On my other blog I am today writing about recessions ...continue...
I do not own this stock Equitable Group (TSX-EQB, OTC-EQGPF). I had read a glowing report on investing in this company, so I decided to check it out. It was interesting as it was loaning money to new immigrants, a class of people who generally have a difficult time getting loans and mortgages from our regular banks. It sounded intriguing.
By first brush through with company was concerning dividends. This showed me that the dividend yield is low currently at 1.26%. Over the past 5 years the dividends have increased at the rate of 4.6% per year, which is moderate. Although the dividend increase for 2012 was quite good at 16.7%, the dividend increase for 2013 is just 7.1%.
The problem I have with this stock is the low dividend yield and moderate dividend increases. If you purchased this stock today, and if the dividend increases stayed at 7.1%, which is the latest increase, then in 10 years' time you would only be getting a yield of 2.51% on your investment and in 15 years' time 3.53%. I think this is too little reward for the risks you take.
Compare this to says, the Bank of Nova Scotia (TSX-BNS) where the current dividend is 3.93% and the last increase was at 9.6%. In 10 years' time a current investment with these values would have a yield of 9.82% and in 15 years' time a yield of 15.53%.
To see if I can find anything else on this stock, I looked at the closing prices since the company went public in 2004. The total return over the past 5 and 9 years to the end of 2012 is acceptable, but not great. The total return over the past 5 and 10 years was at 3.98% and 4.28% per year with 1.40 and 1.41% per year from dividends and 2.58% and 3.88% per year from capital gains.
Why not compare this to another bank and again I looked at BNS which over the past 5 and 10 years to the end of 2012 and it has a total return of 6.47% and 12.36% per year with 3.76% and 4.25% per year from dividends and 2.71% and 8.12% per year from capital gains. This is not a favorable comparison as I will think that the risk in this stock is much higher than the risk of BNS stocks.
This company has a lot of cash on hand. Cash and Equivalent at the end of June 2013 was $417M which translates into some $27.48 per share or 58% of the current price of $47.50. Cash at the end of 2011 and 2012 was also high.
The ROE for 2012 is 16.2% and the ROA is 0.7%. For BNS for the same period the ROE is 15.6% and the ROA is 1%. Not much difference. The whole point to going to a riskier stock is better returns.
When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations, with the consensus recommendation be a Buy. The consensus stock price is $49.70. This implies a 5.89% return with 4.63% from capital gains and 1.26% from dividends.
I took a look at this stock and the returns do not justify the risk. I did not complete my spreadsheet because I am not interested in this stock at this time. See my spreadsheet at eqb.htm.
Equitable Group Inc. is a niche mortgage lender. The company's primary business is first charge mortgage financing, which offer through company's wholly owned subsidiary, Equitable Bank (formerly The Equitable Trust Company). Equitable Bank is a Schedule I bank pursuant to the Bank Act, it actively originates mortgages across Canada and serves single family, small & large commercial borrowers. Its web site is here Equitable Group.
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, October 15, 2013
Friday, October 11, 2013
Canadian Pacific Railway 2
On my other blog I am today writing about the stock market and holding cash ...continue...
I do not currently own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP). It is a stock I held from 1987 to 1999 so I am following it. I also held it from 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. CP is a dividend growth stock.
When I look at insider trading, I find $160M of insider selling and $150.6M of net insider selling with $9.3M of insider buying. There is serious money outstanding in options and option like vehicles like Deferred Share Units (DSU), Restricted Share Units (RSU), Performance Share Units (PSUs) and Stock Appreciation Right (SARs).
The CEO has shares worth $24.1M and has options worth $93.3M. The CFO has shares worth $0.4M and has options worth $14M. An officer has no shares and has options worth $38.2M. Another officer has shares worth 0.4M and options worth $5.6M. A director has shares worth $0.2M and has options worth $0.5M. A director, Ackerman owns substantial shares worth $3.1B. This is just to give you an idea on insider share ownership and option values.
The 5 year median low, median and high median Price/Earnings per Share Ratios are 13.06, 15.21 and 18.71. The current P/E Ratio is 21.91 based on 2013 earnings of $6.19 and stock price of $135.64. On a relatively basis, the stock price is high.
I get a Graham Price of $67.50 and 10 year low, median and high Price/Graham Price Ratios of 0.81, 0.96 and 1.19. The current P/GP Ratio is 2.01 and this stock test says that the stock price is very high on a relative basis.
The 10 year median Price/Book Value per Share Ratio is 1.78 and the current P/B Ratio at 4.15 is some 132% higher. This stock test also says that the stock price is very high.
The current dividend yield is 1.03% and the 5 year median dividend yield is 1.78 a value some 42% higher. This stock test says that the stock price is relatively high.
When I look at analysts' recommendations, they are all over the place. Recommendations are Strong Buy, Buy, Hold, Underperform and Sell. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 months consensus stock price is $131. This implies a negative total return of 2.39% with 1.03% from dividends and a capital loss of 3.42%.
There is an article in the G&M by Brenda Bouw about the better investment, CN (TSX-CNR) or CP (TSX-CP). She quotes David Cockfield of Northland Wealth Management who thinks that the market is overpaying for CP and that CN is the current better bet. The blog of Insider Monkey talks about how CP could be a problem for Ackerman and his hedge fund. So far he has done well with this stock, but Insider Monkey wonders if the stock has stalled.
Personally, I think that this stock is overbought and the stock is very expensive at the moment. See my spreadsheet at cp.htm.
This is the second of two parts. The first part was posted on October10, 2013 and is available here.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR.
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 currently own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP). It is a stock I held from 1987 to 1999 so I am following it. I also held it from 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. CP is a dividend growth stock.
When I look at insider trading, I find $160M of insider selling and $150.6M of net insider selling with $9.3M of insider buying. There is serious money outstanding in options and option like vehicles like Deferred Share Units (DSU), Restricted Share Units (RSU), Performance Share Units (PSUs) and Stock Appreciation Right (SARs).
The CEO has shares worth $24.1M and has options worth $93.3M. The CFO has shares worth $0.4M and has options worth $14M. An officer has no shares and has options worth $38.2M. Another officer has shares worth 0.4M and options worth $5.6M. A director has shares worth $0.2M and has options worth $0.5M. A director, Ackerman owns substantial shares worth $3.1B. This is just to give you an idea on insider share ownership and option values.
The 5 year median low, median and high median Price/Earnings per Share Ratios are 13.06, 15.21 and 18.71. The current P/E Ratio is 21.91 based on 2013 earnings of $6.19 and stock price of $135.64. On a relatively basis, the stock price is high.
I get a Graham Price of $67.50 and 10 year low, median and high Price/Graham Price Ratios of 0.81, 0.96 and 1.19. The current P/GP Ratio is 2.01 and this stock test says that the stock price is very high on a relative basis.
The 10 year median Price/Book Value per Share Ratio is 1.78 and the current P/B Ratio at 4.15 is some 132% higher. This stock test also says that the stock price is very high.
The current dividend yield is 1.03% and the 5 year median dividend yield is 1.78 a value some 42% higher. This stock test says that the stock price is relatively high.
