
I get a 10 year Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 2.13 a value some 22% higher. A potential problem with the PB Ratio is that the Book Value has been declining over the past 5 years. The current dividend yield is 4.96% and the 5 year median is 5.24%. The current yield is some 5% lower than the 5 year median yield.
Well, none of the tests says the stock is cheap. Mostly we see that the stock is a bit higher than the median, which would suggest it is reasonable. Other tests show the price is bit higher than the median high, relatively speaking. So the price is on the high side, but it is not unreasonable.
One analysts thought that the current EPS consensus was too high because most analysts are too optimistic about the companies Energy Products segment. They also thought the current stock price was too high. (The implications of a too high of EPS consensus is that, if the earnings are lower, then we would expect the P/E Ratio would go higher.)
When I look at the analysts' recommendations I find only Buy and Hold. The consensus recommendation would be a Buy (but it is getting close to a Hold). The consensus 12 months stock price is $31.20. This implies a total return of 15.52% with 4.96% from dividends and 10.56% from capital gains.
This company is well thought of. Everyone seems to feel that the current dividend is safe. One analyst suggested that investors should wait for a pull-back in stock price before buying. Most think that the price is a bit too high.
The blogger, the Happy Capitalism commented on this stock late last year. One interesting comment he made is that the stock price has been helped by the quarterly dividend increases in 2011 and 2012. I must admit that I have found that over time, the capital gain on dividend stocks is greatly affected by the dividend increases.
The Jags Report comments on several recent analysts rating modifications on this stock. Mostly analysts are raising the 12 months stock price.
I will continue to hold the stock I have. When I have more money to invest, I might buy more as I do not have that much of this stock. It would seem that the price is relatively high, but then the TSX is relatively high at the moment. I expect it to do well in the long term.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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, March 13, 2013
Russel Metals Inc
On my other blog I am today writing about comprehensive income...continue...
I own this stock of Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
If you look at the 5 and 10 year total return on this stock they are at 6.50% and 29.69% per year. The dividend portion of this total return was 4.89% and 11.30% per year with the capital gain portion at 1.61% and 18.38% per year.
If you look at the growth in dividends there is none over the past 5 year and the negative growth is at 5%. However, over the past 10 years, dividends have grown at 21%. The reason is that they just started dividends in 2000 and they moved up rapidly until 2008. However, the recent recession has hit this stock hard and dividends were cut by 45%.
However, dividends have been growing since 2011. The latest dividend increase was in 2012 and it was an 18% increase. The dividend yield is good at a current 5.1% and a 5 year median at 5.2%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 60% and cash flow at 47%. Russel Metals sees their target dividend payout ratio as 80% of earnings over a business cycle.
Over the past 5 years outstanding shares have declined by 1% per year and over the past 10 years have increased by 4.7% per year. Outstanding shares have decreased due to share buyback. Shares have increased due to stock options and the conversion of convertible debentures to shares.
The revenues of the company have grown at the rate of 3.2% and 7.9% per year over the past 5 and 10 years. Revenue per Share has grown at the rate of 4.2% and 3.1% per year over the past 5 and 10 years.
The Earnings per Share has declined over the past 5 years at 1.4% per year and has grown over the past 10 years at 9.2% per year. There is wide disagreement over EPS for 2013 and 2014, but all analysts expect earnings to climb well over the next while.
Cash Flow per Share did not grow over the past 5 years, but grew at the rate of 4.2% per year over the past 10 years. The financial year ending in 2012 was not a great year for this company, but analysts also expect CFPS to grow over the next two years.
The Return on Equity for this company was 12.4% for the financial year ending in 2012. The 5 year median ROE is also 12.4%. The ROE on comprehensive income is also good, but a little lower for 2012 at 10.7% with a 5 year median also at 10.7%.
The debt ratios have been good on this company, with the 2012 Liquidity Ratio at 3.27 and the Debt Ratio at 1.86. The Leverage and Debt/Equity Ratios are a little higher than normal at 2.25 and 1.21. The 5 year median Leverage and Debt/Equity Ratios are 1.91 and 0.87.
My Accrual Ratio at 18.72% is high and might suggest that the quality of the earnings or cash flow is not as good as they could be. However, the difference between the ROE on Net Income and Comprehensive income is not that great at 13%. A difference between the ROE on Net Income and Comprehensive income also questions the quality of earnings. The EPS/CF Ratio is 0.74 and is below 1.00 and this is good. A high Accrual Ratio is just a warning.
I still expect to do well in this stock over the long term. It is an Industrial stock, so it will have more volatility over the business cycle, than say utility stocks. Because of volatility it is also riskier.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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 Russel Metals Inc. (TSX-RUS, OTC- RUSMF). If first bought this stock in 2007 and it promptly went down by some 26%. I got the stock off of Mike Higgs' list of dividend paying growth stocks. It had a generally good track record, so I have kept it and bought more in 2009 and 2011. I have made a total return of 6.84% per year with 4.45% from dividends and 2.39% from capital gains.
If you look at the 5 and 10 year total return on this stock they are at 6.50% and 29.69% per year. The dividend portion of this total return was 4.89% and 11.30% per year with the capital gain portion at 1.61% and 18.38% per year.
If you look at the growth in dividends there is none over the past 5 year and the negative growth is at 5%. However, over the past 10 years, dividends have grown at 21%. The reason is that they just started dividends in 2000 and they moved up rapidly until 2008. However, the recent recession has hit this stock hard and dividends were cut by 45%.
However, dividends have been growing since 2011. The latest dividend increase was in 2012 and it was an 18% increase. The dividend yield is good at a current 5.1% and a 5 year median at 5.2%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 60% and cash flow at 47%. Russel Metals sees their target dividend payout ratio as 80% of earnings over a business cycle.
Over the past 5 years outstanding shares have declined by 1% per year and over the past 10 years have increased by 4.7% per year. Outstanding shares have decreased due to share buyback. Shares have increased due to stock options and the conversion of convertible debentures to shares.
The revenues of the company have grown at the rate of 3.2% and 7.9% per year over the past 5 and 10 years. Revenue per Share has grown at the rate of 4.2% and 3.1% per year over the past 5 and 10 years.
