Sound bite for Twitter and StockTwits is: Price is cheap to reasonable. You may want to look at this stock if you want a US stock in the health care sector. See my spreadsheet on Medtronic PLC.
I do not own this stock of Medtronic Inc. (NYSE-MDT). In 2009 I was looking for a good US stock for my US$ account. I had heard good things about this stock and also it is in Health Care sector which is a weak sector in Canada. This is one of the few US stocks that I follow.
This is a dividend growth company with moderate dividends and moderate dividend growth. The current dividend is 2.05% and the 5 year median dividend is 2.11%. The dividend growth for the past 5 and 10 years is at 11.1% and 14.6% per year.
However the historical median dividend is quite low at 0.72%. Until 2008 the dividends on this stock was below 1%. At that time also the dividend growth was higher. From 1991 to 2008 the median dividend growth was just over 17% with the 10 year median growth around 16%. The dividend high is close to 3% and this was reached around 2009/2010.
I have records on this stock back to 1991 and they have raised their dividends every year since then. So if I was looking for a dividend growth US stock, especially one in health care, I would consider this stock.
The Dividend Payout Ratio for EPS for the financial year ending in April 2016 is 61%. This is a little high, but it is also high for this Medtronic. The 5 year median DPR for EPS is 37%. This is a good payout. The DPR for CFPS is 33.7% and its 5 year median is 23.6%.
The outstanding shares have been increasing by 5.5% and 1.9% per year over the past 5 and 10 years. When you look for the company's growth it is best to look at per share growth. For example, Revenue has grown at 12.6% and 9.8% per year over the past 5 and 10 years. Revenue per Share has grown at 6.7% and 7.7% per year over the past 5 and 10 years.
This company has very good debt ratios. The Liquidity Ratio for the financial year ending in April 2016 is 3.29, with a 5 year median at 3.36. The Debt Ratio for the financial year ending in April 2016 is 2.09 with a 5 year median at 2.07. The Leverage (A/BK) and Debt/Equity Ratios for the financial year ending in April 2016 is 1.92 and 0.92 respectively with 5 year median values at 1.92 and 0.92 respectively.
Canadian investors are not only affected by how well a US stock does but also by the Canadian/US currency exchange rate. Over the past 3 years, the 5 year total return on this stock for Canadians is positive at 13.18%, 17.37% and 23.48% respectively in total returns per year. However, prior to the financial year of April 2014, Canadian investors would have had a negative 5 year return over a 9 year period.
The 5 year low, median and high median Price/Earnings per Share Ratios are 15.45, 18.04 and 20.63. The corresponding 5 year values are 14.04, 19.10 and 21.58. The corresponding historical values are much higher at 20.06, 25.98 and 31.72. The higher P/E Ratios correspond with the lower dividend yields prior to 2009. The current P/E Ratio is 24.90 based on a stock price of $83.91 and 2017 EPS estimate of $3.37. Based on the last 10 years of data, this stock price testing suggests that the stock price is relatively expensive. If you look at historical data, the stock price is relatively reasonable and below the median.
I get a Graham Price of $52.52. The 10 year low, median and high median Price/Graham Price Ratios are 1.19, 1.51 and 1.73. The current P/GP Ratio is 1.60 based on a stock price of $83.91. This stock price testing suggests that the stock price is relatively reasonable, but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 2.62. The current P/B Ratio is 2.31 based on BVPS of $36.38 and a stock price of $83.91. The current P/B Ratio is some 12% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical dividend yield of 0.72%. The current dividend yield is 2.05% based on dividends of $1.72 and a stock price of $83.91. The current dividend is some 185% higher than the historical median dividend yield. This stock price testing suggests that the stock price relatively cheap.
If you look at the median dividend yield for the last 5 and 10 years they are at 2.11% and 2.08%. In comparison with the yields for the last 5 and 10 years, the stock price is relatively reasonable and around the median.
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 target is $94.63. This implies a total return of 14.83% with 12.78% from capital gains and 2.05% from dividends.
Jessica Moore at Cerbat Gem talks about buys and sells by institutions in this stock. For example, Boston Private Wealth LLC decreased its position in Medtronic PLC by 3.4% during the second quarter. Al Bentley at Simply Wall Street looks at the intrinsic value of this stock and finds it 9% undervalued. Sara Cox at Review Fortune looks at how analysts are rating this stock. She looked at 26 analysts who collectively have a Hold rating on this stock.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.
The last stock I wrote about was about was Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more . The next stock I will write about will Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more on Wednesday, October 26, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Stefanie Kammerman... learn more and I will write about Money Show 2016 - Scott Hanson... learn more on Tuesday, October 25, 2016 around 5 pm.
Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic PLC.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Monday, October 24, 2016
Friday, October 21, 2016
Canadian Pacific Railway
Sound bite for Twitter and StockTwits is: Probably expensive. I think that this stock is a bit expensive. Stocks can remain overpriced for some time just like sectors can. There was a huge sell-off of shares last year toping some $774M. However, this could all be Ackman who sold off his shares last year and ceased being a director. See my spreadsheet on Canadian Pacific Railway.
I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. It is a stock I held from 1987 to 1999. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list.
Dividends on this stock are low and the increases are moderate. The current dividend is just 1.03% and it has an historical median dividend of 1.50%. The dividend on this stock has often been below 1% lately. The dividend increases over the past 5 and 10 years was at 6.2% and 9.2%. The last dividend increase was in 2016 and was for 42.9%. However, this was after two years of flat dividends.
The Dividend Payout Ratio was 16.7% in 2016 and the 5 year median DPR is 28%. The DPR for CFPS was 9% in 2015 and the 5 year median was 12.3%. It would seem to me that it can afford it dividends. Earnings are a bit volatile with growth over the past 5 and 10 years at 16.95 and 9.5% per year. However, if you look at 5 year running averages over the past 5 and 10 years, growth is at 4.3% and 7.2% per year. This is because there was a sharp increase in earnings in 2014.
Dividend growth was not bad in the past. If you held this stock for 5, 10 or 15 years, your current dividend yield on your original purchase if at a median price would be 3%, 3.2% and 6.1%. Going into the future, if the 6% increase holds and you purchased this stock today at $193.39 then you could be earning in 5, 10 or 15 years 1.4%, 1.95 or 2.5% dividend yield.
If you increase the dividend growth to 11.9% to take into account the most recent growth then in 5, 10 or 15 years you might be earning on your current purchase price 1.8%, 3.18 or 5.6% dividend yield. If you use the 10 year growth, which is quite possible to go back to, in 5, 10 or 15 years' time you could be earnings on current purchase price 1.6%, 2.5% or 3.6%. Problem with low yields and moderate growth is that it takes a long time to get high yields.
The outstanding shares have been declining. Over the past 5 and 10 years shares have declined by 2% and 0.3%. Therefore you should look at things like Revenue rather than Revenue per Share. Revenue has grown over the past 5 and 10 years by 6.1% and 4.5%. Revenue per Share has grown by 8.3% and 5.2% per year over the past 5 and 10 years.
The 5 year low, median and high median Price/Earnings per Share Ratios are 20.13, 24.52 and 28.92. The 10 year corresponding values are a lot lower at 13.45, 16.23 and 19.69. The historical values are closer but lower than the 10 year ones at 11.29, 13.64 and 15.98. The current P/E Ratio is 16.39 based on a stock price of $193.39 and 2016 EPS estimate of 11.80. Since the 12 month EPS to the end of the third quarter is $10.10, this estimate seems reasonable. If we use the 10 year values then this testing would suggest that the stock price is relatively reasonable and around the median.
I get at Graham price of $90.01. The 10 year low, median and high median Price/Graham Price Ratios are 1.02, 1.22 and 1.43. The current P/GP Ratio is 2.15 based on a stock price of $193.39. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year Price/Book Value per Share Ratio of 2.10. The current P/B ratio is 6.34 based on BVPS of $30.52 and a stock price of $193.39. The current P/B Ratio is some 202% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
The historical median Dividend Yield (which covers 14 years) is 1.50%. The current dividend yield is 1.03% based on a stock price of $193.39 and a dividend of $2.00. The current dividend yield is some 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
Note that the 5 year median dividend yield is 1.03% which is today's. There are many analysts that feel that the whole stock market is priced rather high. Dividend yields started to trend lower in 2012 for this stock. Part of this was higher stock prices but the other factor was a flat dividend.
The 10 year median P/S Ratio is 2.24. The current P/S Ratio is 4.59 based on 2016 Revenue of $6484M and Revenue per Share of $42.16. The current P/S Ratio is some 104% higher than the 10 year median value. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price is $213.23. This implies a total return of 11.29% with 10.26% from capital gains and 1.03% from dividends with a current stock price of $193.39.
There is a recent article by Kristine Owram in the Financial Post about Ackman's investment in CP. According to Giuseppe Valiante of The Canadian Press in an article on CTV News, CP is directly responsible for damages caused by the derailment in 2013 in Lac-Megantic. Ryan Vanzo of Motley Fool asks if this stock has peaked and answers that he thinks not. However, he does like CNR better. See what analysts think at Stock Chase.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more. The next stock I will write about will be Medtronic Inc. (NYSE-MDT)... learn more on Monday, October 24, 2016 around 5 pm.
