Choice Properties REIT

I did not publish yesterday because I spend all day at CAMH with someone. Life happens, so sometimes you cannot do what you intend.

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. Dividends did not growth in 2019 and the Debt Ratio are not great. This stock has had good returns for a REIT. See my spreadsheet on Choice Properties REIT.

I own this stock of Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF). I got this stock when CDN REIT was acquired by Choice Properties. Choice was originally a spin off from Loblaws. Later George Weston Limited (TSX-WN) in a reorganization received Loblaw’s share of choice (61.6% interest) and Loblaws minority shareholders got George Weston Limited shares. The Weston Family own a majority share in George Weston Ltd and George Weston Limited has a controlling interest in Loblaws.

When I was updating my spreadsheet, I noticed I have done quite well with the Choice Buyout of my CDN Real Estate stock. My total return to date is 11.27% per year with 6.21% from capital gains and 5.06% from dividends. Since getting Choice Properties in May of 2018, I have made a total return of 7.99% per year with2.74% from capital gains and 5.25% from dividends

This stock has only been around since 2013. The dividend yields are moderate (2% to 4% range) to good (5% and over). The current dividend yield is 4.97%, with the 5 and 6 year median dividend yields at 5.66%. The dividends are increasing, but at a low rate. See chart below. Note that there was no increase in 2019 and analysts do not expect any more in the short term.

The Dividend Payout Ratios are fine. Since the EPS was negative in 2019, I cannot calculate the DPR for EPS for 2019. The 5 year coverage was 1110%. DPR for CFPS for 2019 is 26% with 5 year coverage at 15%. Adjusted Cash Flow from Operations (AFFO) and Cash Flow from Operations (FFO) are important for REITs. The DPR for AFFO for 2019 is 87% with 5 year coverage at 86%. The DPR for FFO for 2019 is 85% with 5 year coverage at 70%. The DPR for AFFO and FFO are within a normal range.

I will look at the Free Cash Flow. However, Morningstar and Wall Street Journal Disagree on FCF amounts with the WSJ a lot lower. Although, to me, the WSJ ones do not make much sense. The DPR for FCF for 2019 is 67% with 5 year coverage at 69%. Dividend Coverage Ratio for 2019 is 149 with 5 year coverage at 1.46.

Debt Ratios are not what I like to see. The Long Term Debt Market Cap Ratio is 0.66 which is good. The Liquidity Ratio is 0.72 and adding in Cash Flow after dividends just get us to 0.72. This is the first year this company did not state what the current assets and current liabilities were so I had to calculate them. However, the 5 year median Liquidity Ratio with CF after Dividends is 0.84 so this is too low also. This is low amount when compared to other REITs that I follow.

The Debt Ratio is 1.25 with 5 year median 1.10. This is too low. The other REITs that I follow have a better ratio. The Leverage and Debt/Equity Ratios are 5.04 and 4.04. This is also quite high and other REITs I follow have more reasonable ratios.

The Total Return per year is shown below for years of 5 to 6 to the end of 2019. 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.
2014	5	2.63%	11.90%	5.85%	6.05%
2013	6	2.18%	10.69%	4.77%	5.92%

The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and of no value. The 6 year corresponding ratios are 10.08, 11.08 and 12.08. The corresponding historical ratios are the same and the 6 year ones. The current P/E Ratio is a negative 87.59 based on a stock price of $14.89 and an earnings loss of $0.17. The P/E Ratio for 2021 is 15.04 based on a stock price of $14.89 and 2021 EPS estimate of $0.99. This stock price testing suggests that the stock price is relatively expensive.

This is a REIT, so Adjusted Cash Flow from Operations (AFFO) counts as does P/AFFO Ratios. The 5 year low, median, and high median P/AFFO Ratios are 13.54, 15.32 and 16.27. The corresponding 6 year ratios are 13.79, 15.32 and 16.27. The current P/AFFO Ratio is 16.54. This stock price testing suggests that the stock price is relatively expensive.

This is a REIT, so Cash Flow from Operations (FFO) counts as does P/FFO Ratios. The 5 year low, median, and high median P/AFFO Ratios are 11.23, 12.67 and 13.34. The corresponding 6 year ratios are 11.26, 12.67 and 13.34. The current P/AFFO Ratio is 14.60. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $15.12. The 6 year low, median, and high median Price/Graham Price Ratios are 0.77, 0.88 and 0.93. The current P/GP Ratio is 0.99 based on a stock price $14.89. This stock price testing suggests that the stock price is relatively expensive.

I get a 6 year median Price/Book Value per Share Ratio of 1.21. The current P/B Ratio is 1.50 based on a Book Value of $3,089M, Book Value per Share of $9.96 and a stock price of $14.89. The current P/B Ratio is 23% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical and 6 year median dividend yield of 5.66%. The current dividend yield is 4.97% based on dividends of $0.74 and a stock price of $14.89. The current yield is 12% below the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. The P/E Ratio testing is not good as there are negative P/E Ratios.

The 6 year median Price/Sales (Revenue) Ratio is 6.78. The current P/S Ratio is 7.61 based on 2020 Revenue estimate of $1,371M, Revenue per Share of $1.96 and a stock price of $14.89. The current ratio is 12% above the 10 year 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 probably reasonable to expensive. The tests that show this stock is relatively expensive is showing the price not far into the expensive zone. However, the test showing the stock price as reasonable are showing the stock price above the median. So, it is getting expensive.

Is it a good company at a reasonable price? I own this REIT and I will continue to do so but I will keep an eye on it. The balance sheet is leveraged. This can be a problem in an economic downturn. But George Weston Limited has control and deep pockets. It is on the pricey side.

When I look at analysts’ recommendations, I find Strong Buy (1) and Hold (8). The consensus would be a Hold. The 12 month stock price is $15.06. This implies a total return of 6.11% with 1.14% from capital gains and 4.97% from dividends based on a stock price of $14.89.

See what analysts are saying on Stock Chase. One analyst remarked that the balance sheet is more leveraged that he would like. I feel that way too. But they are working to reduce this leverage. Christopher Liew on Motley Fool thinks this is a good defensive stock to own. A writer Simply Wall Street talks about lack of profit, but FFO and AFFO is what is important for REITs.. A writer on Simply Wall Street talks about who owns shares in this company. Manny Gomes on Enterprise Echo talks about what Nation Bank says about this company.

