What I wanted to do today is compare the Canadian Banks that I follow. What I can categorize is that Insiders are doing a lot of selling. It this selling because our bankers need the money or is this selling due to the fact they lack faith in their banks. This is not clear. Unfortunately, insider selling is not a new problem with our banks. The insiders do not seem to keep stock options granted and they tend to have more options than shares.
None of the banks has raised their dividends in 2009. Part of the reason for this is that they are waiting to see if they will have deal with more new rules from our government. Most analysts feel that dividends will not be raised under the end of this year or early next year.
I have updated my index spreadsheet and I have re-arranged it with the Banks on top. See www.spbrunner.com/stocks/indexport.htm. I have also added in some further information on the banks. In this sub-section, I have looked at items to compare the banks on Buy Signals. If you had noticed, there is a big range of whether analysts feel you should currently buy any of these stocks. Three of the banks have recommendations ranging all the way from Strong Buy to Sell. Obviously, there is a big range of opinion on whether any of these banks should be bought.
The other thing I looked at was what yield you would get on your original investment if you held this stock for 5 or 10 years. The winners on this score are the Royal Bank and the Bank of Nova Scotia. Why I look at this is because I invest for the long term, and a high yield after holding a stock for 5 or 10 years is very desirable from my point of view. Another reason I look at this is because I live off the dividends that I earn.
When you lay out the different ratios and compare the Graham Price to the stock price, the TD bank would appear to be the cheapest. I admit I have only included a few ratios for the CIBC bank, as this is the one bank I do not follow. This might just be the cheapest. I do not follow it as I feel it is the worst run Canadian Bank. I do not think it is a long term stock to hold. However, you can make money on CIBC if you buy it when the stock price is depressed and you sell when it recovers.
If you look at the dividends and their returns, the best banks seem to be the Bank of Nova Scotia and the Royal Bank. I have shares in the Royal Bank and I am quite pleased with the returns I have made on this bank. I am especially pleased with the dividend income.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 31, 2009
Wednesday, December 30, 2009
Bank of Nova Scotia 2
I am continuing my review of the Bank of Nova Scotia (TSX-BNS). I follow this bank, but I have not invested in it. The reason I have not invested in this bank is that I already have enough bank investments with Bank of Montreal, TD Bank and Royal Bank. I think this is also a great bank.
As with my review of the other banks, insider selling is very high. In this bank, there is some insider buying, but little of it. All the insiders have far more stock options than shares. The insider selling is at $47.7M and the insider buying is at $1.3M. This bank has the lowest percentage of insider selling at .09% of the market cap of this stock. These banks certainly do not give potential buyers of their stock any good feelings about their stock when they are so busy dumping their shares.
When looking at P/E ratios, I find that the 5 year average low is 11 and the 5 year average high is 14.7. There is not much of a spread here in these ratios. The P/E Ratio I get for 2010 is 13.7. Sites that show a P/E based on last 12 months earnings get a higher P/E of 15. None of these P/E ratios are particularly low or high. So, we do not learn much from this.
When I look at the dividend yield, I get a current yield of 3.9% and the 5 year average is 4%. This is very close, but it is not telling you that the price is good. When I look at the Price/Book value, I find the current ratio is about 90% of the 10 year average. A good price signal is if the current ratio is 80% or less of the 10 year average. The last thing to look at is the Graham Price. I get a Graham Price for 2010 of $44.12 and the current price is some 10% above this. So, I find that none of the above point to a good current price. However, none of this point to an unreasonably high price neither.
When I look at Analysts recommendations, I find that they range from Strong Buy to Underperform. There are no sell recommendations on this stock. There are a lot of analysts following this stock and the vast majority of the recommendations are a Hold. The next highest recommendation is a Buy. The consensus would be a Hold. (See my site for information on analyst ratings.) The analysts giving this stock a buy, feels that this will be the first Canadian Bank to recover from the current crisis. The Holds feel that the price is a little high.
As I had said before, I do not intend to buy this stock personally, as I already have enough bank stocks. I certainly follow it because I may want to buy it in the future as I feel this is good, well run Canadian Bank. I think that the current price is a reasonable one. My only concern and I have this will all the banks, is the large amount of insider selling going on.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
As with my review of the other banks, insider selling is very high. In this bank, there is some insider buying, but little of it. All the insiders have far more stock options than shares. The insider selling is at $47.7M and the insider buying is at $1.3M. This bank has the lowest percentage of insider selling at .09% of the market cap of this stock. These banks certainly do not give potential buyers of their stock any good feelings about their stock when they are so busy dumping their shares.