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 Canadian Pacific Railway.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. It is a stock I held from 1987 to 1999. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock. I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list.
Dividends on this stock are low and the increases are moderate. The current dividend is just 1.03% and it has an historical median dividend of 1.50%. The dividend on this stock has often been below 1% lately. The dividend increases over the past 5 and 10 years was at 6.2% and 9.2%. The last dividend increase was in 2016 and was for 42.9%. However, this was after two years of flat dividends.
The Dividend Payout Ratio was 16.7% in 2016 and the 5 year median DPR is 28%. The DPR for CFPS was 9% in 2015 and the 5 year median was 12.3%. It would seem to me that it can afford it dividends. Earnings are a bit volatile with growth over the past 5 and 10 years at 16.95 and 9.5% per year. However, if you look at 5 year running averages over the past 5 and 10 years, growth is at 4.3% and 7.2% per year. This is because there was a sharp increase in earnings in 2014.
Dividend growth was not bad in the past. If you held this stock for 5, 10 or 15 years, your current dividend yield on your original purchase if at a median price would be 3%, 3.2% and 6.1%. Going into the future, if the 6% increase holds and you purchased this stock today at $193.39 then you could be earning in 5, 10 or 15 years 1.4%, 1.95 or 2.5% dividend yield.
If you increase the dividend growth to 11.9% to take into account the most recent growth then in 5, 10 or 15 years you might be earning on your current purchase price 1.8%, 3.18 or 5.6% dividend yield. If you use the 10 year growth, which is quite possible to go back to, in 5, 10 or 15 years' time you could be earnings on current purchase price 1.6%, 2.5% or 3.6%. Problem with low yields and moderate growth is that it takes a long time to get high yields.
The outstanding shares have been declining. Over the past 5 and 10 years shares have declined by 2% and 0.3%. Therefore you should look at things like Revenue rather than Revenue per Share. Revenue has grown over the past 5 and 10 years by 6.1% and 4.5%. Revenue per Share has grown by 8.3% and 5.2% per year over the past 5 and 10 years.
The 5 year low, median and high median Price/Earnings per Share Ratios are 20.13, 24.52 and 28.92. The 10 year corresponding values are a lot lower at 13.45, 16.23 and 19.69. The historical values are closer but lower than the 10 year ones at 11.29, 13.64 and 15.98. The current P/E Ratio is 16.39 based on a stock price of $193.39 and 2016 EPS estimate of 11.80. Since the 12 month EPS to the end of the third quarter is $10.10, this estimate seems reasonable. If we use the 10 year values then this testing would suggest that the stock price is relatively reasonable and around the median.
I get at Graham price of $90.01. The 10 year low, median and high median Price/Graham Price Ratios are 1.02, 1.22 and 1.43. The current P/GP Ratio is 2.15 based on a stock price of $193.39. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year Price/Book Value per Share Ratio of 2.10. The current P/B ratio is 6.34 based on BVPS of $30.52 and a stock price of $193.39. The current P/B Ratio is some 202% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
The historical median Dividend Yield (which covers 14 years) is 1.50%. The current dividend yield is 1.03% based on a stock price of $193.39 and a dividend of $2.00. The current dividend yield is some 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
Note that the 5 year median dividend yield is 1.03% which is today's. There are many analysts that feel that the whole stock market is priced rather high. Dividend yields started to trend lower in 2012 for this stock. Part of this was higher stock prices but the other factor was a flat dividend.
The 10 year median P/S Ratio is 2.24. The current P/S Ratio is 4.59 based on 2016 Revenue of $6484M and Revenue per Share of $42.16. The current P/S Ratio is some 104% higher than the 10 year median value. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price is $213.23. This implies a total return of 11.29% with 10.26% from capital gains and 1.03% from dividends with a current stock price of $193.39.
There is a recent article by Kristine Owram in the Financial Post about Ackman's investment in CP. According to Giuseppe Valiante of The Canadian Press in an article on CTV News, CP is directly responsible for damages caused by the derailment in 2013 in Lac-Megantic. Ryan Vanzo of Motley Fool asks if this stock has peaked and answers that he thinks not. However, he does like CNR better. See what analysts think at Stock Chase.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more. The next stock I will write about will be Medtronic Inc. (NYSE-MDT)... learn more on Monday, October 24, 2016 around 5 pm.
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 Canadian Pacific Railway.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Wednesday, October 19, 2016
Kombat Copper Inc.
Sound bite for Twitter and StockTwits is: Following for fun. See my spreadsheet on Kombat Copper Inc.
I own this stock of Kombat Copper Inc. (TSX-KBT, OTC-PNTZF). I originally brought this stock in 2000 as Tathacus Resources Ltd. because it was doing interesting things. It was part of a basket of small caps that I was buying at that time. There was a reverse takeover (RTO) of this company on April 28, 2011 by Pan Terra Industries Inc. Symbol PNT. On May 2, 2012 there was a name change from Pan Terra Industries (PNT) to Kombat Copper Inc. (KBT).
I am keeping this stock as I am curious about what will happen to it and also because my stake in this company is worth less than the fees to sell it. Someone must think that there is some life in this stock as they just make a private place of 3.3M shares. See the news release of June 2016 .
I have no idea if company will ever amount to anything. Probably my shares will be so depleted that I may not gain anything. The company has no revenue and who know when it will get any. There is no analyst following this stock as far as I can see. I am just along for the ride. I really do not know what else to say.
This Press Release talks about Routemaster Capital Inc. appointing Mr. Theron the CEO of Kombat Copper as a director. They say he has extensive management and board experience within the mining industry. The market wire release from Aberdeen International Inc. (TSX-AAB) says that they hold 9,205,000 common shares and 10,000,000 share purchase warrants in Kombat Copper Inc.. There was a Press Release from the company in September 2016 stating what it plans to do in 2016 and 2017.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more . The next stock I will write about will be Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more on Friday, October 21, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Mike Larson... learn more on Thursday, October 20, 2016 around 5 pm.
Also, on my book blog I have put a review of the Dr. Susan Love's Breast Book learn more...
Kombat Copper Inc. is a publicly traded Canadian exploration and development company. Its core operations are focused on copper resources in Namibia, one of the world's most prospective copper regions, where they have substantial assets in place. Its web site is here Kombat Copper 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I own this stock of Kombat Copper Inc. (TSX-KBT, OTC-PNTZF). I originally brought this stock in 2000 as Tathacus Resources Ltd. because it was doing interesting things. It was part of a basket of small caps that I was buying at that time. There was a reverse takeover (RTO) of this company on April 28, 2011 by Pan Terra Industries Inc. Symbol PNT. On May 2, 2012 there was a name change from Pan Terra Industries (PNT) to Kombat Copper Inc. (KBT).
I am keeping this stock as I am curious about what will happen to it and also because my stake in this company is worth less than the fees to sell it. Someone must think that there is some life in this stock as they just make a private place of 3.3M shares. See the news release of June 2016 .
I have no idea if company will ever amount to anything. Probably my shares will be so depleted that I may not gain anything. The company has no revenue and who know when it will get any. There is no analyst following this stock as far as I can see. I am just along for the ride. I really do not know what else to say.
This Press Release talks about Routemaster Capital Inc. appointing Mr. Theron the CEO of Kombat Copper as a director. They say he has extensive management and board experience within the mining industry. The market wire release from Aberdeen International Inc. (TSX-AAB) says that they hold 9,205,000 common shares and 10,000,000 share purchase warrants in Kombat Copper Inc.. There was a Press Release from the company in September 2016 stating what it plans to do in 2016 and 2017.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more . The next stock I will write about will be Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more on Friday, October 21, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Mike Larson... learn more on Thursday, October 20, 2016 around 5 pm.
Also, on my book blog I have put a review of the Dr. Susan Love's Breast Book learn more...
Kombat Copper Inc. is a publicly traded Canadian exploration and development company. Its core operations are focused on copper resources in Namibia, one of the world's most prospective copper regions, where they have substantial assets in place. Its web site is here Kombat Copper 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Monday, October 17, 2016
Teck Resources Ltd
Sound bite for Twitter and StockTwits is: Price probably good. I would never buy a resource stock such a Teck for the long term. However, there is often money to be made in the short term when they cut their dividends. Buying now you might be a bit late to the party, but there may be still profits to be made. The real time to buy is when they announce a dividend cut. See my spreadsheet on Teck Resources Ltd.
I do not own this stock of Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK), but I have in the past. The time to buy this stock is when it cuts its dividend. For example, 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 usual reason you are given to buy resource stocks is for diversification. I disagree. I know that resource stocks take up a large portion of the TSX, but they are volatile and not consistent dividend payers. I track some resources because they are part of the TSX and I like to know what is going on in resource stocks. However, I never consider them a long term investment. I buy them after dividends cuts and ride to some highs, but I never look at any resource stock as a permanent part of my portfolio.
This company again cut their dividends in 2015 and again in 2016. Because of this the stock price has been declining. In fact it has been declining since 2012. After the declared dividend cut in December 2015, the stock price (as usual) started to pick up. The stock price so far this year is up by some 379% based on a current price of $25.58.
