Since I stopped working, I have treated Easter Monday as a holiday. I became a single mother when my child was 3. The problem with Easter Monday was that the day care and schools were closed and I always had to scramble to get someone to babysit because I had to work. In the end I always got someone, but it was never fun.
I now have the opportunity to relax and enjoy this day, so I do.
Monday, April 1, 2013
Thursday, March 28, 2013
BCE Inc 2
I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
When I look at insider trading, I find insider selling at $10.6M and it is all by the CEO. It seems that he is cashing in options. There is a bit of insider buying by directors at $1M. The net insider selling is at $9.6M. Under this company there are not just options, but other option type vehicles like Performance-based Restricted Share Units and Restricted Share Units.
The CEO has shares worth $6.9M and has options are worth $80.2M. The CFO has shares worth $0.2M and has options worth $20.7M. An officer has shares worth $0.5M and has options are worth $13.8M. A director has shares worth $0.9M and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.65, 12.47 and 13.74. I get a current P/E Ratio of 15.23 based on 2013 earnings of $3.10 and stock price of $47.21. I get a Graham Price of $30.70 and 10 year low, median and high median Price/Graham Price Ratios of 1.04, 1.21 and 1.32. The current P/GP Ratio is 1.54. Both these tests suggest that the stock price is on the high side.
I get a 10 year median Price/Book Value per Share Ratio of 2.07. The current P/B Ratio is 3.49. The current ratio is some 69% higher than the 10 year median and this suggests a rather high stock price. (The Book Value has been declining lately, however, there is still a big difference in these ratios.)
The 5 year median dividend yield 5.91% and the current dividend yield on a stock price of $47.21 is 4.94% a value that is some 7% lower. There is not a huge difference, but it still suggests that the stock price is relatively high.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The vast majority of the recommendations are a Hold recommendation and the consensus recommendation is a hold. The 12 month stock price target is $44.80. This implies no total return over the next year with 4.94% from dividends, but a capital loss of 5.10%. The capital loss would basically cancel out the dividend income. (See my site for information on analyst ratings and what they mean.)
See report on BCE at CanTech where Rob Goff of Byron Capital says why he rates BCE as a Hold. Gordon Pape likes this stock and you can read what he says at The Stock Advisors site. He thinks it is a good stock for conservative investors. According to Mideast Times CIBC reiterated their sector perform (Hold) rating recently for BCE.
I think that the stock price is a little too high relatively to make a good long term purchase of this stock. Dividend is good at 4.94%. If dividends are important to you, it is good and there is certainly a good chance it will continue to grow. However, if you hold a stock for the long term, paying too much can greatly affect your long term total earnings.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 selling at $10.6M and it is all by the CEO. It seems that he is cashing in options. There is a bit of insider buying by directors at $1M. The net insider selling is at $9.6M. Under this company there are not just options, but other option type vehicles like Performance-based Restricted Share Units and Restricted Share Units.
The CEO has shares worth $6.9M and has options are worth $80.2M. The CFO has shares worth $0.2M and has options worth $20.7M. An officer has shares worth $0.5M and has options are worth $13.8M. A director has shares worth $0.9M and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.65, 12.47 and 13.74. I get a current P/E Ratio of 15.23 based on 2013 earnings of $3.10 and stock price of $47.21. I get a Graham Price of $30.70 and 10 year low, median and high median Price/Graham Price Ratios of 1.04, 1.21 and 1.32. The current P/GP Ratio is 1.54. Both these tests suggest that the stock price is on the high side.
I get a 10 year median Price/Book Value per Share Ratio of 2.07. The current P/B Ratio is 3.49. The current ratio is some 69% higher than the 10 year median and this suggests a rather high stock price. (The Book Value has been declining lately, however, there is still a big difference in these ratios.)
The 5 year median dividend yield 5.91% and the current dividend yield on a stock price of $47.21 is 4.94% a value that is some 7% lower. There is not a huge difference, but it still suggests that the stock price is relatively high.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The vast majority of the recommendations are a Hold recommendation and the consensus recommendation is a hold. The 12 month stock price target is $44.80. This implies no total return over the next year with 4.94% from dividends, but a capital loss of 5.10%. The capital loss would basically cancel out the dividend income. (See my site for information on analyst ratings and what they mean.)
See report on BCE at CanTech where Rob Goff of Byron Capital says why he rates BCE as a Hold. Gordon Pape likes this stock and you can read what he says at The Stock Advisors site. He thinks it is a good stock for conservative investors. According to Mideast Times CIBC reiterated their sector perform (Hold) rating recently for BCE.
I think that the stock price is a little too high relatively to make a good long term purchase of this stock. Dividend is good at 4.94%. If dividends are important to you, it is good and there is certainly a good chance it will continue to grow. However, if you hold a stock for the long term, paying too much can greatly affect your long term total earnings.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 27, 2013
BCE Inc
On my other blog I am today I am writing about stock Buy Backs...continue...
I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). This is one of the first stocks I bought way back in 1982. Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). Both these stocks I sold as I did not want to keep for the long term. I also sold half my shares of BCE in 2005. I have tracked this stock in Quicken since 1987. I also bought BCE for my RRSP account in 1999.
According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
If I just look at my trading account from which I held the stock bought in 1982, but have only tracked from 1987, I have made less. In this case my total return was 9.4%, with 3.38% from capital gains and 5.57% from dividends. This is still a good return. If you look at the last 5 years, the total return on this stock is 5.43% per year with 1.46% from capital gains and 3.97% from dividends.
Current dividend yield is 4.94%. This stock has a fairly good record of dividend increases over the past 5 and 10 years with dividend growth at 8.5% and 6.2% per year over these periods. Lately they have increased the dividend twice a year, with the most recent increase at just 2.6%. The prior one was for 4.6%. Total dividend increased in 2012 by 7.3%.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 71% and the 5 year median DPR for Cash Flow at 27%. These DPRs are close to what is expected this year and next year.
Over the past 5 and 10 years the outstanding shares have decreased by 0.75% and 1.65% per year. Shares increased due to stock options and share issues and decreased due to share buy backs.
Revenue has only increased by 2.3% and 0.6% per year over the past 5 and 10 years. Revenue per share has increased by 3% and 2.2% per year over these periods.
Earnings are not much better with 5 year EPS down by 7% per year and only up by 2.5% per year over the past 10 years. If you use 5 year running averages, earnings are down by 0.8% and 1.4% per year over the past 5 and 10 years. The reason for the variation in the two views is because earnings have tended to fluctuate year to year. 5 years ago earnings were at a high that has not been obtained since.
When I look at cash flow per share, growth is flat over the past 5 years and has increased by 2.5% per year over the past 10 years. Even growth in book value per share is not great with book value decreasing by 5.5% per year over the past 5 years and increasing by only 1% per year over the past 10 years.
