I do not own this stock (TSX-GWO). However, I own its parent stock of Power Financial (TSX-PWF). The ultimate parent company is Power Corp (TSX-POW). I had owned for many year IFM Financial, another stock of the Power Financial family, but recently sold it and reinvested the into Power Financial as a way to rationalize my portfolio.
The Power Financial Corp is a company that has many fine financial companies under its umbrella. As with all the companies under Power Financial Corp, this company pays good dividends. The 5 and 10 year growth in dividends is still at 5.8% and 12.2% per year despite the fact that the dividends have not been increased since 2009.
All life insurance companies are having a current hard time because of the low interest rates. It is hard to say when this will change. The current 5 year median Dividend Payout Ratios are 70% and 25% for earnings and cash flow. I would suspect that they will have to go lower for the dividend to increase. The expected DPRs for 2011 will be around 63% and 22% for 2011, which is lower than the 5 year median rates, but I do not think quite low enough for a dividend increase.
If you had held this stock over the past 5 years, you would not have made any money, despite the fact this the company was paying you dividends worth 4.3% per year. Over the past 10 years, you would have made between 6 and 7% per year, with dividends payments some 4.5% of your return.
Since the annual statements for December 2011 are not in, I am dealing with those from December 2010. Revenues are up somewhat over the last 5 and 10 years. Revenues per shares have growth of 3.4% and 4.4% per year over the past 5 and 10 years. Growth in revenues this year is expected to be slightly negative.
Earnings growth over the past 5 years is negative and over the past 10 years is up just 7.6% per year. EPS is expected to growth around 12% for 2011. Cash flow growth over the past 5 and 10 years is 6.6% and 7.2% per year. Cash Flow is expected to come in lower in 2011.
Book Value growth has also been low recently, especially the last 5 years at 4.5% and 9.5% per year over the past 5 and 10 years. However, Book Value is expected to be up sharply in 2012 under the new accounting rules.
This is a financial company and as such the debt ratios are different than a lot of companies on the TSX. The current Asset/Liability Ratio is 1.11 and the current Leverage and Debt/Equity Ratios are 11.41 and 10.25. These are what you expect.
When I look at insider trading, I find some $5.5M of insider selling and some $16M of insider buying. All the selling occurred before April 2011 and the buying occurred later. All the selling was by the CFO and officers of the company. All the buying was by directors. For this company, CEO, CFO, officers and other employees have lots more stock options than shares. It is the opposite for the directors.
There are institutions that hold shares in this company, but they hold only 6.4% of the shares. Over the past 3 months they have bought and sold shares in this company and have reduced their ownership by just over 8%. (Note that this company’s is mostly owned by Power Financial Corp.)
I get 5 year median low and high Price/Earnings Ratios of 12.55 and 16.34. The current P/E ratio of 10.48 is therefore low. (However, note that in other financial crisis, Life Insurance companies and banks go P/E ratios below 9.00 at lowest points, so this stock may not yet be as low as it can go.)
I get a Graham Price of $26.63 and a current stock price of $22.43. The current stock price is some 15% lower than the Graham Price. The stock price for this stock has seldom been below the Graham Price and the 10 year median low difference is the stock price being 24% higher than the Graham Price.
I get a 10 year median Price/Book Value Ratio of 2.96 and a current one of 1.39, which is just under 50% of the 10 year median ratio. The current dividend yield of 4.48 is some 17% lower than the 5 year median of $4.65. However, the last few years have seen the dividend yield much higher than historically, where the historic dividend yields has been closer to 3%.
By all measures, the current stock price is low, but it is low for a good reason. Life Insurance companies are not doing well and people do not expect them to do well for some time. However, this could mean that buying them for the long term can be smart, as long as the companies have no trouble recovering, and it would seem that most Canadian Life Insurance companies will recover.
When I look at analysts’ recommendations I find Strong Buy, Buy, Hold, Underperform and Sell. It all depends on your perspective. No one expects this company to recover quickly, but everyone expects it to at some point. The consensus recommendation is a Hold. With a Hold recommendation comes a 12 month stock price of $24. Analysts believe that the current dividend is safe and that it has done better than other life insurance companies in Canada. Even an analysts with a do not buy rating says he thinks that the stock is oversold.
So, if this stock is a buy or not depends on your objectives. It will not recover in the short term, but everyone thinks it will in the longer term.
Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Its web site is here Great-West. See my spreadsheet at gwo.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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, January 24, 2012
Monday, January 23, 2012
EnerCare Inc
I do not own this stock (TSX-ECI). This used to be Consumers Water Income Fund (TSX-CWI.UN) and it converted to a corporation as EnerCare (TSX-ECI). In 2010, it dropped its distributions by almost 50%. Prior to becoming a corporation, they did have some distributions increases. Also, a hopeful sign is that they have increased the dividends by 1.9% for the first one due to be paid in 2012.
One of the problems I see is that they are not making much in the way of earnings. They earned just $.01 in 2010 and are expected to earn just $.10 this year. Next year, analysts expect that earnings will turn negative. They are paying out, of course, more than they are earning. This tends to affect the book value, which has gone steadily down. (Over the past 5 and 10 years, the book value has been decreasing at the 14% and 13% level each year.)
Decrease in Book Value is generally due to paying out more in dividends than the company can afford too. This certainly appears to be the cases over the last few years. To me it is not a good sign that they increased the dividends. I personally prefer companies that do not payout dividends when they cannot afford them. However, management may feel that earnings and cash flow is looking up when the analysts do not see this.
Their Dividend Payout Ratios as regards to cash flow has been much better. The 5 year median DPR for cash flow is 44% and is expected to be in the range of 30% this year and next year. However, cash flow has not been growing over the past 5 and 7 years. It has just been going up and down. It hit its peak in 2008, which really coincides with the latest bear market, so they may do better in the future.
If you had been invested in this stock, you would not have made much money over the past 5 years as the total return is around 1.5% per year. This is in spite of the fact that the dividends earned during this period was around 8.6% per year. However, if you held the stock for 10 years, you would have made a total return of 10.2% per year. The dividends would have been around 11% per year, so you would have lost in capital gain, but got a return in distributions.
The bright point is there has been a modest increase in revenue. The revenue has increased over the past 5 and 10 years at the rate of 6.8% and 6% per year, respectively. The revenue per share has increased over the past 5 years at the rate of 4.8% and 4.5% per year, respectively.
When I look at insider trading I find very modest insider buying and no insider selling. Basically the CFO and officers have more options than shares. This is not true for directors and CEO. Some 16 institutions own 20% of the stock of this company. Over the past 3 months they have only bought more shares and have increased their shares by around 12%.
There are not many analysts following this stock. The analysts’ recommendations I found where Strong Buy, Buy and Hold. The consensus recommendation would be a Buy.
I cannot not get a fix on a Price/Earnings Ratio because of this company’s lack of earnings. The Graham price is going down and is currently at only $2.30. The stock price at $9.60 is some 317% higher. The 10 year median high difference between the stock price and Graham Price is the stock price being 153% higher. This does not show a good stock price.
Since the book value has been moving down, the current Price/Book Value Ratio is, at 3.93, a rather high value. Also this is some 78% above the 10 year median P/B Ratio of 2.21. The current dividend yield at 6.88% is lower by 38% of the 5 year median dividend yield at 11.2%. In other words, my usual stock price tests do not help too much.
One report I found with a buy, gives a 12 month stock price of $10.00. The report was looking at EBITDA margin and Free Cash flow. See Investopedia for a definition of EBITDA margin. Also, see Investopedia for a definition of Free Cash Flow.
A number of analysts mentioned the very good dividend. Also a number mentioned that some regulatory constraints will come off next year and this should help the profitability of this company. A couple of Hold recommendations were made because the recent run up in stock price.
I do know that my stance that company should pay out dividends only as they can afford to could play havoc with my income. However, my experience has been that my dividend income overall has always increased, even though some companies I hold decrease, suspend or do not increase their dividends. I think this is because I have a variety of companies and they are not all in the same business cycle at the same time. I also realize that companies are often heavily punished when they decrease dividends or suspend them, but I find this action illogical. I am a long term investor and I want my companies to act prudent for the long term health of the companies I invest in.
EnerCare Inc owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario. EnerCare also owns EnerCare Connections Inc., a leading sub-metering company, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada. Its web site is here EnerCare. See my spreadsheet at eci.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 for stocks followed and investment notes. Follow me on twitter.