The company has a long history of paying dividends. However, the dividends are not steady. Dividends can be cut or suspended as well as increased. For stocks you should be buying low and selling high. The best time to buy this stock is when they cut their dividends or better when they announce a dividend cut.
Analysts seem to expect this stock to start picking up this year or next. It is obvious the market expects better with this company because of the run up of the stock price this year.
One important point is the debt ratios and they are fairly good. The Liquidity Ratio for 2015 was 2.78 and the 5 year median is also 2.78. The Debt Ratio for 2015 was 1.92 and the 5 year median is 2.08. Leverage and Debt/Equity Ratios for 2015 was 2.08 and 1.08 with the 5 year median values at 1.92 and 0.92 respectively. Good dividend ratios can see a company through the bad times.
This company often has cash on hand. The median cash per share over the past 5 year is $4.81. At the end of 2015 they had cash on hand of $3.27 per share. At the end of the second quarter of 2016 they had $2.21 on hand which is 8.9% of the stock price.
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.76, 17.78 and 22.80. The corresponding 10 year values are 7.89, 13.19 and 16.98. The corresponding historical values are 9.64, 14.66 and 19.68. We should probably be paying attention to the longer term values in this testing. The current P/E Ratio is 26.93 based on a stock price of $25.58 and 2016 EPS of $0.95. The P/E Ratios move to 23.05 and 20.63 for 2016 and 2017 based on EPS of $1.11 and 1.24. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $24.63. The 10 year low, median and high median Price/Graham Price Ratios are 0.60, 0.92 and 1.26. The current P/GP Ratio is 1.04 based on a stock price of $25.58. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.20. The current P/B Ratio is 0.90 a values some 24.7% lower. The current P/B Ratio is based on BVPS of $28.39 and a stock price of $25.58. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year P/S Ratio of 1.97. The current P/S Ratio is 1.80 based on Revenue estimate for 2016 of $8.187M, Revenue per Share of $14.21 and a stock price of $25.58. The current P/S Ratio is some 8.6% lower than the 10 year median. This stock price testing suggests that the stock price is reasonable and below the median.
When trying to judge a stock price, the P/E Ratio is in a lot of cases not the best measure. I personally like the dividend yield test the best, but it is not a great one for this case because dividends go down as well as up. The next best way is the P/B Ratio where you are not using estimates. The P/S Ratio testing is not bad because analysts often hit what the revenue will be when they do not hit where earnings will be.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. That is they are all over the place. Most of the recommendations are a Hold and the consensus would be a Hold. The 12 month stock price consensus is $22.10. Based on a currently price of $25.58, this implies a total loss of 10.86% with a capital loss of 11.26% and dividends of 0.39%.
Jonathan Ratner in this article in the Financial Post talks about RBC Capital Markets upgrading this stock to an Outperform (Buy) because of strength in coking coal prices and potential upside from zinc. Andrew Walker of Motley Fool likes this stock and thinks the price will go to $40. See what analysts are saying at Stock Chase .
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was HNZ Group Inc. (TSX-HNZ, OTC- CDHPF)... learn more . The next stock I will write about will be Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more on Wednesday, October 19, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Peter Schiff... learn more on Tuesday, October 18, 2016 around 5 pm.
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 Resources Ltd.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK), but I have in the past. The time to buy this stock is when it cuts its dividend. For example, 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 usual reason you are given to buy resource stocks is for diversification. I disagree. I know that resource stocks take up a large portion of the TSX, but they are volatile and not consistent dividend payers. I track some resources because they are part of the TSX and I like to know what is going on in resource stocks. However, I never consider them a long term investment. I buy them after dividends cuts and ride to some highs, but I never look at any resource stock as a permanent part of my portfolio.
This company again cut their dividends in 2015 and again in 2016. Because of this the stock price has been declining. In fact it has been declining since 2012. After the declared dividend cut in December 2015, the stock price (as usual) started to pick up. The stock price so far this year is up by some 379% based on a current price of $25.58.
The company has a long history of paying dividends. However, the dividends are not steady. Dividends can be cut or suspended as well as increased. For stocks you should be buying low and selling high. The best time to buy this stock is when they cut their dividends or better when they announce a dividend cut.
Analysts seem to expect this stock to start picking up this year or next. It is obvious the market expects better with this company because of the run up of the stock price this year.
One important point is the debt ratios and they are fairly good. The Liquidity Ratio for 2015 was 2.78 and the 5 year median is also 2.78. The Debt Ratio for 2015 was 1.92 and the 5 year median is 2.08. Leverage and Debt/Equity Ratios for 2015 was 2.08 and 1.08 with the 5 year median values at 1.92 and 0.92 respectively. Good dividend ratios can see a company through the bad times.
This company often has cash on hand. The median cash per share over the past 5 year is $4.81. At the end of 2015 they had cash on hand of $3.27 per share. At the end of the second quarter of 2016 they had $2.21 on hand which is 8.9% of the stock price.
The 5 year low, median and high median Price/Earnings per Share Ratios are 12.76, 17.78 and 22.80. The corresponding 10 year values are 7.89, 13.19 and 16.98. The corresponding historical values are 9.64, 14.66 and 19.68. We should probably be paying attention to the longer term values in this testing. The current P/E Ratio is 26.93 based on a stock price of $25.58 and 2016 EPS of $0.95. The P/E Ratios move to 23.05 and 20.63 for 2016 and 2017 based on EPS of $1.11 and 1.24. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $24.63. The 10 year low, median and high median Price/Graham Price Ratios are 0.60, 0.92 and 1.26. The current P/GP Ratio is 1.04 based on a stock price of $25.58. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.20. The current P/B Ratio is 0.90 a values some 24.7% lower. The current P/B Ratio is based on BVPS of $28.39 and a stock price of $25.58. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year P/S Ratio of 1.97. The current P/S Ratio is 1.80 based on Revenue estimate for 2016 of $8.187M, Revenue per Share of $14.21 and a stock price of $25.58. The current P/S Ratio is some 8.6% lower than the 10 year median. This stock price testing suggests that the stock price is reasonable and below the median.
When trying to judge a stock price, the P/E Ratio is in a lot of cases not the best measure. I personally like the dividend yield test the best, but it is not a great one for this case because dividends go down as well as up. The next best way is the P/B Ratio where you are not using estimates. The P/S Ratio testing is not bad because analysts often hit what the revenue will be when they do not hit where earnings will be.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. That is they are all over the place. Most of the recommendations are a Hold and the consensus would be a Hold. The 12 month stock price consensus is $22.10. Based on a currently price of $25.58, this implies a total loss of 10.86% with a capital loss of 11.26% and dividends of 0.39%.
Jonathan Ratner in this article in the Financial Post talks about RBC Capital Markets upgrading this stock to an Outperform (Buy) because of strength in coking coal prices and potential upside from zinc. Andrew Walker of Motley Fool likes this stock and thinks the price will go to $40. See what analysts are saying at Stock Chase .
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was HNZ Group Inc. (TSX-HNZ, OTC- CDHPF)... learn more . The next stock I will write about will be Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more on Wednesday, October 19, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Peter Schiff... learn more on Tuesday, October 18, 2016 around 5 pm.
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 Resources Ltd.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Friday, October 14, 2016
HNZ Group Inc.
Sound bite for Twitter and StockTwits is: Price probably good. It would seem that ratios on this stock have always been quite low. On a relatively P/E Ratio basis it is expensive, but on a relative P/B Ratio it is not. I would prefer to go with the P/B Ratio as there are no estimates involved. We also know that the EPS is relatively low for this stock currently. See my spreadsheet on HNZ Group Inc.
This might be a suitable stock for someone building a stock portfolio and can stand some risk. If you are dependent on dividends, then this would probably not be a stock for you.
I do not own this stock of HNZ Group Inc. (TSX-HNZ, OTC-CDHPF). Canadian Helicopters Group Inc. has come up in Daily Buy and Sell Advisor of MPL Communications. Dividend Ninja Blogger also mentioned this stock in a blog entry talking about High Yield Canadian Stocks. See link. Richard Morrison wrote about small caps in the Financial Post in February 2011. He was screening financially healthy, profitable, reasonably valued small companies. He got 18 of them, many were former income trusts. One of the 18 stocks was this stock.
The one think I noticed when I updated the spreadsheet is how much cash they have on hand. At the end of 2015 they had over $11M and $0.85 per share or 7.3% of the share price of $13.30. At the end of the second quarter they had $14.7M or $1.13 per share or 8.5% of the share price. Some analysts take cash on hand off of share price when calculating P/E Ratios as they feel this is a better reflection of the true cost of the stock.
The other thing I noticed was how good the debt ratios are. It is important for companies strongly affected by the business cycle to have good debt ratios so that they can safely survive the bad times. This company does. The Liquidity Ratio for 2015 was 2.11. The Debt Ratio was 4.46 in 2015. The Leverage and Debt/Equity Ratios for 2015 were 1.29 and 0.29 respectively.
Long term debt is really low also. The Long Term Debt to Market Cap Ratio is 0.02. (These values are equal when the ratio is 1.00.)
