I own this stock of TransCanada Corp (TSX-TRP, NYSE-TRP). I first bought this stock in 2000 and then
I bought some more of this stock in 2006. I have made a return of 12.35% per year on this company's shares. Of my total return, 4.96% per year is attributable to dividends and 7.39% per year is attributable to capital gains.
When I look at insider trading, I find $33.3M of insider selling and net insider selling at $31.9M. So there is some $1.6M of insider buying. Most of the insider selling is by officers at $28.3M. There is no insider selling by directors and directors are doing $0.5M of the insider buying. All of insider selling seems to be of options.
The CEO has shares worth $4.5Mand has options are worth $77.5M. The CFO has shares worth $0.5M and has options worth $14.4M. An officer has shares $0.4M and has options worth $6.8M. A director has shares worth $0.6M and has options worth $1.9M. This is just to give you an idea on insider share ownership and option values.
When I look at analysts' recommendations I find Buy and Hold recommendations. The consensus recommendation would be a Buy (but just barely). The 12 month stock price is $51.20. This implies a 12 months total return of 10.59% with 3.68% from dividends and 6.91% from capital gains.
The 5 year low, median and high Price/Earnings Ratios are 16.74, 18.61 and 20.48. The current P/E based on a stock price of $47.89 and a 2013 EPS of $2.29 is 20.91. I get a Graham Price of $33.85. I get 10 year low median and high median P/GP Ratios of 1.03, 1.16 and 1.29. The current P/GP Ratio is 1.41.
The current dividend yield is 3.68% and the 5 year median dividend yield is 4.11%. The current yield is 11% below the 5 year median yield. I get a 10 year median Price/Book Value per Share Ratio of 1.16. The current P/B Ratio based on a stock price of $47.89 is 1.15.
What my stock price testing shows is that the stock price is anywhere from reasonable to a bit pricey. Utility stock have been bid up lately as there people investing in utility stocks just for the return. This is because return on bonds is low to non-existent. Utilities are considered to be a rather safe investment. We are in a bit of a cyclical bull market, so I do not see the stock price of utilities moving down significantly at the moment.
If you want to buy a low risk stock with a good dividend, this might be a buy for you. It is a bit pricey, so I do not see much in the way of capital gains. The main value of utility is that they do not tend to be as volatile as the TSX. They will not go as high as the TSX, but they will not go as low either. This does not mean that stock price cannot dive on a cyclical bear market, because it can. It just will not dive in price as much as the TSX as a whole.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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 or StockTwits.
Friday, March 1, 2013
Thursday, February 28, 2013
TransCanada Corp
I own this stock of TransCanada Corp (TSX-TRP, NYSE-TRP). I first bought this stock in 2000 when it decreased it dividends and was reorganizing. It is a good company and I thought at the time it was doing the right thing. The company had started to reduce the dividend in 1998 and it hit the low point in 2000. It took 7 years (2005) before the dividend paid exceeded the dividends prior of 1998.
I bought some more of this stock in 2006. I have made a return of 12.35% per year on this company's shares. Of my total return, 4.96% per year is attributable to dividends and 7.39% per year is attributable to capital gains. Over the past 5 and 10 years, shareholders' total return would be 6.68% and 11.86% per year, respectively. Of the above total returns, 3.67% and 4.41% per year would be attributable to dividends and 3.01% and 7.45% per year attributable to capital gain.
This stock pays a reasonable dividend and gives reasonable increases in dividends. The current dividend yield is 3.86% and the 5 year median dividend yield is 4.11%. The dividend growth over the past 5 and 10 years is at 5% and 5.7%. The most recent increase, which was for 2012, was 4.8%.
The Dividend Payout Ratios are also good with 5 year median DPRs for earnings at 76.5% and for cash flow at 33%. The DRPs for earnings was higher than usual in 2012 at 94.6%. Until the last few years, the DPR for earnings was under 60%. The DPR for cash flow has fluctuated for has not changed that much.
The outstanding shares have been increasing at the rate of 5.5% and 4% per year over the past 5 and 10 years. The increases in shares have been due to stock options and DRIP. Revenue has declined over the past years at 2% per year and up by 4.4% per year over the past 10 years. The Revenue per Share has declined by 7% per year over the past 5 years and has not increased over the past 10 years.
However, if you look at 5 year running values, the Revenue per Share has only declined by 1% per year over the past 5 years and has increased by 2% per year over the past 10 years. Sometimes you need to look at 5 year running values rather than specific points in time. For the 5 year change in Revenue per Share I was looking years of 2007 and 2012. For the 5 year running values I was looking at the average Revenue per Share from the period of 2003 to 2007 compared to the period from 2008 to 2012.
Earnings is down over the past 5 years by 4.4% per year and up over the past 10 years at 1.7% per year. The Cash Flow per Share is down over the past 5 years by 1% per year and up by 1.7% per year. In both these cases the 5 year running averages is better. Book Value per share is up by 4% per year and 6.4% per year over the past 5 and 10 years. None of the growth values are great, but the economy has not be that great lately either.
The Return on Equity is at 8.7% and the 5 year median is 8.7%. The ROE on comprehensive income is 8.6% and the 5 year median ROE is 8.6%. (The ROE on comprehensive income can basically confirm that the ROE on net income is of good quality.)
This is a utility stock and as most utility stocks, it has a heavy debt load. The Liquidity Ratio is low at 0.57. If you consider also the cash flow after dividends, this ratios becomes 1.04. This is ok, but nothing to write home about. The Debt Ratio is much better at 1.62. The Leverage and Debt/Equity Ratios are rather typical for a utility at 2.86 and 1.77.
If you are starting to build a portfolio, utility stocks are a good place to start. They tend to be at the low end of risk and quite conservative. They provide a decent dividend and decent dividend growth. Such stocks tend to be less volatile than the TSX. That means that it will not lose as much in bear markets, but it also means that it will not gain as much in bull markets.
This is a good conservative utility stock and could be a core holding in a conservative portfolio.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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 or StockTwits.
I bought some more of this stock in 2006. I have made a return of 12.35% per year on this company's shares. Of my total return, 4.96% per year is attributable to dividends and 7.39% per year is attributable to capital gains. Over the past 5 and 10 years, shareholders' total return would be 6.68% and 11.86% per year, respectively. Of the above total returns, 3.67% and 4.41% per year would be attributable to dividends and 3.01% and 7.45% per year attributable to capital gain.
This stock pays a reasonable dividend and gives reasonable increases in dividends. The current dividend yield is 3.86% and the 5 year median dividend yield is 4.11%. The dividend growth over the past 5 and 10 years is at 5% and 5.7%. The most recent increase, which was for 2012, was 4.8%.
The Dividend Payout Ratios are also good with 5 year median DPRs for earnings at 76.5% and for cash flow at 33%. The DRPs for earnings was higher than usual in 2012 at 94.6%. Until the last few years, the DPR for earnings was under 60%. The DPR for cash flow has fluctuated for has not changed that much.