Choice Properties Real Estate Investment Trust invests in, manages, and develops retail and commercial properties across Canada. The company's portfolio primarily consists of shopping centres anchored by supermarkets, and stand-alone supermarkets. The properties are mostly located in Ontario and Quebec, followed by Alberta, Nova Scotia, British Columbia, and New Brunswick. Its web site is here Choice Properties REIT.

The last stock I wrote about was about was Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more. The next stock I will write about will be Russel Metals Inc (TSX-RUS, OTC-RUSMF) ... learn more on Friday, February 21, 2020 around 5 pm. Today on my other blog I will write about Investing in CAE Inc.... learn more on Thursday, February 20, 2020 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.

Manulife Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. Stock price is probably reasonable to expensive. I probably invested at the wrong time in this stock. It seems to be improving. Payout ratios are good. See my spreadsheet on Manulife Financial Corp.

I own this stock of Manulife Financial Corp (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria. I bought some more stock in October 2005. I had some more money to spend and wanted to buy stock of dividend paying company I owned, for which I did not own too much. In April 2009, I was looking for something else to buy and Manulife was at a good price. In April 2013, I need to buy higher dividend stocks for my RRIF account. There was some money after RRSP sells, so I bought more MFC.

When I was updating my spreadsheet, I noticed that I invested in the company initially at the wrong time. I bought this stock almost 15 years ago. I also made other purchases in 2006, 2009, 2010, 2013 and 2016. I have made a total return of 2.76% per yar with 0.18% from capital gains and 2.58% from dividends. Looking at total returns from 15 years ago on the stock, it is the lowest at the 15 year period. With a total return of 2.30% with 2.63% from dividends and a capital loss of 0.33%.

The dividend yield is moderate (2% to 4% range). The current dividend yield is 4.29% with 5, 10 and historical dividend yields at 3.81%, 3.51% and 3.00%. Dividend growth has not been consistent and the dividends were cut in 2009 by 50%. They were then flat for a number of years and dividend increases began again in 2014. Dividend growth has been in the moderate range (8% to 14% ranges) since 2014. See chart below.

The Dividend Payout Ratios are good. The DPR for EPS in 2019 is 36% with 5 year coverage at 49%. The DPR for CFPS is 9% for 2019 with 5 year coverage at 10%. The DPR for Free Cash Flow for 2019 is 7% with 5 year coverage at 9%. The Dividend Coverage Ratio for 2019 is 14.69 with 5 year coverage at 10.63. I noticed that that the sites I looked at agreed on what the FCF was.

Debt Ratios are fine. This is a financial, so I look at long term debt and covering assets. The Debt/Covering Assets is 0.99. I calculate a Liquidity Ratio, which is 1.32 for 2019, but this is not an important one for Insurance companies. The Debt Ratio is 1.07 and is normal for financials. The Leverage and Debt/Equity Ratios are 16.15 and 16.15 respectively. These are a little high for an insurance company.

The Total Return per year is shown below for years of 5 to 20 to the end of 2019. 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.
2014	5	11.90%	6.97%	3.51%	3.46%
2009	10	2.52%	6.12%	3.15%	2.97%
2004	15	5.16%	2.30%	-0.33%	2.63%
1999	20	8.38%	9.34%	5.39%	3.96%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.82, 13.78 and 17.74. The corresponding 10 year ratios are 10.32, 13.78 and 11.32. The corresponding historical ratios are 11.22, 13.94 and 16.27. The current p/E ratio is 8.34 based on a stock price of $26.11 and 2020 EPS estimate of $3.13. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $40.47. The 10 year low, median, and high median Price/Graham Price Ratios are 0.68, 0.80 and 0.97. The current P/GP Ratio is 0.65 based on a stock price of $26.11. 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 1.13. The current P/B Ratio is 1.12 based on a stock price of 26.11, Book Value of $45.316M, and Book Value per Share of $23.25. The current ratio is 0.90% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get an historical median dividend yield of 3.00%. The current dividend yield is 4.29% based on dividends of $1.12 and a stock price of $26.11. The current dividend yield is 43% above the historical median one. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 3.51%. The current dividend yield is 4.29% based on dividends of $1.12 and a stock price of $26.11. The current dividend yield is 22% above the 10 year median one. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.76. The current P/S Ratio is 0.96 based on 2020 Revenue estimate of $53,240M, Revenue per Share of $27.32 and a stock price of $26.11. The current ratio is 25% 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 reasonable to expensive. You cannot ignore the P/S Ratio and a ratio of 0.96 is on the high side for life insurance companies. The P/B ratio is pointing to a price right at the median and this is an important ratio. However, there is nothing wrong with the other tests. For the dividend yield testing, the Payout Ratio are in a good place and the P/E Ratios are normal. So, we got rather missed results.

Is it a good company at a reasonable price? The price maybe reasonable. I still am holding on to my shares because I still expect to make good money from this stock in the end. All life insurance companies have had problems in our current low interest rate environment. Since this company has lots of business in Asia, I expect that it will be affect by the current coronavirus. So, the recovery of stock may be delayed.

When I look at analysts’ recommendations, I find Strong Buy (5), Buy (9) and Hold (5). The consensus would be a Buy. The 12 month stock price is $30.50. This implies a total return 21.10% with 16.81% from capital gains and 4.29% from dividends.

See what analysts are saying on Stock Chase . There are mixed reviews, but some say buy at around $26.00. Joey Frenette on Motley Fool thinks it will get much cheaper because of its Asian business and the coronavirus. A writer on Simply Wall Street thinks the P/E Ratio is low because investors do not believe the strong growth in earnings will continue. A writer on Simply Wall Street thinks the company is undervalued. From Bloomberg News on Leader Post talks about Asia weighing on future outlook.

Manulife provides life insurance and wealth management products and services to individuals and group customers in Canada, the United States, and Asia. Its web site is here Manulife Financial Corp.

The last stock I wrote about was about was ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more. The next stock I will write about will be Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more on Thursday, February 20, 2020 around 5 pm. Tomorrow on my other blog I will write about Investing in Dividend Stocks.... learn more on Tuesday, February 18, 2020 around 5 pm.

Also, on my book blog I have put a review of the book The Wealthy Renter by Alex Avery learn more... On my book blog I have put a review of the book Leadership and The Rise of Great Powers by Yan Xuetong learn more... On my book blog I have put a review of the book Bootlegger Blues by Drew Hayden Taylor learn more...

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.