This stock was issued as an income trust in 2005. It was not long after than the tax laws changed. There really has been very little dividend growth before dividends were cut this year. This was probably due to the fact they could not cover dividends in 2014 and there was an earnings loss in 2015. Whether or not this will be a dividend stock in the future is unknown at present. They did say that they were suspending dividends.
I am currently not interested in buying this stock as it is not a dividend growth stock. I will continue to follow it because it might become one. Who knows the future?
Last year was not a good year for this company. They have been having trouble since 2012 with dropping Revenue, Earnings and Cash Flow. Analysts expect 2016 to be a better year with increases in Revenue, Earnings and Cash Flow. If you compare the 12 month period to the end of the second quarter with the 12 months to the end of 2015, Revenue, Earnings and Cash Flow are all up from 2015.
The 5 year low, median and high median Price/Earnings per Share Ratios are 5.94, 8.32 and 10.70. The 10 year corresponding values are 4.45, 6.04 and 7.27. These are very low values. The current P/E Ratio is 16.84 based on a stock price of $13.30 and 2016 EPS estimate of $0.79. This testing suggests that the stock is relatively expensive. However, a P/E Ratio of 16.84 is a rather moderate ratio.
I get a Graham Price of $17.87. The Price/Graham Price Ratio is 0.74 based on a stock price of $13.30. The 10 year low, median and high median P/GP Ratios are 0.42, 0.54 and 0.69. This testing suggests that the stock is relatively expensive. On one hand when P/GP Ratio is at 1.00 or below, it points to a cheap stock price. On the other hand, this stock seems to have always had a low P/GP Ratio.
I get a 10 year median Price/Book Value per Share Ratio of 1.01. The current P/B Ratio is 0.74 based on BVPS of $3.32 and a stock price of $13.30. The current ratio is some 26% lower than the 10 year value. This stock price testing suggests that the stock price is relatively cheap. Also, when the P/B Ratio is 1.50 or less the stock price is considered good.
I get a 10 year median P/S Ratio of 1.02. The current P/S Ratio is 0.81 based on 2016 Revenue estimate of $213, Revenue per Share of $16.36 and a stock price of $13.30. The current P/S Ratio is some 20.3% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. When this P/S Ratio is 1.00 or less the stock price is considered to be good.
When I look at analysts' recommendations, I find Buy and Hold recommendations with more Hold recommendations and the consensus recommendation would be a Hold. The 12 month stock price is $15.38. This implies a total return of 15.64%, all from capital gains.
This Press Release talks about the company combining their two stock symbol into one, but they will continue to monitor non-Canadian Residence ownership. This Press Release talks about the suspension of dividends to maintain their balance sheet. I agree that borrowing to pay dividends is never prudent. I am glad the company can make the tough decisions. Gary Lamphier of the Edmonton Journal writes about how the CEO of this company is positive about the future.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)... learn more . The next stock I will write about will be Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more on Monday, October 17, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Charles White... learn more .
HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Its web site is here HNZ Group 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
This might be a suitable stock for someone building a stock portfolio and can stand some risk. If you are dependent on dividends, then this would probably not be a stock for you.
I do not own this stock of HNZ Group Inc. (TSX-HNZ, OTC-CDHPF). Canadian Helicopters Group Inc. has come up in Daily Buy and Sell Advisor of MPL Communications. Dividend Ninja Blogger also mentioned this stock in a blog entry talking about High Yield Canadian Stocks. See link. Richard Morrison wrote about small caps in the Financial Post in February 2011. He was screening financially healthy, profitable, reasonably valued small companies. He got 18 of them, many were former income trusts. One of the 18 stocks was this stock.
The one think I noticed when I updated the spreadsheet is how much cash they have on hand. At the end of 2015 they had over $11M and $0.85 per share or 7.3% of the share price of $13.30. At the end of the second quarter they had $14.7M or $1.13 per share or 8.5% of the share price. Some analysts take cash on hand off of share price when calculating P/E Ratios as they feel this is a better reflection of the true cost of the stock.
The other thing I noticed was how good the debt ratios are. It is important for companies strongly affected by the business cycle to have good debt ratios so that they can safely survive the bad times. This company does. The Liquidity Ratio for 2015 was 2.11. The Debt Ratio was 4.46 in 2015. The Leverage and Debt/Equity Ratios for 2015 were 1.29 and 0.29 respectively.
Long term debt is really low also. The Long Term Debt to Market Cap Ratio is 0.02. (These values are equal when the ratio is 1.00.)
This stock was issued as an income trust in 2005. It was not long after than the tax laws changed. There really has been very little dividend growth before dividends were cut this year. This was probably due to the fact they could not cover dividends in 2014 and there was an earnings loss in 2015. Whether or not this will be a dividend stock in the future is unknown at present. They did say that they were suspending dividends.
I am currently not interested in buying this stock as it is not a dividend growth stock. I will continue to follow it because it might become one. Who knows the future?
Last year was not a good year for this company. They have been having trouble since 2012 with dropping Revenue, Earnings and Cash Flow. Analysts expect 2016 to be a better year with increases in Revenue, Earnings and Cash Flow. If you compare the 12 month period to the end of the second quarter with the 12 months to the end of 2015, Revenue, Earnings and Cash Flow are all up from 2015.
The 5 year low, median and high median Price/Earnings per Share Ratios are 5.94, 8.32 and 10.70. The 10 year corresponding values are 4.45, 6.04 and 7.27. These are very low values. The current P/E Ratio is 16.84 based on a stock price of $13.30 and 2016 EPS estimate of $0.79. This testing suggests that the stock is relatively expensive. However, a P/E Ratio of 16.84 is a rather moderate ratio.
I get a Graham Price of $17.87. The Price/Graham Price Ratio is 0.74 based on a stock price of $13.30. The 10 year low, median and high median P/GP Ratios are 0.42, 0.54 and 0.69. This testing suggests that the stock is relatively expensive. On one hand when P/GP Ratio is at 1.00 or below, it points to a cheap stock price. On the other hand, this stock seems to have always had a low P/GP Ratio.
I get a 10 year median Price/Book Value per Share Ratio of 1.01. The current P/B Ratio is 0.74 based on BVPS of $3.32 and a stock price of $13.30. The current ratio is some 26% lower than the 10 year value. This stock price testing suggests that the stock price is relatively cheap. Also, when the P/B Ratio is 1.50 or less the stock price is considered good.
I get a 10 year median P/S Ratio of 1.02. The current P/S Ratio is 0.81 based on 2016 Revenue estimate of $213, Revenue per Share of $16.36 and a stock price of $13.30. The current P/S Ratio is some 20.3% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. When this P/S Ratio is 1.00 or less the stock price is considered to be good.
When I look at analysts' recommendations, I find Buy and Hold recommendations with more Hold recommendations and the consensus recommendation would be a Hold. The 12 month stock price is $15.38. This implies a total return of 15.64%, all from capital gains.
This Press Release talks about the company combining their two stock symbol into one, but they will continue to monitor non-Canadian Residence ownership. This Press Release talks about the suspension of dividends to maintain their balance sheet. I agree that borrowing to pay dividends is never prudent. I am glad the company can make the tough decisions. Gary Lamphier of the Edmonton Journal writes about how the CEO of this company is positive about the future.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)... learn more . The next stock I will write about will be Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more on Monday, October 17, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Charles White... learn more .
HNZ Group Inc. is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Its web site is here HNZ Group 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Wednesday, October 12, 2016
Enbridge Income Fund Holdings Inc.
Sound bite for Twitter and StockTwits is: Getting expensive. It is only showing as expensive using the dividend yield. I tend to like this test because it uses known values of dividends paid and stock price. See my spreadsheet on Enbridge Income Fund Holdings Inc.
I do not own this stock of Enbridge Income Fund Holdings Inc. (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). You would not want to invest in both this stock and Enbridge Inc. as Enbridge Inc. is invested in the fund this stock is invested in.
What I hate about reviewing this stock is that I have to fight my way through their accounting. You cannot just look at the accounting for this stock, but you must also look at the Enbridge Income Fund to get the whole picture.
When accounting gets complicated, I do not want to invest. It is too easy to make a mistake in my analysis. It is too easy to miss some problem that would affect the viability of this stock. I would not personally invest in this stock. To me the first rule of investing is that you do not invest in what you do not understand.
It would also seem that I am not the only one confused with the accounting. The estimates given by analysts for ENF's income are really the Revenue for the Enbridge Fund (ENBIF). The other thing is that this stock's accounting is using IFRS accounting rules and the Fund is using USGAAP accounting rules. They seem to want to make things difficult. Problem with different account rules is that values are not determined in the same manner. For example, Net Income might be calculated differently.
The dividends are good with low growth. The current dividend is 5.57% based on a stock price of $33.49 and dividends of $1.87. The growth over the past 5 and 10 years is at 6.5% and 5.7% per year. The Dividend Payout Ratios are rather high. The DPR for EPS for 2015 is at 86% and for CFPS is at 111%. (Also it is not a good sign when the EPS is higher than the CFPS. This is a negative.)
The underlying fund's shares have grown a lot, especially over the past few years. The Outstanding shares have grown by 40.7% and 18.6% per year over the past 5 and 10 years. The growth in shares for this company is lower at 22.9% and 10.9% per year over the past 5 and 10 years. This means that the percentage this company owns in the Fund is lower than it used to be. (This is neither good nor bad by itself.)
