On my other blog I am today writing about the Importance of Capital...continue...
I do not own this stock Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF). I am following this stock as it was a stock on Mike Higgs' dividend growth stocks list.
I have dividend information going back to 1995. The company does not increase the dividend every year, but when they have not increased them for a few years, the next increase can be a good one. They probably stopped increasing dividends lately because the Dividend Payout Ratio for Earnings was above 100% for both the last two years ending in January 2012 and January 2013.
This stock peak in 2010 and has not done well since. The economic recovery from the last recession has been slow. This stock really has not done well since 2010. The stock price is down by almost 60%. Earnings are down more, as they have decreased by 65% as has cash flow. However, Revenue is only down by around 7%.
Dividend Payout Ratios for cash flow per share is usually around 33%, but the one for the financial year ending in January 2013, is at 64%. The DPR for EPS is even higher at 195%. Analysts had expected an increase in EPS for the financial year ending in January 2014, but if you look at the year ending at second quarterly results and the year ending in January 2013, EPS is down by 64%.
Analysts seem to expect that the cash flows for the years ending in January 2014 and 2015 will be negative; however, no analyst seems to feel that the dividends will be cut. The 5 and 10 year growth in dividends are at 3.9% and 23% per year. Even with the current drop in stock, the 5 and 10 year total return for this stock to date is at 2.52% and 11.3% per year.
Return on Equity has in the past been quite good, but the ROE for the year ending in January 2013 is at 5.9%. If you look at ROE for the year ending in August 2013, it is even lower at 2.1%. The difference in ROE on comprehensive income and net income has varied. The difference in ROE for the year ending in January 2013 was fine with the ROE on comprehensive income at 4.3% lower than the ROE on net income.
However, if you look at the difference between these ROE for the year ending in August 2013, the ROE on comprehensive income is 22% lower. This is not good. This is basically a warning.
One thing that this stock has going for it is the very good debt ratios. The Liquidity Ratio is 3.16. The debt Ratio is also very good currently at 3.93. These good ratios, of course, are likely to deteriorate if the company cannot make any money. The current Leverage and Debt/Equity Ratios are also good at 1.34 and 0.34. The other thing that is good is there is a lot of insider ownership, which I will talk about more tomorrow.
Often I tend to suggest investing in beaten down stocks. The market tends to over react to bad news from a company. However, this is a retail stock and this makes investing in it when it is beaten down more risky than say a utility stock. See my spreadsheet at ret.htm.
This is the first of two parts. Second part will be posted on Tuesday, September 17, 2013 and will be here.
Reitmans (Canada) Limited operates a network of clothing stores specializing in women's & men's fashions and accessories. The company operates stores under the names Reitmans, Smart Set, Pennington Superstores, RW & Co., Thyme Maternity, Addition-Elle, and Cassis. Its web site is here Reitmans.
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, September 16, 2013
Friday, September 13, 2013
Granite Real Estate 2
On my other blog I am today writing about Income Investing in September 2013...continue...
I do not own this stock Granite REIT (TSX-GRT.UN, NYSE-GRP.U), but I used to. I first bought some of this stock in 2003. It was a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) Call on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold in 2009; being discourage it would ever do well.
Since this stock changed its symbol this year (from GRT to GRT.UN), the insider trading information is only back to the beginning of this year, rather than for the year ending in today. The insider trading report shows that there is $0.6M in insider selling and 0.5M in net insider selling. So there is a minimal amount of insider buying. The report also shows a minimal amount of insider ownership and no outstanding options.
Some of my normal stock price tests are useless here. I cannot use the dividend yield test as this stock changed to a REIT and greatly increased the dividend. I cannot use the Price/Earnings Ratios stock test because the company had negative earnings in 2007, 2008 and 2009 and this gives 5 year median P/E ratios that are not logical.
With the change in accounting and the changes from a corporation to a REIT, the Book Value has greatly increased, so I do not that a P/B Ratio test will tell us much. The Revenues have declined considerably over the past 5 and 10 years. (The decline in revenue is caused by the drop in revenue from Magna Entertainment Corp. (MEC)). However, I can say that the current Price/Sales Ratio is very high at 8.81.
If you look at Price/Funds from Operations, I get a current P/FFO Ratio of 11.25 and this is slightly below the 5 year median P/FFO of 13.10 and this test suggests that the stock price is cheap.
When I look at analysts' recommendations, I find Buy and Hold. The consensus recommendation would be a buy. The 12 month consensus stock price is $38.70. This implies a total return of 15.23% with 9.32% from dividends and 5.93% from capital gains.
The REIT Spot blog talks about recent changes to this company. Canaccord has a recent report on Granite REIT. They maintain a Hold rating on this company.
This company has changed so much that I do not think we can get useful information from the annual reports to make a decision on it. It is like a brand new company that has just started up. Also, since they have gotten rid of Frank Stronach, it is difficult to say how the new managers will do. See my spreadsheet at grt.htm.
This is the second of two parts. The first part was posted on Thursday, September 12, 2013 and is available here.
Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite Real Estate.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Granite REIT (TSX-GRT.UN, NYSE-GRP.U), but I used to. I first bought some of this stock in 2003. It was a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) Call on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold in 2009; being discourage it would ever do well.
Since this stock changed its symbol this year (from GRT to GRT.UN), the insider trading information is only back to the beginning of this year, rather than for the year ending in today. The insider trading report shows that there is $0.6M in insider selling and 0.5M in net insider selling. So there is a minimal amount of insider buying. The report also shows a minimal amount of insider ownership and no outstanding options.
Some of my normal stock price tests are useless here. I cannot use the dividend yield test as this stock changed to a REIT and greatly increased the dividend. I cannot use the Price/Earnings Ratios stock test because the company had negative earnings in 2007, 2008 and 2009 and this gives 5 year median P/E ratios that are not logical.
With the change in accounting and the changes from a corporation to a REIT, the Book Value has greatly increased, so I do not that a P/B Ratio test will tell us much. The Revenues have declined considerably over the past 5 and 10 years. (The decline in revenue is caused by the drop in revenue from Magna Entertainment Corp. (MEC)). However, I can say that the current Price/Sales Ratio is very high at 8.81.
If you look at Price/Funds from Operations, I get a current P/FFO Ratio of 11.25 and this is slightly below the 5 year median P/FFO of 13.10 and this test suggests that the stock price is cheap.
When I look at analysts' recommendations, I find Buy and Hold. The consensus recommendation would be a buy. The 12 month consensus stock price is $38.70. This implies a total return of 15.23% with 9.32% from dividends and 5.93% from capital gains.
The REIT Spot blog talks about recent changes to this company. Canaccord has a recent report on Granite REIT. They maintain a Hold rating on this company.
This company has changed so much that I do not think we can get useful information from the annual reports to make a decision on it. It is like a brand new company that has just started up. Also, since they have gotten rid of Frank Stronach, it is difficult to say how the new managers will do. See my spreadsheet at grt.htm.
