I do not own this stock (TSX-RSI). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has converted to corporation.
There is little insider trading, with some insider selling and some insider buying with a small net of insider selling. Belkin Enterprises Ltd. owned by Alton Stuart Belkin owns around 13% of the outstanding shares worth around $70M. Most insiders have some shares or debentures. There are some use of options, but very little.
There are 13 institutions that hold some 28% of the outstanding stock. Over the past 3 months they have very marginally increased their shareholdings. Because the increase is so small it tells us that they are just holding on to their shares.
I get 5 year low, median and high median Price/Earnings Ratios of 8.06, 9.42 and 10.40. The current P/E is 12.12 based on a stock price of $6.18 and a 2012 EPS of $0.51. Although this is not a particularly high P/E Ratio, it is certainly relatively high for this stock. (Using 10 year median P/E Ratios would not help as these are very close to the 5 year P/E Ratios.)
However, companies transitioning from an income trust to a corporation are expected to have stock price increases and dividend decreases or a combination so that the dividend yields go to a 4 to 5% yield. The yield on this stock is above this 4 to 5% range coming currently in at 5.83%, this might suggest that the stock price may not be that high.
I get a Graham Price of $5.86 and 10 year low, median and high median Price/Graham Price Ratios are 0.69, 0.78 and 087. This means that the Graham Price is usually higher than the stock price. The current P/GP Ratio is 1.05. This means that the stock price of $6.18 is relatively high.
I get a 10 year Price/Book Value Ratio of 1.38. The current P/B Ratio is 2.07, a value some 50% higher than the 10 year median. This test shows that the stock price of $6.18 is relatively high. As with all income trusts, this book value growth is non-existent or very low. Most income trusts cannot pass this test.
The dividend yield test would also say that the stock price is relatively high. This is because the 4 year median dividend yield is 10.18% and the current dividend yield is 5.83%, a yield that is some 43% lower. However, this stock went from an income trust to a corporation and it was expected that a combination of dividend decreases and stock increases will lower dividend yields on these companies to a 4 to 5% dividend yield.
Part of the decrease in dividends is due to the fact that dividends were initially reduced by some 26%. The stock price has also gone up and this stock shows a dividend yield above the 4 to 5% range. This is implies that the stock price has not risen or the dividend has not been cut as much as expected or some of both. It may also imply that the stock may not be overpriced. Sometimes these things are not a clear cut as we might like them to be.
When I look at analysts' recommendations, I find only a few analysts following this stock and they all have the same rating which is a Hold. The consensus recommendation would be a Hold. It would seem that the consensus 12 months stock price is around $6.00. This implies that the analysts do not expect much in capital gain over the next 12 months. In fact they expect a capital loss over the next 12 months.
One analyst with a Hold recommendation thinks that the stock price is too high. Another analyst complained that that sugar prices can vary so much over time. A few mentioned that one of their main inputs is natural gas, and natural gas is currently very cheap. (The energy they use is from natural gas.)
Although this blog report is from last year, it is from a blogger than likes this stock and he has some interesting things to say about it. See Divestor Blog.
I must admit this is not a stock that I would buy. It is a mature and low growth stock, but I perceive it as rather risky. If I want a risky stock with dividends, I go for fast growing stock with dividends. I do favor tech companies.
I perceive this company as risky as sugar is a commodity and prices of commodities are generally volatile and I do not invest in commodity is any sort of big way. For example, I have very little in oil and gas investments. I admit that in these sorts of investments you can sometimes make a lot of income, but it is volatile and I do not like my income to be volatile.
Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Husky. See my spreadsheet at rsi.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, August 31, 2012
Thursday, August 30, 2012
Rogers Sugar Inc
I do not own this stock (TSX-RSI). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has converted to corporation.
When this stock converted to a corporation they decreased the dividend some 26%. This was in 2011. In 2012, they increased the dividend by 5.9%. Prior to this they had a mixed record. Dividend yields were high (9 to 13%), but they lowered as well as raised their dividends. Dividends are still quite good at 5.83%, but not as good as before.
It is not bad that a company changes it dividend based on what it can pay, however, if you are living off you dividends, you have to take this into consideration before investing in this company. Companies that vary their dividends tend to decrease them in bad times and raise them in good times. Also, because this company is no longer an income trust, they will not go back to the very high dividends of past years.
The 5 year median Dividend Payout Ratios are 91.34% per year for earnings and 57.55% per year for cash flow. The DPR for earnings are quite high. For the financial year ending September 2011 the DPR for earnings was 82.2%. However, the DPR for earnings is expected to get much better for 2012 and is expected to be around 68.6%.
The total return over the past 5 and 10 years is 12.48% and 11.51%. The interest portion of this return was 9.44% and 9.55% per year, respectively. The capital gain portion was 3.04% and 1.96% per year, respectively. As you can see, most of the return was in dividend income and this came in at 76% and 83% of total returns over the past 5 and 10 years. Dividend returns will be lower going forward.
There was a big increase in shares outstanding in both 2002 and 2003. The increase in shares over the past 10 years is therefore rather high at 7.9% per year. The increase in shares outstanding over the past 5 years is very low at just slightly above 0%. Outstanding share changes can affect the per share values under a company.
The revenues of this company have grown at the rate of 2.8% and 12.7% per year over the past 5 and 10 years. The revenue per share has grown at the rate of 2.8% and 4.4% per year over the past 5 and 10 years. The big difference in the 10 year growth between revenue and revenue per share is due to the big increase in shares over the past 10 years. Revenue growth is important, but as an owner of shares, the growth per share is also quite important.
Earnings per share are a different story with growth at 1.9% and 0% over the past 5 and 10 years. Cash Flow growth is also non-existent as it has declined over the past 5 years by 1.4% and grew over the past 10 years at just 1.4%. However, over the past 10 years, they just had 1 year with negative earnings and no years with negative cash flow.
Book values do not do well under income trust companies, so it is not surprising that over the past 5 years book value per share has only grown at 2.8%. The book value per share has declined over the past 10 years by just over 7% per year.
Return on Equity has in the last 5 years been in the good 10% to 15% range and sometimes even in the very good 15 to 20% range. The 5 year median ROE is 16.6%. The ROE at the end of financial year of 2011 was 15.2%. The ROE based on comprehensive income was also 15.2% in the 2011 financial year. This basically tells you that the quality of earnings is probably good. The 5 year median ROE based on comprehensive income is also 16.6%.
The Liquidity Ratio for the financial year of 2011 was low at 1.32. At the end of the 2nd quarter of 2012 it is better at 1.41, but this is still a bit low. The 5 year median is lower still at just 1.16. However, the debt ratio has varied quite a bit over the years.
The Debt Ratio is currently at a very good 1.91 and this is not far from the one for the financial year ending in September 2011 at 1.90. The 5 year median Debt Ratio is 1.89.
The current Leverage and Debt/Equity Ratios are fine at 2.11 and 1.11 respectively. These are close to the 10 years ratios of 2.17 and 1.15, which are also fine.
Rogers Sugar is a mature and low growth business. There are good dividends to be made, but probably not much in way of capital gains. Let's face it a 5.8% income is quite a good return today. However, dividends have fluctuated in the past.
Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Husky. See my spreadsheet at rsi.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.
When this stock converted to a corporation they decreased the dividend some 26%. This was in 2011. In 2012, they increased the dividend by 5.9%. Prior to this they had a mixed record. Dividend yields were high (9 to 13%), but they lowered as well as raised their dividends. Dividends are still quite good at 5.83%, but not as good as before.
It is not bad that a company changes it dividend based on what it can pay, however, if you are living off you dividends, you have to take this into consideration before investing in this company. Companies that vary their dividends tend to decrease them in bad times and raise them in good times. Also, because this company is no longer an income trust, they will not go back to the very high dividends of past years.