The Earnings per Share has declined over the past 5 years at 1.4% per year and has grown over the past 10 years at 9.2% per year. There is wide disagreement over EPS for 2013 and 2014, but all analysts expect earnings to climb well over the next while.
Cash Flow per Share did not grow over the past 5 years, but grew at the rate of 4.2% per year over the past 10 years. The financial year ending in 2012 was not a great year for this company, but analysts also expect CFPS to grow over the next two years.
The Return on Equity for this company was 12.4% for the financial year ending in 2012. The 5 year median ROE is also 12.4%. The ROE on comprehensive income is also good, but a little lower for 2012 at 10.7% with a 5 year median also at 10.7%.
The debt ratios have been good on this company, with the 2012 Liquidity Ratio at 3.27 and the Debt Ratio at 1.86. The Leverage and Debt/Equity Ratios are a little higher than normal at 2.25 and 1.21. The 5 year median Leverage and Debt/Equity Ratios are 1.91 and 0.87.
My Accrual Ratio at 18.72% is high and might suggest that the quality of the earnings or cash flow is not as good as they could be. However, the difference between the ROE on Net Income and Comprehensive income is not that great at 13%. A difference between the ROE on Net Income and Comprehensive income also questions the quality of earnings. The EPS/CF Ratio is 0.74 and is below 1.00 and this is good. A high Accrual Ratio is just a warning.
I still expect to do well in this stock over the long term. It is an Industrial stock, so it will have more volatility over the business cycle, than say utility stocks. Because of volatility it is also riskier.
Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals. See my spreadsheet at rus.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, March 12, 2013
RioCan Real Estate 2
I own this stock of RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
When I look at the insider trading report, I find $0.6M of insider buying and $12M of insider selling for net insider selling of $11.4M. There seems to be buying under the company plan and the selling seems to be of options. Insiders seem to have lots of options, especial the CEO, CFO and officers. The CEO, CFO and officers have options, but directors have Restricted Equity Units.
The CEO has shares worth $9.6Mand has options are worth $87.7M. The CFO has shares worth $1.8M and has options worth $12.4M. An officer has $0.9M and has options worth $11.1M. A director has some shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
When trying to judge the stock price, the Price/Earnings look very low at 9.44 when the 5 year low median is at 14.53, but earnings have climbed with the new accounting rules. This P/E Ratio of 9.44 is based on a stock price of $27.56 and 2013 earnings of $2.92. The interesting thing about earnings is that all analysts seem to expect earnings to drop significantly over the next while.
The Price/Book Value Ratio share has a similar problem as the P/E Ratio as the Book Value climbed with the new account rules. Over the past two years, the Price/Graham Price Ratios have also been quite low. However, the Graham price uses the earnings and book value in its formula.
The dividend yield seems to be a good measure to use. The current dividend yield at 5.12% is some 24% lower than the 5 year dividend yield at 6.73%. This suggests that the stock price is rather on the high side.
The 5 year low, median and high median Price/Cash Flow per Share Ratios are 13.12, 15.19 and 18.22. The current P/CF Ratio is 16.91. This suggests that while the stock price is in the reasonable zone, it is a bit high.
Perhaps another good test is the Price/Adjusted Funds from Operations ratio. The P/AFFO Ratios is currently at 16.96 based on a stock price of $27.56 and AFFO for 2013 of $1.40. The 5 year low, median and high median P/AFFO Ratios are 12.23, 14.15 and 16.54. Since the current P/AFFO Ratio is higher than the 5 year median high P/AFFO Ratios, it suggests that the stock price is on the high side.
While from all this I can say that the stock price is definitely not cheap. It would seem to be on the high side, but it is not unreasonably high. I recently bought some RioCan at a similar price. However, I sold a stock to buy the RioCan stocks, so relatively speaking I sold a stock at a high price and bought RioCan at a relatively high price.
When I look at analysts' recommendations, I find just Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price consensus is $30.00. This implies 12 months total return of 13.97%, with 5.12% from dividends and 8.85% from capital gains.
There is a Financial Post article about RioCan REIT trimming its Canadian portfolio.
An analyst that thinks this stock is a buy quoted the good dividend yield of $5.2% and that fact that this company has been successful in expanding into the US. Others think that it is a high quality REIT and that it will benefit when Target moves into Canada. See an articles in Globe & Mail and Financial Post that talks about RioCan and Target stores.
The Dividend Girl has recently invested in this stock for her TFSA. Finally, the Jags Report talks about recently rating changes by CIBC and Scotia Bank on this stock. There is also some discussion on this stock at Canadian Money Form.
Personally I think that this is a good company and a well-run REIT. However, at the moment, I think that the stock price is reasonable (but on the high side) to a bit too pricey. However, if you look at the seasonality of this stock, March and April are not great months for capital appreciation, the summer is good and price seems to drop-off in October. See chart at Equity Clock site.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.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 $0.6M of insider buying and $12M of insider selling for net insider selling of $11.4M. There seems to be buying under the company plan and the selling seems to be of options. Insiders seem to have lots of options, especial the CEO, CFO and officers. The CEO, CFO and officers have options, but directors have Restricted Equity Units.
The CEO has shares worth $9.6Mand has options are worth $87.7M. The CFO has shares worth $1.8M and has options worth $12.4M. An officer has $0.9M and has options worth $11.1M. A director has some shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
When trying to judge the stock price, the Price/Earnings look very low at 9.44 when the 5 year low median is at 14.53, but earnings have climbed with the new accounting rules. This P/E Ratio of 9.44 is based on a stock price of $27.56 and 2013 earnings of $2.92. The interesting thing about earnings is that all analysts seem to expect earnings to drop significantly over the next while.
The Price/Book Value Ratio share has a similar problem as the P/E Ratio as the Book Value climbed with the new account rules. Over the past two years, the Price/Graham Price Ratios have also been quite low. However, the Graham price uses the earnings and book value in its formula.
The dividend yield seems to be a good measure to use. The current dividend yield at 5.12% is some 24% lower than the 5 year dividend yield at 6.73%. This suggests that the stock price is rather on the high side.
The 5 year low, median and high median Price/Cash Flow per Share Ratios are 13.12, 15.19 and 18.22. The current P/CF Ratio is 16.91. This suggests that while the stock price is in the reasonable zone, it is a bit high.