This is the second of two parts. The first part was posted on Thursday, September 12, 2013 and is available here.
Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite Real Estate.
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, September 12, 2013
Granite Real Estate
I do not own this stock Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U), but I used to. I first bought some of this stock in 2003. It is a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold in 2009; being discourage it would ever do well again.
I look at this stock again to determine what I would have made if I had kept this stock until the current time. My total return per year would have been around 2.97% with 2.54% from dividends and 0.24% from capital gains. I do not regret selling. It would seem, in hind sight, I paid a reasonable price for this stock in 2003, but not in 2006. The stock is not yet back to where it was in 2006.
This stock was hit quite hard in the last recession and is only now recovering. In 2012, they have also changed the currency of both their statements and their distributions. The currency they used to use was US$, but they have changed to the Canadian $. In 2012, the company changed from a corporation to a REIT.
The company cut their dividend in 2010. However, the current dividends are much higher today. The 5 and 10 years growth in dividends is at 27.5% and 17.6% per year. They increased their dividends by 60% in 2011 and then by 150% in 2012. The most recent increase in 2013 is for 5%. In 2013 they have also changed the distribution from a quarterly one to a monthly one.
The Dividend Payout Ratio for 2012 is high for earnings per share at 132%. The DPR for cash flow per share was better at 80%. Analysts expect the DPR for EPS to be much better for this year and around 70%. The current dividend yield is quite good at 5.93%. The dividend increase for 2013 might be an indicator of future increases rather than the history over the last 5 and 10 years.
Revenues hit a high point in 2006. They have declined by almost 80% since then. The revenues are expected to increase in 2013 by around 4%. If you look at the revenues for the last 12 months ending in June 2013 compared to revenues in 2012, they are up by 3.6%. They are going in the right direction.
Earnings per share have been quite volatile and there were losses in 2008, 2009 and 2010. They did start to increase in 2012 and are up for the year ending in June 2013 compared to 2012 by 141%. Cash Flow per Share has also been rather volatile, but they are up over the past 5 years by some 12% per year.
The Return on Equity is rather low in 2012 at just 8.1%. The ROE on comprehensive income is not far behind at 7.1%.
The Liquidity Ratio is low at 1.36. However, REITs do tend to have low Liquidity Ratios. I prefer this ratio to be at 1.50 or higher. The Debt Ratio at 3.57 is very good. Leverage and Debt/Equity Ratios are also good and currently are at 1.32 and 0.32. You want Leverage and Debt/Equity Ratios to be low.
This company has increased the dividend quite a lot recently. However, this was done when it changed to a REIT. I would not expect the past increases to continue. The increase in 2013 was only for 5%. You should also note that REITs tend to increase their dividends just above the rate of inflation. You should probably not expect this company to be any different.
This is another new REIT with a good yield. It is hard to know how well the company will do as a REIT. See my spreadsheet at grt.htm.
This is the first of two parts. Second part will be posted on Friday, September 13, 2013 and will be available here.
Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite Real Estate.
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 look at this stock again to determine what I would have made if I had kept this stock until the current time. My total return per year would have been around 2.97% with 2.54% from dividends and 0.24% from capital gains. I do not regret selling. It would seem, in hind sight, I paid a reasonable price for this stock in 2003, but not in 2006. The stock is not yet back to where it was in 2006.
This stock was hit quite hard in the last recession and is only now recovering. In 2012, they have also changed the currency of both their statements and their distributions. The currency they used to use was US$, but they have changed to the Canadian $. In 2012, the company changed from a corporation to a REIT.
The company cut their dividend in 2010. However, the current dividends are much higher today. The 5 and 10 years growth in dividends is at 27.5% and 17.6% per year. They increased their dividends by 60% in 2011 and then by 150% in 2012. The most recent increase in 2013 is for 5%. In 2013 they have also changed the distribution from a quarterly one to a monthly one.
The Dividend Payout Ratio for 2012 is high for earnings per share at 132%. The DPR for cash flow per share was better at 80%. Analysts expect the DPR for EPS to be much better for this year and around 70%. The current dividend yield is quite good at 5.93%. The dividend increase for 2013 might be an indicator of future increases rather than the history over the last 5 and 10 years.
Revenues hit a high point in 2006. They have declined by almost 80% since then. The revenues are expected to increase in 2013 by around 4%. If you look at the revenues for the last 12 months ending in June 2013 compared to revenues in 2012, they are up by 3.6%. They are going in the right direction.
Earnings per share have been quite volatile and there were losses in 2008, 2009 and 2010. They did start to increase in 2012 and are up for the year ending in June 2013 compared to 2012 by 141%. Cash Flow per Share has also been rather volatile, but they are up over the past 5 years by some 12% per year.
The Return on Equity is rather low in 2012 at just 8.1%. The ROE on comprehensive income is not far behind at 7.1%.
The Liquidity Ratio is low at 1.36. However, REITs do tend to have low Liquidity Ratios. I prefer this ratio to be at 1.50 or higher. The Debt Ratio at 3.57 is very good. Leverage and Debt/Equity Ratios are also good and currently are at 1.32 and 0.32. You want Leverage and Debt/Equity Ratios to be low.
This company has increased the dividend quite a lot recently. However, this was done when it changed to a REIT. I would not expect the past increases to continue. The increase in 2013 was only for 5%. You should also note that REITs tend to increase their dividends just above the rate of inflation. You should probably not expect this company to be any different.
This is another new REIT with a good yield. It is hard to know how well the company will do as a REIT. See my spreadsheet at grt.htm.
This is the first of two parts. Second part will be posted on Friday, September 13, 2013 and will be available here.
Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite Real Estate.
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, September 11, 2013
Teck Resources Ltd 2
On my other blog I am today writing about Payday Loans Companies...continue...
I do not own this stock Teck Resources Ltd (TSX-TCK.B, NYSE-TCK), but I have in the past. In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at. I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.
When I look at insider trading, I find $2.4M of insider selling and this is all by officers, and 2.3M of net insider selling. There is little insider buying and all the buying is by directors. The CEO has shares worth $8.4M and has options worth $48.1M. The CFO has shares worth $0.2M and has options worth $14M. An officer has shares worth $0.1M and has options worth $4.5M. A director has shares worth $0.6M and has options worth $0.8M. This is just to give you an idea on insider share ownership and option values.
Norman Bell Keevil, Caisse de dépôt et placement du Québec, Sumitomo Metal Mining Co. Ltd. and Temagami Mining Company own around 85% of Class A shares and control the company. They also have considerable investments in this company with Norman Bell Keevil's investment worth around $23M, Caisse de dépôt et placement du Québec's worth around 294M, Sumitomo Metal Mining Co. Ltd.'s worth around 49M and Temagami Mining Company's worth around $144M.
