Linamar Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. If you like this stock, now might be a good time to buy as the stock has fallen a lot this year. If you are building a portfolio for future income you want stocks that have good capital gains, which this stock has. See my spreadsheet on Linamar Corporation.

I do not own this stock of Linamar Corporation (TSX-LNR, OTC-LIMAF). I looked at this stock back in 2000 and it was not a stock I thought would fit my current investment philosophy. The dividend yield is generally lower than 1%. In 2008 I read an article that recommended this company as a dividend stock with good value. This stock used to be on the Investment reporter portfolio stock list as an average risk stock.

When I was updating my spreadsheet, I noticed that his company has been doing very well. There is a lot of green on my spreadsheet.

This is a dividend growth stock, but both the dividends and the dividend growth are generally low. The current dividend yield is 0.83%. The 5, 10 and historical dividend median yields are 0.70%, 1.13% and 1.22%. the dividend growth is generally below 8% as you can see in the chart below. Usually when there are low dividend yields, there is high dividend growth. This is an exception to that rule.

Dividend yields after holding this stock for 5 to 25 years is at 1.44% for 5 years, 4.64% for 10 years, 4.43% for 15 years, 1.82% for 20 years and 12.72% for 25 years. Note here again that the yield was exceptionally low 20 years ago when the stock was at the top of the market. 20 years ago, it would not have been a good time to buy this stock.

There is no question that they can afford their dividends. The Dividend Payout Ratio for EPS for 2017 is 5.8% with 5 year coverage at 6.4%. The DPR for CFPS for 2017 is 3.5% with year coverage at 3.7%.

All debt ratios are fine. Although long term debt has been increasing lately with increases of 129% last year and 98% so far this year, the Long Term Debt/Market Cap Ratio is still good currently at 0.67. The Liquidity Ratio for 2017 is good at 1.91 with 5 year median of 1.72. The Debt Ratio is also quite good for 2017 at 2.14 with 5 year median at 2.14. The Leverage and Debt/Equity Ratios are also good with ratios of 1.88 and 0.88 for 2017 with 5 year median at 1.98 and 0.98.

The Total Return per year is shown below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

The investors that had this stock for 20 years would have paid too much, as the stock was at a high 20 years ago and would not be an appropriate time to buy. This is one of things I talk about. If you pay too much for a stock it can badly affect your long term results.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	8.45%	26.95%	25.84%	1.11%
10	7.18%	14.60%	13.73%	0.87%
15	7.60%	16.32%	15.10%	1.22%
20	6.61%	5.52%	4.99%	0.54%
23	7.73%	12.22%	11.12%	1.10%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.64, 9.50 and 12.55. The corresponding 10 year ratios are 6.55, 9.68 and 12.97. The corresponding historical ratios are 8.53, 11.61 and 15.18. The current P/E Ratio is 6.33 based on current stock price of $58.07 and a 2018 EPS estimate of $9.17. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $105.27. The 10 year low, median, and high median Price/Graham Price Ratios are 0.57, 0.77 and 1.01. The current P/GP Ratio is 0.55 based on a stock price of $58.07. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.41. The current P/B Ratio is 1.08 based on Book Value of $3,510M, Book Value per Share of $53.71 and a stock price of $58.07. The current ratio is some 23% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 1.22%. The current dividend yield is 0.83% based on dividends of $0.48 and a stock price of $58.07. The current yield is some 32% below the historical median yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.57. The current P/S Ratio is 0.49 based on a stock price of $58.07, 2018 Revenue estimate of $7,671M and Revenue per Share of $90.58. The current ratio is some 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The stock price on this stock has fallen by some 21% this year. This is why lots of my testing is showing that the stock price is relatively cheap. The one test showing that the stock is expensive is the dividend yield test. However, the dividends have gone both up and down on this stock. Plus, they do not raise dividend each year, but increases are very good when they do. The last dividend increase was in 2017 when dividends went up 20%. On the other hand, analysts do not see any further increases in dividends over the next couple of years.

When I look at analysts’ recommendations I find Buy (7) and Hold (2) recommendations. The consensus would be a Buy. The 12 month stock price consensus is $81.21. This implies a total return of 40.68% with 39.855 from capital gains and 0.83% from dividends.

John Irwin on Automotive News Canada says Doug Ford plans to end government funding for automakers and suppliers. Kristine Owram on Financial Post talks about auto stock going higher on Free Trade Agreement with US. John Irwin on Automotive News Canada talks about the problem with the tariffs on steel and aluminum remaining after trade deal is signed. Ambrose O'Callaghan on Motley Fool views this stock positively after the free trade deal. See what analysts are saying about this stock on Stock Chase. The analysts do like this company.

Linamar Corp is a manufacturing company of engineered products powering vehicles, motion, work, and lives. The Company is made up of two operating segments - the Powertrain / Driveline segment and the Industrial segment. Its web site is here Linamar Corporation.

The last stock I wrote about was about was K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF) ... learn more. The next stock I will write about will be Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK) ... learn more on Wednesday, October 10, 2018 around 5 pm. Today on my other blog I will write about Money Show 2018 – Nick Bontis.... learn more on Tuesday, October 9, 2018 around5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

K-Bro Linen Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Consumer. I would expect this to be a dividend growth in the future. I would suspect that the growth would be in the low range. The current price would seem reasonable. See my spreadsheet on K-Bro Linen Inc.

I do not own this stock of K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF). People were talking about this stock at the 2009 Toronto Money Show. This was one income trust being touted as currently a good buy with very good yield. It was also recommended by Aaron Dunn who is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters.

When I was updating my spreadsheet, I noticed they made less in 2017 because expenses went up faster than revenue. Long Term Debt also went up substantially by some 67% in 2017 and another 65% for the first two quarters of 2018. Last year Long Term debt went up 998% (from 2.4M to 25.8M) in 2016. So, they have increased their debt substantially. However, the Long Term Debt/Market Cap is still at just 0.17 currently.

