Allied Properties Real Estate Investment Trust

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. It would seem to be pricey at the present and not a good time to buy. Revenue has not been increasing as fast as the number of shares. There has been insider selling. See my spreadsheet on Allied Properties Real Estate Investment Trust.

I do not own this stock of Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF). Since several stocks that I followed in 2015 were deleted from the stock exchange, I was looking for other stocks to follow. I am sure that I got this from a Canadian Dividend site called Think Dividends, but I cannot find it at present.

When I was updating my spreadsheet, I noticed that shares have increased by 8.67% and 12.77% per year over the past 5 and 10 years. The per share growth in revenue, which are the ones that count when shares are increase, is low to negative. The Revenue growth looks good at 7.64% and 12.66% per year over the past 5 and 10 years, but the real growth is Revenue per Share and it is negative. Revenue per Share is now by 0.93% and 0.09% per year over the past 5 and 10 years.

However, what is more important is the 5 year running averages. The Revenue growth using 5 year running averages is very good at 12.23% and 17.93%. Revenue per Share using 5 year running average is over the 5 and 10 years is 1.83% and 3.01%. This is still a lot lower than Revenue Growth.

The dividend yield runs from moderate to good. Most are in the moderate range. The current dividend yield is 3.31%, with 5, 10 and historical median dividend yields at 4.05%, 4.39% and 5.69%. The stock started with higher yields and that is why the historical median is much higher than other median yields.

As is usual for REITs the dividend growth is low. As with other REITs they do not increase their dividends every year, but the record for this REIT is not bad with increases in 11 of the past 15 years.

The Dividend Payout Ratio coverage looks fine to me. The DPR for EPS for 2018 is 28% with 5 year coverage at 39%. Generally, for REITs the coverage by Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are looked at. The DPR for 2018 for FFO is 72% with 5 year coverage at 70%. The DPR for 2018 for AFFO is 87% and 5 year coverage at 85%.

The debt ratios are fine but with some vulnerability with the Liquidity Ratio. There is always the possibility that they cannot rollover their debt. The Long Term Debt/Market Cap Ratio for 2018 is 0.40. The Liquidity Ratio is low. If you look at the Liquidity Ratio and add in Cash Flow after Dividends and Debt due currently and Prepaid Items it is 1.22. The Debt Ratio is 2.88. Leverage and Debt/Equity Ratios are 1.53 and 0.53.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. 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	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	2.04%	10.30%	6.23%	4.06%
2008	10	1.80%	20.63%	13.54%	7.10%
2003	15	4.34%	15.01%	8.60%	6.41%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.20, 9.29 and 10.38. The corresponding 10 year ratios are 8.31, 9.27 and 10.22. The corresponding historical ratios are 11.06, 12.64 and 14.22. The current P/E Ratio is 21.40 based on a stock price of $48.15 and 2019 EPS estimate of $2.25. This stock price testing suggests that the stock price is relatively expensive.

Because this is a REIT, we should redo the above using FFO. The 5 year low, median, and high median P/FFO Ratios are 15.27, 16.73 and 18.99. The corresponding 10 year P/FFO Ratios are 14.74, 16.67 and 18.24. The current P/FFO Ratio is 21.50 based on a stock price of $48.15 and FFO estimate for 2019 of $2.24. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $46.07. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.98. The current P/GP Ratio is 1.05 based on a stock price of $48.15. 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 1.07. The current P/B Ratio is 1.14 based on Book Value of $4,375M, Book Value per Share of $42.12 and a stock price of $48.15. This stock price testing suggests that the stock price is relatively reasonable and above the median.

I get an historical median dividend yield of 5.69%. The current yield is 3.31% based on dividends of $1.60 and a stock price of $48.15. The current yield is 42% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 7.43. The current P/S Ratio is 10.73 based on Revenue estimate for 2019 of $466M, Revenue per Share of $4.49 and a stock price of $48.15. The current ratio is 44% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Results of stock price testing is that the stock price is in the relatively expensive range. The one exception is the P/B Ratio test and it still shows a price above the median. In any case, it would seem that now is not a good time to buy this REIT.

When I look at analysts’ recommendations, I find Buy (8) and Hold (2). The consensus would be a Buy. The 12 month stock consensus is $50.50. This implies a total return of 8.20% with 4.88% from capital gains and 3.31% from dividends.

See what analysts are saying about this stock on Stock Chase. They like the REIT but feel its price is too high. Kay Ng on Motley Fool thinks this REIT is currently too expensive. A writer on Simply Wall Street talks about the FFO to Debt Ratio. A writer on What’s on Thorold talks about recent analysts ratings. Joseph Taylor on K Reviewer talks about analysts target prices.

Allied Properties Real Estate Investment Trust is a real estate investment trust engaged in the development, management, and ownership of primarily urban office environments across Canada's major cities. Most of the total square footage in the company's real estate portfolio is located in Toronto and Montreal. Its web site is here Allied Properties Real Estate Investment Trust.

The last stock I wrote about was about was RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) ... learn more. The next stock I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more on Friday, March 8, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy March 2019.... learn more on Thursday, March 07, 2019 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.

RioCan Real Estate

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. The stock price seems to be current good. Good yield, but low dividend growth. See my spreadsheet on RioCan Real Estate.

I own this stock of RioCan Real Estate (TSX-REI.UN, OTC-RIOCF). I first bought this stock 1998 because I wanted to diversify my portfolio into REITs. It was a stock covered and recommended by MPL Communications in their Income Trust coverage. Over the years I have made several more purchases of this REIT.

When I was updating my spreadsheet, I noticed that my overall return was good, but it really mattered with each account on when I bought this stock. Overall my total return is 11.75% per year with 2.85% from capital gains and 8.90% from distributions. This is a REIT so you expect to earn most from distributions.

For my trading account, I bought this stock in 2000, 2002, 2011 and 2014. For this account, my total return is 15.21% per year with 4.93% from capital gains and 10.28% from distributions. For my Pension account, I bought stock in 2006, and 2010. My total return for this account is 7.87% per year with 1.70% from capital gains and 6.17% from distributions. For my RRSP account I bought stock in 1998 and 2013. On this account I have a total return of 9.32% per year with 1.11% from distributions and 8.21% from capital gains.

