Inter Pipeline Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Utility. Their debt is too high. They just cut their dividends, but analysts think that they will rise them again in the future. See my spreadsheet on Inter Pipeline Ltd.

I do not own this stock of Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF). In 2008, a friend had asked me about this pipeline and I had no information on it, so I investigated it. It is a utility and I follow lots of utility stocks. They used to be a Limited Partnership and they changed to a corporation in 2013.

When I was updating my spreadsheet, I noticed that no matter how you look at it, the Liquidity Ratio is very low. The 5 year median is just 0.15 where what you want in this ratio is one that is 1.50 or above. The ratio for 2019 is just 0.14. If you add in cash flow after dividends and just use dividends paid in cash, plus add back the current portion of long term debt it is just 1.25. This could become a problem is they cannot roll over current debt.

The dividend yields are currently moderate with dividend growth low. This company recently reduced the dividends by 72%. The current dividend yield is moderate (2% to 4% ranges) at 3.91%. The dividend yields used to be higher. The 5 and 10 year median dividend yields are good (5% to 6% ranges) at 6.38% and 6.00%. The historical median dividend yield is high (7% and over) at 8.21%. This company used to be a Limited Partnership and as such had very high dividend yields. In 2000 dividend yields were over 17%.

This company used to be a limited partnership and similar to income trusts where yields were high and payouts could be higher than earnings. However, when these companies become corporations, they have to get their dividends under earnings. This company tried to do this and still give increasing dividends. They had not gotten the dividends lower than earnings nor were they able to raise the earnings to cover the dividends. They had been doing increases in the low range (under 8%), until they decreased the dividends this year. However, analysts think that they will increase the dividends again in a couple of years.

The Dividend Payout Ratios (DPR) need to be improved. The DPR for 2019 for EPS is 130% with 5 year coverage at 117% and these rates are too high. The DPR for CFPS for 2019 is 89% with 5 year coverage at 68%. For this DPR you would want to have the ratio at 40% or less. The DPR for Free Cash Flow for 2019 is 84% with 5 year coverage at 99%. These are also too high. It is interesting that Morningstar, Wall Street Journal and Market Screener all disagree on the FCF, but whatever one you use the ratios are too high. Analysts think these ratios might be good by 2021.

Debt Ratios are need improving, but have always been ugly. The Long Term Debt/Market Cap Ratio for 2019 is 0.45. It is higher currently at 0.83 because of a big drop in the stock price. The Liquidity Ratio is just 0.14 for 2019. If you add in Cash Flow after dividends and add back in the current portion of the Long Term Debt, it is still low at just 1.25. It gets even lower currently at 1.02. This is as low as the Liquidity Ratio has ever got. You want it at 1.50 or high.

The Debt Ratio is low at 1.46 and it has a 5 year median of 1.50. This is ok but I prefer it be 1.50 or above. The Leverage and Debt/Equity Ratios are 3.17 and 2.17 and these are too high. I prefer them to be less than 3.00 and 2.00.

The Total Return per year is shown below for years of 5 to 22 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	5.55%	-3.50%	-8.91%	5.41%
2009	10	7.37%	16.30%	7.62%	8.68%
2004	15	5.84%	14.15%	6.19%	7.97%
1999	20	5.04%	18.57%	7.93%	10.64%
1997	22	3.87%	10.18%	3.76%	6.42%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.13, 18.46 and 21.08. The corresponding 10 year ratios are 15.13, 17.86 and 20.50. The corresponding historical ratios are 15.13, 17.86 and 19.92. The current P/E Ratio is 18.61 based on a stock price of $12.28 and EPS estimate for 2020 of $0.66. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $12.03. The 10 year low, median, and high median Price/Graham Price Ratios are 1.31, 1.55 and 1.82. The current P/GP Ratio is 1.02 based on a stock price of $12.28. 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 2.98. The current P/B Ratio is 1.26 based on a Book Value of $4, 147M, Book Value per Share of $9.75 and a stock price of $12.28. The current ratio is 58% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 11.23. The current P/CF Ratio is 7.44 based on 2020 CFPS estimate of $1.65, Cash Flow of $702M and a stock price of $12.28. The current ratio is 34% 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 8.21%. The current dividend yield is 3.91% based on dividends of $0.48 and a stock price of $12.28. The current yield is 52% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 6.00%. The current dividend yield is 3.91% based on dividends of $0.48 and a stock price of $12.28. The current yield is 35% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 4.59. The current P/S Ratio is 2.33 based on 2020 Revenue estimate of $2,238M, Revenue per Share of $5.26 and a stock price of $12.28. The current ratio is 49% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably relatively cheap. The P/S Ratio test is showing the stock price as cheap and so is the P/B Ratio test. The problems with the dividend yield tests is that dividends have just been cut by 72% and as this company used to be a Limited Partnership, past dividend yields would have been unusually high.

The P/CF test is also showing the stock price as cheap and there is nothing wrong with this test. The P/E Ratio tests is showing the price as reasonable but above the median. However, EPS is expected to drop a lot this year, so this would make the P/E Ratio relatively high. There is nothing wrong with the P/GP Ratio tests except possibly the same problem as the P/E Ratio tests. This test is showing the stock price as cheap.

