Medtronic PLC

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. It is probably on the expensive side. Debt Ratios are very good and with a decreasing debt. EPS expectation seem to be going down. Last dividend increase was lower than for the last 5 years. See my spreadsheet on Medtronic Inc.

I do not own this stock of Medtronic PLC (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 stock has the financial year ending at the end of April each year. So, the financial year I am talking about is the one ending in April 2019.

When I was updating my spreadsheet, I noticed analysts still expect good increases in EPS, but not as high as previously thought. Last year the EPS estimates for 2020 and 2021 were $4.15 and $4.56 for EPS. This year, the estimates for 2020 and 2021 were $3.99 and $4.54. So lower for both years, but a lot lower for 2020 and 2021 is close. The 2019 EPS estimate was $3.79, but it came in at $3.41. Another notable thing is that the Debt Ratios are very good.

The dividend yield ranges from low (below 2%) to moderate (2% to 4% range). The current dividend is 2.01% with the 5, 10 and historical medians at 2.11%, 2.37% and 0.82%. The historical one is low because dividend yields were under1% until 2009. In 2009 there was a 50% increase in dividends. The dividend growth used to be in the Good range (15% and above), but is now in the moderate range (8% range to 14% range). See the chart below.

The Dividend Payout Ratios are fine. The DPR for EPS for 2019 is 59% with 5 year coverage at 62%. The DPR for CFPS for 2019 is 33% with 5 year coverage at 39%. Debt has been decreasing, as it was higher and with a ratio of 0.32 in 2016.

Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2019 is 0.21. The Liquidity Ratio is very good and high at 2.59. The Debt Ratio is also very good and high at 2.27. The Leverage and Debt/Equity Ratios are also very good and low at 1.79 and 0.79.

The Total Return per year is shown below for years of 5 to 29 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	12.30%	12.02%	9.65%	2.37%
2008	10	10.31%	13.70%	11.22%	2.48%
2003	15	13.74%	5.72%	4.27%	1.45%
1998	20	14.64%	5.84%	4.61%	1.23%
1993	25	16.66%	15.67%	13.30%	2.37%
1989	29	16.74%	17.94%	15.21%	2.74%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 26.02, 29.02 and 32.17. The corresponding 10 year ratios are 19.44, 22.17 and 24.90. The corresponding historical ratios are 22.67, 26.44 and 31.28. The current P/E Ratios is 26.96 based on a stock price of $107.58 and an EPS of $3.99. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $58.07. The 10 year low, median, and high median Price/Graham Price Ratios are 1.29, 1.51 and 1.73. The current P/GP Ratio is 1.85 based on a stock price of $107.58. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.28. The current P/B Ratio is 2.86 based on a Book Value of $50,363M, Book Value per Share of $37.56 and a stock price of $107.58. The current ratio is some 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 0.82%. The current yield is 2.01% based on Dividends of $2.16 and a stock price of $107.58. The current yield is 145% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap

However, there is a problem with the dividend yield testing. They made a conscious effort to raise the yield on this stock in 2009 when they increased the dividend by 50%. The yield since then is 2.11%. This yield is 5% above the current yield of 2.01%. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 3.35. The current P/S Ratio is 4.58 based on 2020 Revenue estimate of $31,492M, Revenue per Share of $23.49 and a stock price of $107.58. The current ratio is some 37% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. The dividend yield testing is the only test that says it is relatively reasonable. I noted one problem with this test above. Another problem is that the Dividend Payout Ratio has been increasing a lot. Dividends are growing faster than EPS. On the other hand, analysts expect that the EPS will be increasing nicely in the future. On the other hand, the most recent dividend increase was lower than the average for the past 5 years at 8%, with the 5 year increase at 12.30% per year.

Is it a good company at a reasonable price? This stock would seem to be a good one for both the dividend yield and growth and the capital gains shareholders have earned. For the 15 and 10 year capital gains that were low at 4.27% and 4.61%, the starting P/E Ratios were 30.38 and 94.73. I think that the stock price is probably expensive currently.

When I look at analysts’ recommendations, I find Strong Buy (12), Buy (7) and Hold (9). The consensus would be a Buy. The 12 month stock price consensus is $117.77. This implies a total return of 11.48% with 9.47% from capital gains and 2.01% from dividends.

See what analysts are saying on Stock Chase. Analysts like this company. Keith Speights on Motley Fool says the company has been raising dividends for 42 years.. A writer on Simply Wall Street says this stock has an intrinsic value of $93.95 which is close to the current value of $107.89, so current value is fair. A writer on Simply Wall Street says the view from 25 analysts is positive for this stock. Markets Insider Automation on Markets Insider says what Wall Street expects from this stock in the third quarter.

Medtronic Public Limited Company, headquartered in Dublin, Ireland, is among the world's largest medical technology, services, and solutions companies - alleviating pain, restoring health, and extending life for millions of people around the world. Its web site is here Medtronic Inc.

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 be Equitable Group Inc (TSX-EQB, OTC-EQGPF) ... learn more on Wednesday, October 16, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Lorne Steinberg.... learn more on Tuesday, October 15 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Canadian Pacific Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is probably on the expensive side. The good news is that the dividend increase done in 2019 was for 27.7%. It has a low DPR for EPS and CFPS. See my spreadsheet on Canadian Pacific Railway.

I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP). I am following this stock because it is a dividend growth stock. It is one that was on Mike Higgs' list. It is a stock I held from 1987 to 1999 so I am following it. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and chose CN as my railway stock.

When I was updating my spreadsheet, I noticed estimates have gone up. Last year the estimates for 2019 and 2010 were $7,776M and $8,329M for Revenue and the current estimates for 2019 and are $7,858 and $8,337. Last year the estimate for EPS for were $15.90 and $18.00 and the current estimates for these years are $17.70 and $18.60. The last dividend increase was for 27.7% for 2019.