I have read articles that if you are buying long term, you need not worry about the cost of the stocks because that over the long term you will make the same on stocks. The above shows something different. I think time of purchase really counts for the long term. Or, maybe this is pointing to that it would be best to buy shares of what you want to own over a period of time.

As with most REITs, this one has a good dividend yield. The current dividend yield is 5.76% with 5, 10 and historical yields at 5.37%, 5.47% and 7.47%. If you had purchased this stock at a median price 5, 10, 15 or 20 years ago, you would be making a yield on your original price of 5.48%, 9.22%, 8.75% or 15.65%. If you buy dividend growth stock in a portfolio for retirement, a lot of the growth will be growth in income.

The other thing with dividends on REITs is the low growth in dividends. Growth in dividends has been low as you can see in the chart below. However, over a long period, you are still making a very good yield. When you have REITs in your portfolio, a big part of your total return is in dividends.

When you look at EPS to judge if they can afford their dividends, the Dividend Payout Ratio is 86% in 2018 with 5 year coverage at 80%. For REITs, it is generally acceptable to look at DPR in connection with Funds from Operations (FFO). For 2018, the DPR for FFO is 78% with 5 year coverage at 79%.

The Long Term Debt/Market Cap Ratio for 2018 is 0.68. This is fine. I do calculate a Liquidity Ratio, but this ratio is not considered important for REITs. The Debt Ratio is good at 2.21. The Leverage and Debt/Equity Ratios are also good at 1.83 and 0.83.

The Total Return per year is shown below for years of 5 to 24 to the end of 2018. 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	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.42%	5.00%	-0.80%	5.80%
2008	10	0.56%	14.04%	5.71%	8.33%
2003	15	1.56%	10.46%	2.99%	7.47%
1998	20	2.09%	14.38%	4.75%	9.63%
1994	24	5.16%	21.29%	7.19%	14.11%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.67, 12.51 and 13.36. The corresponding 10 year ratios are 11.25, 12.06 and 13.12. The corresponding historical ratios are 11.64, 12.82 and 13.36. The current P/E Ratio is 14.22 based on a stock price of $25.02 and 2019 EPS estimate of $1.76. This stock price testing suggests that the stock price is relatively expensive.

Because this is a REIT, we should repeat this testing using FFO. The 5 year P/FFO Ratios are 13.18, 14.13 and 15.43. The corresponding 10 year ratios are 13.35, 14.92 and 16.77. The current P/FFO Ratio is 13.05 based on a stock price of $25.02 and 2019 FFO estimate of $1.92. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $32.63. The 10 year low, median, and high median Price/Graham Price Ratios are 0.81, 0.91 and 1.02. The current P/Graham Price Ratio is 0.77 based on a stock price of $25.02. 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 1.42. The current P/B Ratio is 1.01 based on a stock price of $25.02, Book Value of $7,522M and Book Value per Share of $24.65. The current P/B Ratio is some 28% 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 7.47%. The current dividend yield is 5.76% based on dividends of $1.44 and a stock price of $25.02. The current yield is some 23% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 7.14. The current P/S Ratio is 6.88 based on 2019 Revenue estimate of $1,110M, Revenue per Share of $3.64 and a stock price of $25.02. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is probably cheap to reasonable. Most analysts put a lot of stock in testing using FFO and these tests show the stock as cheap. However, you cannot ignore the P/S Ratio testing that says the stock price is reasonable and below the median. So, it looks like the price, in any case, is relatively good.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $27.33. This implies a total return of 14.99 based on a stock price of $25.02 and having 9.23% from capital gains and 5.76% from dividends.

See what analysts are saying about this stock on Stock Chase. Analysts seem to like this company. Nelson Smith on Motley Fool says this REIT is one of the top REITs. A Simply Wall St writer on Simply Wall Street talks about insider trading. A Lakeland Staff Writer on Lakeland Observer say the Williams Percent Range is -67 which means the stock is neither overbought or oversold, but closer to oversold. Trina Covell on Press Oracle says Royal Bank has raised this REIT’s target price.

RioCan Real Estate Investment Trust is a Canadian real estate investment trust which owns, develop, and operate Canada's portfolio of retail-focused, increasingly mixed-use properties. The REIT's property portfolio includes shopping centers and mixed-use developments, with most of its properties located in Ontario, Canada. RioCan's tenants consist of grocery stores, supermarkets, restaurants, cinemas, pharmacies, and corporates. By geography, the company operates in Canada, which generates the majority of total revenue, and in the United States. Its web site is here RioCan Real Estate.

The last stock I wrote about was about was Bombardier Inc. (TSX-BBD.B, OTC-BDRBF) ... learn more. The next stock I will write about will be Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more on Wednesday, March 6, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks March 2019.... learn more on Tuesday, March 5, 2019 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.

Bombardier Inc

Sound bite for Twitter and StockTwits is: Cheap Industrial Stock. It would appear that the stock price is relatively cheap. The company has a huge vulnerability because of awful debt ratios. There is minimal insider buying. See my spreadsheet on Bombardier Inc.

I do not own this stock of Bombardier Inc (TSX-BBD.B, OTC-BDRBF) but I used to. The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I did not sell. I lost hope by 2017, so I sold. I made 11.08% per year.

When I was updating my spreadsheet, I noticed the company still is not doing well. Analysts still have hope that revenue, earnings, and cash flow will improve.

This company has had dividends during some periods. In fact, I made half my return in dividends. I did make a total return of 11.08% per year, but 5.69% was in capital gains and 5.39% was in dividends.

The Long Term Debt/Market Cap Ratio is really high at 2.60. Any ratio about 1.00 is really high. The Liquidity Ratio for 2018 is 1.00. If you had in cash flow it becomes 1.04. Current assets just barely cover current liabilities. The Debt Ratio is worse at 0.86. This means that assets cannot cover liabilities and book value is negative. Leverage and Debt/Equity Ratios cannot be calculated because of the negative book value. This is a huge vulnerability for the company.