Is it a good company at a reasonable price? Generally, pipeline companies are the place to be as they tend to be good dividend growth stocks. However, I do not like the debt ratios on this stock and especially the Liquidity Ratio. Low Liquidity Ratios can get a company in trouble if there is a sudden economic problem and a company cannot roll over their debt.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (14). The consensus would be a Hold. The 12 month stock market consensus stock price is $13.06. This implies a total return of $10.26% with 6.35% from capital gains and 3.91% from dividends.

There are several Don’t Buy by analysts on Stock Chase. Chris MacDonald on Motley Fool says that it is a buy if you think management can right this ship. In June 2020, a writer on Simply Wall Street said that the dividend was non-sustainable. The company talks about raising debt on BOE Report in May 2020. In March 2020 Reuters had an article about this company cutting its dividend and halting the planned sale of its European bulk liquid storage business.

Inter Pipeline operates crude oil pipelines, natural gas liquids extraction, and bulk liquid storage businesses in Canada and Europe. Its web site is here Inter Pipeline Ltd.

The last stock I wrote about was about was Morneau Shepell Inc (TSX-MSI, OTC-MSIXF) ... learn more. The next stock I will write about will be TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more on Monday, July 13, 2020 around 5 pm.

Also, on my book blog I have put a review of the book The Reality Bubble by Ziya Tong learn more...

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.

Morneau Shepell Inc

Sound bite for Twitter and StockTwits is: Dividend Paying Financial. The stock price is relatively expensive. The dividend has not changed since 2012 and they still cannot cover it. Good earnings in the first quarter is because of a special event. ROE is very low. Outstanding shares are rising. Debt is increasing. See my spreadsheet on Morneau Shepell Inc.

I do not own this stock of Morneau Shepell Inc (TSX-MSI, OTC-MSIXF). Every once in a while, I go through the stocks that my brokerage, TD Waterhouse, is recommending to find promising new stocks. In February 2013 this stock was rated a buy by TD Waterhouse. It was under Diversified Financials.

When I was updating my spreadsheet, I noticed that Long Term Debt is rising fast. It increased by 108.37% in 2018, by 25.66% in 2019 and by 24.61% in the first quarter of 2020. Goodwill and intangibles increased by 90% in 2018. They seemed to have done well in the first quarter on EPS, but almost all the earnings are because of a divestiture of a business. Insider bought when the stock went below $28 in March. However, there was some insider selling recently at $33.00.

Outstanding shares are increasing at 6.8% and 3.4% per year over the past 5 and 10 years. They are giving out a lot of stock options. Stock Options have increased the outstanding shares by 0.70% on average each year for the past 5 years. You would expect this to be at 0.50% or less. Return on Equity is low at 3.1% in 2019 with 5 year average at 5.5%.

Another problem I see in the Return on Equity (ROE). This has been very low. The highest it ever reached at 9.6%, but it has often been below 3%. For the last two years it has been below 4% and the 5 year median ROE is just 5.45%.

The dividend yields are moderate with dividend growth non-existent. The current dividend yield is moderate (2% to 4% ranges) at 2.48%. The 5 and 10 year median dividend yields are also moderate at 3.81% and 4.91%. The historical dividend yield is good (5% to 6% ranges) at 5.60%. This company started as a income trust. Income trusts tend to have quite high dividend yields. This is the reason for this historical median being high.

Shortly after this company listed as an Income Trust, the rules were changed and this company had to become a corporation. It had a few increases as an income trust, but became a corporation in 2011 and decrease the dividend by around 16%. However, as a corporation, the company needed to cover the dividends by earnings. It looks like this it will finally do this in 2020. So, since 2012, the dividend has been flat. They cannot do dividend increases until they can cover the dividends by earnings. Whether or not it will become a dividend growth company now is not certain, but a possibility.

The Dividend Payout Ratios (DPR) still need improvement. The DPR for EPS for 2019 is 279% with 5 year coverage at 188%. These ratios are far too high. The DPR for CFPS for 2019 is 39% with 5 year coverage at 42%. This coverage is good if 40% or less. The DPR for Free Cash Flow for 2019 is 128% with 5 year coverage at 109%. These are too high also.

Debt Ratios are currently fine. The Long Term Debt/Market Cap Ratio for 2019 is 0.21. Debt is increasing but the current ratio is still good at 0.27. The Liquidity Ratio for 2019 is 1.19 and if you add in Cash Flow after dividends, it is just 1.25. The 5 year median is better at 1.66. The Debt Ratio is fine at 1.68. The Leverage and Debt/Equity Ratios are fine at 2.47 and 1.47.