The Return on Equity looks very good at 20.7% for the financial year of 2012. The 5 year median is also good at 11.9%. However, ROE looks good because book value has decreased in the last couple of years. Sometimes high ROE is not a great thing and too high ROE can point to problems, not a great stock.
The ROE on comprehensive income has been very different over the last two years with the ROE on comprehensive income at 12.3% for 2012 (that is a 41% difference). The 5 year median ROE for comprehensive income is much closer to the ROE on net income at 11.8%. (What the difference between the comprehensive income and net income does is to call into question the quality of the net income.)
The Liquidity Ratio is low even for BCE at 0.58. This means that current assets cannot cover current debt. A couple of things mitigate this. First there is a current portion of Long Term Debt included in the current debt, but it has been handled. Take of this debt and Liquidity Ratio rises to 0.85. Still current assets cannot cover current debt (until ratio is 1.00). Another thing is that cash flow after dividends raises the 0.58 ratio to 1.15 and raises the 0.85 ratio to 1.68. However, this is a retail type stock and cash flows are not, by any means, assured.
If you got any decent size of a portfolio you probably should have exposure to at least one stock in this communications sector. Although I must admit at this time I am not very excited about these stocks. This stock does provide a decent dividend. Demand for telecom products is high and growing. The question is can these companies make money even though their prices are high? BCE's profits certainly have not grown much at all in the last 5 years.
This company will probably provide a good dividend and maybe some capital gains over the next while.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 BCE Inc. (TSX-BCE, NYSE-BCE). This is one of the first stocks I bought way back in 1982. Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). Both these stocks I sold as I did not want to keep for the long term. I also sold half my shares of BCE in 2005. I have tracked this stock in Quicken since 1987. I also bought BCE for my RRSP account in 1999.
According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.
If I just look at my trading account from which I held the stock bought in 1982, but have only tracked from 1987, I have made less. In this case my total return was 9.4%, with 3.38% from capital gains and 5.57% from dividends. This is still a good return. If you look at the last 5 years, the total return on this stock is 5.43% per year with 1.46% from capital gains and 3.97% from dividends.
Current dividend yield is 4.94%. This stock has a fairly good record of dividend increases over the past 5 and 10 years with dividend growth at 8.5% and 6.2% per year over these periods. Lately they have increased the dividend twice a year, with the most recent increase at just 2.6%. The prior one was for 4.6%. Total dividend increased in 2012 by 7.3%.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 71% and the 5 year median DPR for Cash Flow at 27%. These DPRs are close to what is expected this year and next year.
Over the past 5 and 10 years the outstanding shares have decreased by 0.75% and 1.65% per year. Shares increased due to stock options and share issues and decreased due to share buy backs.
Revenue has only increased by 2.3% and 0.6% per year over the past 5 and 10 years. Revenue per share has increased by 3% and 2.2% per year over these periods.
Earnings are not much better with 5 year EPS down by 7% per year and only up by 2.5% per year over the past 10 years. If you use 5 year running averages, earnings are down by 0.8% and 1.4% per year over the past 5 and 10 years. The reason for the variation in the two views is because earnings have tended to fluctuate year to year. 5 years ago earnings were at a high that has not been obtained since.
When I look at cash flow per share, growth is flat over the past 5 years and has increased by 2.5% per year over the past 10 years. Even growth in book value per share is not great with book value decreasing by 5.5% per year over the past 5 years and increasing by only 1% per year over the past 10 years.
The Return on Equity looks very good at 20.7% for the financial year of 2012. The 5 year median is also good at 11.9%. However, ROE looks good because book value has decreased in the last couple of years. Sometimes high ROE is not a great thing and too high ROE can point to problems, not a great stock.
The ROE on comprehensive income has been very different over the last two years with the ROE on comprehensive income at 12.3% for 2012 (that is a 41% difference). The 5 year median ROE for comprehensive income is much closer to the ROE on net income at 11.8%. (What the difference between the comprehensive income and net income does is to call into question the quality of the net income.)
The Liquidity Ratio is low even for BCE at 0.58. This means that current assets cannot cover current debt. A couple of things mitigate this. First there is a current portion of Long Term Debt included in the current debt, but it has been handled. Take of this debt and Liquidity Ratio rises to 0.85. Still current assets cannot cover current debt (until ratio is 1.00). Another thing is that cash flow after dividends raises the 0.58 ratio to 1.15 and raises the 0.85 ratio to 1.68. However, this is a retail type stock and cash flows are not, by any means, assured.
If you got any decent size of a portfolio you probably should have exposure to at least one stock in this communications sector. Although I must admit at this time I am not very excited about these stocks. This stock does provide a decent dividend. Demand for telecom products is high and growing. The question is can these companies make money even though their prices are high? BCE's profits certainly have not grown much at all in the last 5 years.
This company will probably provide a good dividend and maybe some capital gains over the next while.
BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at bce.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 26, 2013
AltaGas Ltd 2
I own this stock of AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The insider trading report shows some $3.1M of insider selling and a bit of insider buying with a net of insider selling of $2.9M. The selling seems to be of stock options. Insiders have options and also option like things called Rights Performance Units and Rights Restricted Units.
The CEO has shares worth $44.8M and has options are worth $43.7M. The CFO has shares worth $0.8M and has options worth $7.8M. An officer has shares worth $1.3M and has options are worth $0.9M. A director has no share and has options worth $1.4M. This is just to give you an idea on insider share ownership and option values.
I have 5 year low, median and high median Price/Earnings Ratios of 13.88, 16.25 and 18.61. Even with the drop in stock price yesterday, the current P/E Ratio is 19.09 based on 2013 earnings of 1.41 and stock price of $34.90. This shows that the stock price is on the high side.
I get a Graham Price of $23.06 and the 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.22 and 1.43. The current P/GP Ratio 1.51 based on a stock price of $34.90. This also shows a relatively high stock price.
I get a 10 year median Price/Book Value per Share stock price of 2.50 and a current P/B Ratio of 2.08 which is some 83% of the 10 year median and shows that the stock price is quite reasonable. (To be cheap, the current P/B Ratio would have to be at 80% or less of the 10 year P/B Ratio.)
The Dividend Yield is not a good test of the stock price as the dividend was cut due to the change of this company from an Income Trust to a corporation. It was felt that the dividend yield on these stocks would move to the 4 to 5% range. At a current 4.13%, it has moved to the bottom of this range and this suggests a reasonable stock price.
If you look at Cash Flow, I get on 5 year P/CF on the median price of 8.20. If you use CF for the last 12 months (that is to the end of 2012 and last financial statement), you get a P/CF of 14.48. This would suggest that the stock price is rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Buy. The 12 month consensus stock price is $37.10. This implies a 10.43% total return with 4.13% from dividends and 6.3% from capital gains.
Yesterday AltaGas Ltd announced the purchase of Blythe Energy. At the same time, the stock price dropped. See article in Market Wire. In the grand scheme of things, you would normally treat this as a buying opportunity. One problem I see is that the stock did not really drop enough to be called cheap. So, it is not much of a buying opportunity.