The Total Return per year is shown below for years of 5 to 32 to the end of 2018 in CDN$. 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 crashed after the 2001 bear market and recession and has never recovered.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-14.68%	-15.13%	0.45%
2008	10	0.00%	-4.14%	-6.08%	1.94%
2003	15	0.00%	-5.73%	-6.96%	1.23%
1998	20	0.00%	-6.99%	-8.21%	1.21%
1993	25	0.00%	1.86%	-1.05%	2.91%
1988	30	0.00%	7.90%	2.98%	4.92%
1986	32	0.00%	5.35%	1.71%	3.64%

The Total Return per year is shown below for years of 5 to 29 to the end of 2018 in US$.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-19.09%	-19.51%	0.41%
2008	10	0.00%	-4.71%	-7.08%	2.37%
2003	15	0.00%	-5.66%	-7.23%	1.56%
1998	20	0.00%	-6.30%	-7.79%	1.49%
1993	25	0.00%	1.82%	-1.20%	3.02%
1989	29	0.00%	6.57%	2.10%	4.48%

The 5 year low, median, and high median Price/Earnings per Share Ratios are -2.21, -2.29 and -3.37. The corresponding 10 year ratios are 6.40, 10.28 and 13.88. The historical ratios are 11.21, 15.47 and 19.79. The current P/E Ratio is 22.72 based on a stock price of $2.79 CDN$ and 2019 EPS estimate of $0.04 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I cannot calculate a Graham Price is the Book Value is negative. I also cannot do the dividend yield test as there are no dividends. I cannot do the Price/Book Value per Share test as the Book Value is negative.

The 10 year median Price/Sales (Revenue) Ratio is 0.36 US$. The current P/S Ratio is 0.28 US$ based on 2019 Revenue estimate of $17,920 US$, Revenue per Share of $7.35US$ and a stock price of $2.12 US$. The current P/S Ratio is some 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the P/S Ratio test is the only valid test and it shows the stock as relatively cheap. The only other one I did was the P/E Ratio test, but the problem with that is that there has been a lot of years of earnings losses. All other tests could not be done because the book value is negative or because there are no dividends.

When I look at analysts’ recommendations, I find Strong Buy (4) and Buy (17) recommendations. The consensus would be a Buy. The 12 month stock price is $3.39 US$ or $4.47 CDN$. This implies a total return of 60% based on a current stock price of $2.79 CDN$ all from capital gains.

See what analysts are saying about this stock on Stock Chase. Most do not like the company. Andrew Button on Motley Fool says he is looking for a good entry point.. A writer on Simply Wall Street says this stock is undervalued by 48%. The Canadian Press via CTV News has an article about Bombardier finding work for their laid off workers. Esteban Duarte and Gowri Gurumurthy on Bloomberg says that Bombardier double the size of its Bond offering as it sold into a red-hot junk bond market.

Bombardier manufactures transportation solutions, from commercial aircraft and business jets to rail transportation equipment and related services. With a home office in Montreal, it has facilities and 74,000 employees operating in 28 countries. Its web site is here Bombardier Inc.

The last stock I wrote about was about was Home Capital Group (TSX-HCG, OTC-HMCBF) ... learn more. The next stock I will write about will be RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) ... learn more on Monday, March 4, 2019 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.

Home Capital Group

Sound bite for Twitter and StockTwits is: Specialty Bank Stock. The stock price seems currently to be relatively cheap. There is insider buying and analysts expect the dividends to be resumed this year. See my spreadsheet on Home Capital Group.

I own this stock of Home Capital Group (TSX-HCG, OTC-HMCBF). I started reviewing this company in September 2009. It is a dividend growth company and was coming up on lists of good dividends paying stocks. It is on some dividend paying companies lists that I look at.

When I was updating my spreadsheet, I noticed that there is lots of insider buying this year as there was last year. This year NIB is at 0.14% with last year at 0.15%. Normal would be around 0.01% or 0.02%. The company is also buying back shares. Last year they bought back almost 23% of the outstanding shares. I do not generally agree with buybacks, but at least they are buying back shares at a low price.

After they got into trouble in 2017, they cancelled their dividends. Analysts do expect that dividends will be reinstated. Some thought it would be in 2018 but since that did not happen, they are giving 2019 as the year for dividend reinstatements.

Prior to 2017 they could afford their dividends. The Dividend Payout Ratio for 2016 for EPS was 26% with 5 year coverage at 19%. The DPR for 2016 for CFPS was 23% with 5 year coverage at 14%.

Debt Ratios are fine on this stock. As with other financials, you do not look at Long Term debt/Market Cap Ratios for at Deposit/Asset Ratios. You want to make sure that they can cover their deposits with assets. For this stock the Deposit/Asset Ratio is 0.74. This is good. I do Liquidity Ratio which is 2.62 and good. However, analysts do ignore this ratio for banks and some other financials. The Debt Ratio is 1.10. For this sort of company, you want this ratio at 1.04 or higher.

The Total Return per year is shown below for years of 5 to 23 to the end of 2018. 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.

It would seem that long term investors have not done badly. It is just recent investors, like me, that have done poorly.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.00%	-16.79%	-18.67%	1.87%
2008	10	0.00%	7.92%	3.82%	4.10%
2003	15	0.00%	6.86%	3.73%	3.13%
1998	20	0.00%	20.36%	15.11%	5.25%
1995	23		39.95%	27.92%	12.03%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.61, 9.38 and 11.89. The corresponding 10 year ratios are 7.15, 9.15 and 11.02. The corresponding historical ratios are 7.50, 9.11 and 11.72. The current P/E Ratio is 8.09 based on a stock price of $17.15 and 2019 EPS estimate of $2.12. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $35.51. The 10 year low, median, and high median Price/Graham Price Ratios are 0.66, 0.86 and 1.07. The current P/GP Ratio is 0.48 based on a stock price of $17.15. 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 1.77. The current P/B Ratio is 0.65 based on Book Value of $1,641M, Book Value per Share of $26.45 and a stock price of $17.15. The current ratio is 63% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do an historical median dividend yield test as dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 5.31. The current P/S Ratio is 2.76 based on 2019 Revenue estimate of $386M, Revenue per Share of $6.22 and a stock price of $17.15. The current P/S Ratio is 48% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is saying that the stock is relatively cheap. The P/E Ratio test does not say this, but that is my least favourite test.

When I look at analysts’ recommendations, I find Hold Recommendations (7) only. The consensus recommendations would therefore be a Hold. The 12 month stock price consensus is $18.86. This implies a total return of 9.97% all from capital gain and based on a current stock price of $17.15.