The Total Return per year is shown below for years of 5 to 15 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	0.00%	17.62%	14.10%	3.52%
2009	10	-0.62%	18.44%	13.15%	5.29%
2004	15	-0.44%	13.26%	8.46%	4.80%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 42.50, 48.53 and 54.76. The corresponding 10 year ratios are 27.78, 33.84 and 38.90. The corresponding 10 year ratios are 27.88, 34.66 and 37.88. The current P/E Ratio is 24.70, based on a stock price of $31.51 and 2020 EPS estimate of $1.15. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $16.22. The 10 year low, median, and high median Price/Graham Price Ratios are 1.76, 2.04 and 2.34. The current P/.GP Ratio is 1.94 based on a stock price of $31.51. 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 2.44. The current P/B Ratio is 3.10 based on a Book Value of $708M, Book Value per Share of $10.17 and a stock price of $31.51. The current P/B Ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Cash Flow per Share Ratio of 14.82. The current P/CF Ratio is 28.65 based on CFPS 2020 estimate of $1.10, Cash Flow of $76.5M and a stock price of $31.51. The current ratio is 93% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 5.60. The current dividend yield is 2.48% based on dividends of $0.78 and a stock price of $31.51. The current dividend yield is 56% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 4.91. The current dividend yield is 2.48% based on dividends of $0.78 and a stock price of $31.51. The current dividend yield is 50% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.42. The current P/S Ratio is 2.23 based on 2020 Revenue estimate of $983M, Revenue per Share of $14.13 and a stock price of $31.51. The current ratio is 57% 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 probably relatively expensive. The dividend yield tests show the stock price is relatively expensive and this is confirmed by the P/S Ratio test. There is nothing wrong with these tests. Although one could argue there is a problem with the dividend yield tests because of the flat dividends. The P/B Ratio test says the stock price is relatively expensive and there is nothing wrong with this test.

The P/E Ratio test has a problem as there is a big hike expected in the EPS, but the hike in the EPS for the first quarter is due to a special event. This problem would also affect the P/GP Ratio test. The P/CP Ratio tests is using an older 2020 CFPS estimate, so this could possibly be suspect.

Is it a good company at a reasonable price? First this stock would seem to be relatively expensive. I cannot recommend this stock as a dividend growth stock as dividends are flat. I cannot recommend it as a dividend stock because they cannot cover their dividends, have a very low ROE, give out lots of stock options and recently been diluting the shares by selling more shares. Investors looking for capital gain might find this attractive if the price was lower.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (1). The consensus would be a Buy. The 12 month consensus stock price is $36.75. This implies a total return of 19.11% with 16.63% from capital gains and 2.48% from dividends.

The most recent entry is in 2019 and the analyst on Stock Chase feels this is a solid slow-growth company. Aditya Raghunath on Motley Fool currently likes this company. A writer on Simply Wall Street talks about recent earnings not being as good as they first appear because of stock dilution and special items. A Writer on Simply Wall Street says this company has unfortunate characteristics that would lead to sub-optimal outcome for dividend investors.. Paul Sywulych of Morneau, Shepell talks on FinTech Magazine on how his companies works.

Morneau Shepell is a human resources company that provides consulting and administrative services in four segments: well-being, administrative outsourcing, consulting, and absence management. The company generates most of its revenue in the United States and Canada. Its web site is here Morneau Shepell Inc.

The last stock I wrote about was about was Suncor Energy Inc (TSX-SU, NYSE-SU) ... learn more. The next stock I will write about will be Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF) ... learn more on Friday, July 10, 2020 around 5 pm. Tomorrow on my other blog I will write about Evergreen Gavekal.... learn more on Thursday, July 09, 2020 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.

Suncor Energy Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Resource. Stock price is probably relatively cheap. Analysts expect big declines in earnings, cash flow and revenue this year with a recovery starting in 2021. They might have a hard time covering the dividends this year and next year things easing in 2022. See my spreadsheet on Suncor Energy Inc.

I do not own this stock of Suncor Energy Inc (TSX-SU, NYSE-SU). I started following this stock as Petro-Canada (TSX-PCA). It was on Mike Higgs' list of dividend growth stocks. This was also a key stock for the Investment Reporter. My spreadsheet follows PCA into SU. PCA and SU merged in 2009.

When I was updating my spreadsheet, I noticed that analysts do not expect this company will do very well this year, but they expect better things in 2021 and 2022. This is showing up in the first quarter of 2020 where there is an EPS loss of $2.31. There is also a 40% decline in Revenue expected and over 66% decline in Cash Flow expected.

The dividend yields are moderate with dividend growth moderate. The current dividend is moderate (2% to 4% ranges) at 3.64%. The 5, 10 year median dividend yields are moderate at 3.17% and 2.85%. The historical median yield is low (below 2%) at 0.67%. They have had a good record of dividend increase. However, this year they reduced the dividend by 55%.

The Dividend Payout Ratios (DPR) could be improved. The DPR for 2019 for EPS is 91% with 5 year coverage at 123%. This is too high. The DPR for 2019 for CFPS is 24% with 5 year coverage at 25%. This is fine. The DPR for Free Cash Flow is 54% with 5 year coverage at 90%. The 5 year coverage is too high.

Debt Ratios are currently fine. The Long Term Debt/Market Cap Ratio for 2019 is good at 0.20. It is currently higher, but still good at 0.39. It went up because of increased debt, but also more from the decline in the stock price. The Liquidity Ratio for 2019 is low at 0.94. If you add in cash flow after dividends it is 1.68. The Debt Ratio for 2019 is fine at 1.89. The Leverage and Debt/Equity Ratios for 2019 are 2.13 and 1.13 and are fine.