The dividend yield for this stock is low (under 2%). The current dividend yield is 1.16%. The 5, 10 and historical median dividend yields are 0.95%, 1.02% and 1.40%. Dividend increases are in the moderate range (8% to 14% ranges). See the chart below. Currently, for this stock the yields on original investment after 5, 10, 15, 20, and 25 years would be 1.49%, 6.55%, 8.35%, 18.30%, and 26.91%

The Dividend Payout Ratios are good. The DPR for EPS for 2018 was 18% with 5 year coverage at 16%. The 10 year median DPR for EPS is 22%. The DPR for CFPS for 2018 was 13% with 5 year coverage at 12%. The 10 year median DPR for CFPS is 13%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 was 0.24. The Liquidity Ratio for 2018 was 057% with a 5 year median of 0.75. If you add in cash flow after dividends, the ratio is 1.78% with 5 year median of 2.12. The Debt Ratio for 2018 was 1.45 with 5 year median also at 1.45. The Leverage and Debt/Equity Ratios for 2018 was 3.20 and 2.20 respectively. The 5 year medians were at 3.00 and 2.00 respectively. These are a little high, but not abnormally high for this sort of company.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	11.61%	52.86%	50.19%	2.67%
2008	10	9.37%	21.09%	19.44%	1.64%
2003	15	10.95%	14.76%	13.44%	1.32%
1998	20	10.24%	16.50%	15.17%	1.33%
1994	24		14.98%	14.00%	0.98%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.87, 18.54 and 21.21. The corresponding 10 year ratios are 14.98, 17.90 and 20.94. The corresponding historical ratios are 11.54, 13.79 and 16.67. The current P/E Ratio is 16.17 based on a stock price of $186.14 and 2019 EPS estimate of $17.70. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $143.28. The 10 year low, median, and high median Price/Graham Price Ratios are 1.58, 2.00 and 2.37. The current P/E Ratio is 2.00 based on a stock price of $286.14. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Book Value per Share Ratio of 4.05. The current P/B Ratio is 5.35 based on Book Value of $7,157M, $51.55 and a stock price of $186.14. The current P/B Ratio is 37% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.40%. The current dividend yield is 1.16% based on dividends of $2.12 and a stock price of $186.14. The current dividend is 17% below the historical median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 4.26. The current P/S Ratio is 5.06 based on 2019 Revenue estimate of $7,858, Revenue per Share of $56.60 and a stock price of $186.14. The current ratio is 19% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is that the stock price is certainly not cheap and it could be a bit pricey. Both the Dividend Yield test and the P/S Ratio testing show that the stock price is above the median. The P/B Ratio testing show that it is expensive. This is because the Book Value’s growth has been weak. Part of the reason is the change in accounting rules in 2010. Also, the Net Income is increasing at a higher rate than the Comprehensive Income. Still the P/S Ratio testing show the stock price close to be expensive also.

Is it a good company at a reasonable price? This is certainly a good dividend growth stock. Personally, I would like to see a higher yield. They have room to move the dividend higher and there was a big increase this year at 27.7%. However, DPR is still low for 219 at 17%.

When I look at analysts’ recommendations, I find Strong Buy (9), Buy (8) Hold (11) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $329.22. This implies a total return of 16.22% with 15.06% from capital gains and 1.16% from dividends.

See what analysts are saying on Stock Chase. They like it but one analyst thinks it might be running out of gas. Kay Ng on Motley Fool thinks that CP has better value than CN. A writer on Simply Wall Street says the ROE for this company is higher than average in the transportation industry. A writer on Simply Wall Street says that the stock price is close to the stock’s intrinsic value. Marion Hillson on The Enterprise Leader talks about National Bank Financial decreasing this stocks target price recently..

Canadian Pacific is a CAD 7.3 billion railroad operating on 12,500 miles of track across most of Canada and in the Midwestern and Northeastern United States; it is the second-smallest Class I railroad by revenue and route miles. Its web site is here Canadian Pacific Railway.

The last stock I wrote about was about was Trigon Metals Inc (TSX-TM, OTC-PNTZF) ... learn more. The next stock I will write about will be Medtronic PLC (NYSE-MDT) ... learn more on Tuesday, October 15, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Trigon Metals Inc

Sound bite for Twitter and StockTwits is: Materials Stock. The only hint about what the stock might be worth is the recent private placement at $0.10 and warrant to buy more within 24 months at $0.15. This company has no revenue and only earnings losses. See my spreadsheet on Trigon Metals Inc.

I own this stock of Trigon Metals Inc (TSX-TM, 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). It is worth less than $10 fee to sell, so I am holding.

When I was updating my spreadsheet, I noticed the company still has no revenue. They issued more shares and outstanding shares when up by 68%. The new shares were via private placement in October 2018 at $0.15 a share. Shares outstanding have gone up by 32% per year over the past 5 years and 53% per year over the past 10 years. Any green on the spreadsheet just denote less bad results and not anything positive.

This stock, of course, has no dividends.

Debt Ratios are not good and having a negative book value is a vulnerability. The Long Term Debt/Market Cap Ratio for 2018 is 0.27. They only took on long term debt for the first time in 2018. Because of the rise in the stock price, the current Long Term Debt/Market Cap Ratio is 0.18. The Liquidity Ratio for 2018 is 1.44, with5 year median also at 1.44. The Debt Ratio is 0.56. This means that assets cannot cover the liabilities and they have a negative book Value. However, the book value just turned negative last year. With a negative book value, the Leverage and Debt/Equity Ratios cannot be calculated.

The Total Return per year is shown below for years of 5 to 21 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Tot Ret	Cap Gain
2013	5	-43.03%	-43.03%
2008	10	-38.69%	-38.69%
2003	15	-33.11%	-33.11%
1998	20	-26.04%	-26.04%
1997	21	-18.99%	-18.99%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative as is the corresponding 10 year ratios and the historical ratios. This testing cannot be done. Since they have no earnings, I cannot get a Graham Price, so this testing cannot be done.