One of the problems I see is that they are not making much in the way of earnings. They earned just $.01 in 2010 and are expected to earn just $.10 this year. Next year, analysts expect that earnings will turn negative. They are paying out, of course, more than they are earning. This tends to affect the book value, which has gone steadily down. (Over the past 5 and 10 years, the book value has been decreasing at the 14% and 13% level each year.)
Decrease in Book Value is generally due to paying out more in dividends than the company can afford too. This certainly appears to be the cases over the last few years. To me it is not a good sign that they increased the dividends. I personally prefer companies that do not payout dividends when they cannot afford them. However, management may feel that earnings and cash flow is looking up when the analysts do not see this.
Their Dividend Payout Ratios as regards to cash flow has been much better. The 5 year median DPR for cash flow is 44% and is expected to be in the range of 30% this year and next year. However, cash flow has not been growing over the past 5 and 7 years. It has just been going up and down. It hit its peak in 2008, which really coincides with the latest bear market, so they may do better in the future.
If you had been invested in this stock, you would not have made much money over the past 5 years as the total return is around 1.5% per year. This is in spite of the fact that the dividends earned during this period was around 8.6% per year. However, if you held the stock for 10 years, you would have made a total return of 10.2% per year. The dividends would have been around 11% per year, so you would have lost in capital gain, but got a return in distributions.
The bright point is there has been a modest increase in revenue. The revenue has increased over the past 5 and 10 years at the rate of 6.8% and 6% per year, respectively. The revenue per share has increased over the past 5 years at the rate of 4.8% and 4.5% per year, respectively.
When I look at insider trading I find very modest insider buying and no insider selling. Basically the CFO and officers have more options than shares. This is not true for directors and CEO. Some 16 institutions own 20% of the stock of this company. Over the past 3 months they have only bought more shares and have increased their shares by around 12%.
There are not many analysts following this stock. The analysts’ recommendations I found where Strong Buy, Buy and Hold. The consensus recommendation would be a Buy.
I cannot not get a fix on a Price/Earnings Ratio because of this company’s lack of earnings. The Graham price is going down and is currently at only $2.30. The stock price at $9.60 is some 317% higher. The 10 year median high difference between the stock price and Graham Price is the stock price being 153% higher. This does not show a good stock price.
Since the book value has been moving down, the current Price/Book Value Ratio is, at 3.93, a rather high value. Also this is some 78% above the 10 year median P/B Ratio of 2.21. The current dividend yield at 6.88% is lower by 38% of the 5 year median dividend yield at 11.2%. In other words, my usual stock price tests do not help too much.
One report I found with a buy, gives a 12 month stock price of $10.00. The report was looking at EBITDA margin and Free Cash flow. See Investopedia for a definition of EBITDA margin. Also, see Investopedia for a definition of Free Cash Flow.
A number of analysts mentioned the very good dividend. Also a number mentioned that some regulatory constraints will come off next year and this should help the profitability of this company. A couple of Hold recommendations were made because the recent run up in stock price.
I do know that my stance that company should pay out dividends only as they can afford to could play havoc with my income. However, my experience has been that my dividend income overall has always increased, even though some companies I hold decrease, suspend or do not increase their dividends. I think this is because I have a variety of companies and they are not all in the same business cycle at the same time. I also realize that companies are often heavily punished when they decrease dividends or suspend them, but I find this action illogical. I am a long term investor and I want my companies to act prudent for the long term health of the companies I invest in.
EnerCare Inc owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario. EnerCare also owns EnerCare Connections Inc., a leading sub-metering company, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada. Its web site is here EnerCare. See my spreadsheet at eci.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 for stocks followed and investment notes. Follow me on twitter.
Friday, January 20, 2012
Dorel Industries Inc
I do not own this stock (TSX-DII.B), but I used to. I started to follow it because it was on the Investment Reporter list of stocks. I bought the stock in 1999 and 2000 and sold it in 2006. I lost 7.8% of the value of my investment. At the time, I did not see that the stock would be going anywhere anytime soon, so I sold.
This was not a dividend paying stock at the time that I held it. However, in 2007 the company started to pay dividends. They were quite low at first, just over 1%. The current dividend rate is 2.34% and the year median rate is 1.68%. The median dividend yield is rather low. However, dividend growth has been good at 12.7% per year over the past 5 years.
What about total return? Well, basically shareholders have not been making any money for the past 5 and 10 years. Share price is back to where it was in 2000 and 2001. The stock price seems to peak in 2004 and has not made it back to that peak yet. It was recovering in 2010, but stock price has fallen down a fair bit in 2011.
The portion of the total return attributable to dividends is less than 1% over the past 10 years and around 1.8% over the past 5 years. The Dividend Payout Ratios are correspondingly low with DPRs for earnings at around 15% and for cash flow around 13%.
This company started to report in US$ in 2000. The dividends are also paid in US$. This will means, that for Canadian stock holders, the dividends will fluctuate with the currency. Also, because our currency has been rising against the US currency, the company has done better in US$ than in CDN$. However, this is a Canadian company and to me, what is important is how well it does in CDN$ terms.
Generally speaking, the company has done better over the past 10 years than over the past 5 years. Since the last annual statement is December 2010, a lot of my figures are to that date. The only figures known for 2011 are the stock prices and dividends as discussed above.
In CDN$ terms, revenue has increased by 2.5% and 6.7% per year over the past 5 and 10 years. It is expected that the revenue for 2011 will be higher than 2010 by 6.6%. (Please note that often when we are getting close to the annual statements the estimates are often more accurate, but not necessarily so.)
In CDN$ terms, earnings has growth by 3.5% and 9.4% per year over the past 5 and 10 years. However, earnings are expected to be substantially lower in 2011 than they were in 2010. Cash Flow, in CDN$ terms, has grown by 1.6% and 7.4% per year over the past 5 and 10 years. Here again, cash flow is expected to be substantially lower in 2011 than in 2010.
This company is owned and controlled by the Schwatz family. As for a lot of such companies, the debt ratios tend to be very good and this company is no exception. The current Liquidity Ratio is 2.37, the current Asset/Liability Ratio is 2.45, the current Leverage Ratio is 1.69 and the current Debt/Equity Ratio is 0.69.
The Return on Equity has generally been, but not always, in the good range of 10% to 15%. The ROE for 2010 was 10.8% as was the 5 year median rate. However, the ROE for last 12 months is lower at 8.4%. The ROE based on the comprehensive income for 2010 was lower at 8.2%. The 5 year median ROE based on the comprehensive income was at 10.8%.
The Price/Earnings Ratios has been rather low on this company, with the 5 year median low and high P/E ratios being 7.48 and 10.48. The current P/E Ratio based on stock price of $25.08 is a little lower than the 5 year median low at 7.37 and therefore shows a good relative price.
I get a Graham Price of $53.05 and this is some 53% higher than the stock price of $25.08. However, the Graham Price has always been higher than the stock price, but the low difference is the stock price being 32% lower than the Graham Price. This also points to a good current stock price.
The 10 year median Price/Book Value Ratio is 1.14, a rather low value. The current P/B Ratio at 0.69 is only 60% of this. This shows a good stock price at different levels. The stock is trading below the Book Value and also it is 60% below the 10 year median value. This shows a very good current stock price.
Looking at dividends, the current dividend at 2.34% is almost 40% higher than the 5 year median dividend yield of 1.68 and this shows a very good current stock price.
Looking at insider trading, there is a very minimal amount of insider buying. Some 38% of this company’s stock is owned by institutions. Over the past 3 months they have marginally reduced their shares (by 1.5%).
When I look at analysts’ recommendations, I Strong Buy, Buy and Hold. The consensus recommendations would be a Buy. The Buy recommendation comes with a 12 months stock price of $31. There are lots more Buy recommendations than any other recommendations.
There was an article on beaten down stocks at G&M and this company was included. There was also an article in the Financial Post about the stock been beaten down and about their Polish purchase. Another blogger has recently reviewed this stock. See the Frankly Speaking blog.
Generally MPL Communications (the owner of Investment Reporter) is good at picking good long term value stocks. They again recommended this stock in November 2011. See their website and insert the “DII.B” symbol. If you click on “profile” tab, other tabs, such as “Advice” will come up. Click on “Advice” tab.
Personally, I have moved to other consumer discretionary stocks and I am not currently interested in this one. I will continue to follow it.