The Total Return per year is shown below for years of 5 to 24 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	10.49%	6.29%	2.90%	3.40%
2009	10	18.80%	3.72%	1.35%	2.37%
2004	15	21.21%	5.87%	3.92%	1.95%
1999	20	18.85%	10.75%	8.72%	2.03%
1995	24	18.92%	10.17%	8.43%	1.74%

I decided also to do one to date as a lot has changed for this stock this year. The Total Return per year is shown below for years of 5 to 25 to date. 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 chart below. Currently long term investors are doing less well.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	-0.80%	-3.94%	-8.39%	4.44%
2009	10	10.59%	-1.48%	-4.95%	3.47%
2004	15	17.06%	-0.36%	-3.01%	2.65%
1999	20	15.39%	4.86%	2.20%	2.65%
1995	25	15.97%	8.11%	5.46%	2.65%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 17.59, 22.31 and 24.85. The corresponding 10 year ratios are 14.47, 16.71 and 19.01. The corresponding historical ratios are 11.19, 22.46 and 27.69. The current P/E Ratio is negative, so this test cannot be done. The P/E Ratio for 2021 is 32.01 and for 2022 is 11.47. Problem is that earnings over this year and next are expected to be non-existent to low.

I get a Graham Price of $20.08. The 10 year low, median, and high median Price/Graham Price Ratios are 0.87, 1.01 and 1.18. The current P/GP Ratio is 1.15 based on a stock price of $23.05. This stock price testing suggests that the stock price is relatively reasonable but above the median. There are problems with the Graham Price calculation because of 2020 negative EPS, but this is my best guess for a Graham Price.

I get a 10 year median Price/Book Value per Share Ratio of 1.36. The current P/B Ratio is 1.25 based on a Book Value of $37,965M, Book Value of 24.89 and a Stock price of $23.05. The current ratio is 32% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.55. The current ratio is 10.20 based on a stock price of $23.05, CFPS estimate for 2020 of $2.26 and Cash Flow of $3,447. The current ratio is 56% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. However, this current ratio is high because cash flow is expected to drop in 2020. In 2021, the ratio is expected to be 5.27, 20% lower than the 10 year ratio.

I get an historical median dividend yield of 0.67%. The current dividend yield is 3.64% based on a stock price of $23.05 and dividends of $0.84. The current dividend yield is 444% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 2.85%. The current dividend yield is 3.64% based on a stock price of $23.05 and dividends of $0.84. The current dividend yield is 28% higher than the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.53. The current P/S is 1.48 based on 2020 Revenue estimate of $23,706, Revenue per Share of $15.54 and a stock price of $23.05. The current ratio is 3% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. The P/S Ratio for 2021 is 1.24, which is 19% below the 10 year ratio.

Results of stock price testing is that the stock price is probably relatively cheap. The only clear test with no problems is the P/B Ratio test and this shows the stock as cheap. The Dividend Yield tests are showing the stock price as cheap even though the dividends were recently cut by 54%. The P/S Ratio test shows the stock price as reasonable and below the median. However, Revenues are expected to fall big time in 2020, but start to recover in 2021.

The P/CF Ratio test is showing the stock price as expensive, but this is also because the cash flow is expected to take a big drop in 2020 and also start to recover in 2021. Both the P/GP Ratio test and the P/E Ratio tests are affected by the negative EPS expected in 2020.

Is it a good company at a reasonable price? The price is probably reasonable. However, even though some people have made money long term in resource stocks and they make up a lot of the TSX, I have little in resource stocks and tend not to recommend them.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (12) and Hold (5) recommendations. The 1 year stock price consensus is $31.74. This implies a total return of $41.34% based on a current stock price of $23.05 with 37.70% from capital gains and 3.64% from dividends.

Analysts feel this is currently a buy on Stock Chase. Brian Pacampara on Motley Fool thinks this stock is currently a buy because it can maintain cash flows. A writer on Simply Wall Street says the P/E Ratio for this stock is higher than others in the sector. A writer on Simply Wall Street thinks this company has too much debt. Shelly Janes on Modern Reader talks about FDx Advisors buying shares in this company.

Suncor Energy is one of Canada's largest integrated energy companies, operating in western Canada, east coast Canada, the United States, and the North Sea. Its web site is here Suncor Energy Inc.

The last stock I wrote about was about was Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF) ... learn more. The next stock I will write about will be Morneau Shepell Inc (TSX-MSI, OTC-MSIXF) ... learn more on Wednesday, July 07, 2020 around 5 pm. Tomorrow on my other blog I will write about Royal Caribbean.... learn more on Tuesday, July 6, 2020 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.

Premium Brands Holdings Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price is probably relatively expensive. DPRs are declining. Debt Ratios are good. This Hold recommendation is probably the right one. See my spreadsheet on Premium Brands Holdings Corp.

I do not own this stock of Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF). I was looking for another stock to follow and I found this is one of the top stocks in TD Bank's Canadian Equity Fund.

When I was updating my spreadsheet, I noticed that although it used to be an income trust company, since changing to a corporation, they have brought their Dividend Payout Ratios under control and have been giving some good increases lately. The recent dividend increases suggest that the company see good times ahead for their company.

The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4%) at 2.66%. The 5 and 10 year dividend yields are also moderate at 2.43% and 4.82%. The historical median dividend yield is in the good range (5% to 6% ranges) at 6.65%. This company used to be an income trust and income trust stocks have much higher dividend yields (and payouts) than corporations.

