I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 and then bought some more in 2010. I haven't done well in this stock, but neither has it been a disaster. My total return is 0.29% per year, with a capital loss of 2.72% per year and dividends of 3.01% per year.
When I look at insider trading I find $5M of insider selling and $0.5 of insider buying with $4.5M net insider selling. Selling is by CEO and officers. There seems to be only one officer with options and he seems to have done most of the insider selling at $3.3M. He is the Chief Operating Officer (COO).
The CEO has shares worth $4.3M and has options are worth $18.3M. The CFO has shares worth $0.3M and has options worth $0.4M. An officer has shares worth $2M and has options worth $0.6M. A director has shares worth $0.3M and no options. 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 Ratios are 10.51, 21.35 and 27.80. The current P/E Ratio is 21.00 based on stock price of $23.91 and 2013 earnings of $1.14 CND$ ($1.12 US$). On a relative basis, this is a reasonable P/E Ratio. However, an analyst pointed out that it is rather a high P/E Ratio for this company and I think that he is right. It is not a growth company and it has not grown much latterly.
I get a Graham Price of $16.96 and the 10 year low, median and high median Price/Graham Price Ratios are 1.27, 1.52 and 1.78. The current P/GP Ratio is 1.41 and this would show a relatively reasonable price. For value orientated a P/GP of 1.00 is the appropriate time to buy a stock. For growth companies, this is often unattainable. I do not consider this to be a growth company, so really, a P/GP of 1.41 shows that the company is a bit pricey.
The 10 Year Price/Book Value per Share Ratio is 1.81 and the current P/B Ratio at 2.13 is some 18% higher. On a relative basis this test shows that the stock price is rather high, but perhaps still reasonable. However, it does show that this stock price is in the high part of the reasonable range.
The 3 year median dividend yield is 2.47%. I am using the last 3 years because this is during the time of the lower dividend payments. The current yield is lower by 5% at 2.34%. Generally, you would want to the dividend yield to be higher than the median dividend yield, but this is close so suggests a relatively reasonable stock price that is a bit higher than the median.
For this stock I also took a look at the Price/Cash Flow per Share Ratio. The 10 year median P/CF Ratio is 6.99 and the current P/CF Ratio is some 19% higher at 8.34. (It is even worse if you look at the 5 year median P/CF Ratio. The 5 year median P/CF Ratio is 5.48 and the current one is some 52% higher at 8.34.) This shows that the stock is towards the top of the reasonable range or high on a relative basis.
When I look at the analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 months consensus stock price is $25.11. This implies a total return of 7.36% with 2.34% from dividends and 5.02% from capital gains.
Some analysts feel that the company is being harmed by the economic environment. It certainly is not a good one for a lot of companies. Todd Bunton of Zacks.com gives a negative report on this stock because of the week 4th quarter of 2012. (The first quarter of 2013 was much better.) He also says that the stock valuation is not cheap. On a relative basis, the stock price is reasonable, but at a current 21.00, the P/E is rather high considering the low recent growth in this stock.
Jack Bass of Apprentice Millionaire Portfolio blog. He talks about a better performance for this company in the first quarter of 2013. In the short term, he does not expect great things from the stock. However, over the longer term, starting in 2014, he expects a much stronger performance on this stock. The Octagon blog talks about recent stock price rises for this company.
The analysts' recommendations configuration is the most common and most stocks have this configuration. I think that the price is rather high for this company. I expect it to be a solid performer, but I do not think it is a growth stock. However, its P/E and P/GP Ratios are what you would generally see as reasonable for growth stocks.
In hindsight I also probably paid too much for this stock. However, I think that it could be a solid performer in the future and so, I am holding on to my current stock. A lot has changed since I bought this stock, especially the dividend yield. I bought at a dividend yield of over 7% and it is now around 2.3%. See my spreadsheet at bin.htm.
They are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Five companies control almost 53% of this company. There are also 11M special shares outstanding. Its web site is here Progressive Waste.
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, May 14, 2013
Monday, May 13, 2013
Progressive Waste Solutions Ltd
On my other blog I am today writing about how Money is Freedom...continue...
I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 and then bought some more in 2010. I haven't done well in this stock, but neither has it been a disaster. My total return is 0.29% per year, with a capital loss of 2.72% per year and dividends of 3.01% per year.
When I bought the company, it was an income trust. It converted to a corporation in 2009 and dropped the dividends some 72%. This moved the Dividend Payout Ratios to good values, with the DPR for earnings around 68% and the DPR for cash flow to around 19%. (See my site for information on Dividend Payout Ratios).
The company raised its dividend in 2011 by some 13%. There were no increases in 2012. Some analysts feel that this company will start raising dividends again and feel it is possible this year, but more likely in 2014 and 2015. I have seen no sign of an increase as they have declared the third dividend for this year and it is the same as the current dividend.
The decrease in dividends moved the median dividend yield from a 6 to 7% to a 2 to 3% range. This is a much lower dividend yield range and with this lower range you would expect the company to growth more. However, we are in difficult economic times for a lot of companies.
The company really has not gone anywhere over the past 5 years as far as total returns go. The total returns are a negative 0.83% and positive 15.10% over the past 5 and 10 years. The dividend portion of these returns is 3.42% and 8.96% per year over the past 5 and 10 years. There is a capital loss of 4.25% per year over the past 5 years and a capital gain of 6.14% per year over the past 10 years. As you can see most of the past great returns were dividends rather than capital gains.
The company's 2013 guidance is 5.4% to 6.5% growth. With the current dividend yield at 2.3%, that would be an equal to a total return of 7.7% to 8.8%, which is acceptable for a dividend paying stock. The first quarterly statements for 2013 are in and the company has increased the EPS, revenue and CF when comparing the last 12 months values with the value for the 12 months ending in 2012.
Over the past 5 and 10 years shares have increased by 14.8% and 15.8% per year. Shares have increased due to stock options and issuance of shares (for acquisitions) and have decreased due to buy backs. This company reports in US dollars. Because of currency exchange rate changes, this company has done better in US$ terms than in CDN$ terms.
Revenues have increased by 16 and 29% per year in CDN$ over the past 5 and 10 years. Revenues per share have increased by 1% and 11% per year over the past 5 and 10 years. Revenues per share sort of plateaued 5 years ago and if you look at the 5 year running average Revenue per Share over the past 5 years, this has increased by 6%.
Earnings per Share have increased by 3.7% and 9.6% per year in CDN$ over the past 5 and 10 years. Here again, this company has done better in US$ terms and CDN$ Terms. Cash Flow per Share has decreased by 1.5% per year over the past 5 years and increased by 11.8% per year over the past 10 years. CFPS has not gained much over the past 5 years. If you look at the 5 year running averages for CFPS, there is an increase of 4.5% per year.
The Return on Equity is rather low on this company and it has always been rather low. The ROE is 7.4% for the 2012 financial year. It is not much better for the last 12 months at 8%. The 5 year median ROEs are 5.3% and 7.4%, respectively. A good point is that the ROE on comprehensive income is higher than that for the ROE on net income. For the 2012 year, the ROE on comprehensive income is 8.5% with the one for the past 12 months at 8.5% also.