The 5 year low, median and high median Price/Earnings Ratios are 6.38, 14.66 and 19.68. The current P/E Ratio is 17.08 based on a stock price of $27.84 and 2013 earnings estimates of 1.63. This suggests that the stock price is towards to high end of the reasonable range.
I get a Graham price of $34.06. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.97 and 1.26. The current P/BP Ratio is 0.82. This stock price tests suggest that the stock price is reasonable. A P/GP Ratio of 1.00 or less also suggests that the stock price is a good one.
The 10 year median Price/Book Value per Share Ratio is 1.85. The current P/B Ratio is 0.88 based on a stock price of $27.84. This current P/B Ratio is some 52% of the 10 year median P/B Ratio. This test suggests that the stock price is cheap. Also, on an absolute basis a P/B Ratio below 1.00 says that the stock price is cheap.
The 5 year median dividend yield is 2.29% (if you exclude the dividend yields for 2009 and 2010. The current dividend yield at 3.23% is some 41% higher. This test says that the stock price is cheap.
The analysts' recommendations are Strong Buy, Buy Hold and Underperform. Most of the recommendations fall into the Buy and Hold categories. The consensus recommendation would be a Buy. The 12 month stock price consensus is $31.50. This implies a 12 month total return of 16.38%, with 3.23% from dividends and 13.15% from capital gains.
The Motley Fool has a good review on this stock. It talks about how the company handled the problems that the purchase of Fording Canadian Coal Trust caused. Over all it is a positive view of this company. The Motley Fool also gave a buy rating on this stock in August 2013. The blogger Dividend Ninja talks about why he bought this stock in August 2013.
However, Zacks research felt that in August 2013 the company was in the overbought territory. On the NASDAQ site Minyanville thinks that on a technical note you should hold off buying this stock.
I think that my stock price tests basically say that this stock is currently selling at a very good price. This is a rather risky and volatile stock as it is in mining (S&P/TSX materials Index). See my spreadsheet at tck.htm.
This is the second of two parts. The first part was posted on Tuesday, September 10, 2013 and is available here.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Teck Resources Ltd (TSX-TCK.B, NYSE-TCK), but I have in the past. In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at. I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.
When I look at insider trading, I find $2.4M of insider selling and this is all by officers, and 2.3M of net insider selling. There is little insider buying and all the buying is by directors. The CEO has shares worth $8.4M and has options worth $48.1M. The CFO has shares worth $0.2M and has options worth $14M. An officer has shares worth $0.1M and has options worth $4.5M. A director has shares worth $0.6M and has options worth $0.8M. This is just to give you an idea on insider share ownership and option values.
Norman Bell Keevil, Caisse de dépôt et placement du Québec, Sumitomo Metal Mining Co. Ltd. and Temagami Mining Company own around 85% of Class A shares and control the company. They also have considerable investments in this company with Norman Bell Keevil's investment worth around $23M, Caisse de dépôt et placement du Québec's worth around 294M, Sumitomo Metal Mining Co. Ltd.'s worth around 49M and Temagami Mining Company's worth around $144M.
The 5 year low, median and high median Price/Earnings Ratios are 6.38, 14.66 and 19.68. The current P/E Ratio is 17.08 based on a stock price of $27.84 and 2013 earnings estimates of 1.63. This suggests that the stock price is towards to high end of the reasonable range.
I get a Graham price of $34.06. The 10 year low, median and high median Price/Graham Price Ratios are 0.68, 0.97 and 1.26. The current P/BP Ratio is 0.82. This stock price tests suggest that the stock price is reasonable. A P/GP Ratio of 1.00 or less also suggests that the stock price is a good one.
The 10 year median Price/Book Value per Share Ratio is 1.85. The current P/B Ratio is 0.88 based on a stock price of $27.84. This current P/B Ratio is some 52% of the 10 year median P/B Ratio. This test suggests that the stock price is cheap. Also, on an absolute basis a P/B Ratio below 1.00 says that the stock price is cheap.
The 5 year median dividend yield is 2.29% (if you exclude the dividend yields for 2009 and 2010. The current dividend yield at 3.23% is some 41% higher. This test says that the stock price is cheap.
The analysts' recommendations are Strong Buy, Buy Hold and Underperform. Most of the recommendations fall into the Buy and Hold categories. The consensus recommendation would be a Buy. The 12 month stock price consensus is $31.50. This implies a 12 month total return of 16.38%, with 3.23% from dividends and 13.15% from capital gains.
The Motley Fool has a good review on this stock. It talks about how the company handled the problems that the purchase of Fording Canadian Coal Trust caused. Over all it is a positive view of this company. The Motley Fool also gave a buy rating on this stock in August 2013. The blogger Dividend Ninja talks about why he bought this stock in August 2013.
However, Zacks research felt that in August 2013 the company was in the overbought territory. On the NASDAQ site Minyanville thinks that on a technical note you should hold off buying this stock.
I think that my stock price tests basically say that this stock is currently selling at a very good price. This is a rather risky and volatile stock as it is in mining (S&P/TSX materials Index). See my spreadsheet at tck.htm.
This is the second of two parts. The first part was posted on Tuesday, September 10, 2013 and is available here.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck.
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, September 10, 2013
Teck Resources Ltd
On my other blog I am today writing about the Global Warming Religion...continue...
I do not own this stock Teck Resources Ltd (TSX-TCK.B, NYSE-TCK), but I have in the past. In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at. I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.
The first thing to discuss is dividends. I have information from 1993 and from then to 2004 the dividends were level. Between 2004 and 2006 dividends increased 900% (from $0 .10 to $1.00 per share, annually). Dividends were then level until they stopped in 2008. Since dividends were restarted in 2004, they have increased by 350% ($0.20 to $0.90 per share, annually).
The current dividend yield is 3.23% based on a stock price of $27.84. The last dividend increases was 12.5% and was made in 2013. The 5 year median dividend yield is 1.29%. This is a resource stock so dividend volatility does not surprise me.
The Dividend Payout Ratios are fine. The DPR for Earnings per Share for 2012 was 58% and for Cash Flow per Share for 2012 was at 14.6%.
Have shareholder made any money on this stock? If you look at this stock to the end of 2012, the total return over the past 5 and 10 years is at 2.11% and 24.02% per year with 1.46% and 4.03% per year from dividends and 0.65% and 20.00% from capital gains.
If you look at this stock to date with a current stock price of $27.84, shareholders have made 39.29% and 13.34% per year, with 3.45% and 3.66% from dividends and 35.84% and 9.68% per year from capital gains. It would seem that perhaps the long term holding of this stock might be profitable.
Shares outstanding have increased by 5.6% and 4.7% per year over the past 5 and 10 years. Shares have increased due to stock options and share issues. They have decreased due to buy backs. There are two classes of shares. Class A shares have 100 votes per share and Class B shares have one vote per share. Norman Bell Keevil, Caisse de dépôt et placement du Québec, Sumitomo Metal Mining Co. Ltd. and Temagami Mining Company own around 85% of Class A shares.
