Magna International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price seems to be reasonable to expensive. It is a cyclical stock. There is insider buying. The dividends increase for 2020 does show that management has confidence in the future. However, so far they have not increased the dividend for 2021 and analyst expect a very small increase of 1%. See my spreadsheet on Magna International Inc.

I do not own this stock of Magna International Inc (TSX-MG, NYSE-MGA). Magna is a stock I have tracked for some time. I have always liked Frank Stronach, the entrepreneur who used to run this company. Manufacturing firms are fairly risky and it is not the sort of company I usually buy. They can be cyclical.

When I was updating my spreadsheet, I noticed that 2019 was not a good a year as the company had in 2018. The first 9 months of this year is not as good as they had in the first 9 months of 2019. However, the company raised their dividends in 2020, so at that time management would seem to be optimistic. It will be interesting to see if they again raise their dividends in 2021.

In 2019, Revenue was down by 3.4% and EPS was down by 15%. For the first 9 months or third quarterly report, Revenue is down by 20% and EPS is down by 73%. In 2020, the dividends were increased by 9.6% which is lower than for the last 5 years where dividend increases were 13.9% per year. Analysts expect a small increase in dividends in 2021 of just over 1%, but a better one, over 10% in 2022. Dividend increases give you an idea on how the management of a company feels about the near future.

The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.48%. The 5, and 10 median dividend yields are also moderate at 2.39% and 2.21%. The historical median dividend yield is low (below 2%) at 1.92%.

Dividend growth is currently good with 5 year growth at 14% per year. The last dividend increase was in 2020 and it was lower at 9.6%. Note that the dividend growth for the past 10 years is high because exactly 10 years ago dividends were cut 85%, and then started to grow again in the following year.

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2019 is 26% with 5 year coverage at 21%. The DPR for CFPS for 2019 is 12% with 5 year coverage also at 12%. The DPR for Free Cash Flow is 22% with 5 year coverage at 25%.

Debt Ratios are fine. The Long Term Debt/Market Cap is good and low at 0.18. The Liquidity Ratio is low at 1.26. However, if you add in Cash Flow after dividends, it is good at 1.67. The Debt Ratio for 2019 is fine at 1.76. The Leverage and Debt/Equity Ratios for 2019 are 2.38 and 1.35 and are also fine.

The Total Return per year is shown below for years of 5 to 31 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.
2013	5	17.62%	4.73%	2.49%	2.24%
2008	10	41.71%	21.34%	18.25%	3.08%
2003	15	10.14%	8.99%	7.52%	1.47%
1998	20	8.08%	9.82%	7.98%	1.84%
1993	25	11.23%	8.85%	7.20%	1.65%
1988	30	9.64%	14.36%	11.51%	2.84%
1987	31	9.31%	13.51%	10.89%	2.63%

The Total Return per year is shown below for years of 5 to 31 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.
2013	5	13.95%	2.28%	0.18%	2.10%
2008	10	41.62%	18.88%	15.80%	3.08%
2003	15	9.58%	8.48%	6.73%	1.75%
1998	20	8.66%	10.51%	8.36%	2.15%
1993	25	11.57%	8.55%	6.84%	1.72%
1988	30	9.29%	13.81%	11.06%	2.74%
1987	31	9.06%	13.14%	10.54%	2.60%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.13, 8.55 and 9.96. The corresponding 10 year ratios are 7.09, 9.37 and 10.69. The corresponding historical ratios are 7.97, 11.39 and 12.54. The current P/E Ratio is 32.57 based on a stock price of $82.34 and EPS estimate for 2020 of $1.98. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

However, the EPS estimate for 2020 is 65% below the EPS for 2019. The EPS is expected to recover in 2021. The P/E Ratio for 2021 is expected to be 11.39 based on a stock price of $82.34 and EPS estimate for 2021 of $7.23. This stock price testing also suggests that the stock price is relatively expensive. This 2021 P/E Ratio is a lot lower than for 2020. This is in CDN$.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, 20, 25, 30 and 31 year periods, I find the following. For example, total return over the past 15 years is 8.99% per year, the starting P/E Ratio (the one from 15 years ago) was 11.49. From this point of view, a P/E Ratio is 11.39 would be fine.

Year	Tot Return	Start P/E
5	4.73%	12.49
10	21.34%	-11.54
15	8.99%	11.49
20	9.82%	9.39
25	8.85%	20.31
30	14.36%	9.34
31	13.51%	16.97

I get a Graham Price of $49.44. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 0.78 and 0.92. The current P/GP Ratio is 1.67 based on a stock price of $82.34. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

However, the Graham Price is greatly affected by the EPS estimate for 2020. The Graham Price for 2021 is 82.34. The 2021 P/GP Ratio is 0.98. This stock price testing also suggests that the stock price is relatively expensive. This 2021 P/GP Ratio is a lot lower than for 2020. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.54. The current P/B Ratio is 1.92 based on a current Book Value of $10,206M, Book Value per Share of $33.66 and a stock price of $64.50. The current P/B Ratio is 24% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.17. The current P/CF Ratio is 8.67 based on a stock price of $64.50, Cash Flow per Share estimate for 2020 of $7.44 and Cash Flow of $2,256. The current P/CF Ratio is 68% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

However, the Cash Flow per Share is expected to drop 43% in 2020 and recover in 2021. The 2021 P/CF Ratio is 5.97. This is based on Cash Flow per Share estimate for 2021 of $10.80, Cash Flow of $3,275 and a stock price of $64.50. The 2021 P/CF Ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 1.92%. The current dividend yield is 2.48% based on a stock price of $64.50 and dividends of $1.60. The current dividend yield is 29% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap. This is in US$. You will get a similar result in CDN$.

