Chartwell Retirement Residences

Sound bite for Twitter and StockTwits is: Dividend Growth Health Care. Stock price would seem to be reasonable. Stock is more like a Real Estate stock than a Health Care stock to me. This company has a lot of debt. Dividend yield is good, but dividend increases low. See my spreadsheet on Chartwell Retirement Residences.

I do not own this stock of Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF). I saw this stock on a dividend investing blog and looked it up on Stock Chase.

When I was updating my spreadsheet, I noticed that they have a very weak Balance Sheet. The current liabilities are far greater than the current assets. Even adding in cash flow after dividends, the company does not get close to covering current liabilities. It is only when you also add back the current mortgage payable amount that we get a value over 1.00 and it is 1.06. If we use cash flow after working capital it will be 1.31. This company has heavy debt. This could be a problem in economic hard times.

It seems more like a Real Estate company than a Health Care company to me. The use of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) shows that it is being valued like a Real Estate Investment Fund (REIT).

The dividend yields are good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 5.41%. The 5 and 10 year median dividend yields are moderate (2% to 4% ranges) at 3.99% and 4.80%. The historical dividend yield is good at 5.78%. The dividend growth is low (under 8%) with 5 year growth per year at 2.13%. They have been paying dividends for 16 years and in that time, they have raised the dividends 7 times, but have decreased them 4 times.

The Dividend Payout Ratios (DPR) are only fine for FFO and AFFO. The DPR for EPS for 2021 is 876% with 5 year coverage at 1169%. Because this stock has the characteristics of a REIT, I am also looking Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). The DPR for FFO for 2020 is 80% with 5 year coverage at 66%. The DPR for AFFO for 2020 is 88% with 5 year coverage at 71%. The DPR for CFPS is 51% with 5 year coverage at 48%. I prefer these ratios to be at 40% or less. The DPR for Free Cash Flow for 2020 is 100% with 5 year coverage at 362%. However, there is a difference in what different sites are reporting for FCF.

Debt Ratios need to improve and the company has a lot of debt. The Long Term Debt/Market Cap Ratio is fine but a bit high at 0.92. They have a lot of mortgage debt so I also looked at Debt/Covering Assets and the ratio is fine at 0.71. The Debt Ratio is low at 1.27. I prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 4.75 and 3.75. I prefer these to be below 3.00 and 2.00.

The Liquidity Ratio is very low at 0.32. Even if you add in Cash Flow after dividends, it is still very low at 0.63. If this ratio is not 1.00 or higher it means that current assets cannot cover current liabilities. Even if you add back the current portion of the long term debt, you only get to a ratio of 1.06. This ratio should be 1.50 or higher.

The Total Return per year is shown below for years of 5 to 17 to the end of 2020. 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.
2015	5	2.13%	2.99%	-1.92%	4.91%
2010	10	1.21%	9.63%	3.49%	6.14%
2005	15	-3.60%	2.77%	-2.16%	4.93%
2003	17	-3.48%	5.81%	-0.53%	6.34%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 230.43, 245.40 and 260.37. The corresponding 10 year ratios are 126.04, 161.90 and 189.57. The corresponding historical ratios are all negative and so useless. The current P/E Ratio is negative and so unusable. The P/E Ratios are very high because the stock is not making much in earnings.

Since this stock is more like a REIT, we need to look at Price/ Funds from Operations Ratios. The 5 year low, median, and high median Price/FFO Ratios are 14.94, 16.08 and 17.63. The corresponding 10 year ratios are 12.61, 14.44 and 16.73. The current P/FFO Ratio is 17.95 based on a stock price of $11.31 and FFO estimate for 2021 of $0.57. This is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

Since this stock is more like a REIT, we need to look at Price/ Adjusted Funds from Operations Ratios. The 5 year low, median, and high median Price/AFFO Ratios are 15.82, 17.20 and 18.91. The corresponding 10 year ratios are 13.74, 15.75 and 17.98. The current P/FFO is 19.84 based on a stock price of $11.31 and AFFO estimate for 2021 of $0.63. This is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $7.43 using FFO in the equation rather than EPS. In the last 17 year, EPS has been positive 7 times and negative 10 times. This makes the Graham Price using EPS more guess work than anything else. The 10 year low, median, and high median Price/Graham Price Ratios are 1.26, 1.45 and 1.66. The current P/GP Ratio is 1.52 based on a stock price of $11.31. The current ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 3.20. The current P/B Ratio is 2.91 based on a Book Value of $833M, Book Value per Share of $3.89 and a stock price of $11.31. The current ratio is 9% 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 15.25. The current P/CF Ratio is 14.56 based on Cash Flow for the last 12 months of $166M, Cash Flow per Share of $0.78 and a stock price of $11.31. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 5.78%. The current dividend yield is 5.41% based on a stock price of $11.31 and dividends of $0.612. The current dividend yield is 6% 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 4.80%. The current dividend yield is 5.41% based on a stock price of $11.31 and dividends of $0.612. The current dividend yield is 13% 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 2.78. The current P/S Ratio is 2.66 based on a stock price of $11.31, Revenue estimate for 2021 of $909M and Revenue per Share of $4.25. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price seems to be reasonable and probably below the median. The 10 year median dividend yield test shows this as does the P/S Ratio test. The historical median dividend yield test says reasonable but above the median. The P/B Ratio and P/CF Ratios say he stock price is reasonable and below the median. The test involving FFO and AFFO say differently, but this stock is not exactly a REIT, but it is very much like a Real Estate stock.