Dorel Industries Inc. is a world class juvenile products and bicycle company. Dorel’s branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel has facilities in seventeen countries, and sales worldwide. There concentrated ownership of this company by the Schwartz family (66%) and Segel family (17%). There are two classes of shares, Class A with multiple voting (10) and Class B, with subordinate voting rates (1). Its web site is here Dorel. See my spreadsheet at dii.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 for stocks followed and investment notes. Follow me on twitter.
This was not a dividend paying stock at the time that I held it. However, in 2007 the company started to pay dividends. They were quite low at first, just over 1%. The current dividend rate is 2.34% and the year median rate is 1.68%. The median dividend yield is rather low. However, dividend growth has been good at 12.7% per year over the past 5 years.
What about total return? Well, basically shareholders have not been making any money for the past 5 and 10 years. Share price is back to where it was in 2000 and 2001. The stock price seems to peak in 2004 and has not made it back to that peak yet. It was recovering in 2010, but stock price has fallen down a fair bit in 2011.
The portion of the total return attributable to dividends is less than 1% over the past 10 years and around 1.8% over the past 5 years. The Dividend Payout Ratios are correspondingly low with DPRs for earnings at around 15% and for cash flow around 13%.
This company started to report in US$ in 2000. The dividends are also paid in US$. This will means, that for Canadian stock holders, the dividends will fluctuate with the currency. Also, because our currency has been rising against the US currency, the company has done better in US$ than in CDN$. However, this is a Canadian company and to me, what is important is how well it does in CDN$ terms.
Generally speaking, the company has done better over the past 10 years than over the past 5 years. Since the last annual statement is December 2010, a lot of my figures are to that date. The only figures known for 2011 are the stock prices and dividends as discussed above.
In CDN$ terms, revenue has increased by 2.5% and 6.7% per year over the past 5 and 10 years. It is expected that the revenue for 2011 will be higher than 2010 by 6.6%. (Please note that often when we are getting close to the annual statements the estimates are often more accurate, but not necessarily so.)
In CDN$ terms, earnings has growth by 3.5% and 9.4% per year over the past 5 and 10 years. However, earnings are expected to be substantially lower in 2011 than they were in 2010. Cash Flow, in CDN$ terms, has grown by 1.6% and 7.4% per year over the past 5 and 10 years. Here again, cash flow is expected to be substantially lower in 2011 than in 2010.
This company is owned and controlled by the Schwatz family. As for a lot of such companies, the debt ratios tend to be very good and this company is no exception. The current Liquidity Ratio is 2.37, the current Asset/Liability Ratio is 2.45, the current Leverage Ratio is 1.69 and the current Debt/Equity Ratio is 0.69.
The Return on Equity has generally been, but not always, in the good range of 10% to 15%. The ROE for 2010 was 10.8% as was the 5 year median rate. However, the ROE for last 12 months is lower at 8.4%. The ROE based on the comprehensive income for 2010 was lower at 8.2%. The 5 year median ROE based on the comprehensive income was at 10.8%.
The Price/Earnings Ratios has been rather low on this company, with the 5 year median low and high P/E ratios being 7.48 and 10.48. The current P/E Ratio based on stock price of $25.08 is a little lower than the 5 year median low at 7.37 and therefore shows a good relative price.
I get a Graham Price of $53.05 and this is some 53% higher than the stock price of $25.08. However, the Graham Price has always been higher than the stock price, but the low difference is the stock price being 32% lower than the Graham Price. This also points to a good current stock price.
The 10 year median Price/Book Value Ratio is 1.14, a rather low value. The current P/B Ratio at 0.69 is only 60% of this. This shows a good stock price at different levels. The stock is trading below the Book Value and also it is 60% below the 10 year median value. This shows a very good current stock price.
Looking at dividends, the current dividend at 2.34% is almost 40% higher than the 5 year median dividend yield of 1.68 and this shows a very good current stock price.
Looking at insider trading, there is a very minimal amount of insider buying. Some 38% of this company’s stock is owned by institutions. Over the past 3 months they have marginally reduced their shares (by 1.5%).
When I look at analysts’ recommendations, I Strong Buy, Buy and Hold. The consensus recommendations would be a Buy. The Buy recommendation comes with a 12 months stock price of $31. There are lots more Buy recommendations than any other recommendations.
There was an article on beaten down stocks at G&M and this company was included. There was also an article in the Financial Post about the stock been beaten down and about their Polish purchase. Another blogger has recently reviewed this stock. See the Frankly Speaking blog.
Generally MPL Communications (the owner of Investment Reporter) is good at picking good long term value stocks. They again recommended this stock in November 2011. See their website and insert the “DII.B” symbol. If you click on “profile” tab, other tabs, such as “Advice” will come up. Click on “Advice” tab.
Personally, I have moved to other consumer discretionary stocks and I am not currently interested in this one. I will continue to follow it.
Dorel Industries Inc. is a world class juvenile products and bicycle company. Dorel’s branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel has facilities in seventeen countries, and sales worldwide. There concentrated ownership of this company by the Schwartz family (66%) and Segel family (17%). There are two classes of shares, Class A with multiple voting (10) and Class B, with subordinate voting rates (1). Its web site is here Dorel. See my spreadsheet at dii.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 for stocks followed and investment notes. Follow me on twitter.
Thursday, January 19, 2012
DirectCash Payments Inc
I do not own this stock (TSX-DCI). I started to follow this stock as it was one that was recommended at the Toronto Money Show of 2009. A number of speakers were talking about Income Trust and ones that will do well when they were converted to corporations. It was again recommended at the Toronto Money show of 2010. This company converted to a corporation in 2011.
This company has done quite well. First on the dividend front, they have not decreased or increased their dividends since 2007. The dividend yield has been coming down, which was expected for old income trust companies. The dividend yield is still good at 6.77%, although the 5 year median dividend yield is higher at 10%.
They are also bringing down their Dividend Payout Ratios, which is important now that they are a corporation. The DPR ratios for 2010 were 76% and 60% for earnings and cash flow. Unfortunately, the EPS is expected to be lower this year and the DPR for earnings is expected to be over 100%. However, the DPR for cash flow is expected to be fine. (See my site for information on Dividend Payout Ratios).
This company was just stated as an income trust in 2004. I only have financial information going back 5 years. Since the final financial statements are not in, I have growth figures only to the end of 2010. Most of the growth figures are very good. This is especially true of revenue per share which has grown at the rate of 16.6% per year over the past 5 years.
The EPS growth is also good, having grown at the rate of 81.5% per year over the past 5 years. Please note that EPS is expected to be lower in 2011 than it was in 2010. Growth in cash flow is at 9.4% per year over the past 5 years. The only one that is not good is Book Value growth and that has been a negative 2% per year over the past 5 years. However, little or no growth in book value occurs often on income trust companies, so this is not surprising. They had their first increase in book value in 2010.
I have total return to the end of 2011 as information on dividends paid and stock price to the end of 2011 is available. The total return on this company over the past 5 years is around 14% per year, with 8.5% of this total return attributable to dividends.
The current Liquidity Ratio at 0.99 is ok, but this ratio has a 5 year median of just 0.71. The Asset/Liability Ratio has always been very good at a current ratio of 2.12 and 5 year median ratio of 2.06. Both the Leverage and Debt/Equity Ratios are fine with current ones at 1.89 and 0.89.
When I look at insider trading reporting, I find some insider buying and some insider selling. However, over the past year there has been net insider buying of $1.1M. There is little insider selling. There are no stock options. The CEO owns some 17% of the company, worth some $48M. There are 12 institutions that own around 26% of this company. Over the past 3 months they have increased their holdings by 14%. There have been no sales of shares by institutions over the past 3 months.
I get 5 year median low and high Price/Earnings Ratios of 15.83 and 19.18. The current P/E Ratio of 17.26 is around the 5 year median and so shows a reasonable price. I get a Graham Price of $12.65, so the current stock price of 20.37 is some 60% higher. However, the low difference between the Graham Price and the stock price is the stock price being 103% higher. This also shows a relatively reasonable stock price. Fast growing companies often trade above the Graham Price.
The 5 year median Price/Book Value Ratio is 2.07 and the current one of 3.32 is some 63% higher. Also a Price/Book Value Ratio of 3.32 is rather high. However, this is to be expected as book value has been falling. The last test is the dividend yield test. The current yield of 6.77% is good, but it is lower than the 5 year median of 10%. However, this is also to be expected as the dividend yield has been coming down on all companies going from Income Trusts to corporations.