When I look at analysts' recommendations, they are all over the place. Recommendations are Strong Buy, Buy, Hold, Underperform and Sell. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 months consensus stock price is $131. This implies a negative total return of 2.39% with 1.03% from dividends and a capital loss of 3.42%.
There is an article in the G&M by Brenda Bouw about the better investment, CN (TSX-CNR) or CP (TSX-CP). She quotes David Cockfield of Northland Wealth Management who thinks that the market is overpaying for CP and that CN is the current better bet. The blog of Insider Monkey talks about how CP could be a problem for Ackerman and his hedge fund. So far he has done well with this stock, but Insider Monkey wonders if the stock has stalled.
Personally, I think that this stock is overbought and the stock is very expensive at the moment. See my spreadsheet at cp.htm.
This is the second of two parts. The first part was posted on October10, 2013 and is available here.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR.
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, October 10, 2013
Canadian Pacific Railway
On my other blog I am today writing about my friend's art show called Transformations 2013 with closing reception tomorrow on October 11, 2013 ...continue...
I do not currently own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP). It is a stock I held from 1987 to 1999 so I am following it. I also held it from 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. CP is a dividend growth stock.
I only have dividends on my current spreadsheet going back 9 years to 2001when CP was spin off of Canadian Pacific Limited (CPL). However, the company has a long history of paying dividends. It had a history of good dividend increases when I bought it in 1987. Over the past 5 and 9 years dividends have increased by 8% and 11% per year.
The dividends are rather low with the 5 year median dividend yield at 1.78%. The increase is moderate so you could probably expect a yield on your original investment of around 3.5% after 10 years and just over 5 after 15 years. The current yield is towards the low end for this stock at around 1.03%. The Dividend Payout Ratios are good with 5 year median values of 24% for earnings and 34% for cash flow.
Total earnings over the past 5 and 10 years have been very good because the stock increased by some 46% in 2012 and some 34% so far this year. The total return to date over the past 5 and 10 years is 35.89% and 15.43% per year with the dividend portion at 2.15% and 1.41% per year and the capital gains at 33.74% and 14.02% per year over this period.
The outstanding shares have increased by 2.6% and 1% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and decreased due to Buy Backs. Growth in revenue, earnings and cash flow has run from negative to mediocre over the past 5 and 10 years.
Using 5 year running averages, the revenue per share has grown at 2.2% and 2.8% per year over the past 5 and 10 years. Over this period, earnings are down by 2% per year for the past 5 years and up by 6.9% per year over the past 10 years. Cash Flow is down by 3.9% and up by 0.5% per year over the past 5 and 10 years. This is not a great showing. Analysts expect better growth for 2013, but not anything astounding.
The Return on Equity is fine coming in at 9.5% for 2012 with a 5 year median of 10.8%. The ROE on comprehensive income for 2012 is only 6.6% lower, which is also the median difference between the ROE on comprehensive income and net income.
The Liquidity Ratio at 1.31 is mediocre, but this ratio has always been mediocre. The Debt Ratio is fine at 2.71. The current Leverage and Debt/Equity Ratios are also fine at 2.71 and 1.71.
This stock has had an astonishing rise lately with perhaps some revenue and cash flow growth to support it. There has yet to be some earnings growth to support the recent rise in stock price, but analysts' do expect good earnings this year and the first two quarters have seen good growth in earnings.
I guess that 2013 will start to show if the huge rise in stock price is justified. See my spreadsheet at cp.htm.
This is the first of two parts. Second part will be posted on Friday, October 11, 2013 and will be here.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR.
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 currently own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP). It is a stock I held from 1987 to 1999 so I am following it. I also held it from 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. CP is a dividend growth stock.
I only have dividends on my current spreadsheet going back 9 years to 2001when CP was spin off of Canadian Pacific Limited (CPL). However, the company has a long history of paying dividends. It had a history of good dividend increases when I bought it in 1987. Over the past 5 and 9 years dividends have increased by 8% and 11% per year.
The dividends are rather low with the 5 year median dividend yield at 1.78%. The increase is moderate so you could probably expect a yield on your original investment of around 3.5% after 10 years and just over 5 after 15 years. The current yield is towards the low end for this stock at around 1.03%. The Dividend Payout Ratios are good with 5 year median values of 24% for earnings and 34% for cash flow.
Total earnings over the past 5 and 10 years have been very good because the stock increased by some 46% in 2012 and some 34% so far this year. The total return to date over the past 5 and 10 years is 35.89% and 15.43% per year with the dividend portion at 2.15% and 1.41% per year and the capital gains at 33.74% and 14.02% per year over this period.
The outstanding shares have increased by 2.6% and 1% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and decreased due to Buy Backs. Growth in revenue, earnings and cash flow has run from negative to mediocre over the past 5 and 10 years.
Using 5 year running averages, the revenue per share has grown at 2.2% and 2.8% per year over the past 5 and 10 years. Over this period, earnings are down by 2% per year for the past 5 years and up by 6.9% per year over the past 10 years. Cash Flow is down by 3.9% and up by 0.5% per year over the past 5 and 10 years. This is not a great showing. Analysts expect better growth for 2013, but not anything astounding.
The Return on Equity is fine coming in at 9.5% for 2012 with a 5 year median of 10.8%. The ROE on comprehensive income for 2012 is only 6.6% lower, which is also the median difference between the ROE on comprehensive income and net income.
The Liquidity Ratio at 1.31 is mediocre, but this ratio has always been mediocre. The Debt Ratio is fine at 2.71. The current Leverage and Debt/Equity Ratios are also fine at 2.71 and 1.71.
This stock has had an astonishing rise lately with perhaps some revenue and cash flow growth to support it. There has yet to be some earnings growth to support the recent rise in stock price, but analysts' do expect good earnings this year and the first two quarters have seen good growth in earnings.
I guess that 2013 will start to show if the huge rise in stock price is justified. See my spreadsheet at cp.htm.
This is the first of two parts. Second part will be posted on Friday, October 11, 2013 and will be here.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here CPR.
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, October 9, 2013
Waterfurnace Renewable Energy Inc 2
On my other blog I am today writing the difference between the WiLan and Waterfurnace stocks ...continue...
I do not own this stock of Waterfurnace Renewable Energy Inc. (TSX-WFI, OTC-WFIFF). I started to follow this stock after it was reviewed by The Investment Reporter in early 2009. They thought then that the price was relative high and that it is a risky investment, but was a buy for capital gains and dividend income. I do not think that much has changed.
When I look at insider trading I find that there is some $0.3M of insider buying and $0.8M insider selling with $0.5 net insider selling. The buying was earlier in the year and was at around $16.00. The selling was later and was around $20 to $22. The current price is $21.30. Of course, the thing is you just see the buying and selling but you get no reason why.
I get 5 year Price/Earnings per Share Ratios low, median and high median 16.19, 19.13amd 23.39. The current P/E Ratio is 18.64 based on a stock price of $21.30 and 2013 EPS of $1.14 CDN$ and $1.11 US$. This test shows that price is relatively reasonable and around the median price.