This stock used to be an income trust and as such the dividend yield would be higher than for corporations. As a corporation, a decrease in yield as expected. The current dividend yield is moderate at 3.12%. The 5 and 10 year median dividend yields are 2.83% and 3.96% with the historical at 5.56% and the yield since the change to a corporation at 2.90%. Note that this company was made public just 13 years ago.

Since Income Trusts can pay out more than earnings in dividends, most of them did just that. This company was no exception. Since going to a corporation, they did a few low increases but they have kept their dividends flat since 2014. We will probably not see any dividend increases before 2019. Analysts see them being flat into 2019.

The DPR for EPS has been coming down. For 2016 the DPR for EPS was 83% with 5 year coverage at 77%. Because of lower earnings for 2017, the DPR for EPS for 2017 was 190% with coverage at 88%. Analysts expect that DPR for EPS will improve greatly by 2019.

All Debt Ratios are good. The Long Term Debt/Market Cap Ratio is still very low even after the second quarterly increases. The one for 2017 is 0.10 with the current one at 0.17. the Liquidity Ratio for 2017 is 1.79 with 5 year median at 1.78. The Debt Ratio is 3.15 with 5 year median at 3.26. The Leverage and Debt/Equity Ratios are 1.46 and 0.46 for 2017.

The Total Return per year is shown below for years of 5 to 13. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Shareholders have made a good return on this stock.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	0.86%	11.06%	7.44%	3.62%
10	0.87%	17.44%	11.84%	5.60%
13	1.27%	16.27%	10.21%	6.07%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 25.69, 30.52 and 35.35. The corresponding 10 year ratios are 17.58, 20.52 and 23.45. The historical ratios are 16.80, 17.74 and 19.91. The ratios are increasing lately mostly due to a drop in earnings. The current P/E Ratio is 41.85 based on a current stock price of $38.50 and 2018 EPS estimate of $0.92. No matter how you look at this, the P/E Ratios are high. This stock price testing suggests that the stock price is relatively expensive.

Analysts expect the EPS to improve in 2019 and 2020 to $1.61 and $1.69, respectively. This will drop the P/E Ratios to 23.91 and 22.78 based on the current price of $38.50. These are better P/E Ratios, but they are still rather high.

I get a Graham Price of $19.90. The 10 year low, median, and high median Price/Graham Price Ratios are 1.38, 1.61 and 1.84. The current P/GP Ratio is 1.93 based on a stock price of $38.50. This stock price testing suggests that the stock price is relatively expensive. However, this ratio is expected to move to 1.45 in 2019.

I get a 10 year median Price/Book Value per Share Ratio of 2.46. The current P/B Ratio is 2.01 based on Book Value of $201M, Book Value per Share of $19.13 and a stock price of $38.50. The current ratio is some 18% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. If the current ratio was lower by 20%, the stock price would be considered to be relatively cheap.

I get an historical median dividend yield of 5.56%. However, since this used to be an income trust stock, a better yield to use is the one since the conversion to a corporation. That yield is 2.90%. The current dividend yield is 3.12% based on dividends of $1.20 and a stock price of $38.50. This stock price testing suggests that the stock price is relatively reasonable and below the median. Analysts had expected rising prices and drop in dividends would leave most old income trusts with interest rates in the 4 and 5% range. The dividend yield is lower than this range.

The 10 year median Price/Sales (Revenue) Ratio is 1.64. The current P/S Ratio is 1.70 based on 2018 Revenue estimate of $238M, Revenue per Share of $22.65 and a stock price of $38.50. The current ratio is some 3.6% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I would discount the P/E Ratio test because it is based on a temporary low EPS. This is the same reason for discounting the Graham Price as the EPS estimate goes into the formula. I like the Price/Book Ratio test as it is based on relatively recent information. It shows the price to be relatively reasonable and below the median. The P/S Ratio is also a good one because expected future revenue is important to expected future earnings. This show the stock price to be relatively reasonable but above the median, but not by that much. So, the stock price is probably reasonable.

When I look at analysts’ recommendations I find Buy (6) and Hold (1) recommendations. There are only 7 analysts following this stock. The consensus would be a Buy. The 12 month stock price consensus is $44.71. This implies a total return of 19.25% with 3.12% from dividends and 16.13% from capital gains.

Lisa Matthews on Fairfield Current talks about an insider of Ronald Graham selling shares in the company and what some brokers have said about the company recently. Lacy Summers on Simply Wall Street says the P/E Ratio is 71.8 while industry average is 17.9. Mary Kom on Fairfield Current talks about a director selling shares. Kris Knutson of Motley Fool says the company has stable long term contracts. However, she thinks the debt levels following expansion and acquisitions may be too high. See what analysts are saying about this stock on Stock Chase. They think it is a good solid business.

The insider selling by Ronald Graham might be interesting, but he is not important enough to be listed in the website. Also, people buy for one basic reason, but can sell for lots of reasons most of which may have nothing to do with the company. Ronald Graham may just need some money. With a director selling shares, you have to wonder why, but still we do not know the reason. I must admit there is a lot of insider selling over the past year and it is at 0.64% of market cap. You would expect insider buying or selling to be closer to 0.01% or 0.02%.

With the article on the P/E being very high, I say so what. It is not because their earnings are valued higher than other companies. It is because they had a bad year and investors are not stupid enough to lower the price to set a reasonable P/E Ratio. In such cases you need to look at other indicators to see what a reasonable price is. I think that P/E Ratios, although quite popular, are not that good for judging stock price reasonableness.

K-Bro Linen Inc provides linen services to healthcare institutions, hotels and other commercial accounts that include the processing, management and distribution of general linen and operating room linen. Its web site is here K-Bro Linen Inc.

The last stock I wrote about was about was Le Chateau Inc. (TSX-CTU, OTC-LCUAF)... learn more. The next stock I will write about will be Linamar Corporation (TSX-LNR, OTC-LIMAF) ... learn more on Tuesday, October 9, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Le Chateau Inc

Sound bite for Twitter and StockTwits is: Still cheap. This stock has not yet turned around but the EPS losses are getting lower. Revenue is still dropping. It is not good that the Book Value is negative. However, they did get credit facilities recently at decent interest rates. See my spreadsheet on Le Chateau Inc.