Perhaps another good test is the Price/Adjusted Funds from Operations ratio. The P/AFFO Ratios is currently at 16.96 based on a stock price of $27.56 and AFFO for 2013 of $1.40. The 5 year low, median and high median P/AFFO Ratios are 12.23, 14.15 and 16.54. Since the current P/AFFO Ratio is higher than the 5 year median high P/AFFO Ratios, it suggests that the stock price is on the high side.
While from all this I can say that the stock price is definitely not cheap. It would seem to be on the high side, but it is not unreasonably high. I recently bought some RioCan at a similar price. However, I sold a stock to buy the RioCan stocks, so relatively speaking I sold a stock at a high price and bought RioCan at a relatively high price.
When I look at analysts' recommendations, I find just Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price consensus is $30.00. This implies 12 months total return of 13.97%, with 5.12% from dividends and 8.85% from capital gains.
There is a Financial Post article about RioCan REIT trimming its Canadian portfolio.
An analyst that thinks this stock is a buy quoted the good dividend yield of $5.2% and that fact that this company has been successful in expanding into the US. Others think that it is a high quality REIT and that it will benefit when Target moves into Canada. See an articles in Globe & Mail and Financial Post that talks about RioCan and Target stores.
The Dividend Girl has recently invested in this stock for her TFSA. Finally, the Jags Report talks about recently rating changes by CIBC and Scotia Bank on this stock. There is also some discussion on this stock at Canadian Money Form.
Personally I think that this is a good company and a well-run REIT. However, at the moment, I think that the stock price is reasonable (but on the high side) to a bit too pricey. However, if you look at the seasonality of this stock, March and April are not great months for capital appreciation, the summer is good and price seems to drop-off in October. See chart at Equity Clock site.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.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, March 11, 2013
RioCan Real Estate
On my other blog I am today writing about boards having women directors...continue...
I own this stock of RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
Over the past 5 and 10 years, investors in this stock have made returns of 10.58% per year and 15.98% per year. Over these periods the capital gain portion was 4.78% per year and 8.25% per year, respectively. Also over these periods the distribution portion was 5.80% per year and 7.73% per year, respectively.
The dividend growth for this stock used to keep up with inflation. However, lately this has not been true. Inflation over the past 5 and 10 years has been running around 1.8% per year. However, the 5 year growth in distributions is just 1.2% per year. The 10 year growth in dividends is better at 2.5%. For inflation information, see Bank of Canada's website.
The reason for the low growth in dividends is that the company only increased dividends by 1.5% in 2009 and then did no increases in 2010 and 2011. In 2012 they again raised the dividend and this raise was better at 2.2%. It has been a tough economy and lots of companies have had problems. There was good reason to not increase dividends in 2010 and 2011 because the company could not cover the dividends with cash flow. I personally rather a company does this than pay dividends it cannot afford to pay.
The 5 year median Dividend Payout Ratio for cash flow was 102%. The one for 2012 was better at 93% and the DPR for cash flow is expected to be in the high 80%'s in 2013. The 5 year median DPR for Funds from Operations is 95% and from Adjusted Funds from Operations is 106%. Having the distributions higher than AFFO is not good and it is expect that the DPR from AFFO for 2013 will be around 100%.
Over the past 5 and 10 years, outstanding units have increased by 7.3% and 6.6% per year. The increase is due to Stock Options, DRIP and New Share Issued.
Revenue is up by 8.7% per year and 9.6% per year over the past 5 and 10 years. However, the Revenue per Share figures is not good because there is a big difference in the number of units outstanding over these periods. The Revenue per Share is only up 1.3% and 2.8% per year over the past 5 and 10 years. Both these growth rates are significant, but being a unitholder, the per unit values are very important.
The Earnings per Share is up a lot and it seems to be due to the change in accounting rules to IFRS. So the EPS growth is not a guide for us. The FFO and AFFO have not increased much with the FFO up by 1% per year over the past 5 years and the AFFO up 0% and 1.5% per year over the past 5 and 10 years.
The growth in Cash Flow per share has not been stellar either, with growth at just 3.4 and 2.9% per year over the past 5 and 10 years. Book Value was affected by the change in accounting rules and its growth does not tell us much.
The company had a good year in 2012, income wise. The Return on Equity for 2012 is 20.6% and the 5 year median ROE is also good at 14%. The ROE on comprehensive income was very similar with the ROE in 2012 at 20.8% and the 5 year median at 13.3%.
It is not good that the EPS/CF Ratio for 2011 and 2012 are above 1.00 at 2.64 and 3.02. Generally speaking, when the CFPS is lower than EPS is it not good for companies over the longer term. However, the EPS were significantly increased due to IFRS accounting rules, so it hard to say how this will all play out. It its unknown what the long term effects of the new IFRS rules will be.
As far a debt ratios goes, the current Liquidity Ratio is fine, especially since the company has a strong cash flow. The current Debt Ratio is very good at 2.13. Both the current Leverage and Debt/Equity Ratios are good at 1.97 and 0.92.
I would certainly like to see better growth for this stock, but we are in rather tough economic times and it is hard to say when we will hit better times. The current cyclical bull market perhaps says better times are coming, but we will not be home free until the Western world does something about the huge debts that our governments have run up. It will take some time to work off these debts.
The Canadian Federal government under Chretien handled the debt well where they backed off spending, but did it slowly so as not to overwhelm the economy. With some countries, like Greece, the sooner they default on debt they really cannot pay back, the better it will be for everyone. It is not as if this is a new concept. In fact, there are few countries that have never defaulted on their debt. Most have defaulted at some time and a lot of countries have defaulted a number of times in the past.
This is a good stock to buy for diversification. I like that it is in the retail properties. When I look at REITs, I prefer ones in retail and commercial properties. The characteristics of a REIT are a good dividend yield with slightly higher dividend growth than inflation. I would be satisfied with a REIT with 4% dividend yield and 4% capital gain per year over the long term. This one has done better than that for me and I have been pleased with it.
And, by the way, two of the eight directors of this company are women to give a 25% women board member representation.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.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 RioCan Real Estate (TSX-REI.UN, OTC- RIOCF). I first bought this stock in 2000 and I have periodically bought more. I have made a return of 16.66% per year on this stock with 8.15% per year from capital gains and 5.81% per year from distributions.