I get a Graham Price of $9.25. The 10 year low, median and high median Price/Graham Price Ratios are 1.92, 2.53 and 3.06. The current P/GP Ratio is 2.30. This stock test shows that the price is relatively reasonable and just below the median price.
The 10 year Price/Book Value per Share Ratio is 8.21 and the current P/B Ratio at 6.40 is only 77% of the 10 year median. This stock test says that the stock price is relatively cheap. The current dividend yield is 4.83% and the 5 year median dividend yield at 3.38% is some 43% lower. On a relative basis, this stock test says that the stock is cheap.
So from the stock testing, we find that on a relative basis the stock price is below the median, so on this basis it is relatively cheap. However, on an absolute basis it is not. P/E ratio of 18.64 is not a low P/E where on an absolute basis a low P/E is 10. The P/B Ratio is not very low at 6.40. On an absolute basis a low P/B Ratio is 1.50 or lower. A P/GP Ratio of 2.30 is a rather high ratio for the P/GP and a ratio at or below 1.00 is what says the stock price is a good one. The only test results that shows a good value is the dividend yield of 4.83%.
When I look at analysts' recommendations I find only two and the recommendations are a Strong Buy and a Buy. The consensus recommendation would be a Strong Buy. The consensus 12 months stock price is $24.44. This implies a total return of 19.58% with 4.83% from dividends and 14.74% from capital gains.
This company's site provides a video that explains how geothermal energy works. See the video here.
See Newswire information on the company's second quarter. The blogger I Divided commented positively on this stock. The site Small Caps US records an interesting interview with Rick Hoffmann, the VP of Administration at WaterFurnace. This company is a pick at the Alternative Energy Stocks site.
There is a lot to like about this stock. It has a strong balance sheet, good ROE, growing revenue, earnings, cash flow and dividends. Investors have been willing to pay a premium for this company. There is some insider ownership running just over 10%.
I think that it is a good dividend growth company, but I do wonder about the price being a bit too high. See my spreadsheet at wfi.htm.
This is the second of two parts. The first part was posted on Tuesday, October 8, 2013 and is available here.
WaterFurnace International, Inc. is a leading manufacturer of residential, commercial, industrial and institutional geothermal and water source heat pumps. Products from WaterFurnace include energy-efficient and environmentally friendly geothermal comfort systems, indoor air quality products and pool heaters. Its web site is here WaterFurnace.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock of Waterfurnace Renewable Energy Inc. (TSX-WFI, OTC-WFIFF). I started to follow this stock after it was reviewed by The Investment Reporter in early 2009. They thought then that the price was relative high and that it is a risky investment, but was a buy for capital gains and dividend income. I do not think that much has changed.
When I look at insider trading I find that there is some $0.3M of insider buying and $0.8M insider selling with $0.5 net insider selling. The buying was earlier in the year and was at around $16.00. The selling was later and was around $20 to $22. The current price is $21.30. Of course, the thing is you just see the buying and selling but you get no reason why.
I get 5 year Price/Earnings per Share Ratios low, median and high median 16.19, 19.13amd 23.39. The current P/E Ratio is 18.64 based on a stock price of $21.30 and 2013 EPS of $1.14 CDN$ and $1.11 US$. This test shows that price is relatively reasonable and around the median price.
I get a Graham Price of $9.25. The 10 year low, median and high median Price/Graham Price Ratios are 1.92, 2.53 and 3.06. The current P/GP Ratio is 2.30. This stock test shows that the price is relatively reasonable and just below the median price.
The 10 year Price/Book Value per Share Ratio is 8.21 and the current P/B Ratio at 6.40 is only 77% of the 10 year median. This stock test says that the stock price is relatively cheap. The current dividend yield is 4.83% and the 5 year median dividend yield at 3.38% is some 43% lower. On a relative basis, this stock test says that the stock is cheap.
So from the stock testing, we find that on a relative basis the stock price is below the median, so on this basis it is relatively cheap. However, on an absolute basis it is not. P/E ratio of 18.64 is not a low P/E where on an absolute basis a low P/E is 10. The P/B Ratio is not very low at 6.40. On an absolute basis a low P/B Ratio is 1.50 or lower. A P/GP Ratio of 2.30 is a rather high ratio for the P/GP and a ratio at or below 1.00 is what says the stock price is a good one. The only test results that shows a good value is the dividend yield of 4.83%.
When I look at analysts' recommendations I find only two and the recommendations are a Strong Buy and a Buy. The consensus recommendation would be a Strong Buy. The consensus 12 months stock price is $24.44. This implies a total return of 19.58% with 4.83% from dividends and 14.74% from capital gains.
This company's site provides a video that explains how geothermal energy works. See the video here.
See Newswire information on the company's second quarter. The blogger I Divided commented positively on this stock. The site Small Caps US records an interesting interview with Rick Hoffmann, the VP of Administration at WaterFurnace. This company is a pick at the Alternative Energy Stocks site.
There is a lot to like about this stock. It has a strong balance sheet, good ROE, growing revenue, earnings, cash flow and dividends. Investors have been willing to pay a premium for this company. There is some insider ownership running just over 10%.
I think that it is a good dividend growth company, but I do wonder about the price being a bit too high. See my spreadsheet at wfi.htm.
This is the second of two parts. The first part was posted on Tuesday, October 8, 2013 and is available here.
WaterFurnace International, Inc. is a leading manufacturer of residential, commercial, industrial and institutional geothermal and water source heat pumps. Products from WaterFurnace include energy-efficient and environmentally friendly geothermal comfort systems, indoor air quality products and pool heaters. Its web site is here WaterFurnace.
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, October 8, 2013
Waterfurnace Renewable Energy Inc
I do not own this stock Waterfurnace Renewable Energy Inc. (TSX-WFI, OTC-WFIFF). I started to follow this stock after it was reviewed Investment Reporter in early 2009. They think that the price is relative high, and it is a risky investment, but it is a buy for capital gains and dividend income.
This company started to pay dividends in 2003. The 5 year median dividend yield is 3.38% and the current dividend yield is 4.83%. There has also been good dividend growth, with the dividend growing over the past 5 and 10 years at 8.67% and 12.84%.
The Dividend Payout Ratios are acceptable also, with the 5 year median DPR at 74% for earnings and 57% for cash flow. The DPR for earnings was over 100% (at 117%) for the financial year of 2012, but sometimes this happens. The DPR for earnings is expected to be around 89% for 2013 and around 74% for 2014.
If you bought this stock today $21.30, and dividend continue to increase at around 8% per year, in 10 years times you could be earnings over 10% on your original investment and over 15% in 15 years times.
The stock has been rising lately and has increased by some 47.5% since the beginning of the year. The total return to date over the past 5 and 10 years is at 2.52% and 20.42% per year. The portion of this return from dividends is at 4.05% and 6.89% per year, with a 5 year loss of 1.52% per year and a 10 year gain of 13.53% per year.
The outstanding shares have grown by less than 1% per year over the past 5 and 10 years. Outstanding shares have increased due to Stock Options and Share Issues and deceased due to Buy Backs. This company has its Head Office in Fort Wayne, Indiana and reports in US$. It has done better in US$ terms than in CDN$ terms over the past 5 and 10 years.