Until 2009, the Return on Equity for this stock was very low. The one for 2010 is 29.2%, but the 5 year median is 3.2%. The ROE for 2011 is expected to be very good also. The reason it was low in prior years is that they were not make much money before 2009.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold. The consensus would be a Buy. One analyst with a buy recommendation says that the company is not a desk pounder at this point, but it has a nice distribution and Payout Ratios are not that high. Another analyst says it is the largest operator of independent ATMs.
DirectCash does not seem to be in the payday loan business, but they have customers in this business. The majority of the customers for DirectCash's prepaid cards are payday loan and cheque cashing companies. DirectCash has a payday loan customer which accounts for over 29% of DirectCash's overall revenues. This is a risk factor. Losing one big customer or client can severely damage a company’s finances. This is what happened to Cinram that I reviewed yesterday.
DirectCash is the leading provider of ATMs, debit terminals, prepaid phone cards and prepaid cash cards in Canada. They have built a substantial technological, sales and service infrastructure that enables them to offer convenient and secure revenue streams for businesses across the country. DirectCash operates in Canada, the United States and Mexico. Over 40% owned by Gallacher family. Its web site is here Metro. See my spreadsheet at dci.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 for stocks followed and investment notes. Follow me on twitter.
This company has done quite well. First on the dividend front, they have not decreased or increased their dividends since 2007. The dividend yield has been coming down, which was expected for old income trust companies. The dividend yield is still good at 6.77%, although the 5 year median dividend yield is higher at 10%.
They are also bringing down their Dividend Payout Ratios, which is important now that they are a corporation. The DPR ratios for 2010 were 76% and 60% for earnings and cash flow. Unfortunately, the EPS is expected to be lower this year and the DPR for earnings is expected to be over 100%. However, the DPR for cash flow is expected to be fine. (See my site for information on Dividend Payout Ratios).
This company was just stated as an income trust in 2004. I only have financial information going back 5 years. Since the final financial statements are not in, I have growth figures only to the end of 2010. Most of the growth figures are very good. This is especially true of revenue per share which has grown at the rate of 16.6% per year over the past 5 years.
The EPS growth is also good, having grown at the rate of 81.5% per year over the past 5 years. Please note that EPS is expected to be lower in 2011 than it was in 2010. Growth in cash flow is at 9.4% per year over the past 5 years. The only one that is not good is Book Value growth and that has been a negative 2% per year over the past 5 years. However, little or no growth in book value occurs often on income trust companies, so this is not surprising. They had their first increase in book value in 2010.
I have total return to the end of 2011 as information on dividends paid and stock price to the end of 2011 is available. The total return on this company over the past 5 years is around 14% per year, with 8.5% of this total return attributable to dividends.
The current Liquidity Ratio at 0.99 is ok, but this ratio has a 5 year median of just 0.71. The Asset/Liability Ratio has always been very good at a current ratio of 2.12 and 5 year median ratio of 2.06. Both the Leverage and Debt/Equity Ratios are fine with current ones at 1.89 and 0.89.
When I look at insider trading reporting, I find some insider buying and some insider selling. However, over the past year there has been net insider buying of $1.1M. There is little insider selling. There are no stock options. The CEO owns some 17% of the company, worth some $48M. There are 12 institutions that own around 26% of this company. Over the past 3 months they have increased their holdings by 14%. There have been no sales of shares by institutions over the past 3 months.
I get 5 year median low and high Price/Earnings Ratios of 15.83 and 19.18. The current P/E Ratio of 17.26 is around the 5 year median and so shows a reasonable price. I get a Graham Price of $12.65, so the current stock price of 20.37 is some 60% higher. However, the low difference between the Graham Price and the stock price is the stock price being 103% higher. This also shows a relatively reasonable stock price. Fast growing companies often trade above the Graham Price.
The 5 year median Price/Book Value Ratio is 2.07 and the current one of 3.32 is some 63% higher. Also a Price/Book Value Ratio of 3.32 is rather high. However, this is to be expected as book value has been falling. The last test is the dividend yield test. The current yield of 6.77% is good, but it is lower than the 5 year median of 10%. However, this is also to be expected as the dividend yield has been coming down on all companies going from Income Trusts to corporations.
Until 2009, the Return on Equity for this stock was very low. The one for 2010 is 29.2%, but the 5 year median is 3.2%. The ROE for 2011 is expected to be very good also. The reason it was low in prior years is that they were not make much money before 2009.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold. The consensus would be a Buy. One analyst with a buy recommendation says that the company is not a desk pounder at this point, but it has a nice distribution and Payout Ratios are not that high. Another analyst says it is the largest operator of independent ATMs.
DirectCash does not seem to be in the payday loan business, but they have customers in this business. The majority of the customers for DirectCash's prepaid cards are payday loan and cheque cashing companies. DirectCash has a payday loan customer which accounts for over 29% of DirectCash's overall revenues. This is a risk factor. Losing one big customer or client can severely damage a company’s finances. This is what happened to Cinram that I reviewed yesterday.
DirectCash is the leading provider of ATMs, debit terminals, prepaid phone cards and prepaid cash cards in Canada. They have built a substantial technological, sales and service infrastructure that enables them to offer convenient and secure revenue streams for businesses across the country. DirectCash operates in Canada, the United States and Mexico. Over 40% owned by Gallacher family. Its web site is here Metro. See my spreadsheet at dci.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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, January 18, 2012
Cinram Intl Inc
I do not own this stock (TSX-CRW.UN), but I used to. This is a company that seems to be able to reinvent itself. It has done this before. I bought it in Feb 2000 for $8.50 when it was recovering from a crash and then sold it $26 in June 2007 because I thought it was in problems again. It sure was as it crashed again by the end of 2007 and stopped the distributions. It is now trading at $.03 per share.
Recently the company has issued new units to pay off part of their debts. See G&M article. The company has also formed another partnership. See G&M article.
There is no point in talking about growth because it has none. However, it still has over a $1B of revenue. It made a profit in 2010, but it is not expected to make one in 2011 or 2012. It also made no profit in 2007, 2008 or 2009. It had cash flow until 2010 when that turn negative also.
The company has had no positive earnings for 2011 so far and not much good news in cash flow either. Analysts expect both negative earnings and negative cash flow in 2011 and 2012.
Book Value is negative in 2010 having turned negative in 2009 and it was also negative with the latest quarterly reported of June 2011.
The 2010 Liquidity Ratio was 1.03 and the Asset/Liability Ratio was 0.99. These have gone down and currently the ratios are 0.74 and 0.81. This means that the assets cannot cover the liabilities.
The company had cash or cash equivalents totaling $164M at the end of 2010. However, the latest statements for the third quarter of 2011 gives cash or cash equivalents as $36.5M. So they are running through their cash.
When I look at analysts’ recommendations, I find Buy, Hold, Underperform and Sell. The consensus would be an Underperform.
However, I intend to keep an eye on it as it might become a good investment in the future again.
Cinram has facilities in North America and Europe. It manufactures and distributes pre-recorded DVDs, Blu-ray Discs, audio CDs, CD-ROMs and digital content for motion picture studios, music labels, publishers and computer software companies around the world. Cinram also provides distribution and logistics services to the telecommunications industry in North America through its wireless subsidiaries. The Cinram group of companies now also incorporates 1K Studios, a digital media firm based in Los Angeles. Its web site is here Cinram. See my spreadsheet at crw.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 for stocks followed and investment notes. Follow me on twitter.
Recently the company has issued new units to pay off part of their debts. See G&M article. The company has also formed another partnership. See G&M article.
There is no point in talking about growth because it has none. However, it still has over a $1B of revenue. It made a profit in 2010, but it is not expected to make one in 2011 or 2012. It also made no profit in 2007, 2008 or 2009. It had cash flow until 2010 when that turn negative also.
The company has had no positive earnings for 2011 so far and not much good news in cash flow either. Analysts expect both negative earnings and negative cash flow in 2011 and 2012.
Book Value is negative in 2010 having turned negative in 2009 and it was also negative with the latest quarterly reported of June 2011.
The 2010 Liquidity Ratio was 1.03 and the Asset/Liability Ratio was 0.99. These have gone down and currently the ratios are 0.74 and 0.81. This means that the assets cannot cover the liabilities.
The company had cash or cash equivalents totaling $164M at the end of 2010. However, the latest statements for the third quarter of 2011 gives cash or cash equivalents as $36.5M. So they are running through their cash.
When I look at analysts’ recommendations, I find Buy, Hold, Underperform and Sell. The consensus would be an Underperform.