The 5 year median Dividend Payout Ratios are 91.34% per year for earnings and 57.55% per year for cash flow. The DPR for earnings are quite high. For the financial year ending September 2011 the DPR for earnings was 82.2%. However, the DPR for earnings is expected to get much better for 2012 and is expected to be around 68.6%.
The total return over the past 5 and 10 years is 12.48% and 11.51%. The interest portion of this return was 9.44% and 9.55% per year, respectively. The capital gain portion was 3.04% and 1.96% per year, respectively. As you can see, most of the return was in dividend income and this came in at 76% and 83% of total returns over the past 5 and 10 years. Dividend returns will be lower going forward.
There was a big increase in shares outstanding in both 2002 and 2003. The increase in shares over the past 10 years is therefore rather high at 7.9% per year. The increase in shares outstanding over the past 5 years is very low at just slightly above 0%. Outstanding share changes can affect the per share values under a company.
The revenues of this company have grown at the rate of 2.8% and 12.7% per year over the past 5 and 10 years. The revenue per share has grown at the rate of 2.8% and 4.4% per year over the past 5 and 10 years. The big difference in the 10 year growth between revenue and revenue per share is due to the big increase in shares over the past 10 years. Revenue growth is important, but as an owner of shares, the growth per share is also quite important.
Earnings per share are a different story with growth at 1.9% and 0% over the past 5 and 10 years. Cash Flow growth is also non-existent as it has declined over the past 5 years by 1.4% and grew over the past 10 years at just 1.4%. However, over the past 10 years, they just had 1 year with negative earnings and no years with negative cash flow.
Book values do not do well under income trust companies, so it is not surprising that over the past 5 years book value per share has only grown at 2.8%. The book value per share has declined over the past 10 years by just over 7% per year.
Return on Equity has in the last 5 years been in the good 10% to 15% range and sometimes even in the very good 15 to 20% range. The 5 year median ROE is 16.6%. The ROE at the end of financial year of 2011 was 15.2%. The ROE based on comprehensive income was also 15.2% in the 2011 financial year. This basically tells you that the quality of earnings is probably good. The 5 year median ROE based on comprehensive income is also 16.6%.
The Liquidity Ratio for the financial year of 2011 was low at 1.32. At the end of the 2nd quarter of 2012 it is better at 1.41, but this is still a bit low. The 5 year median is lower still at just 1.16. However, the debt ratio has varied quite a bit over the years.
The Debt Ratio is currently at a very good 1.91 and this is not far from the one for the financial year ending in September 2011 at 1.90. The 5 year median Debt Ratio is 1.89.
The current Leverage and Debt/Equity Ratios are fine at 2.11 and 1.11 respectively. These are close to the 10 years ratios of 2.17 and 1.15, which are also fine.
Rogers Sugar is a mature and low growth business. There are good dividends to be made, but probably not much in way of capital gains. Let's face it a 5.8% income is quite a good return today. However, dividends have fluctuated in the past.
Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Husky. See my spreadsheet at rsi.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, August 29, 2012
Canadian Utilities Ltd 2
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. One of my favourite investment bloggers is the Loonie Bin Blog continue...
I do not own this stock Canadian Utilities Ltd.(TSX-CU). I started to follow this stock as it was on a number of dividend lists. It was on and still is some dividend lists of Dividend Achievers (see resources) and Dividend Aristocrats (see indices).
Insider trading shows that there was $1.37M of insider buying and $1.35M of insider selling, so there was a very small net of insider buying. Everyone, but directors have lots more options or rights than shares. This includes Subsidiary Executives. There are some directors with shares worth in the millions, and the CEO has shares worth around $6.6M. However, insiders do not own a substantial amount of the outstanding shares. ATCO Ltd (TSX-ACO.X, ACO.Y) owns around 53% of the outstanding shares.
There is not a large investment by institutions into this stock. There are some 5 institutions that own around 5% of the outstanding shares. Over the past 3 months they have marginally decreased their share ownership. This change is small so it tells us nothing.
The 5 year low, median and high median Price/Earnings Ratios are 12.25, 14.02 and 15.79. The current P/E Ratio is 17.11 on a stock price of $69.29 and an EPS value of $4.05 for 2012. The high P/E ratio suggests that the current stock price is relatively high.
I get a Graham Price of $48.04. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.07 and 1.23. The current P/GP Ratio is 1.44 on a stock price of $69.29. This high P/GP Ratios suggests that the stock price is relatively high.
I get a 10 year median Price/Book Value Ratio of 1.99. The current P/B Ratio is 3.64, which is some 37% higher. This high current P/B Ratio suggests a relatively high current stock price.
I get a 5 year median dividend yield of 3.12%. The current dividend yield is 2.55% and is some 18% lower. This lower dividend yield would also suggest a rather high current stock price.
When I look at analysts' recommendations, I find Strong Buy, Buy, and Hold recommendations. The consensus recommendation would be a Buy. (Most of the time this is what you find under analysts' recommendations and it tell you nothing.) My spreadsheet suggests that this stock is overpriced.
One analyst with a Hold recommendation mentioned that the company in Q2 of 2012 missed their EPS estimates. Another analyst says that people continue to use electricity come rain or shine, so investors are happy to accept relatively low, very safe yields. This company fits into this category.
Another analyst said this company's P/E is lower compared to other utility stock. He also liked its potential for raising its dividends. It is expect to raise the dividends at least 9% per year over the coming few years.
The consensus 12 months stock price is $74.10. This implies a 12 month total stock return of 9.5%, with 2.6% from dividends and 6.9% from capital gain.
I think this stock is overpriced, but all utility stock seems to be overpriced currently. It is not wildly overpriced, but a P/E of 17 is rather high for a utility stock. Certainly an ability to give nice dividend raises over the new few years is a positive.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns just over 50% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here Canadian Utilities. See my spreadsheet at cu.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.
I do not own this stock Canadian Utilities Ltd.(TSX-CU). I started to follow this stock as it was on a number of dividend lists. It was on and still is some dividend lists of Dividend Achievers (see resources) and Dividend Aristocrats (see indices).
Insider trading shows that there was $1.37M of insider buying and $1.35M of insider selling, so there was a very small net of insider buying. Everyone, but directors have lots more options or rights than shares. This includes Subsidiary Executives. There are some directors with shares worth in the millions, and the CEO has shares worth around $6.6M. However, insiders do not own a substantial amount of the outstanding shares. ATCO Ltd (TSX-ACO.X, ACO.Y) owns around 53% of the outstanding shares.
There is not a large investment by institutions into this stock. There are some 5 institutions that own around 5% of the outstanding shares. Over the past 3 months they have marginally decreased their share ownership. This change is small so it tells us nothing.
The 5 year low, median and high median Price/Earnings Ratios are 12.25, 14.02 and 15.79. The current P/E Ratio is 17.11 on a stock price of $69.29 and an EPS value of $4.05 for 2012. The high P/E ratio suggests that the current stock price is relatively high.
I get a Graham Price of $48.04. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.07 and 1.23. The current P/GP Ratio is 1.44 on a stock price of $69.29. This high P/GP Ratios suggests that the stock price is relatively high.
I get a 10 year median Price/Book Value Ratio of 1.99. The current P/B Ratio is 3.64, which is some 37% higher. This high current P/B Ratio suggests a relatively high current stock price.
I get a 5 year median dividend yield of 3.12%. The current dividend yield is 2.55% and is some 18% lower. This lower dividend yield would also suggest a rather high current stock price.