The Dividend Payout Ratios (DPR) are high, but they are coming down. The DPR for 2019 for EPS is 88% with 5 year coverage at 76%. The DPR for CFPS for 2019 is 34% with 5 year coverage at 36%. The DPR for 2019 for Free Cash Flow is 96% with 5 year coverage at 84%. The Dividend Coverage Ratio for 2019 is 1.04 with the 5 year ratio at 1.20.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2019 is 0.18 with a current one at 0.24. The increase in this ratio is mostly due to an increase in debt in the first quarter of 27%. The Liquidity Ratio is good at 1.72 as is the Debt Ratio at 1.96. The Leverage and Debt/Equity Ratios are fine at 2.74 and 1.40.

The Total Return per year is shown below for years of 5 to 24 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	10.40%	34.20%	30.08%	4.12%
2009	10	4.87%	25.84%	20.92%	4.92%
2004	15	4.05%	23.28%	16.42%	6.86%
1999	20		7.90%	6.12%	1.78%
1995	24		14.36%	11.99%	2.37%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.86, 32.20 and 40.54. The corresponding 10 year ratios are 23.30, 31.82 and 39.31. The corresponding historical ratios are 13.74, 15.65 and 19.95. The current P/E Ratio is 34.87 based on a stock price of $86.32 and 2020 EPS estimate of $2.31. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $38.94. The 10 year low, median, and high median Price/Graham Price Ratios are 1.59, 2.06 and 2.46. The current P/GP Ratio is 2.23 based on a stock price of $36.82. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.59. The current P/B Ratio is 2.98 based on a stock price of $36.82, Book Value of $1091M and Book Value per Share of $29.17. The current ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 15.97. The Current P/CF Ratio is 15.48 based on a stock price of $36.82, 2020 CFPS estimate of $5.61 and Cash Flow of $209.8M. The current ratio is 3% lower than the 10 year median 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 6.65%. The current dividend yield is 2.66% based on dividends of $2.31 and a stock price of $86.32. The current dividend is 60% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median dividend yield of 4.82%. The current dividend yield is 2.66% based on dividends of $2.31 and a stock price of $86.32. The current dividend is 45% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.52. The current P/S Ratio is 0.86 based on a stock price of $86.32, 2020 Revenue estimate of $3.797M, Revenue per Share of $101.52. The current ratio is 64% 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 probably relatively expensive. The P/S Ratio test is probably the best one and it says the stock price is expensive. Although the P/S Ratio of 0.86 is a good ratio. I know that the dividend yield tests say the same thing, but since this stock used to be an income trust, the median dividend yields have a tendency to be on the high side.

The P/B Ratio tests is generally good because it uses no estimates and it says that the stock price is reasonable but above the median. The P/E Ratio and P/GP Ratio says the same thing and there is nothing wrong with these tests. There is also nothing wrong with the P/CF test that says the stock price is reasonable and below the median and the only test to say so.

Is it a good company at a reasonable price? The stock price is probably no reasonable at this point. This is especially true since we are supposed to be in a bear market. I think that this is a good company and has done well for its shareholders. However, I wonder if now is a good time to buy. I do not think so. However, it was expected that old income trust stocks would have a lower dividend yield caused by declining dividends or increasing stock price or a combination of both. The dividends did decline a bit in 2009, but most of the decline in yield is due to the rise in stock price.

When I look at analysts’ recommendations, I find Buy (3), Hold (3) and Sell (1). The consensus would be a Hold. The 12 months stock price is $88.50. This implies a total return of 4.60% with 1.94% from capital gains and 2.66% from dividends.

Analyst seem to like this stock on Stock Chase. Vineet Kulkarni on Motley Fool thinks this is a good defensive stock and its high P/E Ratio is justified. A writer on Simply Wall Street says that the intrinsic value of this stock is $164.21 and it is selling at $83.75. A writer on Simply Wall Street says this company is paying out too much of its EPS and FCF. The company has announced on Global Newswire their intentions of raising capital to fund future acquisitions..

Premium Brands Holdings Corp is engaged in specialty food manufacturing, premium food distribution and wholesale businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada, and Washington State. Its web site is here Premium Brands Holdings Corp.

The last stock I wrote about was about was Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) ... learn more. The next stock I will write about will be Suncor Energy Inc (TSX-SU, NYSE-SU) ... learn more on Monday, July 06, 2020 around 5 pm.

Also, on my book blog I have put a review of the book Dangerous Melodies by Jonathan Rosenberg learn more...

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.

Empire Company Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Stock price seems to be reasonable and below the median. Debt Ratios should be improved. DPRs are very good. See my spreadsheet on Empire Company Ltd.

I do not own this stock of Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). I have known about this stock for some time before I decided to follow it.

When I was updating my spreadsheet, I noticed the financial statements took a big hit in 2016 because of the Safeway buy. The last 5 year grow has not been very good. Look at book value, it is down over the past 5 years by 7.6% per year and up over the past 10 years is up just 0.2% per year. They have not been able to growth Book Value since 2016. However, these has been some growth in Revenue over the past couple of years, and growth in EPS over the past couple of years.

The dividend yields are low with dividend growth low. The current dividend yield is low (under 2%) at 1.59%. The 5, 10 and historical median dividend yields are also low at 1.64%, 1.56% and 1.45%. The dividend increases are low (under 8% per year) with the 5 year growth at 5.92% per year. However, the last increase was better. It was just over 8% at 8.33% and it was for this year. See chart below.