I get a 10 median dividend yield of 2.21%. The current dividend yield is 2.48% based on a stock price of $64.50 and dividends of $1.60. The current dividend yield is 14% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.42. The current P/S Ratio is 0.61 based on a stock price of $64.50, Revenue estimate for 2020 of $32,007M, and Revenue per Share of $105.55. The current P/S Ratio is 44% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

However, the Revenue is expected to fall by 19% this year and recover somewhat in 2021. The P/S Ratio for 2021 is 0.52 based on Revenue estimate for 2021 of $37,796M, Revenue per Share of $124.64 and a stock price of $64.50. The 2021 P/S Ratio is 22% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price is probably reasonable to expensive. Both dividend yield tests are showing the price as being reasonable. The 2020 good dividend increase shows that management feels good about the future. However, this was not confirmed by the P/S Ratio tests which say the stock price is expensive. The P/CF Test is showing a reasonable price. All the rest are showing the price as relatively expensive. I was doing testing using US$ because this company reports in US$.

Is it a good company at a reasonable price? Price is probably reasonable to expensive. Long term returns vary, but this is a cyclical stock and so this would be expected. I think the company is good. You have to realize it is cyclical. It is a Dividend Growth company which is always something I like. There are probably lots of Buy recommendations with analysts going for momentum. The 12 month stock price consensus is low, but analysts often are conservative in the 12 month stock price.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (6), Hold (5) and Sell (1). The consensus would be a Buy. The 12 month stock price consensus is $79.51 ($62.27 US$). This implies a total loss of 0.95%, with a capital loss of 3.43% and dividends of 2.48%.

Most of the analysts like this stock on Stock Chase. The one analyst that did not said it was cyclical and it is. Joey Frenette on Motley Fool thinks we are heading for a correction and this would be a good stock to downsize at present. A writer on Simply Wall Street complains about the recent ROE for this company. However, the company is having a bad year. The 5 year median ROE is quite good at 16.9%. This is a cyclical stock. A writer on Simply Wall Street says the stock’s intrinsic value is $63.74 CDN$. Recently Business Wire talked about an agreement between Fisker Inc. (NYSE: FSR) and Magna International Inc.

Magna International Inc is an independent supplier of original equipment components, assemblies, modules and systems and related tooling for cars and light trucks. The Company designs, develops and manufactures a diversified range of these products, primarily for North American and European original equipment manufacturers. Its web site is here Magna International Inc.

The last stock I wrote about was about was Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more. The next stock I will write about will be Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more on Monday, December 21, 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.

Methanex Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Materials. The stock price is reasonable. I currently do not consider this a dividend growth stock. Dividends are currently exceeding low at just 0.38%. The dividend future of this company is uncertain at present. With the dividend cut, it would imply that management does not see improvement in the near future. Some debt ratios could stand to be improved. See my spreadsheet on Methanex Corp.

I do not own this stock of Methanex Corp (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid “C” grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices. One main reason to buy this stock would be for diversification.

When I was updating my spreadsheet, I noticed Long Term Debt is Climbing. In 2019 it went up 61.05% and it has climbed 34.40% so far this year. I also noticed that Cash Flow Statement Cash is also going up. It climbed 63% in 2019 and 183% so far this year. Cash per share was up 57% in 2019 and 178% so far this year. Also, these is insider buying.

The dividend yields are currently low with dividend growth currently stopped. The current dividend yield is low (less than 2%) at 0.35%. This is because they recently cut their dividends. The 5, 10 and historical dividend yields are moderate (2% to 4%) at 2.33%, 2.40% and 2.46%. They used to rise their dividends, which they have been paying for some 17 years. See chart below. However, the company is expecting an earnings loss this year and have cut the dividends by 90%. This will point to the fact that management does not expect any improvement in the near term to earnings.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 was $107% with 5 year coverage at 45%. The DPR for CFPS for 2019 is 20% with 5 year coverage at 16%. The DPR for Free Cash Flow for 2019 is 56% with 5 year coverage at 32%.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2019 is 0.59. The Liquidity Ratio for 2019 is 1.90. The Debt Ratio for 2019 is 1.46 and this is a bit low as I would like it to be at 1.50 or higher. The 5 year median Debt Ratio is good at 1.65. The Leverage and Debt/Equity Ratios are higher than what I like at 3.90 and 2.68. I prefer these to be under 3.00 and under 2.00 respectively. The 5 year median ratios are better at 2.71 and 1.56.

The Total Return per year is shown below for years of 5 to 24 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	10.69%	1.86%	-1.24%	3.09%
2009	10	10.93%	12.98%	9.34%	3.64%
2004	15	11.95%	8.48%	5.68%	2.81%
1999	20	15.51%	18.19%	13.55%	4.64%
1995	24		9.02%	6.95%	2.07%

The Total Return per year is shown below for years of 5 to 24 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	8.22%	-0.52%	-3.36%	2.84%
2009	10	8.56%	10.64%	7.08%	3.56%
2004	15	11.38%	8.11%	5.12%	2.99%
1999	20	16.84%	19.93%	14.40%	5.53%
1995	24		9.48%	7.18%	2.30%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.70, 14.27, and 16.83. The corresponding 10 year ratios are 9.91, 13.25 and 16.09. The corresponding historical ratios are 9.55, 10.79 and 15.19. The current P/E Ratio is negative so the P/E Ratio is non-calculable. This is in CDN$.

However, the P/E Ratio for 2021, which is getting close, is 57.20 based on a stock price of $54.78 and EPS estimate for 2021 of $0.96. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

I estimate a Graham Price of $20.76. The 10 year low, median, and high median Price/Graham Price Ratios are 0.96, 1.27 and 1.22. The current P/GP Ratios is 2.64 based on a stock price of $54.78. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

Some people calculate the Graham Price using the EPS for the past 3 years. I have for this stock calculated the Graham Price on this basis. The 10 year low, median, and high median P/GPR Ratios on this basis are 1.22, 1.54 and 1.88. The current P/GP Ratio on this basis is 1.14. On this basis the stock price testing suggests that the stock price is relatively cheap. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 2.53. The current P/B Ratio is 2.74 based on a Book Value of $1,194M, Book Value per Share of $15.67 and a stock price of $42.95. The current ratio is 8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$, but you will get similar results in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.76. The current P/CF Ratio is 9.81 based on Cash Flow per Share estimate for 2020 of $4.38, Cash Flow of $334M and a stock price of $42.95. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

For this year, the cash flow is expected to drop 35%. It is expected to rise some 65% in 2021. If we use the P/CF Ratio for 2021 of 5.96, which is based on a Cash Flow per Share estimate for 2021 of $7.21, Cash Flow of $549M and a stock price of $42.95, we get a different answer. Here the ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$, but you will get similar results in CDN$.