Is it a good company at a reasonable price? The stock seems to be selling at a reasonable price. I would not personally be interested in this stock as I do not want anymore Real Estate stock. The dividend yields are good, but increases are small to non-existent. I rather have a growth company with lower dividend yields but better dividend growth.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $14.07. This implies a total return of 29.81% with 24.40% from capital gains and 5.41% from dividends.

When I look at analysts’ recommendations last year, I found Strong Buy (1), Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus was $12.46. This implies a total return of 11.92% with 6.68% from capital gains and 5.24% from dividends based on a stock price of $11.68. What happened was a decline in the stock price of 3.17% and so total return was 2.07% with a capital loss of 3.17% and dividends of 5.24%. Last year I said that the stock price was reasonable.

Analysts on Stock Chase mostly think this is a buy. Kay Ng Motley Fool thinks the stock is cheap and now is the time to buy. Christopher Liew on Motley Fool think this stock is an excellent dividend play. A writer on Simply Wall Street via Yahoo Finance says this stock is trading near its fair value of $10.71 but there are four risk warnings of (1) Interest payments are not well covered by earnings, (2) Dividend of 5.43% is not well covered by earnings, (3) Large one-off items impacting financial results and (4) Shareholders have been diluted in the past year. The company reports its third quarter results via Yahoo Finance.

Chartwell Retirement Residences is an unincorporated open-ended trust. The company is engaged in the ownership, operation, and management of retirement and long-term care communities in Canada. Its web site is here Chartwell Retirement Residences.

The last stock I wrote about was about was Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more. The next stock I will write about will be Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more on Monday, December 20, 2021 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.

Richards Packaging Income Fund

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price seems expensive at the current time. Expect lower dividend yields in the future. It is a growth company. Shareholders have done well in the past with both dividend growth and Capital Gain growth. See my spreadsheet on Richards Packaging Income Fund.

I do not own this stock of Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF). A member of one of my investment clubs suggested this stock.

When I was updating my spreadsheet, I noticed that the stock price has fallen over 25% year to date. It would seem that 2020 was a good year, but so far this year, quarterly Revenue and EPS has fallen. If you look at the year to date Revenue and EPS of the third quarter, Revenue is down 6% and EPS is down almost 29%. From the chart below, the current lower stock price really only affects the Total Return for the last 5 years.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2015	5	8.40%	22.09%	18.14%	3.95%
2010	10	5.32%	29.00%	22.50%	6.51%
2005	15	1.09%	19.33%	13.62%	5.71%
2004	16	4.42%	17.97%	12.27%	5.70%

The dividend yields are moderate with 5 year dividend growth moderate, but currently flat. The current dividend yield is moderate (2% to 4% ranges) at 2.31%. The 5 year median dividend yield is also moderate at 3.68%. The 10 year median dividend yield is good (5% to 6% range) at 5.29%. The historical median dividend yield is high (7% and above) at 7.31%. This stock used to be an income trust and so the high past dividend yields. The dividend growth for the past 5 years is 8.40% per year. However, this is because there were big dividend increases in 2016 and 2017. The dividends have been flat since then.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 is 30% with 5 year coverage at 58%. The DPR for CFPS for 2020 is 15% with 5 year coverage at 26%. The DPR for Free Cash Flow for 202 is 22% with 5 year coverage at 40%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is very good at just 0.03. I also look Debt to Cash Flow and how many years it would take to pay off the debt in cash flow. For this, 3 years is a good number, but for this company it is 0.32 years (i.e., less than 1 year). The Liquidity Ratio is low at 1.32, but add in cash flow after dividends and it is 1.73. The Debt Ratio is good at 1.83. The Leverage and Debt/Equity Ratios are fine at 2.20 and 1.20.

The Total Return per year is shown below for years of 5 to 16 to the end of 2020. 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.
2015	5	8.40%	36.07%	32.00%	4.08%
2010	10	5.32%	29.27%	24.27%	5.00%
2005	15	1.09%	20.57%	15.41%	5.15%
2004	16	4.42%	17.55%	12.98%	4.57%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.46, 17.92, 20.37. The corresponding 10 year ratios are 13.98, 16.47 and 19.38. The corresponding historical ratios are 13.64, 15.70 and 18.38. The current P/E Ratio is 15.42 based on EPS estimate for 2021 of $3.70 and a stock price of $57.05. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $34.48. The 10 year low, median, and high median Price/Graham Price Ratios are 1.01, 1.35 and 1.64. The current P/GP Ratio is 1.65 based on a stock price of $57.05. The current ratio is above the high of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Different people calculate the Graham Price differently. In the above equation, I am using the formula with the EPS part using the EPS estimate for 2021. Another way of calculating this is to use the Graham Price formula with the last 3 EPS. In this case for years 2018 to 2020. Here Graham Price is $32.96 and the 10 year low, median, and high median Price/Graham Price Ratios are 1.10, 1.57 and 1.90. The P/GP Ratio is 1.73 based on a stock price of $57.05. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.29. The current P/B Ratio is 3.99 based on a stock price of $57.05, Book Value of $166M, and a Book Value per Share of $14.28. The current ratio is 74% above the 10 year median 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 9.21. The current ratio is 12.71 based on Cash Flow for the last 12 months of $52.3, Cash Flow per Share of $4.49 and a stock price of $57.05. The current ratio is 38% 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 7.31%. The current dividend yield is 2.31% based on a stock price of $57.05 and a dividend of $1.32. The current dividend yield is 68% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 5.29%. The current dividend yield is 2.31% based on a stock price of $57.05 and a dividend of $1.32. The current dividend yield is 56% 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 0.82. The current P/S Ratio is 1.51 based on Revenue estimate for 2021 of $441M. The current ratio is 84% 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 on the expensive side. Most of the testing is showing this. The exception is the P/E Ratio where the stock price is showing as reasonable. The best test probably is the P/S Ratio test and it is showing the stock as relatively expensive. The problem with the dividend yield tests is the fact that this company used to be an Income Trust and Income Trust always paid relatively higher dividend yield than other companies.