The outstanding shares have been increasing at the rate of 5.5% and 4% per year over the past 5 and 10 years. The increases in shares have been due to stock options and DRIP. Revenue has declined over the past years at 2% per year and up by 4.4% per year over the past 10 years. The Revenue per Share has declined by 7% per year over the past 5 years and has not increased over the past 10 years.
However, if you look at 5 year running values, the Revenue per Share has only declined by 1% per year over the past 5 years and has increased by 2% per year over the past 10 years. Sometimes you need to look at 5 year running values rather than specific points in time. For the 5 year change in Revenue per Share I was looking years of 2007 and 2012. For the 5 year running values I was looking at the average Revenue per Share from the period of 2003 to 2007 compared to the period from 2008 to 2012.
Earnings is down over the past 5 years by 4.4% per year and up over the past 10 years at 1.7% per year. The Cash Flow per Share is down over the past 5 years by 1% per year and up by 1.7% per year. In both these cases the 5 year running averages is better. Book Value per share is up by 4% per year and 6.4% per year over the past 5 and 10 years. None of the growth values are great, but the economy has not be that great lately either.
The Return on Equity is at 8.7% and the 5 year median is 8.7%. The ROE on comprehensive income is 8.6% and the 5 year median ROE is 8.6%. (The ROE on comprehensive income can basically confirm that the ROE on net income is of good quality.)
This is a utility stock and as most utility stocks, it has a heavy debt load. The Liquidity Ratio is low at 0.57. If you consider also the cash flow after dividends, this ratios becomes 1.04. This is ok, but nothing to write home about. The Debt Ratio is much better at 1.62. The Leverage and Debt/Equity Ratios are rather typical for a utility at 2.86 and 1.77.
If you are starting to build a portfolio, utility stocks are a good place to start. They tend to be at the low end of risk and quite conservative. They provide a decent dividend and decent dividend growth. Such stocks tend to be less volatile than the TSX. That means that it will not lose as much in bear markets, but it also means that it will not gain as much in bull markets.
This is a good conservative utility stock and could be a core holding in a conservative portfolio.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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 or StockTwits.
Wednesday, February 27, 2013
Canadian Real Estate Investment Trust 2
On my other blog I am today writing about expanding CPP...continue...
I own this stock of Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF). To diversify my portfolio, I have invested in some REITs. I have only invested in REITs that have commercial properties. I bought this stock in September 2006 and since that time I have made a total return of 13.14% per year. Of this total return, 4.49% per year is from dividends and 8.65% per year is from capital gains.
When I look at the insider trading report, I see insider buying of $1.1M and no insider selling. Insiders were buying stocks at priced from $40.50 to $44.60. I can only find one insider that has options and this is a Subsidiary Executive with $0.7M in options. The CEO has $18M in shares and the CFO has $4.8M in shares.
When looking at the stock price, I do not think that looking at Price/Earnings is the way to go. It is presently at 48.26 and I think that it does not reflect anything about the stock price. Using Graham Price is a bit iffy also as part of the formula uses EPS.
The Price/Book Value per Share Ratio is a good place to start. The 10 year median P/B Ratio is 2.13. The current ratio based on a stock price of $43.33 is 1.73 based on a stock price of $43.33. The current P/B Ratio is 82% of the 10 year median Ratio. For a stock to be cheap, the current P/B Ratio would have to be only 80% of the 10 year median Ratio. So this test shows that while the stock price is not quite in the cheap category, it is certainly reasonable.
The dividend yield tells another story. The 5 year median dividend yield is 4.64% and the current dividend yield at 3.58% is 23% lower. The current dividend yield is quite low for a REIT. TD gives the Industry average as 5.12%.
If you look at Price/Cash Flow per Share Ratio, I get a get 5 year low, median and high median P/CF Ratios of 12.32, 13.76 and 15.19. Based on current stock price of $43.33 and 2012's CFPS of $2.61, the current P/CF ratio is 16.59. This shows that the stock price is relatively high.
Often FFO and AFFO values are used in connection with REITs. If you look at 5 year low, median and high median Price/FFO Ratio you get ones of 11.41, 12.74 and 14.08. Using the current stock price of $43.33 and the 2013 FFO $2.76, the P/FFO Ratio is 15.70. If you look at 5 year low, median and high median Price/AFFO Ratio you get ones of 13.26, 14.80 and 16.35. Using the current stock price of $43.33 and the 2013 FFO $2.51, the P/FFO Ratio is 17.26. Both these tests show that the stock price is relatively high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation is a Buy. The 12 month consensus stock price is $47.70. This implies a 13.67 total return with 3.58% from dividends and 10.09% from capital gains.
Deloitte puts out an interesting guide to REITs. The Jags Report talks about some analysts raising their 12 month stock price on this stock. The Canadian Money Forum has a discussion on the relative merits of this stock and RioCan.
I like this stock and will buy some more in the future. However, all the indictors I see show that this stock is currently relatively overpriced.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is here CDN REIT. See my spreadsheet at ref.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 or StockTwits.
I own this stock of Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF). To diversify my portfolio, I have invested in some REITs. I have only invested in REITs that have commercial properties. I bought this stock in September 2006 and since that time I have made a total return of 13.14% per year. Of this total return, 4.49% per year is from dividends and 8.65% per year is from capital gains.
When I look at the insider trading report, I see insider buying of $1.1M and no insider selling. Insiders were buying stocks at priced from $40.50 to $44.60. I can only find one insider that has options and this is a Subsidiary Executive with $0.7M in options. The CEO has $18M in shares and the CFO has $4.8M in shares.
When looking at the stock price, I do not think that looking at Price/Earnings is the way to go. It is presently at 48.26 and I think that it does not reflect anything about the stock price. Using Graham Price is a bit iffy also as part of the formula uses EPS.
The Price/Book Value per Share Ratio is a good place to start. The 10 year median P/B Ratio is 2.13. The current ratio based on a stock price of $43.33 is 1.73 based on a stock price of $43.33. The current P/B Ratio is 82% of the 10 year median Ratio. For a stock to be cheap, the current P/B Ratio would have to be only 80% of the 10 year median Ratio. So this test shows that while the stock price is not quite in the cheap category, it is certainly reasonable.
The dividend yield tells another story. The 5 year median dividend yield is 4.64% and the current dividend yield at 3.58% is 23% lower. The current dividend yield is quite low for a REIT. TD gives the Industry average as 5.12%.
If you look at Price/Cash Flow per Share Ratio, I get a get 5 year low, median and high median P/CF Ratios of 12.32, 13.76 and 15.19. Based on current stock price of $43.33 and 2012's CFPS of $2.61, the current P/CF ratio is 16.59. This shows that the stock price is relatively high.
Often FFO and AFFO values are used in connection with REITs. If you look at 5 year low, median and high median Price/FFO Ratio you get ones of 11.41, 12.74 and 14.08. Using the current stock price of $43.33 and the 2013 FFO $2.76, the P/FFO Ratio is 15.70. If you look at 5 year low, median and high median Price/AFFO Ratio you get ones of 13.26, 14.80 and 16.35. Using the current stock price of $43.33 and the 2013 FFO $2.51, the P/FFO Ratio is 17.26. Both these tests show that the stock price is relatively high.