I get an historical median dividend yield of 2.46%. The current dividend yield is 0.35% based on a stock price of $42.95 and a dividend of $0.15. The current dividend yield is 86% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

I get a 10 year median dividend yield of 2.40%. The current dividend yield is 0.35% based on a stock price of $42.95 and a dividend of $0.15. The current dividend yield is 85% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in US$, but you will get similar results in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 1.32. The current P/S Ratio is 1.35 based on a stock price of $42.95, Revenue Estimate for 2020 of $2,423M and Revenue per Share of $31.80. The current ratio is 2% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This is in US$, but you will get similar results in CDN$.

However, the Revenue is expected to fall 13% in 2020 and then recover in 2021. The 10 year median Price/Sales (Revenue) Ratio is 1.32. The P/S Ratio for 2021 is 1.22 based on a stock price of $42.95, Revenue Estimate for 2021 of $2,680M and Revenue per Share of $35.17. The 2021 ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is in US$, but you will get similar results in CDN$.

Results of stock price testing is that the stock price is probably reasonable. The P/S Ratio testing shows that it is just above and below the median. The dividend yield tests are not valid because the dividends have just recently been cut by 90%. The Graham Price test using 3 years of EPS is probably a better one than the one I generally use because you get an answer without any guessing. The P/B Ratio test is a good one and that is showing the stock price as relatively reasonable.

Is it a good company at a reasonable price? The stock is selling at a reasonable price. However, the dividend future is uncertain so for now I cannot call this a dividend growth stock. It is also risky because it depends on one product only.

When I look at analysts’ recommendations, I find Buy (4), Hold (4), Underperform (1) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $48.60 ($38.06 US$). This implies a total loss of 10.93, with a capital loss of 11.28% and dividends of 0.35%.

Analysts have diverging views on this stock on Stock Chase. One analyst called it a one product, commodity company, which it is. Aditya Raghunath of Motley Fool likes this stock, even after the dividend cut. Executive Summary on Simply Wall Street gives the stock 2 stars out of 5 and 2 risk items. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Investing.com talks about what analysts are saying about this stock.

Methanex Corp is the world’s largest producer and supplier of methanol to major international markets in North America, Asia Pacific, Europe, and South America. Its web site is here Methanex Corp.

The last stock I wrote about was about was Stantec Inc (TSX-STN, NYSE-STN) ... learn more. The next stock I will write about will be Magna International Inc (TSX-MG, NYSE-MGA) ... learn more on Friday, December 18, 2020 around 5 pm. Tomorrow on my other blog I will write about TFI International.... learn more on Thursday, December 17, 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.

Stantec Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is reasonable, but it is at the top range of reasonable. Both DPRs and debt ratios are fine. Long term investors have done well. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc (TSX-STN, NYSE-STN), but I used to. I bought and sold this stock between 2008 and 2011 and did not make any money. It was a non-core holding. With their new policy of dividends, this stock has become more interesting.

When I was updating my spreadsheet, I noticed that 2018 was not a good year for this company. Revenue was down 17% and EPS was down 50%. However, the company seems to have recovered nicely in 2019. Both Revenue and EPS was up. This year looks like it will not be quite as good at 2019, but the company is expected to do better in 2021 and 2022. Analysts expect Net Revenue to be up by 5% in 2021 and EPS up by 22% in 2021.

The dividend yields are low with dividend growth moderate. The current dividend is low (below 2%) at 1.49%. The 5, and 7 (historical) dividend yields are also low at 1.45% and 1.41%. Dividends were started om 2012. The dividend growth is currently moderate (8% to 14% ranges) at 9.72% per year for the last 5 years. However, the last dividend increase was low (below 8%) at 6.9%. However, a lot of company’s had lower dividend increases in 2020 because of Covid.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2019 EPS was 33% with 5 year coverage at 41%. The DPR for CFPS for 2019 was 2.1% with 5 year coverage also at 2.1%. The DPR for Free Cash Flow is 16% with 5 year coverage at 26%. (There is no agreement on FCF, but they are generally not far off.)

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is good at 0.20. The Liquidity Ratio for 2019 is 1.57. The Debt Ratio for 2019 is 1.70. The Leverage and Debt/Equity Ratios are 2.43 and 1.43 respectively.

The Total Return per year is shown below for years of 5 to 25 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	9.72%	4.26%	2.82%	1.43%
2009	10	9.67%	10.55%	9.21%	1.34%
2004	15		13.08%	12.10%	0.98%
1999	20		18.77%	17.85%	0.92%
1994	25		16.48%	15.80%	0.68%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.13, 26.41 and 29.68. The corresponding 10 year ratios are 16.82, 19.47 and 22.92. The corresponding historical ratios are 14.50, 16.44 ad 21.33. The current P/E Ratio is 24.96 based on a stock price of $41.68 and EPS estimate for 2020 of $1.67. The current ratio is above the 10 year high median P/E Ratio. This stock price testing suggests that the stock price is relatively expensive.

If you look at P/E Ratios compared to Total Returns for the 5, 10, 15, 20 and 25 year periods, I find the following. The total return over the past 10 years is 10.55% per year, the starting P/E Ratio (the one from 10 years ago) was 24.92. I guess that a P/E Ratio of 24.96 is on the high side.

Year	Tot Return	Start P/E
5	4.26%	18.35
10	10.55%	24.92
15	13.08%	16.65
20	18.77%	9.32
25	16.48%	11.54

I get a Graham Price of $26.22. The 10 year low, median, and high median Price/Graham Price Ratios are 1.18, 1.47 and 1.72. The current P/GP Ratio is 1.39 based on a stock price of $41.68. The current ratio is between the 10 yar low and median P/GP Ratios. 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 1.98. The Current P/B Ratio is 2.28 based on a stock price of $41.68, current Book Value of $2052M, and current Book Value per Share of $18.50. The current ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 11.70. The current P/CF Ratio is 10.50 based on a stock price of $41.68, Cash Flow per Share estimate for 2020 of $3.97 and Cash Flow of $445M. The current P/CF Ratio is 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 and 6 year median dividend yield of 1.41%. The current dividend yield is 1.49% based on dividends of $0.62 and a stock price of $41.68. The current dividend yield is 5.5% above the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 5 year median dividend yield of 1.45%. The current dividend yield is 1.49% based on dividends of $0.62 and a stock price of $41.68. The current dividend yield is 2.4% above the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. (I am using the 5 year median dividend yield to use what information I have.)