ARC Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Resource. The stock price is probably cheap. It has great debt ratios. It has insider ownership. Dividend Payout Ratios need improving. Resource stocks are not my favourite, so I am not recommending buying this. See my spreadsheet on ARC Resources Ltd .

I do not own this stock of ARC Resources Ltd (TSX-ARX, OTC-AETUF). When TFSA first came out, this stock was recommended for this account as it was an income trust at that point and most of the distributions were taxable. This stock is no longer an income trust and the distributions are now dividends and taxed as normal Canadian dividends.

When I was updating my spreadsheet, I noticed this company had great debt ratios. The Liquidity Ratio is 4.65, with Debt Ratio at 5.89 and Leverage and Debt/Equity Ratios at 1.20 and 0.20. Inside own a lot of shares. For example, the CEO owns shares worth over $5M, the CFO owns shares worth over $1M as the Chairman. A Director owns shares worth over $3M. Also, insider buy shares last year with Net Insider Buying at 0.08%. Anything over 0.01% is high.

Dividend yields are in the Good (5% & 6% ranges) to High (7% and over). The current dividend yield is 8.33%, with 5, 10 and historical dividend yield are 5.13%, 5.01% and 9.25%. This company used to be an income trust. Income trusts can pay high dividends and payouts are based on Funds from Operations (FFO). They have been cutting their dividends. I do not see any growth in the near future. Although analysts do not see near term further cuts to the dividends.

The Dividend Payout Ratios are not where they should be. The DPR for EPS for 2019 cannot be calculated because the EPS is negative. The 5 year coverage is 314% and far too high. The DPR for CFPS for 2019 is 30% with 5 year coverage age 36%. The DPR has been decreasing and is now at a good level. The DPR for Free Cash Flow for 2019 cannot be calculated because the FCF is negative. The 5 year coverage is far too high at 377%.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2019 is low at 0.25. The Liquidity Ratio for 2019 is low at 0.53, but if you add in cash flow after dividends it is fine at 1.70. The Debt Ratio is good at 2.47. The Leverage and Debt/Equity Ratios are also good at 1.68 and 0.38 respectively.

The Total Return per year is shown below for years of 5 to 23 to the end of 2019. 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.
2014	5	-12.94%	-15.65%	-20.13%	4.48%
2009	10	-7.44%	-1.47%	-8.51%	7.04%
2004	15	-7.06%	6.22%	-5.06%	11.28%
1999	20	-3.97%	21.27%	-0.39%	21.66%
1996	23	-4.23%	12.39%	-1.94%	14.34%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.62, 16.78 and 20.94. The corresponding 10 year ratios are 19.80, 23.40, 27.00. The corresponding historical ratios are 11.68, 13.51 and 15.47. The current P/E Ratio 25.71 based on a stock price of $7.20 and EPS estimate for 2020 of $0.28. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $7.83. The 10 year low, median, and high median Price/Graham Price Ratios are 1.32, 1.62, 1.87. The current P/GP Ratio is 0.92 based on a stock price of $7.20. 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 2.01. The current P/B Ratio is 0.74 based on a stock price of $7.20, Book Value of $3,440M and Book Value per Share of $9.73. The current ratio is 63% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 9.25%. The current dividend yield is 8.33% based on dividends of $0.60 and a stock price of $7.20. The current yield is 9.9% below the historical yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median dividend yield of 5.01%. The current dividend yield is 8.33% based on dividends of $0.60 and a stock price of $7.20. The current yield is 66% above the 10 year yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 5.03. The current P/S Ratio is 1.92 based on 2020 Revenue estimate of $1,328M, Revenue per Share of $3.76 and a stock price of $7.20. The current ratio is 62% below the 10 year 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. This is showing in the P/S Ratio test, the P/B Ratio test, the 10 year median dividend yield test and the P/GP Ratio test. The 10 year median dividend yield test is probably much better than the historical median dividend yield test because this company used to be an income trust and income trust companies had very high yields compared to corporations. The P/E Ratios seemed to vary a lot.

Is it a good company at a reasonable price? I made money in the Canadian stock market because I kept away from resource stock. Resource stocks are volatile and I do not think they make good long term investments. This stock made a high in 2011 and the stock price is currently some 75% below that high. Last year the 12 month stock price consensus was $13.77. That implied a total return of 48.45% with 42.25% from capital gain and 6.20% from dividends based on a current stock price of $9.68. Instead the stock price 12 months later is at $7.20 and is 28% lower. The price is probably cheap.

When I look at analysts’ recommendations, I find Strong Buy (9), Buy (7) and Hold (1). The consensus would be a Strong Buy. The 12 months stock price consensus is $9.69. This implies a total return of 42.92% with 34.58% from capital gains and 8.33% from dividends.

See what analysts are saying on Stock Chase. They think it is a well-run company, but would not buy at the present time. Aditya Raghunath on Motley Fool says if you think energy might rebound, now maybe the time to buy this stock with its high yield. ARC Resources on Yahoo Finance talk about their forth quarterly results. A writer on Simply Wall Street says the company’s ROCE is too low and investors could probably find a more attractive investment elsewhere.

ARC Resources is an independent energy company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. The company produces light, medium, and heavy crude, condensate, NGLs, and natural gas. Its web site is here ARC Resources Ltd.

The last stock I wrote about was about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more. The next stock I will write about will be Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more on Tuesday, February 18, 2020 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.

Richelieu Hardware Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The price is reasonable to expensive. My problem is the current yield is below 1%. The company has great debt ratios and DPR. See my spreadsheet on Richelieu Hardware Ltd .

I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2007 because it was recommended by the Investment Reporter. It is not on any of the dividend lists, probably because they only started to pay dividends in 2000, they are a rather small company and they did not increase dividends in 2009. This stock would be considered to be a dividend paying growth stock. In 2009, I thought I would add to what I had in this stock. This stock has been much recommended by MPL Communications.

When I was updating my spreadsheet, I noticed it has preformed as expected. I have a total return of 17.77% per year with 16.13% from capital gains and 1.64% from dividends. Dividends have paid for 26% of the cost of my stock. After 11 years I am earning 4.36% on my original purchase. A negative is that dividend increases are getting lower for the for the past 3 years. The dividend increases from 2018 to 2020 inclusive are 5.82%, 5.50% and 5.37%. Although I must admit dividend increases have varied a lot in the past.

Dividend yield is low (under 2%). The current dividend yield is 0.90%, with 5, 10 and historical dividend yields at 0.88%, 1.12% and 1.12%. The current dividend growth is low (under8%), but it has been moderate in the past (8% to 14% ranges). I should mention that they have never done consistent dividend increases.