The debt ratios are fine on for this company. The current Liquidity Ratio is a little low 1.11. However it has often been lower with a 5 year median value of just 0.83. If you include cash flow after dividends, the Liquidity Ratio is much better with a current one at 2.03. The Debt Ratio is good with a current one of 1.59. This ratio has always been good.
The current Leverage and Debt/Equity Ratio are fine at 2.70 and 1.70. These ratios have, in the past, been higher. (With these ratios, you want low ratios.)
Over the last 5 years, stock has not been doing well. However, I still think that it does have long term potential. This company is into waste disposal, so it is never going to be a high flyer, however I do not expect the stock to be a solid long term performer. See my spreadsheet at bin.htm.
They are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Five companies control almost 53% of this company. There are also 11M special shares outstanding. Its web site is here Progressive Waste.
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 Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 and then bought some more in 2010. I haven't done well in this stock, but neither has it been a disaster. My total return is 0.29% per year, with a capital loss of 2.72% per year and dividends of 3.01% per year.
When I bought the company, it was an income trust. It converted to a corporation in 2009 and dropped the dividends some 72%. This moved the Dividend Payout Ratios to good values, with the DPR for earnings around 68% and the DPR for cash flow to around 19%. (See my site for information on Dividend Payout Ratios).
The company raised its dividend in 2011 by some 13%. There were no increases in 2012. Some analysts feel that this company will start raising dividends again and feel it is possible this year, but more likely in 2014 and 2015. I have seen no sign of an increase as they have declared the third dividend for this year and it is the same as the current dividend.
The decrease in dividends moved the median dividend yield from a 6 to 7% to a 2 to 3% range. This is a much lower dividend yield range and with this lower range you would expect the company to growth more. However, we are in difficult economic times for a lot of companies.
The company really has not gone anywhere over the past 5 years as far as total returns go. The total returns are a negative 0.83% and positive 15.10% over the past 5 and 10 years. The dividend portion of these returns is 3.42% and 8.96% per year over the past 5 and 10 years. There is a capital loss of 4.25% per year over the past 5 years and a capital gain of 6.14% per year over the past 10 years. As you can see most of the past great returns were dividends rather than capital gains.
The company's 2013 guidance is 5.4% to 6.5% growth. With the current dividend yield at 2.3%, that would be an equal to a total return of 7.7% to 8.8%, which is acceptable for a dividend paying stock. The first quarterly statements for 2013 are in and the company has increased the EPS, revenue and CF when comparing the last 12 months values with the value for the 12 months ending in 2012.
Over the past 5 and 10 years shares have increased by 14.8% and 15.8% per year. Shares have increased due to stock options and issuance of shares (for acquisitions) and have decreased due to buy backs. This company reports in US dollars. Because of currency exchange rate changes, this company has done better in US$ terms than in CDN$ terms.
Revenues have increased by 16 and 29% per year in CDN$ over the past 5 and 10 years. Revenues per share have increased by 1% and 11% per year over the past 5 and 10 years. Revenues per share sort of plateaued 5 years ago and if you look at the 5 year running average Revenue per Share over the past 5 years, this has increased by 6%.
Earnings per Share have increased by 3.7% and 9.6% per year in CDN$ over the past 5 and 10 years. Here again, this company has done better in US$ terms and CDN$ Terms. Cash Flow per Share has decreased by 1.5% per year over the past 5 years and increased by 11.8% per year over the past 10 years. CFPS has not gained much over the past 5 years. If you look at the 5 year running averages for CFPS, there is an increase of 4.5% per year.
The Return on Equity is rather low on this company and it has always been rather low. The ROE is 7.4% for the 2012 financial year. It is not much better for the last 12 months at 8%. The 5 year median ROEs are 5.3% and 7.4%, respectively. A good point is that the ROE on comprehensive income is higher than that for the ROE on net income. For the 2012 year, the ROE on comprehensive income is 8.5% with the one for the past 12 months at 8.5% also.
The debt ratios are fine on for this company. The current Liquidity Ratio is a little low 1.11. However it has often been lower with a 5 year median value of just 0.83. If you include cash flow after dividends, the Liquidity Ratio is much better with a current one at 2.03. The Debt Ratio is good with a current one of 1.59. This ratio has always been good.
The current Leverage and Debt/Equity Ratio are fine at 2.70 and 1.70. These ratios have, in the past, been higher. (With these ratios, you want low ratios.)
Over the last 5 years, stock has not been doing well. However, I still think that it does have long term potential. This company is into waste disposal, so it is never going to be a high flyer, however I do not expect the stock to be a solid long term performer. See my spreadsheet at bin.htm.
They are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Five companies control almost 53% of this company. There are also 11M special shares outstanding. Its web site is here Progressive Waste.
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, May 10, 2013
Power Financial Corp 2
I own this stock of Power Financial Corp (TSX-PWF, OTC-POFNF). I first bought this stock in 2001 and then bought more in 2004 and most recently in 2011. I have made a return of 7.43% per year on this stock, with 3.1% per year from capital gains and 4.33% per year from dividends.
When I look at insider trading, I find insider selling at $233M and no insider buying. However, all insiders selling is by directors and a lot of it seems by one director Robert Gratton. Robert Gratton probably had enough shares and options to cover all that was sold by directors. There is a story about Robert Gratton retiring at Canada.com. He would be older than 65.
The 5 year low, median and high median Price/Earnings Ratios are 10.57, 12.11 and 16.04. I get a current P/E Ratio of 11.69 based on a stock price of $30.52 and 2013 earnings of $2.61. This would suggest a reasonable stock price.
I get a current Graham Price of $31.23. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.12 and 1.24. The current P/GP Ratio is 0.98 and this also suggests a relatively reasonable stock price. (On an absolute basis, a stock is of good value when the P/GP Ratio is at 1.00 or below.)
The 10 year Price/Book Value per Share Ratio is 2.22 and the current P/B Ratio is at 1.84 is 83% of the 10 year median and this ratio suggests a reasonable stock price. (For the stock price to be cheap, the current P/B Ratio would have to be only 80% or less of the 10 year median P/B Ratio. It is getting close, but it is not there yet.)
The 5 year median dividend yield is 5.05% and the current dividend yield is 4.59%. The current dividend yield is 9% lower than the 5 year median dividend yield. The current dividend yield suggests a reasonable stock price. To show a cheap stock price, you would want a dividend yield a lot higher than the current dividend yield.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus recommendation would be a Hold. Most of the recommendations are a Hold recommendation. The 12 months stock price consensus is $31.40. This implies a total return of 7.47% with 4.59% from dividends and 2.88% from capital gains.
It was not that long ago that a lot of people felt that this was a good dividend paying company to buy. See the Passive Income Earner blog on this company in March of 2011. It is a diversified financial company and the dividend is safe. I will continue to hold and collect my dividends from this company until the economic situation gets better and this company will again be a very good one to buy as well as to hold.
However, I would not suggest buying this stock unless the stock price turns cheap. This would mean that current ratio would be lower than the median low ratios. For example, if the current P/E was lower than the 5 year low median ratio of 10.57. It will be a while before this stock sees a recovery. See my spreadsheet at pwf.htm.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.