Revenues and Revenues per share have grown nicely, with Revenues up by 10% and 17% per year over the past 5 and 10 years and Revenues per Share up 4% and 12% per year over these periods. Over the past 5 years, using 5 year running averages and Revenues per Share is up almost 8%.
Earnings per share have not done as well, especially over the past 5 years. There is a big difference between the 5 year running averages increase and 5 year increase so I will talk about the 5 year running average growth over the past 5 years and it is 0%. The EPS have grown by 11% over the past 10 years.
Cash Flow has grown by 4% and 26% per year over the past 5 and 10 years. If you look at the growth in 5 year running averages, growth is at 10% and 22% per year over these periods, respectively.
Return on Equity has varied a lot over the years. The 5 year median ROE is at 12.2%. However, 2012 was not a good year and that year's ROE is just 4.8%. If you look at ROE for the last year ending in June 2013, ROE is even lower at 3.8%.
There has been some variance between the ROE on net income and on comprehensive income. The ROE on comprehensive income for 2012 is 4.1%, some 15% lower. This is not far off. The difference between ROE on net income and comprehensive income for the year ending in June 2013 is 1.6%.
The last thing to look at is debt ratios and these are very good. The Liquidity Ratio is currently at 3.61. The Debt Ratio is at 2.11. The current Leverage (A/BK) and Debt/Equity Ratios are low and good at 1.90 and 0.90, respectively. These debt ratios will allow the company to ride out most economic problem times.
What I see in this stock is good debt ratios, good dividends and volatility. See my spreadsheet at tck.htm.
This is the first of two parts. Second part will be posted on Wednesday, September 11, 2013 and will be here.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Teck Resources Ltd (TSX-TCK.B, NYSE-TCK), but I have in the past. In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at. I bought this stock in 2008 and sold in 2009. I bought this stock because the company purchased Fording Canadian Coal Trust at exactly the wrong time and got into financial difficulties and the stock price dropped off a cliff as they had to cut dividends. When the stock recovered somewhat in 2009, I sold for a profit.
The first thing to discuss is dividends. I have information from 1993 and from then to 2004 the dividends were level. Between 2004 and 2006 dividends increased 900% (from $0 .10 to $1.00 per share, annually). Dividends were then level until they stopped in 2008. Since dividends were restarted in 2004, they have increased by 350% ($0.20 to $0.90 per share, annually).
The current dividend yield is 3.23% based on a stock price of $27.84. The last dividend increases was 12.5% and was made in 2013. The 5 year median dividend yield is 1.29%. This is a resource stock so dividend volatility does not surprise me.
The Dividend Payout Ratios are fine. The DPR for Earnings per Share for 2012 was 58% and for Cash Flow per Share for 2012 was at 14.6%.
Have shareholder made any money on this stock? If you look at this stock to the end of 2012, the total return over the past 5 and 10 years is at 2.11% and 24.02% per year with 1.46% and 4.03% per year from dividends and 0.65% and 20.00% from capital gains.
If you look at this stock to date with a current stock price of $27.84, shareholders have made 39.29% and 13.34% per year, with 3.45% and 3.66% from dividends and 35.84% and 9.68% per year from capital gains. It would seem that perhaps the long term holding of this stock might be profitable.
Shares outstanding have increased by 5.6% and 4.7% per year over the past 5 and 10 years. Shares have increased due to stock options and share issues. They have decreased due to buy backs. There are two classes of shares. Class A shares have 100 votes per share and Class B shares have one vote per share. Norman Bell Keevil, Caisse de dépôt et placement du Québec, Sumitomo Metal Mining Co. Ltd. and Temagami Mining Company own around 85% of Class A shares.
Revenues and Revenues per share have grown nicely, with Revenues up by 10% and 17% per year over the past 5 and 10 years and Revenues per Share up 4% and 12% per year over these periods. Over the past 5 years, using 5 year running averages and Revenues per Share is up almost 8%.
Earnings per share have not done as well, especially over the past 5 years. There is a big difference between the 5 year running averages increase and 5 year increase so I will talk about the 5 year running average growth over the past 5 years and it is 0%. The EPS have grown by 11% over the past 10 years.
Cash Flow has grown by 4% and 26% per year over the past 5 and 10 years. If you look at the growth in 5 year running averages, growth is at 10% and 22% per year over these periods, respectively.
Return on Equity has varied a lot over the years. The 5 year median ROE is at 12.2%. However, 2012 was not a good year and that year's ROE is just 4.8%. If you look at ROE for the last year ending in June 2013, ROE is even lower at 3.8%.
There has been some variance between the ROE on net income and on comprehensive income. The ROE on comprehensive income for 2012 is 4.1%, some 15% lower. This is not far off. The difference between ROE on net income and comprehensive income for the year ending in June 2013 is 1.6%.
The last thing to look at is debt ratios and these are very good. The Liquidity Ratio is currently at 3.61. The Debt Ratio is at 2.11. The current Leverage (A/BK) and Debt/Equity Ratios are low and good at 1.90 and 0.90, respectively. These debt ratios will allow the company to ride out most economic problem times.
What I see in this stock is good debt ratios, good dividends and volatility. See my spreadsheet at tck.htm.
This is the first of two parts. Second part will be posted on Wednesday, September 11, 2013 and will be here.
Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is here Teck.
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, September 9, 2013
Enbridge Income Fund Holdings
On my other blog I am today writing about the Graham Number or Price...continue...
I do not own this stock Enbridge Income Fund Holdings (TSX-ENF, OTC-EBGUF). I have followed this stock for some time but I have not owned it. I do own Enbridge Inc. (TSX-ENB, NYSE-ENB)
What I hate about this stock is that the financial statements are complex and they make it hard to find things, like EPS, which should be on the income statement. (Actually, in the latest quarterly report it is and I hope it stays there.) Since this fund is wholly invested in the Enbridge Income Fund (EIF), in order to fully investigate this stock you must also investigate the Enbridge Income Fund (EIF). The problem with complexity it is easy to get things wrong.
First I will talk about the dividends. The current dividend yield is 5.76% based on a stock price of $23.17 and dividends of $1.34 per share, annually. This is lower than the 5 year median dividend yield of 8.62%, but all past Income Trust companies have lower dividends yields.
Dividend growth has been at 5.18% per year and 4.59% per year over the past 5 and 10 years. What you have here is a company with good dividend with moderate dividend growth.
The 5 and 10 year total returns for this stock has been very good. The 5 and 10 year total returns are at 26.84% and 16.20% per year over these periods. The dividend portion of this return has been at 8.16% and 6.99% per year over these periods. The capital gain has been at 18.68% and 9.21% per year over these periods.