When looking at P/E ratios, I find that the 5 year average low is 11 and the 5 year average high is 14.7. There is not much of a spread here in these ratios. The P/E Ratio I get for 2010 is 13.7. Sites that show a P/E based on last 12 months earnings get a higher P/E of 15. None of these P/E ratios are particularly low or high. So, we do not learn much from this.
When I look at the dividend yield, I get a current yield of 3.9% and the 5 year average is 4%. This is very close, but it is not telling you that the price is good. When I look at the Price/Book value, I find the current ratio is about 90% of the 10 year average. A good price signal is if the current ratio is 80% or less of the 10 year average. The last thing to look at is the Graham Price. I get a Graham Price for 2010 of $44.12 and the current price is some 10% above this. So, I find that none of the above point to a good current price. However, none of this point to an unreasonably high price neither.
When I look at Analysts recommendations, I find that they range from Strong Buy to Underperform. There are no sell recommendations on this stock. There are a lot of analysts following this stock and the vast majority of the recommendations are a Hold. The next highest recommendation is a Buy. The consensus would be a Hold. (See my site for information on analyst ratings.) The analysts giving this stock a buy, feels that this will be the first Canadian Bank to recover from the current crisis. The Holds feel that the price is a little high.
As I had said before, I do not intend to buy this stock personally, as I already have enough bank stocks. I certainly follow it because I may want to buy it in the future as I feel this is good, well run Canadian Bank. I think that the current price is a reasonable one. My only concern and I have this will all the banks, is the large amount of insider selling going on.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 29, 2009
Bank of Nova Scotia
The last bank I am reviewing is the Bank of Nova Scotia (TSX-BNS). I follow this bank, but I have not invested in it. The reason I have not invested in this bank is that I already have enough bank investments with Bank of Montreal, TD Bank and Royal Bank. I think this is also a great bank.
When you look at total return for the last 5 years, this bank has done better than the Bank of Montreal, but not as well as the TD Bank and the Royal Bank. The total return for the last 5 years was 6.7% per year. The 10 year total return was better at 14.6% per year. For this stock, slightly more than 4% per year was the Dividend return portion of the Total Return.
As with other Canadian banks, the dividend growth for this stock was good. It was some 12% per year for the last 5 years and some 16% per year for the last 10 years. This bank has relatively good growth in revenues over the last 5 years, coming in at just over 8% per year. However, the revenue growth for the last 10 years was not very good, coming in at just under 4% per year. The growth in Book Value for this stock was also quite good, coming in at 10.7% per year and 9.5% per year for the last 5 and 10 years. As the all Canadian Banks, cash flow is not great, and this year this bank as a negative cash flow.
As with all banks, this one has a low Asset/Liability Ratio. This ratio is at 1.05, which is pretty standard for Canadian Banks. This bank had the highest Return on Equity for 2009 and for the last 5 year average. These figures were 13.6% and 17.5% respectively. The last thing to mention is the Accrual Ratio. This is rather high at 4.5% and also, the Cash Flow from Operations was negative. Neither is good.
This bank has a fairly good year in 2009. I will review what the analysts say about this stock tomorrow.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When you look at total return for the last 5 years, this bank has done better than the Bank of Montreal, but not as well as the TD Bank and the Royal Bank. The total return for the last 5 years was 6.7% per year. The 10 year total return was better at 14.6% per year. For this stock, slightly more than 4% per year was the Dividend return portion of the Total Return.
As with other Canadian banks, the dividend growth for this stock was good. It was some 12% per year for the last 5 years and some 16% per year for the last 10 years. This bank has relatively good growth in revenues over the last 5 years, coming in at just over 8% per year. However, the revenue growth for the last 10 years was not very good, coming in at just under 4% per year. The growth in Book Value for this stock was also quite good, coming in at 10.7% per year and 9.5% per year for the last 5 and 10 years. As the all Canadian Banks, cash flow is not great, and this year this bank as a negative cash flow.
As with all banks, this one has a low Asset/Liability Ratio. This ratio is at 1.05, which is pretty standard for Canadian Banks. This bank had the highest Return on Equity for 2009 and for the last 5 year average. These figures were 13.6% and 17.5% respectively. The last thing to mention is the Accrual Ratio. This is rather high at 4.5% and also, the Cash Flow from Operations was negative. Neither is good.
This bank has a fairly good year in 2009. I will review what the analysts say about this stock tomorrow.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 28, 2009
Bank of Montreal 2
The bank I am currently dealing with is the Bank of Montreal (TSX-BMO). I invested in this bank in 1983. I have only tracked it on quicken since December 1987 and since then I have made a return of 16% per year. This has not done as well for me as the Royal Bank has. My dividend yield on my original investment is just over 19% per year.