I get a 10 year median Price/Book Value per Share Ratio of 3.70. However, the current P/B Ratio is negative. So, this testing cannot be done. I cannot do any dividend yield testing as there is no dividend. There are no revenues, so I cannot do any Price/Sales (Revenue) Ratio testing.

Results of stock price testing is that the stock price is that it is impossible to judge the stock price on any basis that I know of. However, there was a recent private placement at $0.10 with a warrant to buy shares at $0.15 within 24 months. Private placements are usually for better deal than you would find on the open market. This will give an idea of what the shares might be worth.

When I look at analysts’ recommendations, I find there are no analysts following this stock.

Juniorbullalive has a post on Stockhouse Bullboard about mines in Namibia. The CEO of trigon Metals provides an update. The company on Globe Newswire talk about a recent private placement. A writer on Simply Wall Street talks about insider buying shares in the company.

Trigon Metals Inc together with its subsidiaries engages in the acquisition, exploration, development, and maintenance of mines and mineral properties in the African country of Namibia. It operates through the development of its Namibian mining and exploration permits segment. The company's project includes Kombat Mine, Gross Otavi and Harasib. Its web site is here Trigon Metals Inc.

The last stock I wrote about was about was Logistec Corp (TSX-LGT.B, OTC-LTKBF) ... learn more. The next stock I will write about will be Canadian Pacific Railway (TSX-CP, NYSE-CP) ... learn more on Friday, October 11, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Michael Cooke.... learn more on Thursday, October 10, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Logistec Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price maybe currently expensive. The last dividend increase was for only 3%. Because this is lower than recent past increases, this is a cautionary note. Debt seems to be increasing rapidly, so this gives a cautionary note. See my spreadsheet on Logistec Corp.

I do not own this stock of Logistec Corp (TSX-LGT.B, OTC-LTKBF). I got this stock from Dividend Growth Investing and Retirement blogger’s all-star spreadsheet for March 2017.

When I was updating my spreadsheet, I noticed the lack of clarity on their site as to who was the Chairman of the Board. For the board of directors, they give picture and you have to run your cursor over the picture to see who people are. None showed as chairman and bio on the person I have as Chairman did not say he was still or ever the chairman. I had to google this information. I do not see why they cannot just tell you this sort of information. This is annoying to say the least.

Another thing I notice was that long term debt is increasing rapidly. Last four years increases were 88.05%, 29.23%, 105.25%, and 66.97%. The last increase is for the first two quarters of 2019. The Long Term Debt/Market Cap Ratio is not high at 0.54, but the big increases in debt might be.

The dividend yield on Class B shares are low (under 2%). The current dividend yield is 1.09% with 5, 10 and historical median dividend yields at 0.76%, 0.96% and 1.92%. The current dividend yield for Class A shares are also low, with a current dividend yield of 0.91% and 5, 10 and historical dividend yields at 0.69%, 0.82% and 1.73%. The dividend growth was low (under 8%) until recently and then the growth became moderate (8% to 14% ranges). See the charts below.

The Dividend Payout Ratios are good. The DPR for EPS for 2018 for Class B shares is 26% with 5 year coverage at 24%. The DPR for CFPS for 2018 for Class B shares is 14% with 5 year coverage at 18%. The DPR for EPS for 2018 for Class A shares is 26% with 5 year coverage at 22%. The DPR for CFPS for 2018 for Class B shares is 14% with 5 year coverage at 18%.

Debt Ratios are fine but all are moving in the wrong direction. The Long Term Debt/Market Cap Ratio for 2018 is 0.30 with the 10 year median at 0.14. The Liquidity Ratio for 2018 is 1.65 with 5 year median at 2.25. The Debt Ratio for 2018 is 1.71 with 5 year median at 2.33. The Leverage and Debt/Equity Ratios for 2018 are 2.43 and 1.42 with 5 year medians at 1.77 and 0.76.

The Total Return per year is shown below for years of 5 to 22 to the end of 2018 for Class B Subordinate Voting Shares. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	12.53%	11.05%	9.49%	1.56%
2008	10	8.12%	26.26%	23.77%	2.49%
2003	15	7.78%	18.37%	15.71%	2.66%
1998	20	6.28%	11.88%	10.23%	1.65%
1996	22	5.94%	15.75%	12.11%	3.64%

The Total Return per year is shown below for years of 5 to 20 to the end of 2018 for Class A with 30 votes per share.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	12.53%	9.68%	8.24%	1.44%
2008	10	8.12%	25.37%	23.06%	2.31%
2003	15	7.78%	17.73%	15.27%	2.46%
1998	20	6.28%	11.28%	9.77%	1.51%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.81, 17.77 and 20.72. The corresponding 10 year ratios are 8.52, 11.12 and 14.38. The corresponding historical median ratios are 8.81, 10.73 and 12.32. The current P/E Ratio is 21.57 based on a stock price of $37.65 and last 12 month EPS of $1.75. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $27.95. The 10 year low, median, and high median Price/Graham Price Ratios are 0.80, 1.11 and 1.39. The current P/GP ratio is 1.35 based on a stock price of $37.65. 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 2.10. The current P/B Ratio is 1.89 based on a stock price of $37.65, Book Value of $252M and Book Value per Share of $19.89. The current ratio is some 10% below 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 median dividend yield of 1.92%. The current dividend yield is 1.09% based on dividends of $0.41 and a stock price of $37.65. The current yield is some 43% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.94. The current P/S Ratio is 0.76 based on the last 12 months of revenue of $624M, Revenue per Share of $49.28 and a stock price of $37.65. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably expensive. The stock price testing done on the dividend yield shows this stock as expensive and this might be the only really valid test. This might be supported by the most recent dividend increase which was this year and for only 3%.

The problem with analyzing this company is that they have Class A and Class B stocks which have not only their own share price but also their own EPS and dividends. This complicates testing using EPS and makes you wonder how good that testing is.