The Dividend Payout Ratios for this stock is not bad as far as earnings go paying out 83.5% in 2012. However, the DPR for cash flow is very high for 2012 at 110.8%. When looking at the EIF for DPRs, I find that that are still quoting DPRs based on Distributable Income. The statements say that DPR for DI is at 78.9% for 2012. If you look at DPR for EIF based on income, the DPR for 2012 is very high at 175.9%. However, the DPR for cash flow is quite good at 53.6% for 2012.
Looking at book value, the EIF has a negative $17.63 value. This stock has a positive $23.53 value. It is hard to say what the interplay is between these values. Also, Enbridge Inc. own shares in EIF. I always find a negative book value to be a problem.
The other thing I do not like is the debt ratios. For this stock they look very good in 2012 with Liquidity Ratio of 2.57 and a Debt Ratio of 33.65. However, the only think that this stock owns is shares in EIF and its 2012 Liquidity Ratio is 0.91 and its Debt Ratio is 1.21. A Liquidity Ratio of less than 1.00 means that current assets cannot cover currently liabilities. However, for EIF if you add in cash flow after dividends, the Liquidity Ratio is just fine at 1.57.
The 5 year low, median and high median Price/Earnings Ratios for this stock are 13.58, 16.21and 19.05. The current P/E Ratio is 16.55 based on a stock price of $23.17 and 2013 earnings of $1.40. (Note that if you compare the EPS for 2012 and for the year ending in June 2013, EPS has increased by 4.05%. The EPS estimates show the EPS declining by 5.4% in 2013.)
The above would suggest that the stock price is relatively reasonable. However, I think that a P/E Ratio of 16.55 is rather high for a utility stock. Also, I am not sure that "earnings" listed in the statements are true "earnings". This stock only owns units in EIF. I am not at all sure how meaningful stock price tests using Price Sales Ratio or Price/Cash Flow per Share Ratio would be. A test based on dividend yield is also not meaningful as the dividend yield has been decreasing on all old income trust companies.
What I can say is that, so far, shareholders have done well with this stock. There will be a decrease in the dividend yields that shareholders received over the past 5 and 10 years. I personally do not like stocks that are complex to investigate. I do not like investing in stocks that I feel I do not understand.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month consensus stock price is $25.50. This implies a total return of 15.82% with 5.76% from dividends and 10.06% from capital gains.
See my spreadsheet on Enbridge Income Fund Holdings at hse.htm and my spreadsheet on Enbridge Income Fund at enbif.htm.
Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, holds high quality, low risk energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and interests in more than 400 megawatts of renewable and alternative power generation capacity. Its web site is here Enbridge Income Fund Holdings.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Enbridge Income Fund Holdings (TSX-ENF, OTC-EBGUF). I have followed this stock for some time but I have not owned it. I do own Enbridge Inc. (TSX-ENB, NYSE-ENB)
What I hate about this stock is that the financial statements are complex and they make it hard to find things, like EPS, which should be on the income statement. (Actually, in the latest quarterly report it is and I hope it stays there.) Since this fund is wholly invested in the Enbridge Income Fund (EIF), in order to fully investigate this stock you must also investigate the Enbridge Income Fund (EIF). The problem with complexity it is easy to get things wrong.
First I will talk about the dividends. The current dividend yield is 5.76% based on a stock price of $23.17 and dividends of $1.34 per share, annually. This is lower than the 5 year median dividend yield of 8.62%, but all past Income Trust companies have lower dividends yields.
Dividend growth has been at 5.18% per year and 4.59% per year over the past 5 and 10 years. What you have here is a company with good dividend with moderate dividend growth.
The 5 and 10 year total returns for this stock has been very good. The 5 and 10 year total returns are at 26.84% and 16.20% per year over these periods. The dividend portion of this return has been at 8.16% and 6.99% per year over these periods. The capital gain has been at 18.68% and 9.21% per year over these periods.
The Dividend Payout Ratios for this stock is not bad as far as earnings go paying out 83.5% in 2012. However, the DPR for cash flow is very high for 2012 at 110.8%. When looking at the EIF for DPRs, I find that that are still quoting DPRs based on Distributable Income. The statements say that DPR for DI is at 78.9% for 2012. If you look at DPR for EIF based on income, the DPR for 2012 is very high at 175.9%. However, the DPR for cash flow is quite good at 53.6% for 2012.
Looking at book value, the EIF has a negative $17.63 value. This stock has a positive $23.53 value. It is hard to say what the interplay is between these values. Also, Enbridge Inc. own shares in EIF. I always find a negative book value to be a problem.
The other thing I do not like is the debt ratios. For this stock they look very good in 2012 with Liquidity Ratio of 2.57 and a Debt Ratio of 33.65. However, the only think that this stock owns is shares in EIF and its 2012 Liquidity Ratio is 0.91 and its Debt Ratio is 1.21. A Liquidity Ratio of less than 1.00 means that current assets cannot cover currently liabilities. However, for EIF if you add in cash flow after dividends, the Liquidity Ratio is just fine at 1.57.
The 5 year low, median and high median Price/Earnings Ratios for this stock are 13.58, 16.21and 19.05. The current P/E Ratio is 16.55 based on a stock price of $23.17 and 2013 earnings of $1.40. (Note that if you compare the EPS for 2012 and for the year ending in June 2013, EPS has increased by 4.05%. The EPS estimates show the EPS declining by 5.4% in 2013.)
The above would suggest that the stock price is relatively reasonable. However, I think that a P/E Ratio of 16.55 is rather high for a utility stock. Also, I am not sure that "earnings" listed in the statements are true "earnings". This stock only owns units in EIF. I am not at all sure how meaningful stock price tests using Price Sales Ratio or Price/Cash Flow per Share Ratio would be. A test based on dividend yield is also not meaningful as the dividend yield has been decreasing on all old income trust companies.
What I can say is that, so far, shareholders have done well with this stock. There will be a decrease in the dividend yields that shareholders received over the past 5 and 10 years. I personally do not like stocks that are complex to investigate. I do not like investing in stocks that I feel I do not understand.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month consensus stock price is $25.50. This implies a total return of 15.82% with 5.76% from dividends and 10.06% from capital gains.
See my spreadsheet on Enbridge Income Fund Holdings at hse.htm and my spreadsheet on Enbridge Income Fund at enbif.htm.
Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, holds high quality, low risk energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and interests in more than 400 megawatts of renewable and alternative power generation capacity. Its web site is here Enbridge Income Fund Holdings.
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, September 6, 2013
Great-West Lifeco Inc 2
I do not own this stock Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). I have followed this stock for some time. This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. It is part of Power Financial TSX-PWF), so you probably should not buy both.
When I look at insider trading, I find that there is some $4.2M of insider selling. All the selling is by officers of the company. Selling seems to stock options being exercised. There is no insider buying. There are a lot of officers with stock options.