The Dividend Payout Ratios are very good. The DPR for EPS for 2019 is 21% with 5 year coverage at 20%. The DPR for CFPS for 2019 was 17% with 5 year coverage also at 17%. The DPR for 2019 for Free Cash Flow for 2019 was 19% with 5 year coverage at 29%. The Dividend Coverage Ratio for 2019 was 5.38 with 5 year coverage at 3.42.

Debt Ratios are all very good. They do not currently have any long term debt. The Liquidity Ratio is very good at 4.65 for 2019. The Debt Ratio is very good at 5.89 for 2019. The Leverage and Debt/Equity Ratios are also very good at 1.2 and 0.20 for 2019.

The Total Return per year is shown below for years of 5 to 26 to the end of 2019. 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.
2014	5	6.29%	8.42%	7.38%	1.03%
2009	10	9.03%	15.15%	13.72%	1.43%
2004	15	10.94%	10.21%	9.12%	1.09%
1999	20	12.04%	15.90%	14.42%	1.47%
1994	25		16.98%	15.69%	1.29%
1993	26		16.14%	14.98%	1.16%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.44, 22.71 and 25.98. The corresponding 10 year ratios are 16.53, 19.17 and 21.80. The corresponding historical ratios are 15.09, 15.30 and 18.57. The current P/E Ratio is 22.87 based on a stock price of $29.50 and 2020 EPS estimate of $1.39. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $16.08. The 10 year low, median, and high median Price/Graham Price Ratios are 1.34, 1.56 and 1.80. The current P/GP Ratio is 1.83 based on a stock price of $29.50. 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 2.97. The current P/B Ratio is 3.31 based on Book Value of $501M Book Value per Share of $8.91 and a stock price of 29.50. The current ratio is 12% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 1.12%. The current dividend yield is 0.90% based on dividends of $0.27 and a stock price of $29.50. The current yield is 19% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. The 10 year median dividend yield is also 1.12%, so testing would no different results.

The 10 year median Price/Sales (Revenue) Ratio is 1.44. The current P/S Ratio is 1.48 based on 2020 Revenue estimate of $1,118M, Revenue per share of $19.88 and a stock price of $29.50. The current ratio is 3% 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 reasonable to expensive. Most of the testing is showing that the stock price is reasonable but above the median. This is true of the tests of P/S Ratio testing, P/B Ratio testing and dividend yield testing. There is however, nothing wrong in any of the testing done.

Is it a good company at a reasonable price? I own this company and think it is a good long term company to own. If you are building a portfolio, companies with low dividend yields are good ones to buy. However, the current dividend yield is below 1% and I do not buy companies where the current dividend yield is below 1%.

When I look at analysts’ recommendations, I find only Hold (2) recommendations. The consensus would be a Hold. The 12 month stock price consensus is $29.75. This implies a total return of 1.75% with 0.85% from capital gains and 0.90% from dividends.

See what analysts are saying on Stock Chase. Some like it for a long term hold and some do not. Some think it is overpriced. Nelson Smith onMotley Fool says the company has a history of delivering excellent returns. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Simply Wall Street say the CEO of this company gets a median pay for this size of company. Blogger on Dividend Earner reviews this stock.

Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company's sales are derived from its operations in Canada. Its web site is here Richelieu Hardware Ltd.

The last stock I wrote about was about was Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more. The next stock I will write about will be ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more on Friday, February 14, 2020 around 5 pm. Tomorrow on my other blog I will write about Baby Boomers Investors.... learn more on Thursday, February 13, 2020 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.

Intact Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. This is a good dividend growth company, but I think that it is a bit expensive currently. It has moderate dividend growth and moderate dividend yield with fine DPRs and fine Debt Ratios. This web site of Million Dollar Journey list this stock as one of the best for 2020. See my spreadsheet on Intact Financial Corp.

I do not own this stock of Intact Financial Corp (TSX-IFC, OTC-IFCZF). I am following this stock because in November 2011, the TD Bank put out a special report on the merits of dividend investing. At the end of the report they listed a number of Canadian stocks as Equity Yield ideas. This was one stock listed that I did not follow. This and Wajax are from TD Report on dividend investing. I have reviewed this stock before in July but it is hard to find stocks with December year ends with the year end results out at this time of the year.

When I was updating my spreadsheet, I noticed earnings are volatile as is to be expected from a General Insurance company. The 12 months stock price is close to the current price. This stock when up almost 42% last year and is up over 9% already this year. It is not wonder analysts expect little growth in the near future.

Dividend yield is in the moderate range (2% to 4% ranges). The current dividend is 2.17% with 5, 10 and historical dividend yields at 2.55%, 2.64% and 2.65% respectively. The dividend growth is moderate (8% to 14% ranges). Growth lately has been 9.63% per year over the past 5 years and the current dividend increase was close at 9.2%, but lower than the last 3 years growth at 9.86%, 9.73% and 9.63% for years of 2017 to 2019.

The Dividend Payout Ratios are fine. The DPR for EPS for 2019 is 60% with 5 year coverage at 52%. Analysts expect the DPR to be lower this year at 46%. The DPR for CPFS for 2019 is 38% with 5 year coverage at 35%. The DPR for Free Cash Flow for 2019 is 37% with 5 year coverage at 42%. The Dividend Coverage Ratio for 2019 is 2.73 with 5 year coverage at 2.38.

Debt Ratios are fine. The Claims/Covering Assets Ratio is good at 0.64. The Liquidity Ratio is not very important for insurance companies, but it is 1.53 for 2019. The Debt Ratio at 1.37 is fine for this sort of company. Leverage and Debt/Equity Ratios at 3.69 and 2.69 are also fine for this sort of company.