Is it a good company at a reasonable price? I think that this is an interesting company but they really complicate things with their separate classes of shares with their own earnings. I do not like complex when it comes to companies to invest in. It is hard to say about the price. It may be expensive, then maybe not. I could be wrong. If you look at start P/E for the total returns for the past 5, 10, 15, and 20 years, they are 12.88, 5.10, 131.08 and 11.52. For the high P/E start for year 15, the EPS dropped 90% in that year and then fully the next year. EPS went from $0.41 to $0.04 to $0.59. So mostly the start P/Es were lower than the current one.

When I look at analysts’ recommendations, I find no analysts following this stock. The Morningstar Quant Report gives it 3 stars out of a possible 5 stars and says that it is currently fairly valued. The Wall Street Journal gave it an analyst’s rating of Hold with one analyst. But it also gives a target price of $7.50 which makes no sense.

See what analysts are saying on Stock Chase. They are no well followed but the company is liked. James Watkins-Strand on Motley Fool likes this company but thinks it is a bit expensive. A writer on Simply Wall Street talks about institutional ownership. A writer on Simply Wall Street thinks the ROE is low and unimpressive. Jay Miller on Crain’s Cleveland Business talks about this company the new operator for Port of Cleveland.

Logistec Corp provides specialized cargo handling and other services to a wide variety of marine, industrial, and municipal customers. It has cargo-handling facilities in eastern North America, short-line rail transportation services, and marine agency services to foreign shipowners and operators serving the Canadian market. Its web site is here Logistec Corp.

The last stock I wrote about was about was Teck Resources Ltd (TSX-TECK.B, NYSE-TECK)... learn more. The next stock I will write about will be Trigon Metals Inc (TSX-TM, OTC-PNTZF) ... learn more on Wednesday, October 09, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Peter Hodson.... learn more on Tuesday, October 08, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Teck Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. A lot of the testing points to the stock price as being relatively cheap. The stock failed the dividend yield test and this points to caution. A positive is the good debt ratios, but there has been a big increase in long term debt recently. See my spreadsheet on Teck Resources Ltd.

I do not own this stock of Teck Resources Ltd (TSX-TECK.B, NYSE-TECK). In 2008, I wanted to cover some resource stocks and this is one that I decided to take a look at.

When I was updating my spreadsheet, I noticed dividends are inconsistent. They go up and down and are flat sometimes. Whenever they declare a dividend cut, the stock price drops precipitously.

Dividends can vary a lot. As you can see from the chart below, it has varied a lot how much of the total return is in dividends. Dividend yields are low (below 2%) and moderate (2 to 4% range) but at the low end of the moderate range. The current dividend yield is 0.92%. The 5, 10 and historical median dividend yields are 0.74%, 1.02% and 1.54%.

The Dividend Payout Ratios are fine, but they have varied a lot over the years. The DPR for EPS for 2018 is 4% with 5 year coverage at 32%. The DPR for CFPS for 2018 is 3% with 5 year coverage at 9%.

Debt Ratios are currently fine. These ratios have varied a lot over time, but mostly they have been good. The Long Term Debt/Market Ratio for 2018 is 0.33 with a current ratio of 0.53. Debt has varied a lot over the years. Since 2016, debt was declining, but in 2019, long term debt has increased by 20%. The Liquidity Ratio for 2018 is 2.11 with 5 year median also at 2.11. The Debt Ratio for 2018 is 2.39 with 5 year median at 2.05. The Leverage and Debt/Equity Ratio for 2018 is 1.72 and 0.72 respectively, with the 5 year median rations at 1.92 and 0.92 respectively.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	-25.98%	3.02%	1.23%	1.79%
2008	10	-14.87%	21.38%	17.18%	4.20%
2003	15	4.73%	10.29%	6.74%	3.55%
1998	20	3.53%	12.25%	8.82%	3.44%
1993	25	2.81%	5.67%	3.85%	1.82%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 4.58. 6.32 and 8.03. The corresponding 10 year ratios are 5.49, 10.63 and 16.97. The corresponding historical ratios are 7.97, 11.42 and 16.97. The current P/E Ratio is 7.06 based on a stock price of $21.67 and 2019 EPS estimate of $3.07. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $52.92. The 10 year low, median, and high median Price/Graham Price Ratios are 0.44, 0.73 and 1.05. The current P/GP Ratio is 0.41 based on a stock price of $21.67. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 0.84. The current P/B Ratio is 0.53 based on a Book Value of $21,136M, Book Value per Share of $40.54 and a stock price of $21.67. The current ratio is some 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.54%. The current dividend yield is 0.92% based on dividends of $0.20 and a stock price of $21.67. The current yield is 40% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.55. The current P/S Ratio is 1.00 based on 2019 Revenue estimate of $10,913M, Revenue per Share of $21.71 and a stock price of $21.67. The current ratio is some 35% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. Most of the stock testing show this. However, there is an exception and that is the Dividend Yield test. Dividends often depend on the outlook for the future that management has.

If the dividend yield test is showing the stock as expensive, then it could point to lack of a positive outlook on behave of management. This is by its nature a short term outlook. Last year the company did do a buy back of shares for an amount higher than dividends. Dividends Paid was at $172M and the buyback was for $189M. I do not know how to judge buybacks as it seems everyone is doing that so I cannot say that it points to anything in particular.

Is it a good company at a reasonable price? I would never buy a resource stock for the long term. These sorts of stocks I feel are cyclical and you should only hold them for the short term. The stock is relatively cheap but tends to be really cheap just after they do a dividend cut. The stock failing the dividend yield tests show that you should be cautious in buying this stock.

When I look at analysts’ recommendations, I find Strong Buy (9), Buy (11) and Hold (3). The consensus would be a Strong Buy. The 12 month stock price consensus is $36.89. This implies a total return 71.16% with 70.24% from capital gains and 0.92% from dividends.

See what analysts are saying on Stock Chase . There is various opinion on whether or not you should buy this stock. Jason Phillips on Motley Fool says it is a blue chip stock trading near its 52 week low. A writer on Simple Wall Street thinks the stock is undervalued. The company talks on Global Newswire about it being named to the Dow Jones Sustainability World Index (DJSI). James Snell on The Free Press talks about what Teck is doing to help save our environment..