One problem I see is that the Revenue of the underlying fund is not growing. The Revenue has declined by 1.9% and grown by 1.8% over the past 5 and 10 years. However, the Revenue per Share has declined by 30.3% and 14.2% per year over the past 5 and 10 years.
The income of this company has grown over the past 5 years and the underlying fund has grown over the past 5 years and 10 years. The Net Income for the underlying fund has grown by 57% and 23% per year over the past 5 and 10 years. However, without Revenue growth I do not see how this can continue. However, analysts expect a sharp rise in Revenue from $298M to $4,246M in 2006. The second quarterly report seems to support this.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.52, 15.81 and 17.10. The corresponding 10 year values are 14.59, 17.23 and 20.24. The historical values are 14.84, 19.31 and 23.96. The current P/E Ratio is 16.50 based on a stock price of $33.49 and 2016 EPS estimate of $2.03. This stock price testing suggests that the stock price is reasonable and around the median.
I get a Graham price of $37.77. The 10 year low, median and high median Price/Graham Price Ratios are 0.79, 0.93 and 1.12. The current P/GP Ratio is 0.89 based on a stock price of $33.49. This stock price testing suggests that the stock price is reasonable and below the median.
The 10 year median Price/Book Value per Share Ratio is 1.17. The current P/B Ratio is 1.07 a values some 8.5% lower based on BVPS of $31.23 and a stock price of $33.49. This stock price testing suggests that the stock price is reasonable and below the median.
The historical median dividend yield is 6.99%. The current dividend yield is 5.57% based on a stock price of $33.49 and dividends of $1.87. The current dividend yield is some 20.1% lower than the current dividend yield. This stock price testing suggests that the stock price is getting expensive. I like this test best here because there is no estimating or accounting that may not tell the whole story involved. This test just deals with what dividends are paid and the current stock price only. It is just inside the expensive range because in this testing a stock is expensive if the current dividend yield is 20% lower than the historical median dividend yield.
When I look at analysts' recommendations I find Buy and Hold recommendations. There is one more Hold recommendation than buy (7 to 6). The consensus recommendations would be a Hold. The 12 months stock price is $35.46. This implies a total return of 11.45% with 5.88% from capital gains and 5.57% from dividends.
Why the increase in Revenue? On September 1, 2015, Enbridge Income Partners LP (EIPLP) acquired 100% interests in entities holding certain Canadian liquids pipelines, storage and renewable energy assets from Enbridge Inc. (Enbridge) and certain of its subsidiaries for aggregate consideration of $30.4 billion plus incentive distribution and performance rights, less working capital adjustments (the 2015 Transaction).
The 2015 Transaction resulted in changes to the Fund's method of accounting for its investments in Enbridge Commercial Trust (ECT) and EIPLP from consolidation accounting to equity method accounting due to certain ownership and governance changes. These changes were applied prospectively from September 1, 2015, the closing date of the 2015 Transaction. The results of operations prior to September 1, 2015 were accounted for on a consolidated basis.
Doug Wharley on Cerbat Gem talks about TD Securities affirming their buy rating and what other analysts are saying.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here. Joseph Solitro of Motley Fool likes this stock because its business model is that 99% of its cash flow is underpinned by long-term commercial agreements with creditworthy counterparties and it has a high dividend yield. See what analysts are saying at Stock Chase .
The last stock I wrote about was about was Linamar Corporation (TSX-LNR, OTC-LIMAF)... learn more . The next stock I will write about will be HNZ Group Inc. (TSX-HNZ, OTC- CDHPF)... learn more on Friday, October 14, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Benjamin Tal... learn more on Thursday, October 13, 2016 around 5 pm.
Enbridge Income Fund Holdings Inc., through its investment in Enbridge Income Fund, holds energy infrastructure assets Its web site is here Enbridge Income Fund Holdings 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of Enbridge Income Fund Holdings Inc. (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). You would not want to invest in both this stock and Enbridge Inc. as Enbridge Inc. is invested in the fund this stock is invested in.
What I hate about reviewing this stock is that I have to fight my way through their accounting. You cannot just look at the accounting for this stock, but you must also look at the Enbridge Income Fund to get the whole picture.
When accounting gets complicated, I do not want to invest. It is too easy to make a mistake in my analysis. It is too easy to miss some problem that would affect the viability of this stock. I would not personally invest in this stock. To me the first rule of investing is that you do not invest in what you do not understand.
It would also seem that I am not the only one confused with the accounting. The estimates given by analysts for ENF's income are really the Revenue for the Enbridge Fund (ENBIF). The other thing is that this stock's accounting is using IFRS accounting rules and the Fund is using USGAAP accounting rules. They seem to want to make things difficult. Problem with different account rules is that values are not determined in the same manner. For example, Net Income might be calculated differently.
The dividends are good with low growth. The current dividend is 5.57% based on a stock price of $33.49 and dividends of $1.87. The growth over the past 5 and 10 years is at 6.5% and 5.7% per year. The Dividend Payout Ratios are rather high. The DPR for EPS for 2015 is at 86% and for CFPS is at 111%. (Also it is not a good sign when the EPS is higher than the CFPS. This is a negative.)
The underlying fund's shares have grown a lot, especially over the past few years. The Outstanding shares have grown by 40.7% and 18.6% per year over the past 5 and 10 years. The growth in shares for this company is lower at 22.9% and 10.9% per year over the past 5 and 10 years. This means that the percentage this company owns in the Fund is lower than it used to be. (This is neither good nor bad by itself.)
One problem I see is that the Revenue of the underlying fund is not growing. The Revenue has declined by 1.9% and grown by 1.8% over the past 5 and 10 years. However, the Revenue per Share has declined by 30.3% and 14.2% per year over the past 5 and 10 years.
The income of this company has grown over the past 5 years and the underlying fund has grown over the past 5 years and 10 years. The Net Income for the underlying fund has grown by 57% and 23% per year over the past 5 and 10 years. However, without Revenue growth I do not see how this can continue. However, analysts expect a sharp rise in Revenue from $298M to $4,246M in 2006. The second quarterly report seems to support this.
The 5 year low, median and high median Price/Earnings per Share Ratios are 14.52, 15.81 and 17.10. The corresponding 10 year values are 14.59, 17.23 and 20.24. The historical values are 14.84, 19.31 and 23.96. The current P/E Ratio is 16.50 based on a stock price of $33.49 and 2016 EPS estimate of $2.03. This stock price testing suggests that the stock price is reasonable and around the median.
I get a Graham price of $37.77. The 10 year low, median and high median Price/Graham Price Ratios are 0.79, 0.93 and 1.12. The current P/GP Ratio is 0.89 based on a stock price of $33.49. This stock price testing suggests that the stock price is reasonable and below the median.
The 10 year median Price/Book Value per Share Ratio is 1.17. The current P/B Ratio is 1.07 a values some 8.5% lower based on BVPS of $31.23 and a stock price of $33.49. This stock price testing suggests that the stock price is reasonable and below the median.
The historical median dividend yield is 6.99%. The current dividend yield is 5.57% based on a stock price of $33.49 and dividends of $1.87. The current dividend yield is some 20.1% lower than the current dividend yield. This stock price testing suggests that the stock price is getting expensive. I like this test best here because there is no estimating or accounting that may not tell the whole story involved. This test just deals with what dividends are paid and the current stock price only. It is just inside the expensive range because in this testing a stock is expensive if the current dividend yield is 20% lower than the historical median dividend yield.
When I look at analysts' recommendations I find Buy and Hold recommendations. There is one more Hold recommendation than buy (7 to 6). The consensus recommendations would be a Hold. The 12 months stock price is $35.46. This implies a total return of 11.45% with 5.88% from capital gains and 5.57% from dividends.
Why the increase in Revenue? On September 1, 2015, Enbridge Income Partners LP (EIPLP) acquired 100% interests in entities holding certain Canadian liquids pipelines, storage and renewable energy assets from Enbridge Inc. (Enbridge) and certain of its subsidiaries for aggregate consideration of $30.4 billion plus incentive distribution and performance rights, less working capital adjustments (the 2015 Transaction).
The 2015 Transaction resulted in changes to the Fund's method of accounting for its investments in Enbridge Commercial Trust (ECT) and EIPLP from consolidation accounting to equity method accounting due to certain ownership and governance changes. These changes were applied prospectively from September 1, 2015, the closing date of the 2015 Transaction. The results of operations prior to September 1, 2015 were accounted for on a consolidated basis.
Doug Wharley on Cerbat Gem talks about TD Securities affirming their buy rating and what other analysts are saying.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here. Joseph Solitro of Motley Fool likes this stock because its business model is that 99% of its cash flow is underpinned by long-term commercial agreements with creditworthy counterparties and it has a high dividend yield. See what analysts are saying at Stock Chase .
The last stock I wrote about was about was Linamar Corporation (TSX-LNR, OTC-LIMAF)... learn more . The next stock I will write about will be HNZ Group Inc. (TSX-HNZ, OTC- CDHPF)... learn more on Friday, October 14, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Benjamin Tal... learn more on Thursday, October 13, 2016 around 5 pm.