The Dividend Payout Ratios (DPR) are very good. The DPR for EPS for 2019 is 22% with 5 year coverage at 34%. The DPR for2019 for CFPS is 7% with 5 year coverage at 10%. The DPR for 2019 for Free Cash Flow is 9% with 5 year coverage at 20%. Dividend Coverage Ratio for 2019 is 11.30 with the 5 year ratio at 5.02.

Debt Ratios are need improving. The Long Term Debt/Market Cap Ratio is good and low at 0.23. The Liquidity Ratio is low at 0.80. If you add in cash Flow after dividends it is still too low at 1.28. The Debt Ratio is also too low at 1.38. I like these last two debt ratios to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 3.73 and 2.71. I prefer them to be under 3.00 and under 2.00 respectively. The 5 year ratios are better at 2.40 and 1.38.

The Total Return per year is shown below for years of 5 to 35 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	5.92%	2.29%	0.84%	1.45%
2009	10	6.88%	8.45%	6.72%	1.73%
2004	15	7.60%	9.33%	7.52%	1.81%
1999	20	12.36%	11.73%	9.69%	2.04%
1994	25	11.26%	13.01%	10.91%	2.10%
1989	30	10.11%	9.95%	8.48%	1.47%
1984	35	9.78%	15.05%	12.33%	2.71%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.99, 18.95 and 21.91. The corresponding 10 year ratios are 13.94, 17.32 and 20.70. The corresponding historical ratios are 10.96, 12.17 and 14.18. The current P/E Ratio is 14.44 based on a stock price of $32.64 and 2020 EPS estimate of $2.26. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $27.31. The 10 year low, median, and high median Price/Graham Price Ratios are 0.93, 1.16 and 1.36. The current P/GP Ratio is 1.20 based on a stock price of $32.64. 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 1.32. The current P/B Ratio is 2.23 based on a stock price of $32.64, Book Value of $3947M, and Book Value per Share of $14.67. The current ratio is 69% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. Since taking a big loss in 2016, they have not been able to build their Book Value. This account for the high P/B Ratio. It can be a problem if they continue to not be able to build up the Book Value.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.64. The current P/CF Ratio is 6.16 based on 2020 CFPS estimate of $5.30, Cash Flow of $1,426 and a stock price of $32.64. The current P/CF ratio is 7% 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 1.45%. The current dividend yield is 1.59% based on dividends of $0.52 and a stock price of $32.64. The current dividend is 10% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 1.56%. The current dividend yield is 1.59% based on dividends of $0.52 and a stock price of $32.64. The current dividend is 2% higher than the historical median dividend 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 0.27. The current P/S Ratio is 0.32 based on 2020 Revenue estimate of $27,149, Revenue per Share of $100.88 and a stock price of $32.64. The current ratio is 21% above 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 stock price is probably reasonable and below the median. This is the results of the dividend yield tests and it was confirmed by the P/S Ratio test. The P/S Ratio test said that the stock price was cheap, but at 21%, it was just over the line to cheap. The other test says that the stock price is reasonable and below the median except for the P/B Ratio test.

Is it a good company at a reasonable price? The stock price is reasonable. They have done a decent job for their shareholders over the years. They seem to have started to recover from the problems of 2016. Their purchase of Safeway and expansion into the Western Canada was not handled well. Personally, I own Metro and I have been pleased with them. I will not be purchasing any other grocery store stock.

When I look at analysts’ recommendations, I find Strong Buy (2) Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $37.67. This implies a total return of 17% with 15.41% from capital gains and 1.59% from dividends.

Some analysts on Stock Chase talk about liking Metro or Loblaws better. Ambrose O'Callaghan on Motley Fool thinks if there is another correction grocery stocks would be good, and this stock in particular. A writer on Simply Wall Street says the CEO of this company is being paid a similar amount as the median CEO pay. A writer on Simply Wall Street says that although the yield is not high the company has a good record of dividend payments and can afford their dividends. Empire starts online shopping in GTA says company item on News Wire.

Empire Co Ltd key businesses are food retailing, investments, and other operations. The food retailing division operates through Empire's subsidiary Sobeys and represents nearly all of the company's income. Its web site is here Empire Company Ltd.

The last stock I wrote about was about was Saputo Inc (TSX-SAP, OTC-SAPIF) ... learn more. The next stock I will write about will be Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF) ... learn more on Friday, July 03, 2020 around 5 pm. Today on my other blog I will write about Something to Buy July 2020.... learn more on Thursday July 02 around 5 pm.

Also, on my book blog I have put a review of the book Great Leaders Live Like Drug Addicts by Michael Brody-Waite learn more...

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.

Saputo Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price is relatively cheap. They had the lowest dividend increase in dividends last year at 3% and none this year. But everyone is worried about the long term economic problems that the current pandemic will bring. See my spreadsheet on Saputo Inc .

I own this stock of Saputo Inc (TSX-SAP, OTC-SAPIF). This was a stock on Mike Higgs' Canadian Dividend Growth Stock list and on the dividend lists that I followed. I bought this stock first in 2006 for my RRSP account. Because I am now taking money from my RRSP accounts, I have been selling this stock because of the low dividend. I still like this stock so I have been buying it in my TFSA.