When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. The consensus recommendation is a Buy. The 12 month consensus stock price is $47.70. This implies a 13.67 total return with 3.58% from dividends and 10.09% from capital gains.
Deloitte puts out an interesting guide to REITs. The Jags Report talks about some analysts raising their 12 month stock price on this stock. The Canadian Money Forum has a discussion on the relative merits of this stock and RioCan.
I like this stock and will buy some more in the future. However, all the indictors I see show that this stock is currently relatively overpriced.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is here CDN REIT. See my spreadsheet at ref.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 or StockTwits.
Tuesday, February 26, 2013
Canadian Real Estate Investment Trust
I own this stock of Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF). To diversify my portfolio, I have invested in some REITs. I have only invested in REITs that have commercial properties. I bought this stock in September 2006 and since that time I have made a total return of 13.14% per year. Of this total return, 4.49% per year is from dividends and 8.65% per year is from capital gains.
Dividends have been increasing by 2.17% and 2.09% per year over the past 5 and 10 years. This is slightly faster than inflation as inflation has been increasing by 1.8% and 1.83% per year over the past 5 and 10 years. (I used information from the Bank of Canada to get inflation rates.)
REITs tend to give good dividend and what you expect is that the dividends (or distributions) will increase at or slightly above the rate of inflation. The current dividend rate under this REIT is 3.32%. The latest dividend increase was 4% for 2013.
The Dividend Payout Ratios are high as far as earnings go with the 5 year median at 119% and for the financial year of 2012 at 125%. However, DPR for cash flow is fine with a 5 year median at 64% and for the financial year of 2012 at 56%. The DPR for the 2012 financial year for FFO is 56% and for AFFO is 62%.
Shareholders have done well over the past 5 and 10 years, with Total Return at 12.73% and at 19.03% per year, respectively. The dividend portion of this return is 4.16% and 6.42% per year, respectively. The capital gain portion is 8.58% and 12.61% per year, respectively.
The outstanding shares have increased by 2.4% and 4% per year over the past 5 and 10 years. The shares have increased due to new stock issues and DRIP and they have decreased through share buy backs.
Revenue has increased by 5.1% and 8.7% per year over the past 5 and 10 years. Revenue per Share has increased by2.7% and 4.9% per year over the past 5 and 10 years. Looking at the 5 year running Revenue per Share, this has increased by 3.7% and 4.7% per year over the past 5 and 10 years. Revenue increases per Share is a little low.
Earnings per Share have gone down by 3% per year over the past 5 years. EPS has not increased over the past 10 years. (However, if you look at the 5 year running EPS over the past 5 years this has increased by 5.7% per year. Sometimes looking at 5 year running averages is better rather than looking only at specific points in time.)
Funds from Operations (FFO) have increased by 4.5% and 7% over the past 5 and 10 years. Adjusted Funds from Operations (AFFO) have increased by 5.5% over the past 5 years. (AFFO has not been around as long as FFO has.)
Cash flow has increased by 7.48% and 7.86% per year over the past 5 and 10 years. Book Value per share has been increasing also, but there was a big increase in Book Value due to the change in accounting rules to IFRS and this shows BVPS changing at a much higher than it probably really is. (Accounting is just as much an art as it is a science.)
Until the last couple of years, ROE was very good for this stock. Since 2011 when BVPS was pushed up the ROE has been rather low and coming in at just 4.7% for the 2012 financial year. For the 2012 financial year, the ROE on comprehensive income was close to the ROE on net income with an ROE of 4.8%.
The Liquidity Ratio is not as important on REITs as it is for other stocks. The current one I calculate to be around 0.90. However, the stock has a good cash flow. Debt Ratio is good at 1.87. The Leverage and the Debt/Equity Ratios are fine at 2.14 and 1.14, respectively.
You would buy a REIT to diversify a portfolio. They provide a decent income which should increase at or slightly above the inflation rate. They will also provide a decent rate of capital gain. They are, of course, subject to the risk of real estate investing and in this case to the risks of commercial real estate investing.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is here CDN REIT. See my spreadsheet at ref.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 or StockTwits.
Dividends have been increasing by 2.17% and 2.09% per year over the past 5 and 10 years. This is slightly faster than inflation as inflation has been increasing by 1.8% and 1.83% per year over the past 5 and 10 years. (I used information from the Bank of Canada to get inflation rates.)
REITs tend to give good dividend and what you expect is that the dividends (or distributions) will increase at or slightly above the rate of inflation. The current dividend rate under this REIT is 3.32%. The latest dividend increase was 4% for 2013.
The Dividend Payout Ratios are high as far as earnings go with the 5 year median at 119% and for the financial year of 2012 at 125%. However, DPR for cash flow is fine with a 5 year median at 64% and for the financial year of 2012 at 56%. The DPR for the 2012 financial year for FFO is 56% and for AFFO is 62%.
Shareholders have done well over the past 5 and 10 years, with Total Return at 12.73% and at 19.03% per year, respectively. The dividend portion of this return is 4.16% and 6.42% per year, respectively. The capital gain portion is 8.58% and 12.61% per year, respectively.
The outstanding shares have increased by 2.4% and 4% per year over the past 5 and 10 years. The shares have increased due to new stock issues and DRIP and they have decreased through share buy backs.
Revenue has increased by 5.1% and 8.7% per year over the past 5 and 10 years. Revenue per Share has increased by2.7% and 4.9% per year over the past 5 and 10 years. Looking at the 5 year running Revenue per Share, this has increased by 3.7% and 4.7% per year over the past 5 and 10 years. Revenue increases per Share is a little low.
Earnings per Share have gone down by 3% per year over the past 5 years. EPS has not increased over the past 10 years. (However, if you look at the 5 year running EPS over the past 5 years this has increased by 5.7% per year. Sometimes looking at 5 year running averages is better rather than looking only at specific points in time.)
Funds from Operations (FFO) have increased by 4.5% and 7% over the past 5 and 10 years. Adjusted Funds from Operations (AFFO) have increased by 5.5% over the past 5 years. (AFFO has not been around as long as FFO has.)
Cash flow has increased by 7.48% and 7.86% per year over the past 5 and 10 years. Book Value per share has been increasing also, but there was a big increase in Book Value due to the change in accounting rules to IFRS and this shows BVPS changing at a much higher than it probably really is. (Accounting is just as much an art as it is a science.)
Until the last couple of years, ROE was very good for this stock. Since 2011 when BVPS was pushed up the ROE has been rather low and coming in at just 4.7% for the 2012 financial year. For the 2012 financial year, the ROE on comprehensive income was close to the ROE on net income with an ROE of 4.8%.