When I look at analysts' recommendations, I find Strong Buy, Buy, and Hold recommendations. The consensus recommendation would be a Buy. (Most of the time this is what you find under analysts' recommendations and it tell you nothing.) My spreadsheet suggests that this stock is overpriced.
One analyst with a Hold recommendation mentioned that the company in Q2 of 2012 missed their EPS estimates. Another analyst says that people continue to use electricity come rain or shine, so investors are happy to accept relatively low, very safe yields. This company fits into this category.
Another analyst said this company's P/E is lower compared to other utility stock. He also liked its potential for raising its dividends. It is expect to raise the dividends at least 9% per year over the coming few years.
The consensus 12 months stock price is $74.10. This implies a 12 month total stock return of 9.5%, with 2.6% from dividends and 6.9% from capital gain.
I think this stock is overpriced, but all utility stock seems to be overpriced currently. It is not wildly overpriced, but a P/E of 17 is rather high for a utility stock. Certainly an ability to give nice dividend raises over the new few years is a positive.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns just over 50% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here Canadian Utilities. See my spreadsheet at cu.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, August 28, 2012
Canadian Utilities Ltd
I do not own this stock (TSX-CU). I started to follow this stock as it was on a number of dividend lists. It was on and still is some dividend lists of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). It is not a bad idea to look at these lists to get ideas on stock to follow or buy. However, please be aware that these lists are constantly being updated. And, companies are not necessarily a good dividend stock just because they are on such lists.
The 5 year median dividend yield is 3.1% and the current yield is 2.55%. The 5 and 10 year growth in dividends is at 7% and 5.5% per year, respectively. The latest dividend increase is very good at 9.9%. Investors in the past have done quite well in that after some 10 years they are getting around 7.5% yield and after 15 years getting around 11.5% yield on their original investment
Total return over the past 5 and 10 years is also quite good. The 5 and 10 year total return is at 7.89% and 12.8% per year. The dividend portion of this return was 2.68% and 3.32% per year over the past 5 and 10 years. The dividends were some 34% and 26% of the total return over these periods. The capital gain portion was at 5.21% and 9.48% per year over these periods.
Revenue has increased at the rate of 4.3% per year over the past 5 years. However, revenue has declined by 1.6% per year over the past 10 years. The Revenue per Share is slightly different with the increase at 4% per year over the past 5 years and a decline of 1.7% per year over the past 10 years. The difference is because outstanding shares have marginally increased each year over the past 5 and 10 years.
Earnings per Share have done better with growth at 7.4% per year and 7% per year over the past 5 and 10 years. The growth in book value is somewhat in line with that of EPS with growth at 5.7% per year and 6.5% per year over the past 5 and 10 years. Growth in cash flow per share is very good with growth at 15.5% and 10% per year over the past 5 and 10 years.
Earnings for the 1st quarter come in within the expected analysts estimate range. However, the earnings for the second quarter come in lower than the expected analysts range. However, the yearly estimates for 2012 and 2013 seem not to have been changed. The EPS for the 3 months ending in June 2012 is $0.74 and the EPS for the 3 months ending in June 2011 is $0.70. So earnings are up some 5.7% between this quarter and last year's quarter.
The Return on Equity is quite good with the ROE at the end of December 2011 at 16.5%. The 5 year median ROE is also quite good at 15.3%. The ROE based on comprehensive income is a bit lower, but still quite good at 13.3% for the end of December 2011. The 5 year median is also good at 14.2%.
The current Liquidity Ratio is quite low at 0.82, but the situation is better than it initially appears as they have spent cash on assets and they have redeemed some preferred shares. The cash flow is still strong. The Liquidity Ratio at the end of December 2011 was 1.47, a better ratio. The current Debt Ratio is a bit lower than normal at 1.52.
The current Leverage and Debt/Equity Ratios are a little high at 3.74 and 2.45. Their 5 year median ratios are 3.02 and 1.74. All the debt ratios are trending the wrong way, buy I do not think that, at this point, there is anything to worry about. They have redeemed some preferred shares and issued new ones at a lower yield. They have bought assets and they still have a good cash flow.
This company has done well for its shareholders over the past 5 and 10 years. The markets have been rather difficult. It is a utility stock and lots of utility stocks have done well. Most of the utility type stocks have done well in our current market as dividends are decent. This stock still has a decent dividend, but the yield is below the both the 5 and 10 years median yields. The management of this company certainly feels good about the future with the recent large dividend increase.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns just over 50% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here Canadian Utilities. See my spreadsheet at cu.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 5 year median dividend yield is 3.1% and the current yield is 2.55%. The 5 and 10 year growth in dividends is at 7% and 5.5% per year, respectively. The latest dividend increase is very good at 9.9%. Investors in the past have done quite well in that after some 10 years they are getting around 7.5% yield and after 15 years getting around 11.5% yield on their original investment
Total return over the past 5 and 10 years is also quite good. The 5 and 10 year total return is at 7.89% and 12.8% per year. The dividend portion of this return was 2.68% and 3.32% per year over the past 5 and 10 years. The dividends were some 34% and 26% of the total return over these periods. The capital gain portion was at 5.21% and 9.48% per year over these periods.
Revenue has increased at the rate of 4.3% per year over the past 5 years. However, revenue has declined by 1.6% per year over the past 10 years. The Revenue per Share is slightly different with the increase at 4% per year over the past 5 years and a decline of 1.7% per year over the past 10 years. The difference is because outstanding shares have marginally increased each year over the past 5 and 10 years.
Earnings per Share have done better with growth at 7.4% per year and 7% per year over the past 5 and 10 years. The growth in book value is somewhat in line with that of EPS with growth at 5.7% per year and 6.5% per year over the past 5 and 10 years. Growth in cash flow per share is very good with growth at 15.5% and 10% per year over the past 5 and 10 years.
Earnings for the 1st quarter come in within the expected analysts estimate range. However, the earnings for the second quarter come in lower than the expected analysts range. However, the yearly estimates for 2012 and 2013 seem not to have been changed. The EPS for the 3 months ending in June 2012 is $0.74 and the EPS for the 3 months ending in June 2011 is $0.70. So earnings are up some 5.7% between this quarter and last year's quarter.
The Return on Equity is quite good with the ROE at the end of December 2011 at 16.5%. The 5 year median ROE is also quite good at 15.3%. The ROE based on comprehensive income is a bit lower, but still quite good at 13.3% for the end of December 2011. The 5 year median is also good at 14.2%.
The current Liquidity Ratio is quite low at 0.82, but the situation is better than it initially appears as they have spent cash on assets and they have redeemed some preferred shares. The cash flow is still strong. The Liquidity Ratio at the end of December 2011 was 1.47, a better ratio. The current Debt Ratio is a bit lower than normal at 1.52.
The current Leverage and Debt/Equity Ratios are a little high at 3.74 and 2.45. Their 5 year median ratios are 3.02 and 1.74. All the debt ratios are trending the wrong way, buy I do not think that, at this point, there is anything to worry about. They have redeemed some preferred shares and issued new ones at a lower yield. They have bought assets and they still have a good cash flow.
This company has done well for its shareholders over the past 5 and 10 years. The markets have been rather difficult. It is a utility stock and lots of utility stocks have done well. Most of the utility type stocks have done well in our current market as dividends are decent. This stock still has a decent dividend, but the yield is below the both the 5 and 10 years median yields. The management of this company certainly feels good about the future with the recent large dividend increase.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns just over 50% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here Canadian Utilities. See my spreadsheet at cu.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, August 27, 2012
The North West Company 2
On my other blog I am today writing about what to read for novice investors. I think that if you want to learn about investing today I would suggest reading some blogs rather than any particular book. Some of my favourite investment bloggers are continue....