Over the past 5 and 10 years, investors in this stock have made returns of 10.58% per year and 15.98% per year. Over these periods the capital gain portion was 4.78% per year and 8.25% per year, respectively. Also over these periods the distribution portion was 5.80% per year and 7.73% per year, respectively.
The dividend growth for this stock used to keep up with inflation. However, lately this has not been true. Inflation over the past 5 and 10 years has been running around 1.8% per year. However, the 5 year growth in distributions is just 1.2% per year. The 10 year growth in dividends is better at 2.5%. For inflation information, see Bank of Canada's website.
The reason for the low growth in dividends is that the company only increased dividends by 1.5% in 2009 and then did no increases in 2010 and 2011. In 2012 they again raised the dividend and this raise was better at 2.2%. It has been a tough economy and lots of companies have had problems. There was good reason to not increase dividends in 2010 and 2011 because the company could not cover the dividends with cash flow. I personally rather a company does this than pay dividends it cannot afford to pay.
The 5 year median Dividend Payout Ratio for cash flow was 102%. The one for 2012 was better at 93% and the DPR for cash flow is expected to be in the high 80%'s in 2013. The 5 year median DPR for Funds from Operations is 95% and from Adjusted Funds from Operations is 106%. Having the distributions higher than AFFO is not good and it is expect that the DPR from AFFO for 2013 will be around 100%.
Over the past 5 and 10 years, outstanding units have increased by 7.3% and 6.6% per year. The increase is due to Stock Options, DRIP and New Share Issued.
Revenue is up by 8.7% per year and 9.6% per year over the past 5 and 10 years. However, the Revenue per Share figures is not good because there is a big difference in the number of units outstanding over these periods. The Revenue per Share is only up 1.3% and 2.8% per year over the past 5 and 10 years. Both these growth rates are significant, but being a unitholder, the per unit values are very important.
The Earnings per Share is up a lot and it seems to be due to the change in accounting rules to IFRS. So the EPS growth is not a guide for us. The FFO and AFFO have not increased much with the FFO up by 1% per year over the past 5 years and the AFFO up 0% and 1.5% per year over the past 5 and 10 years.
The growth in Cash Flow per share has not been stellar either, with growth at just 3.4 and 2.9% per year over the past 5 and 10 years. Book Value was affected by the change in accounting rules and its growth does not tell us much.
The company had a good year in 2012, income wise. The Return on Equity for 2012 is 20.6% and the 5 year median ROE is also good at 14%. The ROE on comprehensive income was very similar with the ROE in 2012 at 20.8% and the 5 year median at 13.3%.
It is not good that the EPS/CF Ratio for 2011 and 2012 are above 1.00 at 2.64 and 3.02. Generally speaking, when the CFPS is lower than EPS is it not good for companies over the longer term. However, the EPS were significantly increased due to IFRS accounting rules, so it hard to say how this will all play out. It its unknown what the long term effects of the new IFRS rules will be.
As far a debt ratios goes, the current Liquidity Ratio is fine, especially since the company has a strong cash flow. The current Debt Ratio is very good at 2.13. Both the current Leverage and Debt/Equity Ratios are good at 1.97 and 0.92.
I would certainly like to see better growth for this stock, but we are in rather tough economic times and it is hard to say when we will hit better times. The current cyclical bull market perhaps says better times are coming, but we will not be home free until the Western world does something about the huge debts that our governments have run up. It will take some time to work off these debts.
The Canadian Federal government under Chretien handled the debt well where they backed off spending, but did it slowly so as not to overwhelm the economy. With some countries, like Greece, the sooner they default on debt they really cannot pay back, the better it will be for everyone. It is not as if this is a new concept. In fact, there are few countries that have never defaulted on their debt. Most have defaulted at some time and a lot of countries have defaulted a number of times in the past.
This is a good stock to buy for diversification. I like that it is in the retail properties. When I look at REITs, I prefer ones in retail and commercial properties. The characteristics of a REIT are a good dividend yield with slightly higher dividend growth than inflation. I would be satisfied with a REIT with 4% dividend yield and 4% capital gain per year over the long term. This one has done better than that for me and I have been pleased with it.
And, by the way, two of the eight directors of this company are women to give a 25% women board member representation.
RioCan is Canada's largest real estate investment trust. It owns and manages Canada's largest portfolio of shopping centers. RioCan owns an 80% interest in 31 grocery anchored and new format retail centers in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers located predominantly in the Northeastern United States. Its web site is here RioCan. See my spreadsheet at rei.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, March 8, 2013
Manitoba Telecom Services Inc 2
I own this stock of Manitoba Telecom Services Inc. (TSX:-MBT, OTC-MOBAF). I first bought this stock in 2006. I sold some in 2010 and on these shares I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock that I bought in 2006 and still have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
When I look at the insider trading report, I find no insider selling and no insider buying. It would appear that insiders are holding on to the shares they are getting via their stock options. This is a positive. Not only do insiders have stock options, they also have stock option like vehicles called Rights Performance Share Units, Rights Restricted Share Units and Rights Director Compensation Units.
The CEO has shares worth $4.5M and has options are worth $49.7M. The CFO has shares worth $0.4M and has options worth $9.7M. An officer has some shares and has options worth $1M. A director has some shares and has options worth $0.2. This is just to give you an idea on insider share ownership and option values.
I get low, median and high median Price/Earnings Ratios of 14.33, 16.91 and 19.48. The current P/E is 15.24 based on 2013 earnings of 2.13 and a stock price of $32.46. This test shows that this stock is at a very reasonable price.
I get a Graham Price of $24.06. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.17 and 1.32. The current P/GP Ratio is 1.35. I get a 10 year Price/Book Value per Share Ratio of 2.09. The current P/B Ratio is 2.69, a value some 29% higher. Both these tests show that the stock is rather high. The BV has been falling lately and this would affect both these tests.
Since the dividend was cut within the last few years, a dividend yield test is probably not so helpful. However, there are other things to look at. One is the Price/Cash Flow per Share Ratio. The 5 year median P/CF Ratio is 4.96. We can also look at the Price/Sales per Share Ratio. For the P/S Ratio the 5 year median is 1.22 and the 5 year high median is 1.34. The current P/S Ratio is 1.30.