Also, Power Financial (TSX-PWF) owns some 69% of this company. Paul Desmarais who also owns a great deal of Power Financial and together with Power Financial the ownership in Great-West is around 78%. The CEO has shares worth $3.9M and has options worth $16.5M. The CFO has shares worth $6.3M and has options with $13.4M.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.43, 12.29 and 15.65. The current P/E Ratio is 13.05 based on a stock price of $29.75 and 2013 EPS estimate of $2.28. This test shows that the stock price is reasonable. It is around the relative median price.
I get a Graham price of $26.31. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.29 and 1.44. The current P/GP Ratio is 1.13 based on a stock price of $29.75. This test shows that that the stock prices is reasonable and towards the lower end of reasonable.
The 10 year Price/Book Value per Share Ratio is 2.46. The current P/B Ratio is 2.20, a value some 90% of the 10 year ratio. This test says that the stock price is reasonable. (For this test to say the stock is cheap, the current P/B Ratio must be 80% or less than the 10 year P/B Ratio.
The 5 year median dividend yield is 5.23%. The current dividend yield is lower by over 21% at 4.13%. This puts the stock towards the high end of the reasonable range. However, the 10 year median dividend yield is 3.71%, and this is a lot lower than the 5 year median dividend yield. The 10 year median dividend yield is 11% lower than the current dividend yield and shows that the stock price is reasonable. The dividend yield has been moving up recently and that is why the current 5 year median dividend yield is rather high historically.
There are a number of analysts following this stock. The analysts' recommendations are Strong Buy, Buy and Hold. The majority of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price is $31.60 which implies a 12 month total return of 10.35%, with 4.13% from dividends and 6.22% from capital gains.
I must say that I disagree with the Hold recommendations. This is a good company at a reasonable price. If you want to do well in this stock for the longer term, you buy when the stock is at least reasonable. I think that that the stock price is reasonable.
The Motley Fool has an interesting article about Life Insurance companies and interest rates. It talks about why increasing interest rates are good for these companies. The Investment Executive web site has an article on this company about their first quarterly results.
Insurance companies are starting to recover. If you wait for full recovery, you may not get them at a reasonable price. If you want the stock for the long term, you buy when the price is good and tuck it away in your portfolio for a while. In other words, buy now and do not wait for when everybody wants it. See my spreadsheet at gwo.htm.
This is the second of two parts. The first part was posted on Thursday, September 5, 2013 and is available here.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West Lifeco.
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 that there is some $4.2M of insider selling. All the selling is by officers of the company. Selling seems to stock options being exercised. There is no insider buying. There are a lot of officers with stock options.
Also, Power Financial (TSX-PWF) owns some 69% of this company. Paul Desmarais who also owns a great deal of Power Financial and together with Power Financial the ownership in Great-West is around 78%. The CEO has shares worth $3.9M and has options worth $16.5M. The CFO has shares worth $6.3M and has options with $13.4M.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.43, 12.29 and 15.65. The current P/E Ratio is 13.05 based on a stock price of $29.75 and 2013 EPS estimate of $2.28. This test shows that the stock price is reasonable. It is around the relative median price.
I get a Graham price of $26.31. The 10 year low, median and high median Price/Graham Price Ratios are 1.13, 1.29 and 1.44. The current P/GP Ratio is 1.13 based on a stock price of $29.75. This test shows that that the stock prices is reasonable and towards the lower end of reasonable.
The 10 year Price/Book Value per Share Ratio is 2.46. The current P/B Ratio is 2.20, a value some 90% of the 10 year ratio. This test says that the stock price is reasonable. (For this test to say the stock is cheap, the current P/B Ratio must be 80% or less than the 10 year P/B Ratio.
The 5 year median dividend yield is 5.23%. The current dividend yield is lower by over 21% at 4.13%. This puts the stock towards the high end of the reasonable range. However, the 10 year median dividend yield is 3.71%, and this is a lot lower than the 5 year median dividend yield. The 10 year median dividend yield is 11% lower than the current dividend yield and shows that the stock price is reasonable. The dividend yield has been moving up recently and that is why the current 5 year median dividend yield is rather high historically.
There are a number of analysts following this stock. The analysts' recommendations are Strong Buy, Buy and Hold. The majority of the recommendations are a Hold, so the consensus recommendation would be a Hold. The 12 month stock price is $31.60 which implies a 12 month total return of 10.35%, with 4.13% from dividends and 6.22% from capital gains.
I must say that I disagree with the Hold recommendations. This is a good company at a reasonable price. If you want to do well in this stock for the longer term, you buy when the stock is at least reasonable. I think that that the stock price is reasonable.
The Motley Fool has an interesting article about Life Insurance companies and interest rates. It talks about why increasing interest rates are good for these companies. The Investment Executive web site has an article on this company about their first quarterly results.
Insurance companies are starting to recover. If you wait for full recovery, you may not get them at a reasonable price. If you want the stock for the long term, you buy when the price is good and tuck it away in your portfolio for a while. In other words, buy now and do not wait for when everybody wants it. See my spreadsheet at gwo.htm.
This is the second of two parts. The first part was posted on Thursday, September 5, 2013 and is available here.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West Lifeco.
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, September 5, 2013
Great-West Lifeco Inc
On my other blog I am today writing about the PEG Ratio...continue...
I do not own this stock Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). I have followed this stock for some time. This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. It is part of Power Financial TSX-PWF), so you probably should not buy both.
This is a life insurance company. All life insurance companies are having difficulties in our current economic climate, especially with the interest rates being kept so low. As with other life insurance companies, this company has not raised their dividends for some time. Before 2009, they were considered to be a dividend growth company. They will probably be again, but when this will happen is a big question.
Prior to 2009, the dividend growth for this company was around 16% per year. The 10 year dividend growth is still good at 10%, but that is because of dividend increases before 2009. Dividends have not increased since 2009.
The Dividend Payout Ratios are still fine on this stock with DPR for earnings at 65% for the 2012 fiscal year. The DPR for cash flow is also fine at around 22% for cash flows.
The Total returns have been bad to just ok over the past 5 and 10 years. The 5 year total return is a loss of 3.3% per year with 4% per year from Dividends and a capital gain loss of 7.3% per year. The 10 year total return is 6.89% per year with 4.59% per year from dividends and 2.38% per year from capital gains.
The outstanding shares have increased by 1.24% and 2.64% per year over the past 5 and 10 years. The shares have increased due to stock options and Share Issues. They have decreased due to Buy Backs. Revenues have increased by 3% and 6% per year over the past 5 and 10 years. Revenue per Share has, of course, not done as well. However, if we look at Revenue per Share using the 5 year running averages, the 5 and 10 year increases are at 5.6% and 4.9%.
Earnings per Share are very good over the past 10 years, but poor over the past 5 years no matter how you look at it. The growth over the past 5 and 10 years, using 5 year running averages, is at 1% and 10.6% per year.