I do not own this stock of Le Chateau Inc. (TSX-CTU, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010 The title of the article in Investor’s Digest was Dividend Stocks: Buy,

When I was updating my spreadsheet, I noticed that they took out a loan from their Credit Facility, that their assets are decreasing and their book value continues to decrease. Between 2016 and 2018, book value declined 99% and is now just $0.01 per share. The Second Quarter of 2018 shows a negative Book Value.

The company cut their dividends in 2011 when they first got into financial difficulties. They have not made a profit since so until they do again there will be no dividends.

The long term debt increased by 95% in 2017 and the Long Term Debt/Market Cap is extremely high at 10.47. The stock went up the first part of this year so this ratio is now 6.92. Still extremely high. You do not want to see this ratio over 1.00. The Debt Ratio was 1.00 for the financial year ending January 2018. With the second quarter of 2018, the ratio is just 0.94. This means that the assets cannot cover the liabilities and therefore there is a negative Book Value.

The Liquidity Ratio is good at 3.40 and it is wise for them to have it high because they are still not making any profit. Leverage and Debt/Equity Ratios are extremely high at 615.17 and 614.17. On the other hand, they just got a new credit facility at reasonable interest rates. This is a good sign.

The Total Return per year is shown below for years of 5 to 25. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

From the chart below, you can see that people who have held this stock for 15 or more years have made a return. All this return would be in dividends as the stock has capital loss for every period I covered.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	n/a	-46.53%	-46.53%	0.00%
10	n/a	-31.42%	-36.30%	4.88%
15	n/a	11.06%	-17.00%	28.06%
20	n/a	6.29%	-13.49%	19.77%
25	n/a	8.18%	-9.39%	17.57%

I cannot do any price testing with the Price/Earnings per Share Ratios because they are all negative except the historical ones as this company has not made any profit since 2011. The current P/E Ratio is negative also. The historical low, median, and high median P/E Ratios are 4.58, 6.61 and 9.03. It had a historical median P/E Ratio of 8.48 prior to 2011.

I cannot get a Graham Price because of the history of earnings losses since 2011. I could not test this currently either because of the negative book value.

I get a 10 year median Price/Book Value per Share Ratio of 0.99. However, I cannot do any testing using the P/B Ratio as it is now negative.

I cannot do any historical median dividend yield testing because there are no dividends.

The 10 year median Price/Sales (Revenue) Ratio is 0.36. The current P/S Ratio is 0.05 based on 12 month revenue to the end of the second quarter of $199M, Revenue per Share of $6.64 and a current stock price of $0.32. The current P/S Ratio is 86% lower than the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts’ recommendations I cannot find any analysts that is following this stock.

The company talks about the second quarter of 2018 on Global News Wire. The company talks about more store closures on the Financial Post due to e-commerce. Victor Youngblood on Simply Wall Street talks about the debt of the company but does not seem to realize the company got into financial difficulties in 2011 which have yet to be resolved. Last year Susan Portelance of Motley Fool compared this company unfavorably with Reitmans. There is nothing since 2011 on Stock Chase because analysts are no longer following this company.

Le Chateau Inc is a Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories, and footwear for style-conscious women and men. Its web site is here Le Chateau Inc.

The last stock I wrote about was about was Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more. The next stock I will write about will be K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF) ... learn more on Friday, October 5, 2018 around 5 pm. Tomorrow on my other blog I will write about Something to Buy October 2018.... learn more on Thursday, October 4, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Granite REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. Testing show price to be reasonable and above the median to expensive. It is hoped the company will do better with new CEO. It has done quite well for a REIT in the last few years with the dividend increases. See my spreadsheet on Granite REIT.

I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U) but I used to own it as MI Developments. I first bought some of this stock in 2003. TD bank also had an Action Buy Call (Strong Buy) on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold it in 2009; being discourage it would ever do well again.

When I was updating my spreadsheet, I noticed they do not tell you directly anywhere how many units are outstanding and how it has changed from last year. This is a rather simply thing to do and I do not see why they cannot simply put that information on the report rather than make you figure it out from the verbiage on the report. This company used to report in US$, but switched to CDN$ in 2012.

The dividend yield is good (4% and higher) and the dividend are increasing. The increases are getting lower than before. See the chart below. The current dividend yield is 4.91%. The 5, 10 and historical median dividend yields are 5.61%, 5.55% and 3.78%. Dividend growth has been lower since the change to a REIT in 2012.

The Dividend Payout Ratio for 2017 for EPS is 30% with 5 year coverage at 50%. The DPR for CFPS for 2017 is 67% and 5 year coverage at 68%. The DPR for AFFO for 2017 is 84% with 5 year coverage at 74%. The DPR for FFO for 2017 is 80% with 5 year coverage at 71%. It would seem that they can cover their dividends.

The Long Term Debt/Market Cap Ratio is 0.28 for 2017. The Liquidity Ratio for 2017 is 2.82 with 5 year median at 1.25 (and 5 year median is low). The Debt Ratio for 2017 is 3.00 with 5 year median at 3.03. The Leverage and Debt/Equity Ratios for 2017 are 1.50 and 0.50. All these are good debt ratios. The only problem is with the Liquidity Ratios are few years ago but when you add in cash flow after dividends, the 5 year median is 1.75, a good ratio.

The Total Return per year is show below for years of 5 to 15. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	5.43%	10.97%	5.46%	5.51%
10	15.95%	10.00%	5.90%	4.10%
15	13.09%	7.23%	4.14%	3.09%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.92, 10.01 and 11.10. The corresponding 10 year ratios are 6.69, 7.72 and 8.75. The corresponding historical Ratios are 7.30, 8.60 and 9.91. The current P/E Ratio is 4.64 based on a current stock price of $55.47 and last 12 month for EPS of $11.96. This stock price testing suggests that the stock price is relatively cheap.