See what analysts are saying on Stock Chase. They think the company has challenges. Karen Thomas on Motley Fool thinks this stock is too risky to buy. Jacob Boyd on Simply Wall Street notes that analysts expect a big increase in earnings. Lisa Matthews on Fairfield Current talks about CIBC raising their target price on this stock. .

Home Capital Group Inc is a specialty finance company that offers residential and commercial mortgage lending, securitization of insured mortgage products, consumer lending, and credit card services. The company also offers deposits via brokers and financial planners, and through its direct-to-consumer deposit brand, Oaken Financial. Home Capital's mortgage lending focuses on homeowners who typically do not meet all the lending criteria of traditional financial institutions. Its web site is here Home Capital Group.

The last stock I wrote about was about was Emera Inc. (TSX-EMA, OTC-EMRA) ... learn more. The next stock I will write about will be Bombardier Inc. (TSX-BBD.B, OTC-BDRBF) ... learn more on Friday, March 1, 2019 around 5 pm. Tomorrow on my other blog I will write about Banks and Other Things.... learn more on Thursday, February 28, 2019 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.

Emera Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. The stock price is cheap to reasonable. It would seem that this utility stock will grow at a lower rate than it has over the past 5 and 10 years. Debt ratios are not good, but they are set to sell off assets. See my spreadsheet on Emera Inc.

I own this stock of Emera Inc. (TSX-EMA, OTC-EMRA). I found this company in Mike Higg’s site. Mike’s site had a spreadsheet showing Dividend Paying Canadian Growth stocks. In 2005, I wanted to buy something for my Locked-In RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account.

When I was updating my spreadsheet, I noticed the debt ratios were not nice. There are none that I like. Their Long Term Debt/Market Cap ratios are over 1.00 with the one for 2018 at 1.40. The Liquidity Ratio for 2018 is 0.62. This means that the current asses cannot cover current liabilities. It is only adding back in the current portion of the long term debt and cash value after dividends that it just gets over 1.00 at 1.01. This is a big vulnerability. What if in a recession they cannot roll over their current portion of the long term debt?

The Debt Ratio is low at just 1.35. The 5 year median is 1.40. I like this at 1.50 at least. Leverage and Debt/Equity Ratios are 4.44 and 3.29 respectively and these are too high. The debt ratios have basically not been good since 2015.

Dividends are currently good with current moderate growth. The current dividend yield is 5.06% with growth over the last 5 years are 10.07% per year. The yield used to be in the moderate range with 5, 10 and historical yield at 4.35%, 4.26% and 4.82%. The last 10 year’s growth in dividend was good at 8.99% per year, but the years prior, growth was less than 8% per year. See the chart below. The last dividend increase occurred in 2018 and it was for 4%.

The Dividend Payout Ratio for 2018 is 75% with 5 year coverage at 86%. The DPR for CFPS is 42% with 5 year coverage at 38%. These are a little high, but not by much. The last two years of 2016 and 2018 the DPR for EPS was above 100%. The TD Bank looks also a DPR for AFFO which has a 2018 payout of 51% with 5 year coverage at 59%.

I covered the debt ratios above and I was not pleased with them. However, Emera is selling some assets and so this will probably help this situation. See a Business Wire item on the Financial post.

The Total Return per year is shown below for years of 5 to 26 to the end of 2018. 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	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	10.07%	12.75%	7.41%	5.34%
2008	10	8.99%	12.08%	7.01%	5.07%
2003	15	6.72%	10.87%	6.16%	4.71%
1998	20	5.25%	8.70%	4.51%	4.19%
1993	25	4.55%	9.72%	4.97%	4.75%
1992	26		10.87%	5.54%	5.32%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.34, 15.88 and 17.42. The corresponding 10 year ratios are 14.31, 16.32 and 18.75. The corresponding historical ratios are 13.06, 15.5 and 16.96. The current P/E Ratio is 16.31 based on a stock price of $46.47 and 2019 EPS estimate of $2.85. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $44.66. The 10 year low, median, and high median Price/Graham Price Ratios are 1.11, 1.28 and 1.44. The current P/GP Ratio is 1.04 based on a stock price of $46.47. 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 1.84. The current P/B Ratio is 1.49 based on a Book Value of $7.283, Book Value per Share of $31.11 and a stock price of $46.47. The current ratio is 19% below the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but below the median.

I get an historical median dividend yield of 4.82%. The current dividend yield is 5.06% based on dividends of $2.35 and a stock price of $46.47. The current yield is 5% above the historical median yield. This stock price testing suggests that the stock price is relatively reasonable but below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.90. The current P/S Ratio is 1.62 based on 2019 Revenue estimate of $6,710M, Revenue per Share of $28.66 and a stock price of $46.47. The current ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but below the median.

Results of stock price testing is showing up as suggesting that the stock price is relatively reasonable but below the median. The Graham Price testing says the stock price is relatively cheap. For the P/B Ratio testing, if the difference in ratios was 20%, not 19%, the stock would be considered cheap.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5), Hold (7) and Underperform (10. The consensus would be a Buy. The 12 month stock price is $48.57. This implies a total return of 9.58% with 4.52% from capital gains and 5.06% from dividends based on a current price of 46.47.

See what analysts are saying at Stock Chase. An analyst has said they plan to cut dividend growth probably to 3 to 4% per year. Most analysts like the company. Andrew Button on Motley Fool thinks this stock is a wise investment. Kyle Sanford on Simply Wall Street thinks that this is a top dividend stock. Adrian McCoy on What’s on Thorold says some analysts are positive about this stock.

Emera is geographically diverse energy and services company investing in electricity generation, transmission, and distribution as well as gas transmission and utility energy services. Emera has operations throughout North America and in four Caribbean countries. Its web site is here Emera Inc .

The last stock I wrote about was about was Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more. The next stock I will write about will be Home Capital Group (TSX-HCG, OTC-HMCBF) ... learn more on Wednesday, February 27, 2019 around 5 pm. Tomorrow on my other blog I will write about Four Advisor Stocks.... learn more on Tuesday, February 26, 2019 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.

Atrium Mortgage Investment Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. A little on the pricey side but not overly so. Dividends are taxed as interest so suitable for TFSA RRSP or RRIF accounts. See my spreadsheet on Atrium Mortgage Investment Corp.