Cash Flow growth is also much better over the past 10 years than over the past 5 years. The 5 and 10 years growth in cash flow per share is 5% per year and 11% per year. The growth in cash flow per share over the past 5 and 10 years using the 5 year running averages is 2.5% and 14% per year.
The Return on Equity for this company has dropped a bit since 2009, but it is still good as it is over 10%. The ROE for 2012 is at 11% and the ROE on comprehensive income is just 5% less at 10.4%.
The debt ratios are fine and are in line with financial companies. The Liquidity Ratio is 1.36, but rises to 2.38 if you include cash flow after dividends. Liquidity Ratio is not really an important one for financial firms. The Debt Ratio is 1.07. The Leverage and Debt/Equity Ratios are 14.43 and 13.43, respectively.
This is still a solid company, but I am not sure when it will grow again. See my spreadsheet at gwo.htm.
This is the first of two parts. Second part will be posted on Friday, September 6, 2013 and will be here.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West Lifeco.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). I have followed this stock for some time. This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. It is part of Power Financial TSX-PWF), so you probably should not buy both.
This is a life insurance company. All life insurance companies are having difficulties in our current economic climate, especially with the interest rates being kept so low. As with other life insurance companies, this company has not raised their dividends for some time. Before 2009, they were considered to be a dividend growth company. They will probably be again, but when this will happen is a big question.
Prior to 2009, the dividend growth for this company was around 16% per year. The 10 year dividend growth is still good at 10%, but that is because of dividend increases before 2009. Dividends have not increased since 2009.
The Dividend Payout Ratios are still fine on this stock with DPR for earnings at 65% for the 2012 fiscal year. The DPR for cash flow is also fine at around 22% for cash flows.
The Total returns have been bad to just ok over the past 5 and 10 years. The 5 year total return is a loss of 3.3% per year with 4% per year from Dividends and a capital gain loss of 7.3% per year. The 10 year total return is 6.89% per year with 4.59% per year from dividends and 2.38% per year from capital gains.
The outstanding shares have increased by 1.24% and 2.64% per year over the past 5 and 10 years. The shares have increased due to stock options and Share Issues. They have decreased due to Buy Backs. Revenues have increased by 3% and 6% per year over the past 5 and 10 years. Revenue per Share has, of course, not done as well. However, if we look at Revenue per Share using the 5 year running averages, the 5 and 10 year increases are at 5.6% and 4.9%.
Earnings per Share are very good over the past 10 years, but poor over the past 5 years no matter how you look at it. The growth over the past 5 and 10 years, using 5 year running averages, is at 1% and 10.6% per year.
Cash Flow growth is also much better over the past 10 years than over the past 5 years. The 5 and 10 years growth in cash flow per share is 5% per year and 11% per year. The growth in cash flow per share over the past 5 and 10 years using the 5 year running averages is 2.5% and 14% per year.
The Return on Equity for this company has dropped a bit since 2009, but it is still good as it is over 10%. The ROE for 2012 is at 11% and the ROE on comprehensive income is just 5% less at 10.4%.
The debt ratios are fine and are in line with financial companies. The Liquidity Ratio is 1.36, but rises to 2.38 if you include cash flow after dividends. Liquidity Ratio is not really an important one for financial firms. The Debt Ratio is 1.07. The Leverage and Debt/Equity Ratios are 14.43 and 13.43, respectively.
This is still a solid company, but I am not sure when it will grow again. See my spreadsheet at gwo.htm.
This is the first of two parts. Second part will be posted on Friday, September 6, 2013 and will be here.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West Lifeco.
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, September 4, 2013
Canexus Corporation
I do not own this stock Canexus Corporation (TSX-CUS, OTC-CXUSF). I started to follow this stock last year after reading that it was part of Sentry Small/Mid Cap Income Fund. It is a small cap that pays good dividends. See stocks in this fund on G&M. Sentry home site is here. This stock was also mentioned by Michael Decter in May of 2012. Michael Decter is president and CEO of LDIC Inc.
This is another x-Income Trust company. The dividend yield is good and is currently at 7.67%. The 5 year median dividend yield is 8.61%. The company has only been around since 2005 and dividends have both increased and decreased over this period. Dividends are down by 8.96% over the past 5 years, but are up by 11.69% over the past 10 years. The company has also changed from monthly to quarterly payments of dividends.
The problem, of course, as with other x-income trust companies is that the Dividend Payout Ratios are too high. The 5 year median DPR for earnings is at 127% and for cash flow is at 102%. For the financial ending in 2012 the DPR for earnings was still over 100% at 194%, but the cash flow was a lot better at 67%. The company is not expected to earning much this year so DPR for earnings will not improve. Analysts do expect the DPR to be much better in 2015 at around 98%.
Shares have been rapidly increasing by 33% and 21% per year over the past 5 and 8 year. Increasing shares is neither good nor bad, particularly, but rapidly increasing share makes the values per share quite important. For example, Revenue has increased by 7% and 5.6% per year over the past 5 and 7 years, but Revenue per Share is down by 20% and 14% per year over the past 5 and 7 years. This is not a good showing.
Both Earnings per Share and Cash Flow per Share have fluctuated but have not made much progress. Book Value per Share decreased between 2005 and 2012 with 2012 being the first year of an increase. The Book Value has decreased by 28% and 22% per year over the past 5 and 7 years. Declining Book Value is quite common for Income Trust companies as they often payout a high percentage of earnings in distributions.
The other thing that makes this stock quite risky is the debt ratios. The current Liquidity Ratio is 1.04 and even with cash flow less dividends it is still low at 1.16. The current Debt Ratio is also low at 1.49 (where I would like to see it is at least at 1.50, so it is just below what I like.) The Debt Ratio used to be much better and has a 5 year median ratio of 3.52. The Leverage and Debt/Equity Ratios have varied a lot, but they are currently a bit high at 3.02 and 2.02 respectively.
Another problem is that the Return on Equity on Net Income for 2012 was some 14% higher than the ROE on Comprehensive Income. The difference is even higher for the last 12 months ending in June 2012. The difference is here is 33%. The problem this points out is that there might be some question about the quality of the earnings.
Analysts' recommendations are Strong Buy, Buy and Hold. The consensus recommendation is a Buy. The 12 month stock price consensus is $9.33. This implies a 12 month total return of 38.53% with 7.67% from dividends and 30.86% from capital gains.
From what I can see the high DPRs and low Debt Ratios makes this stock quite risky. The dividend yield is very good. See my spreadsheet at cus.htm.
Canexus Corporation is engaged in the production of sodium chlorate and chlor-alkali products, and operates a hydrocarbon terminal. They have four plants in Canada and two at one site in Brazil. Its web site is here Canexus.
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 another x-Income Trust company. The dividend yield is good and is currently at 7.67%. The 5 year median dividend yield is 8.61%. The company has only been around since 2005 and dividends have both increased and decreased over this period. Dividends are down by 8.96% over the past 5 years, but are up by 11.69% over the past 10 years. The company has also changed from monthly to quarterly payments of dividends.