Enbridge Income Fund Holdings Inc., through its investment in Enbridge Income Fund, holds energy infrastructure assets Its web site is here Enbridge Income Fund Holdings 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Tuesday, October 11, 2016
Linamar Corporation
Sound bite for Twitter and StockTwits is: Reasonable to expensive. It is interesting that it is only a P/E Basis that this stock is showing as cheap. On other measures it is looking rather expensive. I would like to see the dividend yield over 1% for it to be a buy. I would not purchase any stock with a yield under 1%. See my spreadsheet on Linamar Corporation.
I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought fit my investment philosophy. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock. However, it has now been taken off this list.
This stock has a low dividend and a low Dividend Payout Ratio. The current dividend is below 1% at just 0.71% based on stock price of $56.03 and Dividends of $0.40. The DPR for EPS was 6.03% in 2015 with a 5 year median of 9.09%. The DPR for CFPS was 3.64% in 2015 with a 5 year median of 4.45%
Dividend increases have been inconsistent. Generally most years have no increases with some years having big increases. The last increase was in 2014 and it was for 25%. The dividends have grown by 10.8% and 5.2% per year over the past 5 and 10 years.
The dividend yield on initial purchase is quite good. The 5, 10 or 15 year yield on original purchase at a median price is at 10.2%, 21.5% and 30.9%. This is because of the surge in the stock price over the past few years. From the low in January 2012 to the high in June 2015, the stock price was up some 516%.
The total return to the end of 2015 was 30.78% and 21.42% per year over the past 5 and 10 years. Of this return 29.71% and 20.32% per year was due to capital gains. Of this return, 1.10% and 1.07% per year was due to dividends. The stock has been backing off its highs and is down some 25% so far this year.
When I look at my spreadsheet all is see is green. That is because Revenue, Earnings and Cash Flow have grown by at least 8% per year over the past 5 and 10 years. Outstanding shares have not moved much so we can look at per share values and other values.
Revenue per Share is up by 17.8% and 10.1% per year over the past 5 and 10 years. EPS is up by 37.3% and 16.7% per year over the past 5 and 10 years, although growth in EPS tends to be a bit volatile. Cash Flow per share is up by 26.6% and 12.5% per year over the past 5 and 10 years.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.31, 11.50 and 13.38. The 10 year corresponding values are 8.34, 10.74 and 14.04. The corresponding historical values are 8.98, 11.68 and 15.95. These values are remarkable similar. The current P/E Ratio is 7.31 based on a stock price of $56.03 and 2016 EPS estimate of 7.66%. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $78.86. The 10 year low, median and high Price/Graham Price Ratios are 0.59, 0.82 and 1.07. The current P/GP Ratio is 0.71. This stock price testing suggests that the stock price is relatively reasonable but below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.34. The current P/B Ratio is 1.55. The current ratio is ratio is based on BVPS of $36.08 and a stock price of $56.03. This stock price testing suggests that the stock price is reasonable but above the median.
The historical median dividend yield is 1.25%. The current dividend yield at 0.71% is some 43% lower. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median P/S Ratio of 0.48. The current P/S Ratio is 0.60 based on 2016 Revenue estimate of $6,148M. Revenue per Share would be $92.91. The current P/S Ratio is some 25% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a buy. The 12 month stock price consensus is $65.00. This implies a total return of 7.80% with 7.09% from capital gains and 0.71% from dividends.
Renee Jackson on Cerbat Gem talk about three analysts giving this stock a hold recommendation and three giving it a buy recommendation. Kay Ng of Motley Fool thinks that the returns will be better with Linamar than Magna. Kristine Owram in the Financial Post talks about how this company is betting that Aluminum will continue to replace steel as automakers strive to produce more fuel-efficient vehicles. There is an analysis of this company's dividend at Capital Cube
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.
The last stock I wrote about was about was K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF)... learn more . The next stock I will write about will be Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)... learn more on Wednesday, October 12, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Money Sense Panel... learn more .
Linamar Corporation is a diversified global manufacturing company of highly engineered products. It is a world-class designer and diversified manufacturer of precision metallic components and systems for the automotive industry, and mobile industrial markets. Its web site is here Linamar Corporation.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought fit my investment philosophy. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock. However, it has now been taken off this list.
This stock has a low dividend and a low Dividend Payout Ratio. The current dividend is below 1% at just 0.71% based on stock price of $56.03 and Dividends of $0.40. The DPR for EPS was 6.03% in 2015 with a 5 year median of 9.09%. The DPR for CFPS was 3.64% in 2015 with a 5 year median of 4.45%
Dividend increases have been inconsistent. Generally most years have no increases with some years having big increases. The last increase was in 2014 and it was for 25%. The dividends have grown by 10.8% and 5.2% per year over the past 5 and 10 years.
The dividend yield on initial purchase is quite good. The 5, 10 or 15 year yield on original purchase at a median price is at 10.2%, 21.5% and 30.9%. This is because of the surge in the stock price over the past few years. From the low in January 2012 to the high in June 2015, the stock price was up some 516%.
The total return to the end of 2015 was 30.78% and 21.42% per year over the past 5 and 10 years. Of this return 29.71% and 20.32% per year was due to capital gains. Of this return, 1.10% and 1.07% per year was due to dividends. The stock has been backing off its highs and is down some 25% so far this year.
When I look at my spreadsheet all is see is green. That is because Revenue, Earnings and Cash Flow have grown by at least 8% per year over the past 5 and 10 years. Outstanding shares have not moved much so we can look at per share values and other values.
Revenue per Share is up by 17.8% and 10.1% per year over the past 5 and 10 years. EPS is up by 37.3% and 16.7% per year over the past 5 and 10 years, although growth in EPS tends to be a bit volatile. Cash Flow per share is up by 26.6% and 12.5% per year over the past 5 and 10 years.
The 5 year low, median and high median Price/Earnings per Share Ratios are 8.31, 11.50 and 13.38. The 10 year corresponding values are 8.34, 10.74 and 14.04. The corresponding historical values are 8.98, 11.68 and 15.95. These values are remarkable similar. The current P/E Ratio is 7.31 based on a stock price of $56.03 and 2016 EPS estimate of 7.66%. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $78.86. The 10 year low, median and high Price/Graham Price Ratios are 0.59, 0.82 and 1.07. The current P/GP Ratio is 0.71. This stock price testing suggests that the stock price is relatively reasonable but below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.34. The current P/B Ratio is 1.55. The current ratio is ratio is based on BVPS of $36.08 and a stock price of $56.03. This stock price testing suggests that the stock price is reasonable but above the median.
The historical median dividend yield is 1.25%. The current dividend yield at 0.71% is some 43% lower. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median P/S Ratio of 0.48. The current P/S Ratio is 0.60 based on 2016 Revenue estimate of $6,148M. Revenue per Share would be $92.91. The current P/S Ratio is some 25% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a buy. The 12 month stock price consensus is $65.00. This implies a total return of 7.80% with 7.09% from capital gains and 0.71% from dividends.
Renee Jackson on Cerbat Gem talk about three analysts giving this stock a hold recommendation and three giving it a buy recommendation. Kay Ng of Motley Fool thinks that the returns will be better with Linamar than Magna. Kristine Owram in the Financial Post talks about how this company is betting that Aluminum will continue to replace steel as automakers strive to produce more fuel-efficient vehicles. There is an analysis of this company's dividend at Capital Cube
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.
The last stock I wrote about was about was K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF)... learn more . The next stock I will write about will be Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)... learn more on Wednesday, October 12, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Money Sense Panel... learn more .
Linamar Corporation is a diversified global manufacturing company of highly engineered products. It is a world-class designer and diversified manufacturer of precision metallic components and systems for the automotive industry, and mobile industrial markets. Its web site is here Linamar Corporation.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Friday, October 7, 2016
K-Bro Linen Inc.
Sound bite for Twitter and StockTwits is: Currently expensive. I think that the P/E Ratios are too high. This is after a laundry company, not a tech company. It would be much closer to a viable P/E Ratio is it was $10 lower with a P/E of 17.80. See my spreadsheet on K-Bro Linen Inc.
I know that a lot of analysts are looking for quick growth because of them coming into Ontario. I still think that P/E Ratios are too high. I would wait for the year end dip. I am currently doing that. I wonder when and if it will happen. On the other hand some industries in various areas have done well in consolidating their industry. I am thinking of the funeral business and cheese industry.
I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.
This stock grew its dividend a bit while it was an Income Trust. Dividends were not increased each year and most increases were low (that is under 3%). However, the dividend has been flat since 2014. A lot of old Income Trusts are having difficulties increasing dividends after the change to a corporation if they do not decrease dividends at the time of the change.
The Dividend Payout Ratio is for 2015 at 79%. It is expected to be around 70% in 2016. This ratio has been traveling south for some time, but it is a bit high. I would like to see it between 50 to 60%. Because of where this ratio is, it is probably why analysts do not see a dividend increase soon.
Dividends are moderate and increases are very low. The current dividend is 2.97% based on dividends of $1.20 and a stock price of $40.43. The dividends have grown at 1.75% and 1.53% per year over the past 5 and 10 years. I do not consider a stock a dividend growth stock unless the dividends growth faster than the rate of inflation. According to the Bank of Canada the 3, 5 and 10 year rate of inflation is at 1.60%, 1.38% and 1.64%. I have hope for this stock.