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 $233M and no insider buying. However, all insiders selling is by directors and a lot of it seems by one director Robert Gratton. Robert Gratton probably had enough shares and options to cover all that was sold by directors. There is a story about Robert Gratton retiring at Canada.com. He would be older than 65.
The 5 year low, median and high median Price/Earnings Ratios are 10.57, 12.11 and 16.04. I get a current P/E Ratio of 11.69 based on a stock price of $30.52 and 2013 earnings of $2.61. This would suggest a reasonable stock price.
I get a current Graham Price of $31.23. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.12 and 1.24. The current P/GP Ratio is 0.98 and this also suggests a relatively reasonable stock price. (On an absolute basis, a stock is of good value when the P/GP Ratio is at 1.00 or below.)
The 10 year Price/Book Value per Share Ratio is 2.22 and the current P/B Ratio is at 1.84 is 83% of the 10 year median and this ratio suggests a reasonable stock price. (For the stock price to be cheap, the current P/B Ratio would have to be only 80% or less of the 10 year median P/B Ratio. It is getting close, but it is not there yet.)
The 5 year median dividend yield is 5.05% and the current dividend yield is 4.59%. The current dividend yield is 9% lower than the 5 year median dividend yield. The current dividend yield suggests a reasonable stock price. To show a cheap stock price, you would want a dividend yield a lot higher than the current dividend yield.
When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus recommendation would be a Hold. Most of the recommendations are a Hold recommendation. The 12 months stock price consensus is $31.40. This implies a total return of 7.47% with 4.59% from dividends and 2.88% from capital gains.
It was not that long ago that a lot of people felt that this was a good dividend paying company to buy. See the Passive Income Earner blog on this company in March of 2011. It is a diversified financial company and the dividend is safe. I will continue to hold and collect my dividends from this company until the economic situation gets better and this company will again be a very good one to buy as well as to hold.
However, I would not suggest buying this stock unless the stock price turns cheap. This would mean that current ratio would be lower than the median low ratios. For example, if the current P/E was lower than the 5 year low median ratio of 10.57. It will be a while before this stock sees a recovery. See my spreadsheet at pwf.htm.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.
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, May 9, 2013
Power Financial Corp
I own this stock of Power Financial Corp (TSX-PWF, OTC-POFNF). I first bought this stock in 2001 and then bought more in 2004 and most recently in 2011. I have made a return of 7.43% per year on this stock, with 3.1% per year from capital gains and 4.33% per year from dividends.
This is not a great return, but not really bad considering the problems all life insurance companies are having at the moment because of very low interest rates. As with a lot of companies, they have struggled since 2008 problems. This company, which prior to 2008 had a very good history of increasing their dividends, has not raised them since 2008. Unfortunately no analyst following this stock expects any dividend increases this year or next.
The rate of increases in dividends before 2008 averaged around 16% per year. The 10 year growth in dividends is still good at 10.41, but the 5 year growth is low at 3.8% and will soon be non-existent. The Dividend Payout Ratio has been climbing for earnings. The 5 year median is around 66%. It used to be below 40%. The DPR for cash flow has not changed much over the years and the 5 year median DPR for cash flow is at17%.
The outstanding shares have increased by 0.12% and 0.23% over the past 5 and 10 years. These are really only marginal increases. The shares seem to be increasing due to stock options. Revenue has recently been increasing and the 5 and 10 year growth is 2.5% and 5.7% per year. Revenue per Share is similar with growth at 2.4% and 5.4% per year.
This company is having problems growing its earnings and Earnings per Share have fallen by 3.9% per year over the past 5 years. EPS has grown at 5.5% per year over the past 10 years. Cash Flow per Share has done better and has grown at1.5% and 12.2% per year over the past 5 and 10 years. (However, if you look at 5 year running averages, cash flow growth is much better at 6% per year and 18% per year over the past 5 and 10 years.)
The return on equity is better for 2012 than it has been for a number of years, coming in at 12.1%. The 5 year median ROE is just 7.5%. The ROE on comprehensive income is not much different coming in at 11.2% for 2012 and with a 5 year median ROE of 7.3%.
The Liquidity Ratio is quite good at 2.31. The Debt Ratio at 1.10 is good for an insurance company, although traditionally this company used to have higher Debt Ratios with the 5 and 10 year median ratios at 1.17 and 1.18. The Leverage and Debt/Equity Ratios at 11.02 and 10.02 respectively is fine for an insurance company and in line with historical ratios.
This company has been slowly recovering from 2008 problems, but as with most life insurance companies, interest rates will probably have to improve before it will become a dividend growth company again. In the meantime, I am getting a yield on my money of around 5% and this is higher than historical norms for this company where yield were closer to 3% or lower. See my spreadsheet at pwf.htm.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
This is not a great return, but not really bad considering the problems all life insurance companies are having at the moment because of very low interest rates. As with a lot of companies, they have struggled since 2008 problems. This company, which prior to 2008 had a very good history of increasing their dividends, has not raised them since 2008. Unfortunately no analyst following this stock expects any dividend increases this year or next.
The rate of increases in dividends before 2008 averaged around 16% per year. The 10 year growth in dividends is still good at 10.41, but the 5 year growth is low at 3.8% and will soon be non-existent. The Dividend Payout Ratio has been climbing for earnings. The 5 year median is around 66%. It used to be below 40%. The DPR for cash flow has not changed much over the years and the 5 year median DPR for cash flow is at17%.
The outstanding shares have increased by 0.12% and 0.23% over the past 5 and 10 years. These are really only marginal increases. The shares seem to be increasing due to stock options. Revenue has recently been increasing and the 5 and 10 year growth is 2.5% and 5.7% per year. Revenue per Share is similar with growth at 2.4% and 5.4% per year.
This company is having problems growing its earnings and Earnings per Share have fallen by 3.9% per year over the past 5 years. EPS has grown at 5.5% per year over the past 10 years. Cash Flow per Share has done better and has grown at1.5% and 12.2% per year over the past 5 and 10 years. (However, if you look at 5 year running averages, cash flow growth is much better at 6% per year and 18% per year over the past 5 and 10 years.)
The return on equity is better for 2012 than it has been for a number of years, coming in at 12.1%. The 5 year median ROE is just 7.5%. The ROE on comprehensive income is not much different coming in at 11.2% for 2012 and with a 5 year median ROE of 7.3%.
The Liquidity Ratio is quite good at 2.31. The Debt Ratio at 1.10 is good for an insurance company, although traditionally this company used to have higher Debt Ratios with the 5 and 10 year median ratios at 1.17 and 1.18. The Leverage and Debt/Equity Ratios at 11.02 and 10.02 respectively is fine for an insurance company and in line with historical ratios.
This company has been slowly recovering from 2008 problems, but as with most life insurance companies, interest rates will probably have to improve before it will become a dividend growth company again. In the meantime, I am getting a yield on my money of around 5% and this is higher than historical norms for this company where yield were closer to 3% or lower. See my spreadsheet at pwf.htm.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Its web site is here Power Financial.
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, May 8, 2013
Davis & Henderson Corp 2
On my other blog I am today writing about the Online Advertising...continue...