The 10 year median Price/Sales (Revenue) Ratio is 1.11. The current P/S Ratio is 1.26 based on Revenue estimate for 2020 of $3,702M, Revenue per Share of $33.02 and a stock price of $41.68. The current ratio is 14% 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. The dividend yield testing says that the stock price is below the median, but this is not confirmed by the P/S Ratio which says it is above the median. Most of the testing is showing the stock price as above or below the median, but still in the reasonable range. The exception is the P/E Ratio test. If you notice the P/E Ratios have been climbing higher over time.

Is it a good company at a reasonable price? I like this company. It is currently a dividend growth company having started dividend payments 6 years ago. The stock price seems reasonable, although it is at the top end of the reasonable range. With the low dividend yield it would be good stock to build a portfolio with.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price is $46.00. This implies a total return of 11.85%, with 10.36% from capital gains and 1.49% from dividends based on a current stock price of $41.68.

Analysts on Stock Chase seem to like this company. Aditya Raghunath on Motley Fool does not currently like this stock and thinks they might have a tough road ahead. A writer on Simply Wall Street talks about some positive aspects to this company. A writer on Simply Wall Street thinks this is a company worth watching.. The Blogger Dividend Earner looked at this stock in May of this year.

Stantec Inc is a global engineering and construction firm. Stantec has one reportable segment: consulting services. It utilizes one common brand and operates the same systems with generally the same policies, practices, and programs. Stantec derives the substantial majority of its sales from the United States and Canada, and the company works in both the public and private sectors. Its web site is here Stantec Inc.

The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more. The next stock I will write about will be Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more on Wednesday, December 16, 2020 around 5 pm. Tomorrow on my other blog I will write about Johnson and Johnson.... learn more on Tuesday, December 15, 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.

FirstService Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. The stock price would seem to be on the expensive side currently. Shareholders have done well with this stock over the longer term. Mostly the dividend yields are below 1% and I do not buy companies when their yields are below 1%. See my spreadsheet on FirstService Corp.

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSV) but I used to. I bought FirstService Corp in 2002 as it looked like a good solid company that knows how to make money. By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends. The company is now paying dividends.

When I was updating my spreadsheet, I noticed it would appear that the company had a bad year because of the $6.58 EPS loss for 2019. However, a $314,379 charge was made against the earnings because of the settlement of made with Jay S. Hennick, the Company’s Founder and Chairman to eliminate the multiple voting shares and his long-term incentive arrangement (the “LTIA”). Otherwise, the EPS for 2019 would be $8.14.

The dividend yields are low with dividend growth low. Dividends are paid in US$. The current dividend is low (below 1%) at just 0.52%. The 5 and 6 year median dividend yields are also low at 0.77% and 0.88%. Dividends were started in 2013. The growth is low (under 8% per year) at 7.90% per year for the last 5 years. The last dividend increase was higher at a moderate level (8% to 14% ranges) at 10% and was done in 2020.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS is non-calculable for 2019 and the 5 year coverage is also non-calculable. This is because of the big earnings loss in 2019. However, this is also because of one-time special charge. The DPR for EPS is expected to be 33% in 2020 and this is good. The CPR for CFPS for 2019 is 25% with 5 year coverage at 17%. This is a good rate. The DPR for Free Cash Flow for 2019 is 36% with 5 year coverage at 23%.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2019 is 0.20. The Liquidity Ratio for 2019 is 1.44. The Debt Ratio is a bit lower than what I like at 1.44. I prefer this to be 1.50 or higher. Leverage and Debt/Equity Ratios for 2019 at 3.26 and 2.26. These are also a bit high as I prefer hem to be under 3.00 and 2.00, respectively.

The Total Return per year is shown below for years of 5 to 24 to the end of 2019 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.
2014	5	10.36%	33.46%	32.11%	1.35%
2009	10	8.72%	29.08%	27.94%	1.14%
2004	15		17.03%	16.55%	0.48%
1999	20		18.63%	18.25%	0.38%
1995	24		21.87%	21.51%	0.36%

The Total Return per year is shown below for years of 5 to 24 to the end of 2019 in 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	7.90%	30.42%	29.27%	1.15%
2009	10	6.54%	26.17%	25.38%	0.78%
2004	15		16.49%	16.11%	0.38%
1999	20		19.22%	18.91%	0.31%
1995	24		22.06%	21.77%	0.28%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 32.48, 42.62 and 50.41. The corresponding 10 year ratios are 31.11, 39.56 and 46.76. The corresponding historical ratios are 13.70, 18.48 and 25.12. The current P/E Ratio is 66.08 based on a stock price of $163.26 and EPS estimate for 2020 of $2.47 ($1.93 US$). This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.

I get a Graham Price of $32.28. The 10 year low, median, and high median Price/Graham Price Ratios are 3.26, 4.04 and 5.09. The current P/GP Ratio is 5.06 based on a stock price of $163.26. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 8.47. The current P/B Ratio is 8.73 based on a stock price of $127.88, Book Value of $638M, and Book Value per Share of $14.64. The current P/B Ratio is 3% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$. (This testing is slightly different is CDN$ where the difference is 0% and so the stock price testing suggests that the stock price is relatively reasonable but at the median.)

I get a 10 year median Price/Cash Flow per Share Ratio of 12.72. The current P/CF Ratio is 26.64 based on a Stock price of $127.88, Cash Flow per Share estimate of $4.80 and Cash Flow $209M. The current P/CF ratio is 109% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You get similar results in CDN$. The estimate Cash Flow per Share is some 92% above the Cash Flow per Share for 2019, so you have to wonder?