The Total Return per year is shown below for years of 5 to 15 to the end of 2019. 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.
2014	5	9.63%	13.34%	10.86%	2.47%
2009	10	9.04%	17.27%	14.22%	3.05%
2004	15	11.65%	13.68%	11.01%	2.67%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.23, 20.96 and 22.58. The corresponding 10 year ratios are 15.96, 17.31 and 18.66. The corresponding historical ratios are 14.41, 15.57 and 16.73. The current P/E Ratio is 21.24 based on a stock price of $153.16 and $7.21. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $93.57. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.29 and 1.39. The current P/GP Ratio is 1.64 based on a stock price of $153.16. 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 2.02. The current P/B Ratio is 2.84 based on a stock price of $153.16, Book Value of $7,719M and Book Value per Share of $53.97. The current ratio is 40% 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 2.65%. The current Dividend yield is 2.17% based on dividend of $3.32 and a stock price of $153.16. The current dividend is 18.2% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median dividend yield of 2.64%. The current Dividend yield is 2.17% based on dividend of $3.32 and a stock price of $153.16. The current dividend is 17.7% below the 10 year median dividend yield. 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 1.54. The current P/S Ratio is 1.89 based on 2020 Revenue estimate of $11.600M, Revenue per Share of $81.11 and a stock price of $153.16. The current ratio is 22% above the 10 year median 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, but just inside expensive territory. For P/E Ratio testing, P/B ratio testing and Dividend Yield testing, expensive is the current ratio or yield is 20% or more above the median ratio. At 40% higher the P/B Ratio is in expensive territory, but for the dividend yield and P/S Ratios they are off at 18.2% 17.7% and 22%, so around the expensive territory cut off.

Is it a good company at a reasonable price? First, I think that this is a good dividend growth stock with moderate dividend yield and moderate dividend growth. The total return over the past 5, 10 and 15 years is 13.34%, 17.27% and 13.68%. This is a general insurance company and so it tends to have some volatility in stock price and earnings, but has produced good long term results. At the moment, I think the stock price is on the expensive side, so it might be one to keep an eye on to buy at some future time when the stock price pulls back.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4) and Hold (5). The consensus would be a Buy. The 12 month stock price is $154.92. This implies a total return 3.33% with 1.16% from capital gains and 2.17% from dividends based on a stock price of $153.16.

See what analysts are saying on Stock Chase. They like this company and say it is a consistent performer. Aditya Raghunath on Motley Fool likes this stock and says it is a steady performer, but analysts do not expect the stock price is rise much further this year. A writer on Simply Wall Street talks about who owns this stock. A writer on Simply Wall Street remarks about analysts stock price being close to current price because they do not expect a good year for this company in 2021. Steven Smith on Modern Reader talks about recent analysts remarks.

Intact Financial Corp is a property and casualty insurance company that provides written premiums in Canada. The company distributes insurance under the Intact Insurance brand through a network of brokers and a wholly owned subsidiary, BrokerLink, and directly to consumers through belairdirect. Its web site is here Intact Financial Corp .

The last stock I wrote about was about was Absolute Software Corporation (TSX-ABT, OTC-ALSWF) ... learn more. The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more on Wednesday, February 12, 2020 around 5 pm. Tomorrow on my other blog I will write about Warren Buffet.... learn more on Tuesday, February 11, 2020 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.

Absolute Software Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. However, they can not afford their dividends. The second quarter of 2020 ending December 2019 showed improvements in revenue, earnings, and cash flow. See my spreadsheet on Absolute Software Corporation .

I do not own this stock of Absolute Software Corporation (TSX-ABT, OTC-ALSWF). The Motley Fool published an article by Matt DiLallo in December 2014 called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade.

When I was updating my spreadsheet, I noticed dividend increases stopped last year. They really cannot afford the dividends. They are paying out more than the earnings and Free Cash Flow. The DPR for CF is too high. The company has a negative book value mainly because of Deferred Revenue.

The other thing is that stock price went up just over 12% the last 2 years and is up by 11% so far this year. Revenue declined in 2016 and they had an earnings loss in 2017. They do seem to be recovering from both of these. The 12 months EPS to the end of the second quarter was $0.25 up from $0.18 in 2019.

The dividends are paid in CDN$. Dividend yields are moderate (2% to 4% ranges). The current dividend is 3.17%. The 5, 6 and historical dividend yields are 4.26%. 3.96% and 3.96%. The dividend growth has been low (under 8%) to moderate (8% to 14% ranges). See charts below. The problem is that this company has kept the dividend flat for the past two years.

The Dividend Payout Ratios are too high. They cannot afford the current dividend. The DPR for EPS for 2019 is 178% with 5 year coverage at 258%. The DPR for CFPS for 2019 is 39% with 5 year coverage at 60%. The DPR for Free Cash Flow for 2019 is 141% with 5 year coverage at 139%. Dividend Coverage Ratio for 2019 is 0.71.

Debt Ratios are awful mostly. The only real long term debt the company has is Deferred Revenue, and Debt/Market Cap Ratio is 0.23 which is good. Liquidity Ratio is 0.71. Add in Cash Flow after dividends, it is 0.74. Add in the current portion of Deferred Revenue and you get 3.51. The Debt Ratio is 0.67 and this means that the book value is negative. The reason again is Deferred Revenue.

The Total Return per year is shown below for years of 5 to 19 to the end of 2019 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.
2014	5	6.83%	5.07%	1.39%	3.68%
2009	10	8.15%	7.81%	5.18%	2.63%
2004	15		28.61%	25.17%	3.45%
1999	19		18.73%	16.73%	2.00%

The Total Return per year is shown below for years of 5 to 19 to the end of 2019 US$. 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.
2014	5	4.28%	2.35%	-1.11%	3.46%
2009	10	4.47%	4.87%	2.38%	2.50%
2004	15		26.35%	22.93%	3.42%
2000	19		24.14%	21.48%	2.66%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 34.12, 40.74 and 47.35. The corresponding 10 year ratios are 18.55, 22.68 and 26.81. The historical P/E Ratios are all negative. They had earning losses until 2012. The current P/E Ratio is 34.58 based on a stock price of $10.11 and EPS of $0.29 CDN$ ($0.22 US$). This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $3.22 The 10 year low, median, and high median Price/Graham Price Ratios are 2.37, 3.11 and 3.88. The current P/GP Ratio is 3.14 based on a stock price of $10.11. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I cannot do a P/B Ratios test because the book value is negative.

I get an historical median dividend yield of 3.96%. The current dividend yield is 3.17% based on $0.32 CDN$ and a stock price of $10.11. The current dividend is 20% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. The historical median dividend year is just 6 years ago, so there is no sense doing a 10 year median dividend yield test.

The 10 year median Price/Sales (Revenue) Ratio is 2.68. The current P/S Ratio is 3.10 based on 2020 Revenue estimate of $104, Revenue per Share of $2.46 and a stock price of $7.26. The current ratio is some 16% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$. You can a similar outcome using CDN$.