I own this stock of Davis and Henderson Corp. (TSX-DH, OTC- DHIFF). I first bought this stock as an income trust in 2009. I bought more in 2010, 2011 and 2013. I have made a return of 21.78% per year with 12.98% from capital gains and 8.8% from dividends.
When I look at insider trading, I find insider buying of $2.5M and very little insider selling. Buying is by CEO, officers and directors. Unfortunately for people currently looking at buying this stock the insider buying all happen a year ago when the stock price was mostly below $18.00 and purchases were at 20 to 30% lower than prices today.
The CEO has shares worth $1M and has options are worth $7.8M. The CFO has shares worth $0.5M and has options worth $3M. An officer has some shares and has options worth $1.5M. A director has shares worth $3.9M and no options. 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 9.28, 11.71 and 13.23. The current P/E Ratio is 12.31 based on 2013 EPS of $1.89 and stock price of $23.27. This P/E is based on an EPS for 2013 that is substantially higher than the ones earned in 2011 and 2012, especially the EPS of 2012. The current P/E of 12.31 shows a reasonable stock price on an absolute basis.
I get a Graham Price of $22.45. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 0.93 and 1.07. The current P/GP Ratio of 1.04 is closes to the high median P/GP ratios, but signals that the stock price is still in the reasonable range.
I get a 10 year Price/Book Value per Share Ratio of 1.83. The current P/B Ratio is 2.18, a value some 19% higher. This signals that the stock price is still in the reasonable range, but towards the higher end of the reasonable range.
There is not much point is doing a test on the dividend yield as the dividends were decreased with this company became a corporation. It was suggested at that time that the old income trusts would end up with dividends in the 4 to 5% range. This dividend is a bit better at 5.5%.
I will do a fourth stock test using the Price/Sales per Share Ratios. I get a current P/S Ratio of 1.88 based on 2013 revenue of 7.5.11M, Revenue (or Sales) per Share value of $12.41 and a stock price of $23.27. The 10 year median P/S Ratio is 2.20, so the current P/S Ratio is 15% lower and would suggest a current reasonable stock price.
When I look at analysts' recommendations, I get a Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 months consensus stock price is $23.40 a value slightly above the current stock price. This would imply a 6.06% total return with 0.56% from capital gains and 5.5% from dividends.
Some people see their substantial income from printing cheques a positive and others a negative. It is a dying form of payment, but they are into other financial technologies which in the end will replace cheques. However, cheques have not died yet and it may be quite a while before they do. Sometimes these sorts of changes take a lot longer than you ever think possible.
Some analysts mention the sale of non-core assets. Most think that this was a good move. Others like the good dividend yield and everyone feels that it is safe. Some analysts feel that they have room for a dividend increase. CanTech magazine recently names this company in a list of the 10 most profitable tech companies in Canada.
I will certainly hold on to the shares I have. It would seem that the current share price is reasonable, although it might be to the higher end of the reasonable price range. Dividends are very good. See my spreadsheet at dh.htm.
Davis & Henderson is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here Davis & Henderson.
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 Davis and Henderson Corp. (TSX-DH, OTC- DHIFF). I first bought this stock as an income trust in 2009. I bought more in 2010, 2011 and 2013. I have made a return of 21.78% per year with 12.98% from capital gains and 8.8% from dividends.
When I look at insider trading, I find insider buying of $2.5M and very little insider selling. Buying is by CEO, officers and directors. Unfortunately for people currently looking at buying this stock the insider buying all happen a year ago when the stock price was mostly below $18.00 and purchases were at 20 to 30% lower than prices today.
The CEO has shares worth $1M and has options are worth $7.8M. The CFO has shares worth $0.5M and has options worth $3M. An officer has some shares and has options worth $1.5M. A director has shares worth $3.9M and no options. 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 9.28, 11.71 and 13.23. The current P/E Ratio is 12.31 based on 2013 EPS of $1.89 and stock price of $23.27. This P/E is based on an EPS for 2013 that is substantially higher than the ones earned in 2011 and 2012, especially the EPS of 2012. The current P/E of 12.31 shows a reasonable stock price on an absolute basis.
I get a Graham Price of $22.45. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 0.93 and 1.07. The current P/GP Ratio of 1.04 is closes to the high median P/GP ratios, but signals that the stock price is still in the reasonable range.
I get a 10 year Price/Book Value per Share Ratio of 1.83. The current P/B Ratio is 2.18, a value some 19% higher. This signals that the stock price is still in the reasonable range, but towards the higher end of the reasonable range.
There is not much point is doing a test on the dividend yield as the dividends were decreased with this company became a corporation. It was suggested at that time that the old income trusts would end up with dividends in the 4 to 5% range. This dividend is a bit better at 5.5%.
I will do a fourth stock test using the Price/Sales per Share Ratios. I get a current P/S Ratio of 1.88 based on 2013 revenue of 7.5.11M, Revenue (or Sales) per Share value of $12.41 and a stock price of $23.27. The 10 year median P/S Ratio is 2.20, so the current P/S Ratio is 15% lower and would suggest a current reasonable stock price.
When I look at analysts' recommendations, I get a Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 months consensus stock price is $23.40 a value slightly above the current stock price. This would imply a 6.06% total return with 0.56% from capital gains and 5.5% from dividends.
Some people see their substantial income from printing cheques a positive and others a negative. It is a dying form of payment, but they are into other financial technologies which in the end will replace cheques. However, cheques have not died yet and it may be quite a while before they do. Sometimes these sorts of changes take a lot longer than you ever think possible.
Some analysts mention the sale of non-core assets. Most think that this was a good move. Others like the good dividend yield and everyone feels that it is safe. Some analysts feel that they have room for a dividend increase. CanTech magazine recently names this company in a list of the 10 most profitable tech companies in Canada.
I will certainly hold on to the shares I have. It would seem that the current share price is reasonable, although it might be to the higher end of the reasonable price range. Dividends are very good. See my spreadsheet at dh.htm.
Davis & Henderson is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here Davis & Henderson.
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, May 7, 2013
Davis & Henderson Corp
I own this stock of Davis & Henderson Corp. (TSX-DH, OTC- DHIFF). I first bought this stock as an income trust in 2009. I bought more in 2010, 2011 and 2013. I have made a return of 21.78% per year with 12.98% from capital gains and 8.8% from dividends.
When I bought this stock it was an income trust with a very good dividend and a history of dividend increases. However, when it became a corporation, it decreased it dividends by 35%. It has started to increase dividends again and the last increase was for 3.2% in 2012.
The 5 year median Dividend Payout Ratio for earnings is high at 100%, but this is expected to be in closer to 70% in 2013. The 5 year median DPR for cash flow is better at around 70% and this is expected to continue.
The outstanding shares have increased by 6.2% and 4.6% per year over the past 5 and 10 years. Shares have increased due to stock options and share issues. Shares were issued for acquisitions. Revenue has increased by 15% and 13% per year over the past 5 and 10 years. Revenue per share has increased by 8.7% and 7.6% per year over the past 5 and 10 years.