The stock I am talking about today is the North West Company (TSX-NWC), a company I do not own. At the 2009 Money Show, a number of people where talking about some former, or soon to be former, income trusts being very good investments. This was one company that people were talking about. The dividend yield at that time was 7%.
Lots of insider own shares and some own shares worth into the millions. However, insiders own a very small portion of this company's outstanding shares. Over the past year there has not been much in the way of insider trading. Insider buying is $0.4M and insider selling is $0.6M, leaving a net of insider selling of $0.2M.
There are 39 institutional owners that hold some 28% of the outstanding shares. Over the past 3 months they have sold just over 1% of their shares. This is not enough to be a negative.
The 5 year low, median and high median Price/Earnings Ratios are 11.12, 12.67 and 14.23. The current P/E Ratio of 15.85 on a stock price of $21.40 is rather high and suggests that the current stock price is rather high. Part of the problem is that the financial year ending January 2012 was not that great but the earnings are expected to climb over the next couple of years.
I get a Graham Price of $13.36. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.15 and 1.35. The current P/GP Ratio of 1.60 on a stock price of $21.40 also suggests a relatively high current stock price.
I get a 10 year median Price/Book Value Ratio of 2.92. The current P/B Ratio is 3.64 a value that is some 24% higher. This also suggests a rather high current stock price.
The 5 year median dividend yield is 7.09%. The current yield of 4.86% is some 31% lower. Usually a lower dividend suggests a rather high stock price. However, this company used to be an income trust. It was expected that old income trust companies would end up with dividend yields between 4 and 5%. This yield is closer to the 5% and would suggest that perhaps the stock price really is not that high.
There are number of analysts following this stock and all their recommendations are a Hold recommendation. Therefore, the consensus recommendation would be a Hold. The 12 month consensus stock price is $22.30. This implies a 9.07% total return with 4.86% from dividends and 4.21% from capital gains over the next year.
One analyst with a Hold recommendation worried about the current economic climate. Many people feel we might be heading for another recession. There is also the worry of competition, especially from Target. Here is what Desjardins Securities analyst John Hughes said about this company in June 2012. Here is what CIBC said about this stock in March 2012. This company is also mentioned in a numbers cruncher article entitled "Low-volatility dividend stocks for stormy times" in the G&M.
The stock price is relatively high, but it is not in an unreasonable range. The dividend yield is quite good. The mitigating circumstance is that old income trust were expected to having raising stock prices and/or lowering dividends to get to a 4% to 5% dividend yield range. This company has used decreased dividends (they were lowered some 30%) to get into this dividend yield range. However, stock price has risen a bit, but higher P/E Ratios is also due to lower EPS.
It is a bit pricey and we might be heading into a recession. Also, October is coming and often we get lower markets in the fall. I would think that if you want to buy this stock, you might get a better price in the fall. However, you are also taking a chance as dropping prices in the fall do not always occur for all stocks.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company. See my spreadsheet at nwc.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 stock I am talking about today is the North West Company (TSX-NWC), a company I do not own. At the 2009 Money Show, a number of people where talking about some former, or soon to be former, income trusts being very good investments. This was one company that people were talking about. The dividend yield at that time was 7%.
Lots of insider own shares and some own shares worth into the millions. However, insiders own a very small portion of this company's outstanding shares. Over the past year there has not been much in the way of insider trading. Insider buying is $0.4M and insider selling is $0.6M, leaving a net of insider selling of $0.2M.
There are 39 institutional owners that hold some 28% of the outstanding shares. Over the past 3 months they have sold just over 1% of their shares. This is not enough to be a negative.
The 5 year low, median and high median Price/Earnings Ratios are 11.12, 12.67 and 14.23. The current P/E Ratio of 15.85 on a stock price of $21.40 is rather high and suggests that the current stock price is rather high. Part of the problem is that the financial year ending January 2012 was not that great but the earnings are expected to climb over the next couple of years.
I get a Graham Price of $13.36. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.15 and 1.35. The current P/GP Ratio of 1.60 on a stock price of $21.40 also suggests a relatively high current stock price.
I get a 10 year median Price/Book Value Ratio of 2.92. The current P/B Ratio is 3.64 a value that is some 24% higher. This also suggests a rather high current stock price.
The 5 year median dividend yield is 7.09%. The current yield of 4.86% is some 31% lower. Usually a lower dividend suggests a rather high stock price. However, this company used to be an income trust. It was expected that old income trust companies would end up with dividend yields between 4 and 5%. This yield is closer to the 5% and would suggest that perhaps the stock price really is not that high.
There are number of analysts following this stock and all their recommendations are a Hold recommendation. Therefore, the consensus recommendation would be a Hold. The 12 month consensus stock price is $22.30. This implies a 9.07% total return with 4.86% from dividends and 4.21% from capital gains over the next year.
One analyst with a Hold recommendation worried about the current economic climate. Many people feel we might be heading for another recession. There is also the worry of competition, especially from Target. Here is what Desjardins Securities analyst John Hughes said about this company in June 2012. Here is what CIBC said about this stock in March 2012. This company is also mentioned in a numbers cruncher article entitled "Low-volatility dividend stocks for stormy times" in the G&M.
The stock price is relatively high, but it is not in an unreasonable range. The dividend yield is quite good. The mitigating circumstance is that old income trust were expected to having raising stock prices and/or lowering dividends to get to a 4% to 5% dividend yield range. This company has used decreased dividends (they were lowered some 30%) to get into this dividend yield range. However, stock price has risen a bit, but higher P/E Ratios is also due to lower EPS.
It is a bit pricey and we might be heading into a recession. Also, October is coming and often we get lower markets in the fall. I would think that if you want to buy this stock, you might get a better price in the fall. However, you are also taking a chance as dropping prices in the fall do not always occur for all stocks.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company. See my spreadsheet at nwc.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, August 24, 2012
The North West Company
I do not own this stock of North West Company (TSX-NWC, OTC-NWTUF). At the 2009 Money Show, a number of people where talking about some former, or soon to be former income trusts being very good investments. This was one company that people were talking about. The dividend yield at that time was 7%.
The dividend yield has come down to a yield of 4.9% yield today. It was expected that a combination of stock increases and dividend adjustments would cause former income trusts to end up with dividends in the 4 to 5% range. With this stock the stock price has more or less held firm, but dividends were, initially at least, reduced by 30%.
The company's Dividend Payout Ratios were not that bad, having peaked at 90% for earnings and 62% for cash flow for the financial year ending in January 2011. They were lower for the financial year ending in January 2012, being 88% for earnings and 44% for cash flow. The DPRs for the financial year ending January 2013 for earnings is expected to be around 77%.
Dividend growth is not bad considering that they were cut 30% in 2012. The 5 and 10 year growth in dividends is 3.7% and 7.1% per year. They have begun to raise the dividends again, and the most recent dividend increase was done for the April 2012 and was for 8.3%.
Total return over the past 5 and 10 years has been quite good, with 5 year returns at 10.63% per year and 10 year returns at 22.13% per year. The dividend portion of these returns is 7.22% and 9.40% per year, respectively. The capital gain portion is at 3.40% and 12.96% per year, respectively. The dividends comprise some 68% and 42% of the 5 and 10 year total returns. However, going forward, the dividends will be down in the 4 to 5% range rather than the past 7 to 9% range.
Growth is generally quite mixed. Revenue and Revenue per Share growth is the same as there has been no growth in shares over the past 5 and 10 years. Revenue growth in the best growth under this company and bodes well for the future. Revenue has grown at the rate of 9.6% and 7.8% per year over the past 5 and 10 years. Cash flow growth is also fine at 8.8% and 7.8% per year over the past 5 and 10 years.