Is it a good company at a reasonable price? I think that the price is on the high side. Shareholders have had good returns in both dividends and capital gains. However, I would expect that the dividend yield to be lower in the future. Although this might be a company to watch and buy when the price is more reasonable.

This company had its best year probably in 2020 as far as Revenue, EPS and Cash Flow is concerned. I see that the stock price with a 5 year capital gain of 32% is rising faster than the Revenue with 5 year gain of 14%, EPS with a 5 year gain of 18%. However, Cash Flow is rising faster with a 5 year gain of 38% and Cash Flow per Share with a 5 year gain also of 38%.

On the other hand, the stock is down some 25% to date. The 5 year capital gain growth to date is 18%. The 5 year growth in EPS to date is 34%, but the 5 year Revenue Growth to Date is 10% and the 5 year growth in Cash Flow is 9%. Year to date, Revenue is up but EPS and Cash Flow is down. The Final thing is that it is Revenue that in the end that will push growth in EPS and Cash Flow.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the beginning P/E Ratios level has not predicted good returns and neither has the Dividend Yield. It would seem that only the P/S Ratio has and the current one is higher than in the past.

In the following chart the total return for the 10 years to December 31, 2020 is 29.27% per year. The beginning yield was at 8.98%, and the P/E Ratio and the P/S Ratio were at 10.06 and 0.58. Does this chart change my opinion of the stock price?

# Years	Total Ret	Beg P/E	Beg P/S	Beg Yield
5	36.07%	19.77	0.90	4.60%
10	29.27%	10.06	0.58	8.98%
15	20.57%	13.36	0.56	12.54%
16	17.55%	20.57	0.99	6.06%
current		15.42	1.50	2.31%

When I look at analysts’ recommendations, I find a Strong Buy (1) recommendation. The consensus would be a Strong Buy. The 12 month stock price consensus (but there is only one) is $80.00. This implies a total return of 42.54% with 40.23% from capital gains and 2.31% from dividends.

Most of the analysts on Stock Chase like this stock as a buy. Nikhil Kumar on Motley Fool thinks this stock will out outperform the market. Adam Othman on Motley Fool thinks this company has a stable and profitable business and the stock would be good to add growth to a TFSA. A writer at Simply Wall Street via Yahoo Finance says that the company has a sustained record of paying dividends and might rise them again in the future. The company announces their third quarter results on Globe Newswire.

Richards Packaging Income Fund (the “Fund”) is a limited purpose, open-ended trust created on February 26, 2004 to invest in distribution businesses throughout North America. The Fund commenced operations on April 7, 2004 when the Fund completed an initial and indirectly purchased 96% of the securities of Richards Packaging Inc. The remaining 4% represented the exchangeable shareholder ownership by management. Richards Packaging Inc is involved in packaging distribution businesses. Its web site is here Richards Packaging Income Fund.

The last stock I wrote about was about was Magna International Inc (TSX-MG, NYSE-MGA) ... learn more. The next stock I will write about will be Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more on Friday, December 17, 2021 around 5 pm. Tomorrow on my other blog I will write about Health Care Stocks.... learn more on Thursday, December 16, 2021 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.

Magna International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The Stock Price might be reasonable, but at the far end of the reasonableness range. Shareholders have done well with this company over the long term. The company’s Dividend Payout Ratios and Debt Ratios are fine. 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.

When I was updating my spreadsheet, I noticed that analyst’s expectation of Revenue for 2020 was $32,007, but the Revenue in 2020 was a bit higher at $32,647. However, they have now lowered their expectation for 2021 and 2022 to $35,973 and $39,874 from $37,796 and $40,023. The same thing happened to EPS. The expected EPS for 2020 was $1.98, but it came in at $2.52. However, they still lowered their estimates for 2020 and 2021 to $4.54 and $6.77 from $5.66 and $7.22.

Item	Years	2020	2021	2022	2023
Revenue	In 2020	$32,007	$37,796	$40,023
Revenue	In 2021	$32,647	$35,973	$39,874	$44,892
EPS	In 2020	$1.98	$5.66	$7.22
EPS	In 2021	$2.52	$4.54	$6.77	$10.10

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4%) at 2.15%. The 5 and 10 year dividend yields are also moderate at 2.49% and 2.29%. The historical median dividend yield is low (below 2%) at 1.90%. The dividend growth is moderate (8% o 14% ranges) at 12.28% per year over the past 5 years. The last dividend increase was low (below 8%) at 7.5% and it was for 2021.

If the company increases the dividend at the same rate as they used per year over the past 5 years of 12.28%, then in 25 years’ time, the dividend yield on your original investment would be at 39.62% assuming current starting dividend of $2.18 CDN$.

Div Yd	Div	Years	At IRR	Div Inc
3.91%	$3.89	5	12.28%	78.42%
6.98%	$6.93	10	12.28%	218.33%
12.45%	$12.37	15	12.28%	467.96%
22.21%	$22.07	20	12.28%	913.34%
39.62%	$39.37	25	12.28%	1707.98%

Also, assuming the same dividend increases for the future, your initial cost would be covered 93.72% based on current stock cost of $99.36 CDN$.