The revenue is up by 3.23% and 4.19% per year over the past 5 and 10 years in CDN$ terms and up by 3.02% and 9.08% per year over the past 5 and 10 years in US$ Terms. The 5 year running averages increases over the past 5 and 10 years is a lot better than the 5 and 10 years increases with the 5 year running average increases over the past 5 and 10 years up by 10.25% and 8.42% per year in CDN$ terms.
In CDN$ terms, the earnings per share is up by 0.7% and 5.27% per year over the past 5 and 10 years. If you use the 5 year running averages, the EPS is up by 15% and 21% per year over the past 5 and 10 years. Difference is because exactly 5 and 10 years ago were good years. For the 10 year growth figures, there is a good increase because there was negative earning years prior to 10 years ago.
The growth in cash flow per share is up by 7% and 6.9% per year over the past 5 and 10 years. If you look at the 5 year running averages, they are much better and very good at 17% and 18% per year over the past 5 and 10 years. I would think over the future years, the growth will be in line more with the 5 and 10 year growth rather than 5 year running averages growth. This is because around 11 years ago the company started to do quite well comparatively to its past.
The 5 year median Return on Equity is 38.8% and the ROE for 2012 is 24.7%. ROE has been quite high in the past from 2001 on. The ROE on comprehensive income is quite close to the ROE on net income.
One thing I quite like about this stock is the very good debt ratios. The current Liquidity Ratio is 4.66 and the Debt Ratio is 2.66. The comparative 5 year median values are 4.25 and 2.47, respectively. The current Leverage and Debt/Equity Ratios are also very good, currently at 1.79 and 0.79.
This is the sort of stock you buy for capital gains and increasing dividends. I agree that it is a rather risky stock because of the nature of its business. However, I think that long term investors will be well rewarded. See my spreadsheet at wfi.htm.
This is the first of two parts. Second part will be posted on Wednesday, October 9, 2013 and will be available here.
WaterFurnace International, Inc. is a leading manufacturer of residential, commercial, industrial and institutional geothermal and water source heat pumps. Products from WaterFurnace include energy-efficient and environmentally friendly geothermal comfort systems, indoor air quality products and pool heaters. Its web site is here WaterFurnace.
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 company started to pay dividends in 2003. The 5 year median dividend yield is 3.38% and the current dividend yield is 4.83%. There has also been good dividend growth, with the dividend growing over the past 5 and 10 years at 8.67% and 12.84%.
The Dividend Payout Ratios are acceptable also, with the 5 year median DPR at 74% for earnings and 57% for cash flow. The DPR for earnings was over 100% (at 117%) for the financial year of 2012, but sometimes this happens. The DPR for earnings is expected to be around 89% for 2013 and around 74% for 2014.
If you bought this stock today $21.30, and dividend continue to increase at around 8% per year, in 10 years times you could be earnings over 10% on your original investment and over 15% in 15 years times.
The stock has been rising lately and has increased by some 47.5% since the beginning of the year. The total return to date over the past 5 and 10 years is at 2.52% and 20.42% per year. The portion of this return from dividends is at 4.05% and 6.89% per year, with a 5 year loss of 1.52% per year and a 10 year gain of 13.53% per year.
The outstanding shares have grown by less than 1% per year over the past 5 and 10 years. Outstanding shares have increased due to Stock Options and Share Issues and deceased due to Buy Backs. This company has its Head Office in Fort Wayne, Indiana and reports in US$. It has done better in US$ terms than in CDN$ terms over the past 5 and 10 years.
The revenue is up by 3.23% and 4.19% per year over the past 5 and 10 years in CDN$ terms and up by 3.02% and 9.08% per year over the past 5 and 10 years in US$ Terms. The 5 year running averages increases over the past 5 and 10 years is a lot better than the 5 and 10 years increases with the 5 year running average increases over the past 5 and 10 years up by 10.25% and 8.42% per year in CDN$ terms.
In CDN$ terms, the earnings per share is up by 0.7% and 5.27% per year over the past 5 and 10 years. If you use the 5 year running averages, the EPS is up by 15% and 21% per year over the past 5 and 10 years. Difference is because exactly 5 and 10 years ago were good years. For the 10 year growth figures, there is a good increase because there was negative earning years prior to 10 years ago.
The growth in cash flow per share is up by 7% and 6.9% per year over the past 5 and 10 years. If you look at the 5 year running averages, they are much better and very good at 17% and 18% per year over the past 5 and 10 years. I would think over the future years, the growth will be in line more with the 5 and 10 year growth rather than 5 year running averages growth. This is because around 11 years ago the company started to do quite well comparatively to its past.
The 5 year median Return on Equity is 38.8% and the ROE for 2012 is 24.7%. ROE has been quite high in the past from 2001 on. The ROE on comprehensive income is quite close to the ROE on net income.
One thing I quite like about this stock is the very good debt ratios. The current Liquidity Ratio is 4.66 and the Debt Ratio is 2.66. The comparative 5 year median values are 4.25 and 2.47, respectively. The current Leverage and Debt/Equity Ratios are also very good, currently at 1.79 and 0.79.
This is the sort of stock you buy for capital gains and increasing dividends. I agree that it is a rather risky stock because of the nature of its business. However, I think that long term investors will be well rewarded. See my spreadsheet at wfi.htm.
This is the first of two parts. Second part will be posted on Wednesday, October 9, 2013 and will be available here.
WaterFurnace International, Inc. is a leading manufacturer of residential, commercial, industrial and institutional geothermal and water source heat pumps. Products from WaterFurnace include energy-efficient and environmentally friendly geothermal comfort systems, indoor air quality products and pool heaters. Its web site is here WaterFurnace.
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, October 7, 2013
WiLan Inc
On my other blog I am today writing the retirement age ...continue...
I do not own this stock WiLan Inc. (TSX-WIN, NASDAQ-WILN). I bought this company in 2000, as it was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. I lost all hope of ever making any money on this stock. The other thing is that they completely refocused their company, or completely changed it to earn money on their patents. I like to follow companies I sold so I know what they do in the future.
This company is so different than the one I will review tomorrow, which actually does work for its living. This company basically uses litigation to get other companies to license old patents of WiLan. I do not care for this business model. I think that patent litigation does more harm than good and I personally would not investment currently in a company with this business model. I know that others feel different, but that gives variety to life different investment possibilities to different people.
Another thing I do not like is that I believe that they cannot afford to pay a dividend. You need to earn money and to have positive cash flow to do this. Currently this company has neither. Over the past 10 years, this company has 6 years of negative earnings. The 5 year running average in earnings is -$.01. The company has not had any negative cash flow during the last 5 years, but cash flow is expected to be negative in 2013. Cash flow over the first two quarters of 2013 is negative, so it would appear that the analysts could be right on this.
I cannot get any growth measurements for this company as far as earnings and cash flow go because there are too many years with negative earnings and/or cash flow. I do have 5 and 10 year growth nor 5 year running average growth over the last 5 and 10 years because of this problem.