B.C. government's plan for new taxes on LNG exports could create problems and uncertainty for companies like AltaGas Ltd.
A lot of analysts like this company, but not all of them do. I think that the stock price is a bit too high, even with the price drop on Monday. A lot of utility companies have rather high stock prices at this point.
The Liquidity Ratio is a bit low. This happens on utilities companies and they generally make up for this with cash flow. However, this company, currently is paying too much of the cash flow in dividends. This will correct over time and is a problem for a number of companies that switched from income trusts to corporations. The ROE for the last couple of years is not good at this point and this will probably adjust itself over the next couple of years also.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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.
The insider trading report shows some $3.1M of insider selling and a bit of insider buying with a net of insider selling of $2.9M. The selling seems to be of stock options. Insiders have options and also option like things called Rights Performance Units and Rights Restricted Units.
The CEO has shares worth $44.8M and has options are worth $43.7M. The CFO has shares worth $0.8M and has options worth $7.8M. An officer has shares worth $1.3M and has options are worth $0.9M. A director has no share and has options worth $1.4M. This is just to give you an idea on insider share ownership and option values.
I have 5 year low, median and high median Price/Earnings Ratios of 13.88, 16.25 and 18.61. Even with the drop in stock price yesterday, the current P/E Ratio is 19.09 based on 2013 earnings of 1.41 and stock price of $34.90. This shows that the stock price is on the high side.
I get a Graham Price of $23.06 and the 10 year low, median and high median Price/Graham Price Ratios are 0.98, 1.22 and 1.43. The current P/GP Ratio 1.51 based on a stock price of $34.90. This also shows a relatively high stock price.
I get a 10 year median Price/Book Value per Share stock price of 2.50 and a current P/B Ratio of 2.08 which is some 83% of the 10 year median and shows that the stock price is quite reasonable. (To be cheap, the current P/B Ratio would have to be at 80% or less of the 10 year P/B Ratio.)
The Dividend Yield is not a good test of the stock price as the dividend was cut due to the change of this company from an Income Trust to a corporation. It was felt that the dividend yield on these stocks would move to the 4 to 5% range. At a current 4.13%, it has moved to the bottom of this range and this suggests a reasonable stock price.
If you look at Cash Flow, I get on 5 year P/CF on the median price of 8.20. If you use CF for the last 12 months (that is to the end of 2012 and last financial statement), you get a P/CF of 14.48. This would suggest that the stock price is rather high.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Buy. The 12 month consensus stock price is $37.10. This implies a 10.43% total return with 4.13% from dividends and 6.3% from capital gains.
Yesterday AltaGas Ltd announced the purchase of Blythe Energy. At the same time, the stock price dropped. See article in Market Wire. In the grand scheme of things, you would normally treat this as a buying opportunity. One problem I see is that the stock did not really drop enough to be called cheap. So, it is not much of a buying opportunity.
B.C. government's plan for new taxes on LNG exports could create problems and uncertainty for companies like AltaGas Ltd.
A lot of analysts like this company, but not all of them do. I think that the stock price is a bit too high, even with the price drop on Monday. A lot of utility companies have rather high stock prices at this point.
The Liquidity Ratio is a bit low. This happens on utilities companies and they generally make up for this with cash flow. However, this company, currently is paying too much of the cash flow in dividends. This will correct over time and is a problem for a number of companies that switched from income trusts to corporations. The ROE for the last couple of years is not good at this point and this will probably adjust itself over the next couple of years also.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 25, 2013
AltaGas Ltd
On my other blog I am today I am writing about Kiva...continue...
I own this stock of AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. It was on the dividend lists that I was following and I was looking for something to buy. A lot has happened since then. The company was an income trust when I bought it and in 2010 it converted from an income trust to a corporation and cut its dividend 39%.
I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The 5 and 10 year total return on this stock is at 11.13% and 24.07% per year. Over these periods, 4.89% and 13.56% was made in capital gains and 6.24% and 10.51% from dividends (or distributions).
The 5 year median dividend yield is 8.64%. Generally speaking income trusts had much higher yields than other stocks. It was felt that the good ones would have their stock prices up and the dividends down so that the end results would be a yield around 4 to 5%. This is what has happened in this stock. The current yield is 4.1%.
It was removed from the dividends lists because of this cut in dividends. However, this stock again started to raise the dividend in 2011 (by 4.5%). The company again raised the dividend in 2012 and this increase was a 4.3% increase. Over the past 10 years, the growth in dividends is at 17% per year. (The decrease over the past 5 years is 7.8%.)
The Dividend Payout Ratios for earnings is a bit high, with a 5 year median of 131%. However, this used to be an income trust company and they do make a profit. It is expected that the DPR for earnings will move below the earnings by 2014. The 5 year median DPR for cash flow is 71%. The DPR for cash flow for 2012 was 58%.
The outstanding shares have increased by 12.6% and 8.8% per year over the past 5 and 10 years. Shares have increased due to Stock Options, Shares Issues and DRIP. They have made acquisitions.
Last year was not a great year for revenue as it was down by 7% and analysts expect another year of lower revenue in 2013, but they expect a nice increase in 2014. The Revenue is up by 0.3% and 11.6% per year over the past 5 and 10 years. Revenue per Share is down over the past 5 years by 11% and up over the past 10 years by 2.5%.
Earnings per Share is down by 14% per year over the past 5 years and up by 7.2% over the past 10 years. If you look at 5 year running averages, earnings are only down by 1% per year over the past 5 years and up by 12% per year over the past 10 years.
Cash Flow per Share is down by 3% per year over the past 5 years and up by 4.6% per year over the past 10 years. The Book Value per Share is up by 11% and 12% per year over the past 5 and 10 years. This company has changed their accounting rules to US GAAP and this has affected the Book Value.
The Return on Equity is low for 2012 at just 6.8%. The 5 year median value is better at 10%. The ROE on comprehensive income is close, but lower at 6.6%.
The Liquidity Ratio has always been rather low and it still is at 1.05 for 2012. The Debt Ratio is better at 1.51. Leverage and Debt/Equity Ratios are rather normal for a utility at 3.35 and 2.22.
I have been pleased with my investment in the company. I do not expect my high return going into the future. The dividend yield is lower and on utilities you can expect that capital gain, on a long term basis to be similar to dividend increases. That would translate into dividends around 4% and capital gain around 4%.
However, as this stock is of a median risk and is into LNG exports, the capital gain would probably be higher than 4%. I know some analysts expect the capital gains would be more than twice the 4% I have suggested for utilities. They are probably right. In any event, I will not earn the 30% per year return I have been earning going into the future.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 AltaGas Ltd (TSX-ALA, OTC- ATGFF). I originally bought this stock in 2009. It was on the dividend lists that I was following and I was looking for something to buy. A lot has happened since then. The company was an income trust when I bought it and in 2010 it converted from an income trust to a corporation and cut its dividend 39%.