I own this stock of Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). I saw this on company on the Canadian Dividend All-Star List. It has just recently started to pay dividends. It has only been around since 2012 and has good dividends. It has just recently started to pay dividends and dividends are good but are taxed as interest. So, this stock should go into a TFSA, RRSP or RRIF account.

When I was updating my spreadsheet, I noticed that shares are increasing rapidly with outstanding shares up by 11.5% and 21.9% per year over the past 5 and 8 years. It is therefore the per share values that count. For example Revenue is up by 19.7% and 27.3% per year over the past 5 and 8 years, but Revenue per Share is only up by 7.3% and 6.5% per year over the past 5 and 10 years

The yield is good but growth is low. The current yield is 6.83%, with 5 and 8 year median yields at 7.22% and 7.16%. The dividend growth is low with 5 year growth at 4.1% per year. They just started paying dividends in 2013. However, they have paid special dividends each year since. The special dividends are not high, but sort of equivalent to one monthly dividend payment.

They are paying out 99% of the EPS if you include the special dividends paid. For 2019 they have not raised their dividends, but it is expected that they will still pay a special dividend in 2019. However, if you look at dividends paid in cash compared to net income, the percentage of payout is 86.7% with 5 year coverage at 88.3%.

The Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.32. The Liquidity Ratio is really high at 108.41 for 2018 as they have few current liabilities, but this ratio tends to be ignored for Financials such as this company. The Debt Ratio is good at 2.24. The Leverage and Debt/Equity Ratios are also good at 1.81 and 0.81.

The Total Return per year is shown below for years of 5 to 9 to the end of 2018. 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	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	4.14%	11.11%	3.04%	8.07%
2009	8		7.52%	2.70%	4.82%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.95, 12.71 and 13.43. The 8 year corresponding Ratios are 11.78, 12.71and 13.43. The current P/E Ratio is 13.44 based on a stock price of $13.17 and 2019 EPS estimate of $0.98. This stock price testing suggests that the stock price is relatively expensive, but it is just in the expensive range.

I get a Graham Price of $15.28. The 8 year low, median, and high median Price/Graham Price Ratios are 0.73, 0.80 and 0.85. The current P/GP Ratio is 0.86 based on a stock price of $13.17. This stock price testing suggests that the stock price is relatively expensive, but it is just in the expensive range.

I get an 8 year median Price/Book Value per Share Ratio of 1.11. The current P/B Ratio is 1.24 based on Book Value of $387M, Book Value per Share of $10.59 and a stock price of $13.17. The current ratio is 11.9% above the 8 year median 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 7.16%. The current dividend yield is 6.83% based on dividends of $0.90 and a stock price of $13.17. The current yield is 4.6% below the historical yield. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The 8 year median Price/Sales (Revenue) Ratio is 7.89. The current ratio is 7.40 based on 2019 Revenue estimate of $65.1M, Revenue per share of $1.78 and a stock price of $13.17. The current ratio is some 6.2% below the 8 year median ratio. This stock price testing suggests that the stock price is relatively reasonable, and below the median.

Results of stock price testing is mostly that it is above the median and some just into the expensive range. The one analyst following this stock gives a recommendation of Hold. It may be a bit pricey at this time.

When I look at analysts’ recommendations, I find one analyst following this stock and that analyst gives a Hold recommendation. The 12 month stock price given is $13.00. This implies a total return of 5.54% with a capital loss of 1.29% and dividend gains of 6.83%. This is based on a current stock price of $13.17.

This stock is not on Stock Chase. Brian Paradza of Motley Fool thinks this is a great stock as long as the real estate market remains stable and growing. Kevin Zeng on Simply Wall Street says the payout ratio is too high. However, not all companies are the same when looking at Dividend Payout Ratios. Edwin Gilmore on Bharatapress says Fundamental Research reaffirmed a “hold” rating on this stock. There is a press release on Market Watch about this company closing a recent public offering.

Atrium Mortgage Investment Corp is a non-banking finance company providing residential and commercial mortgages that lends funds in major urban centres in Canada where the stability and liquidity of real estate are high. Its web site is here Atrium Mortgage Investment Corp.

The last stock I wrote about was about was Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more. The next stock I will write about will be Emera Inc. (TSX-EMA, OTC-EMRA) ... learn more on Monday, February 25, 2019 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.

Choice Properties REIT

Sound bite for Twitter and StockTwits is: Dividend Growth REIT. Price seems currently reasonable. The Weston family certainly see this as a good long term investment. See my spreadsheet on Choice Properties REIT.

I own this stock of Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF). I got this stock when CDN REIT was acquired by Choice Properties. Choice was originally a spin off from Loblaws. The Weston Family via George Weston Ltd now owns a big piece of it.

When I was updating my spreadsheet, I noticed this stock is relatively new with only 5 years of data as it was spun off form Loblaws in 2013. They stock has done fairly well so far in a short period.

REITs tend to have good yields and low growth. This REIT is not any different. The current yield is good at 5.52% with 5 year median at 5.79% and from inception at 5.57%. They have not done increases every year. They did increases in 2016 and 2017. There was no increase in 2018. The 5 year growth is low at 2.63% per year.

For REITs you look at Dividend Payout Ratios using Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). The DPR for FFO for 2018 was 72% with 5 year coverage at 69%. The DPR for AFFO for 2018 was 89% with 5 year coverage at 86%. I think that these are fine.

The only Debt Ratio that I really like to the Long Term Debt/Market Cap Ratio at 0.72. The Liquidity Ratio is really low at 0.22 where current assets cannot coverage current liabilities. However, if you add back in current portion of the long term debt and cash flow after distributions, you get a ratio of 1.80. So, the implication is that to pay current liabilities the company is depending on rolling over debt and cash flows. The Debt Ratio is low at 1.29 where I would prefer it at 1.50.

The Total Return per year is shown below for years of 5 to the end of 2018. 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 total return over the past 5 years is satisfactory.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	2.63%	8.14%	1.83%	6.31%

The 5 year low, median, and high median Price/AFFO per Share Ratios are 13.79, 14.89 and 16.23. The current P/AFFO Ratio is 15.76 based on a stock price of $13.40 and AFFO estimate for 2019 of $0.85. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 5 year low, median, and high median Price/FFO per Share Ratios are 11.23, 11.92 and 12.99. The current P/FFO Ratio is 12.97 based on a stock price of $13.40 and FFO estimate for 2019 of $1.00. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $16.80. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.84 and 0.89. The current P/GP Ratio is 0.80 based on a stock price of $13.40. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 5 year median Price/Book Value per Share Ratio of 1.12. The current P/B Ratio is 1.07 based on a Book Value of 3,491M, Book Value per Share of $12.53 and a stock price of $13.40. The current P/B Ratio is 4.9% below the 5 year ratio. This stock price testing suggests that the stock price is reasonable and below the median.