Div Pd	Cost	Years	At IRR	Div Cov
$13.91	$99.36	5	12.28%	14.00%
$34.84	$99.36	10	12.28%	35.07%
$72.19	$99.36	15	12.28%	72.65%
$93.12	$99.36	20	12.28%	93.72%
$130.47	$99.36	25	12.28%	131.31%

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 was 63% with 5 year coverage at 25%. The DPR for EPS is expected to be lower in 2021 at 38%. The DPR for Cash Flow per Share for 2020 was 18% with 5 year coverage at 13%. The DPR for Free Cash Flow for 2020 was 21% with 5 year coverage at 22%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.19 and is low and good. The Liquidity Ratio for 2020 is low at 1.37, but if you add in Cash Flow after dividends it is good at 1.63. The Debt Ratio for 2020 is good at 1.69. The Leverage and Debt/Equity Ratios are fine at 2.52 and 1.49.

The Total Return per year is shown below for years of 5 to 32 to the end of 2020 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.
2015	5	12.28%	12.36%	9.93%	2.43%
2010	10	24.97%	15.63%	13.25%	2.38%
2005	15	10.71%	11.94%	10.36%	1.58%
2000	20	7.67%	11.03%	9.24%	1.79%
1995	25	10.25%	9.13%	7.60%	1.52%
1990	30	12.47%	14.68%	11.95%	2.73%
1987	32	9.25%	13.83%	11.33%	2.50%

The Total Return per year is shown below for years of 5 to 32 to the end of 2020 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.
2015	5	12.70%	14.30%	11.79%	2.52%
2010	10	22.52%	12.77%	10.54%	2.23%
2005	15	10.06%	11.37%	9.56%	1.80%
2000	20	8.55%	12.15%	10.02%	2.13%
1995	25	10.56%	9.19%	7.58%	1.61%
1990	30	12.10%	14.05%	11.50%	2.55%
1987	35	9.08%	13.52%	11.08%	2.44%

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 7.39, 9.37 and 10.69. The corresponding historical ratios are 7.97, 11.44 and 12.54. The current P/E Ratio is 17.29 based on a stock price of $99.36 and EPS estimate for 2021 of $5.75 ($4.54 US$). The current ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is done in CDN$.

I get a Graham Price of $80.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 0.79 and 0.61. The current P/GP Ratio is 1.24 based on a stock price of $99.36. This ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is done in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.54. The current P/B Ratio is 1.98 based on a Book Value of $11,782M, Book Value per Share of $39.18 and a stock price of $78.48. The current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is done in US$. You will get a similar result in CDN$.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.05. The current P/CF Ratio is 9.15 based on Cash Flow per Share estimate for 2021 of $8.48 and a stock price of $78.48. The current ratio is 81% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is done in US$. You will get a similar result in CDN$.

The CFPS estimate for 2021 of 8.48 is a drop of 22%. The 2022 CFPS is higher at 12.10. The 2022 P/CF Ratio is 6.41 based on Cash Flow per Share estimate for 2021 of $12.10 and a stock price of $78.48. The current ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is done in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 1.99%. The current dividend yield is 2.22% based on a stock price of $78.48 and dividends of $1.72. The current dividend yield is 11% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is done in US$. You will get a similar result in CDN$.

I get an historical median dividend yield of 2.33%. The current dividend yield is 2.22% based on a stock price of $78.48 and dividends of $1.72. The current dividend yield is 5% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is done in US$. You will get a similar result in CDN$.

The 10 year median Price/Sales (Revenue) Ratio is 0.44. The current P/S Ratio is 0.65 based on a stock price of $78.48 and Revenue estimate for 2021 of $35,973M, and Revenue per Share of $119.61. The current ratio is 48% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive. This testing is done in US$. You will get a similar result in CDN$.

Because there is a 10% drop in expected Revenue for 2021, I will also look at 2022. The 10 year median Price/Sales (Revenue) Ratio is 0.44. The 2022 P/S Ratio is 0.59 based on a stock price of $78.48 and Revenue estimate for 2021 of $39,874M, and Revenue per Share of $132.58. The current ratio is 33% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive. This testing is done in US$. You will get a similar result in CDN$.

Results of stock price testing is that the stock price could be reasonable but on the top end of the reasonableness range. The Dividend Yield testing is showing that the stock price is either reasonable and below the median or above the median. However, the P/S Ratio testing is showing the stock price as relatively expensive. All the other tests are showing the stock price as expensive.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the beginning Dividend Yield for good returns maybe a bit high. The beginning P/E Ratio and P/S Ratios today are generally higher than for good yields in the past. There are exceptions in the past, like year 25 for P/S Ratio and P/E Ratios and year 10 for Dividend Yield.

In the following chart the total return for the 10 years to December 31, 2020 is 15.63% per year. The beginning yield was at 0.84%, and the P/E Ratio and the P/S Ratio were at 12.49 and 0.53. Does this chart change my opinion of the stock price? Not really.

# Years	Total Ret	Beg P/E	Beg P/S	Beg Yield
5	12.36%	8.30	0.51	2.03%
10	15.63%	12.49	0.53	0.84%
15	11.94%	12.21	0.35	2.11%
20	11.03%	6.51	0.31	2.96%
25	9.13%	17.77	1.16	1.20%
30	14.68%	-1.55	0.22	1.92%
32	13.83%	16.97	0.27	4.04%
current		17.29	0.66	2.19%

Is it a good company at a reasonable price? The current price could be reasonable. This has been a good investment for shareholders in the past. Both the Total Return and the dividend income has been good. There will be some volatility in both the stock price and earnings.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (7), Hold (3) and Underperform (1). The consensus would be a Buy. The 12 month stock price of $119.76 ($94.60 US$). This implies a total return of 22.73% with 20.54% from capital gains and 2.19% from dividends based on a current stock price of $99.36.