Teck Resources Ltd is a diversified miner with zinc, copper, coal, and oil sands operations in Canada, the United States, Chile, and Peru. Zinc is Teck's primary commodity in terms of EBITDA contribution, followed by copper, coking coal, and oil sands. Its web site is here Teck Resources Ltd.

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 Logistec Corp (TSX-LGT.B, OTC-LTKBF) ... learn more on Monday, October 07, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Linamar Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is probably relatively cheap to reasonable. Lack of dividend increases may point to the use of caution if looking to buy. Dividends are low with mostly low growth. 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.

When I was updating my spreadsheet, I noticed that new estimates for 2019 and 2020 were lower than last year. For example, the Revenue estimates for these years were $8,185M and $8,613M last year, but lower at $7,653 and $7,833M. The EPS estimates for these years were $10.30 and $11.50 for EPS, but the current estimates for these years are now $7.75 and $8.12.

Dividend yields are low (below 2%). The current dividend yield is 1.13%. The 5, 10 and historical dividend yields are 0.70%, 0.88% and 1.21%. The growth in dividends has often been low overall, but the increases are quite good when made. For example, a lot of years have no increases then a big one is made. The years 2013, 2015, 2016 and 2018 had no increases, but there was a 25% increase in 2014 and a 20% in 2018. Dividends have gone down as well as up.

The Dividend Payout Ratios are very low and therefore good. The DPR for 2018 is 5% with 5 year coverage at 6%. The DPR for CFPS for 2018 is 3% with 5 year coverage also at 3%.

Debt Ratios for Long Term Debt/Market Cap shows some vulnerability, but other ones are fine. The Long Term Debt/Market Cap Ratio for 2018 is getting high at 0.83 and is even higher currently at 0.92. It used to be much lower, but debt increased by 91% in 2018. The Liquidity Ratio has been good and the 2018 one is at 2.01. The Debt Ratio is also good at 1.88. I like these two to be 1.50 or above and this is why they are good. The Leverage and Debt/Equity Ratios are fine, but it would be nice if they were lower. The 2018 ratios are 2.14 and 1.14 respectively.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

As you can see, total return has varied a lot. Most of the total return is in capital gains.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	8.45%	1.46%	0.50%	0.97%
2008	10	7.18%	31.67%	28.47%	3.20%
2003	15	7.60%	10.90%	9.55%	1.35%
1998	20	6.48%	3.57%	2.81%	0.75%
1993	24	7.38%	9.82%	8.45%	1.37%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.64, 8.16 and 9.67. The corresponding 10 year ratios are 6.55, 8.95 and 11.44. The corresponding historical ratios are 8.44, 11.60 and 15.03. The current P/E Ratio is 5.50 based on a current stock price of $42.59 and 2019 EPS estimate of $7.75. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $102.64. The 10 year low, median, and high median Price/Graham Price Ratios are 0.57, 0.77 and 0.96. The current P/GP Ratio is 0.41 based on a stock price of $42.59. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.41. The current P/B Ratio is 0.70 based on a Book Value of $3,938M, Book Value per Share of $60.42 and a stock price of $42.59. The current ratio is 50% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.21%. The current dividend yield is 1.13% based on a dividend of $0.48 and a stock price of $42.59. The current yield is 1% below the historical median yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.57. The current P/S Ratio is 0.36 based on 2019 Revenue estimate of $7,653, Revenue per Share of $117.41 and a stock price of $42.59. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap, but you should be caution. Most of the testing I have done show this stock price as being relatively cheap. However, the dividend yield does not, but showing a reasonable price that is just above the median. Often the dividend and it increases reflect how the company feels about the future. So, this would be a caution warning.

Is it a good company at a reasonable price? This is not my sort of dividend growth company. I do not mind companies with a low yield, but I like it accompanied by a moderate to good dividend growth. This very low dividend yield company has a low dividend growth. Dividend increases are good when given, but they are few and far between. The stock price seems relatively cheap to relatively reasonable.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (1) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $53.20. this implies a total return of 26.04% with 1.13% from dividends and 24.91% from capital gains.

See what analyst are saying Stock Chase. They do not see a strong auto sector at present. Will Ashworth on Motley Fool said he was a bad performer in August, but even with flat revenue they could generate $179M in free cash flow. A writer on Simply Wall Street says the stock is higher than its intrinsic value and therefore it is not a good time to buy. Brian Madden on BNN Bloomberg discuss this stock and see a slide in auto sales. Natalie Wong and Kristine Owram from Bloomberg on Financial Post says Canadian companies maybe affected by the GM Strike.

Linamar Corp makes powertrains and drivelines for vehicle and power generation markets and operates under two business segments: Powertrain/Driveline and Industrial. Its web site is here Linamar Corporation .

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 Teck Resources Ltd (TSX-TECK.B, NYSE-TECK)... learn more on Friday, October 04, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy October 2019.... learn more on Thursday, October 03, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

K-Bro Linen Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer stock. Stock price is probably reasonable. It will probably become an dividend growth stock once is gets the Dividend Payout Ratios under control. See my spreadsheet on K-Bro Linen Inc.

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.

When I was updating my spreadsheet, I noticed the stock price has caught up with the declining EPS and shareholders capital gain was negative in 2018. The stock declined almost 20% last year, but is up by almost 8% this year. EPS is expected to rise this year. The EPS for the past 12 months is higher than to the end of last year.

Dividend yields are moderate (2 to 4% ranges) to good (5% or over). The current dividend yield is moderate at 3.53%. The 5, 10 and historical median dividend yields are 2.83%, 3.36% and 5.02%. If you look at median dividend yield since the company became a corporation, the yield is 3.09%. Dividends have been flat since 2014. Since this is an old income trust, current yields are likely to continue and the company will not get back to the yields it had as an income trust. See dividend growth in the chart below.