The Liquidity Ratio is not as important on REITs as it is for other stocks. The current one I calculate to be around 0.90. However, the stock has a good cash flow. Debt Ratio is good at 1.87. The Leverage and the Debt/Equity Ratios are fine at 2.14 and 1.14, respectively.
You would buy a REIT to diversify a portfolio. They provide a decent income which should increase at or slightly above the inflation rate. They will also provide a decent rate of capital gain. They are, of course, subject to the risk of real estate investing and in this case to the risks of commercial real estate investing.
Canadian Real Estate Investment Trust is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is here CDN REIT. See my spreadsheet at ref.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 or StockTwits.
Monday, February 25, 2013
Shoppers Drug Mart 2
On my other blog I am today writing about not buying bonds...continue...
I own this stock of Shoppers Drug Mart (TSX-SC, OTC- SHDMF). I bought the stock for my TFSA in 2009, 2010 and 2011. By May of 2011 I sold some shares. I have made the grand total of 1.03% per year on this investment. The portion attributable to dividends is 2.97% per year with a capital loss of 1.76% per year.
When I look at insider trading, I find no insider selling and no insider buying. Recent options given out seem to have been kept by insiders. Shoppers are also buying back shares. For this company there are not only things call options, but also other options like vehicles called Rights Deferred Share Units and Rights Restricted Share Units
The CEO has a few shares and has options are worth $11M. The CFO has a few shares and has options worth $3.7M. An officer has a few shares and has options worth $0.4M. A director has no shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings Ratios are 13.91, 14.76 and 16.90. The current P/E Ratio is 14.31 based on a stock price of $42.80 and 2013 earnings of $2.99. I get a Graham price of $37.6 and the current Price/Graham Price Ratio is 1.15. The 10 year low, median and high median P/GP Ratios are 1.48, 1.68 and 1.83.
The current Dividend yield is 2.48% and the 5 year median 2.26% a value around 9% lower than the current dividend yield. I get a 10 year median Price/Book Value per Share Ratio of 3.16. The current P/B Ratio is 2.06. The current one is only 66% of the 10 year median Ratio.
On testing the current stock price, it is not surprising that the current stock price does better against the longer term median values as the relative stock price has been going down as the company is switching from a growth stock to a mature stock. I would go with the dividend yield test and suggest the stock price is reasonable.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are in the Hold category and the consensus recommendations would be a Hold. The 12 month consensus stock price is $44.30 and this implies total returns of 5.98% with 2.48% from dividends and 3.50% from capital gains.
Shoppers suffer from regulatory pressure. There have been recent coordinated efforts by every province to reduce generic prices. This company also operates in a challenging economic and competitive environment. Some analysts like the stock as a defensive stock; others feel that since a regulated market is a good part of their business, the stock will continue to go sideways.
There is a positive article in the Financial Post with the title of "Seniors discount pays off for Shoppers Drug Mart, sending profit, dividend higher". A number of analysts mentioned that it has recently raised its dividend. They have raised the dividend every year since starting a dividend in 2005.
I am going to hold on to the stock in this company that I currently have. For dividend paying stocks, over the longer term, the capital gain tends to equal the growth in dividends. I expect dividends to grow at 6 to 7% per year and with dividends at 2.5%, I expect a reasonable return of 8 to 9% per year. We are still in a secular bear market, so this may not happen for a while. However, I do invest for the longer term.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. Its web site is here Husky. See my spreadsheet at sc.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 or StockTwits.
I own this stock of Shoppers Drug Mart (TSX-SC, OTC- SHDMF). I bought the stock for my TFSA in 2009, 2010 and 2011. By May of 2011 I sold some shares. I have made the grand total of 1.03% per year on this investment. The portion attributable to dividends is 2.97% per year with a capital loss of 1.76% per year.
When I look at insider trading, I find no insider selling and no insider buying. Recent options given out seem to have been kept by insiders. Shoppers are also buying back shares. For this company there are not only things call options, but also other options like vehicles called Rights Deferred Share Units and Rights Restricted Share Units
The CEO has a few shares and has options are worth $11M. The CFO has a few shares and has options worth $3.7M. An officer has a few shares and has options worth $0.4M. A director has no shares and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.
The 5 year low, median and high median Price/Earnings Ratios are 13.91, 14.76 and 16.90. The current P/E Ratio is 14.31 based on a stock price of $42.80 and 2013 earnings of $2.99. I get a Graham price of $37.6 and the current Price/Graham Price Ratio is 1.15. The 10 year low, median and high median P/GP Ratios are 1.48, 1.68 and 1.83.
The current Dividend yield is 2.48% and the 5 year median 2.26% a value around 9% lower than the current dividend yield. I get a 10 year median Price/Book Value per Share Ratio of 3.16. The current P/B Ratio is 2.06. The current one is only 66% of the 10 year median Ratio.
On testing the current stock price, it is not surprising that the current stock price does better against the longer term median values as the relative stock price has been going down as the company is switching from a growth stock to a mature stock. I would go with the dividend yield test and suggest the stock price is reasonable.
When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are in the Hold category and the consensus recommendations would be a Hold. The 12 month consensus stock price is $44.30 and this implies total returns of 5.98% with 2.48% from dividends and 3.50% from capital gains.
Shoppers suffer from regulatory pressure. There have been recent coordinated efforts by every province to reduce generic prices. This company also operates in a challenging economic and competitive environment. Some analysts like the stock as a defensive stock; others feel that since a regulated market is a good part of their business, the stock will continue to go sideways.
There is a positive article in the Financial Post with the title of "Seniors discount pays off for Shoppers Drug Mart, sending profit, dividend higher". A number of analysts mentioned that it has recently raised its dividend. They have raised the dividend every year since starting a dividend in 2005.
I am going to hold on to the stock in this company that I currently have. For dividend paying stocks, over the longer term, the capital gain tends to equal the growth in dividends. I expect dividends to grow at 6 to 7% per year and with dividends at 2.5%, I expect a reasonable return of 8 to 9% per year. We are still in a secular bear market, so this may not happen for a while. However, I do invest for the longer term.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. Its web site is here Husky. See my spreadsheet at sc.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 or StockTwits.
Friday, February 22, 2013
Shoppers Drug Mart
Note: Shoppers increased their dividend for 2013 to $.285 per share per quarter and this gives them a current yield of 2.66%. This is a 7.5% increase.
I own this stock of Shoppers Drug Mart (TSX-SC, OTC- SHDMF). This stock has been a disappointment for me. I watched it for a number of years before buying and it proceeded to go down after all my purchases. I bought the stock for my TFSA in 2009, 2010 and 2011. By May of 2011 I sold some shares. I have made the grand total of 1.03% per year on this investment. The portion attributable to dividends is 2.97% per year with a capital loss of 1.76% per year.
Dividend yield is currently around 2.5% and the stock has a 5 year median dividend yield of 2.26%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 33% and for cash flow at 22%. So we can say the stock has a decent yield and decent DPRs. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 2.29% per year with a capital loss of 4.18% per year and dividends at 1.89% per year. There is a positive total return over the past 10 years with the total return at 7.45% per year with capital gain at 5.72% per year and dividends at 1.73% per year.