However, I intend to keep an eye on it as it might become a good investment in the future again.
Cinram has facilities in North America and Europe. It manufactures and distributes pre-recorded DVDs, Blu-ray Discs, audio CDs, CD-ROMs and digital content for motion picture studios, music labels, publishers and computer software companies around the world. Cinram also provides distribution and logistics services to the telecommunications industry in North America through its wireless subsidiaries. The Cinram group of companies now also incorporates 1K Studios, a digital media firm based in Los Angeles. Its web site is here Cinram. See my spreadsheet at crw.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 for stocks followed and investment notes. Follow me on twitter.
Tuesday, January 17, 2012
Inter Pipeline Fund
I do not own this stock (TSX-IPL.UN). It is not that this is not fine company, but I already have enough in pipelines. The current dividend yield is good at 5.68% but not as good as the 5 year median dividend yield of 9%. However, this is to be expected since the rules changed for income trust companies.
However, this company intends to remain structured as a limited partnership. As a limited partnership, Inter Pipeline also retains the ability to treat a portion of our annual distributions to unitholders as a tax-deferred return of capital. Here is some information on Limited Partnerships at about.com. Tax reporting can be a bit tricky, so know what you are getting into. IPL has lots of information on this at their web site.
The growth in dividends for the last 5 and 10 years at 3.7% and 3.5% per year, respectively is good considering the high dividend yield and that inflation (according to the Canadian Government was running around 2% per year over the past 5 and 10 years). Also, there was no dividend increases in 2008 and 2009. The most recent dividend increase for 2012 was 9.4%.
The Dividend Payout Ratios are high, with 5 year median ratios at 97% and 66% for earnings and cash flow, respectively. The DPR for cash flow is expected to come down a bit this year to around 63% in 2011, but the DPR for earnings is not expected to retreat at all. The above is probably why the book value is losing ground with it declining by 1.5% and 3.7% over the past 5 and 10 years.
Total returns for the stock over the past 5 and 10 years have been very good with 5 and 10 year returns at 23% and 18.5% per year, respectively. The portion of this return attributable to dividends was 7.4% and 7.7%, respectively. However, expect a lower portion of total return from this stock in the future, as dividend yields are coming down.
The growth in revenue over the past 5 years is not good, but it is over the past 10 years. Growth in revenue per share over the past 5 years is a negative 5% per year. Growth over the past 10 years is 13% per year. Growth in earnings and cash flow are both good.
Recently, the return on equity has been good. The ROE for the end of the 2010 financial year was 17.6%, but the 5 year median at 11.9% was still good, but lower. The ROE for the 12 months ending in September 2011 is good at 18.6%. The ROE on comprehensive income is also good with the one for 2010 at 15.5% and with a 4 year median rate of 13%.
The Liquidity Ratio for this company has often been quite low. Part of this is because it includes a current of the long term debt. The company does have debt facilities in place to handle debt. The Liquidity Ratio given is 0.10. You need a ratio of at least 1.00 for current assets to cover current liabilities. However, if you include the cash flow in the calculation, the ratio is 1.30.
The Asset/Liability Ratio has lately been low also, with a current value of 1.42 and a 5 year median ratio of also 1.42. (I would prefer both Liquidity Ratio and A/L Ratio to be at least 1.50.) The Leverage and Debt/Equity Ratios currently at 3.40 and 2.40 are not unusual for this sort of company.
The Insider Trading report shows no insider trading over the past year. However, insiders are given deferred Unit rights not options. Few insiders actually own any Class A Units (sold on TSX, Limited Liability Units) or Class B Units (Unlimited Liability Units.) Most insiders have Deferred Unit Rights. Institutions hold around 12% of the outstanding units. Over the past 3 months were has been some buying and selling and they have reduced the units they hold by 3.5%.
The 5 year median low and high Price/Earnings Ratios are 9.98 and 16.74. The current P/E ratio of 19 is therefore rather high. I get a current Graham Price of $10.90 and the current stock price of $18.49 is some 70% higher. The 10 year median high difference between the Graham Price and stock price is 22%. By this measure, stock price is high.
The Price/Book Value Ratio is going to be relatively high because the book value has been decreasing. However, it is also absolutely high at 3.40. The current dividend yield is also relatively low as the dividend yield has been decreasing.
The analysts’ recommendations on this stock are Strong Buy, Buy and Hold. The consensus recommendation is a Hold. The 12 month stock price for a couple of Hold recommendations is $18, which is slightly below the current price. A number of analysts say they like the company and that it is well managed. However, they also say buy on weakness, or buy at or below $16.50 to $17.00.
There is a recent G&M article from a technical analyses view.
As I have said, I will not be buying this as I have enough pipeline companies in my portfolio.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not an income trust. Its web site is here Inter Pipeline. See my spreadsheet at IPL.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 for stocks followed and investment notes. Follow me on twitter.
However, this company intends to remain structured as a limited partnership. As a limited partnership, Inter Pipeline also retains the ability to treat a portion of our annual distributions to unitholders as a tax-deferred return of capital. Here is some information on Limited Partnerships at about.com. Tax reporting can be a bit tricky, so know what you are getting into. IPL has lots of information on this at their web site.
The growth in dividends for the last 5 and 10 years at 3.7% and 3.5% per year, respectively is good considering the high dividend yield and that inflation (according to the Canadian Government was running around 2% per year over the past 5 and 10 years). Also, there was no dividend increases in 2008 and 2009. The most recent dividend increase for 2012 was 9.4%.
The Dividend Payout Ratios are high, with 5 year median ratios at 97% and 66% for earnings and cash flow, respectively. The DPR for cash flow is expected to come down a bit this year to around 63% in 2011, but the DPR for earnings is not expected to retreat at all. The above is probably why the book value is losing ground with it declining by 1.5% and 3.7% over the past 5 and 10 years.
Total returns for the stock over the past 5 and 10 years have been very good with 5 and 10 year returns at 23% and 18.5% per year, respectively. The portion of this return attributable to dividends was 7.4% and 7.7%, respectively. However, expect a lower portion of total return from this stock in the future, as dividend yields are coming down.
The growth in revenue over the past 5 years is not good, but it is over the past 10 years. Growth in revenue per share over the past 5 years is a negative 5% per year. Growth over the past 10 years is 13% per year. Growth in earnings and cash flow are both good.
Recently, the return on equity has been good. The ROE for the end of the 2010 financial year was 17.6%, but the 5 year median at 11.9% was still good, but lower. The ROE for the 12 months ending in September 2011 is good at 18.6%. The ROE on comprehensive income is also good with the one for 2010 at 15.5% and with a 4 year median rate of 13%.
The Liquidity Ratio for this company has often been quite low. Part of this is because it includes a current of the long term debt. The company does have debt facilities in place to handle debt. The Liquidity Ratio given is 0.10. You need a ratio of at least 1.00 for current assets to cover current liabilities. However, if you include the cash flow in the calculation, the ratio is 1.30.
The Asset/Liability Ratio has lately been low also, with a current value of 1.42 and a 5 year median ratio of also 1.42. (I would prefer both Liquidity Ratio and A/L Ratio to be at least 1.50.) The Leverage and Debt/Equity Ratios currently at 3.40 and 2.40 are not unusual for this sort of company.
The Insider Trading report shows no insider trading over the past year. However, insiders are given deferred Unit rights not options. Few insiders actually own any Class A Units (sold on TSX, Limited Liability Units) or Class B Units (Unlimited Liability Units.) Most insiders have Deferred Unit Rights. Institutions hold around 12% of the outstanding units. Over the past 3 months were has been some buying and selling and they have reduced the units they hold by 3.5%.
The 5 year median low and high Price/Earnings Ratios are 9.98 and 16.74. The current P/E ratio of 19 is therefore rather high. I get a current Graham Price of $10.90 and the current stock price of $18.49 is some 70% higher. The 10 year median high difference between the Graham Price and stock price is 22%. By this measure, stock price is high.
The Price/Book Value Ratio is going to be relatively high because the book value has been decreasing. However, it is also absolutely high at 3.40. The current dividend yield is also relatively low as the dividend yield has been decreasing.
The analysts’ recommendations on this stock are Strong Buy, Buy and Hold. The consensus recommendation is a Hold. The 12 month stock price for a couple of Hold recommendations is $18, which is slightly below the current price. A number of analysts say they like the company and that it is well managed. However, they also say buy on weakness, or buy at or below $16.50 to $17.00.