Earnings per Share is down by 9% over the past 5 years and up by 1% over the past 10 years. 5 years ago, EPS hit a peak and if you look at the 5 year running averages over the past 5 years, the EPS is up by 0.7% per year over the past 5 years. Cash Flow per Share is up by 1.8% and 5% per year over the past 5 and 10 years. CFPS also peaked 5 years ago and if you look at the 5 year running averages over the past 5 years, the CPFS is up by 4.7%.
This company services financial companies and was hit by 2008 problems and has been recovering, but unevenly since. Analysts expect only modest gains in revenues, but better gains in EPS over the next couple of years. Modest gains in revenues are expected because of this company's selling of non-core assets, but this is not expected to materially affect the EPS.
The growth in Book Value per Share is also quite low and has only increased by 3% and 2% per year over the past 5 and 10 years.
Last year was not a good year for earnings and the ROE was just 9.8%. The ROE on comprehensive income was close at 9.4%. The 5 year median ROE for net income was much better at 14.7% and the ROE for comprehensive income was 14.8%.
The Liquidity Ratio has never been very good on this stock and the latest one is just 0.96. This means that the current assets cannot cover the current liabilities. However, if you add in cash flow after dividends, this ratio raises to 1.75 a good ratio. However, Liquidity does depend on cash flow.
The Debt Ratio has always been very good and the latest one is 2.20. The Leverage and Debt/Equity Ratios have always been quite good with the latest ones at 1.84 and 0.84. (For Debt Ratio, higher is better and a good ratio is 1.50 and above. For the Leverage and Debt/Equity Ratios lower is better. These ratios are low and therefore are good.)
The dividend yield is still quite good on this stock at 5.5%. The latest dividend increases have both been just above 3% and therefore slightly above inflation. According to the Bank of Canada, inflation is running around 1.8% per year over the past 5 and 10 years and at under 1% over the past year.
Just over 40% of my total return is from dividends. This will change going forward as dividends and dividend yields are down. However, DH is recovering and present stock prices are higher than in 2008. It is an ex-income trust that has DPRs under control. It also continues to have a good dividend yield. See my spreadsheet at dh.htm.
Davis & Henderson is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here Davis & Henderson.
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 bought this stock it was an income trust with a very good dividend and a history of dividend increases. However, when it became a corporation, it decreased it dividends by 35%. It has started to increase dividends again and the last increase was for 3.2% in 2012.
The 5 year median Dividend Payout Ratio for earnings is high at 100%, but this is expected to be in closer to 70% in 2013. The 5 year median DPR for cash flow is better at around 70% and this is expected to continue.
The outstanding shares have increased by 6.2% and 4.6% per year over the past 5 and 10 years. Shares have increased due to stock options and share issues. Shares were issued for acquisitions. Revenue has increased by 15% and 13% per year over the past 5 and 10 years. Revenue per share has increased by 8.7% and 7.6% per year over the past 5 and 10 years.
Earnings per Share is down by 9% over the past 5 years and up by 1% over the past 10 years. 5 years ago, EPS hit a peak and if you look at the 5 year running averages over the past 5 years, the EPS is up by 0.7% per year over the past 5 years. Cash Flow per Share is up by 1.8% and 5% per year over the past 5 and 10 years. CFPS also peaked 5 years ago and if you look at the 5 year running averages over the past 5 years, the CPFS is up by 4.7%.
This company services financial companies and was hit by 2008 problems and has been recovering, but unevenly since. Analysts expect only modest gains in revenues, but better gains in EPS over the next couple of years. Modest gains in revenues are expected because of this company's selling of non-core assets, but this is not expected to materially affect the EPS.
The growth in Book Value per Share is also quite low and has only increased by 3% and 2% per year over the past 5 and 10 years.
Last year was not a good year for earnings and the ROE was just 9.8%. The ROE on comprehensive income was close at 9.4%. The 5 year median ROE for net income was much better at 14.7% and the ROE for comprehensive income was 14.8%.
The Liquidity Ratio has never been very good on this stock and the latest one is just 0.96. This means that the current assets cannot cover the current liabilities. However, if you add in cash flow after dividends, this ratio raises to 1.75 a good ratio. However, Liquidity does depend on cash flow.
The Debt Ratio has always been very good and the latest one is 2.20. The Leverage and Debt/Equity Ratios have always been quite good with the latest ones at 1.84 and 0.84. (For Debt Ratio, higher is better and a good ratio is 1.50 and above. For the Leverage and Debt/Equity Ratios lower is better. These ratios are low and therefore are good.)
The dividend yield is still quite good on this stock at 5.5%. The latest dividend increases have both been just above 3% and therefore slightly above inflation. According to the Bank of Canada, inflation is running around 1.8% per year over the past 5 and 10 years and at under 1% over the past year.
Just over 40% of my total return is from dividends. This will change going forward as dividends and dividend yields are down. However, DH is recovering and present stock prices are higher than in 2008. It is an ex-income trust that has DPRs under control. It also continues to have a good dividend yield. See my spreadsheet at dh.htm.
Davis & Henderson is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Its web site is here Davis & Henderson.
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, May 6, 2013
Leon's Furniture Ltd 2
On my other blog I am today writing about the Best Spell Checker you can find anywhere ...continue...
I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC- LEFUF). I first bought this stock in 2006 and then bought more in 2008, 2009 and 2010. I have made a return on my purchases of 4.61% with 1.28% from capital gains and 3.33% from dividends.
When I look at insider trading I find a small bit of insider buying and no insider selling. There is a large insider ownership of shares. The Leon family seems to own some 66% of the outstanding shares and there may be some 69% of insider ownership. Instead of stock options, insiders seem to get non-voting shares that can be converted to common shares.
The 5 year low, median and high median Price/Earnings Ratios are 11.99, 14.03, and 15.09. The current P/E Ratio is 11.39 based on 2013 EPS of $1.14 and current stock price of $12.99. This shows that the stock is reasonable.
I get a Graham Price of $12.82. The 10 year low, median and high Price/Graham Price Ratios are 1.06, 1.20 and 1.38. The current P/GP Ratio is 1.01 and this shows that the stock price is relatively cheap.
The 10 year Price/Book Value per Share Ratio is 2.33. The current P/B Ratio is 2.03. The current ratio is some 87% of the 10 year ratio. This shows that the stock price is relatively reasonable. (For the stock price to be relatively cheap, the current P/B Ratio should be 80% or less than the 10 year P/B Ratio.)
The dividend yield is 3.08% and the 5 year median Dividend Yield is 2.7%. The current yield is higher than the 5 year median dividend yield and this is good, but it is only some 15% higher, so this test is pointing to a reasonable stock price.
When I look for analysts' recommendations, I can only find one analysts' recommendation and that is a hold. However a number of people have remarked on its purchase of The Brick furniture company and feel that this is a very good move for the company.
The blogger Average Dividend Yield just added some more Leon's stock to his portfolio.
Leon's has purchased the outstanding shares of The Brick (TSX-BRK). There is also a story in the Calgary Herald on this take over. As a result Revenue (or Sales) and EPS is expected to increase in 2013 and 2014.