When I was updating my spreadsheet, I noticed that the TD report said that the company has a no layoff policy. I like this. Companies have to think long term, not just make money for the shareholders now. This food company is suffering because of the reduced foodservices demand.

The dividend yields are low with dividend growth currently low. The current dividend yield is currently into the moderate range (2% or 4%) at 2.11%. However, the dividends have mostly been in the low range (under 2%) with the 5, 10 and historical yields at 1.52%, 1.59% and 1.59%. The growth in dividends is current low and have been for the past 5 years. The last increase was for 2019 and it was for only 3%. Prior to 5 years ago, increases were higher. See chart below.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 is 47% with 5 year coverage at 35%. The DPR for CFPS for 2019 is 19% with 5 year coverage also at 19%. The DPR for Free Cash Flow 59% with 5 year coverage at 45%. Dividend Coverage Ratio for 2019 is 1.71 with 5 year coverage at 2.23.

Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.26. The Liquidity Ratio is 1.63. The Debt Ratio is 1.91. The Leverage and Debt/Equity Ratios are 2.10 and 1.10.

The Total Return per year is shown below for years of 5 to 22 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	5.97%	4.52%	2.86%	1.66%
2009	10	19.21%	12.19%	10.09%	2.11%
2004	15	10.55%	12.55%	10.44%	2.12%
1999	20	16.84%	13.95%	11.81%	2.15%
1997	22	14.50%	20.76%	12.23%	8.53%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.50, 23.32 and 26.37. The current P/E Ratio is 18.70, 21.36 and 23.97. The corresponding historical ratios are 16.80, 18.81 and 21.43. The current P/E Ratio is 23.08 based on a stock price of $32.08 and 2020 EPS estimate of $1.39. This stock price testing suggests that the stock price is relatively reasonable but above the median

I get a Graham Price of $22.41. The 10 year low, median, and high median Price/Graham Price Ratios are 1.59, 1.83 and 2.03. The current P/GP Ratio is 1.43 based on a stock price of $32.08. 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 3.55. The current P/B Ratio is 2.00 based on a stock price of $32.08, Book Value of $6,559M and Book Value per Share of $16.05. The current ratio is 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 16.17. The current P/CF Ratio is 11.14 based on 2020 CFPS estimate of $2.88, Cash Flow of $1,177M and a stock price of $32.08. The current Ratio is 31% 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 1.59%. The current dividend yield is 2.12% based on a stock price of $32.08 and Dividends of $0.68. The current yield is 33% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median dividend yield of 1.59%. The current dividend yield is 2.12% based on a stock price of $32.08 and Dividends of $0.68. The current yield is 33% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 1.21. The current P/S Ratio is 0.87 based on a stock price of $32.08, 2020 Revenue estimate of $15,079M and Revenue per Share of $36.90. The current ratio is 28% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is relatively cheap. Both the historical and 10 year dividend yield tests say this and it is confirmed by the P/S Ratio test. The P/B Ratio test says the same thing and no estimate are used in the P/B Ratio test. I see nothing wrong with the P/CF Test except this it is based on estimates, but a test on the 12 month cash flow says the same thing.

Th difference with the P/E Ratio is that the EPS is expected to drop this year. However, EPS is quite volatile. The 5 year growth in EPS is a negative 1.07% per year, with the 10 year EPS growth at 4.71% per year. But I also have 5 year running values, and the one comparing 5 year running EPS between EPS now and 6 years ago and the one comparing 5 year running EPS between now and 11 years ago show EPS growing by 7.89% and 10.44% per year. The expected drop in EPS for 2020 also affects the P/GP Ratio testing.

Is it a good company at a reasonable price? I think that the stock price is reasonable if not cheap. I still think that his is a good company and a long term hold. I expect that the current pandemic will adversely affect the company because they sell to the foodservice industry.

When I look at analysts’ recommendations, I find Buy (3), Hold (5) and Sell (1). The consensus would be a Hold. The 12 month stock price is $38.50. This implies a total return of $22.13% with 20.01% from capital gains and 2.12% from dividends.

Most analysts on Stock Chase call it a defensive stock. Victoria Hetherington on Motley Fool says buy this for its passive income. A writer on Simply Wall Street says Saputo current flat earnings and new issue of share at 5% of its market value are negatives. A writer on Simply Wall Street says the high than it peers P/E Ratio shows the market is expecting this company to have better growth than its peers . The blogger Dividend Earner did a write up of this in February 2019. This stock is listed on the blogger site Million Dollar Journey in the list of the of 2020 Best Canadian Dividend Stocks.

Saputo is a dairy processor and cheese producer that operates in Canada, the U.S., Argentina, the United Kingdom, and Australia and sells products in more than 50 countries. It is one of the top three cheese producers in the U.S. (48% of revenue) and one of the largest cheese manufacturers in Canada (30% of revenue). Its web site is here Saputo Inc .

The last stock I wrote about was about was Parkland Fuel Corp (TSX-PKI, OTC-PKIUF) ... learn more. The next stock I will write about will be Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) ... learn more on Thursday, July 2, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2020.... learn more on Tuesday, June 30, 2020 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.

Parkland Fuel Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price is probably reasonable and below the median. This company has provided good shareholders returns. There was some insider buying during the bear market, but mostly insider selling over the past year. They have a lot of debt. See my spreadsheet on Parkland Fuel Corp.