This stock has 5 and 7 year growth in dividends at 11.7% and14.7%. However, the most recent dividend increase, which occurred in 2012, was for 6%. The best dividend increases were in between 2006 and 2008. I would suspect that future ones will be in the 6 to 7% range.
The total outstanding shares have decreased by 0.78% and 0.06% over the past 5 and 10 years. Shares have increased due to stock options and decreased due to share buy backs. Revenue has increased over the past 5 and 10 years by 4.9% and 10.4% per year. Revenue per Share has increased over the past 5 and 10 years by 5.8% and 10.4% per year.
Earnings have increased by 4.5% and 9% per year over the past 5 and 10 years. Cash Flow has increase by 6% and 11% per year over the past 5 and 10 years. Book Value has increased by 7.7% and 10% per year over the past 5 and 10 years. If you look at 5 year running averages for revenue, earnings and cash flow, the 5 year increases are much better.
The Return on Equity is quite good at 14.1% for the financial year ending in 2012 and a 5 year median value of 14.4%. The ROE on comprehensive income is quite close and quite good at 13.7% for the financial year ending in 2012 and with a 5 year median ROE of 13.9%.
The Liquidity Ratio tends to fluctuate on this stock, with the current one at 1.18. However, if you also consider cash flow after dividends, this ratio goes to 1.48. The Debt Ratios are very good and have always been very good. The current one is 2.51. The current Leverage Debt/Equity Ratios are also good at 1.73 and 0.69.
The problem is that this company stopped being a growth stock (or viewed by the stock market as a growth stock). When a company stops being a growth stock, the change you see is mostly in the Price/Earnings Ratio. For the 5 year prior to my purchase the 5 year median P/E Ratio was 26.04. The current 5 year median P/E Ratio is 15.07.
Even though this company has had growth in Revenues, Earnings, Cash Flow and Book Value, the stock price has been going down. After the stock price hit a low in 2010 and did revive a bit, the stock price has been quite flat since the end of 2010. For the moment, I am continuing to hold what stock I have.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. Its web site is here Shoppers Drug Mart. See my spreadsheet at sc.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 or StockTwits.
I own this stock of Shoppers Drug Mart (TSX-SC, OTC- SHDMF). This stock has been a disappointment for me. I watched it for a number of years before buying and it proceeded to go down after all my purchases. I bought the stock for my TFSA in 2009, 2010 and 2011. By May of 2011 I sold some shares. I have made the grand total of 1.03% per year on this investment. The portion attributable to dividends is 2.97% per year with a capital loss of 1.76% per year.
Dividend yield is currently around 2.5% and the stock has a 5 year median dividend yield of 2.26%. The Dividend Payout Ratios are good with 5 year median DPR for earnings at 33% and for cash flow at 22%. So we can say the stock has a decent yield and decent DPRs. (See my site for information on Dividend Payout Ratios).
Total return over the past 5 years is a negative 2.29% per year with a capital loss of 4.18% per year and dividends at 1.89% per year. There is a positive total return over the past 10 years with the total return at 7.45% per year with capital gain at 5.72% per year and dividends at 1.73% per year.
This stock has 5 and 7 year growth in dividends at 11.7% and14.7%. However, the most recent dividend increase, which occurred in 2012, was for 6%. The best dividend increases were in between 2006 and 2008. I would suspect that future ones will be in the 6 to 7% range.
The total outstanding shares have decreased by 0.78% and 0.06% over the past 5 and 10 years. Shares have increased due to stock options and decreased due to share buy backs. Revenue has increased over the past 5 and 10 years by 4.9% and 10.4% per year. Revenue per Share has increased over the past 5 and 10 years by 5.8% and 10.4% per year.
Earnings have increased by 4.5% and 9% per year over the past 5 and 10 years. Cash Flow has increase by 6% and 11% per year over the past 5 and 10 years. Book Value has increased by 7.7% and 10% per year over the past 5 and 10 years. If you look at 5 year running averages for revenue, earnings and cash flow, the 5 year increases are much better.
The Return on Equity is quite good at 14.1% for the financial year ending in 2012 and a 5 year median value of 14.4%. The ROE on comprehensive income is quite close and quite good at 13.7% for the financial year ending in 2012 and with a 5 year median ROE of 13.9%.
The Liquidity Ratio tends to fluctuate on this stock, with the current one at 1.18. However, if you also consider cash flow after dividends, this ratio goes to 1.48. The Debt Ratios are very good and have always been very good. The current one is 2.51. The current Leverage Debt/Equity Ratios are also good at 1.73 and 0.69.
The problem is that this company stopped being a growth stock (or viewed by the stock market as a growth stock). When a company stops being a growth stock, the change you see is mostly in the Price/Earnings Ratio. For the 5 year prior to my purchase the 5 year median P/E Ratio was 26.04. The current 5 year median P/E Ratio is 15.07.
Even though this company has had growth in Revenues, Earnings, Cash Flow and Book Value, the stock price has been going down. After the stock price hit a low in 2010 and did revive a bit, the stock price has been quite flat since the end of 2010. For the moment, I am continuing to hold what stock I have.
Shoppers Drug Mart Corp. is a licensor of Shoppers Drug Mart in Canada and Pharmaprix in Quebec. The company owns and operates Shoppers Home Health Care stores. It also owns MediSystem Technologies Inc. and the new Murale Stores. Its web site is here Shoppers Drug Mart. See my spreadsheet at sc.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 or StockTwits.
Thursday, February 21, 2013
Husky Energy Inc 2
On my other blog I am today writing about Debt Ratios...continue...
I own this stock of Husky Energy Inc. (TSX-HSE, OTC- HUSKF). This is one of very few adventures into the oil and gas stocks I have taken. I bought this in July 2008 and at that time the stock was doing very well. However, this is not the case at present. My total return on this stock is 1.7% per year, with 4.02% per year from dividends and 2.24% per year in capital losses.
When I look at insider trading I find no insider selling and insider buying at $1.2M. It is nice to see some insider buying, however, this is a$30B company and buying of just $1.2M does not add up to much. Interestingly some of this buying has been recent at around $30.50 per share, but seems to be with a company plan.
There are not only options under this company, but other options like vehicles like Performance Share Units, Rights Preferred Share Units and Deferred Share Unit. Part of the problem with insider trading reports is that the report only treats things actually called options as options. It would seem that some the Performance Share Units have been cashed in over the past year.
The 5 year low, median and high median Price/Earnings Ratios are 10.90, 12.52 and 20.96. The current P/E based on a stock price of $30.86 and 2013 earnings estimate of $1.95 is 15.83. This shows the stock price to be a bit high, buy probably still reasonable.
I get a Graham Price of $29.03. The 10 year low, median and high median Price/Graham Price Ratios are 0.77, 1.07 and 1.30. The current P/GP Ratio is 1.06. This ratio points to a reasonable stock price. The 10 year median Price/Book Value per Share Ratio is 2.20. The current ratio is only 73% of the 10 year ratio and this ratio points to a low stock price.