Other growth has not been great. Growth in EPS is just 1.2% and 6.2% per year over the past 5 and 10 years. Growth in book value is the lowest, with its growth at 2.4% and 2.6% per year over the past 5 and 10 years.
Although the ROE based on net income and comprehensive income are both quite good, there is a big difference this year in these ROE calculations. The ROE on net income is 20.4%, with a 5 year median ROE of 25.3%. The ROE on comprehensive is lower at 15.2%, with a 5 year median ROE of 25%. (An ROE from 10% to 15% is considered good. A sustained percentage above 20% is considered above average.)
Debt Ratios on this company are quite good. The current Liquidity Ratio is 2.59, with a 5 year median of 1.66. The current Debt Ratio is 1.83, with a 5 year median of 1.87. The current Leverage and Debt/Equity Ratios are fine, coming in at 2.20 and 1.20, respectively.
Considering the current market situation, this stock is doing quite well. It is a stock I would consider investing in.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company. See my spreadsheet at nwc.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 dividend yield has come down to a yield of 4.9% yield today. It was expected that a combination of stock increases and dividend adjustments would cause former income trusts to end up with dividends in the 4 to 5% range. With this stock the stock price has more or less held firm, but dividends were, initially at least, reduced by 30%.
The company's Dividend Payout Ratios were not that bad, having peaked at 90% for earnings and 62% for cash flow for the financial year ending in January 2011. They were lower for the financial year ending in January 2012, being 88% for earnings and 44% for cash flow. The DPRs for the financial year ending January 2013 for earnings is expected to be around 77%.
Dividend growth is not bad considering that they were cut 30% in 2012. The 5 and 10 year growth in dividends is 3.7% and 7.1% per year. They have begun to raise the dividends again, and the most recent dividend increase was done for the April 2012 and was for 8.3%.
Total return over the past 5 and 10 years has been quite good, with 5 year returns at 10.63% per year and 10 year returns at 22.13% per year. The dividend portion of these returns is 7.22% and 9.40% per year, respectively. The capital gain portion is at 3.40% and 12.96% per year, respectively. The dividends comprise some 68% and 42% of the 5 and 10 year total returns. However, going forward, the dividends will be down in the 4 to 5% range rather than the past 7 to 9% range.
Growth is generally quite mixed. Revenue and Revenue per Share growth is the same as there has been no growth in shares over the past 5 and 10 years. Revenue growth in the best growth under this company and bodes well for the future. Revenue has grown at the rate of 9.6% and 7.8% per year over the past 5 and 10 years. Cash flow growth is also fine at 8.8% and 7.8% per year over the past 5 and 10 years.
Other growth has not been great. Growth in EPS is just 1.2% and 6.2% per year over the past 5 and 10 years. Growth in book value is the lowest, with its growth at 2.4% and 2.6% per year over the past 5 and 10 years.
Although the ROE based on net income and comprehensive income are both quite good, there is a big difference this year in these ROE calculations. The ROE on net income is 20.4%, with a 5 year median ROE of 25.3%. The ROE on comprehensive is lower at 15.2%, with a 5 year median ROE of 25%. (An ROE from 10% to 15% is considered good. A sustained percentage above 20% is considered above average.)
Debt Ratios on this company are quite good. The current Liquidity Ratio is 2.59, with a 5 year median of 1.66. The current Debt Ratio is 1.83, with a 5 year median of 1.87. The current Leverage and Debt/Equity Ratios are fine, coming in at 2.20 and 1.20, respectively.
Considering the current market situation, this stock is doing quite well. It is a stock I would consider investing in.
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company. See my spreadsheet at nwc.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, August 23, 2012
AGF Management Ltd 2
I do not own this stock of AGF Management Ltd. (TSX-AGF.B), but I used to. I bought this stock in 2001 and sold it off in 2006 and 2008. I made over this period of 7 years some 2.08% per year return. All the return was dividends. I made nothing in capital gains. I sold the stock because I did not think that the stock was going anywhere.
The insider trading report says that there was $0.57M in insider buying and $0.78M in insider selling with net insider selling of $0.2M. There are insiders who have a lot invested in this firm. For example the CEO owns stock worth $148M. However, insiders have not only stock options, but Performance Share Units and Restricted Share Units. (There are lots of firms transitioning away from options to other option like vehicles.) They also have an Employees Share Ownership Plan (ESOP).
There are some 42 institutions that own some 28% of the outstanding shares of this firm. Over the past 3 months they have decreased their outstanding shares by 7.5%. This is a negative.
I get 5 year low, median and high median Price/Earnings Ratios of 10.45, 13.94 and 17.22. The current P/E Ratio is 13.02 which show that the stock price of $11.59 is reasonable. (Note that yesterday, the ROE on the comprehensive income was considerable below the ROE on the net income. This makes you question the quality of the company's earnings.)
I get a Graham Price of $15.78. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.23 and 1.50. The current P/GP Ratio of 0.73 shows a rather low current stock price of $11.59.
I get a 10 year median Price/Book Value Ratio of 1.58. The current P/B Ratio is just 0.93. This current ratio is just 58% of the 10 year median ratio. It is also below 1.00, which means that the stock is selling below the book value. (Generally, when a stock is selling below its book value, it is considered to be cheap.)
The 5 year median dividend yield is 6.19% and the current yield of 9.15% is some 48% higher. This would imply that the current price was a good one. However, one has to be cautious when the dividend yield is so high. This stock started out with low dividends and the 10 year median dividend yield is just 2.97%. It is only since 2008 that the yield has been climbing rather high.
Using my stock price tests it would seem like the current stock price of $11.59 is a good to reasonable price. However, the dividend yield is just too high and I am also worried about the quality of the earnings. What I am suggesting is that we should proceed with caution on this stock.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. The consensus recommendation would be a Hold. Most the recommendations are a Hold. The consensus 12 months stock price is $12.70. That implies a 12 months total return of 18.73%, with 9.58% from capital gains and 9.15% from dividend income.
The first quarterly EPS came in within analysts' estimates. However, the second quarterly EPS was way below analysts' estimates. Here is an article on this subject from Reuters. Article said that lower earnings were due to declining financial markets.
A couple of analysts with a Buy recommendation liked the yield and thought it was safe. One noted that this company is one of the last independent mutual fund companies. Analysts that do not like this stock feel that all mutual fund companies in Canada are in problems. One analyst thinks that Canadians are waking up to the fact that they are paying way too much money to have their investments managed.
There is an article about AGF suing an ex-employee Patricia Perez-Coutts who was a fund manager at AGF. Westwood Holdings Group Inc. has hired not only Ms. Perez-Coutts, but also other members of her former team at AGF. See the G&M article. There is also a G&M article on a big outflow of assets that occurred for this company in July 2012. See the G&M article. Also one other blogger Happy Capitalism wrote about this company in May of this year. He thinks that the stock has been oversold for a while and he sees this as a sign of weakness in the stock.
I like strong stable dividend growth type companies. This company is none of those things, really. It is not a company I would buy at this time. They used to be a good company. Maybe they will be again in the future. So, I will continue to follow it, but I am certainly not interested at this point in buying it.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is here AGF. See my spreadsheet at agf.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 insider trading report says that there was $0.57M in insider buying and $0.78M in insider selling with net insider selling of $0.2M. There are insiders who have a lot invested in this firm. For example the CEO owns stock worth $148M. However, insiders have not only stock options, but Performance Share Units and Restricted Share Units. (There are lots of firms transitioning away from options to other option like vehicles.) They also have an Employees Share Ownership Plan (ESOP).
There are some 42 institutions that own some 28% of the outstanding shares of this firm. Over the past 3 months they have decreased their outstanding shares by 7.5%. This is a negative.