The 5 year low, median and high median Price/Earnings per Share Ratios are 19.60, 23.30 and 26.99. The corresponding 10 year values are 15.05, 17.20 and 19.57. Personally, I think that the 5 year median P/E Ratios are too high for a consumer discretionary stock. The current P/E Ratio is 23.64 based on a stock price of $40.43 and 2016 EPS estimate of $1.71. Compared to the 5 year P/E Ratio this is showing as relatively reasonable. However, compared to the 10 year ratios, it is relatively expensive.
I get a Graham Price of $23.50. The 10 year low, median and high median Price/Graham Price Ratios are 1.12, 1.26 and 1.39. The current P/GP Ratio is 1.72 based on a stock price of $40.43. This stock price testing suggests that the stock is relatively expensive.
The 10 year median Price/Book Value per Share Ratio is 2.03. The current P/B Ratio is 2.82 based on BVPS of $14.35 and a stock price of $40.43. The current P/B Ratio is some 39% higher than the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.
Because this stock used to be an income trust and income trusts have higher dividend yields than corporations, the testing using the historical or 10 year dividend yield would make no sense. The 5 year dividend yield is 3.44%. This is some 14% higher than the current dividend yield of 2.97%. This testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold Recommendations. Most are a Hold recommendation and the consensus recommendation is a Hold. The 12 month stock price is $47.18. This implies a total return of 19.66% with 16.70% from capital gains and 2.97% from dividends.
Teresa Graham on Cerbat Gem talks about analysts ratings and the fact the TD just reaffirmed their buy rating. This company announced via Newswire that they are moving to their new facilities in Toronto. Tria Donaldson and Cheryl Stadnichuk talk about some of the controversy in the privatization of laundry services at Rabble. There are other viewpoints such as the editorial at Calgary Herald. See what analysts are saying at Stock Chase.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF)... learn more . The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF)... learn more on Tuesday, October 11, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Gold Panel... learn more .
K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria. Its web site is here K-Bro Linen 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I know that a lot of analysts are looking for quick growth because of them coming into Ontario. I still think that P/E Ratios are too high. I would wait for the year end dip. I am currently doing that. I wonder when and if it will happen. On the other hand some industries in various areas have done well in consolidating their industry. I am thinking of the funeral business and cheese industry.
I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.
This stock grew its dividend a bit while it was an Income Trust. Dividends were not increased each year and most increases were low (that is under 3%). However, the dividend has been flat since 2014. A lot of old Income Trusts are having difficulties increasing dividends after the change to a corporation if they do not decrease dividends at the time of the change.
The Dividend Payout Ratio is for 2015 at 79%. It is expected to be around 70% in 2016. This ratio has been traveling south for some time, but it is a bit high. I would like to see it between 50 to 60%. Because of where this ratio is, it is probably why analysts do not see a dividend increase soon.
Dividends are moderate and increases are very low. The current dividend is 2.97% based on dividends of $1.20 and a stock price of $40.43. The dividends have grown at 1.75% and 1.53% per year over the past 5 and 10 years. I do not consider a stock a dividend growth stock unless the dividends growth faster than the rate of inflation. According to the Bank of Canada the 3, 5 and 10 year rate of inflation is at 1.60%, 1.38% and 1.64%. I have hope for this stock.
The 5 year low, median and high median Price/Earnings per Share Ratios are 19.60, 23.30 and 26.99. The corresponding 10 year values are 15.05, 17.20 and 19.57. Personally, I think that the 5 year median P/E Ratios are too high for a consumer discretionary stock. The current P/E Ratio is 23.64 based on a stock price of $40.43 and 2016 EPS estimate of $1.71. Compared to the 5 year P/E Ratio this is showing as relatively reasonable. However, compared to the 10 year ratios, it is relatively expensive.
I get a Graham Price of $23.50. The 10 year low, median and high median Price/Graham Price Ratios are 1.12, 1.26 and 1.39. The current P/GP Ratio is 1.72 based on a stock price of $40.43. This stock price testing suggests that the stock is relatively expensive.
The 10 year median Price/Book Value per Share Ratio is 2.03. The current P/B Ratio is 2.82 based on BVPS of $14.35 and a stock price of $40.43. The current P/B Ratio is some 39% higher than the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively expensive.
Because this stock used to be an income trust and income trusts have higher dividend yields than corporations, the testing using the historical or 10 year dividend yield would make no sense. The 5 year dividend yield is 3.44%. This is some 14% higher than the current dividend yield of 2.97%. This testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations, I find Buy and Hold Recommendations. Most are a Hold recommendation and the consensus recommendation is a Hold. The 12 month stock price is $47.18. This implies a total return of 19.66% with 16.70% from capital gains and 2.97% from dividends.
Teresa Graham on Cerbat Gem talks about analysts ratings and the fact the TD just reaffirmed their buy rating. This company announced via Newswire that they are moving to their new facilities in Toronto. Tria Donaldson and Cheryl Stadnichuk talk about some of the controversy in the privatization of laundry services at Rabble. There are other viewpoints such as the editorial at Calgary Herald. See what analysts are saying at Stock Chase.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here and here.
The last stock I wrote about was about was Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF)... learn more . The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF)... learn more on Tuesday, October 11, 2016 around 5 pm. Today on my other blog I will write about Money Show 2016 - Gold Panel... learn more .
K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria. Its web site is here K-Bro Linen 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Wednesday, October 5, 2016
Le Chateau Inc.
Sound bite for Twitter and StockTwits is: Cheap for a reason. This company has declining Revenue and Book Value plus negative earnings and cash flow. The long term debt has just increased by some 400%. Stock is certainly cheap for a reason. See my spreadsheet on Le Chateau Inc. .
I do not own this stock of 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 from a column Jennifer Dowty wrote about Dividend Paying stocks in 2010.
Actually I am rather shocked company that this stock is still around. It is still bleeding revenue so it has not turned around. They are trying. Also their earnings, cash flow and stock price is still tracking lower. A worrisome development is long term debt has increases between last year and this by some 400% and the Long Term Debt/Market Cap Ratio is 3.61. It is always worrisome when this ratio is 1.00 and above.
Their Liquidity Ratio has been holding up well with the one for the financial year ending in January 2016 at 3.24 and a 5 year median of 3.13. However, the Debt Ratio is tracking lower with the one for January 2016 at 1.56 and a 5 year median at 2.66. Often companies in volatile industries have high debt ratios in order to survive the bad times in good shape.
There is a lot of stock price testing that cannot be done because the earnings have been negative for a few years and they have cut their dividends. We can do not valid Price/Earnings per Share (P/E) Ratio testing, Price/Graham Price Ratio testing or dividend yield testing.
The company still has Revenue even if it is declining still. The 10 year median P/S Ratio is 0.66. The current P/S Ratio is 0.02. This is based on Revenue of $231.4M for the last 12 months, Revenue per Share of $8.82 over the past 12 months and a stock price or $0.19. This ratio is very low. It is also some 96% lower than the 10 year P/S Ratio. This stock price testing suggests that the stock price is relatively cheap.
When dealing with small companies with no earnings, a P/S Ratio of 1.00 or below is good. However, with this company the revenue is declining. The decline is not as sharp as the book value, but it is still declining. The Revenue per Share has declined by 9.3% and 3.7% per year over the past 5 and 10 years.
The only other test we can do for the Price/Book Value per Share Ratio. The 10 year median P/B Ratio is 1.37. The current P/B Ratio at 0.14 is some 90% lower. The current P/B Ratio is based on BVPS of $1.35 and a stock price of $0.19. This stock price testing suggests that the stock price is relatively cheap.
A P/B Ratio of 1.50 is considered low. So this company's P/B Ratio is very low. However, the BVPS is still going south. The BVPS has been declining at 21% and 7.4% per year over the past 5 and 10 years.
As far as I can see no analysts is currently covering this stock. The company is in deep problems and analysts have stopped following it.
There is a report via Market Wired on Stock House about this company's second quarterly report for 2016. This CBC report in the early part of 2016 talks about this company closing some 14 stores this year with more closures to come and the company concentrating more on online sales. Vanessa Lu in the Hamilton Spectator talks about what Herschel Segal is doing to help Le Chateau survive in today's retail world.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Granite REIT (TSX-GRT.UN, NYSE-GRP.U)... learn more . The next stock I will write about will be K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF)... learn more on Friday, October 7, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Rob Carrick... learn more on Tuesday, October 4, 2016 around 5 pm..
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 retail locations in Canada and in the Middle East. Le Chateau's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. Its web site is here Le Chateau 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of 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 from a column Jennifer Dowty wrote about Dividend Paying stocks in 2010.
Actually I am rather shocked company that this stock is still around. It is still bleeding revenue so it has not turned around. They are trying. Also their earnings, cash flow and stock price is still tracking lower. A worrisome development is long term debt has increases between last year and this by some 400% and the Long Term Debt/Market Cap Ratio is 3.61. It is always worrisome when this ratio is 1.00 and above.