This bank also has a huge amount of insider selling. The insider selling is 52.8M and the Insider buying is 1.4M over the past year. This is not as bad as the TD or the Royal Bank in dollar amount, but it is still heavy in selling. If you compare the selling to the market cap of this stock, the selling totals .18% for this stock and this put the selling between the Royal Bank and the TD Bank. The selling has been heavy since this stock hit bottom in March 2009. Here again the selling is of options. Insiders own far more in options than in stock.
You certainly to not get a warm fuzzy feeling about buying any Canadian Bank stock when the insiders are very busy dumping their shares. However, for this bank the CFO has retained his shares and has even added to them slightly by keeping options granted. This is not something that has happened for the other banks I have reviewed.
When looking at the Ratios, I find that the P/E at 12.8 is between the 5 year average low of 11 and the 5 year average high of 16. When you look at sites that use a P/E based on the last 12 months earnings, the P/E comes in higher closer to 17.5. The current dividend yield at 5.1% is higher than the 5 year average of 4.7%. When I look at the Price/Book Value, I find the current ratio is about 80% of the 10 year average, so this points to a good price.
The last price signal to look at is the Graham Price. The Graham Price at $59.41 is some 8.4% higher than the current price. From all this, I find that all price signals, except the P/E ratio, points to a good current price. The Accrual ratio gives no particular signal, but it is a good thing that it is negative.
The Globe Investor site gives this bank a 4 star rating. This is the rating they are giving to all 5 of Canada’s large banks. When I look at analysts recommendations, I find them ranging from Strong Buy to Sell. Most of the ratings are Buy and Hold, but there are some Underperform and at least 1 sell rating and one Strong Buy rating. (See my site for information on analyst ratings.) Some analysts like the current price, some think that it is fairly priced and some think that this bank will underperform our other banks.
I am happy to hold this stock and I will continue to do so. I will not be buying any more, because I already have enough. If you do not hold this stock and you like to have it for the long term, I think that the current price is very good. I have done quite well by this stock.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
This bank also has a huge amount of insider selling. The insider selling is 52.8M and the Insider buying is 1.4M over the past year. This is not as bad as the TD or the Royal Bank in dollar amount, but it is still heavy in selling. If you compare the selling to the market cap of this stock, the selling totals .18% for this stock and this put the selling between the Royal Bank and the TD Bank. The selling has been heavy since this stock hit bottom in March 2009. Here again the selling is of options. Insiders own far more in options than in stock.
You certainly to not get a warm fuzzy feeling about buying any Canadian Bank stock when the insiders are very busy dumping their shares. However, for this bank the CFO has retained his shares and has even added to them slightly by keeping options granted. This is not something that has happened for the other banks I have reviewed.
When looking at the Ratios, I find that the P/E at 12.8 is between the 5 year average low of 11 and the 5 year average high of 16. When you look at sites that use a P/E based on the last 12 months earnings, the P/E comes in higher closer to 17.5. The current dividend yield at 5.1% is higher than the 5 year average of 4.7%. When I look at the Price/Book Value, I find the current ratio is about 80% of the 10 year average, so this points to a good price.
The last price signal to look at is the Graham Price. The Graham Price at $59.41 is some 8.4% higher than the current price. From all this, I find that all price signals, except the P/E ratio, points to a good current price. The Accrual ratio gives no particular signal, but it is a good thing that it is negative.
The Globe Investor site gives this bank a 4 star rating. This is the rating they are giving to all 5 of Canada’s large banks. When I look at analysts recommendations, I find them ranging from Strong Buy to Sell. Most of the ratings are Buy and Hold, but there are some Underperform and at least 1 sell rating and one Strong Buy rating. (See my site for information on analyst ratings.) Some analysts like the current price, some think that it is fairly priced and some think that this bank will underperform our other banks.
I am happy to hold this stock and I will continue to do so. I will not be buying any more, because I already have enough. If you do not hold this stock and you like to have it for the long term, I think that the current price is very good. I have done quite well by this stock.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 23, 2009
Bank of Montreal
The next bank I want to deal with is the Bank of Montreal (TSX-BMO). I invested in this bank in 1983. I have only tracked it on quicken since December 1987 and since then I have made a return of 16% per year. This has not done as well for me as the Royal Bank has. My dividend yield on my original investment is just over 19% per year. This is after some 27 years and for the Royal Bank, I am making a 27.6% return after 15 years. However, the return on this bank is nothing to sneeze at.
The thing I notice about this bank is that it has not done was well as the other 4 I follow over the last 5 years. The 10 year total return is some 10% per year, but the 5 year total return is only 1.6%. This is not good. The dividends accounted for about 4.5% of the return in both periods. So, over the last 5 years, the stock has done badly. The growth in revenue is also not good. For the 5 and 10 year periods, the revenue growth is just under 4%.