The 5 year median dividend yield is 4.59% and the current yield is 3.89%. The current one is below 5 year median by around 15%. The current difference between these yields point to a stock price that is on the high side, but probably still reasonable.
The stock price testing is gives some mixed results, but there is nothing that says the stock is overbought. There is a problem with the dividend yield test as dividends fluctuate on oil and gas companies. The next best test is the one for P/B Ratio and this shows the stock is cheap.
When I look at analysts' recommendations, I find lots in the Hold recommendation category and a couple in the Underperform category. The consensus would be a Hold. The 12 months stock price is $31.60. This implies and 12 month total return of 6.29% with 3.89% from dividends and 2.40% from capital gains.
A number of analysts feel that the current dividends are safe. They talk about the company having enough cash flow to keep current dividends. Others talk about the oil sector being out of favour at this point in time. A Financial Post article says Husky reported a 16% rise in fourth-quarter net profit as cheaper crude oil fattened refining margins. An iPolitics article talks about Husky missing the analysts estimates for the 4th quarter of 2012.
I think that the relative stock price is reasonable. It would be a contrarian pick, but the point in being a good investor is to buy stocks lower and you sell them. To do this, you obviously have to buy when others are not.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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 or StockTwits.
I own this stock of Husky Energy Inc. (TSX-HSE, OTC- HUSKF). This is one of very few adventures into the oil and gas stocks I have taken. I bought this in July 2008 and at that time the stock was doing very well. However, this is not the case at present. My total return on this stock is 1.7% per year, with 4.02% per year from dividends and 2.24% per year in capital losses.
When I look at insider trading I find no insider selling and insider buying at $1.2M. It is nice to see some insider buying, however, this is a$30B company and buying of just $1.2M does not add up to much. Interestingly some of this buying has been recent at around $30.50 per share, but seems to be with a company plan.
There are not only options under this company, but other options like vehicles like Performance Share Units, Rights Preferred Share Units and Deferred Share Unit. Part of the problem with insider trading reports is that the report only treats things actually called options as options. It would seem that some the Performance Share Units have been cashed in over the past year.
The 5 year low, median and high median Price/Earnings Ratios are 10.90, 12.52 and 20.96. The current P/E based on a stock price of $30.86 and 2013 earnings estimate of $1.95 is 15.83. This shows the stock price to be a bit high, buy probably still reasonable.
I get a Graham Price of $29.03. The 10 year low, median and high median Price/Graham Price Ratios are 0.77, 1.07 and 1.30. The current P/GP Ratio is 1.06. This ratio points to a reasonable stock price. The 10 year median Price/Book Value per Share Ratio is 2.20. The current ratio is only 73% of the 10 year ratio and this ratio points to a low stock price.
The 5 year median dividend yield is 4.59% and the current yield is 3.89%. The current one is below 5 year median by around 15%. The current difference between these yields point to a stock price that is on the high side, but probably still reasonable.
The stock price testing is gives some mixed results, but there is nothing that says the stock is overbought. There is a problem with the dividend yield test as dividends fluctuate on oil and gas companies. The next best test is the one for P/B Ratio and this shows the stock is cheap.
When I look at analysts' recommendations, I find lots in the Hold recommendation category and a couple in the Underperform category. The consensus would be a Hold. The 12 months stock price is $31.60. This implies and 12 month total return of 6.29% with 3.89% from dividends and 2.40% from capital gains.
A number of analysts feel that the current dividends are safe. They talk about the company having enough cash flow to keep current dividends. Others talk about the oil sector being out of favour at this point in time. A Financial Post article says Husky reported a 16% rise in fourth-quarter net profit as cheaper crude oil fattened refining margins. An iPolitics article talks about Husky missing the analysts estimates for the 4th quarter of 2012.
I think that the relative stock price is reasonable. It would be a contrarian pick, but the point in being a good investor is to buy stocks lower and you sell them. To do this, you obviously have to buy when others are not.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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 or StockTwits.
Wednesday, February 20, 2013
Husky Energy Inc
I own this stock of Husky Energy Inc. (TSX-HSE, OTC- HUSKF). This is one of very few adventures into the oil and gas stocks I have taken. I bought this in July 2008 and at that time the stock was doing very well. However, this is not the case at present. My total return on this stock is 1.7% per year, with 4.02% per year from dividends and 2.24% per year in capital losses.
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Dividends are going in the wrong direction with dividend decreases at 10.4% per year. However, over the past 10 years dividends are up by 12.8% per year. The dividends on oil and gas stocks tend to fluctuate rather than go in any one direction. However, people who hold this stock for 10 plus years seem to do well in dividend yield against original purchase price.
For this stock the total return over the past 5 years is negative with a decline of 4.08% per year. The capital loss is 7.58% per year and dividends account for a return of 3.5% per year. The 10 year total return is very good at 24.53% per year, with 13.57% from capital gains and 10.96% from dividends.
Shares have increased by 2.96% and 1.63% per year over the past 5 and 10 years. Increases are mainly due to stocks issued as dividends (for some dividends you can accept stock in place of the dividend) and by stock options for insiders. Revenue is up by 8% and 13.5% per year over the past 5 and 10 years. Revenue per share is up by 4.8% and 11.3% per year.
The earnings per share is down over the past 5 years by 11.5% and up over the past 10 years at 8.16%. The cash flow per share is down by 6.9% over the past 5 years and up by 5.8% per year over the past 10 years. Book Value per share is grown at 7% per year and 12.09% per year over the past 5 and 10 years.
As you can see the 10 year growth figures are much better than the 5 year growth figures. I have also looked at 5 year running growth and for revenue, earnings and book values. These 5 year running growth figures are significantly better over the past 5 years. This is because things like earnings tend to fluctuate and looking at 5 year running figures shows if the company is doing better over time. The answer to this question is, of course, yes.
The Return on Equity has been good with the ROE for 2012 at 10.7% and the 5 year median ROE also at 10.7%. The ROE on comprehensive income is close to the above ROE, coming in at 10.4% for 2012 and with a 5 year median of 10.4%.
Over the last 5 year the Liquidity Ratio has picked up significantly and the current ratio is a good 1.62. The company has good cash flows and this ups this ratio to 2.80. The Debt Ratio is also very good at 2.20. The Leverage and Debt/Equity Ratios are also very good at 1.86 and 0.85.
Our Alberta oil companies are having a hard time as our oil is being sold under world prices because we simply do not have enough oil pipes to deliver the oil we produce to market. It is hard to say when this will be fixed, but such anomalies do not last forever as people will find a way to get our underpriced oil commodity to market at market prices.
This stock certainly has not performed as well as I had hoped it would. However, I do not have much invested in this stock as I do not do much investing in the oil and gas industry. I certainly do not see any other oil and gas company that would be a good replacement for this stock. I still think it will do well over the longer term.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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 or StockTwits.