The Dividend Payout Ratios are still too high, but analysts expect them to improve. The DPR for 2018 for EPS for 2018 was 204% with 5 year coverage at 170%. The DPR for EPS is expected to be this year at 98% with 5 year coverage at 111%. The DPR for CFPS for 2018 was 44% with 5 year coverage at 42%.

Debt Ratios are fine and mostly quite good. The Long Term Debt/Market Cap Ratio for 2018 is good and low at 0.20. The Liquidity Ratio good at 1.97. The Debt Ratio is good and high at 2.61. I like the last two ratios to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are good and low at 1.62 and 0.62 respectively.

The Total Return per year is shown below for years of 5 to 14 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.35%	-0.09%	-3.32%	3.24%
2008	10	0.87%	20.81%	13.15%	7.66%
2004	14	1.17%	14.37%	7.80%	6.57%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 29.73, 33.61 and 37.49. The 10 year corresponding ratios are 20.57, 23.99 and 27.42. The corresponding historical ratio are 18.04, 18.71 and 20.62. The current P/E Ratio is 29.27 based on a stock price of $36.00 and 2019 EPS estimate of $1.23. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $22.46. The 10 year low, median, and high median Price/Graham Price Ratios are 1.59, 1.86 and 2.13. The current P/GP Ratio is 1.60 based on a stock price of $36.00. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.46. The current P/B Ratio is 1.97 based on a stock price of $36.00, Book Value of $193M, and a Book Value per Share of $18.23. The current ratio is 19.7% below 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 median dividend yield of 5.02%. The median dividend yield since becoming a corporation is 3.09%. The current dividend yield is 3.33% based on dividends of $1.20 and a stock price of $36.00. The current dividend yield is 33.6% below the historical median yield but it is 7.9% above the yield since becoming a corporation. This stock price testing suggests that the stock price is relatively reasonable and below the median going by the yield since the company has become a corporation.

The 10 year median Price/Sales (Revenue) Ratio is 1.73. The current P/S Ratio is 1.51 based on 2019 Revenue estimate of $252M, Revenue per Share of $23.86 and a stock price of $36.00. The current ratio is 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. In this case the best test is the P/S Ratio test. This test shows the stock price is relatively reasonable and below the median. The rest of the testing shows these same results except for the P/E Ratio testing. The P/E Ratios are all relatively high for this sort of company. The dividend yield test is suspect because the company used to be an income trust.

Is it a good company at a reasonable price? I think that this company has a lot of potential. It would appear, on a number of tests, to be reasonable priced.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $45.43. This implies a total return of 29.53% with 3.33% from dividends and 26.19% from capital gains.

See what analysts are saying on Stock Chase. It is not well covered but analysts like the company. Kris Knutson on Motley Fool likes this company, but report is from last year. A writer on Simply Wall Street points out a lot of negatives for this company, but does not understand that this used to be an income trust company that had to switch to a corporation because changes to the CDN Tax Laws. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Simply Wall Street says that the company’s intrinsic value says the stock is undervalued. Stock Muse Staff on Stock Muse say the Piotroski F-Score is 4 showing the company of middling strength .

K-Bro Linen Inc is a healthcare and hospitality laundry and linen processor in Canada. K-Bro operates nine facilities in eight major cities across Canada, and two distribution centres, providing management services and laundry processing of hospitality, healthcare, and specialty linens. Its web site is here K-Bro Linen Inc.

The last stock I wrote about was about was Le Chateau Inc (TSX-CTU, OTC-LCUAF) ... learn more. The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more on Wednesday, October 2, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks October 2019.... learn more on Tuesday, October 2, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Le Chateau Inc

Sound bite for Twitter and StockTwits is: Consumer Stock. This stock is probably cheap. This is showing up the P/S Ratio testing. However, revenue is declining, they cannot make a profit and the Book Value is negative. It is surprising it is still hanging in there. See my spreadsheet on Le Chateau Inc.

I do not own this stock of Le Chateau Inc (TSX-CTU, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect. The Investor’s Digest is a publication of MPL Communications.

When I was updating my spreadsheet, I noticed the investors who have been in this company for more than 15 years have still made money. All their return is in dividends. This is the advantage of dividend stocks. You often do not lose money in the long term. It seems like all analysts have given up on this company because it has not been able to make a profit since 2011. It is interesting that it is still hanging in there.

For the second quarter of 2019, the accounting rules they have introduced take account of lease liabilities and right to use assets. This is part of the reason the Liquidity Ratio is below 1.00 (which means current assets cannot cover current liabilities. The other reasons are the current portion of the credit facility and the current portion of the long term debt.

Dividends were suspended in 2012 because the company could no longer afford them. They started with earnings losses for the 2011 calendar year.

Debt Ratios are not good. The 2018 Long Term Debt/Market Cap is 19.72. However, it moved down to 5.91 for the second quarter of 2019. The Liquidity Ratio was high and good 2018 at 2.11 but it moved to 0.77 currently. Even with cash flow added, it is 0.81. The current assets cannot cover the current liability. The Debt Ratio for 2018 is 1.05. It has moved to 0.94 currently. That means that assets cannot cover liabilities and they have a negative book value.

The Total Return per year is shown below for years of 5 to 26 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	n/a	-52.65%	-52.65%	0.00%
2008	10	n/a	-30.76%	-36.45%	5.70%
2003	15	n/a	9.15%	-21.52%	30.67%
1998	20	n/a	9.39%	-15.46%	24.84%
1993	25	n/a	4.15%	-13.77%	17.92%
1992	26	n/a	8.13%	-11.43%	19.56%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative. The corresponding 10 year ratios are all negative. The corresponding historical ratios are 4.56, 6.57 and 8.76. The current P/E Ratio is negative 0.11 based on a stock price of $0.09 and an earnings loss for the past 12 months of $0.79. We cannot do any testing with the P/E Ratio.