The worse growth figures is in the earnings and over the last 5 years this has gone down at rate of 7% per year. The one place that it has kept up with the other banks is in dividend increases, and here it is the lowest, but not by much. It has increased dividends at 12% per year. However, of the 4 banks I follow, it has a higher payout than any other bank. The others have a payout rate in the 50% range and this bank’s payout is in the 60% range.
When I look at the Asset/Liability rate, this stock is also the lowest at 1.04. It also has the lowest Return on Equity for the last 5 years. The average 5 year rate is just over 13%. The ROE at the 2009 reporting date was just 8.8%. However, this was better than TD Bank, whose ROE at the 2009 reporting date was 7.6%. The best I can say about this bank is at least the Accrual Ratio was negative at -.2%.
I will not be posting tomorrow because of the holidays. I will post again on Monday, December 28, 2009. I will finish up on this bank and go on to the Bank of Nova Scotia. I will then post the spreadsheet showing all the figures, so you can compare these banks.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The thing I notice about this bank is that it has not done was well as the other 4 I follow over the last 5 years. The 10 year total return is some 10% per year, but the 5 year total return is only 1.6%. This is not good. The dividends accounted for about 4.5% of the return in both periods. So, over the last 5 years, the stock has done badly. The growth in revenue is also not good. For the 5 and 10 year periods, the revenue growth is just under 4%.
The worse growth figures is in the earnings and over the last 5 years this has gone down at rate of 7% per year. The one place that it has kept up with the other banks is in dividend increases, and here it is the lowest, but not by much. It has increased dividends at 12% per year. However, of the 4 banks I follow, it has a higher payout than any other bank. The others have a payout rate in the 50% range and this bank’s payout is in the 60% range.
When I look at the Asset/Liability rate, this stock is also the lowest at 1.04. It also has the lowest Return on Equity for the last 5 years. The average 5 year rate is just over 13%. The ROE at the 2009 reporting date was just 8.8%. However, this was better than TD Bank, whose ROE at the 2009 reporting date was 7.6%. The best I can say about this bank is at least the Accrual Ratio was negative at -.2%.
I will not be posting tomorrow because of the holidays. I will post again on Monday, December 28, 2009. I will finish up on this bank and go on to the Bank of Nova Scotia. I will then post the spreadsheet showing all the figures, so you can compare these banks.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 22, 2009
The Return of History, Robert Kagan
I want to get back to the stuff I love besides investing. The other thing is reading. I read a lot of great books and this one is no exception. This is not the first book I read by Robert Kagan. I read his of Paradise and Power also. His books are small, but he packs a lot into them. The full title of this book is The Return of History and the End of Dreams.
As a Canadian, I do not have the instinctive dislike of American as some of my follow citizens do, especially those living in places like Toronto, where I live. I do not mind that the US wants to make the world safe for their way of life. Because in doing so, they also make places like Canada possible. If the Chinese or Russians make the world safe for their way of life, I see not place for a country like Canada.
The Canadian way of life is somewhere between the American and the European. We are sort of capitalistic and sort of socialistic. We tend to muddle our way through things. However, Canada is a great place to life and a great country to raise kids in. I have always been grateful that I was born in a place like Canada, as there are so many awful places in the world that people are born into.
Now back to Robert Kagan and his book. The title of this book is because of Francis Fukuyama’s book called The End of History and the Last Man. In this book, which Frank wrote after the fall of the Berlin wall, he felt that the world would move towards liberal democracies politically. It is obvious now that this did not happen. There are a number of large states that are autocratic. Historically, this is a throw back to the nineteenth century, when in Europe you had mainly autocratic states, and very few liberal democracies, like US and Britain. He thinks that liberal democracies may well win in the end, but it could be a long and tough road.
Robert Kagan talks about China and Russia. He talks about the fact the most Russians and Chinese seem quite happy with their autocratic government. The Russians especially seem very happy with Putin. They seem to feel that as a democracy that they were shoved around by the West and now, with Putin in power, that can be a great power again.
He also talks about radical Islam. He does not believe that the radicals will be winners in the future. He certainly concedes that they can do a lot of damage, especially since they dream of destroying a great American city. However, what they really want is to take the world and their people back to the 7th century. He feels that even a lot of the most ardent Moslems do not want this and therefore, the radical cannot win.
The last thing Robert Kagan talks about is that the democracies should, and may well be forced to, band together if they want to survive and thrive in the current and future world. He thinks that the worlds governments will not all be liberal democracies in anytime that will help the current liberal democratic societies.