As with most ratios, for the P/CF Ratio and the P/S Ratio, lower is better. The P/CF shows that the stock price is reasonable. The P/S Ratio shows also a reasonable, but a bit high. After all this, the current price is probably reasonable, but there are some tests that show that the price is a bit too high.
When I look at the analysts' recommendations, I find that they are all over the place. I find Buy, Hold, Underperform and Sell recommendations. However, most of the recommendations are in the Hold category and this give a consensus recommendation of Hold. The consensus 12 month stock price is $33.10. This is a price very close to the current only, so not much in capital appreciation is expected this year.
In Canada, I understand that we have some of the highest prices for telecom services in the world and this company cannot do well. Is this complacency? Is it poor business planning? I must say that I am rather underwhelmed. I am only holding on to it because the dividend seems safe and yield is good. I will get rid of it once I find a good replacement stock.
I do not see this stock as a good long term investment and my preference is for stocks that make a good long term investment. However, it is interesting that the over the past year insiders are holding on to stock acquired through options.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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 no insider selling and no insider buying. It would appear that insiders are holding on to the shares they are getting via their stock options. This is a positive. Not only do insiders have stock options, they also have stock option like vehicles called Rights Performance Share Units, Rights Restricted Share Units and Rights Director Compensation Units.
The CEO has shares worth $4.5M and has options are worth $49.7M. The CFO has shares worth $0.4M and has options worth $9.7M. An officer has some shares and has options worth $1M. A director has some shares and has options worth $0.2. This is just to give you an idea on insider share ownership and option values.
I get low, median and high median Price/Earnings Ratios of 14.33, 16.91 and 19.48. The current P/E is 15.24 based on 2013 earnings of 2.13 and a stock price of $32.46. This test shows that this stock is at a very reasonable price.
I get a Graham Price of $24.06. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.17 and 1.32. The current P/GP Ratio is 1.35. I get a 10 year Price/Book Value per Share Ratio of 2.09. The current P/B Ratio is 2.69, a value some 29% higher. Both these tests show that the stock is rather high. The BV has been falling lately and this would affect both these tests.
Since the dividend was cut within the last few years, a dividend yield test is probably not so helpful. However, there are other things to look at. One is the Price/Cash Flow per Share Ratio. The 5 year median P/CF Ratio is 4.96. We can also look at the Price/Sales per Share Ratio. For the P/S Ratio the 5 year median is 1.22 and the 5 year high median is 1.34. The current P/S Ratio is 1.30.
As with most ratios, for the P/CF Ratio and the P/S Ratio, lower is better. The P/CF shows that the stock price is reasonable. The P/S Ratio shows also a reasonable, but a bit high. After all this, the current price is probably reasonable, but there are some tests that show that the price is a bit too high.
When I look at the analysts' recommendations, I find that they are all over the place. I find Buy, Hold, Underperform and Sell recommendations. However, most of the recommendations are in the Hold category and this give a consensus recommendation of Hold. The consensus 12 month stock price is $33.10. This is a price very close to the current only, so not much in capital appreciation is expected this year.
In Canada, I understand that we have some of the highest prices for telecom services in the world and this company cannot do well. Is this complacency? Is it poor business planning? I must say that I am rather underwhelmed. I am only holding on to it because the dividend seems safe and yield is good. I will get rid of it once I find a good replacement stock.
I do not see this stock as a good long term investment and my preference is for stocks that make a good long term investment. However, it is interesting that the over the past year insiders are holding on to stock acquired through options.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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, March 7, 2013
Manitoba Telecom Services Inc
I own this stock of Manitoba Telecom Services Inc. (TSX:-MBT, OTC- MOBAF), but I probably should not. I first bought this stock in 2006 on the recommendation of TD Waterhouse. The best I can say about this stock is that it is not the worse purchase I have made. Originally, I bought a fair bit of this stock, but I have sold some but still have some left.
What I bought in 2006 and sold in 2010, I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock I have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
In 2010, this company cut its dividends by 35%. If you look at dividend growth over the past 5 and 10 years, the 10 year growth is at 7.6% per year. Over the past 5 years dividends have declined by 8% per year. The current dividend is high at 5.2%. The 5 year dividend yield is 6.9%.
The dividend was cut because earnings fell. Since the dividend cut, dividends have remained the same. It does not look like their dividend policy is going to change any time soon. The Dividend Payout Ratio for earnings for 2013 and 2014 is expected to be around 80%. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 1.27% with a capital loss of 6.72% per year and dividend at 5.45% per year. The total return over the past 10 years is 5.15%, with a capital loss of 1.03% per year and dividends at 6.18% per year.
The outstanding shares have increased less than 1% per year over the past 5 and 10 years. They have increased due to DRIP and stock options and have decreased due to buy backs. When looking at growth, the growth for the last 10 years is better than that for the last 5 years.
Revenue per share is down 3% per year over the past 5 years and up by 5.5% per year over the past 10 years. Earnings per share over the past 5 and 10 years are flat. However, if you look at 5 year running averages, EPS is down by 7.7% per year over the past 5 years and up by 3% per year over the past 10 years.
Cash Flow per Share is down by 4.7% per year over the past 5 years and is up by 4.3% per year over the past 10 years. Book Value per share has been going down over the past 5 and 10 years. There was a decline in book value because of the change to the IFRS accounting rules. However, book value was going down even without the change in accounting rules.
The Return on Equity for the financial year of 2012 looks very good at 21.7%. However, the ROE on comprehensive income is a lot less at 12.2%. (That is a 44% difference and may suggest that the quality of the earnings is not good.)
The Liquidity Ratio is very low at 0.47. (When this is below 1.00 it means that current assets cannot cover current liabilities.) If you can consider cash flow after dividends, this moves up at 1.17. This is an ok ratio, but it is better if it were at 1.50 or higher. The Debt Ratio at 1.42 is a bit low also and would be better if it was at 1.50 or higher. The Leverage and Debt/Equity Ratios are a bit high at 3.38 and 2.38.
Eventually, I will get rid of this stock as I have determined that is not a core investment for me. However, there is nothing I see to replace it at the moment as most utilities stocks that I like are rather pricey at this point. TD Waterhouse still has a buy on this stock. I do not think that anything startling is going to happen to this stock, so it is safe for the next while.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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.