I get an historical median dividend yield of 5.57%. The current dividend yield is 5.52% based on dividends of $0.74 and a stock price of $13.40. The current yield is 0.85% below the historical median. This stock price testing suggests that the stock price is reasonable but above the median.

The 5 year median Price/Sales (Revenue) Ratio is 6.77. The current P/S Ratio is 6.63 based on Revenue estimate for 2019 of $1,350, Revenue per Share of $2.02 and a stock price of $13.40. The current ratio is some 2.1% below the 5 year ratio. This stock price testing suggests that the stock price is reasonable and below the median.

Results of stock price testing is that all the tests show the price at reasonable, but some above and some below the median.

When I look at analysts’ recommendations, I find Strong Buy (1) and Hold (8). The consensus would be a Hold. The 12 month stock price is $13.53. This implies a total return of 6.49% with 0.97% from capital gains and 5.52% from dividends.

See what analysts are saying about this stock on Stock Chase. It is considered to be a defensive stock. Vishesh Raisinghani on Motley Fool says it has a great yield but is too concentrated in retail. Bruce Howe on Simply Wall Street talks about using FFO in various calculations for this REIT. A Herdon Staff Writer on Herdon Gazette says the Williams Percent Range is -11.70 which is in overbought territory.

Choice Properties Real Estate Investment Trust invests in, manages, and develops retail and commercial properties across Canada. The company's portfolio primarily consists of shopping centres anchored by supermarkets, and stand-alone supermarkets. The properties are mostly located in Ontario and Quebec, followed by Alberta, Nova Scotia, British Columbia, and New Brunswick. Its web site is here Choice Properties REIT.

The last stock I wrote about was about was Manulife Financial Corp. (TSX-MFC, NYSE-MFC) ... learn more. The next stock I will write about will be Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more on Friday, February 22, 2019 around 5 pm. Tomorrow on my other blog I will write about Investing Now… learn more on Thursday, February 21, 2019 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.

Manulife Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Financial. Price is Price is probably cheap to reasonable. Life Insurance companies should do better in a rising rate environment. They did poorly in the very low interest rate environment and will do better as rates normalize whenever that should be. See my spreadsheet on Manulife Financial Corp.

I own this stock of Manulife Financial Corp (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria.

When I was updating my spreadsheet, I noticed the 5 and 10 year EPS growth does not tell the whole story about EPS growth. EPS growth looks to be over the past 5 and 10 years at 7.54% and 21.96%. However, looking at the 5 year running average we get growth of 19.78% over the past 5 years and negative growth over the past 10 years are 2.20%.

The 5 Year Running Average for 5 years looks at average growth for 5 years to 2013 compared to the average growth for the 5 years to 2018. After 2008 EPS was really low until 2013 when they had a good year. The 5 year running average for 5 years captures this fact.

The 5 Year Running Average for 10 years looks at the average growth for the 5 years to 2008 and compares that the average growth for the 5 years to 2018. The 10 year growth looks really good because exactly 10 years ago was a really bad year. However, prior to 2008 EPS was much better than after 2008. The 5 Year Running Average for 10 years captures this.

This insurance company was, as were all insurance companies, hit hard by the 2008 bear market and recession. An very low interest rate environment is bad for Life Insurance companies. In 2009 they cut their dividend by 50%. Things have been improving as they started to increase the dividends again in 2014. This year they will be back to the old dividend level of 2008. In 2008 was their highest level of dividend payments.

The current dividend yield is moderate as it is at 4.80%. The yield was in the low to moderate range until the 2008 problems. Of course, the stock price dropped because of 2008 and the yield moved up. The 5, 10 and historical median dividend yields are 3.48%, 3.51%and 2.84% respectively.

They can afford their dividends. The Dividend Payout Ratio for EPS for 2018 is 39% with 5 year coverage at 49%. The DPR for CFPS for 2018 is 9% with 5 year coverage at 10%.

Since this is an life insurance company, you want assets to cover the contract liabilities. The coverage could be better as it was in 2018 at 0.99. You also want to look at contract liabilities compared to total debt and this ratio is fine at 0.50. I find the Liquidity Ratio low at 1.18, but mostly the Liquidity Ratio is ignored for this sort of financial. The Debt Ratio is fine at 1.07 as you would want this to be at 1.04 or higher.

The Total Return per year is shown below for years of 5 to 19 to the end of 2018. 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 total return has been quite low for long term investors. I am a long term investor and my return has been low. However, I do expect this to improve in the future. I did not expect that it should take so long for interest rates to recover, but the thing is that these situations last longer than you ever image they will.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	11.84%	2.11%	-1.54%	3.65%
2008	10	-0.94%	2.52%	-0.71%	3.23%
2003	15	5.55%	2.84%	-0.51%	3.35%
1999	19	8.30%	8.38%	3.98%	4.40%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.82, 13.78 and 17.74. The 10 year corresponding ratios are 11.02, 13.76 and 16.80. The historical ratios are 11.37, 14.14 and 16.31. The current P/E Ratio is 7.95 based on a stock price of $20.82 and 2019 EPS estimate of $2.62. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $35.50. The 10 year low, median, and high Price/Graham Price Ratios are 0.68, 0.91 and 1.06. The current P/GP Ratio is 0.55 based on a stock price of 20.82. 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 1.14. The current P/B Ratio is 0.97 based on Book Value of $41,142M, Book Value per Share of $21.38 and a stock price of $20.82. The current Ratio is 15% 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 2.84%. The current yield is 4.80% based on dividends of $1.00 and a stock price of $20.82. The current yield is some 69% 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 0.77. The current P/S Ratio is 0.83 based on 2019 Revenue estimate of $49,199M, Revenue per Share of 24.96 and a stock price of $20.82. The current ratio is 8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

Results of stock price testing is mostly that the stock price is relatively cheap. However, you cannot ignore the P/S Ratio testing. It is revenue that pushes the ultimate earnings and cash flow. However, since this is a Life Insurance company Assets under Management also is the pusher of earnings and cash flow for the future. Revenue is not grown well, but AUM is. Price is probably cheap to reasonable.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (10) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus would be $28.08. This would imply a total return of $39.67% with 4.80% from dividends and 34.87% from capital gains.