I cannot do any testing with Price/Graham Price Ratios because we have a negative book value. I cannot do any testing re Price/Book Value per Share Ratio because of the negative book Value. I cannot do any testing with the dividend yield because there is no dividend.

The 10 year median Price/Sales (Revenue) Ratio is 0.29. The current P/S Ratio is 0.01 based on last 12 months of Revenue of $182.2M, Revenue per Share of $6.03 and a stock price of $0.09. The current ratio is some 95% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably relatively cheap. As noted above, most of what I like to test with cannot be done. The only that there can be any testing is P/S Ratio and this is generally a good test.

Is it a good company at a reasonable price? This company has not made a profit since 2011, it has not dividend, Revenue is declining and the Book Value is negative. It is not the sort of stock I would invest in. It is cheap.

When I look at analysts’ recommendations, I find that no analysts are following this stock.

See what analysts are saying on Stock Chase. Last entries were for 2011 when analyst feared the company was heading into trouble. Susan Portelance on Motley Fool compared this company negatively to Reitmans in 2017. A writer on Simply Wall Street in 2018 said that a high level of debt like this company holds can be dangerous as liquidity can dry up in unexpected downturns. The company reported on Globe Newswire the results for the second quarter of 2019. This article on Globe Newswire talks about the Chairman providing a loan to Le Chateau Inc.

Le Chateau Inc is a Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories, and footwear for style-conscious women and men. Its web site is here Le Chateau Inc.

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 September 30, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Granite REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price is probably expensive. The changes in 2012 seem to be have quite good for the company. 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. 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.

When I was updating my spreadsheet, I noticed that they gave out more units to the shareholders but then did a consolidation so this did not increase the number of units outstanding. I think that the effect on the number of units of this distribution for shareholders is nil, which is what I am assuming. I wish that they would not do such weird things as it can be hard to tell the exact implications.

The dividend yields are moderate (2 to4% range) to good (5% or over). The current yield is 4.34%, with 5, 10 and historical median dividend yields at 5.50%, 5.55% and 4.47%. There were some big dividend increases when this company became a REIT, but since then, they have slowed down. This last increase was in this year and it was for just 2.6%.

The Dividend Payout Ratios seems to be fine. The DPR for EPS for 2018 was 27% with 5 year coverage of 44% for the calculated EPS. For REITs, generally speaking, the Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are used to look at DPR. For 2018 the DPR for FFO is 74% with 5 year coverage at 73%. The DPR for AFFO for 2018 is 91% with 5 year coverage at 79%.

Debt Ratios are all fine. The Long Term Debt/Market Cap ratio is 0.49 for 2018 and this is low and fine. The Liquidity Ratio has varied greatly and is quite high and fine for 2018 at 8.39. The Debt Ratio for 2018 is also high and fine at 2.48. The Leverage and Debt/Equity Ratios are low and fine at 1.68 and 0.68.

The Total Return per year is shown below for years of 5 to 16 to the end of 2018 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	5.34%	12.58%	6.60%	5.99%
2008	10	14.01%	27.66%	19.33%	8.33%
2003	15	12.50%	5.68%	2.63%	3.05%
2002	16		7.64%	4.38%	3.26%

The Total Return per year is shown below for years of 5 to 16 to the end of 2018 in US$.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.23%	6.71%	1.28%	5.43%
2008	10	12.78%	27.41%	17.95%	9.45%
2003	15	13.02%	5.69%	2.26%	3.43%
2002	16		9.32%	5.32%	3.99%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 5.74, 6.73 and 7.71. The corresponding 10 year ratios are 6.53, 7.67 and 7.38. The corresponding historical ratios are 6.53, 7.67 and 8.82. The current P/E Ratio is 7.23 based on a stock price of $64.42 and 12 months ending at the second quarter EPS of 8.91. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Because this is a REIT, the Price/FFO Ratio is often used. The 5 year low, median, and high median P/FFO ratios are 11.34, 12.75 and 14.17. This corresponding 10 year ratios are 11.23, 12.93, and 14.63. The current P/FFO Ratio is 18.25 based on current stock price of $64.42 and 2019 FFO estimate of $3.53. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $66.54. The 10 year low, median, and high median Price/Graham Price Ratios are 0.71, 0.77 and 0.84. The current P/GP Ratio is 0.97 based on a stock price of $64.42. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.05. The current P/B Ratio is 1.16 based on a stock price of $64.42, Book Value of $2756M and Book Value per Share of $55.75. The current ratio is 11% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above median.

I get an historical median dividend yield of 4.47%. The current yield is 4.34% based on dividends of $2.80 and a stock price of $64.42. The current yield is 3% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above median.

The 10 year median Price/Sales (Revenue) Ratio is 8.76. The current P/S Ratio is 11.71 based on 2019 Revenue estimate of $272M, Revenue per Share of $5.00 and a stock price of $64.42. The current P/S Ratio is 34% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is probably expensive. The P/S Ratio testing is interesting because it is both an increase in the stock price and an increase in the number of outstanding shares that contributed to this ratio’s testing showing that the stock price is relatively expensive. You have to wonder if the dividend yield test is any good because of the change of this company from a corporation to a REIT. The P/B would seem to point to a reasonable if not cheap stock price. However, P/B Ratios for REIT tend to be low (that is under 1.5) which is considered low for other companies.

Is it a good company at a reasonable price? The changes in 2012 including to a REIT seems to have been very good for this company. It now seems to be a good REIT to own. However, at present, it does seem to be on the expensive side. Interestingly, the Chairman of this company has yet to show up on an INK report and he has been reported to be the chairman for the last 3 years. The INK report shows officers and board members of a company and what they own in shares.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (2) and Hold (3). The consensus would be a Buy. The 12 months consensus stock price is $67.78. This would imply a total return of 11.12% based on a stock price of $64.42 with 4.35% from dividends and 6.77% from capital gains.