Results of stock price testing is that the stock price is the price is reasonable to expensive. The best test is the P/S Ratio test. The problem with the dividend yield test is that I do think the dividends are in danger of being cut. They cannot afford them and they are no longer increasing them. The P/GP maybe unreliable because the book value is negative and I took my best stab at getting a Graham Price. The P/E Ratios went from negative to very high ones, so you have to wonder about this test. I cannot do a P/B Ratio test because of a negative Book Value.

Is it a good company at a reasonable price? This is a very risky Tech stock. What they might do about the dividends is unknown. They so far can cover them with the cash they have. Cash is coming from sale of investments, cash flow and selling of shares. Currently, I personally would not be interested in this stock, but I will keep an eye on it.

When I look at analysts’ recommendations, I find Strong Buy (3) and Hold (3). The consensus would be a Buy. The 12 months stock price is $7.97 US$ or $10.59 CDN$. This implies a total return of 7.93% with 4.77% from capital gains and 3.17% from dividends based on a current stock price of $10.11 CDN$.

See what analysts are saying on Stock Chase. They have stopped following this stock. This can happen when a small company is not doing well. Aditya Raghunath on Motley Fool thinks this is a growth stock for 2020. A writer on Simply wall street thinks this is not a good dividend stock as they are paying out too much and they have cut the dividends in the past.. A writer on Simply Wall Street says analysts have become more optimistic after the second quarterly results. Jayson Maclean on Can Tech says that Paradigm Capital analyst Kevin Krishnaratne has upped his target price.

Absolute Software Corp provides endpoint security and data risk management solutions for commercial, healthcare, education, and government customers. Its products and solutions include endpoint security, industry solutions, application resiliency, endpoint data discovery, professional services, and investigations. Its web site is here Absolute Software Corporation.

The last stock I wrote about was about was Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more. The next stock I will write about will be Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more on Monday, February 10, 2020 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 National Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Stock price seems to be reasonable to expensive. Analysts expect little in stock price movement this year. The company’s management seems to be saying the same thing with the lowest ever dividend increase. See my spreadsheet on Canadian National Railway.

I own this stock of Canadian National Railway (TSX-CNR, NYSE-CNI). In 2005 I was look for good companies to buy at a reasonable price. This stock met by criteria. This is a dividend growth company with a good record of dividend increases. I brought some more in 2009.

When I was updating my spreadsheet, I noticed that I have done very well with this stock. For my trading account I have a total return of 16.57% per year with 14.60% from capital gains and 1.97% from dividends. The dividends that I have received have covered 71.6% of the cost of my stock. This is after 14.6 years. It may be a low dividend yield stock, but on my original purchase in 2005, I am making 12.8% on my original investment.

The dividend yield on this stock is low (under 2%). The current dividend is 1.81% with 5, 10 and historical yields at 1.74%, 1.75% and 1.58%. Dividend growth until 2020 has been good (15% and above). In 2020 they dividend the lowest dividends increase ever at just 7%. They tend to do one dividend increase each year at the beginning of the year. A low dividend yield and high dividend growth is a good stock for people starting out.

The Dividend Payout Ratios are fine, but maybe high for this company. The DPR for EPS for 2019 is 37% with 5 year coverage at 30%. This is probably the highest DPR for EPS that this company has had. There is always a tension between needing money for investments and paying money out to shareholders. This is probably why the dividend increase for 2020 was low. The DPR for CFPS for 2019 is 25% with 5 year coverage at 22%. This is also in a high range for the company. The DPR for Free Cash Flow for 2019 is 75% with 5 year coverage at 51%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is low and good at just 0.14. The Liquidity Ratio is rather low at 0.66, but if you add in cash flow after dividends it is good at 1.68. The Debt Ratio is good at 1.70. The Leverage and Debt/Equity Ratios are fine at 2.43 and 1.43.

The Total Return per year is shown below for years of 5 to 23 to the end of 2019. 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.
2014	5	16.54%	9.75%	7.98%	1.77%
2009	10	15.59%	17.19%	15.15%	2.04%
2004	15	17.35%	14.88%	13.12%	1.77%
1999	20	16.58%	17.56%	15.57%	1.99%
1996	23	16.30%	17.15%	15.25%	1.90%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.51, 17.83 and 20.07. The corresponding 10 year ratios are 14.73, 17.25 and 19.78. The corresponding historical ratios are 12.13, 13.63 ad 15.37. The current P/E Ratio is 20.43 based on a stock price of $126.85 and 2020 EPS estimate of $6.21. This stock price testing suggests that the stock price is expensive.

I get a Graham Price of $59.49. The 10 year low, median, and high median Price/Graham Price Ratios are 1.50, 1.71 and 1.95. The current P/GP Ratio is 2.13 based on a stock price of $126.85. This stock price testing suggests that the stock price is expensive.

I get a 10 year median Price/Book Value per Share Ratio of 4.16. The current P/B Ratio is 5.01 based on a stock price of $126.85, Book Value of $18,041M, and Book Value per Share of $25.33. The current ratio is 20% above the 10 year ratio. This stock price testing suggests that the stock price is expensive.

I get an historical median dividend yield of 1.58%. The current dividend yield is 1.81% based on a stock price of $126.85 and dividends $2.04. The current dividend yield is 15% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 1.75%. The current dividend yield is 1.81% based on a stock price of $126.85 and dividends $2.04. The current dividend yield is 3% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 4.97. The current P/S Ratio is 5.80 based on 2020 Revenue estimate of $15,589, Revenue per Share of $21.89 and a stock price of $126.85. The current ratio is 17% 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 probably reasonable to expensive. Most of the testing is showing the stock price on the expensive side. Although the ones I like of P/S Ratio testing and dividend yield testing is showing the price as reasonable, but one above the median and one below.

Is it a good company at a reasonable price? I think that this is a good dividend paying stock. It has a low yield, but good dividend growth. For the stock I bought in 2005, I have a yield of 12.8% on my original purchase price. The price may be on the high side.

If you look at capital gains and starting P/E you can see a pattern. In the following chart, over the past 5 years, the Capital Gain per year was 7.98% and 5 years ago the P/E was 20.78. This is only capital gain. The Total return for the past 5 years is 9.75% because of 2.88% from dividends. So, with the current P/E Ratio at 20.43, you might expect to get a total return above 8% which is, of course, a good total return. Starting P/E Ratio seems to count with this stock.