There is a recent G&M article from a technical analyses view.
As I have said, I will not be buying this as I have enough pipeline companies in my portfolio.
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. The company is a limited partnership, not an income trust. Its web site is here Inter Pipeline. See my spreadsheet at IPL.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 for stocks followed and investment notes. Follow me on twitter.
Monday, January 16, 2012
CI Financial Corp
I do not own this stock (TSX-CIX). This was an income trust company and it switched back to a corporation in January 2009. As an income trust it increased its dividend substantially (around 200%). When it switched back to a corporation it lowered its dividends (around 75%). It was an income trust between 2006 and 2009.
For the year ending in December 2011, the growth in dividends is 4.7%, as this period starts before the income trust increase. As an income trust, the dividend yield was quite high. It was much lower before becoming an income trust and it is much lower after. Currently, the dividend yield is 4.4%. The 5 year median is much higher at 8%.
Part of the reason for the higher past dividend yield was due to the fact that earnings and cash flow peaked in 2007 and this company has not been able yet to get back to these peaks. In the past the Dividend Payout Ratios were very high. The 5 year medians are still quite high at 98.5% for earnings and 92% for cash flow. However, the corresponding DPRs for 2011 are expected to be 68% and 62%, respectively, which are much better.
Total return over the past 5 years is basically 0, with dividends providing some 6.5% return. That is, you broken even because of dividends paid. The total return over the past 10 years is much better at 10%, with 5.7% of this return attributable to dividends. The portion of the total return in the future that is attributable to dividends will probably be lower.
Because the financial statements are not yet available for 2011, I only have growth to the last year’s final statements of 2010. Growth over the past 5 is modest, with generally the 10 year growth being better. The growth in earnings over the past 5 and 10 years is 3.3% and 39% per year. Revenue growth is more modest, with 5 and 10 year growth at 2.8% and 6.9% per year. Cash growth is low, with 5 and 10 year growth at 5.2% and 3.4% per year. I would not expect any better growth figures for 2011.
The current Liquidity Ratio at 1.13 is better than it has been for some time, as was generally below 1.00. Part of the reason for the low Liquidity Ratio was that the company included a portion of the long term debt in current liabilities. They do have credit facilities to handle their long term debt.
The Asset/Liability Ratio has always been quite good with a current one of 2.09. The Leverage and Debt/Equity Ratios have been quite good and the current ones are 1.92 and 0.92, respectively.
The Return on Equity has always been good with a 5 year median at 20.5%. The ROE based on the comprehensive income is also good with the 5 year median also being 20.5%.
The insider trading report shows some $14.1M of insider selling, with the majority of this selling by directors. There is a very modest about of insider buying. Insider selling seems to be of options. The insider trading report shows that insider own more shares and options and this is a good thing. There are 96 institutions who own some 66% of this company. This probably includes the 36.5% owned by the Bank of Nova Scotia. Institutions have been buying and selling shares over the past 3 months and they have very modestly reduced their investment in this company.
I get 5 year median low and high Price/Earnings Ratios of 11.19 and 18.34. The current P/E Ratio of 15.4 would in between these and towards to lower ratio. I get a Graham Price of $13.35 and the current stock price of $20.60 is some 54% higher. This is a better ratio that the median one where the stock price is 69% higher than the Graham Price.
I get a 10 year median Price/Book Value ratio of 4.21 and the current one of 3.56 is some 89% lower. The only test that does not show a currently relatively reasonable stock price is the dividend yield where the current one of 4.4% is higher than the 5 year median of 8%. However, the 10 year median high dividend yield of 4.3% is probably a better test as the dividends were greatly increased while this stock was an income trust.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. A Buy recommendation comes with a 12 months stock price of $24. One analyst remarked on the attractive dividend yields and a dividend yield over 4% is certainly attractive for a mutual fund company.
Mutual funds tend to suffer in market downturns as investors pull out funds during such periods. One analyst felt that CI Financial funds solid performance will allow it to compete effectively in the current market. However, a couple of analysts said that they do not think this stock will go anywhere anytime soon.
I have heard to said that you are better off buying mutual fund companies rather than mutual funds because will you get a better return. I do not know if this is true or not because I have not invested in this area. However, the price of this particular stock seems reasonable, so it might be the time to invest in this stock. However, I would not expect to make much money on it over the next couple of years.
Should Bank of Nova Scotia sell their shares in this company? See Financial Post article. Barclays Capital downgraded CI Financial from overweight to equal weight. See Financial Post article.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. Its web site is here CI Funds. See my spreadsheet at cix.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 for stocks followed and investment notes. Follow me on twitter.
For the year ending in December 2011, the growth in dividends is 4.7%, as this period starts before the income trust increase. As an income trust, the dividend yield was quite high. It was much lower before becoming an income trust and it is much lower after. Currently, the dividend yield is 4.4%. The 5 year median is much higher at 8%.
Part of the reason for the higher past dividend yield was due to the fact that earnings and cash flow peaked in 2007 and this company has not been able yet to get back to these peaks. In the past the Dividend Payout Ratios were very high. The 5 year medians are still quite high at 98.5% for earnings and 92% for cash flow. However, the corresponding DPRs for 2011 are expected to be 68% and 62%, respectively, which are much better.
Total return over the past 5 years is basically 0, with dividends providing some 6.5% return. That is, you broken even because of dividends paid. The total return over the past 10 years is much better at 10%, with 5.7% of this return attributable to dividends. The portion of the total return in the future that is attributable to dividends will probably be lower.
Because the financial statements are not yet available for 2011, I only have growth to the last year’s final statements of 2010. Growth over the past 5 is modest, with generally the 10 year growth being better. The growth in earnings over the past 5 and 10 years is 3.3% and 39% per year. Revenue growth is more modest, with 5 and 10 year growth at 2.8% and 6.9% per year. Cash growth is low, with 5 and 10 year growth at 5.2% and 3.4% per year. I would not expect any better growth figures for 2011.
The current Liquidity Ratio at 1.13 is better than it has been for some time, as was generally below 1.00. Part of the reason for the low Liquidity Ratio was that the company included a portion of the long term debt in current liabilities. They do have credit facilities to handle their long term debt.
The Asset/Liability Ratio has always been quite good with a current one of 2.09. The Leverage and Debt/Equity Ratios have been quite good and the current ones are 1.92 and 0.92, respectively.
The Return on Equity has always been good with a 5 year median at 20.5%. The ROE based on the comprehensive income is also good with the 5 year median also being 20.5%.
The insider trading report shows some $14.1M of insider selling, with the majority of this selling by directors. There is a very modest about of insider buying. Insider selling seems to be of options. The insider trading report shows that insider own more shares and options and this is a good thing. There are 96 institutions who own some 66% of this company. This probably includes the 36.5% owned by the Bank of Nova Scotia. Institutions have been buying and selling shares over the past 3 months and they have very modestly reduced their investment in this company.
I get 5 year median low and high Price/Earnings Ratios of 11.19 and 18.34. The current P/E Ratio of 15.4 would in between these and towards to lower ratio. I get a Graham Price of $13.35 and the current stock price of $20.60 is some 54% higher. This is a better ratio that the median one where the stock price is 69% higher than the Graham Price.
I get a 10 year median Price/Book Value ratio of 4.21 and the current one of 3.56 is some 89% lower. The only test that does not show a currently relatively reasonable stock price is the dividend yield where the current one of 4.4% is higher than the 5 year median of 8%. However, the 10 year median high dividend yield of 4.3% is probably a better test as the dividends were greatly increased while this stock was an income trust.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Hold. A Buy recommendation comes with a 12 months stock price of $24. One analyst remarked on the attractive dividend yields and a dividend yield over 4% is certainly attractive for a mutual fund company.
Mutual funds tend to suffer in market downturns as investors pull out funds during such periods. One analyst felt that CI Financial funds solid performance will allow it to compete effectively in the current market. However, a couple of analysts said that they do not think this stock will go anywhere anytime soon.
I have heard to said that you are better off buying mutual fund companies rather than mutual funds because will you get a better return. I do not know if this is true or not because I have not invested in this area. However, the price of this particular stock seems reasonable, so it might be the time to invest in this stock. However, I would not expect to make much money on it over the next couple of years.
Should Bank of Nova Scotia sell their shares in this company? See Financial Post article. Barclays Capital downgraded CI Financial from overweight to equal weight. See Financial Post article.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. Its web site is here CI Funds. See my spreadsheet at cix.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 for stocks followed and investment notes. Follow me on twitter.