Analysts on Stock Chase like this stock. One says buy on weakness. Amy Legate-Wolfe on Motley Fool says to invest in Magna if you want to invest in EV at a lower risk. Puja Tayal Motley Fool says Magna is one of his top picks for December 2021. A writer from Simply Wall Street on Yahoo Finance talks about insider Anton Mayer buying shares. There is a Zacks Equity Research paper on Yahoo Finance talking about this stock.

Magna International automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contracted vehicle assembly. Roughly half of Magna's revenue comes from North America while Europe accounts for approximately 44%. 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 Wednesday, December 15, 2021 around 5 pm. Tomorrow on my other blog I will write about Buy Now, Pay Later.... learn more on Tuesday December 14, 2021 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 seems to be expensive at the present time. Shareholders have done well in the past with this company. The dividend yield is very low at present at only 0.93%. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc (TSX-STN, NYSE-STN). I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. I lot of people were recommending it as a great stock. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. 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 the stock price is up 69% this year to $69.63 the highest it has ever been. In this case, it does make a difference in Total Return, especially for 5 and 10 years.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2015	5	8.40%	16.73%	15.47%	1.26%
2010	10	9.28%	19.22%	17.58%	1.64%
2005	15		12.97%	12.17%	0.81%
2000	20		17.36%	16.61%	0.75%
1995	25		20.25%	19.56%	0.69%
1994	26		14.25%	13.75%	0.49%

The dividend yields are low with dividend growth moderate. The current dividend yield is low (below 2%) at 0.93%. The 5 and 8 year median dividend yields are also low at 1.59% and 1.45%. The dividend growth is moderate (8% to 14% ranges) at 8.40% per year for the last 5 year. The last dividend increase was lower at 6.45% and it occurred in 2021.

This stock has a very low dividend yield, so it might be of interest to look at what sort of yield is now being made on investments made at 5, 10, 15, 20 and 25 years ago. The yield is shown in the table below. For example, if this stock was bought 15 years ago, the shareholder would have a current yield on the original investment of 6.02%. Also, I like to look at what percentage of the original cost that would have been paid by dividends if the stock was purchased 5, 10, 15, 20, and 25 years ago. See the chart below. For example, if this stock was purchased 15 years ago, a shareholder would have covered 42.73% of the cost of the shares.

Years	Yield	Cost Cov
5	2.05%	8.86%
10	5.08%	36.11%
15	6.02%	42.73%
20	24.56%	174.42%
25	89.49%	635.59%

At the current yield of 0.93% and the dividend increase of 8.40% per year over the past 5 years, in years from 5 to 25, a shareholders can expect growth in yield to be as shown in the table below. So at the lower starting yield, the growth is yield is a lot lower.

Years	Growth	Yield
5	49.69%	1.39%
10	124.08%	2.08%
15	235.43%	3.12%
20	402.12%	4.66%
25	651.64%	6.98%

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 is 40% with 5 year coverage at 46%. The DPR for CFPS for 2020 is $11% with 5 year coverage at 17%. The DPR for Free Cash Flow is 12% with 5 year coverage at 21%. Free Cash Flow varies by site, but not my much.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.14 and is low and good. The Liquidity Ratio is good at 1.59. The Debt Ratio is good at 1.78. The Leverage and Debt/Equity Ratios are fine at 2.27 and 1.27.

The Total Return per year is shown below for years of 5 to 26 to the end of 2020. 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.
2015	5	8.40%	5.19%	3.77%	1.42%
2010	10	9.28%	13.16%	11.53%	1.63%
2005	15		10.95%	9.96%	0.99%
2000	20		17.52%	16.53%	0.99%
1995	25		18.74%	17.90%	0.83%
1994	26		14.18%	13.51%	0.67%

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 19.09, 22.46 and 25.87. The corresponding historical ratios are 14.75, 16.51 and 21.84. The current P/E Ratio is 32.75 based on a stock price of $71.07 and EPS estimate for 2021 of $2.17. The current P/E Ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $29.73. The 10 year low, median, and high median Price/Graham Price Ratios are 1.28, 1.49 and 1.79. The current P/GP Ratio is 2.39 based on a stock price of $71.07. This ratio is above the high ratio of the 10 year median ratios. 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 2.07. The current P/B Ratio is 3.93 based on a stock price of $71.07, Book Value of $2011.8M, and Book Value per Share of $18.10. The current ratio is 90% above the 10 year median 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 11.59. The current P/CF Ratio is 21.09 based on a stock price of $71.07, Cash Flow per Share estimate for 2021 of $3.37 and Cash Flow of $374.6M. The current ratio is 82% above the 10 year median ratios. This stock price testing suggests that the stock price is expensive.

Because the Cash Flow per Share in 2020 is expected to drop by some 38%, I also looked at the P/CF Ratio for 2022. This ratio is 14.71 based on CFPS estimate for 2022 of $4.83, Cash Flow of $536.9M and a stock price of 71.07. This ratio is 27% above the 10 year median ratio of 11.59. This stock price testing suggests that the stock price is relatively expensive.

I get an historical and 8 year median dividend yield of 1.45%. The current dividend yield is 0.93% based on dividends of $0.66 and a stock price of $27.07. The current dividend yield is 36% below the historical and 8 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 1.13. The current P/S Ratio is 2.17 based on Revenue estimate for 2021 of $3,646M, Revenue per Share of $32.80 and a stock price of $71.07. The current ratio is 92% 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 that it is expensive. The Dividend Yield test and the P/S Ratio tests show the stock price as expensive. Also, all the tests show this too.