Since this is a REIT, we should also do testing using Funds from Operations (FFO). The 5 year low median and high median P/FFO Ratis are 11.34, 12.61 and 13.57. The corresponding 10 year ratios are 11.06, 12.68 and 13.87. The current P/FFO Ratio is 15.45 based on a stock price of $55.47 and 2018 FFO estimate of $3.59. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $62.77. The 10 year low, median, and high median Price/Graham Price Ratios are 0.69, 0.76 and 0.83. The current P/GP Ratio is 0.88 based on a stock price of $55.47. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.05. The current P/B Ratio is 1.14 based on Book Value of $2,288M, Book Value per Share of $48.79 and a stock price of $55.47. The current ratio is some 8.8% above the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 3.78%. The current dividend yield is 4.91% based on dividends of $2.72 and a stock price of $55.47. The current dividend yield is some 30% higher than the historical yield. This stock price testing suggests that the stock price is cheap.

The 10 year median Price/Sales (Revenue) Ratio is 8.57. The current P/S Ratio is 8.65 based on 2018 Revenue estimate of $261M, Revenue per Share of $5.56 and a stock price of $55.47. The current ratio is 1% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and slightly above the median.

In doing the stock price testing we should note that using EPS says that the stock is cheap, but FFO says it is not. The thing is that for REITs, the FFO counts more than EPS. Dividend testing says that the stock is cheap, but this company changed from a corporation to an REIT and here you would expect the dividends (or distributions) to go up. The best tests for this company looks to be the P/B Ratio and the P/S Ratio. Both these say the stock price is reasonable, but above the median.

When I look at analysts’ recommendations I find Buy (1) and Hold (5). The consensus recommendations would be a Hold. The 12 month stock price is $55.10. this implies a total return of 4.24% with a capital loss of 0.67% and dividends of 4.92% based on a current stock price of $55.47.

Ploutos Investing on Seeking Alpha analyses this stock and approves the move into warehouses. Trapping Value on Seeking Alpha likes this REIT because of low leverage. Barry Critchley on Financial Post talks about COO assaulting the CFO. There is an Granite REIT announcement on Canadian Newswire about selling of properties and a new credit facility. See what analysts are saying about this stock on Stock Chase. There was a recent buy recommendation by Joshua Varghese, but few follow this company.

Granite Real Estate Investment Trust is a real estate investment trust. The Company is engaged in the ownership and management of industrial, warehouse and logistics properties in North America and Europe. Its web site is here Granite REIT.

The last stock I wrote about was about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) ... learn more. The next stock I will write about will be Le Chateau Inc. (TSX-CTU, OTC-LCUAF)... learn more on Wednesday, October 03, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks October 2018.... learn more on Tuesday, October 2, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Gluskin Sheff + Associates Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. If you want to buy this stock, it would seem that now is the time as it is cheap. The company has a habit of paying special dividends. Yield on special dividends for 2018 financial year was 8.76%. CEO and CFO are buying stock. See my spreadsheet on Gluskin Sheff + Associates Inc.

I own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor’s Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now working at the Globe and Mail and she used to be a Portfolio Manager for Manulife Asset Management Limited.

When I was updating my spreadsheet, I noticed that they spend a lot of cash during the financial year ending in June 2018. They settled the suit of the Founders costing $11M and they paid two special dividends of which totaled $44M. Results were that the book value when down around 29%. Also, there is inside buying of 0.25% of Market Cap. This is high as generally it would be around 0.01 or 0.02% at most. The CEO and CFO are buyers.

Dividend yields are moderate to good. The current yield is 6.72%. The 5, 10 and historical dividend yields are 4.68%, 3.45% and 3.81%. There has been no dividend increase since 2017. However, they paid $1.45 in two special dividends in financial year ending 2018.

The Dividend Payout Ratio for 2018 financial year is 202% with 5 year coverage of 111%. It is not as bad as it seems. Because they were being sued by the founders, money was set aside for these claims. Now these claims have been settled by the courts, they paid out special dividends. The regular dividend had coverage in 2017 of 82%.

The Debt Ratios are good. The Long Term Debt/Market Cap Ratio is very low at 0.02. The Liquidity Ratio for 2018 is 1.69 with 5 year median at 1.81. The Debt Ratio for 2018 is 3.23 with 5 year median at 3.23 also. The Leverage and Debt/Equity Ratios for 2018 are 1.45 and 0.45 with5 year medians at 1.40 and 0.40.

The Total Return per year is show below for years of 5 to 12. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Capital gains have been very low. Dividends have been quite good.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	7.78%	15.59%	2.15%	13.44%
10	9.00%	2.35%	-4.58%	6.93%
12	12.36%	6.53%	-0.87%	7.41%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.74, 13.67 and 15.61. The corresponding 10 year ratios are 10.94, 14.07 and 16.59. The corresponding historical ratios are 11.35. 14.46 and 17.58. The current P/E Ratio is 9.66 based on a current stock price of $14.88 and 2019 EPS estimate of $1.54. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $10.32. The 10 year low, median, and high median Price/Graham Price Ratios are 1.48, 1.91 and 2.29. The current P/GP Ratio is 1.44 based on a stock price of $14.88. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 5.83. The current P/B Ratios is 4.84 based on Book Value of $96M, Book Value per Share of $3.08 and a stock price of $14.88. The current ratio is some 17% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.45%. The current dividend yield is 6.72% based on dividends of $1.00 and a stock price of $14.88. The current yield is some 95% above the historical median. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.43. The current P/S Ratio is 2.92 based on 2019 Revenue estimate of $159M, Revenue per Share of $5.09 and a stock price of $14.88. The current ratio is below the 10 year median by some 34%. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts’ recommendations I find only Hold (6) recommendations. The consensus would be a Hold. The 12 month stock price consensus is $17.42. This implies a total return of 23.79% with 17.07% from capital gains and 6.72% from dividends.

Mary Kom on Fairfield Current talks about recent analysts’ ratings. Business Wire on Financial Post highlights some of the company’s fourth quarterly results. Karen Thomas on Motley Fool liked this stock last year. See what analysts are saying about this stock on Stock Chase. There are some worries.