Revenue has increased over the past 5 and 10 years by 7.5% and 14% per year. However, Revenue per Share over the past 5 and 10 years has declined as has Revenue per Share using the 5 year running averages over the past 5 and 10 years.
Since we are past the hump of 2000 tech bubble, shareholders have had total returns over the past 5 and 10 years of 11.10% and 11.71% per year. The dividend portion of this total return was 1.46% and 0.46% per year over these periods and the capital gains portion was 9.63% and 10.97% per year over these periods.
There are too many negative earnings years to get a fix on historical Price/Earnings Ratios, so I cannot do any stock price check using the P/E Ratios. However, a current P/E of 35 is rather a high P/E based on 2013 earnings of $.11 and a stock price of $4.07. The P/E next year is expected to be just 8.03 based on 2014 earnings of $.48, but analyst also thought that there would be earnings $0.40 for 2012 where there was a $.12 loss.
I get a Graham Price of $2.41 and the Price/Graham Price Ratio of 1.69 on a stock price of $4.07. A P/GP Ratio of 1.69 is high and is also rather high in comparison with the low, median and high median P/GP Ratios of 0.57, 1.16 and 1.77.
The 10 year median Price/Book Value per Share is 2.01 and the current one at 1.79 is some 89% of the 10 year ratio. This stock price suggests that the stock price is reasonable. The Dividend Yield of 3.93% is higher than it has ever been, but since I do not think the dividend is affordable, and therefore at risk, I do not think that a test on the Dividend Yield is appropriate. (I believe the company says the dividend is not at risk, so we should see.)
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price is $6.28. This implies total returns of 58.23% with 3.93% from dividends and 54.30% from capital gains. (I do not believe this.)
WiLan settles one lawsuit with HTC Corp according to a September article in the Financial Post. An earlier ruling in the patent litigation processes went against WiLan according to a July article in the Financial Post. The blogger The Apprentice Millionaire is rather upbeat on this stock.
As you may have gathered, I am not upbeat at all about this company. I do not particularly like patent trolls and worse, they do not seem to be able to make a profit. See my spreadsheet at win.htm.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, WiLan's inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here WiLan Inc.
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 WiLan Inc. (TSX-WIN, NASDAQ-WILN). I bought this company in 2000, as it was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. I lost all hope of ever making any money on this stock. The other thing is that they completely refocused their company, or completely changed it to earn money on their patents. I like to follow companies I sold so I know what they do in the future.
This company is so different than the one I will review tomorrow, which actually does work for its living. This company basically uses litigation to get other companies to license old patents of WiLan. I do not care for this business model. I think that patent litigation does more harm than good and I personally would not investment currently in a company with this business model. I know that others feel different, but that gives variety to life different investment possibilities to different people.
Another thing I do not like is that I believe that they cannot afford to pay a dividend. You need to earn money and to have positive cash flow to do this. Currently this company has neither. Over the past 10 years, this company has 6 years of negative earnings. The 5 year running average in earnings is -$.01. The company has not had any negative cash flow during the last 5 years, but cash flow is expected to be negative in 2013. Cash flow over the first two quarters of 2013 is negative, so it would appear that the analysts could be right on this.
I cannot get any growth measurements for this company as far as earnings and cash flow go because there are too many years with negative earnings and/or cash flow. I do have 5 and 10 year growth nor 5 year running average growth over the last 5 and 10 years because of this problem.
Revenue has increased over the past 5 and 10 years by 7.5% and 14% per year. However, Revenue per Share over the past 5 and 10 years has declined as has Revenue per Share using the 5 year running averages over the past 5 and 10 years.
Since we are past the hump of 2000 tech bubble, shareholders have had total returns over the past 5 and 10 years of 11.10% and 11.71% per year. The dividend portion of this total return was 1.46% and 0.46% per year over these periods and the capital gains portion was 9.63% and 10.97% per year over these periods.
There are too many negative earnings years to get a fix on historical Price/Earnings Ratios, so I cannot do any stock price check using the P/E Ratios. However, a current P/E of 35 is rather a high P/E based on 2013 earnings of $.11 and a stock price of $4.07. The P/E next year is expected to be just 8.03 based on 2014 earnings of $.48, but analyst also thought that there would be earnings $0.40 for 2012 where there was a $.12 loss.
I get a Graham Price of $2.41 and the Price/Graham Price Ratio of 1.69 on a stock price of $4.07. A P/GP Ratio of 1.69 is high and is also rather high in comparison with the low, median and high median P/GP Ratios of 0.57, 1.16 and 1.77.
The 10 year median Price/Book Value per Share is 2.01 and the current one at 1.79 is some 89% of the 10 year ratio. This stock price suggests that the stock price is reasonable. The Dividend Yield of 3.93% is higher than it has ever been, but since I do not think the dividend is affordable, and therefore at risk, I do not think that a test on the Dividend Yield is appropriate. (I believe the company says the dividend is not at risk, so we should see.)
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price is $6.28. This implies total returns of 58.23% with 3.93% from dividends and 54.30% from capital gains. (I do not believe this.)
WiLan settles one lawsuit with HTC Corp according to a September article in the Financial Post. An earlier ruling in the patent litigation processes went against WiLan according to a July article in the Financial Post. The blogger The Apprentice Millionaire is rather upbeat on this stock.
As you may have gathered, I am not upbeat at all about this company. I do not particularly like patent trolls and worse, they do not seem to be able to make a profit. See my spreadsheet at win.htm.
Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, WiLan's inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Its web site is here WiLan Inc.
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, October 4, 2013
Molson Coors Canada 2
On my other blog I am today writing about Don Vialoux, guru of market seasonality ...continue...
I do not own this stock of Molson Coors Canada (TSX-TPX.A, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one of the original companies that I purchased and I did very well with it before it was bought out.
Looking at insider trading, I can find information on Molson Coors Brewing Company (NYSE-TAP). Over the past 3 months there was $0.2M of insider buying and $8.8M of insider selling. Over the past year there was $10.6M of insider buying and $28.8M of insider selling.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.99, 12.28 and 13.66. The current P/E Ratio is 12.67 based on a stock price of $51.96 and 2013 earnings of 4.10 CDN$. I get a Graham Price of $63.08 and the 10 year low, median and high Price/Graham Price Ratios are 0.79, 0.91 and 1.04. The current P/GRP Ratio is 0.82 based on a stock price of $51.96.
The 10 year Price/Book Value per Share Ratio is 1.21 and the current ratio is the same at 1.21. The current dividend yield is 2.54% and the 5 year median dividend yield is some 6% lower at 2.39%. All my stock price test show that the stock price is reasonable as it is relatively just around the median mark.
There are no analysts following the Molson Coors Canada, but some follow Molson Coors Brewing Company (NYSE-TAP). The analysts have recommendations of Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. The consensus US$ stock price over the next 12 months is $54.00. This implies a total return of 9.68% with 2.54% from dividends and 7.14% from capital gains.
Dara Mohsenian of Morgan Stanley had a discussion with Molson Coors about their 2nd quarterly results.
I do not think anything much is happening with this company. It has a decent dividend and probably will growth their dividend over time, but I do not see this company as a good money maker. See my spreadsheet at tpx.htm.