What I bought in 2006 and sold in 2010, I made a return of 0.8% per year. The capital gain loss was 6% per year and the dividends were 6.8% per year. The remaining stock I have, I have made a return of 3.4% per year, with a capital loss of 3% per year and dividends at 6.4% per year. It could be worse.
In 2010, this company cut its dividends by 35%. If you look at dividend growth over the past 5 and 10 years, the 10 year growth is at 7.6% per year. Over the past 5 years dividends have declined by 8% per year. The current dividend is high at 5.2%. The 5 year dividend yield is 6.9%.
The dividend was cut because earnings fell. Since the dividend cut, dividends have remained the same. It does not look like their dividend policy is going to change any time soon. The Dividend Payout Ratio for earnings for 2013 and 2014 is expected to be around 80%. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 1.27% with a capital loss of 6.72% per year and dividend at 5.45% per year. The total return over the past 10 years is 5.15%, with a capital loss of 1.03% per year and dividends at 6.18% per year.
The outstanding shares have increased less than 1% per year over the past 5 and 10 years. They have increased due to DRIP and stock options and have decreased due to buy backs. When looking at growth, the growth for the last 10 years is better than that for the last 5 years.
Revenue per share is down 3% per year over the past 5 years and up by 5.5% per year over the past 10 years. Earnings per share over the past 5 and 10 years are flat. However, if you look at 5 year running averages, EPS is down by 7.7% per year over the past 5 years and up by 3% per year over the past 10 years.
Cash Flow per Share is down by 4.7% per year over the past 5 years and is up by 4.3% per year over the past 10 years. Book Value per share has been going down over the past 5 and 10 years. There was a decline in book value because of the change to the IFRS accounting rules. However, book value was going down even without the change in accounting rules.
The Return on Equity for the financial year of 2012 looks very good at 21.7%. However, the ROE on comprehensive income is a lot less at 12.2%. (That is a 44% difference and may suggest that the quality of the earnings is not good.)
The Liquidity Ratio is very low at 0.47. (When this is below 1.00 it means that current assets cannot cover current liabilities.) If you can consider cash flow after dividends, this moves up at 1.17. This is an ok ratio, but it is better if it were at 1.50 or higher. The Debt Ratio at 1.42 is a bit low also and would be better if it was at 1.50 or higher. The Leverage and Debt/Equity Ratios are a bit high at 3.38 and 2.38.
Eventually, I will get rid of this stock as I have determined that is not a core investment for me. However, there is nothing I see to replace it at the moment as most utilities stocks that I like are rather pricey at this point. TD Waterhouse still has a buy on this stock. I do not think that anything startling is going to happen to this stock, so it is safe for the next while.
This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom. See my spreadsheet at mbt.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, March 6, 2013
Emera Inc 2
On my other blog I am today writing about the pain and pleasure in trading stocks...continue...
I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list some time ago. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
When I look at the insider trading report, I find $11.6M of insider selling and $0.4M of insider buying. That gives a net of insider selling of $11.1M. The selling seems to involve stock options. The company not only has options, but option like vehicles like Performance Share Units (PSU) and Deferred Share Unit (DSU).
The CEO has shares worth $0.5M and has options are worth $43M. The CFO has shares worth $0.3M and has options worth $6.8M. An officer has some shares and has options worth $5M. A director has some shares and has options worth $2.8M. This is just to give you an idea on insider share ownership and option values.
I get a Graham Price of $22.46 for 2013. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.07 and 1.20. Using the current stock price of $35.72, I get a P/GP Ratio of 1.59. My spreadsheet shows a 10 year median Price/Book Value per Share of 1.79 and a current P/B Ratio of 2.82. The current P/B Ratio is some 58% higher than the 10 year median ratio. Both these tests say that the stock price is quite high.
The 5 year low, median and high median Price/Earnings Ratios are 14.14, 16.63 and 18.70. I get a current P/E 20.18 based on 2013 earnings $1.77 and stock price of $35.72. I get a current dividend yield of 3.92% and a 5 year median dividend yield of 4.25%. The current yield is some 8% higher than the 5 year dividend yield. These tests say that the stock price is on the high side, but not by very much.
Unless there is a particular reason not to use the dividend yield test, this is the test that is the best for dividend paying stocks. The stock is therefore on the high side. However, the dividend yield is still good at 3.9%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $36.90. This implies a total return of 7.22%, with 3.92% from dividends and 3.3% from capital gains. Some analysts think that the stock price will be lower in 12 months.
This is a low risk stock with a relatively good dividend yield. The company seems to have a target of growth dividends and earnings at 4 to 6% over the medium term that seems reasonable. This is a utility stock which people buy for the low risk and good dividend. In the longer term, capital gains on dividend stocks tend to equal dividend growth. So a 4% dividend and 4% capital gain is a good return for a utility stock.
A number of analysts say the same thing. That is they think that the dividend is good, the company is solid but the stock is a bit pricey. Some investors have been interested in the dividend yield because what you get from bonds is so low.
As far as bloggers go, the Dividend Girl is buying this stock. This blogger has a rather interesting approach to investing. The Happy Capitalism blogger also review this stock a while ago. And, there is an interesting article in the Financial Post late last year called "Emera's timely $175-million deal".
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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 Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list some time ago. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
When I look at the insider trading report, I find $11.6M of insider selling and $0.4M of insider buying. That gives a net of insider selling of $11.1M. The selling seems to involve stock options. The company not only has options, but option like vehicles like Performance Share Units (PSU) and Deferred Share Unit (DSU).
The CEO has shares worth $0.5M and has options are worth $43M. The CFO has shares worth $0.3M and has options worth $6.8M. An officer has some shares and has options worth $5M. A director has some shares and has options worth $2.8M. This is just to give you an idea on insider share ownership and option values.
I get a Graham Price of $22.46 for 2013. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.07 and 1.20. Using the current stock price of $35.72, I get a P/GP Ratio of 1.59. My spreadsheet shows a 10 year median Price/Book Value per Share of 1.79 and a current P/B Ratio of 2.82. The current P/B Ratio is some 58% higher than the 10 year median ratio. Both these tests say that the stock price is quite high.