This book is well worth the price and the time it takes to read it. Robert Kagan is in Wikipedia, see Robert Kagan . He is also on YouTube, see After Words for an interview.
On my website is how to find this book on Amazon if you care to purchase it. See Kagan. Also, this book review and other books I have reviewed are on my website at Book Reviews.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
As a Canadian, I do not have the instinctive dislike of American as some of my follow citizens do, especially those living in places like Toronto, where I live. I do not mind that the US wants to make the world safe for their way of life. Because in doing so, they also make places like Canada possible. If the Chinese or Russians make the world safe for their way of life, I see not place for a country like Canada.
The Canadian way of life is somewhere between the American and the European. We are sort of capitalistic and sort of socialistic. We tend to muddle our way through things. However, Canada is a great place to life and a great country to raise kids in. I have always been grateful that I was born in a place like Canada, as there are so many awful places in the world that people are born into.
Now back to Robert Kagan and his book. The title of this book is because of Francis Fukuyama’s book called The End of History and the Last Man. In this book, which Frank wrote after the fall of the Berlin wall, he felt that the world would move towards liberal democracies politically. It is obvious now that this did not happen. There are a number of large states that are autocratic. Historically, this is a throw back to the nineteenth century, when in Europe you had mainly autocratic states, and very few liberal democracies, like US and Britain. He thinks that liberal democracies may well win in the end, but it could be a long and tough road.
Robert Kagan talks about China and Russia. He talks about the fact the most Russians and Chinese seem quite happy with their autocratic government. The Russians especially seem very happy with Putin. They seem to feel that as a democracy that they were shoved around by the West and now, with Putin in power, that can be a great power again.
He also talks about radical Islam. He does not believe that the radicals will be winners in the future. He certainly concedes that they can do a lot of damage, especially since they dream of destroying a great American city. However, what they really want is to take the world and their people back to the 7th century. He feels that even a lot of the most ardent Moslems do not want this and therefore, the radical cannot win.
The last thing Robert Kagan talks about is that the democracies should, and may well be forced to, band together if they want to survive and thrive in the current and future world. He thinks that the worlds governments will not all be liberal democracies in anytime that will help the current liberal democratic societies.
This book is well worth the price and the time it takes to read it. Robert Kagan is in Wikipedia, see Robert Kagan . He is also on YouTube, see After Words for an interview.
On my website is how to find this book on Amazon if you care to purchase it. See Kagan. Also, this book review and other books I have reviewed are on my website at Book Reviews.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 21, 2009
Royal Bank 2
On Friday I talked about the Royal Bank (TSX-RY) in which I have been invested in since 1995. Since that time, I have made a return of 19.5% per year. Another way I talked about how to look at this stock is that, on my original investment, I am now making some 27.6% per year on my original investment, after 15 years. This is important for me as I live off my dividends. Compare this to BMO, in which I have been invested in since 1983 and now make some 19.3% return on my initial investment. The BMO investment occurred 27 years ago. By this measure, Royal Bank has been a better investment.
When I look at Insider Buying and Insider Selling reports, I also find a lot of Insider Selling as I did for the TD Bank. Most of this also has to do with selling of options. Here again, the insiders have far more options than they do shares in the bank. However, the selling is not quite as bad as for TD Bank. Insider Selling is .11% of the stock’s market cap, compared with the TD, which has Insider Selling of .24% stock’s market cap. I know that both these figures are below 1%, but the amounts are substantial. Here the selling totals 85M. The Insider Buying is also higher for Royal, which is 7.3M compared to just less than 1M for the TD Bank.
When I look at ratios, the first one is on the P/E ratio. For this stock, I get a P/E of 12.7 for 2009. This is based on expected 2009 earnings. The sites using earnings of last 12 months get a P/E closer to 22. The 5 year average low for this stock is 11.4 and the 5 year average high is 16.8. My P/E is certainly closer to the low than the high. However, to signal a good price, you want a P/E less than the 5 year low.
For the Dividend Yield, I get a current one of 3.6% and the 5 year average is 3.7%. Here, a low price signal is a yield higher than the 5 year average. When I look at the Price/Book Value Ratio, I find that the current one is about 90% of the 10 year average. A good price signal is when the P/BV Ratio is 80% of the 10 year average. The last buy/sell signal I am looking at is the Graham Price. The current Graham Price is $50.30. The stock price is some 9% above this.
What all the above shows on price is that there is no strong buy signal, nor any strong sell signal either. The price is probably a reasonable one. The problem with a lot of the above is that most are based on expected earnings for 2009. The ones that are based on current values is the dividend yield and the P/BV and both these show a current reasonable price.