I bought more stock in 2009 and then in 2010 and also 2012. I have made a total return of 31.62% per year on this stock with 23.93% from capital gains and 7.69% from dividends. I like this stock and have some 3.8% of my portfolio in it.
The 5 and 10 year total return on this stock is at 11.13% and 24.07% per year. Over these periods, 4.89% and 13.56% was made in capital gains and 6.24% and 10.51% from dividends (or distributions).
The 5 year median dividend yield is 8.64%. Generally speaking income trusts had much higher yields than other stocks. It was felt that the good ones would have their stock prices up and the dividends down so that the end results would be a yield around 4 to 5%. This is what has happened in this stock. The current yield is 4.1%.
It was removed from the dividends lists because of this cut in dividends. However, this stock again started to raise the dividend in 2011 (by 4.5%). The company again raised the dividend in 2012 and this increase was a 4.3% increase. Over the past 10 years, the growth in dividends is at 17% per year. (The decrease over the past 5 years is 7.8%.)
The Dividend Payout Ratios for earnings is a bit high, with a 5 year median of 131%. However, this used to be an income trust company and they do make a profit. It is expected that the DPR for earnings will move below the earnings by 2014. The 5 year median DPR for cash flow is 71%. The DPR for cash flow for 2012 was 58%.
The outstanding shares have increased by 12.6% and 8.8% per year over the past 5 and 10 years. Shares have increased due to Stock Options, Shares Issues and DRIP. They have made acquisitions.
Last year was not a great year for revenue as it was down by 7% and analysts expect another year of lower revenue in 2013, but they expect a nice increase in 2014. The Revenue is up by 0.3% and 11.6% per year over the past 5 and 10 years. Revenue per Share is down over the past 5 years by 11% and up over the past 10 years by 2.5%.
Earnings per Share is down by 14% per year over the past 5 years and up by 7.2% over the past 10 years. If you look at 5 year running averages, earnings are only down by 1% per year over the past 5 years and up by 12% per year over the past 10 years.
Cash Flow per Share is down by 3% per year over the past 5 years and up by 4.6% per year over the past 10 years. The Book Value per Share is up by 11% and 12% per year over the past 5 and 10 years. This company has changed their accounting rules to US GAAP and this has affected the Book Value.
The Return on Equity is low for 2012 at just 6.8%. The 5 year median value is better at 10%. The ROE on comprehensive income is close, but lower at 6.6%.
The Liquidity Ratio has always been rather low and it still is at 1.05 for 2012. The Debt Ratio is better at 1.51. Leverage and Debt/Equity Ratios are rather normal for a utility at 3.35 and 2.22.
I have been pleased with my investment in the company. I do not expect my high return going into the future. The dividend yield is lower and on utilities you can expect that capital gain, on a long term basis to be similar to dividend increases. That would translate into dividends around 4% and capital gain around 4%.
However, as this stock is of a median risk and is into LNG exports, the capital gain would probably be higher than 4%. I know some analysts expect the capital gains would be more than twice the 4% I have suggested for utilities. They are probably right. In any event, I will not earn the 30% per year return I have been earning going into the future.
AltaGas operates physical assets and provides essential services to customers who produce and consume natural gas and power. Their gas business provides gathering, processing, transportation, storage and marketing of natural gas and natural gas liquids. Their power business generates and delivers power in Alberta and British Columbia and is developing a significant portfolio of renewable power projects. Its web site is here AltaGas. See my spreadsheet at ala.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 22, 2013
Atlantic Power Corp
I do not own this stock of Atlantic Power Corp (TSX-ATP, NYSE-AT). Can it be any surprise that this company has cut dividends? Since set up in 2004, they made a profit only in one year, 2008. Every other year there was a loss.
Dividends were dropped 65%. However, I do not think that paying dividends is very wise when there are no earnings. Yes, the Dividend Payout Ratio for cash flow was not that bad with the current one for 2012 at 82%. However, the 5 year median DPR for CF is 90% and for 2011 the DPR for cash flow was 179%. Anyone still feel this company should pay dividends.
I know that people like also look at AFFO and FFO. The DPRs for 2012 for FFO was 100% and for AFFO was 99.6%. The DPR for 2013 for AFFO is expected to be 101% and for 2014 is expected to be 83.5%.
I do not think I can talk about total returns. I usually talk about this to the end of the prior year and in this case it would be 2012. There was not much in capital gain, which was running at just over 1% per year. However, there were good dividends in the 8% to 10% yield range. However, just after the decrease in dividends was announced, the shares fell over 50%.
The company has increased outstanding shares by 14% and 16% per year over the past 5 and 10 years. The increase in shares is due to Stock Options, DRIP and Issuance of new shares.
Growth in revenue was good, with growth at 8.3% and 46% per year over the past 5 and 10 years. However, because of the increase in outstanding shares, Revenue per Share was not so great. The Revenue per Share was done 5% per year over the past 5 years. Revenue per Share was up by 26% per year over the past 10 years.
There has also been some growth in Cash Flow per Share, with CFPS up 2% per year over the past 5 years and up 30% per year over the past 10 years.
When I look at the insider trading report, I find a bit of insider buying of $114,000. The buying was at prices just over $5 per share. There was no insider selling. In any event insiders do not own much. The CEO has $1.5M of shares, and one officer has $0.3M. There is not much in options or options like vehicles. There are some Deferred Share Units and some Notional Shares, but there is not much here either.
When I look at analysts' recommendations, I find Hold and Underperform recommendations. The consensus would be a Hold. I must say I am surprise there is no sell recommendations. The 12 month consensus stock price is $6.89. This implies a total return of 33.52% with 7.33% from dividends and 26.19% from capital gain. But, is this really believable? Analysts expect no profits over the next two years, but they do expect losses to be lower. Also, it is expected that AFFO will drop 44% in 2013 and another 25% in 2014.
People generally buy utilities because they are generally low risk companies. The tradeoff is low risk and a decent return. This is a high risk company. I do not see any possibility of a large return to justify the risk. They cannot earn a profit. Personally I would avoid it totally.
I bought TransCanada Corp in 2000 when they cut their dividend. However, the management had proven that they could make money for their shareholders. They also had a good plan to reorganize the company for the future. So far the only thing that Atlantic Power has shown is that they cannot make a profit.
To get other's point of view, look at Motley Fool. However, they do not have a positive view either and feel that the company is cheap for very good reasons. There is also a comment on this stock by BMO at Benzinga. It is not very positive either. The dividend girl decided to sell her shares in this company.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power. See my spreadsheet at atp.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.
Dividends were dropped 65%. However, I do not think that paying dividends is very wise when there are no earnings. Yes, the Dividend Payout Ratio for cash flow was not that bad with the current one for 2012 at 82%. However, the 5 year median DPR for CF is 90% and for 2011 the DPR for cash flow was 179%. Anyone still feel this company should pay dividends.