I get an historical and 6 year median dividend yield of 0.90%. The current dividend yield is 0.52% based on dividends of $0.66 and a stock price of $127.88. The current dividend yield is 43% below the historical and 6 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You get similar results in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.78. The current P/S Ratio is 2.05 based on Revenue estimate for 2020 of $2,718M, Revenue per Share of $62.38 and a stock price of $127.88. The current ratio is 162% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. You get similar results in CDN$.

Results of stock price testing is that the stock price is probably expensive. The dividend yield test shows this and it is confirmed by the P/S Ratio test. The P/E Ratios, the P/GP Ratios and the P/B Ratios for this stock are very high over the past 10 years.

Is it a good company at a reasonable price? I think that the stock price is relatively expensive. Looking at long term return now, the company has done quite well for Shareholders. I like dividend growth companies, but this company currently and mostly has very low dividend yields. You would not buy this company for the dividend. The last dividend increase was moderate (at 10%) and this is a good sign.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2) and Hold (4) recommendations. The consensus recommendation would be a buy. The 12 month stock price consensus is $172.81 ($135.00 US$). This implies a total return of 6.37% with 5.85% from capital gains and 0.52% from dividends.

Analysts like this stock on Stock Chase. Adam Othman on Motley Fool thinks this is a great stock to buy in the next market crash. A writer on Simply Wall Street says that the CEO of this company is paid a higher remuneration than the industry median. A writer on Simply Wall Street talks about ownership of this company. The blogger Dividend Earner takes a look at this stock.

FirstService Corp operates in two business divisions: FirstService Residential and FirstService Brands. FirstService Residential has service contracts to manage thousands of residential communities. FirstService Brands provides property services to residential and commercial customers. The company earns the majority of its revenue in the United States, with the remaining revenue generated in Canada. Its web site is here FirstService Corp.

The last stock I wrote about was about was Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more. The next stock I will write about will be Stantec Inc (TSX-STN, NYSE-STN) ... learn more on Monday, December 14, 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.

Keg Royalties Income Fund

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. The stock price is currently relatively cheap. With lower dividends, DPR’s are much better. Analysts seem to have lost interest in this stock. It is totally dependent on one other company for its income. Neither are a good sign. Recipe Unlimited Corporation’s debt ratios are not good. See my spreadsheet on Keg Royalties Income Fund.

I do not own this stock of Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF). This was a stock suggested by one of my readers. I like dinning at The Keg. I find the food very good. At stock forums I viewed, investors liked this company as it is guaranteed 4% of the sales at Keg restaurants as income to the fund. So, I decided to take a look at it.

When I was updating my spreadsheet, I noticed that over 99% of the Balance Sheet depends on Keg Restaurants Ltd. KRL is owned by Recipe Unlimited Corp (TSX-RECP, OTC-RCPOF). The only information that is in the financial reports for Keg Royalties is the Revenue, that KRL receives on which the income of Keg Royalties is based. I took a quick look online of Financial statements for RECP for the past 5 years to 2019. Revenue is going up, but Net Income is going down. The Balance sheet for RECP shows Shareholders’ equity going down. The Cash Flow statements shows Operating Income going up.

There is interesting accounting on the third quarterly report. Gross profit is $44.895 (last year it was $8.274 which is rather normal for this company). The Gross Profit is so high because the company added in $39,696 for Fair value gain on Exchangeable Partnership units. The Basic earnings per Fund Unit is $3.95 with the Diluted earnings per Fund Unit at $0.46. There is this big difference because to calculated the Diluted profit for the period, the $39,696 for Fair value gain on Exchangeable Partnership units is taken off the profit for the period. The company has this accounting each year, but for the 3rd quarter of 2018, the amount was $1,445 which was in line with other years.

The dividend yields are currently moderate with dividend growth going in the wrong direction. The current dividend yield is moderate (2% to 4% range) at 4.95%. The 5 and 10 year dividend yields are good (5% to 6% ranges) at 5.57% and 5.37%. The historical dividend yield is high (7% or higher) at 7.33%. This stock used to be an income trust and this accounts for past high dividend yields.

In the past the dividends have grown, but growth was never consistent and dividends were often flat. Currently dividends are going down. The restaurant business has been hit hard by Covid. After a 63% decline in dividends, dividends went back up by 43%. Net result is a decline in dividends of 47%.

The Dividend Payout Ratios (DPR) are improving. They never got their DPR for EPS under control since changing from an Income Trust. The DPR for EPS for 2019 was 102% with 5 year coverage at 123%. The DPR for 2020 is expected to be 56% with a 5 year coverage of 111%. The DPR for CFPS for 2019 was 53% with 5 year coverage also at 53%. This is too high. The DPR for CPFS is expect to be around 39% in 2020. There is some agreement in Free Cash Flow. The DPR for FCF for 2019 was 101% with 5 year coverage at 98%.

Debt Ratios are fine for Keg, but not for RECP. The Long Term Debt/Market Cap Ratio for 2019 is 0.80. The Liquidity Ratio is 2.04. The Debt Ratio is 1.71. The Leverage and Debt/Equity Ratios for 2019 is 2.41 and 1.41. Since it really counts on what Recipe Unlimited Corporation TSX-RECP does, as some 99% of the assets of Keg depend on this company. As far as I gather from online data, RECP’s Liquidity Ratio for 2019 is 0.66 (which means that current assets cannot cover current liabilities), and Debt Ratio for 2019 is 1.18. This are not good ratios.

The Total Return per year is shown below for years of 5 to 18 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	3.41%	4.07%	-2.66%	6.73%
2009	10	-1.18%	12.38%	3.62%	8.76%
2004	15	0.33%	9.37%	1.16%	8.22%
2001	18	4.47%	11.47%	2.38%	9.09%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.86, 18.65, 20.13. The corresponding 10 year ratios is 17.02, 18.98 and 20.93. The corresponding historical ratios are 11.90, 13.11 and 14.31. The current P/E Ratio is 10.52 based on a stock price of $12.10 and EPS estimate for 2020 of $1.15. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $17.99. The 10 year low, median, and high median Price/Graham Price Ratios are 1.28, 1.43 and 1.57. The current P/GP Ratio is 0.67 based on a stock price of $12.10. 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 1.95. The current P/B Ratio is 0.97 based on a stock price of $12.10, Book Value of $142M, and Book Value per Share of $12.51. The current ratio is 51% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 9.22. The current P/CF Ratio is 7.39 based on last 12 months Cash Flow of $18.6M, Cash Flow per Share of $1.64 and a stock price of $12.10. The current ratio is 23% 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 7.33%. The current dividend yield is 4.96% based on dividends of $0.60 and a stock price of $12.10. The current dividend yield is 32% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is the recent dividend cut.