The 5 year low, median and high median Price/Earnings Ratios are 14.14, 16.63 and 18.70. I get a current P/E 20.18 based on 2013 earnings $1.77 and stock price of $35.72. I get a current dividend yield of 3.92% and a 5 year median dividend yield of 4.25%. The current yield is some 8% higher than the 5 year dividend yield. These tests say that the stock price is on the high side, but not by very much.
Unless there is a particular reason not to use the dividend yield test, this is the test that is the best for dividend paying stocks. The stock is therefore on the high side. However, the dividend yield is still good at 3.9%.
When I look at the analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 months consensus stock price is $36.90. This implies a total return of 7.22%, with 3.92% from dividends and 3.3% from capital gains. Some analysts think that the stock price will be lower in 12 months.
This is a low risk stock with a relatively good dividend yield. The company seems to have a target of growth dividends and earnings at 4 to 6% over the medium term that seems reasonable. This is a utility stock which people buy for the low risk and good dividend. In the longer term, capital gains on dividend stocks tend to equal dividend growth. So a 4% dividend and 4% capital gain is a good return for a utility stock.
A number of analysts say the same thing. That is they think that the dividend is good, the company is solid but the stock is a bit pricey. Some investors have been interested in the dividend yield because what you get from bonds is so low.
As far as bloggers go, the Dividend Girl is buying this stock. This blogger has a rather interesting approach to investing. The Happy Capitalism blogger also review this stock a while ago. And, there is an interesting article in the Financial Post late last year called "Emera's timely $175-million deal".
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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, March 5, 2013
Emera Inc
I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found it on a dividend growth stock list. I first bought this stock in 2005 and then some more in 2011. I have made a total return of 14.96% per year on this stock. Of this return, 4.33% is attributable to dividends and 10.63% is attributable to capital gains.
If you look at total return over the past 5 and 10 years to the end of 2012, you get returns of 14.07% and 12.6% per year, respectively. Of these returns 4.39% and 4.52% per year respectively is attributable to dividends and 9.68% and 8.08% per year respectively is attributable to capital gains.
The growth in dividends over the past 5 and 10 years has been at 8.7% and 4.7% per year. The latest dividend increase at the end of 2012 was for 3.7%. The current dividend yield is 3.92%. I have held this stock for 8 years and on my original investments I am making a yield of 6.8%.
The Dividend Payout Ratios are fine, with the 5 year median DPR for earnings at 70% and the DPR for cash flow at 37%.
Over the past 5 and 10 years outstanding shares have increased by2% and 3.3% per year. The increase is due to stock options, Employees Plan, DRIP and issuance of stock. Revenue is up by 9% and 5.3% per year over the past 5 and 10 years. Revenue per Share is up by 5.5% and 3.3% per year over the past 5 and 10 years.
Earnings per Share is up by 5.9% and 7.6% per year over the past 5 and 10 years. Cash Flow per Share has not changed over the past 5 years and is up by only 2.8% per year over the past 10 years. If you look at 5 year running averages over the past 5 and 10 years, cash flow is up by 2.5% and 2% per year.
Book Value per share has really not changed over the past 5 and 10 years. Part of the reason for this is that the company changed their accounting rules from CDN GAAP to US GAAP and there was a 17% drop in book value with accounting change. The company has also issued preferred shares and there is an increase in the non-controlling interest in this company.
The Return on Equity looks good with a ROE at the end of the financial year of 2012 at 10.8% and with a 5 year median of 10.7%. However, there is a big difference between the ROE on net income and the ROE on comprehensive income. The ROE on comprehensive income is at 6. 2% for the financial year of 2012 and it has a 5 year median of 7.33%. This could mean that there could be problems with the quality of the earnings reported.
As are most utilities, this company has a heavy debt load. However, the Liquidity Ratio is low at just 0.93. (This means that the current assets cannot cover the current debt.) If you add in cash flow after dividends, you get a better ratio of 1.15. The Debt Ratio is also a bit low at 1.43, but is rather typical of this company.
The Leverage and Debt/Equity Ratios at 4.54 and 3.16 are a bit high and higher than the 10 year median ratios of 3.24 and 2.23. In other words, the debt ratios are not where I would prefer to see them and they are probably at this point a bit worse than the industry average for utilities. (See my site and my blog for further information on Debt Ratios.)
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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.
If you look at total return over the past 5 and 10 years to the end of 2012, you get returns of 14.07% and 12.6% per year, respectively. Of these returns 4.39% and 4.52% per year respectively is attributable to dividends and 9.68% and 8.08% per year respectively is attributable to capital gains.
The growth in dividends over the past 5 and 10 years has been at 8.7% and 4.7% per year. The latest dividend increase at the end of 2012 was for 3.7%. The current dividend yield is 3.92%. I have held this stock for 8 years and on my original investments I am making a yield of 6.8%.
The Dividend Payout Ratios are fine, with the 5 year median DPR for earnings at 70% and the DPR for cash flow at 37%.
Over the past 5 and 10 years outstanding shares have increased by2% and 3.3% per year. The increase is due to stock options, Employees Plan, DRIP and issuance of stock. Revenue is up by 9% and 5.3% per year over the past 5 and 10 years. Revenue per Share is up by 5.5% and 3.3% per year over the past 5 and 10 years.
Earnings per Share is up by 5.9% and 7.6% per year over the past 5 and 10 years. Cash Flow per Share has not changed over the past 5 years and is up by only 2.8% per year over the past 10 years. If you look at 5 year running averages over the past 5 and 10 years, cash flow is up by 2.5% and 2% per year.
Book Value per share has really not changed over the past 5 and 10 years. Part of the reason for this is that the company changed their accounting rules from CDN GAAP to US GAAP and there was a 17% drop in book value with accounting change. The company has also issued preferred shares and there is an increase in the non-controlling interest in this company.
The Return on Equity looks good with a ROE at the end of the financial year of 2012 at 10.8% and with a 5 year median of 10.7%. However, there is a big difference between the ROE on net income and the ROE on comprehensive income. The ROE on comprehensive income is at 6. 2% for the financial year of 2012 and it has a 5 year median of 7.33%. This could mean that there could be problems with the quality of the earnings reported.
As are most utilities, this company has a heavy debt load. However, the Liquidity Ratio is low at just 0.93. (This means that the current assets cannot cover the current debt.) If you add in cash flow after dividends, you get a better ratio of 1.15. The Debt Ratio is also a bit low at 1.43, but is rather typical of this company.