I know that people like also look at AFFO and FFO. The DPRs for 2012 for FFO was 100% and for AFFO was 99.6%. The DPR for 2013 for AFFO is expected to be 101% and for 2014 is expected to be 83.5%.
I do not think I can talk about total returns. I usually talk about this to the end of the prior year and in this case it would be 2012. There was not much in capital gain, which was running at just over 1% per year. However, there were good dividends in the 8% to 10% yield range. However, just after the decrease in dividends was announced, the shares fell over 50%.
The company has increased outstanding shares by 14% and 16% per year over the past 5 and 10 years. The increase in shares is due to Stock Options, DRIP and Issuance of new shares.
Growth in revenue was good, with growth at 8.3% and 46% per year over the past 5 and 10 years. However, because of the increase in outstanding shares, Revenue per Share was not so great. The Revenue per Share was done 5% per year over the past 5 years. Revenue per Share was up by 26% per year over the past 10 years.
There has also been some growth in Cash Flow per Share, with CFPS up 2% per year over the past 5 years and up 30% per year over the past 10 years.
When I look at the insider trading report, I find a bit of insider buying of $114,000. The buying was at prices just over $5 per share. There was no insider selling. In any event insiders do not own much. The CEO has $1.5M of shares, and one officer has $0.3M. There is not much in options or options like vehicles. There are some Deferred Share Units and some Notional Shares, but there is not much here either.
When I look at analysts' recommendations, I find Hold and Underperform recommendations. The consensus would be a Hold. I must say I am surprise there is no sell recommendations. The 12 month consensus stock price is $6.89. This implies a total return of 33.52% with 7.33% from dividends and 26.19% from capital gain. But, is this really believable? Analysts expect no profits over the next two years, but they do expect losses to be lower. Also, it is expected that AFFO will drop 44% in 2013 and another 25% in 2014.
People generally buy utilities because they are generally low risk companies. The tradeoff is low risk and a decent return. This is a high risk company. I do not see any possibility of a large return to justify the risk. They cannot earn a profit. Personally I would avoid it totally.
I bought TransCanada Corp in 2000 when they cut their dividend. However, the management had proven that they could make money for their shareholders. They also had a good plan to reorganize the company for the future. So far the only thing that Atlantic Power has shown is that they cannot make a profit.
To get other's point of view, look at Motley Fool. However, they do not have a positive view either and feel that the company is cheap for very good reasons. There is also a comment on this stock by BMO at Benzinga. It is not very positive either. The dividend girl decided to sell her shares in this company.
Atlantic Power Corporation is an independent power producer that owns interests in a diversified fleet of power generation and transmission projects located in the United States. This company has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. ATP owns interests in a diversified portfolio of independent, non-utility power generation projects and one transmission line situated in major U.S. markets. Its web site is here Atlantic Power. See my spreadsheet at atp.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 21, 2013
Veresen Inc 2
I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends.
When I look at the insider trading report, I see a bit of insider buying ($0.7M) and no insider selling. There seems to be low insider ownership and little in the way of options. They have an option like vehicle called Deferred Share Units, but few insiders seem to have any or much of these types of options. The CEO is new and seems to have received some $30,000 in options for 2012.
The 5 year low, median and high median Price/Earnings Ratios are 23.79, 29.84 and 35.89. The current P/E Ratio is 42.06 based on 2013 earnings of $0.31 and current stock price of $13.04. First, all these P/E Ratios are very high for a utility. Even at that the current P/E is higher than the 5 year high median value.
I get a current Graham Price of $6.41. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.35 and 1.58. The current P/GP Ratio is 2.03. The current ratio is high compared to historical ratio. Also, for utility companies you would expect the P/GP Ratio to be around 1.00 in any event.
The 10 year Price/Book Value per Share Ratio is 1.91 and the current P/B Ratio is 15% higher at 2.21. This would point to a rather relatively reasonable stock price. The main problem with the book value is that it is going south. Until they earn more than they pay in dividends, this will continue.
The dividend yield is 7.67% and the 5 year median dividend yield is 8.92% a value some 14% higher. This higher dividend yield points to a stock price relatively reasonable to a bit high.
Looking at the Price/AFFO Ratios, I get a 5 year high median of 10.6 and the current P/AFFO Ratio is 11.96. I get a 5 year median Price/Cash Flow per Share Ratio on closing stock price of 7.74 and a current P/CF Ratio of 12.36. There is no measurement that I see where it does not show the stock price as relatively high.
When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendation and the consensus recommendation is a Buy. (This is the most common configuration you can get with analysts' recommendations.) The 12 month stock price consensus is $13.50. This implies a total return of 11.2%, with 7.67% from dividends and 3.53% from capital gains.
One analyst says that this is a buy because the stock can provide attractive income for its shareholders. Some analysts have wondered about the sustainability of the dividend and also whether it will be able in the future to raise the dividend. There are some recent comments on this stock at Stock Chase.
I think that there is not much room for a stock price increases given the lack of any future potential dividend increase. Because a yield of 7.7% is quite good as a return on this stock I will continue to hold what I have. However, I am keeping an eye on this stock. (There is no other utility I want to replace this with and all the good ones seem to have relatively high stock prices.) In the meantime, I do not think much is going to happen with this stock.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 see a bit of insider buying ($0.7M) and no insider selling. There seems to be low insider ownership and little in the way of options. They have an option like vehicle called Deferred Share Units, but few insiders seem to have any or much of these types of options. The CEO is new and seems to have received some $30,000 in options for 2012.
The 5 year low, median and high median Price/Earnings Ratios are 23.79, 29.84 and 35.89. The current P/E Ratio is 42.06 based on 2013 earnings of $0.31 and current stock price of $13.04. First, all these P/E Ratios are very high for a utility. Even at that the current P/E is higher than the 5 year high median value.
I get a current Graham Price of $6.41. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.35 and 1.58. The current P/GP Ratio is 2.03. The current ratio is high compared to historical ratio. Also, for utility companies you would expect the P/GP Ratio to be around 1.00 in any event.
The 10 year Price/Book Value per Share Ratio is 1.91 and the current P/B Ratio is 15% higher at 2.21. This would point to a rather relatively reasonable stock price. The main problem with the book value is that it is going south. Until they earn more than they pay in dividends, this will continue.
The dividend yield is 7.67% and the 5 year median dividend yield is 8.92% a value some 14% higher. This higher dividend yield points to a stock price relatively reasonable to a bit high.
Looking at the Price/AFFO Ratios, I get a 5 year high median of 10.6 and the current P/AFFO Ratio is 11.96. I get a 5 year median Price/Cash Flow per Share Ratio on closing stock price of 7.74 and a current P/CF Ratio of 12.36. There is no measurement that I see where it does not show the stock price as relatively high.