I get an historical median dividend yield of 6.37%. The current dividend yield is 4.96% based on dividends of $0.60 and a stock price of $12.10. The current dividend yield is 22% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem is the recent dividend cut.

The 10 year median Price/Sales (Revenue) Ratio is 7.36. The current P/S Ratio is 4.52 based on Royalty Income Estimate for 2020 of $30.4M, Income per Share of $2.68 and a stock price of $12.10. The current ratio is 39% 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. The dividend yield tests are not good ones because of the recent cut in dividends. Of course, when a company cuts the dividend, it is never a good sign. The P/S Ratio test says the stock price is cheap, as does most of the other testing.

Is it a good company at a reasonable price? The price is reasonable. The dividend used to grow although once it because a corporation, it could not afford the dividends it was paying. They seem now under control. My problem with the stock that it is totally reliant on one company which is Keg Restaurants, for which I cannot find financials. Keg Restaurants is owned by Recipe Unlimited Corp and the financials I find online show that their debt ratios are not the sort I like. Personally, I would not buy this stock.

When I look at analysts’ recommendations, I find one Buy (1) for one month ago. There are no current recommendations I can find. There is no price consensus. It is not a good sign when analysts lose interest in a stock.

The last analyst comments for this stock on Stock Chase was in 2017 and it was rather negative. Kris Knutson on Motley Fool likes this stock for its higher yield. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Simply Wall Street looks at insider trading. He says there is only insider selling, but it is so low, he does not think it matters much. The Keg announces its third quarterly results for 2020 on the Keg Site.

Keg Royalties Income Fund is a Canada based company. The organization works under the Restaurant business sector. The target market of this company is those people who want higher end casual dining experience. The majority of its revenue is in the form of royalty income. Its web site is here Keg Royalties Income Fund.

The last stock I wrote about was about was Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more. The next stock I will write about will be FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more on Friday, December 11, 2020 around 5 pm. Tomorrow on my other blog I will write about Investing Sins.... learn more on Thursday, December 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.

Stella-Jones Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Materials. The stock price is relatively cheap on this dividend growth stock. It also has great debt ratios. The current dividend is good for this stock at 1.33% as this stock often has yields below 1%. Insiders are buying. See my spreadsheet on Stella-Jones Inc.

I do not own this stock of Stella-Jones Inc (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.

When I was updating my spreadsheet, I noticed that this company has great debt ratios. For example, the Liquidity Ratio for 2019 was 6.34 with 5 year median at 6.70. The Debt Ratio for 2019 was 2.30 and 5 year also at 2.30. I like these ratios to be 1.50 or above. So, the ratios for this company are very good.

The dividend yields are low with dividend growth moderate. The current dividend yield is low (under 2%) at 1.33%. The 5, 10 and historical dividend yields are also low at 0.98%, 1.00% and 1.07%. The dividend growth is currently moderate (8% to 14% ranges) at 14.9%. Although the last increase, which was for 2020 was low (below 8%) at 7.14%. You can see in the chart below that in the past the dividend growth tended toward good (15% or higher).

The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2019 is 24% with 5 year coverage at 20%. The DPR for CFPS for 2019 is 12% with 5 year coverage at 11%. Site do not agree on Free Cash Flow, but they are similar. The DPR for FCF for 2019 is 175% with 5 year coverage at 36%. FCF was low in 2019. Analysts expect the DPR for FCF in 2020 to be at around 17%.

Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2019 is 0.24. The Liquidity Ratio for 2019 is 6.54. The Debt Ratio for 2019 is 2.30. The Leverage and Debt/Equity Ratio for 2019 is 1.77 and 0.77.

The Total Return per year is shown below for years of 5 to 25 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	14.87%	4.02%	2.76%	1.26%
2009	10	20.06%	21.13%	19.28%	1.85%
2004	15	24.88%	26.09%	23.80%	2.29%
1999	20	21.23%	24.66%	22.72%	1.94%
1994	25		16.37%	15.49%	0.88%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.83, 20.24 and 22.30. The corresponding 10 year ratios are 15.54, 18.17 and 21.44. The corresponding historical ratios are 9.14, 12.43 and 16.03. The current P/E Ratio is 14.91 based on a stock price of $45.03 and EPS estimate for 2020 of $3.02. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $38.04. The 10 year low, median, and high median Price/Graham Price Ratios are 1.22, 1.50 and 1.77. The current P/GP Ratio is 1.18 based on a stock price of $45.03. 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 2.60. The current P/B Ratio is 2.11 based on a Book Value of $1,437M, Book Value per Share of $21.30 and a stock price of $45.03. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 21.08. The current P/CF Ratio is 11.88 based on Cash Flow per Share estimate for 2020 of $3.79, Cash Flow of $191M and a stock price of $45.03. The current ratio is 44% 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 1.07%. The current dividend yield is 1.33% based on dividends of $0.60 and a stock price of $45.03. The current dividend yield is 25% 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 1.00%. The current dividend yield is 1.33% based on dividends of $0.60 and a stock price of $45.03. The current dividend yield is 33% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.55. The current P/S Ratio is 1.23 based on a stock price of $45.03, Revenue estimate for 2020 of $2,458M and Revenue per Share of $36.55. The current ratio is 21% 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 relatively cheap. This is showing the dividend yield tests and is confirmed by the P/S Ratio test. All the test but the P/B Ratio test shows the same thing. The P/B Ratio shows the stock price as close to cheap.