Is it a good company at a reasonable price? The stock price is expensive, not reasonable at this point in time. It has been doing better in recent times, except for 2020. Analysts certainly expect that it will do quite well over the next few years. Long Term total returns has been good for shareholders.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (7) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $76.83. This implies a total return of $9.03% with 8.10% from capital gains and 0.93% from dividends based on a current stock price of $41.68.

When I looked at analysts’ recommendations last year, I found Strong Buy (3), Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price is $46.00. That implied 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. What happened was a total return of 72.00% with 70.51% from capital gains and 1.49% from dividends. I said last year that the stock price was probably reasonable.

Most, but not all analysts on Stock Chase think it is a buy. Jitendra Parashar on Motley Fool says this company could be another great Canadian growth stock. Jitendra Parashar on Motley Fool thinks that the synergies from the assets of the Cardno firm can keep this stock rising in the near term. Esteban Duarte of Bloomberg on Yahoo Finance says Stantec is looking to buy acquisitions in US because of the recently passed infrastructure bill.

Stantec Inc is a global engineering and construction firm. The Company's services include engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics, from initial project concept and planning through to design, construction administration, commissioning, maintenance, decommissioning, and remediation. 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 Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more. The next stock I will write about will be Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more on Friday, December 10, 2021 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2021.... learn more on Thursday, December 09, 2021 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 might be reasonable based on the dividend yield. Dividends are now back to pre-pandemic level, so this is a good sign. There are no recent analyst recommendations. It is totally dependent on Keg Restaurants Limited (KRL) for which there is little financial information. 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 there is a huge difference in Basic and Diluted EPS. The Basic EPS is 1.96 and the Diluted EPS is 0.59. The difference is the number of Exchangeable Partnership Units. What I have never liked about looking at this firm is that some 99% of their assets are dependent on Keg Restaurants Limited (KRL) and they do not publish KRL financial statements. The last thing I noticed is that no analysts is giving estimates in 2021. I also cannot find any analyst’s ratings.

The dividend yields are high with dividend growth maybe restarting. The current dividend yield is high (7% and higher) at 7.53%. The 5, 10 and historical dividend yields are good (5% and 6% ranges) at 5.95%, 6.12% and 6.94%. Dividends were cut in 2020 by 63% in 2020 but have since then been increased by 170% and back to the old rate given in 2019. I am assuming as the economy gets back online, the dividends will start to again be increased but they do have a mixed record when it comes to dividend increases.

The Dividend Payout Ratios (DPR) are probably fine as they get royalty income and they can pay out all that they receive. The DPR for EPS for 2020 was 109% with 5 year coverage at 126%. The DPR for CFPS for 2020 was 56% with 5 year coverage 54%. The DPR for Free Cash Flow for 2020 was 94% with 5 year coverage at 99%.

Debt Ratios are fine, but the company is totally dependent on KRL and I do not have their financials. I calculate the Long Term Debt/Market Cap ratio at 0.94. However, there could be various interpretations of what their Long Term Debt is. The Liquidity Ratio is 2.70. The Debt Ratio is 1.87. The Leverage and Debt/Equity Ratios are 2.15 and 1.15.

The Total Return per year is shown below for years of 5 to 19 to the end of 2020. 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.
2015	5	-8.34%	-0.52%	-7.35%	6.82%
2010	10	-6.63%	7.28%	-0.68%	7.96%
2005	15	-3.43%	8.80%	-0.18%	8.98%
2001	19	0.98%	10.81%	1.03%	9.77%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.39, 18.33 and 20.13. The corresponding 10 year ratios are 17.02, 18.98 and 24.05. The corresponding historical ratios are 11.44, 13.90 and 15.42. There are no analyst estimates for EPS and the EPS for the last 12 months is negative, which will give a P/E Ratio that is negative. We cannot do any P/E Ratio testing for this stock.

I get a Graham Price of $11.02. 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 1.37 based on a stock price of $15.08. The current ratio is between the low and median of the 10 year median 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 1.95. The current P/B Ratio is 1.65 based on a stock price of $15.08, Book Value of $104M, and Book Value per Share of $9.14. The current ratio is 16% 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 8.77. The current P/CF Ratio is 12.72 based on Cash Flow for the last 12 months of $13.5M, Cash Flow per Share of $1.19 and a stock price of $15.08. The current ratio is 70% 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 6.94%. The current dividend yield is 7.53% based on dividends of $1.135 and a stock price of $15.08. The current dividend yield is 8.5% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 6.12%. The current dividend yield is 7.53% based on dividends of $1.135 and a stock price of $15.08. The current dividend yield is 23% 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 7.36. The current P/S Ratio is 13.65 based on Keg Income for last 12 months of $12.54, Revenue per Share of $1.10 and a stock price of $15.08. The current P/S Ratio is 86% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.36 based on the Royalty Pool. The current P/S Ratio is 0.44 based on Keg Royalty Pool for last 12 months of $385M, Royalty Pool per Share of $33.93 and a stock price of $15.08. The current P/S Ratio is 24% 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 maybe reasonable or cheap, according to the dividend yield tests, but is expensive according to the P/S Ratio tests.

Is it a good company at a reasonable price? The price might be reasonable. What I do not like is that this stock is completely dependent on the Keg Restaurants Ltd for which you get little accounting information beyond the Sales.