When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendation and the consensus recommendation is a Buy. (This is the most common configuration you can get with analysts' recommendations.) The 12 month stock price consensus is $13.50. This implies a total return of 11.2%, with 7.67% from dividends and 3.53% from capital gains.
One analyst says that this is a buy because the stock can provide attractive income for its shareholders. Some analysts have wondered about the sustainability of the dividend and also whether it will be able in the future to raise the dividend. There are some recent comments on this stock at Stock Chase.
I think that there is not much room for a stock price increases given the lack of any future potential dividend increase. Because a yield of 7.7% is quite good as a return on this stock I will continue to hold what I have. However, I am keeping an eye on this stock. (There is no other utility I want to replace this with and all the good ones seem to have relatively high stock prices.) In the meantime, I do not think much is going to happen with this stock.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 20, 2013
Veresen Inc
On my other blog I am today I am writing about Stock Price Ratios...continue...
I own this stock of Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in December 2008 and March 2009. When I bought it, it was still a limited partnership under Fort Chicago Energy (TSX-FCE.UN). When I bought this stock it had a good record of distribution increases. However, since they decided to change to a corporation, there has been no dividend (or distribution) increases. We are in the 5th year of no increase and I do not see any in the immediate future either.
There are 10 analysts covering this stock and they all see no increases for the dividends. They also see no decrease either. Certainly, analysts covering this stock feel that the current dividend level is sustainable because of cash flows. See forecasts at Financial Times.
The problem this company has is that it is not making enough in earnings to cover the dividends. The 5 year median Dividend Payout Ratio for Earnings is 303%. However, if you look at DPR for CF, the 5 year median is much better at 63%. The DPR for Adjusted Funds from Operations (AAFO) is also fine with the 5 year median at 85%.
I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends. If you look at the past 5 and 10 years, the total return for this stock is 10.70% and 13.39% per year, respectively. The return from capital gains is 1.76% and 3.67% per year, respectively. The return from dividend is 8.94% and 9.72% per year, respectively.
At some point they are going to have to get the earnings above the dividends. Personally, I think that they should bit the bullet and cut dividends in half. I cannot see total return much above the dividend distributions until they are in a position to increase dividends. However, since the dividend has yield of 7.67%, the stock has a pretty good return.
The outstanding shares have increased by 8.5% and 10.3% per year over the past 5 and 10 years. Shares have increased due to Stock Issues, DRIP and Conversion of Debentures (to shares).
They changed their accounting rules from CDN GAAP to US GAAP. This accounting change and greatly affected the Revenue and I can get no fix on growth in Revenue. Analysts do expect Revenue to increase in 2013 and 2014.
The calculation of earnings does not seem to be affected by the accounting change. No matter how you look at it, 2012 was not a good year for this company. Earnings per Share is down 40% for 2012. (The company also took a 40% EPS cut in 2011.) Analysts expect EPS share to rise this year and next. The only positive thing to say is that the company has earnings.
The Cash Flow per Share is also down for 2012 by some 34%. CFPS has decreased over the past 5 years by 9.4% per year, but has increased over the past 10 years by 7.3 per year.
Before 2011, the Return on Equity was ok. Last year and this year it has been quite low, with ROE coming in at 6.5% and 4% respectively. The ROE on comprehensive income is lower at 3.5%, but there is usually a difference between net income and comprehensive income.
One warning message is from the Accrual Ratio. I get one of 30.14% for 2012. This is quite high and would suggest that stock price should go down this year. However, so far this year, the stock price is up 10%. We are currently in a bit of a bull market.
Generally, the Liquidity Ratio has been quite low, but the company had good cash flow. For the year ended in 2012, the Liquidity Ratio was a very good 1.66. The Debt Ratio has been low in the past, but for 2012 it was also quite good at 1.67. The Leverage and Debt/Equity Ratios have also improved and for 2012 stand at 2.70 and 1.53. These are good ratios for a utility.
I still think that for longer term they should cut their dividend. However, a number of analysts imply they are recommending this stock because they expect the current dividend to continue. The company has the cash flow to pay the dividend. The problem with paying a dividend that cannot be covered by the earnings is that book value will decrease.
I will not be buying more stock, but for now I will be holding on to what I have. I do not have much, less than .5% of my portfolio in this stock. I still do not like the fact that the earnings do not cover the dividends. Maybe I am old fashion, but sometimes you earn money by being old fashion.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 Veresen Inc. (TSX-VSN, OTC- FCGYF). I bought this stock in December 2008 and March 2009. When I bought it, it was still a limited partnership under Fort Chicago Energy (TSX-FCE.UN). When I bought this stock it had a good record of distribution increases. However, since they decided to change to a corporation, there has been no dividend (or distribution) increases. We are in the 5th year of no increase and I do not see any in the immediate future either.
There are 10 analysts covering this stock and they all see no increases for the dividends. They also see no decrease either. Certainly, analysts covering this stock feel that the current dividend level is sustainable because of cash flows. See forecasts at Financial Times.
The problem this company has is that it is not making enough in earnings to cover the dividends. The 5 year median Dividend Payout Ratio for Earnings is 303%. However, if you look at DPR for CF, the 5 year median is much better at 63%. The DPR for Adjusted Funds from Operations (AAFO) is also fine with the 5 year median at 85%.
I have done well on this stock as I got it at a good price. I have a total return 28.97% per year on this stock with 16.02% per year from capital gain and 12.95% per year from dividends. If you look at the past 5 and 10 years, the total return for this stock is 10.70% and 13.39% per year, respectively. The return from capital gains is 1.76% and 3.67% per year, respectively. The return from dividend is 8.94% and 9.72% per year, respectively.
At some point they are going to have to get the earnings above the dividends. Personally, I think that they should bit the bullet and cut dividends in half. I cannot see total return much above the dividend distributions until they are in a position to increase dividends. However, since the dividend has yield of 7.67%, the stock has a pretty good return.
The outstanding shares have increased by 8.5% and 10.3% per year over the past 5 and 10 years. Shares have increased due to Stock Issues, DRIP and Conversion of Debentures (to shares).
They changed their accounting rules from CDN GAAP to US GAAP. This accounting change and greatly affected the Revenue and I can get no fix on growth in Revenue. Analysts do expect Revenue to increase in 2013 and 2014.
The calculation of earnings does not seem to be affected by the accounting change. No matter how you look at it, 2012 was not a good year for this company. Earnings per Share is down 40% for 2012. (The company also took a 40% EPS cut in 2011.) Analysts expect EPS share to rise this year and next. The only positive thing to say is that the company has earnings.
The Cash Flow per Share is also down for 2012 by some 34%. CFPS has decreased over the past 5 years by 9.4% per year, but has increased over the past 10 years by 7.3 per year.
Before 2011, the Return on Equity was ok. Last year and this year it has been quite low, with ROE coming in at 6.5% and 4% respectively. The ROE on comprehensive income is lower at 3.5%, but there is usually a difference between net income and comprehensive income.