Friday, January 13, 2012
Intact Financial Corp
I do not own this stock (TSX-IFC). TD Waterhouse put out a report on good dividend paying stocks to own. This was a stock they named. I had not heard of it before, so I decided to investigate it. TD reports is at TD Waterhouse. (Note that this company used to be ING Group)
The company has only been paying dividends only since 2005. The growth in dividends over the past 5 years is 8.16%. The most recent dividend increase, at the beginning of 2011 was 8.8%. In the past they have increase their dividends at the beginning of the year. They have not yet announced their increase for 2012, but this is not due until March 2012.
The 5 year median dividend yield 3.1% and the current one is 2.6%. The Dividend Payout Ratios are good at 37.5% for earnings and 28.5% for cash flow. The potential return in 10 years’ time, if you purchase this stock today, is 5.64%.
Growth has been just ok. However, this is a general insurance company and you can expect to see more volatility in earnings and cash flows that what you would see in other insurance companies, like life insurance. The upside to this is that this stock can offer some really good entry points for buying.
Growth in Cash Flow is best with a 5 year growth at 11% per year. The worse is in earnings, which is down 9% per year over the past 5 years. Growth in both revenues and book value are mediocre. Revenue growth over past 5 years is 4.6% per year and book value growth over the past 5 years is 4.8% per year.
The Liquidity Ratio has fluctuated, but the current one at 18.05 is extremely good. On the other hand, the current Asset/Liability Ratio is mediocre at 1.27. This is lower than the 5 year median ratio of 1.37. The Leverage and Debt/Equity Ratios are a little high at 5.27 and 4.14. These are also higher than the 5 year median ratios of 3.76 and 2.76.
The Return on Equity has fluctuated, but the one for the last quarter ending September 30th is good at 12.7%. The ROE for the end of the 2010 financial year was only a bit better at 13.7%.
When I look at insider trading, I find that there has been $1.9M of insider selling and a minimal amount of insider buying. This company does not seem to have stock options for insiders, but they do have a similar long term stock incentive plan. There are a lot of insiders under this plan, and they generally have more stock incentive shares than stock shares.
There are 414 institutions that hold some 41% of the shares of this company. There has been buying and selling over the past 3 months, however, they have increased their exposure to this company by3.6% over the past 3 months.
The 5 year median high and low Price/Earnings Ratios are 11.96 and 14.94. On a relative basis, the current P/E of 10.07 would be low. (The 10 year median P/E is 10.13.) I get a current Graham Price of $60.58 and the current stock price of $56.70 is some 6.4% lower. The median and high difference between the Graham Price is the stock being 12.2% lower and 10.8% higher, respectively. This points the stock price above the median one, but below the high one, relatively.
I get a 10 year median Price/Book Value of 1.69 and a current one of 1.96. This puts the current ratio some 16% above the long term one. I get a 5 year median Dividend Yield of 3.09% and a current one of 2.61%. The low yield over the past 7 years is 2.32%.
All these tests, except for the P/E Ratio, show a reasonable, but not great stock price. Since the P/E ratio is based on earning estimates, I think the price is reasonable, but not great.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus would be a Buy. With this Buy recommendation comes with a 12 months stock price of $66.98. A Hold recommendation comes with a 12 month stock price of $64. Analysts agree that this is a well-run company. Many think that earnings are going to soar in 2012 and this is the reason for the low P/E Ratio.
A number of analysts mention the recent growth by 40% when they acquired a Canadian subsidiary of a French company, AXA Canada. I have not invested in any general insurance companies. I took a look at this because of the TD report I mentioned. Dividend is ok at 2.6%. I have always thought of general insurance companies a rather volatile as far as earnings go. However, if you are patient and wait for the next down turn in the general insurance industry, you could probably pick this company up cheaply.
Intact Financial Corporation (www.intactfc.com) is the largest provider of property and casualty insurance in Canada. Intact offers home, auto and business insurance through Intact Insurance, Novex Group Insurance, Belairdirect, GP Car and Home and BrokerLink. Its web site is here Metro. See my spreadsheet at ifc.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 for stocks followed and investment notes. Follow me on twitter.
The company has only been paying dividends only since 2005. The growth in dividends over the past 5 years is 8.16%. The most recent dividend increase, at the beginning of 2011 was 8.8%. In the past they have increase their dividends at the beginning of the year. They have not yet announced their increase for 2012, but this is not due until March 2012.
The 5 year median dividend yield 3.1% and the current one is 2.6%. The Dividend Payout Ratios are good at 37.5% for earnings and 28.5% for cash flow. The potential return in 10 years’ time, if you purchase this stock today, is 5.64%.
Growth has been just ok. However, this is a general insurance company and you can expect to see more volatility in earnings and cash flows that what you would see in other insurance companies, like life insurance. The upside to this is that this stock can offer some really good entry points for buying.
Growth in Cash Flow is best with a 5 year growth at 11% per year. The worse is in earnings, which is down 9% per year over the past 5 years. Growth in both revenues and book value are mediocre. Revenue growth over past 5 years is 4.6% per year and book value growth over the past 5 years is 4.8% per year.
The Liquidity Ratio has fluctuated, but the current one at 18.05 is extremely good. On the other hand, the current Asset/Liability Ratio is mediocre at 1.27. This is lower than the 5 year median ratio of 1.37. The Leverage and Debt/Equity Ratios are a little high at 5.27 and 4.14. These are also higher than the 5 year median ratios of 3.76 and 2.76.
The Return on Equity has fluctuated, but the one for the last quarter ending September 30th is good at 12.7%. The ROE for the end of the 2010 financial year was only a bit better at 13.7%.
When I look at insider trading, I find that there has been $1.9M of insider selling and a minimal amount of insider buying. This company does not seem to have stock options for insiders, but they do have a similar long term stock incentive plan. There are a lot of insiders under this plan, and they generally have more stock incentive shares than stock shares.
There are 414 institutions that hold some 41% of the shares of this company. There has been buying and selling over the past 3 months, however, they have increased their exposure to this company by3.6% over the past 3 months.
The 5 year median high and low Price/Earnings Ratios are 11.96 and 14.94. On a relative basis, the current P/E of 10.07 would be low. (The 10 year median P/E is 10.13.) I get a current Graham Price of $60.58 and the current stock price of $56.70 is some 6.4% lower. The median and high difference between the Graham Price is the stock being 12.2% lower and 10.8% higher, respectively. This points the stock price above the median one, but below the high one, relatively.
I get a 10 year median Price/Book Value of 1.69 and a current one of 1.96. This puts the current ratio some 16% above the long term one. I get a 5 year median Dividend Yield of 3.09% and a current one of 2.61%. The low yield over the past 7 years is 2.32%.
All these tests, except for the P/E Ratio, show a reasonable, but not great stock price. Since the P/E ratio is based on earning estimates, I think the price is reasonable, but not great.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus would be a Buy. With this Buy recommendation comes with a 12 months stock price of $66.98. A Hold recommendation comes with a 12 month stock price of $64. Analysts agree that this is a well-run company. Many think that earnings are going to soar in 2012 and this is the reason for the low P/E Ratio.
A number of analysts mention the recent growth by 40% when they acquired a Canadian subsidiary of a French company, AXA Canada. I have not invested in any general insurance companies. I took a look at this because of the TD report I mentioned. Dividend is ok at 2.6%. I have always thought of general insurance companies a rather volatile as far as earnings go. However, if you are patient and wait for the next down turn in the general insurance industry, you could probably pick this company up cheaply.
Intact Financial Corporation (www.intactfc.com) is the largest provider of property and casualty insurance in Canada. Intact offers home, auto and business insurance through Intact Insurance, Novex Group Insurance, Belairdirect, GP Car and Home and BrokerLink. Its web site is here Metro. See my spreadsheet at ifc.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 for stocks followed and investment notes. Follow me on twitter.
Thursday, January 12, 2012
Metro Inc 2
I own this stock (TSX-MRU.A). I bought this stock in 2004. I have made a total return of 18.23% per year. The portion of this return attributable to dividends would be only 1.35%. This is quite typical of grocery stocks. Dividend yields are usually always low, but dividend increases are good.
Over the past year there has been insider trading, but mostly insider selling to the tune of $16.3M and minimal inside buying. It would appear that insiders are selling off stock options. All insiders, except for directors, have more stock options than shares. Metro is also buying back shares.
There are 139 institutions that own some 36% of this company. Over the past 3 months they have reduced their exposure to this company marginally (by less than 1%).