I get 5 year low, median and high median Price/Earnings Ratios of 10.45, 13.94 and 17.22. The current P/E Ratio is 13.02 which show that the stock price of $11.59 is reasonable. (Note that yesterday, the ROE on the comprehensive income was considerable below the ROE on the net income. This makes you question the quality of the company's earnings.)
I get a Graham Price of $15.78. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.23 and 1.50. The current P/GP Ratio of 0.73 shows a rather low current stock price of $11.59.
I get a 10 year median Price/Book Value Ratio of 1.58. The current P/B Ratio is just 0.93. This current ratio is just 58% of the 10 year median ratio. It is also below 1.00, which means that the stock is selling below the book value. (Generally, when a stock is selling below its book value, it is considered to be cheap.)
The 5 year median dividend yield is 6.19% and the current yield of 9.15% is some 48% higher. This would imply that the current price was a good one. However, one has to be cautious when the dividend yield is so high. This stock started out with low dividends and the 10 year median dividend yield is just 2.97%. It is only since 2008 that the yield has been climbing rather high.
Using my stock price tests it would seem like the current stock price of $11.59 is a good to reasonable price. However, the dividend yield is just too high and I am also worried about the quality of the earnings. What I am suggesting is that we should proceed with caution on this stock.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. The consensus recommendation would be a Hold. Most the recommendations are a Hold. The consensus 12 months stock price is $12.70. That implies a 12 months total return of 18.73%, with 9.58% from capital gains and 9.15% from dividend income.
The first quarterly EPS came in within analysts' estimates. However, the second quarterly EPS was way below analysts' estimates. Here is an article on this subject from Reuters. Article said that lower earnings were due to declining financial markets.
A couple of analysts with a Buy recommendation liked the yield and thought it was safe. One noted that this company is one of the last independent mutual fund companies. Analysts that do not like this stock feel that all mutual fund companies in Canada are in problems. One analyst thinks that Canadians are waking up to the fact that they are paying way too much money to have their investments managed.
There is an article about AGF suing an ex-employee Patricia Perez-Coutts who was a fund manager at AGF. Westwood Holdings Group Inc. has hired not only Ms. Perez-Coutts, but also other members of her former team at AGF. See the G&M article. There is also a G&M article on a big outflow of assets that occurred for this company in July 2012. See the G&M article. Also one other blogger Happy Capitalism wrote about this company in May of this year. He thinks that the stock has been oversold for a while and he sees this as a sign of weakness in the stock.
I like strong stable dividend growth type companies. This company is none of those things, really. It is not a company I would buy at this time. They used to be a good company. Maybe they will be again in the future. So, I will continue to follow it, but I am certainly not interested at this point in buying it.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is here AGF. See my spreadsheet at agf.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, August 22, 2012
AGF Management Ltd
On my other blog are some comments about "Dividend yields on Original Investments". See comments blog.
I do not own this stock of AGF Management Ltd. (TSX-AGF.B), but I used to. I bought this stock in 2001 and sold it off in 2006 and 2008. I made over this period of 7 years some 2.08% per year return. All the return was dividends. I made nothing in capital gains. I sold the stock because I did not think that the stock was going anywhere. From when I sold in 2006 to 2008, the stock did recover a bit.
The other thing I did not like about the stock was that they were continuing to raise the dividends at the expense of Dividend Payout Ratios. The DPRs were quite low when I first bought this stock, but they have been steadily rising. The ones for the financial year ending in November 2011 the DPRs were 90% for earnings and 58% for cash flow. The DPR for earnings for 2012 is expected to be above 100%.
Looking at my spreadsheet, the really only bright spot is the growth in dividends which run at 9% and 17% over the past 5 and 10 years. However, they are been slowing down lately with the last two increases being at 3% and 2.9%. The other growth that is not awful is that for book value per shares and this has grown at 3.9% and 4.5% per year over the past 5 and 10 years.
Total return is not growing and this stock has had the total return go down 4% per year over the past 5 years. Total return is 0% per year over the past 10 years. Dividend income was at 4.6% per year and 3.6% per year over the past 5 and 10 years. Capital gains were a negative 9.3% and 3.7% per year over the past 5 and 10 years.
Although the company has not had any years of negative earnings or cash flow, they also have not been able to growth their earnings or cash flow. They also are not growing their revenue. The revenue has had 0% growth over the past 5 and 10 years. Revenue per share has declined by 2% per year over the past 5 years and has had 0% growth over the past 10 years.
Earnings per Share have declined 1% per year and 4% per year over the past 5 and 10 years. Cash Flow per Shares has declined 1% and 3% per year over the past 5 and 10 years.
The Return on Equity Ratios looks very good on this stock, with the ROE for the financial year ending in November 2011 at 17.8%. However, the ROE based on the Comprehensive is a lot lower at 8.3%. Usually this happens when the quality of the earnings are not as good as they might appear. You expect some variance, but not so much.
The current Liquidity Ratios at 1.12, although not a great ratio, is higher than it has been for a while. Mostly, the Liquidity Ratio is below 1.00 (5 and 10 year median ratios are 0.66 and 0.70). With this ratio under 1.00 it means that the current assets cannot cover the current debts. The other thing to point out that is that if you include cash flow exclusive of dividends, it does not raise the ratio above 1.00.
The current Debt Ratio is rather low also with a current value of 1.32. This ratio also has a tendency to be low and the 5 and 10 year median ratios are at 1.25 and 1.33. This is ok, but what you want is a ratio of 1.50 or above.
The current Leverage and Debt/Equity Ratios are a little high at 4.12 and 3.12. With these ratios lower is much better.
I still do not like this stock as an investment and I am glad that I sold when I did.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is here AGF. See my spreadsheet at agf.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.
I do not own this stock of AGF Management Ltd. (TSX-AGF.B), but I used to. I bought this stock in 2001 and sold it off in 2006 and 2008. I made over this period of 7 years some 2.08% per year return. All the return was dividends. I made nothing in capital gains. I sold the stock because I did not think that the stock was going anywhere. From when I sold in 2006 to 2008, the stock did recover a bit.
The other thing I did not like about the stock was that they were continuing to raise the dividends at the expense of Dividend Payout Ratios. The DPRs were quite low when I first bought this stock, but they have been steadily rising. The ones for the financial year ending in November 2011 the DPRs were 90% for earnings and 58% for cash flow. The DPR for earnings for 2012 is expected to be above 100%.
Looking at my spreadsheet, the really only bright spot is the growth in dividends which run at 9% and 17% over the past 5 and 10 years. However, they are been slowing down lately with the last two increases being at 3% and 2.9%. The other growth that is not awful is that for book value per shares and this has grown at 3.9% and 4.5% per year over the past 5 and 10 years.
Total return is not growing and this stock has had the total return go down 4% per year over the past 5 years. Total return is 0% per year over the past 10 years. Dividend income was at 4.6% per year and 3.6% per year over the past 5 and 10 years. Capital gains were a negative 9.3% and 3.7% per year over the past 5 and 10 years.
Although the company has not had any years of negative earnings or cash flow, they also have not been able to growth their earnings or cash flow. They also are not growing their revenue. The revenue has had 0% growth over the past 5 and 10 years. Revenue per share has declined by 2% per year over the past 5 years and has had 0% growth over the past 10 years.
Earnings per Share have declined 1% per year and 4% per year over the past 5 and 10 years. Cash Flow per Shares has declined 1% and 3% per year over the past 5 and 10 years.
The Return on Equity Ratios looks very good on this stock, with the ROE for the financial year ending in November 2011 at 17.8%. However, the ROE based on the Comprehensive is a lot lower at 8.3%. Usually this happens when the quality of the earnings are not as good as they might appear. You expect some variance, but not so much.