Cap Gain Period	Cap Gain per year	Starting P/E
5 years	7.98%	20.78
10 years	15.15%	14.63
15 years	12.13%	17.05
20 years	15.57%	10.43

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (20), and Sell (2). Until recently, you hardly ever saw sell recommendations. The consensus recommendation is a Hold. The 12 months stock price is $126.76. This would imply a total return of 1.74%, with 1.81% from dividends and a capital loss of 0.07%. Obviously, our analysts do not expect much movement in the stock price this year. The company also seems to expect a slowdown because of the low increase in dividends for 2020.

Stock Chase. They like this company, but some say they prefer the cheaper CP. Aditya Raghunath on Motley Fool thinks it is a safe dividend stock but does not like the fact it has recently spent more time on reducing costs than growing.. A writer on Simply Wall Street thinks this stock is fairly value as the P/E Ratio is at its industry’s peers’ ratio. A Writer on Simply Wall Street says the dividend is adequately covered by EPS and CF . Christopher Reynolds on Global News talks about the end of the CNR strike.

Canadian National Railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. Its web site is here Canadian National Railway .

The last stock I wrote about was about was Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more. The next stock I will write about will be Absolute Software Corporation (TSX-ABT, OTC-ALSWF) ... learn more on Friday, February 7, 2020 around 5 pm. Tomorrow on my other blog I will write about Something to Buy February 2020.... learn more on February 06, 2020 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.

Exco Technologies Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price would seem to be relatively cheap. Dividend increases are decreasing and this is a negative. But analysts think that EPS will start to increase again stating this year. See my spreadsheet on Exco Technologies Ltd.

I do not own this stock of Exco Technologies Ltd (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.

When I was updating my spreadsheet, I noticed as a result the Company lost control of the Company’s indirect wholly owned subsidiary ALC Bulgaria EOOD (“ALC”) which filed for Liquidation in Bulgaria. This has affected sales and also some assets and liabilities. Hopefully, this is only a temporary setback for the company. Unfortunately, the stock price has been falling since 2015.

Also, the last dividend increase was for 5.6% in 2020. The one for 2019 was 5.9%. The one in 2018 was for 6.2%. The one for 2017 was 14.3%. This is pointing out that increases are getting lower. Dividend increases seem to reflect managements view of the future. A decreasing level of dividend increases would suggest a more negative view of the future.

This company started to pay dividends in 2003, some 16 years ago. Dividend yields started off low (under 2%), but because of dividend increases they became moderate (2% to 4% ranges). Lately they have been increasing due to the decline of the stock price. The current dividend yield is 4.71%. The 5, 10 and historical median dividend yields are 3.25%, 3.26% and 1.99%.

Dividend growth has been good until very recently. The dividend growth in the past up to the 16 years of dividends is shown below as the dividend growth per year. However, the last dividend increase, which was in 2020 was for only 5.6%. This would tend to indicate the lack of optimism for the near future on behalf of management to be lacking.

The Dividend Payout Ratios are fine except the DPR for EPS may be a little high. The DPR for EPS for 2019 is 55% with 5 year coverage at 32%. The 55% maybe little high for this sort of company. The DPR for CFPS is 26% with 5 year coverage at 20%. This is fine. The DPR for Free Cash Flow is 40% with 5 year coverage at 36%. The Dividend Coverage Ratio for 2019 is 2.52 with 5 year coverage at 2.78. Mostly, any ratio over 2.50 is fine.

Debt Ratios are all good. The Long Term Debt/Market Cap Ratio for 2019 is quite low and therefore good at 0.06. The Liquidity Ratio is high and good at 2.90 with 5 year median at 2.27. The Debt Ratio is high and good at 4.41 with 5 year median at 3.50. The Leverage and Debt/Equity Ratios are low and good at 1.29 and 0.29 respectively, with 5 year medians at 1.32 and 0.32.

The Total Return per year is shown below for years of 5 to 27 to the end of 2019. 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.
2014	5	12.73%	-4.61%	-7.63%	3.01%
2009	10	17.63%	20.03%	14.77%	5.26%
2004	15	13.96%	2.37%	0.35%	2.02%
1999	20	13.03%	4.99%	3.17%	1.82%
1994	25		5.86%	4.33%	1.53%
1992	27		8.26%	6.63%	1.63%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.40, 13.17, and 15.68. The corresponding 10 year ratios are 8.62, 10.21 and 12.46. The corresponding historical ratios are 9.80, 13.34 and 15.73. The current ratio is 9.35 based on a stock price of $7.65 and 2020 EPS estimate of $0.82. This stock price testing suggests that the stock price is relatively reasonable and below the median if we use the 10 year ratios.

I get a Graham Price of $12.26. The 10 year low, median, and high median Price/Graham Price Ratios are 0.65, 0.78 and 0.94. The current P/GP Ratio is 0.62 based on a stock price of $7.65. 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 1.28. The current P/B Ratio is 0.94 based on Book Value of $328M, Book Value per Share of $8.15 and a stock price of $7.65. Th current ratio is 27% 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 1.99%. The current dividend yield is 4.97% based on dividend of $0.38 and a stock price of $7.65. The current yield is 150% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 3.06%. The current dividend yield is 4.97% based on dividend of $0.38 and a stock price of $7.65. The current yield is 62% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.80. The current P/S Ratio is 0.62 based on a stock price of $7.65, Revenue estimate for 2020 of $496 and Revenue per Share of $12.34. The current ratio is 23% below the 10 year 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. It is interesting that all the test except for the P/E Ratio test showed that the stock price is relatively cheap. However, if you compare the current P/E Ratio to the 5 year ratios and the historical ratios, the result is a relatively cheap stock price. This is one reason why I look at the other period ratios.

Is it a good company at a reasonable price? The stock price would seem to be on the cheap side, so it is reasonable. This company is in the automobile industry and this industry is probably changing. The company has been doing a reasonable job for its shareholders. It has good debt ratios and a good dividend yield. Analysts think that it will be picking up soon with Revenue and EPS. It could be a good company to invest in.

When I look at analysts’ recommendations, I find Buy (1), Hold (3) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $8.70. This implies a total return of $18.69% based on a current stock price of $6.65 with 13.73% from capital gains and 4.97% from dividends.

See what analysts are saying on Stock Chase. They seemed to have stop following this stock in 2017 because of poor results. Debra Ray on Motley Fool thinks the stock should start to correct upwards next year or so. A writer on Simply Wall Street says that there are no major changes the analyst’s estimates with the second quarterly results of 2020. A writer on Simply Wall Street thinks this company is potentially undervalued..

Exco Technologies Ltd is a designer, developer, and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries. Its web site is here Exco Technologies Ltd.