One warning message is from the Accrual Ratio. I get one of 30.14% for 2012. This is quite high and would suggest that stock price should go down this year. However, so far this year, the stock price is up 10%. We are currently in a bit of a bull market.
Generally, the Liquidity Ratio has been quite low, but the company had good cash flow. For the year ended in 2012, the Liquidity Ratio was a very good 1.66. The Debt Ratio has been low in the past, but for 2012 it was also quite good at 1.67. The Leverage and Debt/Equity Ratios have also improved and for 2012 stand at 2.70 and 1.53. These are good ratios for a utility.
I still think that for longer term they should cut their dividend. However, a number of analysts imply they are recommending this stock because they expect the current dividend to continue. The company has the cash flow to pay the dividend. The problem with paying a dividend that cannot be covered by the earnings is that book value will decrease.
I will not be buying more stock, but for now I will be holding on to what I have. I do not have much, less than .5% of my portfolio in this stock. I still do not like the fact that the earnings do not cover the dividends. Maybe I am old fashion, but sometimes you earn money by being old fashion.
Veresen is a leading diversified energy infrastructure company that owns and operates energy infrastructure assets across North America. We are engaged in three principal business lines of Pipelines, Midstream and Power (gas-fired and renewable facilities). Its web site is here Veresen. See my spreadsheet at vsn.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 19, 2013
TransAlta Corp 2
I own this stock of TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%. (What I would like from utility investments is 4% in dividends and 4% in capital gains each year.)
The report on insider trading is interesting. There is a small amount of insider buying ($0.5M) and no insider selling. Not only does this company have options, but it has option like vehicles called Performance Share Ownership Plan (PSOP) and Restricted Share Units (RSU). Both insider ownership and options are rather modest.
The CEO has shares worth $1.3M and has options are worth $6.4M. The CFO has shares worth $0.6M and has options worth $1.8M. Officers seem to have modest holdings and modest options. A director has some share and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values.
I get 5 year low, median and high median Price/Earnings Ratios of 17.80, 21.80 and 23.98. The current P/E Ratio is 18.32 based on 2013 earnings estimates of $0.82 and a stock price of $15.02. This implies a relatively good stock price. However, I personally find these P/E Ratios a bit high, especially for low growth utility stock.
I get a Graham Price of $12.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.31 and 1.55. The current P/GP Ratio is 1.18. This again shows a relatively good stock price.
I get a 10 year Price/Book Value per Share of 1.74. The current P/B Ratio is very close at 1.72 and this shows a relatively average stock price.
The place that shows a really good stock price is looking at the Dividend Yield. The 5 year median Dividend Yield is 5.35% and the current Dividend Yield is 7.86%. The current yield is some 47% higher than the 5 year median Dividend Yield. This is signaling that the stock is cheap. This test also might be the best test for this stock.
The analysts' recommendations have a rather curious formation. I find Strong Buy, Hold and Underperform recommendations. (There are no Buy recommendations.) The consensus recommendation is a Hold. The 12 month stock consensus is $15.70. This implies a total return of 12.38%, with 7.86% from dividends and 4.53% from capital gains.
On the positive side, no one expects this company to go belly up, nor does anyone expect them to cut their dividends. The dividends do give support to the stock price. It has been suggested that the company hit bottom in the second quarter of 2012 and it will improve from there. However, analysts are being very cautiously optimistic with most saying giving a recommendation of Hold or Underperform.
A number of analysts are worried about the effects of issues with Centralia power Plant in Washington State. It seems like there is some resolution to this. See article in Calgary Herald. It would seem that analysts probably like other utility companies better because this company has mostly older coal fired plants.
TransAlta is trying to diversity away from coal fired electrical plants and is building Wind Mill farms. See article in Wind Powering Engineering site.
The Ontario Government has been determined to build wind mills farms and TransAlta has one on Wolfe Island in Ontario. There is a positive article on wind farms by David Suzuki and it is the first positive article I have seen on wind farms. You can read the article here. Of course, the report could be very much coloured by the fact that Suzuki is very much in favour of wind mills politically. There is an article by CBC that is more negative.
However, you have to wonder if wind mills producing electricity is the future. In Ontario we have problems with this electricity. The wind blows when it blows and not when we need electricity. Because of this we have sold wind mill electricity at a negative price. (Yes, we paid people to take the electricity off our hands.) This is not sustainable. However, the Ontario government has recently been talking about using batteries to store excess wind mill electricity until it is needed. I cannot find the articles I read in the past, but this Toronto Star article talks a bit about the problems Ontario has with electricity produced by wind mills.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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.
The report on insider trading is interesting. There is a small amount of insider buying ($0.5M) and no insider selling. Not only does this company have options, but it has option like vehicles called Performance Share Ownership Plan (PSOP) and Restricted Share Units (RSU). Both insider ownership and options are rather modest.
The CEO has shares worth $1.3M and has options are worth $6.4M. The CFO has shares worth $0.6M and has options worth $1.8M. Officers seem to have modest holdings and modest options. A director has some share and has options worth $0.5M. This is just to give you an idea on insider share ownership and option values.
I get 5 year low, median and high median Price/Earnings Ratios of 17.80, 21.80 and 23.98. The current P/E Ratio is 18.32 based on 2013 earnings estimates of $0.82 and a stock price of $15.02. This implies a relatively good stock price. However, I personally find these P/E Ratios a bit high, especially for low growth utility stock.
I get a Graham Price of $12.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.31 and 1.55. The current P/GP Ratio is 1.18. This again shows a relatively good stock price.
I get a 10 year Price/Book Value per Share of 1.74. The current P/B Ratio is very close at 1.72 and this shows a relatively average stock price.
The place that shows a really good stock price is looking at the Dividend Yield. The 5 year median Dividend Yield is 5.35% and the current Dividend Yield is 7.86%. The current yield is some 47% higher than the 5 year median Dividend Yield. This is signaling that the stock is cheap. This test also might be the best test for this stock.
The analysts' recommendations have a rather curious formation. I find Strong Buy, Hold and Underperform recommendations. (There are no Buy recommendations.) The consensus recommendation is a Hold. The 12 month stock consensus is $15.70. This implies a total return of 12.38%, with 7.86% from dividends and 4.53% from capital gains.
On the positive side, no one expects this company to go belly up, nor does anyone expect them to cut their dividends. The dividends do give support to the stock price. It has been suggested that the company hit bottom in the second quarter of 2012 and it will improve from there. However, analysts are being very cautiously optimistic with most saying giving a recommendation of Hold or Underperform.
A number of analysts are worried about the effects of issues with Centralia power Plant in Washington State. It seems like there is some resolution to this. See article in Calgary Herald. It would seem that analysts probably like other utility companies better because this company has mostly older coal fired plants.