Gluskin Sheff & Associates Inc provides discretionary investment management services to high net worth private clients and institutional investors in Canada and abroad. Its web site is here Gluskin Sheff + Associates Inc.

The last stock I wrote about was about was Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... learn more. The next stock I will write about will be Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more on Monday, October 1, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Great-West Lifeco Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Stock is selling at a good price and last few dividend increases were above 6%. If you want to hold this stock, it would seem like a good time to buy. See my spreadsheet on Great-West Lifeco Inc..

I do not own this stock of Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. I have been following this stock for some time. However, I will not buy it because I have Power Financial Corp. (TSX-PWF). Great West Lifeco Inc. is one of the companies under the Power Financial Corp. and Power Corp. (TSX-POW).

When I was updating my spreadsheet, I noticed that this company did get hit hard by the last recession. Most insurance companies did. There were no dividend increases for 5 years from 210 to 2014 inclusive.

This stock had lower yields until the 2008 bear and then they went from low (1% and lower) and moderate (2 and 3%) to good (4% and higher). The current dividend yield is 4.92%, with 5, 10 and historical dividend yields at 4.06%, 4.33% and 3.37%. Dividend growth is low at the present time with the 5 and 10 year growth at 3.60% and 3.31%. Pass growth was higher, see chart below. The last dividend increase was in 2018 and it was for 6%.

The Dividend Payout Ratio for EPS for 2017 was at 68% with 5 year coverage at 53%. The DPR for CFPS for 2017 was at 42% with 5 year coverage at 42%. The coverage for EPS is fine, but I would prefer the coverage for CFPS to be 40% or less.

Life Insurance companies generally have lots of debt because of their contracts. So, for them, the Long Term Debt/Market Cap is not the measure you want. You want the Long Term Debt to be covered by cash and investments. For this company the Debt/Investment Ratio is 0.95.

The Total Return per year is show below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

Except for 10 year returns, shareholders have done well. Make sure that you are not overpaying when buying stocks because if you do it can affect your long term results. 10 years ago, the stock hit a high. It was probably not a good time to buy.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	3.60%	12.29%	7.59%	4.70%
10	3.31%	3.45%	-0.13%	3.58%
15	7.85%	8.35%	4.09%	4.26%
20	10.91%	11.19%	6.68%	4.50%
23	12.39%	18.67%	11.67%	7.00%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.37, 12.53 and 13.91. the corresponding 10 year corresponding ratios are 11.34, 12.48 and 14.21. The historical ratios are 12.27, 13.47 and 15.32. The current P/E Ratio is 10.30 based on a current stock price of $31.61 and 2018 EPS estimate of $3.07. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $39.29. The 10 year low, median, and high median Price/Graham Price Ratios are 0.89. 1.00 and 1.16. The current P/GP Ratio is 0.83 based on a stock price of $31.61. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.82. The current P/B Ratio is 1.49 based on a Book Value of $20,989M, Book Value per Share of $21.22 and a stock price of $31.61. The current P/B Ratio is some 18% below the 10 year median. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.37%. The current Dividend yield is 4.92% based on dividends of $1.556 and a stock price of $31.61. The current dividend yield is some 46% above the historical yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.75. The current P/S Ratio is 0.66 based on 2018 Revenue estimate of $47,705M, Revenue per Share of $48.24 and a stock price of $31.61. The current ratio is some 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I see no reason to say that any of these tests are invalid. So, it would seem that the stock price is running from relatively cheap to relatively reasonable and below the median. The P/B Ratio test shows the price close to cheap as the stock price is considered cheap if the current ratio is 20% below the 10 year median ratio. This test shows the stock price close to cheap. So, 3 of 5 test show stock is cheap and one shows it nearly cheap. Certainly, the stock is selling at a good price.

When I look at analysts’ recommendations I find Strong Buy (1), Buy (1) and Hold (8). The consensus would be a Hold. The 12 month stock price consensus is $36.40. This implies a total return of 20.08% with 15.15% from capital gains and 4.92% from dividends based on a current price of $31.61.

David French and John Tilak on Reuters talk about this company selling off some Life Insurance contracts. Hector Vargas on Simply Wall Street talks about ownership and seems to have missed the ownership by Power Corp. Maria Luz-Campos on X News Press talks about recent analyst’s reports. Jason Phillips on Motley Fool talks about Yield Curve and Insurance Companies. See what analysts are saying about this company on Stock Chase. Some are no keen on this company.

Great-West Lifeco Inc is a life insurance company that also offers health insurance, retirement and investment services, asset management and reinsurance businesses. It operates in Canada, U.S. and Europe. Its web site is here Great-West Lifeco Inc..

The last stock I wrote about was about was Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) ... learn more. The next stock I will write about will be Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) ... learn more on Friday, September 28, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Steven Hawkins.... learn more on Thursday, September 26, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Trican Well Service Ltd

Sound bite for Twitter and StockTwits is: Industrial Services Stock. This company services the oil and gas industry. It would seem that the stock is relatively cheap, but it is also quite risky. It does have very good debt ratios. See my spreadsheet on Trican Well Service Ltd.

I do not own this stock of Trican Well Service Ltd (TSX-TCW, OTC-TOLWF). I was following Canyon Services Group Inc. and Trican Well Services Ltd. had a plan of arrangement with Canyon Shareholders. I used to get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up the Canyon Services Group stock on July 19, 2012 and I was impressed with it so I did a spreadsheet.

I am following this company from Canyon Services Group into Trican Well Services. When I was updating my spreadsheet, I noticed it does not seem to be doing very well and it would seem that it will be a while before it has dividends again. TCW cancelled dividends in 2014 and analysts do not expect it to make a profit this year.

All the debt ratios are good. This is always a good idea if you have volatility in your earnings like this company. Long Term Debt/Market Cap is low at 0.06. Liquidity for 2017 is 1.94 with 5 year median of 1.52. The Debt Ratio for 2017 is 4.56 with 5 year median of 3.97. Leverage and Debt/Equity Ratios for 2017 are 1.28 and 0.28 with 5 year median of 1.31 and 0.31.