Is it a good company at a reasonable price? This is a dividend growth stock, which is the kind I like. The stock price is not only reasonable, but it is cheap. It also has good debt ratios which is also something I like.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (2). The consensus is a Buy. The 12 month stock price target is $51.63. This implies a total return of 15.99%, with 14.66% from capital gains and $1.33% from dividends.

An analyst says on Stock Chase that this stock has not been this cheap in a decade. Christopher Liew on Motley Fool likes this stock because of its resiliency in the pandemic. A writer on Simply Wall Street likes this stock because it is a growing business and the CEO pay is reasonable. A writer on Simply Wall Street says that the company has the ability to adequately reinvest at a good rate of return.. Brian Kelly on The Sault Star talks about his investment in this stock.

Stella-Jones Inc produces and sells lumber and wood products. The company sells products in five main customer categories. The railway ties category, the utility poles category, the other three categories are residential lumber for use in housing construction, industrial products for use in marine and building industries, and logs and lumber, which sells wood products to homebuilding markets. The majority of revenue comes from the United States. Its web site is here Stella-Jones Inc.

The last stock I wrote about was about was First Capital REIT (TSX-FCR, OTC-FCRGF) ... learn more. The next stock I will write about will be Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more on Wednesday, December 9, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Investing.... learn more on Tuesday, December 8, 2020 around 5 pm.

Also, on my book blog I have put a review of the book The Great Rupture by Viktor Shvets 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.

First Capital REIT

Sound bite for Twitter and StockTwits is: Dividend Paying REIT. The stock price is cheap to reasonable. It is currently not a dividend growth stock, but was one in the past. See my spreadsheet on First Capital Realty.

I do not own this stock of First Capital Realty (TSX-FCR.UN, OTC-FCXXF). Myowneradvistor.com asked me to look into this stock. In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.

When I was updating my spreadsheet, I noticed sometime when looking at Free Cash Flow at different sites, I wonder if I am looking at the same company. With this company, I checked and I was looking at the same company, but FCF are extremely different. Neither set of figures make any sense.

The dividend yields are currently good with dividend growth currently non-existent. The current dividend is good (5% and 6% ranges) at 5.51%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 4.21%, 4.56% and 4.89%. The dividend increases used to be low at around 2% per year, but there has been no increase in dividends since 2016.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 49% with 5 year coverage at 53%. Unfortunately, analysts feel that the DPR for 2020 will be in the range of 316% (with 5 year coverage at 57%). The DPR for CFPS for 2019 was 44% with 5 year coverage at 48%. This is too high and would prefer it to be at 40% or less of CFPS. I do not know what to make of the Free Cash Flow I can find so I am not covering this under DPR.

Debt Ratios are fine. The Long Term Debt/Market Cap is 0.97. The Liquidity Ratio is 0.63 and if you add in cash flow after dividends, you get only to 0.77. Only by adding back the current portion of the long term debt do you get a reasonable ratio of 1.82. (You have to ensure that this current portion of long term debt is rolled over.) The Debt Ratio is 1.79 and this is good. The Leverage and Debt/Equity Ratio are fine at 2.27 and 1.27, respectively.

The Total Return per year is shown below for years of 5 to 25 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	0.35%	6.68%	2.26%	4.42%
2009	10	0.73%	9.63%	4.42%	5.20%
2004	15	1.19%	9.66%	3.89%	5.77%
1999	20	2.17%	12.16%	5.16%	7.00%
1994	25	6.46%	12.96%	5.38%	7.58%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.17, 12.89 and 14.60. The corresponding 10 year ratios are 11.73. 13.40 and 15.06. The corresponding historical ratios are 16.30, 18.83 and 20.41. The current P/E Ratio is 57.78 based on a stock price of $15.60 and EPS estimate for 2020 of $0.27. This stock price testing suggests that the stock price is relatively expensive.

However, the EPS drops in 2020 by some 84%. If we look at the P/E Ratio for 2021, which is now not far away, the P/E Ratio is 15.45 based on a stock price of $15.60 and EPS estimate for 2021 of $1.01. The last 12 month EPS is also $1.01 and that is to the end of the third quarter, so you have to wonder about an EPS for 2020 of just $0.27. However, this stock price testing suggests that the stock price is relatively reasonable but above the median.

Since this stock is now a REIT, we should also look at the Price/Funds from Operations Ratios. The 5 year low, median, and high median Price/Earnings per Share Ratios are 16.00, 17.61 and 18.42. The corresponding 10 year ratios are 16.03, 17.65 and 18.88. The current P/FFO Ratio is 15.76 based on a stock price of $15.60 and FFO estimate for 2020 of 0.99. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $20.75. The 10 year low, median, and high median Price/Graham Price Ratios are 0.88, 0.96 and 1.03. The current P/GP Ratio is 0.75 based on a stock price of $15.60. 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 1.15. The current P/B Ratio is 0.81 based on a Book Value of $4,234M, Book Value per Share of $19.32 and a stock price of $15.60. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 17.45. The current P/CF Ratio is 15.15 based on Cash Flow per Share for last 12 months of $1.03, Cash Flow of $227 and a stock price of $15.60. 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.

I get an historical median dividend yield of 4.89%. The current dividend yield is 5.51% based on dividends of $0.86 and a stock price of $15.60. The current dividend yield is 13% 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 4.56%. The current dividend yield is 5.51% based on dividends of $0.86 and a stock price of $15.60. The current dividend yield is 21% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 6.26. The current P/S Ratio is 5.06 based on Revenue estimate for 2020 of $675M, Revenue per Share of $3.08, and a stock price of $15.60. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is almost cheap.

Results of stock price testing is that the stock price is cheap to reasonable. The median dividend yield tests say the stock price is cheap to reasonable and this is confirmed by the P/S Ratio test which says the stock price is reasonable, but it is very close to the cheap side. Most of the rest of the testing is showing the stock as either cheap or reasonable.

Is it a good company at a reasonable price? The stock price is reasonable. I like dividend growth stocks and this stock is currently not a dividend growth stock. With REITs, l like the dividends to at least grow at the rate of inflation when the yield is good. Currently, the dividends are not growing and the last increase was 5 years ago. However, dividends or distributions did grow in the past. If the company does again grow their distribution in the future, I would feel differently about this stock.