When I look at analysts’ recommendations, I find a Sell (1). This is an old recommendation from November 2021. Most sites are saying there are 0 ratings (because analysts are not following this stock). It is never a good sign when analysts are not following or stop following a stock. There seems to be Sell (1) recommendation in September, October and November and no recommendations in December.

Analyst on Stock Chase have not review this stock since 2017 when they said it was a Hold. It is never a good sign when analysts lose interest in a stock. Stock Chase gives this stock one star out of five. Christopher Liew on Motley Fool says that management feels that the Keg will have a swift and strong recovery after the pandemic. Adam Othman on Motley Fool reviews this company in July 2021. A report from Simply Wall Street on Yahoo Finance talks about how they are concerned about this stock’s trends. Keg Income Fund talks about their third quarterly results on Newswire.

The Keg Royalties Income Fund is a Canada based company. The organization works under the Restaurant business sector. The business model of this company is that all Keg restaurants are placed under it, so 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 Waterloo Brewing Ltd (TSX-WBR, OTC, BIBLF) ... learn more. The next stock I will write about will be Stantec Inc (TSX-STN, NYSE-STN) ... learn more on Wednesday, December 08, 2021 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks December 2021 .... learn more on Tuesday, December 07, 2021 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.

Waterloo Brewing Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price may currently be reasonable. I worry about the debt level and the ability to pay dividends.See my spreadsheet on Waterloo Brewing Ltd.

I do not own this stock of Waterloo Brewing Ltd (TSX-WBR, OTC-BIBLF). This stock has come up on the Dividend All-Star List at Dividend Growth Investing and Retirement site. It also just starting paying dividends in 2016. The company’s financial year ends January 31 each year. I am looking at the financial year ending January 31, 2021.

When I was updating my spreadsheet, I noticed there is not much in the way of analysts’ estimates for this company. For example, not all sites are showing estimates for EPS and Net Income. Debt Ratios for the last couple of years have not been good. For example, the current Liquidity Ratio for 2021 is 0.46. If it is under 1.00, it means that current assets cannot cover current liabilities. Even if you add in Cash Flow after dividends, it is just 0.65. Generally, a ratio is 1.50 or higher is what is acceptable.

The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% range) at 2.00%. The 5 and 6 median dividend yields are also moderate at 2.33% and 2.51%. The company just started to pay dividends in 2016. The dividend growth over the past 5 years is good (15% and higher) at 17.28% per year. The last dividend increase was for 4.9% and it was in 2021.

The Dividend Payout Ratios (DPR) are expected to improve. The DPR for EPS for 2021 is 133% with 5 year coverage also at 133%. Analysts expect that the DPR for EPS will be around 53% in 2022 (next financial year). The DPR for CFPS for 2021 is 25% with 5 year coverage at 29%. The DPR for Free Cash Flow is negative. The DPR for FCF for 2022 is expected to be 163%.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio is 0.01 and so very low and good. The Debt Ratio for 2021 is low at 1.41 and it is best if this ratio is 1.50 or better. The Leverage and Debt/Equity Ratios for 2021 are 3.43 and 2.43 respectively. These are too high. I prefer them to be below 3.00 and below 2.00.

The Liquidity Ratio is very low at 0.46 and not much better when you add in Cash Flow after Dividends which gets you only to 0.65. In a situation like this you want to look at the Assets/Current Liabilities Ratio and with this ratio, the higher the better. However, for Waterloo it is just 2.12. It would appear that the company has a current hard time covering current liabilities. This is not good.

The Total Return per year is shown below for years of 5 to 30 to the end of 2020. 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.
2015	5	17.28%	24.93%	22.22%	2.70%
2010	10		20.57%	19.10%	1.47%
2005	15		6.77%	6.11%	0.66%
2000	20		15.30%	14.66%	0.63%
1995	25		4.87%	4.49%	0.38%
1990	30		4.13%	3.83%	2.21%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 37.14, 49.63 and 72.38. The corresponding 10 year ratios are 42.07, 50.81 and 65.47. The corresponding historical ratios are 32.01, 48.74 and 57.79. The P/E Ratios are very high because of years of low EPS and stock prices will only go so low depending on the perceived value of the company. The current P/E Ratio is 26.33 based on a stock price of $5.53 and EPS estimate for 2022 of $0.21. The current P/E Ratio is below the low of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $2.20. The 10 year low, median, and high median Price/Graham Price Ratios are 1.62, 2.21 and 2.74. The current P/GP Ratio is 2.51 based on a stock price of $5.53. The current ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.05. The current P/B Ratio is 5.40 based on a Book Value of $36M, Book Value per Share of $1.02 and a stock price of $5.53. The current ratio is 163% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The P/B Ratio is currently very high because of a decreasing Book Value per Share.

I get a 10 year median Price/Cash Flow per Share Ratio of 10.84. The last 12 months cash flow is negative, so I cannot do any testing for P/CF Ratio.

I get an historical (6 year) median dividend yield of 2.51%. The current dividend yield is 2.00% based on dividends of $0.11 and a stock price of $5.53. The current dividend yield is 20% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 5 year median dividend yield of 2.33%. The current dividend yield is 2.00% based on dividends of $0.11 and a stock price of $5.53. The current dividend yield is 14% below the historical 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 1.52. The current P/S Ratio is 1.82 based on Revenue estimate for 2022 of $115M, Revenue per Share of $3.25 and a stock price of $5.53. 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.

Results of stock price testing is that the stock price maybe reasonable. It is not relatively cheap. The P/S Ratio test says it is reasonable and above the median, as does the 5 year median dividend yield test. The stock price seems at the top end of the reasonable range.