The current Liquidity Ratios at 1.12, although not a great ratio, is higher than it has been for a while. Mostly, the Liquidity Ratio is below 1.00 (5 and 10 year median ratios are 0.66 and 0.70). With this ratio under 1.00 it means that the current assets cannot cover the current debts. The other thing to point out that is that if you include cash flow exclusive of dividends, it does not raise the ratio above 1.00.
The current Debt Ratio is rather low also with a current value of 1.32. This ratio also has a tendency to be low and the 5 and 10 year median ratios are at 1.25 and 1.33. This is ok, but what you want is a ratio of 1.50 or above.
The current Leverage and Debt/Equity Ratios are a little high at 4.12 and 3.12. With these ratios lower is much better.
I still do not like this stock as an investment and I am glad that I sold when I did.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is here AGF. See my spreadsheet at agf.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, August 21, 2012
Alimentation Couche-Tard Inc. 2
I own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B). I bought this stock in 2004 and some more in 2006 and 2007. I have made a return of 17.26% per year total return on this stock. Dividends are very low and the portion of this total return attributable to dividends is just 0.51%. The rest, 16.75% is attributable to capital gains.
There is lots of insider selling as is usual with the stock. There is $61.8M of insider selling and net insider selling at $61.7M. Mainly it is insiders cashing in their options. Also, there is some $10M of insider selling by CEO who is gifting some shares. Besides options they have Phantom Stock Units and Deferred Share Unit Plan.
Most insiders have more options or options like things than shares, but there is some heavy insider ownership also, but this in in the Class A multiple voting shares. Also Metro Inc. (TSX-MRU.A) owns almost 28% of the Class A multiple voting shares of this company. The company buys shares on the open market that covers what they give out in options.
Also, in July 2012 the company announced an equity issue on a bought-deal basis of 6.35M Class B shares at price of $47.25 CDN$. I have changed the shares outstanding on my spreadsheet to reflect this. There seems to be very little institutional ownership of this stock (less than 2%). (However, note Metro's shares above.)
I get 5 year low, median and high Price/Earnings Ratios of 9.48, 12.00 and 14.52. I get a current P/E Ratio of 15.15. This P/E ratio shows that the current stock price of $49.07 stock price is a bit high. (Bought deal at $47.25 gives a P/E 14.59. This shows that the bought deal price was also relatively high.)
I get a Graham Price of $29.14. The 10 year low, median and high Price/Graham Price Ratios are 1.12, 1.55 and 1.88. The current P/GP Ratio is 1.68 shows a rather reasonable, if a little high, stock price at $49.07. (Bought deal at $47.25 gives a P/GP ratio of 1.62. Not far off the current P/GP ratio.)
I get a 10 year median Price/Book Value Ratio of 2.88. The current P/B Ratio is 4.21, a value some 46% above the 10 year median P/B Ratio. This shows a relatively high stock price. (The bought deal price of $47.25 has a P/B Ratio of 4.06. This P/B Ratio is 41% above the 10 year median P/B Ratio and therefore a rather high relative price.)
I get a 5 year median dividend yield of 0.81%. The current yield is 0.61%, a yield some 24% lower. This also points to a high price. This yield is even lower than the 10 year median low dividend yield of 0.64%. (The bought deal stock price of $47.25 gives a dividend yield of 0.63%. This yield is some 21% lower than the 5 year median dividend yield. It is also a bit lower than the 10 year median low dividend yield.)
Except for the Graham price test, the current stock price of $49.07 is showing as a relatively high stock price. The recent bought deal stock price of $47.25 is also showing as relatively high price on most tests. (However, just because there is bought deal does not mean that they paid a good price.)
When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $59.00. This implies and 12 month total return of 20.8%, with some 20.2% from capital gains.
I think that the stock price is relatively high for this stock. However, it appears that lots of analysts think otherwise. One analyst thought although the current debt ratios are a bit low, the company did not go the market because of this, but to reload their balance sheet well in advance of their next transaction. The thought is they are going to be going after assets in Europe.
Some analysts with Buy recommendations comment that the management of the company has done a very good job. Another thinks that they have a great model with convenience stores next to gas stations. One analyst with a Don't Buy recommendation says that he does not like the fact that they get a lot of their money selling tobacco products and therefore would not buy the stock.
Personally, I think it is a great company and I will hold on to my shares. I believe that the stock price is high, but not unreasonably high.
This stock is a recent pick of Michael Smedley who is the executive vice-president of Morgan Meighen & Associates. See article. The globe talks about consumer stocks, including this one, as being currently hot. See article. You can learn all about the company and its history at Wikipedia. There is also a long article on this company at CPS Net.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Couche-Tard. See my spreadsheet at atd.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.
There is lots of insider selling as is usual with the stock. There is $61.8M of insider selling and net insider selling at $61.7M. Mainly it is insiders cashing in their options. Also, there is some $10M of insider selling by CEO who is gifting some shares. Besides options they have Phantom Stock Units and Deferred Share Unit Plan.
Most insiders have more options or options like things than shares, but there is some heavy insider ownership also, but this in in the Class A multiple voting shares. Also Metro Inc. (TSX-MRU.A) owns almost 28% of the Class A multiple voting shares of this company. The company buys shares on the open market that covers what they give out in options.
Also, in July 2012 the company announced an equity issue on a bought-deal basis of 6.35M Class B shares at price of $47.25 CDN$. I have changed the shares outstanding on my spreadsheet to reflect this. There seems to be very little institutional ownership of this stock (less than 2%). (However, note Metro's shares above.)
I get 5 year low, median and high Price/Earnings Ratios of 9.48, 12.00 and 14.52. I get a current P/E Ratio of 15.15. This P/E ratio shows that the current stock price of $49.07 stock price is a bit high. (Bought deal at $47.25 gives a P/E 14.59. This shows that the bought deal price was also relatively high.)
I get a Graham Price of $29.14. The 10 year low, median and high Price/Graham Price Ratios are 1.12, 1.55 and 1.88. The current P/GP Ratio is 1.68 shows a rather reasonable, if a little high, stock price at $49.07. (Bought deal at $47.25 gives a P/GP ratio of 1.62. Not far off the current P/GP ratio.)
I get a 10 year median Price/Book Value Ratio of 2.88. The current P/B Ratio is 4.21, a value some 46% above the 10 year median P/B Ratio. This shows a relatively high stock price. (The bought deal price of $47.25 has a P/B Ratio of 4.06. This P/B Ratio is 41% above the 10 year median P/B Ratio and therefore a rather high relative price.)
I get a 5 year median dividend yield of 0.81%. The current yield is 0.61%, a yield some 24% lower. This also points to a high price. This yield is even lower than the 10 year median low dividend yield of 0.64%. (The bought deal stock price of $47.25 gives a dividend yield of 0.63%. This yield is some 21% lower than the 5 year median dividend yield. It is also a bit lower than the 10 year median low dividend yield.)
Except for the Graham price test, the current stock price of $49.07 is showing as a relatively high stock price. The recent bought deal stock price of $47.25 is also showing as relatively high price on most tests. (However, just because there is bought deal does not mean that they paid a good price.)
When I look at the analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The vast majority of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $59.00. This implies and 12 month total return of 20.8%, with some 20.2% from capital gains.
I think that the stock price is relatively high for this stock. However, it appears that lots of analysts think otherwise. One analyst thought although the current debt ratios are a bit low, the company did not go the market because of this, but to reload their balance sheet well in advance of their next transaction. The thought is they are going to be going after assets in Europe.