See what analysts are saying on Stock Chase. They think that management is doing an excellent job. Karen Thomas on Motley Fool thinks this is good REIT at an attractive price. A writer on Simply Wall Street says the company has a good interest coverage ratio. Liza Goodheart on The Enterprise Leader says CIBC raised the target price on this stock. Charles Blunt on Mayfield Recorder says the company has an average recommendation of Buy.

Granite Real Estate Investment Trust, or Granite, is a real estate investment trust engaged in the acquisition, development, and management of primarily industrial properties in North America and Europe. Granite's portfolio comprises various manufacturing, corporate office, warehouse and logistics, and product engineering facilities. Its web site is here Granite REIT.

The last stock I wrote about was about was Alcanna Inc (TSX-CLIQ, OTC-LQSIF) ... learn more. The next stock I will write about will be Le Chateau Inc (TSX-CTU, OTC-LCUAF) ... learn more on September 27, 2019 around 5 pm. Tomorrow on my other blog I will write about Money Show 2019 – Nick Bontis.... learn more on Thursday, September 26, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Alcanna Inc

Sound bite for Twitter and StockTwits is: Consumer Stock Cheap. This stock is probably cheap. It has cancelled the dividends, so there is no telling what and if any dividends will be in their future plans. Expenses seem to be growing faster than revenue. Analysts do not expect to see any positive earnings this year. The 12 month EPS to the end of the second quarter is a loss of $4.79. See my spreadsheet on Alcanna Inc .

I do not own this stock of Alcanna Inc (TSX-CLIQ, OTC-LQSIF). The idea of following this stock came from a reader of my blog.

When I was updating my spreadsheet, I noticed that Selling and Admin expenses increased much more than Sales. Selling and Admin increased by 14.4% compared to Sales which increased by 5%. They had a big write off for goodwill. There is a lot of insider buying below $6.00. This company has some good debt ratio for 2018, but this changed in the second quarter of 2019.

They have cancelled their dividends for this year. They could not afford their dividends as they have not been making a profit in the last two years. They used to be an income trust and income trusts could pay out based on FFO and AFFO, but corporation should be paying out based on earnings. They have never been close to paying out their dividends paid on earnings.

Debt Ratios are fine for 2018 but have vulnerabilities currently because of accounting changes. We will have to see how these new accounting changes play out in the longer term. Their Long Term Debt/Market Cap ratio is low and good at 0.47 for 2018 and currently at 0.51. Their Liquidity Ratio is high and good at 3.17 for 2018 and 2.57 currently. Their Debt Ratio is good in 2018 at 2.24. However, it becomes low currently at 1.20 because of following different account rules for its leases. The Leverage and Debt/Equity Ratios are fine in 2018 at 1.81 and 0.81 but become very high currently at 5.98 and 4.98 because of the same accounting changes noted above.

The Total Return per year is shown below for years of 5 to 14 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.

The shareholders with longer term holdings have made a profit because of dividends, but shareholders have not profited over the last few years because dividends have been cut and capital gains losses are bigger.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	-19.73%	-14.36%	-21.44%	7.08%
2008	10	-13.96%	5.38%	-8.69%	14.07%
2004	14	-7.86%	3.81%	-8.47%	12.28%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative at 0.91, 1.83 and 2.83. The 10 year corresponding ratios are 13.44, 14.91 and 16.38. The corresponding historical ratios are 13.91, 16.41 and 18.95. The current P/E Ratio is a negative 13.23 based on a stock price of $5.30 and 2019 EPS estimate of earnings losses of $0.40. The P/E Ratio for next year is 26.50 based on a stock price of $5.30 and 2020 EPS of $0.20. This all suggests that the P/E Ratio test for this stock is probably undesirable.

I get a Graham Price of $3.28. The 10 year low, median, and high median Price/Graham Price Ratios are 0.88, 1.11 and 1.39. The current P/GP Ratio is 1.62 based on a stock price of $5.30. This stock price testing suggests that the stock price is relatively expensive. But this is probably not a good test either because of all the earning losses.

I get a 10 year median Price/Book Value per Share Ratio of 1.20. The current P/B Ratio is 2.22 based on a stock price of $5.30, Book Value of $88.7M and Book Value per Share of $2.39. The current ratio is 84% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

A dividend yield test cannot be done because the dividend has been cancelled.

The 10 year median Price/Sales (Revenue) Ratio is 0.48. The current P/S Ratio 0.25 based 2019 Revenue estimate of $797M, Revenue per Share of $21.47 and a stock price of $5.30. The current ratio is 49% below the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive

Results of stock price testing is that the stock price is probably cheap by the only real valid test that I can do, which is the P/S Ratio Test. There are problems with the other tests due to the number and amount of the earning losses and lack of a dividend.

Is it a good company at a reasonable price? Personally, I would not buy this company at the present time, so I cannot say it is a good company to buy. It is probably cheap.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1), and Hold (3). The consensus would be a Buy. The 12 month stock price is $7.60. This implies a total return of 43.40% all from capital gains.

See what analysts are saying on Stock Chase. They are now into cannabis. (Everyone is now into cannabis.) Christopher Liew on Motley Fool says to avoid this stock at all costs. A writer on Simply Wall Street says it is running a high debt while not making money and this can be a risky business. A writer on Simply Wall Street says that a company losing money with revenues going in the wrong direction is not what investors like to see. A contributor on Goodwell Gazette says that the Piotroski F-Score of 2 for this company is a low one. David Arnold on Invest Tribune says there has been an increase in short sellers of this stock.

Alcanna Inc is the private-sector retailer of alcoholic beverages in Canada and in the top 5 in North America. The company operates approximately 235 stores under the brand names Wine & Beyond, Liquor Deport and Brown Jug in Alberta, B.C., and Alaska. The company owned 25 per cent by Aurora Cannabis Inc and also owns the Nova Cannabis brand with 5 stores in Alberta and 1 in Toronto. Its web site is here Alcanna Inc.

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 Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more on September 25, 2019 around 5 pm. Tomorrow on my other blog I will write Money Show 2019 Gold.... learn more on Tuesday, September 24, 2019 around 5 pm.

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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.