See what analysts are saying about this company on Stock Chase. They have mixed feelings. Christopher Liew of Motley Fool likes this stock. Liz Campbell on Simply Wall Street talks about the company’s P/E Ratio. The Canadian Press via CTV News says the company posted record earnings.. Christopher Katsarov on the Globe and Mail discusses an judgement the company is involved with.

Manulife is the largest of the three major Canadian life insurers by market capitalization, ahead of Sun Life and Great-West Life. It provides financial protection and wealth management products and services to individual and group customers in Canada, the United States, and Asia. Its web site is here Manulife Financial Corp.

The last stock I wrote about was about was IGM Financial (TSX-IGM, OTC-IGIFF) ... learn more. The next stock I will write about will be Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more on Wednesday, February 20, 2019 around 5 pm. Today on my other blog I will write about My Budgeting… learn more on Tuesday, February 19, 2019 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.

IGM Financial Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. The stock is cheap but no one seems to expect any change to the better in the near future. It has not increased its dividend since 2015 and there is no sign of a future increase, so I do not think I can still call it a dividend growth stock anymore. On the other hand, no one is suggesting that they will be cutting the dividend either. See my spreadsheet on IGM Financial Inc.

I do not own this stock of IGM Financial (TSX-IGM, OTC-IGIFF). I originally bought this stock to replace AGF Management (TSX-AGF.B). IGM was known as a dividend growth stock and it was on a lot of lists of good stocks, including Mike Higgs' and Dividend Aristocrats. I sold this 2011 because I had Power Financial, of which this company is partially owned by and I wanted to rationalize my portfolio. So, I sold this stock and bought more of Power Financial. I purposely sold at a low point to reduce taxes and did a buy at a low price also.

When I was updating my spreadsheet, I noticed the performance of this stock has been low to moderate for quite some time. For example, Revenue is up by 3.85% and 1.85% per year over the past 5 and 10 years. Revenue per share is up by 4.82% and 2.72% per year over the past 5 and 10 years. The difference between these growth rates is due to buybacks.

This stock used to be a dividend growth stock. It has had a hard time since the 2008 bear market with low to non-existent dividend growth. There has been no dividend increases since 2015 and analysts do not see any in the near future either

The current dividend yield is good but the yields used to be in the moderate range. The current dividend yield is 6.59% with 5, 10 and historical median yields at 5.58%, 5.20% and 3.43%.

They can still afford their dividends, but payout is on the high side. The Dividend Payout Ratio for 2018 for EPS was 71% with 5 year coverage at 75%. It would probably need to be in the 50% range before the company raises dividends again. The DPR for CFPS for 2018 was a high at 59% with 5 year coverage at 48%. I would prefer to see this at 40% or less.

The debt ratios are fine, but I would like to see some ratios at better points. The long Term Debt/Market Cap Ratio is good at 0.25. The Liquidity Ratio is good also at 1.92 for 2018 with 5 year median also at 1.92. The Debt Ratio is low at 1.42 with 5 year ratio at 1.44. I prefer this at 1.50. The Leverage and Debt/Equity Ratios for 2018 are a bit high at 3.39 and 2.39 with 5 year medians at 2.86 and 1.86. I prefer these to be below 3.00 and 2.00 respectively.

The Total Return per year is shown below for years of 5 to 28 to the end of 2018. 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.

All stocks were down a lot by the end of December of 2018. However, it would appear that it has not made much for shareholders for a while.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.91%	-6.12%	-11.17%	5.05%
2008	10	1.18%	5.09%	-1.32%	6.41%
2003	15	5.63%	6.05%	-0.02%	6.06%
1998	20	9.30%	6.00%	0.81%	5.19%
1993	25	12.08%	9.68%	4.09%	5.59%
1990	28	11.76%	16.40%	8.46%	7.94%

So far, the stock is up 10% this year and this helps the total return for the last 5 years, but still total returns are really low for the past 15 years.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	0.91%	2.12%	-3.74%	5.86%
2008	10	1.18%	3.47%	-2.14%	5.62%
2003	15	5.63%	5.10%	-0.47%	5.57%
1998	20	9.30%	8.57%	2.56%	6.01%
1993	25	12.08%	12.28%	5.63%	6.65%
1990	29	11.76%	16.41%	8.52%	7.89%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.74, 12.96 and 15.17. The corresponding 10 year ratios are 12.13, 14.52 and 16.18. The corresponding historical ratios are 13.63, 17.42 and 18.20. The current P/E Ratio is 10.98 based on a stock price of $34.15 and 2019 EPS estimate of $3.11. This stock price testing suggests the stock price is relatively cheap.

I get a Graham Price of $35.96. The 10 year low, median, and high median Price/Graham Price Ratios are 1.11, 1.26 and 1.40. The current P/GP Ratio is 0.95 based on a stock price of $34.15. This stock price testing suggests the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 2.31. The current P/B Ratio is 1.85 based on Book Value of $4,452M, Book Value per Share of $18.48 and a stock price of $34.15. The current ratio is 20% below the 10 year median ratio. This stock price testing suggests the stock price is relatively cheap.

I get an historical median dividend yield of 3.43%. The current dividend yield is 6.59% based on dividends of $2.25 and a stock price of $34.15. The current yield is 92% above the median historical yield. This stock price testing suggests the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 4.02. The current P/S Ratio is 2.58 based on 2019 Revenue estimate of $3,185M and Revenue per Share of $13.22 and a stock price of $34.15. The current ratio is some 36% below the 10 year median ratio. This stock price testing suggests the stock price is relatively cheap.

Results of stock price testing is that all the tests are showing that the stock price testing suggests the stock price is relatively cheap.

When I look at analysts’ recommendations, I find Buy (4), Hold (3) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $36.75. This implies a total return of 14.20% with 7.61% from capital gains and 6.59% from dividends.