Some analysts with Buy recommendations comment that the management of the company has done a very good job. Another thinks that they have a great model with convenience stores next to gas stations. One analyst with a Don't Buy recommendation says that he does not like the fact that they get a lot of their money selling tobacco products and therefore would not buy the stock.
Personally, I think it is a great company and I will hold on to my shares. I believe that the stock price is high, but not unreasonably high.
This stock is a recent pick of Michael Smedley who is the executive vice-president of Morgan Meighen & Associates. See article. The globe talks about consumer stocks, including this one, as being currently hot. See article. You can learn all about the company and its history at Wikipedia. There is also a long article on this company at CPS Net.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Couche-Tard. See my spreadsheet at atd.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, August 20, 2012
Alimentation Couche-Tard Inc
On my other blog are some comments about "Women on Boards". See comments blog.
I own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B). I bought this stock in 2004 and some more in 2006 and 2007. I have made a return of 17.26% per year total return on this stock. Dividends are very low and the portion of this total return attributable to dividends is just 0.51%. The rest, 16.75% is attributable to capital gains.
When I bought this company they were not paying dividends. It was not meant to be a long term buy. However, I changed my mind and kept the stock after they started dividends in 2006. Mind you, dividends are quite low as the company has a 5 year median dividend yield of just 0.81%. My experience is lower for the simple fact that I held the stock when it was not paying dividends. The portion of my return in dividends is just under 3%.
This stock has been doing well of late. If you look at the stock over the past 5 and 10 years using their financial years ending in April, you find that the stock has 5 and 10 year total returns of 13.14% and 18.50% per year. The portion of this return attributable to dividends is 0.56% and 0.46%. The rest is all capital gain.
I have just held this stock for 8 years and my dividend yield on my original purchase is just 2%. You would have to hold the stock for 15 years to more to get a really good return on your original purchase. Increases in dividends have been very good with dividend increases over the last 5 and 6 years at 20.1% and 18.4%. It is currently a fast growing stock.
This is considered to be a consumer staple stock. It has down much better than the TSX since our recent problems in 2008. This company does a lot of business in the US so it reports in US$. It has, of course, done better in US$ than in CDN$. However, it has done well in both currencies.
Over the past 5 and 10 years the Revenues have increased by 11% and 21% per year, respectively. The Revenue per Share has grown by 13% and 20% per year. The increase or decrease in shares accounts for the difference between the Revenue growth and the Revenue per Share growth.
The shares outstanding are up 1% over the past 10 years, but are down almost 2% over the past 5 years. The company tends to buy back shares each year that generally more than covers the options they give out.
Earnings per Share have also grown well over the past 5 and 10 years with growth at 18.6% and 22.3% per year, respectively. Cash Flow per Share has also grown well over the past 5 and 10 years with growth at 12.3% and 18.6% per year, respectively. There is the same story with Book Value per Share growth at 13.2% and 17.7% per year growth over the past 5 and 10 years.
The Return on Equity is also great. The ROE for the financial year ending April 2012 is 21%. The 5 year median ROE is 19.1%, an equally great ROE. The ROE based on comprehensive income is very similar with the ROE for April 2012 at 19.6% and the 5 year median at 19.6%. (The ROE on comprehensive income confirms the quality of the ROE on net income.)
As far a debt ratios goes, the Liquidity Ratio for financial year ending April 2012 is quite low at 0.85. This means that the current assets do not cover the current liabilities. However, the cash flow is quite strong and if you add in cash flow after dividends you get a more acceptable value of 1.32. The 5 year median Liquidity ratio is 1.10.
The Debt Ratio is much better at 1.95. This has a 5 year ratio of 1.78. The Leverage and Debt/Equity Ratios are fine at 2.05 and 1.05.
This has been a great stock for me. It is doing great currently even though the overall market is not. This stock would be considered a dividend growth stock. I think that why I have good dividend income growth is because I have a variety of stocks with low, median and high dividends and low, median and high dividend growth rates.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Couche-Tard. See my spreadsheet at atd.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.
I own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B). I bought this stock in 2004 and some more in 2006 and 2007. I have made a return of 17.26% per year total return on this stock. Dividends are very low and the portion of this total return attributable to dividends is just 0.51%. The rest, 16.75% is attributable to capital gains.
When I bought this company they were not paying dividends. It was not meant to be a long term buy. However, I changed my mind and kept the stock after they started dividends in 2006. Mind you, dividends are quite low as the company has a 5 year median dividend yield of just 0.81%. My experience is lower for the simple fact that I held the stock when it was not paying dividends. The portion of my return in dividends is just under 3%.
This stock has been doing well of late. If you look at the stock over the past 5 and 10 years using their financial years ending in April, you find that the stock has 5 and 10 year total returns of 13.14% and 18.50% per year. The portion of this return attributable to dividends is 0.56% and 0.46%. The rest is all capital gain.
I have just held this stock for 8 years and my dividend yield on my original purchase is just 2%. You would have to hold the stock for 15 years to more to get a really good return on your original purchase. Increases in dividends have been very good with dividend increases over the last 5 and 6 years at 20.1% and 18.4%. It is currently a fast growing stock.
This is considered to be a consumer staple stock. It has down much better than the TSX since our recent problems in 2008. This company does a lot of business in the US so it reports in US$. It has, of course, done better in US$ than in CDN$. However, it has done well in both currencies.
Over the past 5 and 10 years the Revenues have increased by 11% and 21% per year, respectively. The Revenue per Share has grown by 13% and 20% per year. The increase or decrease in shares accounts for the difference between the Revenue growth and the Revenue per Share growth.
The shares outstanding are up 1% over the past 10 years, but are down almost 2% over the past 5 years. The company tends to buy back shares each year that generally more than covers the options they give out.
Earnings per Share have also grown well over the past 5 and 10 years with growth at 18.6% and 22.3% per year, respectively. Cash Flow per Share has also grown well over the past 5 and 10 years with growth at 12.3% and 18.6% per year, respectively. There is the same story with Book Value per Share growth at 13.2% and 17.7% per year growth over the past 5 and 10 years.
The Return on Equity is also great. The ROE for the financial year ending April 2012 is 21%. The 5 year median ROE is 19.1%, an equally great ROE. The ROE based on comprehensive income is very similar with the ROE for April 2012 at 19.6% and the 5 year median at 19.6%. (The ROE on comprehensive income confirms the quality of the ROE on net income.)
As far a debt ratios goes, the Liquidity Ratio for financial year ending April 2012 is quite low at 0.85. This means that the current assets do not cover the current liabilities. However, the cash flow is quite strong and if you add in cash flow after dividends you get a more acceptable value of 1.32. The 5 year median Liquidity ratio is 1.10.
The Debt Ratio is much better at 1.95. This has a 5 year ratio of 1.78. The Leverage and Debt/Equity Ratios are fine at 2.05 and 1.05.
This has been a great stock for me. It is doing great currently even though the overall market is not. This stock would be considered a dividend growth stock. I think that why I have good dividend income growth is because I have a variety of stocks with low, median and high dividends and low, median and high dividend growth rates.
In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Its stores offer a broad mix of food products, beverages, other merchandise and services and motor fuel. Grouped under three main brands: Couche-Tard, Mac's and Circle K. Stores are located across 10 Provinces of Canada in three geographic markets (East, Centre and West), and across 43 American states and the District of Columbia in eight major markets (Great Lakes, Midwest, Southeast, Florida, Gulf, Arizona, West Coast and Southwest). In addition, a network of about 3,700 licensees extends in seven other regions worldwide (China, Guam, Hong Kong, Indonesia, Japan, Macau and Mexico). Its web site is here Couche-Tard. See my spreadsheet at atd.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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