Dividends are going in the wrong direction with dividend decreases at 10.4% per year. However, over the past 10 years dividends are up by 12.8% per year. The dividends on oil and gas stocks tend to fluctuate rather than go in any one direction. However, people who hold this stock for 10 plus years seem to do well in dividend yield against original purchase price.
For this stock the total return over the past 5 years is negative with a decline of 4.08% per year. The capital loss is 7.58% per year and dividends account for a return of 3.5% per year. The 10 year total return is very good at 24.53% per year, with 13.57% from capital gains and 10.96% from dividends.
Shares have increased by 2.96% and 1.63% per year over the past 5 and 10 years. Increases are mainly due to stocks issued as dividends (for some dividends you can accept stock in place of the dividend) and by stock options for insiders. Revenue is up by 8% and 13.5% per year over the past 5 and 10 years. Revenue per share is up by 4.8% and 11.3% per year.
The earnings per share is down over the past 5 years by 11.5% and up over the past 10 years at 8.16%. The cash flow per share is down by 6.9% over the past 5 years and up by 5.8% per year over the past 10 years. Book Value per share is grown at 7% per year and 12.09% per year over the past 5 and 10 years.
As you can see the 10 year growth figures are much better than the 5 year growth figures. I have also looked at 5 year running growth and for revenue, earnings and book values. These 5 year running growth figures are significantly better over the past 5 years. This is because things like earnings tend to fluctuate and looking at 5 year running figures shows if the company is doing better over time. The answer to this question is, of course, yes.
The Return on Equity has been good with the ROE for 2012 at 10.7% and the 5 year median ROE also at 10.7%. The ROE on comprehensive income is close to the above ROE, coming in at 10.4% for 2012 and with a 5 year median of 10.4%.
Over the last 5 year the Liquidity Ratio has picked up significantly and the current ratio is a good 1.62. The company has good cash flows and this ups this ratio to 2.80. The Debt Ratio is also very good at 2.20. The Leverage and Debt/Equity Ratios are also very good at 1.86 and 0.85.
Our Alberta oil companies are having a hard time as our oil is being sold under world prices because we simply do not have enough oil pipes to deliver the oil we produce to market. It is hard to say when this will be fixed, but such anomalies do not last forever as people will find a way to get our underpriced oil commodity to market at market prices.
This stock certainly has not performed as well as I had hoped it would. However, I do not have much invested in this stock as I do not do much investing in the oil and gas industry. I certainly do not see any other oil and gas company that would be a good replacement for this stock. I still think it will do well over the longer term.
This company is one of Canada's largest energy and energy-related companies. The Company's operations include the exploration, development and production of crude oil and natural gas. Husky has operations in Western Canada, Eastern Canada, US, China, Indonesia and Greenland. This company is mostly foreign owned. Industry: Oil and Gas (Integrated Oils). It is listed under TSX Energy Index. Its web site is here Husky. See my spreadsheet at hse.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 or StockTwits.
Tuesday, February 19, 2013
Intact Financial Corp
On my other blog I am today writing about Adjusting my RRSP Account...continue...
I do not own this stock of Intact Financial Corp (TSX-IFC, OTC-IFCZF). TD Waterhouse put out a report In November 2011 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. (Note that this company used to be ING Group)
First of all I will discuss dividends. The have a decent dividend of 2.75% and a 5 year median dividend yield of 3.1%. The can afford the dividends as the 5 year median Dividend Payout Ratios are 37% for earnings and 25% for cash flow. The DPRs for the 2012 financial year are the same.
Dividend growth is good as the 5 year and 7 year growth is 13.7% and 8.2%. The first increase was almost 60%, so I would suspect that the growth would be around 8% in the future. The last increase was just announced for the first quarter of 2013 and increase was for 10%.
The current Liquidity Ratio is very good at 1.93. The other debt ratios are not so good, but it is a financial institution. The Current Debt Ratio is at 1.33 and current Leverage and Debt/Equity Ratios are at 4.50 and 3.39. So they are ok.
As far as growth goes, Revenue has the best growth with Revenue growth at 9.5% and 9.8% per year over the past 5 and 9 years. Revenue per Share has grown at 8% and 7.5% per year. Earnings have been erratic, but analysts expect better earnings over the next couple of years. The Return on Equity has been good with a 5 year median at 12.1% and the 5 year median ROE on comprehensive income slightly higher at 12.7%
When I look at analysts' recommendations I find Strong Buy, Buy and Hold. The consensus would be a Buy (as most of the recommendations are here). (See my site for information on analyst ratings.) The 12 months stock price is $74.10. This implies a return of 18.3% with 2.5% from dividends and 15.8% from capital gains.
On the insider trading report there is some insider buying ($0.3M) and some insider selling ($1M). Insider selling seems to be involving stock options. There are not a lot of outstanding stock options. The CEO owns $5.9M in shares and has options of $4.6M.
When I look at the relative price, the Price/Earnings Ratio at 10.46 shows a relatively low price (5 year median P/E low and high being 12.90 and 15.00). The Price/Graham Price is similar. The Price/Book Value shows a relatively average price with the current P/B Ratio (1.94) being 5% higher than the 10 year median ratio (1.84).
However, the dividend yield shows relative price is elevated with the current dividend yield lower than the 5 year median yield by almost 11% (2.75% to 3.1%). If you get mixed results and there is no reason not to go with the dividend yield test, I would go with the dividend yield test which suggests that stock price is a bit on the high side.
The management of this company is well thought of. It would be a long term investment because there is volatility in property and casualty insurance companies, but these companies can make money for shareholders over the long term. They are getting a good track record for annual increases in dividends. (Dividends have been raised every year since they started 8 years ago.)
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 Intact. 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 or StockTwits.
I do not own this stock of Intact Financial Corp (TSX-IFC, OTC-IFCZF). TD Waterhouse put out a report In November 2011 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. (Note that this company used to be ING Group)
First of all I will discuss dividends. The have a decent dividend of 2.75% and a 5 year median dividend yield of 3.1%. The can afford the dividends as the 5 year median Dividend Payout Ratios are 37% for earnings and 25% for cash flow. The DPRs for the 2012 financial year are the same.
Dividend growth is good as the 5 year and 7 year growth is 13.7% and 8.2%. The first increase was almost 60%, so I would suspect that the growth would be around 8% in the future. The last increase was just announced for the first quarter of 2013 and increase was for 10%.
The current Liquidity Ratio is very good at 1.93. The other debt ratios are not so good, but it is a financial institution. The Current Debt Ratio is at 1.33 and current Leverage and Debt/Equity Ratios are at 4.50 and 3.39. So they are ok.
As far as growth goes, Revenue has the best growth with Revenue growth at 9.5% and 9.8% per year over the past 5 and 9 years. Revenue per Share has grown at 8% and 7.5% per year. Earnings have been erratic, but analysts expect better earnings over the next couple of years. The Return on Equity has been good with a 5 year median at 12.1% and the 5 year median ROE on comprehensive income slightly higher at 12.7%
When I look at analysts' recommendations I find Strong Buy, Buy and Hold. The consensus would be a Buy (as most of the recommendations are here). (See my site for information on analyst ratings.) The 12 months stock price is $74.10. This implies a return of 18.3% with 2.5% from dividends and 15.8% from capital gains.