The Total Return per year is show below for years of 5 to 11. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

This stock is rather risky, so you would want a good long term return. The only return that would justify the risk would be the 10 year return. However, this stock is in a boom, bust industry.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	n/a	-6.10%	-9.38%	3.28%
10	n/a	17.22%	11.92%	5.30%
11		6.36%	3.11%	3.25%

The 5 year low, median, and high median Price/Earnings per Share Ratios are -3.56, -4.52 and -5.88. The corresponding 10 year ratios are 0.22, 1.64 and 1.72. The historical corresponding ratios are 0.22, 1.72 and 2.22. These are low or negative ratios are because of earnings losses. The current P/E ratio is -25.33. It is not possible to test the stock price using P/E Ratios.

I get a Graham Price of $1.92. The 10 year low, median, and high median Price/Graham Price Ratios are 0.52, 0.94 and 1.31. The current P/GP Ratio is 1.19 based on a stock price of $2.28. This stock price testing suggest that the stock price is relatively reasonable but above the median. Next year the Graham Price is projected to be $4.04 with a P/GP Ratio of just 0.57. However, projections are notorious for being inaccurate and the further way they are the more inaccurate they seem.

I get a 10 year median Price/Book Value per Share Ratio of 1.59. The current P/B Ratio is 0.69 based on Book Value of $1074M, Book Value per Share of $3.29 and a stock price of $2.28. The current P/B Ratio is some 54% below the 10 year median ratio. This stock price testing suggest that the stock price is relatively cheap.

I get an historical median dividend yield of 0% because dividends have been cancelled, so we cannot do any testing using the dividend yield.

The 10 year median Price/Sales (Revenue) Ratio is 1.78. The current P/S Ratio is 0.70 based on Revenue estimates for 2018 of $1,070M, Revenue per Share of $3.28 and a stock price of $2.28. The current P/S Ratio is some 61% below the 10 year median ratios. This stock price testing suggest that the stock price is relatively cheap.

I do so many tests on the stock price because for different stocks in different periods some tests are not really applicable for various reason. For this stock the best tests seem to be the P/B Ratio and P/S Ratios. Both these show the stock has being relatively cheap. The P/B Ratio test maybe the best because it uses no estimates.

When I look at analysts’ recommendations I find Strong Buy (3), Buy (9) and Hold (4). The Consensus would be a Buy. The 12 month stock price is $4.71. This implies a 107% return of all capital gains based on a stock price of $2.28.

Vince Mercandetti on Baseball Daily Digest talks about some analysts downgrading this stock. News on Reuters talk about the TSX going up 0.06% and this stock falling 6.2% on September 21, 2018. Karen Thomas on Motley Fool talks about there being some good upside for oil service stocks in the future, including for this one. She is right about the industry upswing returns being phenomenal and downturns being brutal. See what analysts are saying about this stock on Stock Chase. They think it is cheap, almost debt free and well run.

Trican Well Service Ltd is an oilfield services company engaged in providing products, equipment, services, and technology used in drilling, completion, stimulation and reworking of oil and gas wells in Canada, United States and internationally. Its web site is here Trican Well Service Ltd.

The last stock I wrote about was about was Wajax Corp. (TSX-WJX, OTC-WJXFF) ... learn more. The next stock I will write about will be Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... learn more on Wednesday, September 26, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 – Gordon Pape.... learn more on Tuesday, September 25, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Wajax Corp

Sound bite for Twitter and StockTwits is: Dividend Paying Industrial. This does not have a great track records for dividends. However, the current price seems reasonable and below the median. They have good debt ratios and this will see them through the tough times. See my spreadsheet on Wajax Corp .

I do not own this stock of Wajax Corp. (TSX-WJX, OTC-WJXFF). TD Waterhouse put out a report on good dividend paying stocks to own in November 2011. This was a stock they named. I had not heard of it before, so I decided to investigate it.

When I was updating my spreadsheet, I noticed that the company did not do well after 2012, but there is improvement in 2017 and in the first two quarters of 2018. This stock used to be an income trust from 2004 to 2011. As an income trust they paid quite high dividends.

Since starting dividends in 1986, the dividends have gone up and down and been cancelled. The historical high is around 14.38% and low at 0%. This historical median is 4.27%. See the chart below. Where there is n/a, it means that at the start of the period the dividends were 0%. There were no dividends from 1992 to 2003. Dividends were restarted when the company became an income trust.

The dividend yields have always been in the moderate (2 and 3% range) to good (over 4%). The current dividend is 3.82% with 5, 10 and historical medians are 5.12%, 6.30% and 4.27%. The dividends were decreasing from 2013 to 2016 inclusive. They have been flat since 2016. There is currently no growth in dividends.

They can currently afford their dividends as the Dividend Payout Ratio for EPS for 2017 is 65%. However, 5 year coverage is 124%. The DPR for CFPS is better with the DPR for CFPS in 2017 at 24% and 5 year coverage at 38%. Analysts expect the DPR for EPS to decrease in 2018 and following years so there might be hope for future growth in dividends.

The Long Term Debt/Market Cap Ratio is good at 0.29. The other debt ratios are good also with Liquidity Ratio at 2.21 and the Debt Ratio at 1.69. The Leverage and Debt/Equity Ratios at 2.44 and 1.44 are typical.