The Leverage and Debt/Equity Ratios at 4.54 and 3.16 are a bit high and higher than the 10 year median ratios of 3.24 and 2.23. In other words, the debt ratios are not where I would prefer to see them and they are probably at this point a bit worse than the industry average for utilities. (See my site and my blog for further information on Debt Ratios.)
Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera. See my spreadsheet at ema.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, March 4, 2013
Bombardier Inc
On my other blog I am today writing about the Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)...continue...
I own this stock of Bombardier Inc. (TSX-BBD.B, OTC-BDRAF). I bought this company in 1987. One of my problems is that I comparatively paid very little for this stock and if I sold almost all I get would be taxed as capital gain. This is one reason why I have not sold it. Another reason is that I have felt it will recover. When it will recover is a big question. You got to wonder how well it can do in the near term in light of our current economic situation.
If I look at my return since 1987, I have made a total return of 12.64% per year with 8.06% from capital gains and 4.58% from dividends. Over the past 5 years my total return is a negative 1.5% per year and over the past 10 years my return is a negative 0.7% per year. I do not think that anyone has made money on this stock recently. This is certainly true if you bought this stock as a long term investment.
This stock reports in US$. It has done better in US$ terms than in CDN$ terms. However, it has not done well in growing revenue or cash flow. They have done much better in growing earnings. Also, comparing 5 year running averages over the past 5 years, it has also done better than just comparing values 5 and 10 years ago to current values.
The Return on Equity looks ridiculously high because of the high debt load this company has. However, it would seem that it is typical for this industry. For this stock it is probably better to look at Return on Assets (ROA) and this looks a little low at 2.3% with a 5 year median better at 3.3%.
Debt Ratios are not great with both the Liquidity Ratio at 1.07 and the Debt Ratios at 1.06 being rather low. The Leverage and Debt/Equity Ratios are quite high at 26.21 and 24.81 respectively. However, they are down considerably from last year's highs.
As far as insider trading is concerned, there is not much with no insider buying and only $1M in insider selling. The Bombardier family controls this company through the use of different classes of stock. They do have a lot of money tied up in the company.
The 5 year low, median and high median Price/Earnings Ratios are 7.45, 11.34 and 14.49. The current P/E ratio is 9.22 based on a stock price of $4.05 CDN$ and earnings for 2013 of $0.44 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.68 and 2.09. The current P/GP Ratio is 1.69.
There is no sense in looking at book value as the book value dropped significantly with the changing of the account rules of IFRS so I cannot get a good comparison. The 5 year median dividend yield is 1.92% and the current dividend yield 2.47% a value some 29% higher. On these tests the stock price would appear to be reasonable.
When you look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. However, the recommendations are towards to buy side and the consensus would be a Strong Buy. The consensus 12 month stock price is $4.93 and this implies total return of 24.2%, with 2.47% from dividends and 21.73% from capital gains.
The problem I have with Bombardier is that I paid so little for this stock that the value of the stock is almost all capital gain. If I sell, I would get hit with a very big tax bill. I also expect the company to recover. However, this will take time as we are still in the secular bear market started in 2000. We are also still affected by the recession that started in 2008.
I am holding on to my stock because I believe that the company will recover. If I thought it would not recover, I would sell it. However, I am not yet tempted to buy any more.
Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. Its web site is here Bombardier. See my spreadsheet at bbd.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 Bombardier Inc. (TSX-BBD.B, OTC-BDRAF). I bought this company in 1987. One of my problems is that I comparatively paid very little for this stock and if I sold almost all I get would be taxed as capital gain. This is one reason why I have not sold it. Another reason is that I have felt it will recover. When it will recover is a big question. You got to wonder how well it can do in the near term in light of our current economic situation.
If I look at my return since 1987, I have made a total return of 12.64% per year with 8.06% from capital gains and 4.58% from dividends. Over the past 5 years my total return is a negative 1.5% per year and over the past 10 years my return is a negative 0.7% per year. I do not think that anyone has made money on this stock recently. This is certainly true if you bought this stock as a long term investment.
This stock reports in US$. It has done better in US$ terms than in CDN$ terms. However, it has not done well in growing revenue or cash flow. They have done much better in growing earnings. Also, comparing 5 year running averages over the past 5 years, it has also done better than just comparing values 5 and 10 years ago to current values.
The Return on Equity looks ridiculously high because of the high debt load this company has. However, it would seem that it is typical for this industry. For this stock it is probably better to look at Return on Assets (ROA) and this looks a little low at 2.3% with a 5 year median better at 3.3%.
Debt Ratios are not great with both the Liquidity Ratio at 1.07 and the Debt Ratios at 1.06 being rather low. The Leverage and Debt/Equity Ratios are quite high at 26.21 and 24.81 respectively. However, they are down considerably from last year's highs.
As far as insider trading is concerned, there is not much with no insider buying and only $1M in insider selling. The Bombardier family controls this company through the use of different classes of stock. They do have a lot of money tied up in the company.
The 5 year low, median and high median Price/Earnings Ratios are 7.45, 11.34 and 14.49. The current P/E ratio is 9.22 based on a stock price of $4.05 CDN$ and earnings for 2013 of $0.44 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.68 and 2.09. The current P/GP Ratio is 1.69.
There is no sense in looking at book value as the book value dropped significantly with the changing of the account rules of IFRS so I cannot get a good comparison. The 5 year median dividend yield is 1.92% and the current dividend yield 2.47% a value some 29% higher. On these tests the stock price would appear to be reasonable.
When you look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. However, the recommendations are towards to buy side and the consensus would be a Strong Buy. The consensus 12 month stock price is $4.93 and this implies total return of 24.2%, with 2.47% from dividends and 21.73% from capital gains.
The problem I have with Bombardier is that I paid so little for this stock that the value of the stock is almost all capital gain. If I sell, I would get hit with a very big tax bill. I also expect the company to recover. However, this will take time as we are still in the secular bear market started in 2000. We are also still affected by the recession that started in 2008.
I am holding on to my stock because I believe that the company will recover. If I thought it would not recover, I would sell it. However, I am not yet tempted to buy any more.
Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. Its web site is here Bombardier. See my spreadsheet at bbd.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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