On the insider trading report there is some insider buying ($0.3M) and some insider selling ($1M). Insider selling seems to be involving stock options. There are not a lot of outstanding stock options. The CEO owns $5.9M in shares and has options of $4.6M.
When I look at the relative price, the Price/Earnings Ratio at 10.46 shows a relatively low price (5 year median P/E low and high being 12.90 and 15.00). The Price/Graham Price is similar. The Price/Book Value shows a relatively average price with the current P/B Ratio (1.94) being 5% higher than the 10 year median ratio (1.84).
However, the dividend yield shows relative price is elevated with the current dividend yield lower than the 5 year median yield by almost 11% (2.75% to 3.1%). If you get mixed results and there is no reason not to go with the dividend yield test, I would go with the dividend yield test which suggests that stock price is a bit on the high side.
The management of this company is well thought of. It would be a long term investment because there is volatility in property and casualty insurance companies, but these companies can make money for shareholders over the long term. They are getting a good track record for annual increases in dividends. (Dividends have been raised every year since they started 8 years ago.)
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 Intact. 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 or StockTwits.
Friday, February 15, 2013
AGF Management Ltd
I do not own this stock (TSX-AGF.B, OTC-AGFMF), but I used to. I bought it in 2001 and sold stock in 2006 and 2008. I made a return of just over 2% per year. I sold it because the company was having problems and I could not see that they would get any better anytime soon. Still, I sold at a better price that I could get today.
It seems to me that this company did not recover well from the prior recession and then it got hit with the last one. Since it is a Mutual Fund company, you would expect a recession to hit it hard, but you also expect to see it recover when a recession is over.
I like looking at cash flow more than earnings. It is harder to fool around with cash flow than earnings and in any event EPS is rather a fake figure. It can be a useful way to compare companies in the same and different industry for example. This company had a negative cash flow in the financial year ending in November 2012 and this is not good.
Also, there is a big difference between the Return on Capital for comprehensive income and net income. This is another warning sign. The ROE on comprehensive income is just 4% and this is almost 60% lower than the ROE on net income, which is a good at 9.9%.
It is also not a good sign with the EPS is higher the CFPS. (Although generally for this stock the EPS/CF Ratio is fine and is between 0 and 0.99. The 10 year median is 0.46.)
Another thing that is not good is the increase in Dividend Payout Ratios. The 5 year median DPRs for earnings and cash flow are 89% and 41%. However, they are increasing and been increasing for sometime. The DPR for earnings was 196% in 2012 and is expected to be 180% and 162% in 2013 and 2012. The cash flow was negative for 2012. However, the lack of cash flow has to do with charges on discontinued operating activities. (In any event, it still negatively affected the cash flow.)
When I look at the analysts' recommendations I find Buy, Hold and Underperform. The consensus recommendation would be a Hold. It is obvious that others have a better opinion that I do of this stock. The 12 month stock price consensus is $11.50. This implies a total return of 6.78% with a capital loss of 2.38% and dividends of 9.17%.
I see a couple of interesting things. The CEO owns some $152M in shares and an officer (another Goldring) owns $141M in shares. (Could this be why there is still a dividend payment?) Reuters says that there are some 32 institutions that own 24% of the outstanding shares. However, over the past 3 months institutions have sold some 23% of their outstanding shares. Some people seem to be bailing out of this stock.
A number of analysts feel that the dividend is safe because if you ignore the cash flow used in discontinued operation activities, they have a positive cash flow. (This is true and shows in their cash flow statement.) Although other sites do not show any sell recommendations, there are sell recommendations on Stock Chase .
There is comments and a report on Q4 at Investment Executive . There is also a Jags Report about the National Bank raising the 12 month stock price from $9.50 to $11. TD Securities and CIBC have commented on their 12 month stock price of $10.50 and $12.50, respectively.
Personally, I would not buy this stock. They cannot cover their dividends with their earnings and probably will not be able to in the near future.
AGF Management Limited is an integrated, global wealth management company, whose principal subsidiaries provide investment management for mutual funds, institutions and corporations, as well as high-net-worth clients; and trust products and services. 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 or StockTwits.
It seems to me that this company did not recover well from the prior recession and then it got hit with the last one. Since it is a Mutual Fund company, you would expect a recession to hit it hard, but you also expect to see it recover when a recession is over.
I like looking at cash flow more than earnings. It is harder to fool around with cash flow than earnings and in any event EPS is rather a fake figure. It can be a useful way to compare companies in the same and different industry for example. This company had a negative cash flow in the financial year ending in November 2012 and this is not good.
Also, there is a big difference between the Return on Capital for comprehensive income and net income. This is another warning sign. The ROE on comprehensive income is just 4% and this is almost 60% lower than the ROE on net income, which is a good at 9.9%.
It is also not a good sign with the EPS is higher the CFPS. (Although generally for this stock the EPS/CF Ratio is fine and is between 0 and 0.99. The 10 year median is 0.46.)
Another thing that is not good is the increase in Dividend Payout Ratios. The 5 year median DPRs for earnings and cash flow are 89% and 41%. However, they are increasing and been increasing for sometime. The DPR for earnings was 196% in 2012 and is expected to be 180% and 162% in 2013 and 2012. The cash flow was negative for 2012. However, the lack of cash flow has to do with charges on discontinued operating activities. (In any event, it still negatively affected the cash flow.)
When I look at the analysts' recommendations I find Buy, Hold and Underperform. The consensus recommendation would be a Hold. It is obvious that others have a better opinion that I do of this stock. The 12 month stock price consensus is $11.50. This implies a total return of 6.78% with a capital loss of 2.38% and dividends of 9.17%.
I see a couple of interesting things. The CEO owns some $152M in shares and an officer (another Goldring) owns $141M in shares. (Could this be why there is still a dividend payment?) Reuters says that there are some 32 institutions that own 24% of the outstanding shares. However, over the past 3 months institutions have sold some 23% of their outstanding shares. Some people seem to be bailing out of this stock.
A number of analysts feel that the dividend is safe because if you ignore the cash flow used in discontinued operation activities, they have a positive cash flow. (This is true and shows in their cash flow statement.) Although other sites do not show any sell recommendations, there are sell recommendations on Stock Chase .
There is comments and a report on Q4 at Investment Executive . There is also a Jags Report about the National Bank raising the 12 month stock price from $9.50 to $11. TD Securities and CIBC have commented on their 12 month stock price of $10.50 and $12.50, respectively.
Personally, I would not buy this stock. They cannot cover their dividends with their earnings and probably will not be able to in the near future.
AGF Management Limited is an integrated, global wealth management company, whose principal subsidiaries provide investment management for mutual funds, institutions and corporations, as well as high-net-worth clients; and trust products and services. 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 or StockTwits.
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