This is the second of two parts. The first part was posted on Thursday, October 3, 2013 and is available here.
Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock of Molson Coors Canada (TSX-TPX.A, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one of the original companies that I purchased and I did very well with it before it was bought out.
Looking at insider trading, I can find information on Molson Coors Brewing Company (NYSE-TAP). Over the past 3 months there was $0.2M of insider buying and $8.8M of insider selling. Over the past year there was $10.6M of insider buying and $28.8M of insider selling.
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.99, 12.28 and 13.66. The current P/E Ratio is 12.67 based on a stock price of $51.96 and 2013 earnings of 4.10 CDN$. I get a Graham Price of $63.08 and the 10 year low, median and high Price/Graham Price Ratios are 0.79, 0.91 and 1.04. The current P/GRP Ratio is 0.82 based on a stock price of $51.96.
The 10 year Price/Book Value per Share Ratio is 1.21 and the current ratio is the same at 1.21. The current dividend yield is 2.54% and the 5 year median dividend yield is some 6% lower at 2.39%. All my stock price test show that the stock price is reasonable as it is relatively just around the median mark.
There are no analysts following the Molson Coors Canada, but some follow Molson Coors Brewing Company (NYSE-TAP). The analysts have recommendations of Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. The consensus US$ stock price over the next 12 months is $54.00. This implies a total return of 9.68% with 2.54% from dividends and 7.14% from capital gains.
Dara Mohsenian of Morgan Stanley had a discussion with Molson Coors about their 2nd quarterly results.
I do not think anything much is happening with this company. It has a decent dividend and probably will growth their dividend over time, but I do not see this company as a good money maker. See my spreadsheet at tpx.htm.
This is the second of two parts. The first part was posted on Thursday, October 3, 2013 and is available here.
Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors.
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, October 3, 2013
Molson Coors Canada
On my other blog I am today writing about my friend's art show called Transformations 2013 starting tomorrow on October 4, 2013 ...continue...
I do not own this stock of Molson Coors Canada (TSX-TPX.A, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one original companies that I purchased and I did very well with it before it was bought out.
First let's talk about dividends. This stock has a reasonable dividend which is currently at 2.54% (on a stock price of $51.96). The increases in dividends are also reasonable with 5 and 10 year growth at 15% and 9.3% per year in CDN$ and at 14.9% and 12% per year in US$.
The last dividend increase was in 2011 and was for 14.3%. There was no dividend increase in 2012 and so, far no dividend increase in 2013 with 3 dividends for 2013 already being paid. The company has increased the dividends over the years, but increases have been inconsistent and they have been level over a number of years in the past.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 35% and for cash flow at 21%. The DPRs for 2012 were higher at 53% for earnings and 27% for cash flow. They are expected to be lower in 2013 at approximately at 32% for earnings and 37% for cash flow. (Note the ratio are the same in CDN$ and US$.)
For Canadian stockholders, the total returns over the past 5 and 10 years have not been great with 5 year total returns a negative 1.25% per year with 2.33% per year from dividends and a capital loss of 3.57% per year. The 10 years returns are better but at just 1.86% per year with 3.18% per year from dividends and a capital loss of 1.32% per year.
I am taking values from the Molson Inc. (TSX-MOL.A) to this company to determine Canadian Shareholders' return. Molson and Coors amalgamated in 2005. American shareholders from Coors have done better, but their total return is not great either.
The company has an odd structure with Class A Common Shares and Class B Common Shares. There are also Exchangeable Shares of these two classes for old Molson Inc. shareholders on the TSX so that Canadian Shareholders did not have to pay capital gains on the amalgamation of Molson and Coors in 2005. All shares have currently one vote. Analysts tend to classify this stock as an American stock and few Canadian analysts follow this stock.
Outstanding shares have increase by 1% and 7.5% per year over the past 5 and 10 years. Since Amalgamation, the exchange shares have decreased as they have converted to common shares on the NYSE. No matter how you look at this company, Revenue has been declining over the past 5 and 10 years. The earnings and cash flow have been increasing if you look at 5 year running averages. Both earnings and cash flows tend to be volatile so if you look at exactly 5 and 10 years ago, you do not see much progress.
Looking at 5 year running averages, the earnings in CDN$ has increased by 8.3% per year and 7.8% per year over the past 5 and 10 years. Also looking at 5 year running averages, the cash flow per share in CDN$ has increased by 5.4% and 9.2% per year over the past 5 and 10 years.
For Revenues per share, these have declined in CDN$ by 10% per year over the past 5 and 10 years. For Revenues per Share, if we look at 5 year running averages, the decline is not better with the decline at 16% and 8% per year over the past 5 and 10 years. These figures are a bit better in US$ terms with the decline in Revenue per Share using the 5 year running averages at 13% and 4% per year over the past 5 and 10 years.
The Return on Equity is currently not great but has never been. The ROE for 2012 is just 5.5% and the 5 year median ROE is a bit better at 8.8%. What is desirable is ROEs at 10% or higher. For 2012, the ROE on comprehensive income is better at 7.4%, but the 3 year ROE is the same.
The Liquidity Ratios have never been particularly good on this stock and the current one is at 0.71. This means that the current assets cannot cover the current liabilities. However, if you exclude the current portion of the long term debt, the ratio goes to 1.26. If you look at the addition of cash flow excluding dividends the ratio goes to 1.51.
The Debt Ratios has always been quite good and it is currently at 1.99. The current Leverage and Debt/Equity Ratios are fine at 2.01 and 1.01 respectively.
I worry about the decline in revenues. Analysts expect a big decline in revenues in 2013 (by 23%) but if you look at Revenues over the past year ending in the second quarter of 2013, revenues are up by 7%. The ROEs are rather low also.
Beer companies or at least this one does not seem to be much of a money maker. Perhaps this is because of all the competition from small brewing companies. See my spreadsheet at tpx.htm.
This is the first of two parts. Second part will be posted on Friday, October 4, 2013 and will be here.
Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
I do not own this stock of Molson Coors Canada (TSX-TPX.A, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one original companies that I purchased and I did very well with it before it was bought out.
First let's talk about dividends. This stock has a reasonable dividend which is currently at 2.54% (on a stock price of $51.96). The increases in dividends are also reasonable with 5 and 10 year growth at 15% and 9.3% per year in CDN$ and at 14.9% and 12% per year in US$.
The last dividend increase was in 2011 and was for 14.3%. There was no dividend increase in 2012 and so, far no dividend increase in 2013 with 3 dividends for 2013 already being paid. The company has increased the dividends over the years, but increases have been inconsistent and they have been level over a number of years in the past.
The Dividend Payout Ratios are good with the 5 year median DPR for earnings at 35% and for cash flow at 21%. The DPRs for 2012 were higher at 53% for earnings and 27% for cash flow. They are expected to be lower in 2013 at approximately at 32% for earnings and 37% for cash flow. (Note the ratio are the same in CDN$ and US$.)
For Canadian stockholders, the total returns over the past 5 and 10 years have not been great with 5 year total returns a negative 1.25% per year with 2.33% per year from dividends and a capital loss of 3.57% per year. The 10 years returns are better but at just 1.86% per year with 3.18% per year from dividends and a capital loss of 1.32% per year.