Historical background inflation is 3%, but we are in, supposedly, a historically low inflation period. (Although I really doubt this as my expenses have grown more than the low inflation rate the government is showing.)

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (2) and Hold (3). The consensus would be a Buy. The 12 month stock price is $17.79. This implies a total return of 19.55% with 14.04% from capital gains and 5.51% from dividends.

The last analyst to remark on this stock on Stock Chase did not like it because it is in the retail space. Daniel Da Costa on Motley Fool thinks you should buy this stock because it is way too cheap. The executive summary on Simply Wall Street nicely summarizes this stock. It gets two stars out of 5 stares. A writer on Simply Wall Street says the CEO has a higher than industry median remuneration. The company announces the Third Quarterly Results for 2020 on Newswire.

First Capital REIT is a developer, owner, and operator of mixed-use urban real estate in Canada's populated centres. The company's focus is on creating thriving neighbourhoods that create value for businesses, residents, communities, and investors. Its web site is here First Capital Realty.

The last stock I wrote about was about was Wild Brain Ltd (TSX-WILD, OTC- WLDBF) ... learn more. The next stock I will write about will be Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more on Monday, December 7, 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.

Wild Brain Ltd

Sound bite for Twitter and StockTwits is: Consumer Sector Stock. The stock price is probably cheap, but might just be reasonable. Debt Ratios need improving. They had dividends in the past, but could not cover them with EPS. This stock is not expected to see a profit until 2023. See my spreadsheet on Wild Brain Ltd.

I do not own this stock of Wild Brain Ltd (TSX-WILD, OTC-WLDBF). In the CanTech Letter of May 2014 Byron Capital says investors should accumulate DHX Media aggressively. I also have a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014. They have a year-end date of June of each year, so I am covering June 2020 in this report.

When I was updating my spreadsheet, I noticed that this company has had a name change from DHX Media Ltd (TSX-DHX, OTC-DHXMF) to Wild Brain Ltd (TSX-WILD, OTC- WLDBF) after I last reviewed the stock last year. The dividends were not well covered in the past. They have had earning losses since 2017 and analysts do not see any positive earnings until 2023.

The dividends have been suspended (in 2019). Dividends used to be low (under 2%) to moderate (2% to 4%). The low dividend yield is 0% and the high is 2.93%. The 5, and 7 median dividend yields are low at 0.80 and 0.89. The average increase in dividends over the past 7 years was 9.8%

The Dividend Payout Ratios (DPR) shows dividends were not well covered in the past. Because of earning losses, I cannot calculate the DPR for the last year of dividends in 2018. The 5 year coverage at that point was 99%. They were paying out more than they could afford. The DPR for 2018 for CFPS was 27% with 5 year coverage at 52%. The sites do not agree on Free Cash Flow, but none suggest that the dividends were affordable.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2020 is too high at 2.26. It should be lower than 1.00 and some analysts like it at 0.50 or lower. It is better in 2021 because of a higher stock price, but long term debt also went up. The Liquidity Ratio at 1.86 is good. The Debt Ratio at 1.42 is a bit low and I prefer it to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 are 14.09 and 9.89. I prefer these to be below 3.00 and 2.00.

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	0.00%	-31.84%	-32.59%	0.75%
2009	10	0.00%	7.22%	4.10%	3.12%
2004	15		-2.18%	-3.56%	1.39%

The 5 year low, median, and high median Price/Earnings per Share Ratios are negative. The corresponding 10 year ratios are 19.03, 26.68 and 33.68. The corresponding historical ratios are 12.40, 18.20 and 24.00. The current P/E Ratio is negative because analysts expect a $0.04 EPS loss this year. Next year the EPS is also a loss at $0.06. The P/E Ratio for 2023 is 34.20 as the EPS is expected to be $0.05and the current stock price is $1.71. This stock price testing suggests that the stock price is relatively expensive.

I am guessing a Graham Price of $0.72 is probably fair. The 10 year low, median, and high median Price/Graham Price Ratios are 1.42, 2.37 and 3.19. The current P/GP Ratio is 2.37 based on a stock price of $1.71. 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 2.31. The current P/B Ratio is 3.71 based on a Book Value of $79M, Book Value per Share of $0.46 and a stock price of $1.71. The current ratio is 60% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 4.43. The current 4.89 based on Cash Flow per Share estimate for 2021 of $0.35, Cash Flow of $59.8M and a stock price of $1.71. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I cannot do any dividend yield tests because this stock has suspended it dividend.

The 10 year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 0.68 based on Revenue estimate for 2021 of $443M, Revenue per Share of $2.53 and a stock price of $1.71. The current ratio is 64% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive cheap.

Results of stock price testing is that the stock price is probably cheap. The stock price testing is all over the place and this is mainly because this company is having a hard time and it is showing up in their financials. For example, the Book Value is rapidly falling and that is why this test shows the stock price as expensive.

Is it a good company at a reasonable price? The stock price is probably reasonable, but this would be a risky stock to buy as it is not expected to do anything much in the near term.

When I look at analysts’ recommendations, I find Hold (6) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $1.71. This would imply a total return of 0%. There can only be return from capital gains as the dividends are suspended.

There are no recently entries on Stock Chase but all the old ones are negative. Ambrose O'Callaghan on Motley Fool thinks the new deal with Apple TV is positive for this company. The executive overview on Simply Wall Street gives this stock 2 starts out of 5 and says it will be unprofitable in the near term. . The company’s first quarterly results for 2021 are on WFTM News. An article on The Chronicle Herald talks about how a change in YouTube’s advertising policy affect revenues at WildBrain.

WildBrain Ltd is a children's content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget, and Degrassi franchise. The company owns the independent library of children's content. It licenses its content to broadcasters and streaming services worldwide and generates royalties through its consumer products program. Its web site is here Wild Brain Ltd.

The last stock I wrote about was about was Northland Power Inc (TSX-NPI, OTC-NPIFF) ... learn more. The next stock I will write about will be First Capital REIT (TSX-FCR, OTC-FCRGF) ... learn more on Friday, November 4, 2020 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2020.... learn more on Thursday, December 03, 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.