See what analysts are saying on Stock Chase. A few analysts site their high fees but most think it will do fine. Victoria Hetherington on Motley Fool thinks this might be a stock for your TFSA. Renee Allred on Simply Wall Street seems to miss the fact that this company is largely owned by Power Financial. IGM talks about their fourth quarterly results on Newswire Canada. Mary Kom on Fairfield Current talks about some analyst’s recommendations on this stock.

IGM Financial is the largest non-bank-affiliated asset manager in Canada. The firm is part of the Power Financial group of companies, which includes Great West Life, London Life, Canada Life, and Putnam Investments. IGM has two main operating divisions--Investors Group and Mackenzie Financial--that provide investment management products and services. Its web site is here IGM Financial Inc.

The last stock I wrote about was about was ARC Resources Ltd. (TSX-ARX, OTC-AETUF) ... learn more. The next stock I will write about will be Manulife Financial Corp. (TSX-MFC, NYSE-MFC) ... learn more on Tuesday, February 19, 2019 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.

ARC Resources Ltd

Sound bite for Twitter and StockTwits is: Dividend Paying Energy stock. The stock price is relatively cheap. The positives are cheap stock and insider buying, the negative is declining Revenue and Earnings. They cannot raise the dividends until the earnings are higher than the dividends. See my spreadsheet on ARC Resources Ltd.

I do not own this stock of ARC Resources Ltd. (TSX-ARX, OTC-AETUF). When TFSA first came out, this stock was recommended for this account as it was an income trust at that point and most of the distributions were taxable. This stock is no longer an income trust and the distributions are now dividends and taxed as normal Canadian dividends.

When I was updating my spreadsheet, I noticed there is relatively a lot of insider buying with NIB at 0.16% where you might expect it around 0.01% to 0.02%. There has been NIB since I started to track this stock in 2014. However, there is lots of red on my spreadsheet as Revenue, Earnings and Cash Flow have been declining.

This company used to be an income trust and therefore had very high yields in the past. They went over 20% at one point. This historical median yield is 9.50%, but since 2011 when the change to a corporation occurred, the median yield is much lower at 4.70%. The 5 and 10 year median yields are 4.06% and 5.01%. The current one is 6.20.%.

Most of the old income trust companies decreased their dividends when they became corporation. That is because I high rate of dividend payments, higher than the earnings, can be paid out under income trust. When the company became a corporation, they had to get their payout ratios in line with earnings. Often companies had time to do this because they had tax pools left to lower the taxes for a while after becoming corporations.

This company reduced their dividends by 50% in the 2008, 2009 time frame and then another 50% in 2016. When you look at dividend growth over the 22 years of this company, it is all negative as shown in the chart below.

They cannot afford their dividends, but the ratios are improving. The Dividend Payout Ratios for EPS for 2018 was 100% with 5 year coverage at 175%. The DPR for CFPS for 2018 was better at 26% with 5 year coverage at 36%. They still are showing DPR using FFO and giving a ratio of 26% with 5 year coverage at 36%.

The Long Term Debt/Market Cap Ratio for 2018 was good at 0.29. The Liquidity Ratios are good with the one for 2018 at 1.97 and 5 year median ratio also at 1.97. The Debt Ratios are good with the one for 2018 at 2.57 with 5 year median at 2.39. The Leverage and Debt/Equity Ratios are quite good also with the ones for 2018 at 1.64 and 0.64 respectively. The 5 year median ratios are 1.69 and 0.69 respectively.

The Total Return per year is shown below for years of 5 to 22 to the end of 2018. 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.

When this company was an income trust it has a very high dividend. Shareholders have only made money from the dividend payments.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2013	5	-12.94%	-18.16%	-22.82%	4.66%
2008	10	-13.87%	-1.15%	-8.69%	7.54%
2003	15	-7.06%	10.40%	-3.66%	14.06%
1998	20	-3.41%	29.61%	1.43%	28.18%
1996	22	-4.41%	12.42%	-2.08%	14.49%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.95, 19.50 and 26.05. The corresponding 10 year ratios are 19.80, 23.40 and 27.00. The historical ones are 12.22, 14.65 and 16.47. The current P/E Ratio is 22.00 based on a stock price of $9.68 and a 2019 EPS estimate of $0.44. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $10.13. The 10 year low, median, and high median Price/Graham Price Ratios are 1.32, 1.62 and 1.87. The current P/GP Ratio is 0.95 based on a stock price of $9.68. 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 2.01. The current P/B Ratio is 0.93 based on a Book Value of $3,676M, Book Value per Share of $10.40 and a stock price of $9.68. The current P/B Ratio is some 54% below the 10 year median. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 9.50%. The current dividend yield is 6.20% based on a stock price of $9.68 and dividends of $0.60. The current dividend is some 35% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

However, this company used to be an income trust and income trust corporation have higher dividend yields than corporations. The median dividend yield since this company was a corporation is 4.70%. The current dividend yield of 6.20% is some 32% above this. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 5.03. The current P/S Ratio is 2.60 based on 2019 Revenue estimate of $1,275M, Revenue per Share of $3.61 and a stock price of $9.68. The current ratio is some 47% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is showing that the stock price is relatively cheap. The P/E Ratios are rather high because the EPS has been very volatile and much more so that the stock price. This is not a good test. The other testing is showing that the stock price is cheap. On an absolute basis a P/GP Ratio below 1.00 is showing a cheap price as is a P/B Ratio under 1.00. Certainly, the P/S Ratio and P/B Ratio testing is solid.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (14) and Hold (1). The stock price consensus is $13.77. This implies a total return of 48.45% with 42.25% from capital gain and 6.20% from dividends based on a current stock price of $9.68.

See what analysts are saying about this company on Stock Chase. Generally, they like the company and management, but one analyst feels that the dividend is not safe. Brian Pacampara on Motley Fool likes this company’s high dividend. Cameron Brookes on Simply Wall Street talks about the dividends not being well covered by earnings. . .

ARC Resources is an independent energy company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. The company produces light, medium, and heavy crude, condensate, NGLs, and natural gas. Its web site is here ARC Resources Ltd.

The last stock I wrote about was about was Absolute Software Corporation (TSX-ABT, OTC-ALSWF) ... learn more. The next stock I will write about will be IGM Financial (TSX-IGM, OTC-IGIFF) ... learn more on Friday, February 15, 2019 around 5 pm. Tomorrow on my other blog I will write about Ideal Retirement Budget learn more on Thursday, February 14, 2019 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.