The Total Return per year is show below for years of 5 to 31. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

In 2002, 15 years ago, the stock price hit a low point, but the company provided great dividends after 2004 and two special dividends in 2007 and 2008.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	-19.89%	-4.69%	-9.55%	4.86%
10	-12.68%	6.29%	-2.59%	8.88%
15	n/a	41.03%	13.09%	27.94%
20	n/a	8.14%	1.59%	6.55%
25	n/a	11.76%	5.48%	6.28%
30	1.95%	8.05%	3.06%	4.99%
31	1.89%	6.09%	1.73%	4.36%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.22, 14.23 and 16.42. The corresponding 10 year ratios are 8.77, 10.68 and 12.63. The corresponding historical ratios are 9.36, 11.39 and 13.87. The current P/E Ratio is 11.34 based on a stock price of $26.20 and 2018 EPS estimate of $2.31. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $27.89. The 10 year low, median, and high median Price/Graham Price Ratios are $0.92, 1.14 and 1.34. The current P/GP Ratio is 0.94 based on a stock price of $26.20. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.16. The current P/B Ratio is 1.75 based on Book Value of $300M, Book Value per Share of $14.97 and a stock price of $26.20. The current ratio is some 19% below the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 4.27%. The current dividend yield is 3.82% based on dividends of $1.00 and a stock price of $26.20. The current yield is some 11% below the historical median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 0.37. The current P/S Ratio is 0.36 based on 2018 Revenue estimate of $1,463M, Revenue per Share of $72.90 and a stock price of $26.20. The current ratio is some 4% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I think that the best tests for this stock currently is the Graham Price, B/P Ratio and P/S Ratio tests. These tests all show a stock price that is reasonable and below the median.

The P/E Ratios have moved around a lot. This is often not a good test. Also, with this company’s history of dividend payments and the fact that is was a corporation, then an income trust and then a corporation makes the dividend yield test questionable. That is because what can be paid in dividends is calculated differently with income trusts and corporations.

When I look at analysts’ recommendations I find Buy (2) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $31.63. This implies a total return of 24.54% with 20.73% from capital gains and 3.82% from dividends based on a current stock price of $26.20.

Liz Campbell on Simply Wall Street says that this company’s Return On Capital Employed (ROCE) is low. The company talks about its four quarterly results for 2017 on Canadian News Wire. Ambrose O'Callaghan on Bay Street talk about the company share going up 7% after reporting of the fourth quarter of 2017. Mat Litalien on Motley Fool says this company is a good buy. See what analysts are saying about this stock on Stock Chase. There are few analysts following this stock.

Wajax Corp is a distributor of industrial components. Its products include machinery used for construction, machines used in power generation and transmission and other industrial components used in businesses like forestry and mining. Its web site is here Wajax Corp.

The last stock I wrote about was about was Telus Corp. (TSX-T, NYSE-TU) ... learn more. The next stock I will write about will be Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) ... learn more on Monday, September 24, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Telus Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is at the high end of reasonable as it is above the median. The debt ratios are mediocre so that is a vulnerability. See my spreadsheet on Telus Corp.

I do not own this stock of Telus Corp. (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from KeyStone Financial Publishing Corp talked about having recommended this stock. Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. Telus Corp (TSX-T) was one of three stocks he recommended in 2009.

When I was updating my spreadsheet, I noticed the 20 year total return was low at 6.41% compared to the other total returns. This case shows that sometimes a stock gets overpriced and that is not the time to buy. If you pay too much for a stock, it can badly affect long term results.

The dividend yields are moderate (2 and 3%) to good (4% and over). The current dividend yield is 4.35% with 5, 10 and historical yields at 3.92%, 4.22% and 3.91%.

Dividends growth has varied over the years. They increased since 2005, but before that they declined and were flat some years. As you can see in the chart below, the dividend increases have been good over thee last 5, 10 and 15 years, but the increases are currently slowing down.

The Dividend Payout Ratio for 2017 is 79% with 5 year coverage at 74%. This is acceptable for a utility. The DPR for CFPS for 2017 is 29% with 5 year coverage at 29%. This is also fine.

The Long Term Debt/Market Ratio for 2017 is fine at 0.43. The Liquidity Ratio is low at just 0.56. This means that current assets cannot cover current liabilities. If you add in cash flow after dividends it is only 1.09. If you add back in the current portion of the long term debt it is 1.50. This 5 year median is also low at 1.15 with cash flow and 1.45 with long term debt added back. This is a vulnerability.

The Debt Ratio is also low at 1.39 with 5 year median at 1.41. This is also a vulnerability. I prefer this to be at 1.50. The Leverage and Debt/Equity Ratios are a little high at 3.58 and 2.58 respectively. The 5 year median ratios are better at 2.68 and 1.68.

The Total Return per year is show below for years of 5 to 23. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

From the chart below, you can see that the total return over the past 5, 10 and 15 years is good, but it is decreasing.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	10.33%	12.18%	7.91%	4.27%
10	19.55%	10.62%	6.78%	3.84%
15	13.27%	16.61%	11.98%	4.63%
20	5.76%	6.41%	3.82%	2.59%
23	5.21%	9.75%	6.18%	3.57%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.20, 18.51 and 19.64. The corresponding 10 year ratios are 14.35, 15.94 and 17.53. The corresponding historical ratios are 14.84, 17.92 and 19.83. So, you can see that the P/E Ratios are going up for the 5 year durations due to rising price but that the 10 year duration went down from the historical due to price decline. The current P/E Ratio is 18.03 based on a stock price of $48.31 and 2018 EPS estimate of $2.68. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $31.29. The 10 year low, median, and high median Price//Graham Price Ratios are 1.22, 1.36 and 1.49. The current P/GP Ratio is 1.54 based on a stock price of $48.31. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 2.97 based on a stock price of $48.31, Book Value of $9,679M, and Book Value per Share of $16.24. The current P/B Ratio is 14% above the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get an historical median dividend yield of 3.91%. The current dividend yield is 4.35% based on dividends of $2.10 and a stock price of $48.31. The current yield is some 11% above the historical yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.83. The current P/S Ratio is 2.04 based on 2018 Revenue estimate of $14,111M, Revenue per Share of $23.68 and a stock price of $48.31. The current ratio is some 11% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

My least liked stock price testing is using the P/E Ratio. In this case the P/E Ratio seems a bit volatile and it is going up because the price part is going up without a corresponding rise in earnings. On of my favorites is the dividend yield test because you use current information and not estimates. However, the yield is going up because they are paying out a higher portion of the earnings. The P/B Ratio and P/S Ratios are very often good tests. For this stock they show that the stock price is relatively reasonable but above the median. This is probably right.