I am taking values from the Molson Inc. (TSX-MOL.A) to this company to determine Canadian Shareholders' return. Molson and Coors amalgamated in 2005. American shareholders from Coors have done better, but their total return is not great either.
The company has an odd structure with Class A Common Shares and Class B Common Shares. There are also Exchangeable Shares of these two classes for old Molson Inc. shareholders on the TSX so that Canadian Shareholders did not have to pay capital gains on the amalgamation of Molson and Coors in 2005. All shares have currently one vote. Analysts tend to classify this stock as an American stock and few Canadian analysts follow this stock.
Outstanding shares have increase by 1% and 7.5% per year over the past 5 and 10 years. Since Amalgamation, the exchange shares have decreased as they have converted to common shares on the NYSE. No matter how you look at this company, Revenue has been declining over the past 5 and 10 years. The earnings and cash flow have been increasing if you look at 5 year running averages. Both earnings and cash flows tend to be volatile so if you look at exactly 5 and 10 years ago, you do not see much progress.
Looking at 5 year running averages, the earnings in CDN$ has increased by 8.3% per year and 7.8% per year over the past 5 and 10 years. Also looking at 5 year running averages, the cash flow per share in CDN$ has increased by 5.4% and 9.2% per year over the past 5 and 10 years.
For Revenues per share, these have declined in CDN$ by 10% per year over the past 5 and 10 years. For Revenues per Share, if we look at 5 year running averages, the decline is not better with the decline at 16% and 8% per year over the past 5 and 10 years. These figures are a bit better in US$ terms with the decline in Revenue per Share using the 5 year running averages at 13% and 4% per year over the past 5 and 10 years.
The Return on Equity is currently not great but has never been. The ROE for 2012 is just 5.5% and the 5 year median ROE is a bit better at 8.8%. What is desirable is ROEs at 10% or higher. For 2012, the ROE on comprehensive income is better at 7.4%, but the 3 year ROE is the same.
The Liquidity Ratios have never been particularly good on this stock and the current one is at 0.71. This means that the current assets cannot cover the current liabilities. However, if you exclude the current portion of the long term debt, the ratio goes to 1.26. If you look at the addition of cash flow excluding dividends the ratio goes to 1.51.
The Debt Ratios has always been quite good and it is currently at 1.99. The current Leverage and Debt/Equity Ratios are fine at 2.01 and 1.01 respectively.
I worry about the decline in revenues. Analysts expect a big decline in revenues in 2013 (by 23%) but if you look at Revenues over the past year ending in the second quarter of 2013, revenues are up by 7%. The ROEs are rather low also.
Beer companies or at least this one does not seem to be much of a money maker. Perhaps this is because of all the competition from small brewing companies. See my spreadsheet at tpx.htm.
This is the first of two parts. Second part will be posted on Friday, October 4, 2013 and will be here.
Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors.
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, October 2, 2013
The North West Company 2
On my other blog I am today writing about an interview with a follower of my blog, Gord...continue...
I do not own this stock The North West Company (TSX-NWC, OTC-NWTUF). I wanted to review all the income trust stocks touted in the Money Show of 2009. (Tax changes for income trusts had already been announcement in October 2006.) There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield.
There is little activity in insider trading with $0.4M of insider selling and minimal insider buying. This tells us nothing interesting. The CEO has shares worth $6.2M and has options worth $17.7M. The CFO has shares worth $1.3M and has options worth $2.1M. An officer has a few shares and has options worth $1.3M. A director has shares worth $0.4M and has options worth $0.4M. Two directors own substantial shares with one having shares worth $17.8M and another has shares worth $3.9M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.12, 13.35 and 14.23. The current P/E Ratio is 16.79 based on 2013 Earnings of $1.39 and a stock price of $23.34. On a relative basis, this stock test suggests that the stock price is relatively high. However, P/E Ratios have been increasing lately and the P/E Ratios lows for 2011 and 2012 were 15.45 and 14.23. On an absolute basis a P/E Ratio of 16.79 is not particularly high.
I get a Graham Price of $13.97. The 10 year low, median and high median Price/Graham Price Ratios are 0.96, 1.22 and 1.46. The current P/GP Ratio is 1.36. This stock test suggests that the stock price is within the reasonable zone, but on the high side.
The 10 year Price/Book Value per Share Ratio is 3.07 and the current P/B Ratio is 3.74 based on a stock price of $23.34. The current P/B Ratio is some 21% higher than the 10 year median Ratio and this suggests that the stock price is getting rather high.
I cannot do a test on dividend yield as the dividends have moved down recently due to the change in the company from an income trust to a corporation. It was felt that yields for these companies would probably end up in the 4% to 5% range and with the current yield at 4.8%, this is certainly were this yield is.
If you look at Price/Cash Flow per Share Ratio, the 5 year P/CF Ratio is 8.33 and the current P/CF Ratio is some 77% higher at 14.77. If you look at Price/Sales Ratios, the 5 year P/S Ratio is 0.59 and the current P/S Ratio at 0.74 is come 26% higher. On an absolute basis, a good price is when the P/CF Ratio is 5.00 or below and the P/S Ratio is 1.00 or below. On a relatively basis, both these tests show that the stock price is relatively high.
When I look at analysts' recommendations, I find Buy and Hold recommendations, with the majority being a Hold recommendation. The consensus recommendation would be a Hold. The 12 month stock price consensus is $24.60. This implies a 12 month total return of 10.2% with 4.8% from dividends and 5.4% from capital gains.
The newspaper The Winnipeg Free Press talks about the company having slightly higher profits in the 2nd quarter. A G&M article by Validea Canada talks about this company scoring high with a Buffett model.
I think that this is a good company, but the stock price is certainly not cheap and it is marginally if the price is reasonable. Analysts like the good yield and one analyst said that he did not think that the stock was yet overpriced at $23.10. However, I do not think that now is a good time to buy. See my spreadsheet at nwc.htm.
This is the second of two parts. The first part was posted on Tuesday, October 1, 2013 and is available here.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.
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 The North West Company (TSX-NWC, OTC-NWTUF). I wanted to review all the income trust stocks touted in the Money Show of 2009. (Tax changes for income trusts had already been announcement in October 2006.) There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield.
There is little activity in insider trading with $0.4M of insider selling and minimal insider buying. This tells us nothing interesting. The CEO has shares worth $6.2M and has options worth $17.7M. The CFO has shares worth $1.3M and has options worth $2.1M. An officer has a few shares and has options worth $1.3M. A director has shares worth $0.4M and has options worth $0.4M. Two directors own substantial shares with one having shares worth $17.8M and another has shares worth $3.9M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.12, 13.35 and 14.23. The current P/E Ratio is 16.79 based on 2013 Earnings of $1.39 and a stock price of $23.34. On a relative basis, this stock test suggests that the stock price is relatively high. However, P/E Ratios have been increasing lately and the P/E Ratios lows for 2011 and 2012 were 15.45 and 14.23. On an absolute basis a P/E Ratio of 16.79 is not particularly high.