The 5 year median high and low Price/Earnings Ratios are 9.08 and 13.18 respectively. The current price of $52.41 has a P/E of 12.27. This shows a relatively high stock price. I get a Graham Price of $49.40. The current stock price is some 6.1% higher. The median difference between the Graham Price and the stock price is the stock price being 6.98% higher. This difference points to a relatively reasonable stock price.
I get a 10 year median Price/Book Value Ratio of 2.16 and a current P/B Ratio of 2.06, some 3% lower. This lower P/B Ratio points to a reasonable stock price. The 5 year median Dividend Yield is 1.6%. The current dividend yield is only 1.47%, a value 8% lower. This difference points to a relatively high stock price. The 10 year median dividend yield on high stock prices is 1.33%. This says that the stock price has been relatively higher.
My stock price tests are mixed, but I believe that they point to a relatively high price, although the stock has, in the past been relatively higher.
So, what do the analysts say? I find recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The consensus recommendation would be a Buy. There are more recommendations on the buy side, than the underperform/sell side. One Buy comes with a 12 month stock price of $56. One analyst said that the company is cost-focused.
Another analyst said that this company is well-run, but he felt that the whole industry is suffering from margin compression, which he does not like. This is similar to my worry about lack of increase in revenues discussed in my posting of yesterday.
See a recent reports from G&M, with one dated November 16, 2011 and another one dated the same day.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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 for stocks followed and investment notes. Follow me on twitter.
Over the past year there has been insider trading, but mostly insider selling to the tune of $16.3M and minimal inside buying. It would appear that insiders are selling off stock options. All insiders, except for directors, have more stock options than shares. Metro is also buying back shares.
There are 139 institutions that own some 36% of this company. Over the past 3 months they have reduced their exposure to this company marginally (by less than 1%).
The 5 year median high and low Price/Earnings Ratios are 9.08 and 13.18 respectively. The current price of $52.41 has a P/E of 12.27. This shows a relatively high stock price. I get a Graham Price of $49.40. The current stock price is some 6.1% higher. The median difference between the Graham Price and the stock price is the stock price being 6.98% higher. This difference points to a relatively reasonable stock price.
I get a 10 year median Price/Book Value Ratio of 2.16 and a current P/B Ratio of 2.06, some 3% lower. This lower P/B Ratio points to a reasonable stock price. The 5 year median Dividend Yield is 1.6%. The current dividend yield is only 1.47%, a value 8% lower. This difference points to a relatively high stock price. The 10 year median dividend yield on high stock prices is 1.33%. This says that the stock price has been relatively higher.
My stock price tests are mixed, but I believe that they point to a relatively high price, although the stock has, in the past been relatively higher.
So, what do the analysts say? I find recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The consensus recommendation would be a Buy. There are more recommendations on the buy side, than the underperform/sell side. One Buy comes with a 12 month stock price of $56. One analyst said that the company is cost-focused.
Another analyst said that this company is well-run, but he felt that the whole industry is suffering from margin compression, which he does not like. This is similar to my worry about lack of increase in revenues discussed in my posting of yesterday.
See a recent reports from G&M, with one dated November 16, 2011 and another one dated the same day.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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 for stocks followed and investment notes. Follow me on twitter.
Wednesday, January 11, 2012
Metro Inc
I own this stock (TSX-MRU.A). I bought this stock in 2004. I have made a total return of 18.23% per year. The portion of this return attributable to dividends would be only 1.35%. This is quite typical of grocery stocks. Dividend yields are usually always low, but dividend increases are good.
This stock is on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). It is considered to be a dividend paying growth stock. These stocks are characterized by low dividend yields, high dividend growth and good capital gains.
I have had this stock for 8 years and the yield on my original investment is 4.36%. The dividend growth over the last 5 and 10 years has been at 11.8% and 15.4% per year, respectively. The last dividend increase for the 2011 financial year was for 13.2%. The 5 year median dividend yield is 1.6%.
The dividend yield has always been quite low on this stock and with this comes very low Dividend Payout Ratios. The DPRs for Earnings is 19.4 and for cash flow is 13%. The 5 year median DPR for earnings is 19% and for Cash Flow is 12%.
Mostly growth is good. The exception is growth in Revenue. Revenue growth over the past 5 and 10 years is up by 1% and 8.9% per year, respectively. Revenue growth per share is up 3.5% and 8.8% per year, respectively. The reason for the difference in revenue and revenue per share over the past 5 years is that the company has been buying back stock, so there are fewer shares now than 5 years ago.
Future revenue growth over the next two years is not expected to be very high either. This could be a problem as it is revenue growth that ultimately fuels a company’s growth. Without growth in earnings and cash flow, you cannot grow dividends.
For total return over the past 5 and 10 years, growth has been at 7.4% and 19.3% respectively. The portion of the return attributable to dividends is 1.5% and 2.2%, respectively. Earnings, Cash Flow and Book Value growth are all good. For example, EPS growth over the past 5 and 10 years is at 11.3% and 12% per year, respectively.
Liquidity Ratios are fine. The current one is 1.16 which is low but ok. It is better than the 5 year median one of 1.09. The Asset/Liabilities ratio has always been very good. The current one is at 2.07 and this ratio has a 5 year median value of 1.94. The Leverage and Debt/Equity Ratios are fine at 1.93 and 0.93. They are better than the 5 year median values of 2.06 and 1.06, respectively. (See my site for further information on Debt Ratios.)
The Return on Equity Ratios has generally been good and the one for the end of the financial year ending in September is 15%. The 5 year median ROE is 15%. The ROE based on the Comprehensive Income is also good at 15%. The good range for the ROE is the 10% to 15% range. A lot of companies are now reporting the Comprehensive Income. For more information on this, see Wikipedia.
I have been pleased with the performance of this stock. It is classified as a consumer staple stock. I started to invest in such stock once I had invested in enough utilities and financial stocks. However, I am keeping an eye on the revenues.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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 for stocks followed and investment notes. Follow me on twitter.
This stock is on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). It is considered to be a dividend paying growth stock. These stocks are characterized by low dividend yields, high dividend growth and good capital gains.
I have had this stock for 8 years and the yield on my original investment is 4.36%. The dividend growth over the last 5 and 10 years has been at 11.8% and 15.4% per year, respectively. The last dividend increase for the 2011 financial year was for 13.2%. The 5 year median dividend yield is 1.6%.
The dividend yield has always been quite low on this stock and with this comes very low Dividend Payout Ratios. The DPRs for Earnings is 19.4 and for cash flow is 13%. The 5 year median DPR for earnings is 19% and for Cash Flow is 12%.
Mostly growth is good. The exception is growth in Revenue. Revenue growth over the past 5 and 10 years is up by 1% and 8.9% per year, respectively. Revenue growth per share is up 3.5% and 8.8% per year, respectively. The reason for the difference in revenue and revenue per share over the past 5 years is that the company has been buying back stock, so there are fewer shares now than 5 years ago.
Future revenue growth over the next two years is not expected to be very high either. This could be a problem as it is revenue growth that ultimately fuels a company’s growth. Without growth in earnings and cash flow, you cannot grow dividends.
For total return over the past 5 and 10 years, growth has been at 7.4% and 19.3% respectively. The portion of the return attributable to dividends is 1.5% and 2.2%, respectively. Earnings, Cash Flow and Book Value growth are all good. For example, EPS growth over the past 5 and 10 years is at 11.3% and 12% per year, respectively.
Liquidity Ratios are fine. The current one is 1.16 which is low but ok. It is better than the 5 year median one of 1.09. The Asset/Liabilities ratio has always been very good. The current one is at 2.07 and this ratio has a 5 year median value of 1.94. The Leverage and Debt/Equity Ratios are fine at 1.93 and 0.93. They are better than the 5 year median values of 2.06 and 1.06, respectively. (See my site for further information on Debt Ratios.)
The Return on Equity Ratios has generally been good and the one for the end of the financial year ending in September is 15%. The 5 year median ROE is 15%. The ROE based on the Comprehensive Income is also good at 15%. The good range for the ROE is the 10% to 15% range. A lot of companies are now reporting the Comprehensive Income. For more information on this, see Wikipedia.
I have been pleased with the performance of this stock. It is classified as a consumer staple stock. I started to invest in such stock once I had invested in enough utilities and financial stocks. However, I am keeping an eye on the revenues.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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 for stocks followed and investment notes. Follow me on twitter.
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