When I look at the analyst recommendations, I find them mostly at Strong Buy, Buy and Hold. I also found 1 Underperform recommendation. The consensus recommendation appears to be a Hold. Most analysts have a 12 month target price of $58 or $59. Because of this, they feel that there is not much room for stock price growth in the near future. (See my site for information on analyst ratings.)
When I look at the charts, I find that this stock has beaten the TSX and the Financial Sub-index for all periods from 6 months to 10 years. The further you go out the more it has beaten both indexes. The Financial Index has only been higher than the TSX from 10 year period and greater. The other thing to note is that for the last 5 and 10 years, this stocks total return includes dividends and dividends provided just over 4% of the total return.
I am happy with this stock. I do not intend to buy more for the simple reason it comprises too much of my portfolio. I have no plans to sell any either because it is not more than 10% of my portfolio. I have done well by this stock and I think the current price is relatively reasonable. When buying stock, what you want to look for are reasonable prices.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at Insider Buying and Insider Selling reports, I also find a lot of Insider Selling as I did for the TD Bank. Most of this also has to do with selling of options. Here again, the insiders have far more options than they do shares in the bank. However, the selling is not quite as bad as for TD Bank. Insider Selling is .11% of the stock’s market cap, compared with the TD, which has Insider Selling of .24% stock’s market cap. I know that both these figures are below 1%, but the amounts are substantial. Here the selling totals 85M. The Insider Buying is also higher for Royal, which is 7.3M compared to just less than 1M for the TD Bank.
When I look at ratios, the first one is on the P/E ratio. For this stock, I get a P/E of 12.7 for 2009. This is based on expected 2009 earnings. The sites using earnings of last 12 months get a P/E closer to 22. The 5 year average low for this stock is 11.4 and the 5 year average high is 16.8. My P/E is certainly closer to the low than the high. However, to signal a good price, you want a P/E less than the 5 year low.
For the Dividend Yield, I get a current one of 3.6% and the 5 year average is 3.7%. Here, a low price signal is a yield higher than the 5 year average. When I look at the Price/Book Value Ratio, I find that the current one is about 90% of the 10 year average. A good price signal is when the P/BV Ratio is 80% of the 10 year average. The last buy/sell signal I am looking at is the Graham Price. The current Graham Price is $50.30. The stock price is some 9% above this.
What all the above shows on price is that there is no strong buy signal, nor any strong sell signal either. The price is probably a reasonable one. The problem with a lot of the above is that most are based on expected earnings for 2009. The ones that are based on current values is the dividend yield and the P/BV and both these show a current reasonable price.
When I look at the analyst recommendations, I find them mostly at Strong Buy, Buy and Hold. I also found 1 Underperform recommendation. The consensus recommendation appears to be a Hold. Most analysts have a 12 month target price of $58 or $59. Because of this, they feel that there is not much room for stock price growth in the near future. (See my site for information on analyst ratings.)
When I look at the charts, I find that this stock has beaten the TSX and the Financial Sub-index for all periods from 6 months to 10 years. The further you go out the more it has beaten both indexes. The Financial Index has only been higher than the TSX from 10 year period and greater. The other thing to note is that for the last 5 and 10 years, this stocks total return includes dividends and dividends provided just over 4% of the total return.
I am happy with this stock. I do not intend to buy more for the simple reason it comprises too much of my portfolio. I have no plans to sell any either because it is not more than 10% of my portfolio. I have done well by this stock and I think the current price is relatively reasonable. When buying stock, what you want to look for are reasonable prices.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, December 18, 2009
Royal Bank
The next bank I want to deal with is the Royal Bank (TSX-RY). I have invested in this bank also. I have been invested in this bank in 1995 and since that time, I have made a return of 19.5% per year. Canadian banks have been great investments. I have also have had two 2 for 1 stocks splits under this bank. I have felt for sometime that this is one of the best Canadian Banks.
The dividend comments I made on the TD Bank yesterday, also apply to Royal Bank. People do not expect any dividend increases on our banks until at least the end of 2010. The problem is not only that the banks want to strengthen their balance sheets; they are also concerned that our government may bring in new regulations. They want to see what, if any, new regulations that the government might impose before they commit to higher dividends. Royal Bank has also done great in dividend increases in the past. In the last 5 and 10 years, the dividend increases have been at 14.6% per year and 15.5% per year on average.
When you look at growth rates, the Royal Bank has done better than the TD Bank except for increase in Book Value over the last 5 years. It has done especially better in growth in Revenue and Earnings. Although these growth rates are not terrific, the Royal Bank has still done a lot better than the TD Bank.