Their Liquidity Ratio has been holding up well with the one for the financial year ending in January 2016 at 3.24 and a 5 year median of 3.13. However, the Debt Ratio is tracking lower with the one for January 2016 at 1.56 and a 5 year median at 2.66. Often companies in volatile industries have high debt ratios in order to survive the bad times in good shape.
There is a lot of stock price testing that cannot be done because the earnings have been negative for a few years and they have cut their dividends. We can do not valid Price/Earnings per Share (P/E) Ratio testing, Price/Graham Price Ratio testing or dividend yield testing.
The company still has Revenue even if it is declining still. The 10 year median P/S Ratio is 0.66. The current P/S Ratio is 0.02. This is based on Revenue of $231.4M for the last 12 months, Revenue per Share of $8.82 over the past 12 months and a stock price or $0.19. This ratio is very low. It is also some 96% lower than the 10 year P/S Ratio. This stock price testing suggests that the stock price is relatively cheap.
When dealing with small companies with no earnings, a P/S Ratio of 1.00 or below is good. However, with this company the revenue is declining. The decline is not as sharp as the book value, but it is still declining. The Revenue per Share has declined by 9.3% and 3.7% per year over the past 5 and 10 years.
The only other test we can do for the Price/Book Value per Share Ratio. The 10 year median P/B Ratio is 1.37. The current P/B Ratio at 0.14 is some 90% lower. The current P/B Ratio is based on BVPS of $1.35 and a stock price of $0.19. This stock price testing suggests that the stock price is relatively cheap.
A P/B Ratio of 1.50 is considered low. So this company's P/B Ratio is very low. However, the BVPS is still going south. The BVPS has been declining at 21% and 7.4% per year over the past 5 and 10 years.
As far as I can see no analysts is currently covering this stock. The company is in deep problems and analysts have stopped following it.
There is a report via Market Wired on Stock House about this company's second quarterly report for 2016. This CBC report in the early part of 2016 talks about this company closing some 14 stores this year with more closures to come and the company concentrating more on online sales. Vanessa Lu in the Hamilton Spectator talks about what Herschel Segal is doing to help Le Chateau survive in today's retail world.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Granite REIT (TSX-GRT.UN, NYSE-GRP.U)... learn more . The next stock I will write about will be K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF)... learn more on Friday, October 7, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 - Rob Carrick... learn more on Tuesday, October 4, 2016 around 5 pm..
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 retail locations in Canada and in the Middle East. Le Chateau's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. Its web site is here Le Chateau 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
Monday, October 3, 2016
Granite REIT
Sound bite for Twitter and StockTwits is: Price reasonable and below median. This probably a fair price considering how long we have been into this recovery. The yield is very good and the company has been raising the dividends by around 5% per year lately. This is a good growth considering the high yield. However, I would suspect that there might be some volatility in dividends granted in the future as there was in the past. See my spreadsheet on Granite REIT.
I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U). I first bought some of this stock in 2003 when it was called MI Developments (TSX-MIM.A). It was 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 it in 2009; being discourage it would ever do well again.
In actual fact if I had held on to this stock, I would have done well. The stock improved after 2009. In 2011 they started to increase the dividends big time. Between 2010 and 2012 the dividends went up almost 300%. The dividend increases slowed after that and they are in the 3% to 5% range. The last increase was in 2016 and it was for 5.7%.
The growth in dividends over the past 5 and 10 years is at 35.8% and 13.9% per year. However, past performance does not translate into future performance. Most of this increase came in one year of 2012 with an increase in dividends of 145%. This was after two years of dividend decreases of 14% and 21% and an increase in dividends of 60%. The company probably increased the dividends in 2011 to coincide with the change from a corporation to a REIT.
Dividends on this stock have gone down as well as up in the past. This is most likely to be what the future holds for this stock. Dividends have been paid for some 14 years including this year. Dividends were decreased in 4 years and increased in the rest of the years. It may be a dividend growth in the long term, but maybe not in the short term.
This company seemed to be hit hard by the 2008 recession, but has been recovering since then. It has been recovering in connection with revenue, earnings (including FFO) and cash flow over the past 5 years. Revenue per Share is up by 4.5% and 2.4% per year over the past 5 and 10 years. FFO is up by 118.6% and 2.1% per year over the past 5 and 10 years.
They do not even give an EPS figure so I will not be doing any P/E Ratio testing. However, I can use FFO in the same manner. The 5 year low, median and high median P/FFO Ratios are 11.12, 12.61 and 13.57. The 10 year values are 10.88, 12.16 and 13.55. The current P/FFO is 11.58 based on FFO estimate of $3.48 for 2016 and a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and below the median.
I get a Graham Price of $55.49 (based on FFO). The 10 year low, median and high median Price/Graham Price Ratios are 0.66, 0.74 and 0.83. The current P/GP Ratio is 0.73 based on a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.01. The current P/B Ratio is 1.02, a value some 2% high. The current P/B Ratio is based on BVPS of $39.33 and a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and around the median.
The current dividend yield is 6.05%. The historical median dividend yield is 2.80% and the 5 year median is 5.61%. This stock started out with low dividends (1 to 2%) because it was a corporation. The yields went up to the 5 to 6% range when it became a REIT. The current yield is some 7.8% higher than the 5 year yield and this is probably what we should be testing against. On this basis the stock price is reasonable and below the median.
When I look at analysts’ recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price consensus is $43.00. This implies a total return of 12.77% with 6.73% from capital gains and 6.05% from dividends based on a current price of $40.29.
John Tilak of Reuters has an article on Yahoo Finance talking about buying Canadian REITs. See what analysts are saying at Stock Chase. Mainly it is rated a Hold because analysts are unsure how new management will work out. Joseph Solitro of Motley Fool likes this REIT because it has been growing its FFO and the yield is over 6%.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)... learn more . The next stock I will write about will be Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF)... learn more on Wednesday, October 5, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 – James Purvis... learn more on Tuesday, October 4, 2016 around 5 pm.
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 REIT.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U). I first bought some of this stock in 2003 when it was called MI Developments (TSX-MIM.A). It was 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 it in 2009; being discourage it would ever do well again.
In actual fact if I had held on to this stock, I would have done well. The stock improved after 2009. In 2011 they started to increase the dividends big time. Between 2010 and 2012 the dividends went up almost 300%. The dividend increases slowed after that and they are in the 3% to 5% range. The last increase was in 2016 and it was for 5.7%.
The growth in dividends over the past 5 and 10 years is at 35.8% and 13.9% per year. However, past performance does not translate into future performance. Most of this increase came in one year of 2012 with an increase in dividends of 145%. This was after two years of dividend decreases of 14% and 21% and an increase in dividends of 60%. The company probably increased the dividends in 2011 to coincide with the change from a corporation to a REIT.
Dividends on this stock have gone down as well as up in the past. This is most likely to be what the future holds for this stock. Dividends have been paid for some 14 years including this year. Dividends were decreased in 4 years and increased in the rest of the years. It may be a dividend growth in the long term, but maybe not in the short term.
This company seemed to be hit hard by the 2008 recession, but has been recovering since then. It has been recovering in connection with revenue, earnings (including FFO) and cash flow over the past 5 years. Revenue per Share is up by 4.5% and 2.4% per year over the past 5 and 10 years. FFO is up by 118.6% and 2.1% per year over the past 5 and 10 years.
They do not even give an EPS figure so I will not be doing any P/E Ratio testing. However, I can use FFO in the same manner. The 5 year low, median and high median P/FFO Ratios are 11.12, 12.61 and 13.57. The 10 year values are 10.88, 12.16 and 13.55. The current P/FFO is 11.58 based on FFO estimate of $3.48 for 2016 and a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and below the median.
I get a Graham Price of $55.49 (based on FFO). The 10 year low, median and high median Price/Graham Price Ratios are 0.66, 0.74 and 0.83. The current P/GP Ratio is 0.73 based on a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.01. The current P/B Ratio is 1.02, a value some 2% high. The current P/B Ratio is based on BVPS of $39.33 and a stock price of $40.29. This stock price testing suggests that the stock price is reasonable and around the median.
The current dividend yield is 6.05%. The historical median dividend yield is 2.80% and the 5 year median is 5.61%. This stock started out with low dividends (1 to 2%) because it was a corporation. The yields went up to the 5 to 6% range when it became a REIT. The current yield is some 7.8% higher than the 5 year yield and this is probably what we should be testing against. On this basis the stock price is reasonable and below the median.
When I look at analysts’ recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price consensus is $43.00. This implies a total return of 12.77% with 6.73% from capital gains and 6.05% from dividends based on a current price of $40.29.
John Tilak of Reuters has an article on Yahoo Finance talking about buying Canadian REITs. See what analysts are saying at Stock Chase. Mainly it is rated a Hold because analysts are unsure how new management will work out. Joseph Solitro of Motley Fool likes this REIT because it has been growing its FFO and the yield is over 6%.
I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.
The last stock I wrote about was about was Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)... learn more . The next stock I will write about will be Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF)... learn more on Wednesday, October 5, 2016 around 5 pm. Tomorrow on my other blog I will write about Money Show 2016 – James Purvis... learn more on Tuesday, October 4, 2016 around 5 pm.
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 REIT.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.
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