I know that I am not currently making much money on this stock, but it is a retail stock and we are in a tough economic climate at present. I feel that the stock price is low to reasonable, but it is not cheap. It is expected that Leon's will do not any special dividends until they have completed the integration of their Brick purchase. See my spreadsheet at lnf.htm.
This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Leon family owns 68% of this company. Its web site is here Leon's.
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 Leon's Furniture Ltd (TSX-LNF, OTC- LEFUF). I first bought this stock in 2006 and then bought more in 2008, 2009 and 2010. I have made a return on my purchases of 4.61% with 1.28% from capital gains and 3.33% from dividends.
When I look at insider trading I find a small bit of insider buying and no insider selling. There is a large insider ownership of shares. The Leon family seems to own some 66% of the outstanding shares and there may be some 69% of insider ownership. Instead of stock options, insiders seem to get non-voting shares that can be converted to common shares.
The 5 year low, median and high median Price/Earnings Ratios are 11.99, 14.03, and 15.09. The current P/E Ratio is 11.39 based on 2013 EPS of $1.14 and current stock price of $12.99. This shows that the stock is reasonable.
I get a Graham Price of $12.82. The 10 year low, median and high Price/Graham Price Ratios are 1.06, 1.20 and 1.38. The current P/GP Ratio is 1.01 and this shows that the stock price is relatively cheap.
The 10 year Price/Book Value per Share Ratio is 2.33. The current P/B Ratio is 2.03. The current ratio is some 87% of the 10 year ratio. This shows that the stock price is relatively reasonable. (For the stock price to be relatively cheap, the current P/B Ratio should be 80% or less than the 10 year P/B Ratio.)
The dividend yield is 3.08% and the 5 year median Dividend Yield is 2.7%. The current yield is higher than the 5 year median dividend yield and this is good, but it is only some 15% higher, so this test is pointing to a reasonable stock price.
When I look for analysts' recommendations, I can only find one analysts' recommendation and that is a hold. However a number of people have remarked on its purchase of The Brick furniture company and feel that this is a very good move for the company.
The blogger Average Dividend Yield just added some more Leon's stock to his portfolio.
Leon's has purchased the outstanding shares of The Brick (TSX-BRK). There is also a story in the Calgary Herald on this take over. As a result Revenue (or Sales) and EPS is expected to increase in 2013 and 2014.
I know that I am not currently making much money on this stock, but it is a retail stock and we are in a tough economic climate at present. I feel that the stock price is low to reasonable, but it is not cheap. It is expected that Leon's will do not any special dividends until they have completed the integration of their Brick purchase. See my spreadsheet at lnf.htm.
This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Leon family owns 68% of this company. Its web site is here Leon's.
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, May 3, 2013
Leon's Furniture Ltd
I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC- LEFUF). I first bought this stock in 2006 and then bought more in 2008, 2009 and 2010. I have made a return on my purchases of 4.61% with 1.28% from capital gains and 3.33% from dividends.
This is a stock that has been on the list of the Investment Report of MPL communications for some time. In an Investor Hotline email which emails are available on their site, they say that Leon's remains a Hold for dividends and capital gains. They do not expect Leon's to have any special dividends until they integrate their Brick purchase.
Leon's only increases dividends when they felt that they could be sustained. If they had extra money, it is given out as a special dividend. The last special dividend I received was for 2012 and it was at $0.15 per share. The current dividend is $0.10 per share, quarterly.
The company has a moderate level of dividends (long term at around 2.5%) with moderate increases. The 5 and 10 year growth in dividends is at 8% and 13% per year. Dividend increases slowed down after 2008, but the most recent dividend increases was for 11%.
The Dividend Payout Ratios have always been good under this company. The 5 year median DPR for earning is 46% and for cash flow is 36%. (See my site for information on Dividend Payout Ratios).
The outstanding shares have decreased by 0.4% and 1% over the past 5 and 10 years. The company does buy back shares occasionally. Employees can buy under the company's Management Share Purchases plan, convertible, non-voting shares. The company does not appear to have stock options.
Revenue has increase by 1.4% and 4.3% per year over the past 5 and 10 years. Revenue per Share has increased by 1.4% and 5.3% per year over the past 5 and 10 years. If you look at the 5 year running average for revenue per share, increases are better at 5.2% and 7.2% per year over the past 5 and 10 years.
Earnings per Share have increased by 1.2% and 5.8% per year over the past 5 and 10 years. Here again, the 5 year running average EPS has increased better at 4.9% and 6.9% per year over the past 5 and 10 years. The Cash Flow per Share has decreased by 5.3% per year over the past 5 years, but increased by 1.6% over the past 10 years. The 5 year running average has increased by 3.8% and 7.13% per year over the past 5 and 10 years.
When the 5 year running average increases are better than the 5 year and 10 year increases it usually points to the fact that exactly 5 or 10 years ago, the values were better than average or were very good years. For example, the EPS 5 years ago was at $0.80 and for the latest year financial year were $0.85, an increase of just 1.2% per year.
However, the average EPS between 2003 and 2007 (5 years ago) was $0.65. Compare that with the 5 year average EPS from 2008 to 2012 and you get EPS of $0.83, an increase of 4.9% per year. There were nice increases in EPS from 2003 to 2007, but EPS was rather flat from 2008 to 2012 with some declines as well as increases in EPS.
The Return on Equity is 10.3% for the last financial year of 2012. The 5 year median ROE is 15.2%. The ROE on Comprehensive Income is close at 10.9% and with a 5 year median of 15.6%. With the comprehensive income higher than the net income it points to the good quality of the net income.
Insider ownership is almost 70%. When this occurs you often get very good debt ratios and this stock is no different. The current Liquidity Ratio is 2.96 and the Debt Ratio is 4.36. (Generally, I want both of these to be at 1.50 or above.) The Leverage and Debt/Equity Ratios are quite low and therefore good at 1.30 and 0.30.
I bought this stock to diversity into retail stocks. The company has a good, but inconsistent record of dividend increases. I also like the idea of receiving the occasional special dividend. At this point my capital gain return is low, but we are in difficult economic times. I plan to hold on to my shares. See my spreadsheet at lnf.htm.
This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Leon family owns 68% of this company. Its web site is here Leon's.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
This is a stock that has been on the list of the Investment Report of MPL communications for some time. In an Investor Hotline email which emails are available on their site, they say that Leon's remains a Hold for dividends and capital gains. They do not expect Leon's to have any special dividends until they integrate their Brick purchase.
Leon's only increases dividends when they felt that they could be sustained. If they had extra money, it is given out as a special dividend. The last special dividend I received was for 2012 and it was at $0.15 per share. The current dividend is $0.10 per share, quarterly.
The company has a moderate level of dividends (long term at around 2.5%) with moderate increases. The 5 and 10 year growth in dividends is at 8% and 13% per year. Dividend increases slowed down after 2008, but the most recent dividend increases was for 11%.
The Dividend Payout Ratios have always been good under this company. The 5 year median DPR for earning is 46% and for cash flow is 36%. (See my site for information on Dividend Payout Ratios).
The outstanding shares have decreased by 0.4% and 1% over the past 5 and 10 years. The company does buy back shares occasionally. Employees can buy under the company's Management Share Purchases plan, convertible, non-voting shares. The company does not appear to have stock options.