The main spot for both banks that I do not like is the lack of growth or just any Operating Cash Flow. None of our banks are great at this. However, I must admit, that the Net Cash Flow for the banks are usually positive. Also, as with TD Bank, this bank has a better 5 year running average for the Return on Equity (ROE) than for 2009. However, the Royal Bank’s 9.7% ROE is not bad.
As for other banks, the Asset/Liability Ratio is low at 1.06, but it is in line with this ratio on other banks. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 17.7 and this is high, but it is better than the 5 year average of 23.
I am happy with this stock and I intend to hold on to what I have. Another way to look at this stock is that, on my original investment, I am now making some 27.6% per year after 15 years. This is important for me as I live off my dividends.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The dividend comments I made on the TD Bank yesterday, also apply to Royal Bank. People do not expect any dividend increases on our banks until at least the end of 2010. The problem is not only that the banks want to strengthen their balance sheets; they are also concerned that our government may bring in new regulations. They want to see what, if any, new regulations that the government might impose before they commit to higher dividends. Royal Bank has also done great in dividend increases in the past. In the last 5 and 10 years, the dividend increases have been at 14.6% per year and 15.5% per year on average.
When you look at growth rates, the Royal Bank has done better than the TD Bank except for increase in Book Value over the last 5 years. It has done especially better in growth in Revenue and Earnings. Although these growth rates are not terrific, the Royal Bank has still done a lot better than the TD Bank.
The main spot for both banks that I do not like is the lack of growth or just any Operating Cash Flow. None of our banks are great at this. However, I must admit, that the Net Cash Flow for the banks are usually positive. Also, as with TD Bank, this bank has a better 5 year running average for the Return on Equity (ROE) than for 2009. However, the Royal Bank’s 9.7% ROE is not bad.
As for other banks, the Asset/Liability Ratio is low at 1.06, but it is in line with this ratio on other banks. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 17.7 and this is high, but it is better than the 5 year average of 23.
I am happy with this stock and I intend to hold on to what I have. Another way to look at this stock is that, on my original investment, I am now making some 27.6% per year after 15 years. This is important for me as I live off my dividends.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 17, 2009
Toronto Dominion Bank 2
Today, I want to finish my review of this stock (TSX-TD). I first bought this bank in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
The first thing to discuss is Insider Buying and Insider Selling. On this stock, there is mainly just Insider Selling. Insider Selling is at 130M for the past year. The net Insider Selling is at 129.1M. As you can see, there is not much buying. This, together with the lack of a dividend increase, and you got to feel that insiders do not much faith in TD. This is a huge negative against buying any of TD’s stock.
Now, lets move on to the Ratios. First, I will talk about the P/E ratios. For this stock, the P/Es based on last 12 months earnings are higher than mine based on expected earnings. This is because this bank is expected to earn more in 2010 than it did in 2009. I get a P/E of 12. The 5 year average low is 11 and the 5 year average high is 15.5. This puts the P/E close to the low. The next item is the dividend yield. The current yield is 3.7% and the 5 year average is 3.4%. This means that the current price is relatively good.
The last ratio to look at is the Price/Book Value ratio. This current ratio at 1.37 is just 70% of the 10 year average. This shows a very good relative price. A good price is when the current Ratio is 80% or less of the 10 year average. The next thing to talk about is the Graham Price. Currently the Graham Price is $59.33, which is 8% lower than the current stock price of $64.23. The expected Graham Price for 2010 is $74.36 and this is almost 14% higher than the current stock price. The Graham Price for 2008 was $65.45 and this is higher than the current stock price. All this would point to a good current stock price.
Globe Investor site gives this bank a 4 star rating. When I look at the recommendations for this stock, I see calls that cover the full range from Strong Buy, Buy, Hold, Underperform and Sell. However, the dominate recommendations are Strong Buy, Buy and Hold. There is very few of the other two. The consensus recommendation would be a buy. (See my site for information on analyst ratings.) You can see from all this there is a very wide range of opinion on this stock.
Our banks certainly have current problems. However, if you believe that TD will get back on track, make money and start increasing their dividends again, then you should be looking at an opportune time to buy the stock. The best time to get the lowest price is when there are problems are others are selling. I have long term faith in this bank and so, I will hold what I own for now. I will sell only when this stock becomes too much of my portfolio, or I find a bank I like better.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The first thing to discuss is Insider Buying and Insider Selling. On this stock, there is mainly just Insider Selling. Insider Selling is at 130M for the past year. The net Insider Selling is at 129.1M. As you can see, there is not much buying. This, together with the lack of a dividend increase, and you got to feel that insiders do not much faith in TD. This is a huge negative against buying any of TD’s stock.