The last stock I wrote about was about was AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more on Wednesday, February 5, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks February 2020.... learn more on February 4, 2020 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.

AGF Management Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. The stock price is probably reasonable and may even be cheap. However, dividends have been going down as well as stock price. The stock price has picked up in 2019, but dividend increases are still non-existent. Personally, I cannot get excited by this company. See my spreadsheet on AGF Management Ltd.

I do not own this stock of AGF Management Ltd (TSX-AGF.B, OTC-AGFMF). I used to own this stock. I bought it in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed. It has yet to recover.

According to my calculations when I sold this off, I had a total return of 2.08% per year with -0.01% from capital loss and 2.09% from dividends. If I had this stock still today, my capital loss would be 6.89% per year. Although my dividends would be at 6.54% per year.

When I was updating my spreadsheet, I noticed that they have been destroying shareholder value in this company for probably 10 years now.

The best that I can say about dividends is that the decreases in dividends seems to have stopped for now with the DPR at a reasonable level. Dividends were decreased by 70% in 2015 and have been flat since then. Dividend yields are moderate (2% to 4% ranges). The current dividend is 4.46%. The 5, 10 median dividends yields are in the good range (5% and above) at 6.17% and 6.61%. The historical median dividend yield is moderate at 3.47%. The 5 and 10 median dividend yields are higher because when the company started to have problems in 2008, yields increased a lot.

The Dividend Payout Ratios could be better especially for CF. The current DPR for EPS in 2019 is good at 53% and 5 year coverage at 55%. The DPR for CFPS for 2019 are still too high at 56% and with 5 year coverage at 57%. I prefer this to be 40% or less. The DPR for Free Cash Flow for 2019 is 40% with 5 year coverage at 52%. The Dividend Coverage Ratio for 2019 is 2.51 (which is good) and the 5 year coverage is low at 1.91.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2019 is good at 0.42. The Liquidity Ratio for 2019 is 1.41. With Cash Flow after dividends, it becomes a better one at 1.78. The Debt Ratio is good at 3.03. The Leverage and Debt/Equity Ratios for 2019 are good at 1.49 and 0.49, respectively.

The Total Return per year is shown below for years of 5 to 28 to the end of 2019. 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.
2014	5	-21.59%	-0.69%	-5.38%	4.69%
2009	10	-10.77%	-3.11%	-9.25%	6.14%
2004	15	-1.64%	-0.09%	-6.52%	6.43%
1999	20	3.86%	3.63%	-2.91%	6.54%
1994	25	5.70%	12.77%	3.40%	9.36%
1991	28	5.94%	17.26%	6.15%	11.10%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.49, 8.80 and 10.11. The corresponding 10 year ratios are 9.54, 12.56 and 15.58. The corresponding historical ratios are 10.21, 14.94 and 18.96. The current P/E Ratio is 12.80 based on a stock price of $7.17 and 2020 EPS estimate of $0.56. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $12.20. The 10 year low, median, and high median Price/Graham Price Ratios are 0.55, 0.72 and 0.88. The current P/GP Ratio is 0.59 based on a stock price of $7.17. 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 0.84. The current P/B Ratio is 0.61 based on a Book Value of $925M, Book Value per Share of $11.81 and a stock price of $7.17. The current ratio is some 28% 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 3.47%. The current dividend yield is 4.46% based on dividends of $0.32 and a stock price of $7.17. The current dividend yield is 29% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 6.61%. The current dividend yield is 4.46% based on dividends of $0.32 and a stock price of $7.17. The current dividend yield is 33% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.69. The current P/S Ratio is 1.35 based on 2020 Revenue estimate of $417M, Revenue per Share of $5.32 and a stock price of $7.17. The current ratio is 20% below the 10 year 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 reasonable and might be cheap. It is interesting to note that the P/E Ratio of 12.80 is a reasonable one, but the P/GP Ratio of 0.59 and the P/B Ratio of 0.61 are extremely low ratios. When the P/GP Ratio or the P/B Ratio is below 1.00, stocks are generally thought of as cheap. With the extremely low P/B Ratio, where the stock is selling below the book value, signals a cheap stock, but stocks are usually at this position for a reason.

Is it a good company at a reasonable price? The second part can be answered immediately as this stock price is reasonable if not cheap. However, I would not consider buying this stock again. If I had kept it, I would have been losing money on this company since 2001 and would have lost 72.69% of my investment in a capital loss. The loss would have been at 6.89% per year. However, with dividends my capital loss would be down to 0.35% per year. This shows the value of having dividend paying stock, but do you really want to own a stock that only breaks even on a long term basis because of dividends?

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (5). The consensus would b a Buy. The 12 month stock price is 7.69. This implies a total return of $11.72% with 7.25% from capital gains and 4.46% from dividends based on a stock price of $7.17.

In 2018, the 12 month stock price consensus is $8.81 which implies a total return of 20.24% with 4.22% from dividends and 16.23% from capital gains based on a stock price of $7.58. What happened was that stock price end up at $5.38. So, the total return was a loss of 22.17% with a capital loss of 26.39% and 4.22% from dividends.

Last year the 12 month stock price consensus was $6.61. This implies a total return of 28.81% with 22.86% from capital gains and 5.95% from dividends based on a stock price $5.58. What happened was that the stock price has ended up at $7.17. So, the total return was 34.44% with 28.49% from capital gains and 5.95% from dividends. The stock price was up 33.6% in 2019 and up 11.3% so far this year.

See what analysts are saying on Stock Chase. There is not much coverage and latest says Asset Management businesses are being killed. Nikhil Kumar on Motley Fool thinks it is cheap and a good time for buying it. A writer on Simply Wall Street says with a beta of 1.53 means the stock price will change at a higher level than the market in booms and busts.. A Writer on Simply Wall Street says the stocks intrinsic value is $6.23 CDN. An announcement on Global Newswire says the proposed merger of Smith & Williamson and Tilney Group has not been approved by the Financial Conduct Authority (FCA).

AGF Management is a Canada-based asset manager with operations and investments in Canada, the United States, the United Kingdom, Ireland, and Asia. AGF Management has a more meaningful portion of its business tied to institutional clients than its peers, with 34% of AUM derived from institutional and subadvised accounts. The company also derives 15% of its managed assets from high-net-worth clients. Its web site is here AGF Management Ltd.

The last stock I wrote about was about was Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more. The next stock I will write about will be Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more on February 3, 2020 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.