I get a Graham Price of $13.97. The 10 year low, median and high median Price/Graham Price Ratios are 0.96, 1.22 and 1.46. The current P/GP Ratio is 1.36. This stock test suggests that the stock price is within the reasonable zone, but on the high side.
The 10 year Price/Book Value per Share Ratio is 3.07 and the current P/B Ratio is 3.74 based on a stock price of $23.34. The current P/B Ratio is some 21% higher than the 10 year median Ratio and this suggests that the stock price is getting rather high.
I cannot do a test on dividend yield as the dividends have moved down recently due to the change in the company from an income trust to a corporation. It was felt that yields for these companies would probably end up in the 4% to 5% range and with the current yield at 4.8%, this is certainly were this yield is.
If you look at Price/Cash Flow per Share Ratio, the 5 year P/CF Ratio is 8.33 and the current P/CF Ratio is some 77% higher at 14.77. If you look at Price/Sales Ratios, the 5 year P/S Ratio is 0.59 and the current P/S Ratio at 0.74 is come 26% higher. On an absolute basis, a good price is when the P/CF Ratio is 5.00 or below and the P/S Ratio is 1.00 or below. On a relatively basis, both these tests show that the stock price is relatively high.
When I look at analysts' recommendations, I find Buy and Hold recommendations, with the majority being a Hold recommendation. The consensus recommendation would be a Hold. The 12 month stock price consensus is $24.60. This implies a 12 month total return of 10.2% with 4.8% from dividends and 5.4% from capital gains.
The newspaper The Winnipeg Free Press talks about the company having slightly higher profits in the 2nd quarter. A G&M article by Validea Canada talks about this company scoring high with a Buffett model.
I think that this is a good company, but the stock price is certainly not cheap and it is marginally if the price is reasonable. Analysts like the good yield and one analyst said that he did not think that the stock was yet overpriced at $23.10. However, I do not think that now is a good time to buy. See my spreadsheet at nwc.htm.
This is the second of two parts. The first part was posted on Tuesday, October 1, 2013 and is available here.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.
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, October 1, 2013
The North West Company
I do not own this stock The North West Company (TSX-NWC, OTC-NWTUF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This stock had a yield just over 7%. The current rate is 4.8%. It was expected that these old income trusts would generally end up with dividend yields between 4 and 5%.
When this company changed from an income trust to a corporation, it decreased its dividends by almost 30%. Since then, it has been increasing its dividends again. The increase in 2012 was 8.3% and for 2013 it was 7.7%. The 10 year growth in dividends is 7.6% per year. I would think that this would be what to expect from dividend growth on this company in the future.
The 5 year Dividend Payout Ratio is 86% for earnings and 56% for cash flow. The DPR for 2012 was 78% for earnings and 43% for cash flow. The DPR for 2013 is expected to be around 81% for earnings and 71% for cash flow. We have second quarter results in and earnings and cash flow seems to be heading towards the estimates given for this company for 2013.
Total return to the end of January 2013, the financial statement date for this company, was 10.93% and 21.29% per year over the past 5 and 10 years. The portion applicable to dividends was 6.26% and 8.42% over these periods. The portion applicable to capital gains was 4.67% and 12.86% per year over these periods.
There have been modest increases in outstanding shares and increases are due to stock options. For example shares increased by 0.02% in 2012. So increase in shares is essentially zero. The growth in revenues has been quite good and quite steady. The growth in earnings is volatile, as this is a retail stock. The growth in cash flow is a bit volatile.
Growth in both revenue and revenue per share has been just above 7% per year over the past 5 and 10 years. It is best to look at the growth in 5 year running averages for earnings per share because of the volatility and the growth here is 8.8% and 9.5% per year, over the past 5 and 10 years. Growth in cash flow per share is at 5% and 7% per year. Using the 5 year running averages for cash flow, the growth is better at 8.8% and 7.7% per year over the past 5 and 10 years.
The Return on Equity has always been quite good with the 5 year median ROE at 25.3% with a ROE for the financial year ending at the end of January 2013 at 22%. The ROE on comprehensive income for the financial year ending in January 2013 is close at 21%.
The Debt Ratios are good for this company, with the Liquidity Ratio at the end of January at 1.60 and the Debt Ratio at the end of January at 1.83. The end of January 2013 Leverage and Debt/Equity Ratios are fine at 2.20 and 1.20.
I think that this company has done well for its shareholders and will continue to do that. However, you should expect lower dividend yields that in the pass, maybe around 4% to 4.5%.See my spreadsheet at nwc.htm.
This is the first of two parts. Second part will be posted on Wednesday, October 2, 2013 and will be here. Tomorrow I will talk about what analysts say and how good the current stock price is.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.
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 this company changed from an income trust to a corporation, it decreased its dividends by almost 30%. Since then, it has been increasing its dividends again. The increase in 2012 was 8.3% and for 2013 it was 7.7%. The 10 year growth in dividends is 7.6% per year. I would think that this would be what to expect from dividend growth on this company in the future.
The 5 year Dividend Payout Ratio is 86% for earnings and 56% for cash flow. The DPR for 2012 was 78% for earnings and 43% for cash flow. The DPR for 2013 is expected to be around 81% for earnings and 71% for cash flow. We have second quarter results in and earnings and cash flow seems to be heading towards the estimates given for this company for 2013.
Total return to the end of January 2013, the financial statement date for this company, was 10.93% and 21.29% per year over the past 5 and 10 years. The portion applicable to dividends was 6.26% and 8.42% over these periods. The portion applicable to capital gains was 4.67% and 12.86% per year over these periods.
There have been modest increases in outstanding shares and increases are due to stock options. For example shares increased by 0.02% in 2012. So increase in shares is essentially zero. The growth in revenues has been quite good and quite steady. The growth in earnings is volatile, as this is a retail stock. The growth in cash flow is a bit volatile.
Growth in both revenue and revenue per share has been just above 7% per year over the past 5 and 10 years. It is best to look at the growth in 5 year running averages for earnings per share because of the volatility and the growth here is 8.8% and 9.5% per year, over the past 5 and 10 years. Growth in cash flow per share is at 5% and 7% per year. Using the 5 year running averages for cash flow, the growth is better at 8.8% and 7.7% per year over the past 5 and 10 years.
The Return on Equity has always been quite good with the 5 year median ROE at 25.3% with a ROE for the financial year ending at the end of January 2013 at 22%. The ROE on comprehensive income for the financial year ending in January 2013 is close at 21%.
The Debt Ratios are good for this company, with the Liquidity Ratio at the end of January at 1.60 and the Debt Ratio at the end of January at 1.83. The end of January 2013 Leverage and Debt/Equity Ratios are fine at 2.20 and 1.20.
I think that this company has done well for its shareholders and will continue to do that. However, you should expect lower dividend yields that in the pass, maybe around 4% to 4.5%.See my spreadsheet at nwc.htm.
This is the first of two parts. Second part will be posted on Wednesday, October 2, 2013 and will be here. Tomorrow I will talk about what analysts say and how good the current stock price is.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.
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.
Subscribe to:
Comments (Atom)