Now, lets move on to the Ratios. First, I will talk about the P/E ratios. For this stock, the P/Es based on last 12 months earnings are higher than mine based on expected earnings. This is because this bank is expected to earn more in 2010 than it did in 2009. I get a P/E of 12. The 5 year average low is 11 and the 5 year average high is 15.5. This puts the P/E close to the low. The next item is the dividend yield. The current yield is 3.7% and the 5 year average is 3.4%. This means that the current price is relatively good.
The last ratio to look at is the Price/Book Value ratio. This current ratio at 1.37 is just 70% of the 10 year average. This shows a very good relative price. A good price is when the current Ratio is 80% or less of the 10 year average. The next thing to talk about is the Graham Price. Currently the Graham Price is $59.33, which is 8% lower than the current stock price of $64.23. The expected Graham Price for 2010 is $74.36 and this is almost 14% higher than the current stock price. The Graham Price for 2008 was $65.45 and this is higher than the current stock price. All this would point to a good current stock price.
Globe Investor site gives this bank a 4 star rating. When I look at the recommendations for this stock, I see calls that cover the full range from Strong Buy, Buy, Hold, Underperform and Sell. However, the dominate recommendations are Strong Buy, Buy and Hold. There is very few of the other two. The consensus recommendation would be a buy. (See my site for information on analyst ratings.) You can see from all this there is a very wide range of opinion on this stock.
Our banks certainly have current problems. However, if you believe that TD will get back on track, make money and start increasing their dividends again, then you should be looking at an opportune time to buy the stock. The best time to get the lowest price is when there are problems are others are selling. I have long term faith in this bank and so, I will hold what I own for now. I will sell only when this stock becomes too much of my portfolio, or I find a bank I like better.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 16, 2009
Toronto Dominion Bank
As I said yesterday, since the Canadian Banks have now reported, I will start reviewing them. The first thing to note is dividends. Since none have upped their dividends this year, (except for Laurentian Bank), I heard that the Canadian banks will be taken off the dividend lists I follow. I looked at these lists today and find they are still there. Most people seem to think that the big five banks will not be increasing their dividends until at least at the end of 2010 or early 2011. I cannot find the banks saying anything, so I guess we will just have to wait.
I first bought this bank (TSX-TD) in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. However, I did sell as small amount of shares (200) when they went up $10 a share. I still have lots. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
Considering we are in a recession that has hit banks hard, the return on the stock I bought in 2000 is good. The other thing to point out is the dividends. Almost 3.5% of my return is in dividends. I have a lot of bank stock and generally, the return on Canadian bank stock has been very good. Even though the dividend was not increased this year, over the last 5 years, the growth in dividends has still been very good at 12.4% per year.
The other only bright spot in growth in this stock is the growth in Book Value. The other growth figures, on things like revenues and earnings are not good, but this is to be expected at this point in the business cycle. Looking at the Return on Equity (ROE), this was only 7.6% for the financial year ending October 2009. The 5 year average of 13.8% is, of course, much better.
When we look at the Asset/Liability Ratio, I find it low at 1.07. However, all banks are low and are generally at around 1.04. So this is better than most. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 14.4this is high, but it is better than the 5 year average of 19. TD bank also tends to have a better than average A/BV ratio that other banks in Canada.
I am happy with this stock and I intend to hold on to what I have. The only thing I worry about is having too high a percentage of my portfolio in one stock or in one sector. I might in the future sell some if this stock becomes too high a percentage of my portfolio.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html
I first bought this bank (TSX-TD) in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. However, I did sell as small amount of shares (200) when they went up $10 a share. I still have lots. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
Considering we are in a recession that has hit banks hard, the return on the stock I bought in 2000 is good. The other thing to point out is the dividends. Almost 3.5% of my return is in dividends. I have a lot of bank stock and generally, the return on Canadian bank stock has been very good. Even though the dividend was not increased this year, over the last 5 years, the growth in dividends has still been very good at 12.4% per year.
The other only bright spot in growth in this stock is the growth in Book Value. The other growth figures, on things like revenues and earnings are not good, but this is to be expected at this point in the business cycle. Looking at the Return on Equity (ROE), this was only 7.6% for the financial year ending October 2009. The 5 year average of 13.8% is, of course, much better.
When we look at the Asset/Liability Ratio, I find it low at 1.07. However, all banks are low and are generally at around 1.04. So this is better than most. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 14.4this is high, but it is better than the 5 year average of 19. TD bank also tends to have a better than average A/BV ratio that other banks in Canada.
I am happy with this stock and I intend to hold on to what I have. The only thing I worry about is having too high a percentage of my portfolio in one stock or in one sector. I might in the future sell some if this stock becomes too high a percentage of my portfolio.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.htm.
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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html
Subscribe to:
Posts (Atom)