Revenue has increase by 1.4% and 4.3% per year over the past 5 and 10 years. Revenue per Share has increased by 1.4% and 5.3% per year over the past 5 and 10 years. If you look at the 5 year running average for revenue per share, increases are better at 5.2% and 7.2% per year over the past 5 and 10 years.
Earnings per Share have increased by 1.2% and 5.8% per year over the past 5 and 10 years. Here again, the 5 year running average EPS has increased better at 4.9% and 6.9% per year over the past 5 and 10 years. The Cash Flow per Share has decreased by 5.3% per year over the past 5 years, but increased by 1.6% over the past 10 years. The 5 year running average has increased by 3.8% and 7.13% per year over the past 5 and 10 years.
When the 5 year running average increases are better than the 5 year and 10 year increases it usually points to the fact that exactly 5 or 10 years ago, the values were better than average or were very good years. For example, the EPS 5 years ago was at $0.80 and for the latest year financial year were $0.85, an increase of just 1.2% per year.
However, the average EPS between 2003 and 2007 (5 years ago) was $0.65. Compare that with the 5 year average EPS from 2008 to 2012 and you get EPS of $0.83, an increase of 4.9% per year. There were nice increases in EPS from 2003 to 2007, but EPS was rather flat from 2008 to 2012 with some declines as well as increases in EPS.
The Return on Equity is 10.3% for the last financial year of 2012. The 5 year median ROE is 15.2%. The ROE on Comprehensive Income is close at 10.9% and with a 5 year median of 15.6%. With the comprehensive income higher than the net income it points to the good quality of the net income.
Insider ownership is almost 70%. When this occurs you often get very good debt ratios and this stock is no different. The current Liquidity Ratio is 2.96 and the Debt Ratio is 4.36. (Generally, I want both of these to be at 1.50 or above.) The Leverage and Debt/Equity Ratios are quite low and therefore good at 1.30 and 0.30.
I bought this stock to diversity into retail stocks. The company has a good, but inconsistent record of dividend increases. I also like the idea of receiving the occasional special dividend. At this point my capital gain return is low, but we are in difficult economic times. I plan to hold on to my shares. See my spreadsheet at lnf.htm.
This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Leon family owns 68% of this company. Its web site is here Leon's.
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, May 2, 2013
Melcor Developments Inc 2
I just bought Michael Pollan's new book called "Cooked". If you love food, you will love books by Michael Pollan. Pollan is always a great read.
I own this stock of Melcor Developments Inc. (TSX-MRD, OTC-MODVF). I first bought this stock in 2008 and some more in 2009. I have made a return of 13.86% per year with 2.69% from dividends and 11.17% per year from capital gains. Dividend on this company is paid twice yearly.
When I look at insider trading I find $0.3M of insider selling and no insider buying. This is very little. It would seem that the Melton family owns a little over half of the outstanding shares in this company. Melton Holdings Ltd. has 48% of outstanding shares and Timothy Charles Melton owns just over 5% of the outstanding shares.
The CEO has shares worth $24.6M and has options are worth $2.1M. The CFO has some shares and has options worth $0.8M. An officer has shares worth $0.8M and has options worth $2.4M. A director has some shares and no options. This is just to give you an idea on insider share ownership and option values.
I rather not use the Price/Earnings ratios to look at reasonableness of stock price. The estimated EPS for this stock have been off quite a bit over the past couple of years. There seems to be only 1 analyst following this stock.
I get a Graham Price of $30.62. The 10 year low, median and high median Price/Graham Price Ratios are 0.43, 0.61 and 0.78. The current P/GP Ratio is 0.58 on a stock price of $17.80. This shows a relatively reasonable stock. It also shows a cheap stock price as any P/GP of 1.00 or less says that the stock is cheap on an absolute basis.
The 10 year Price/Book Value per Share Ratio is 1.04. The current P/B Ratio is 0.78. The current ratio is just 75% of the 10 years ratio and says that the current stock price is cheap. (It is also considered that any P/B Ratio below 1.00 shows a stock price that is absolutely cheap.)
The 5 year median Dividend Yield is 3.02%. The current dividend yield is lower by 14% at 2.58%. What you want is a current dividend yield higher than the 5 year median dividend yield. The higher the current dividend yield is above the 5 year median, the cheaper the stock price. Currently, the dividend yield is not far off the 5 year dividend yield, so this shows a relatively reasonable price. (Note that dividends tend to fluctuate on this stock.)
When I look for analysts' recommendations, I only find one and that recommendation is a Buy. It comes with a 12 month stock price of $27.00. This stock price is some 52% above the current stock price.
This stock is mentioned in a value stock article in a G & M article of a few months back. There is also a recent article in Edmonton Journal on Melcor deciding to set up a REIT. There is a short blog about this company at 24 Seven Finance.
I like this rather small Real Estate company. It is not your typical Real Estate investment, but I believe it will do well for me. Price is looks cheap to reasonable by my tests, although I think it is rather cheap. See my spreadsheet at mrd.htm.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates western Canada and the US. The company also develops, owns and manages commercial income properties, as well as four golf courses. Its web site is here Melcor.
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 Melcor Developments Inc. (TSX-MRD, OTC-MODVF). I first bought this stock in 2008 and some more in 2009. I have made a return of 13.86% per year with 2.69% from dividends and 11.17% per year from capital gains. Dividend on this company is paid twice yearly.
When I look at insider trading I find $0.3M of insider selling and no insider buying. This is very little. It would seem that the Melton family owns a little over half of the outstanding shares in this company. Melton Holdings Ltd. has 48% of outstanding shares and Timothy Charles Melton owns just over 5% of the outstanding shares.
The CEO has shares worth $24.6M and has options are worth $2.1M. The CFO has some shares and has options worth $0.8M. An officer has shares worth $0.8M and has options worth $2.4M. A director has some shares and no options. This is just to give you an idea on insider share ownership and option values.
I rather not use the Price/Earnings ratios to look at reasonableness of stock price. The estimated EPS for this stock have been off quite a bit over the past couple of years. There seems to be only 1 analyst following this stock.
I get a Graham Price of $30.62. The 10 year low, median and high median Price/Graham Price Ratios are 0.43, 0.61 and 0.78. The current P/GP Ratio is 0.58 on a stock price of $17.80. This shows a relatively reasonable stock. It also shows a cheap stock price as any P/GP of 1.00 or less says that the stock is cheap on an absolute basis.
The 10 year Price/Book Value per Share Ratio is 1.04. The current P/B Ratio is 0.78. The current ratio is just 75% of the 10 years ratio and says that the current stock price is cheap. (It is also considered that any P/B Ratio below 1.00 shows a stock price that is absolutely cheap.)
The 5 year median Dividend Yield is 3.02%. The current dividend yield is lower by 14% at 2.58%. What you want is a current dividend yield higher than the 5 year median dividend yield. The higher the current dividend yield is above the 5 year median, the cheaper the stock price. Currently, the dividend yield is not far off the 5 year dividend yield, so this shows a relatively reasonable price. (Note that dividends tend to fluctuate on this stock.)