Is it a good company at a reasonable price? The stock price may currently be reasonable. I worry about the debt level and the ability to pay dividends. I would not be interested in this stock myself at the present time.

When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (2). The consensus would be a Strong buy. The 12 month target stock price is $9.66. This implies a total return of 76.68% with 74.68% from capital gains and 2.00% from dividends.

Analysts on Stock Chase in March and May of this year really liked this stock. Kay Ng on Motley Fool likes the growth in revenue of this company. Ambrose O'Callaghan on Motley Fool thinks this company is in a booming business. The company on Cision talks about winning Bronze in the corresponding category at the 2021 Canadian Brewing Awards. A writer on Simply Wall Street on Yahoo Financial worries about the company being able to afford its dividends.

Waterloo Brewing Ltd engages in the production and distribution of alcohol-based products. Its products are distributed to end consumers primarily through The Beer Store in Ontario and Provincial Liquor Boards across Canada. Its web site is here Waterloo Brewing Ltd.

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 Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more on Monday, December 6, 2021 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 might be cheap. it would be a highly speculative buy. Analysts are paying more attention to this stock and that is a positive. Debt Ratios are not good and companies can easily get in trouble because of this. 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 saw a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014.

When I was updating my spreadsheet, I noticed that the stock price went up a lot this year. It is up 91% year to date. Also, in the last couple of year more analyst have been following this stock and more have been giving estimates. It is always interesting when analysts pay more or pay less attention to a stock. Analysts tend to pay more attention to stocks that are doing well and less to those that are doing poorly.

The company suspended their dividends in 2018. There has been no information on what their future intentions are. When they did pay dividends, the dividend yield was low (below 2%). They could not cover their dividends because they had not made a profit since 2017. They could not cover the dividends by Cash Flow either.

Debt Ratios need improving. The Long Term Debt/Market Cap is current at 1.00. It has been over 2.00 in the recent past. Debt was growing but stock price was not. The Liquidity Ratio is good at 1.76. The Debt Ratio is too low at 1.37. I prefer this to be at 1.50 or above. The Leverage and Debt/Equity Ratios are far too high at 26.37 and 19.29 when I prefer then to be below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 15 to the end of 2020. 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.
2015	5	0.00%	-26.28%	-26.72%	0.44%
2010	10	0.00%	8.47%	5.79%	2.68%
2005	15		-0.36%	-1.48%	1.12%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and therefore, unusable. The corresponding 10 year ratios are 5.95, 8.64 and 11.33. The corresponding historical ratios are 5.95, 8.64 and 11.33. The current P/E Ratio is negative and so unusable. The P/E Ratio for 2023 is 41.63 based on stock price of $3.33 and EPS estimate for 2023 Financial year of $0.08. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $0.76. The 10 year low, median, and high median Price/Graham Price Ratios are 1.45, 2.47 and 3.54. The current P/GP Ratio is 4.38 based on a stock price of $3.33. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive. The P/GP Ratios are very high where the top P/GP Ratio for a buy is considered to be 1.50.

I get a 10 year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 10.37 based on a Book Value of $55M, Book Value per Share of $0.32 and a stock price of $3.33. The current ratio is 299% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The current ratio is high because of falling book value which has decreased at 37% per year over the past 5 years. This is a problem.

I get a 10 year median Price/Cash Flow per Share Ratio of 3.60. The current P/C Ratio is 9.00 based on a stock price of $3.33, Cash Flow per Share estimate for 2022 of $0.37, Cash Flow of $63.6M. The current ratio is 150% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The P/CF Ratio is 9.00 and that is not a high ratio. Based on this ratio, the stock price would be reasonable. The problem with the 10 year median ratio is that Cash Flow has varied a lot in the past 10 years from a high of 49.44 to a low of negative 134.25. This would be a better test if all the P/CF Ratios were positive and closer in value.

I cannot do any dividend yield testing as the dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 1.17 based on Revenue of $490M, Revenue per Share of $2.85 and a stock price of $3.33. The current ratio is 38% 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. The P/S Ratio is the best test because the ratios, although they vary a lot are all positive figures. This test says the stock price is cheap. Most of the other tests are dealing with very high ratios and 10 year median ratios that include both positive and negative values. The current P/GP Ratio is high because of low EPS and dropping Book Value.

Is it a good company at a reasonable price? The stock price might be reasonable, but the debt ratios suck. Over the past 17 years I have data, the company has earned a profit 8 times and has losses 9 times. Over the past 10 years, there has been 5 years of positive earnings and 5 years of earning losses. This would not be my first choice of a stock to buy in the consumer area. However, people are getting interested in this stock and it has gone up a lot this year, but any buy would be highly speculative.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $4.49. This implies a total return of 34.83% all from capital gains.

Analysts last looked at this stock on Stock Chase in 2019 and produced a lot of recommendations of Do not Buy. Stock Chase gives this stock one star out of 5. Christopher Liew on Motley Fool says it is a dark horse stock that may surprise you. Ambrose O'Callaghan on Motley Fool says it is minnow, but still worth considering as a future stock today. Wild Brain reports on its first quarter of 2022 via Cision. This article from Cision talks about WildBrain spark expands from YouTube to the Metaverse.

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. The company through its subsidiary operates networks of children's channels on YouTube. Its web site is here Wild Brain Ltd.

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 Waterloo Brewing Ltd (TSX-WBR, OTC, BIBLF) ... learn more on Friday, December 03, 2021 around 5 pm. Tomorrow on my other blog I will write about If It Sounds Too Good.... learn more on Thursday, December 02, 2021 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.