The problem, of course, as with other x-income trust companies is that the Dividend Payout Ratios are too high. The 5 year median DPR for earnings is at 127% and for cash flow is at 102%. For the financial ending in 2012 the DPR for earnings was still over 100% at 194%, but the cash flow was a lot better at 67%. The company is not expected to earning much this year so DPR for earnings will not improve. Analysts do expect the DPR to be much better in 2015 at around 98%.
Shares have been rapidly increasing by 33% and 21% per year over the past 5 and 8 year. Increasing shares is neither good nor bad, particularly, but rapidly increasing share makes the values per share quite important. For example, Revenue has increased by 7% and 5.6% per year over the past 5 and 7 years, but Revenue per Share is down by 20% and 14% per year over the past 5 and 7 years. This is not a good showing.
Both Earnings per Share and Cash Flow per Share have fluctuated but have not made much progress. Book Value per Share decreased between 2005 and 2012 with 2012 being the first year of an increase. The Book Value has decreased by 28% and 22% per year over the past 5 and 7 years. Declining Book Value is quite common for Income Trust companies as they often payout a high percentage of earnings in distributions.
The other thing that makes this stock quite risky is the debt ratios. The current Liquidity Ratio is 1.04 and even with cash flow less dividends it is still low at 1.16. The current Debt Ratio is also low at 1.49 (where I would like to see it is at least at 1.50, so it is just below what I like.) The Debt Ratio used to be much better and has a 5 year median ratio of 3.52. The Leverage and Debt/Equity Ratios have varied a lot, but they are currently a bit high at 3.02 and 2.02 respectively.
Another problem is that the Return on Equity on Net Income for 2012 was some 14% higher than the ROE on Comprehensive Income. The difference is even higher for the last 12 months ending in June 2012. The difference is here is 33%. The problem this points out is that there might be some question about the quality of the earnings.
Analysts' recommendations are Strong Buy, Buy and Hold. The consensus recommendation is a Buy. The 12 month stock price consensus is $9.33. This implies a 12 month total return of 38.53% with 7.67% from dividends and 30.86% from capital gains.
From what I can see the high DPRs and low Debt Ratios makes this stock quite risky. The dividend yield is very good. See my spreadsheet at cus.htm.
Canexus Corporation is engaged in the production of sodium chlorate and chlor-alkali products, and operates a hydrocarbon terminal. They have four plants in Canada and two at one site in Brazil. Its web site is here Canexus.
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, September 3, 2013
Le Chateau Inc
On my other blog I am today writing about limiting your exposure when buying stocks...continue...
I do not own this stock Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. The Investor's Digest is a publication of MPL Communications. See publications on their site.
Currently, this stock is not doing very well. It stopped its dividend payments in 2012 and I am not sure anyone would guess on when they might restart. The years of 2011 and 2012 are years of losses. The first quarter of 2013 showed a loss also. There are no longer any analysts following this stock. Their last good year was 2009.
This is a potential problem when buying retail stocks, especially one in fashion wear. And, who knows if or when this stock will turn around and again be a dividend growth stock, which it was since 2005. It started dividends in, as far as I can tell, in 1994, and then increased them for the first time in 1998, the next increase coming 6 years later in 2005. Between 2005 and 2011 dividends increased each year. They paid special dividends in 2007 and 2009.
The strength of the stock has been the strong debt ratios. The Liquidity Ratio for 2012 is 2.79 and the 5 year median ratio is 3.03. The Debt Ratio in 2012 is 2.74 and the 5 year median ratio is 2.91. The Leverage and Debt/Equity Ratios for 2012 are also quite good at 1.68 and 0.68.
The other thing to note is the large insider ownership. The CEO owns some $30M of shares as does the founder of this company. There are two types of shares, Class A which has one vote per share and Class B that has 10 votes per share. The CEO and Founder own these shares. Barry Gruman also holds shares worth some $22M. Barry Gruman used to be an analyst at First Marathon Securities Ltd.
There is an interesting article on this company in the Canadian Business magazine. It talks about this company having flirted with disaster before and has come back. Insiders are sure that they can do this again. They are buying shares. In 2012, the company got a $10M loan from the company's founder Herschel Segal in this report from The Chronicle Herald. The company also got a line of credit from GE.
However, you look at this stock, it is a turnaround situation. Will it turn around? Insiders are saying they will make this happen. See my spreadsheet at ctu.htm.
Le Chateau is a Canadian specialty retailer and manufacturer of contemporary fashion apparel, accessories, and footwear at value pricing for style-conscious women and men of all ages. The Company has 231 retail locations, of which 227 are located in Canada and 2 in the New York City area. They also have 7 stores under license in the Middle East. Its web site is here Le Chateau.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. The Investor's Digest is a publication of MPL Communications. See publications on their site.
Currently, this stock is not doing very well. It stopped its dividend payments in 2012 and I am not sure anyone would guess on when they might restart. The years of 2011 and 2012 are years of losses. The first quarter of 2013 showed a loss also. There are no longer any analysts following this stock. Their last good year was 2009.
This is a potential problem when buying retail stocks, especially one in fashion wear. And, who knows if or when this stock will turn around and again be a dividend growth stock, which it was since 2005. It started dividends in, as far as I can tell, in 1994, and then increased them for the first time in 1998, the next increase coming 6 years later in 2005. Between 2005 and 2011 dividends increased each year. They paid special dividends in 2007 and 2009.
The strength of the stock has been the strong debt ratios. The Liquidity Ratio for 2012 is 2.79 and the 5 year median ratio is 3.03. The Debt Ratio in 2012 is 2.74 and the 5 year median ratio is 2.91. The Leverage and Debt/Equity Ratios for 2012 are also quite good at 1.68 and 0.68.
The other thing to note is the large insider ownership. The CEO owns some $30M of shares as does the founder of this company. There are two types of shares, Class A which has one vote per share and Class B that has 10 votes per share. The CEO and Founder own these shares. Barry Gruman also holds shares worth some $22M. Barry Gruman used to be an analyst at First Marathon Securities Ltd.
There is an interesting article on this company in the Canadian Business magazine. It talks about this company having flirted with disaster before and has come back. Insiders are sure that they can do this again. They are buying shares. In 2012, the company got a $10M loan from the company's founder Herschel Segal in this report from The Chronicle Herald. The company also got a line of credit from GE.
However, you look at this stock, it is a turnaround situation. Will it turn around? Insiders are saying they will make this happen. See my spreadsheet at ctu.htm.
Le Chateau is a Canadian specialty retailer and manufacturer of contemporary fashion apparel, accessories, and footwear at value pricing for style-conscious women and men of all ages. The Company has 231 retail locations, of which 227 are located in Canada and 2 in the New York City area. They also have 7 stores under license in the Middle East. Its web site is here Le Chateau.
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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