When I look at analysts’ recommendations I find I find Strong Buy (2), Buy (11) and Hold (6). The consensus would be a Buy. The 12 month stock price is $50.83. This implies a total return of 9.56% with 5.22% from capital gains and 4.35% from dividends.

Andrew Walker on Motley Fool talks about why you should have this stock in your RRSP. Peter Morris on Simply Wall Street discusses Telus Corp’s P/E Ratio. Ted Liu on Private Capital Journal talk about Telus Corp’s purchase of Medisys Health Group Inc. Michael Canly on Simply Wall Street talks about the company’s debt levels. See what analysts are saying about this stock on Stock Chase. Most analysts like it and some mention its high P/E Ratios.

TELUS Corp is engaged in providing phone, Internet access, and television services to residential and business customers. It also offers cloud-based services to business customers through its data centers. Its web site is here Telus Corp.

The last stock I wrote about was about was Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more. The next stock I will write about will be Wajax Corp. (TSX-WJX, OTC-WJXFF) ... learn more on Friday, September 21, 2018 around 5 pm. Tomorrow on my other blog I will write Toronto Money Show.... learn more on Thursday, September 20, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Accord Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Stock is cheap to reasonable. The company is small and it is risky. See my spreadsheet on Accord Financial Corp.

I do not own this stock of Accord Financial Corp (TSX-ACD, OTC-ACCFF). Fred Poulin from StockTwits recommended this stock saying it was a small cap that pay dividends. Also, the stock has a solid background and would be a good filler stock.

When I was updating my spreadsheet, I noticed that this stock has not done very well over the past 5 years. Last year (2017) was the first year they have not raised the dividends since 2002. Outstanding share have been growing by 0.21% per year over past 5 years and declining 1.28% per year over the past 10 years. With declining shares (for 10 year period), you need to look at things like Revenue and not Revenue per Share.

Revenue for the past 5 and 10 years has grown at 3.94% and 1.03% per year. Revenue per Share has grown at 3.72% and 2.34% per year. With declining shares, EPS can look better than they really are. EPS has declined by 1.08% over the past 5 years and grown by 0.87% over the past 10 years. Net Income has declined by 0.52% and 0.12% over the past 5 and 10 years.

Dividend yields are moderate (2 and 3%) to good (4% and over). The current dividend yield is 3.60%. The 5, 10 and historical median dividend yields are 3.90%, 4.00% and 2.59%. Dividend growth over the past 25 years has been low and it is been going down over the past 15 years. See chart below.

The Dividend Payout Ratio for 2017 for EPS is 50% with 5 year coverage at 41%. The DPR for CFPS for 2017 is 34% with 5 year coverage at 17%. So they can afford their dividends

The Long Term Debt/Market Cap Ratio is 1.81 which is high, but this debt can be covered by what they have in cash and near cash with a ratio of 0.60. The Liquidity Ratio is 8.45 but this is not very important on financial stocks. The Debt Ratio is 1.47 which is a little low as I like this at 1.50 and above. The 5 year median Debt Ratio is 1.79.

Leverage and Debt/Equity Ratios are a little high at 3.28 and 2.24 respectively. The 5 year median values are better at 2.26 and 1.26 respectively.

The Total Return per year is show below for years of 5 to 25. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.

The 10 year grow is low, but a lot of financials had problems coming out of the 2008 bear market and following recession.

Years	Div. Gth	Tot Ret	Cap Gain	Div.
5	3.04%	10.03%	5.62%	4.41%
10	5.05%	5.01%	1.41%	3.60%
15	6.50%	10.56%	4.08%	6.48%
20	2.98%	9.18%	4.06%	5.11%
25	2.38%	12.48%	6.74%	5.74%
30	12.69%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 9.46, 11.20 and 12.34. The 10 year corresponding ratios are 8.77, 10.65 and 11.95. The corresponding historical ratios are 8.56, 10.42 and 11.75. The current P/E Ratio is 10.42 based on a stock price of $10.00 and 12 month earnings to the end of the second quarter of $0.96. This stock price is relatively reasonable and below the median.

I get a Graham Price of $14.46. The 10 year low, median, and high median Price/Graham Price are 0.64, 0.73 and 0.83. The current P/GP Ratio is 0.69 based on a stock price of $10.00. This stock price is relatively reasonable and below the median.

I get a 10 year median Price/Book Value per Share Ratio of 1.25. The current P/B Ratio is 1.03 based on Book Value of $80.4M, Book Value per Share of $9.68 and a stock price of $10.00. The current ratio is some 17% below the 10 year median. This stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 2.59%. The current dividend yield is 3.60% based on dividends of $0.36 and a stock price of $10.00. The current dividend yield is some 39% above the historical median. This stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 2.35. The current P/S Ratio is 2.12 based on 12 month revenue to the end of the second quarter of 2018 of $39M, Revenue per Share of $4.78 and a stock price of $10.00. The current ratio is some 9.8% below the 10 year median. This stock price is relatively reasonable and below the median.

When I look at analysts’ recommendations I find that no analysts are following this company.

The company announced via Canada Newswire that they have secured revolving credit of $292M. The company announced via Canada Newswire their fourth quarterly results for 2017. Interview of Accord’s CEO on Small Cap Power starts around 8.36 minute mark. Austin Wood on Simply Wall Street talks about ownership of this company. According to INK, the chairman owns 24%.

Accord Financial Corp provides asset-based financial services to businesses such as asset-based lending, including factoring, working capital financing, credit protection and receivables management, and supply chain financing for importers. Its web site is here Accord Financial Corp.

The last stock I wrote about was about was Just Energy Group Inc. (TSX-JE, NYSE-JE) ... learn more. The next stock I will write about will be Telus Corp. (TSX-T, NYSE-TU) ... learn more on Wednesday, September 19, 2018 around 5 pm. Tomorrow on my other blog I will write about Efficient Markets Hypothesis.... learn more on Tuesday, September 18, 2018 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.