TransAlta is trying to diversity away from coal fired electrical plants and is building Wind Mill farms. See article in Wind Powering Engineering site.
The Ontario Government has been determined to build wind mills farms and TransAlta has one on Wolfe Island in Ontario. There is a positive article on wind farms by David Suzuki and it is the first positive article I have seen on wind farms. You can read the article here. Of course, the report could be very much coloured by the fact that Suzuki is very much in favour of wind mills politically. There is an article by CBC that is more negative.
However, you have to wonder if wind mills producing electricity is the future. In Ontario we have problems with this electricity. The wind blows when it blows and not when we need electricity. Because of this we have sold wind mill electricity at a negative price. (Yes, we paid people to take the electricity off our hands.) This is not sustainable. However, the Ontario government has recently been talking about using batteries to store excess wind mill electricity until it is needed. I cannot find the articles I read in the past, but this Toronto Star article talks a bit about the problems Ontario has with electricity produced by wind mills.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 18, 2013
TransAlta Corp
On my other blog I am today I am writing a few thoughts on capitalism and socialism...continue...
I own this stock of TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%.
This stock has a current dividend yield of 7.86% and has a 5 year median dividend yield of 5.35%. This stock has never been dividend growth stock as they have been inconsistent in raising their dividends. However, they have increased the dividends over the years. The 5 and 10 year growth in dividends is at 3.28% per year and 1.63% per year, respectively. The most recent increase was in 2012 and the increase was only for 1.72%.
Lately the company has been paying out more in dividends than it has earned. The 2012 financial year was not good for this company. It suffered a loss in the second quarter that dominated the year and it ended the year with an EPS loss. See an article in the Financial Post.
It is expected that the Dividend Payout Ratio for earnings for this year and 2014 will be around 150%. This is certainly a negative for this stock. However, it is in better shape when looking at the DPR for cash flow, where the 5 year median DPR is 32%. The DPR for CF was higher in 2012 at 52%, but it is expected to go to 36% and 34% for 2013 and 2014. Dividends are not expected to change over the next two years.
Shareholders have not made much on this stock over the past 5 and 10 years. Over the past 5 years there was total return loss of 9.86% per year with a capital loss of 14.63% per year and dividends at 4.77% per year. Over the past 10 years shareholders would have made a total return of 5.3% per year, with a capital loss of 1.23% per year and dividends at 6.53% per year.
Outstanding shares have increased over the past 5 and 10 years at4.9% and 4.1% per year, respectively. Shares have increased due DRIP, Stock Options and Share Issues. In the past there has also been some share buy backs.
The company has not done much to increase its revenue over the past 5 and 10 years. Revenue is down 4% per year over the past 5 year and is up by only 2.23% per year over the past 10 years. Revenue per Share is down by 8.45% per year and 1.84% per year over the past 5 and 10 years, respectively. Revenue is expected to increase modestly over the next couple of years.
Cash Flow per Share is also down with CFPS down 10.4% and 2.9% per year over the past 5 and 10 years, respectively. Book Value per share is also down with BVPS down 5.2% and 3.4% per year over the past 5 and 10 years. None of this is good. However, CFPS is expected to rise this year and next.
Generally speaking the Return on Equity tends to be fine. Since 2012 had an earnings loss there is no ROE for this stock for 2012.
The Liquidity Ratio tends to be rather low, but this company has a good cash flow. The Debt Ratio is fine at 1.55. The Leverage and Debt/Equity Ratios are a bit high at 4.24 and 2.74, but utility companies tend to have rather high Leverage and Debt/Equity Ratios.
A number of analysts feel that this stock has now bottomed out and hopefully this is true. It has been a rough year for this company. Last year was no better. See my reports from last year, report 1 or report 2.
Hopefully 2013 will be a better year for this company. However, so far the stock is still tracking south.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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 TransAlta Corp (TSX-TA, NYSE-TAC). I first bought this stock in 1987 and I bought more in 2009. I sold small amounts of this stock in 2000 and in 2012. It has not been a top performer, but it has done ok over the years. My Total Return on this stock is 7.02% per year with 7.81% from dividends and with a capital loss of 0.79%.
This stock has a current dividend yield of 7.86% and has a 5 year median dividend yield of 5.35%. This stock has never been dividend growth stock as they have been inconsistent in raising their dividends. However, they have increased the dividends over the years. The 5 and 10 year growth in dividends is at 3.28% per year and 1.63% per year, respectively. The most recent increase was in 2012 and the increase was only for 1.72%.
Lately the company has been paying out more in dividends than it has earned. The 2012 financial year was not good for this company. It suffered a loss in the second quarter that dominated the year and it ended the year with an EPS loss. See an article in the Financial Post.
It is expected that the Dividend Payout Ratio for earnings for this year and 2014 will be around 150%. This is certainly a negative for this stock. However, it is in better shape when looking at the DPR for cash flow, where the 5 year median DPR is 32%. The DPR for CF was higher in 2012 at 52%, but it is expected to go to 36% and 34% for 2013 and 2014. Dividends are not expected to change over the next two years.
Shareholders have not made much on this stock over the past 5 and 10 years. Over the past 5 years there was total return loss of 9.86% per year with a capital loss of 14.63% per year and dividends at 4.77% per year. Over the past 10 years shareholders would have made a total return of 5.3% per year, with a capital loss of 1.23% per year and dividends at 6.53% per year.
Outstanding shares have increased over the past 5 and 10 years at4.9% and 4.1% per year, respectively. Shares have increased due DRIP, Stock Options and Share Issues. In the past there has also been some share buy backs.
The company has not done much to increase its revenue over the past 5 and 10 years. Revenue is down 4% per year over the past 5 year and is up by only 2.23% per year over the past 10 years. Revenue per Share is down by 8.45% per year and 1.84% per year over the past 5 and 10 years, respectively. Revenue is expected to increase modestly over the next couple of years.
Cash Flow per Share is also down with CFPS down 10.4% and 2.9% per year over the past 5 and 10 years, respectively. Book Value per share is also down with BVPS down 5.2% and 3.4% per year over the past 5 and 10 years. None of this is good. However, CFPS is expected to rise this year and next.
Generally speaking the Return on Equity tends to be fine. Since 2012 had an earnings loss there is no ROE for this stock for 2012.
The Liquidity Ratio tends to be rather low, but this company has a good cash flow. The Debt Ratio is fine at 1.55. The Leverage and Debt/Equity Ratios are a bit high at 4.24 and 2.74, but utility companies tend to have rather high Leverage and Debt/Equity Ratios.
A number of analysts feel that this stock has now bottomed out and hopefully this is true. It has been a rough year for this company. Last year was no better. See my reports from last year, report 1 or report 2.
Hopefully 2013 will be a better year for this company. However, so far the stock is still tracking south.
TransAlta is a power generation and wholesale marketing company. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. Its web site is here TransAlta. See my spreadsheet at ta.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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