When I look for analysts' recommendations, I only find one and that recommendation is a Buy. It comes with a 12 month stock price of $27.00. This stock price is some 52% above the current stock price.
This stock is mentioned in a value stock article in a G & M article of a few months back. There is also a recent article in Edmonton Journal on Melcor deciding to set up a REIT. There is a short blog about this company at 24 Seven Finance.
I like this rather small Real Estate company. It is not your typical Real Estate investment, but I believe it will do well for me. Price is looks cheap to reasonable by my tests, although I think it is rather cheap. See my spreadsheet at mrd.htm.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates western Canada and the US. The company also develops, owns and manages commercial income properties, as well as four golf courses. Its web site is here Melcor.
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, May 1, 2013
Melcor Developments Inc
On my other blog I am today writing about Mutual Funds ...continue...
I own this stock of Melcor Developments Inc. (TSX-MRD, OTC-MODVF). I first bought this stock in 2008 and some more in 2009. I have made a return of 13.86% per year with 2.69% from dividends and 11.17% per year from capital gains. Dividend on this company is paid twice yearly.
The reason I have done so well is because the stock I bought in 2009 was a lot cheaper than stock I bought in 2008. This company has hit hard by the last economic crisis. Earnings were down and dividends were cut by over 40% in 2009. Dividends have been increasing since then. The last increase was for 4.5%, but it was the second increase for 2012 and the total increase for 2012 was 12.5%.
I know a lot of people do not like companies that decrease dividends, but I am not one of them. I rather a company behave prudently and pay out in dividends only what they can afford. Dividend growth on this company over the past 10 years is good at 16%. However, dividend growth over the last 5 years is low at just 2.3%. This is because of the 2009 decrease.
The Dividend Payout Ratios are good on this company with the 5 year median DPRs for earnings at 24% and the DPRs for cash flow at 52%. (The company's CFPS has been lower than the EPS over the past 2 years. It would not be good if this continues. )
The outstanding shares have decreased by 0.7% and 0.1% per year over the past 5 and 10 years. The shares have increased due to stock options and decreased due to share buy backs. The change in outstanding shares is really nominal.
Revenue has increased by 5.8% and 9.5% over the past 5 and 10 years. Revenue per Share has increased by 6.5% and 9.7% per year over the past 5 and 10 years.
The Earnings per Share growth is also good at 10% and 16% per year over the past 5 and 10 years. The Cash Flow per Share growth is not as good, growing at just 2.3% and 0.6% per year over the past 5 and 10 years. However, for CFPS, the 5 year running average growth is better, especially for over the past 10 years. The CFPS growth here is at 2.8% and 8.4% per year over the past 5 and 10 years.
The Book Value per Share has grown well also at 20% and 19% per year over the past 5 and 10 years. I should also point out that under the new IFRS accounting rules Real Estate company's EPS and BV seem to be higher than under the previous rules.
The Return on Equity is good with a ROE of 15.2% for 2012. The ROE for Comprehensive Income is similar at 14.9% for 2012.
This company has a very strong balance sheet. The Liquidity Ratio 3.61 and the Debt Ratio is 1.92. The Leverage and Debt/Equity Ratios are fine at 2.10 and 1.09.
As I had mentioned earlier, the EPS/CF Ratio has been higher than 1.00 over the past 2 years. When the EPS/CF ratio is higher than 1.00 it means that the earnings are higher than the cash flow. This is not the first time this has happened for this company. UC-Berkeley accounting professor Richard Sloan has found through a number of academic studies that companies with cash flow higher than earnings outperform companies with earnings higher than cash flow.
This is a real estate company and I bought it for diversification purposes. I probably paid too much for it when I initially bought it in 2008. However, I bought more in 2009 because I thought that the market did overreact to bad news from this company. I will hold on to my shares and I believe that this company will do fine for me and my portfolio. See my spreadsheet at mrd.htm.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates western Canada and the US. The company also develops, owns and manages commercial income properties, as well as four golf courses. Its web site is here Melcor.
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 Melcor Developments Inc. (TSX-MRD, OTC-MODVF). I first bought this stock in 2008 and some more in 2009. I have made a return of 13.86% per year with 2.69% from dividends and 11.17% per year from capital gains. Dividend on this company is paid twice yearly.
The reason I have done so well is because the stock I bought in 2009 was a lot cheaper than stock I bought in 2008. This company has hit hard by the last economic crisis. Earnings were down and dividends were cut by over 40% in 2009. Dividends have been increasing since then. The last increase was for 4.5%, but it was the second increase for 2012 and the total increase for 2012 was 12.5%.
I know a lot of people do not like companies that decrease dividends, but I am not one of them. I rather a company behave prudently and pay out in dividends only what they can afford. Dividend growth on this company over the past 10 years is good at 16%. However, dividend growth over the last 5 years is low at just 2.3%. This is because of the 2009 decrease.
The Dividend Payout Ratios are good on this company with the 5 year median DPRs for earnings at 24% and the DPRs for cash flow at 52%. (The company's CFPS has been lower than the EPS over the past 2 years. It would not be good if this continues. )
The outstanding shares have decreased by 0.7% and 0.1% per year over the past 5 and 10 years. The shares have increased due to stock options and decreased due to share buy backs. The change in outstanding shares is really nominal.
Revenue has increased by 5.8% and 9.5% over the past 5 and 10 years. Revenue per Share has increased by 6.5% and 9.7% per year over the past 5 and 10 years.
The Earnings per Share growth is also good at 10% and 16% per year over the past 5 and 10 years. The Cash Flow per Share growth is not as good, growing at just 2.3% and 0.6% per year over the past 5 and 10 years. However, for CFPS, the 5 year running average growth is better, especially for over the past 10 years. The CFPS growth here is at 2.8% and 8.4% per year over the past 5 and 10 years.
The Book Value per Share has grown well also at 20% and 19% per year over the past 5 and 10 years. I should also point out that under the new IFRS accounting rules Real Estate company's EPS and BV seem to be higher than under the previous rules.
The Return on Equity is good with a ROE of 15.2% for 2012. The ROE for Comprehensive Income is similar at 14.9% for 2012.
This company has a very strong balance sheet. The Liquidity Ratio 3.61 and the Debt Ratio is 1.92. The Leverage and Debt/Equity Ratios are fine at 2.10 and 1.09.
As I had mentioned earlier, the EPS/CF Ratio has been higher than 1.00 over the past 2 years. When the EPS/CF ratio is higher than 1.00 it means that the earnings are higher than the cash flow. This is not the first time this has happened for this company. UC-Berkeley accounting professor Richard Sloan has found through a number of academic studies that companies with cash flow higher than earnings outperform companies with earnings higher than cash flow.
This is a real estate company and I bought it for diversification purposes. I probably paid too much for it when I initially bought it in 2008. However, I bought more in 2009 because I thought that the market did overreact to bad news from this company. I will hold on to my shares and I believe that this company will do fine for me and my portfolio. See my spreadsheet at mrd.htm.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates western Canada and the US. The company also develops, owns and manages commercial income properties, as well as four golf courses. Its web site is here Melcor.
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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