I do not own this stock of Parkland Fuel Corp (TSX-PKI, OTC-PKIUF). I decided to do a spreadsheet on this stock as it was a stock recommended by Roger Conrad in Money Show 2013.

When I was updating my spreadsheet, I noticed insiders started to buy when stock fell below $35 and stopped when it was at $22.00. They started selling again when stock rose above $35. However, there has been a lot of insider selling over the past year with Net Insider Selling at 0.12% (where you expect only 0.2% or less).

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.51%. The 5, 10 and historical median dividend yields are also moderate at 4.12/%, 4.89% and 3.67% respectively. The current increases are very low. The last one was for 2020 and it was for 1.7%. See the chart below also.

The stock started as a corporation, then changed to an income trust and then back to a corporation. Prior to becoming an income trust in 2002, there were little in the way of dividend increases. Dividends were up substantially in 2002 by some 1580%. There were some nice increases after that, but when it changed back to a corporation, dividends were decreased starting in 2011. Dividend increases have been low since.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2019 was 47% with 5 year coverage at 100%. The DPR for EPS was only below 100% last year for the first time since the company became an income trust. Income trust can pay over the EPS, but corporations cannot. The DPR for CFPS for 2019 was 21% with 5 year coverage at 39%. The DPR for Free Cash Flow for 2019 was 29% with 5 year coverage at 41%. Dividend Coverage Ratio for 2019 is 3.58 with 5 year ratio at 2.42.

Debt Ratios could be improved. The Long Term Debt/Market Cap Ratio for 2019 is 0.54. The Liquidity Ratio for 2019 is 1.16. If you add in cash flow after dividends it is good at 1.54. This is good for this stock as the 5 year median for Liquidity with CF after dividends is 1.14. The Debt Ratio is a bit low at 1.33 and a 5 year median of 1.46. I prefer this to be at 1.50 or better. The Leverage and Debt/Equity Ratios are too high at 4.74 and 3.56 with 5 year medians of 3.16 and 2.16.

The Total Return per year is shown below for years of 5 to 31 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	2.42%	20.95%	17.02%	3.93%
2009	10	-0.58%	18.75%	13.54%	5.21%
2004	15	4.98%	22.28%	13.37%	8.91%
1999	20	21.30%	19.69%	12.61%	7.07%
1994	25	18.61%	17.33%	12.34%	4.98%
1989	30	15.29%	13.75%	10.42%	3.33%
1988	31	14.76%	14.19%	10.83%	3.36%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 34.28, 40.45 and 46.59. The Corresponding 10 year ratios are 17.42. 21.89 and 26.54. The corresponding historical ratios are 10.57, 13.00 and 15.89. The current P/E Ratio is negative, so I can not use it to in testing for P/E Ratio. The 2021 P/E Ratio is 23.33 based on a stock price of $32.20 and 2021 EPS estimate of $1.38. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $19.68. The 10 year low, median, and high median Price/Graham Price Ratios are 1.36, 1.70 and 2.04. The current P/GP Ratio is 1.64 based on a stock price of $32.20. 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 2.94. The current P/B Ratio is 2.58 based on a Book Value of $1,849M, Book Value per Share of $12.48 and a stock price of $32.20. The current ratio is 12% below the 10 year median P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median Price/Cash Flow per Share Ratio of 10.53. The current P/CF Ratio is 9.20 based on a stock price of $32.20, Cash Flow per Share estimate for 2020 of $3.50 and Cash Flow of $519M. The current ratio is 6% below the 10 year median 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 3.67%. The current dividend yield is 3.77% based on dividends of $1.21, and a stock price of $32.20. The current yield is 3% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of 4.89%. The current dividend yield is 3.77% based on dividends of $1.21, and a stock price of $32.20. The current yield is 23% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.30. The current P/S Ratio is 0.29 based on 2020 Revenue estimate $16,272M, Revenue per Share of $109.79 and a stock price of $32.20. The current ratio is 2% below the 10 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 that the stock price is probably reasonable and below the median. My favourite test for this company is the P/S Ratio test which shows that stock price just below the median. There is nothing wrong with the P/GP Ratio Test, P/B Ratio Test nor the P/CF Ratio tests. All these tests show that the stock price is reasonable and below the median.

The historical dividend yield test shows the stock price reasonable and below the median also. The 10 year dividend yield test shows that the stock price is relatively expensive. The problem with the dividend yield tests is that the dividends have varied a lot over time. This is because the company was a corporation, then an income trust and then back to a corporation.

Most the P/E Ratio are quite high. EPS has been quite volatile. When the EPS has dropped significantly, the stock price has not. The stock price will only fall so far with a drop in EPS and this can cause quite high P/E Ratios.

Is it a good company at a reasonable price? The think that the stock price is reasonable. This stock has done well for its shareholders overtime. It is a dividend growth stock, but do not expect much growth from the dividends and probably more of the total return in capital gains.

When I look at analysts’ recommendations, I find Strong Buy (5) and Buy (9). The consensus is a Strong Buy. The 12 month stock price is $40.57. This implies a total return of 29.77% with 25.99% from Capital gains and 3.77% from dividends.

Analysts on Stock Chase like this stock and one says be patient and it will recover. Mat Litalien Motley Fool says the dividend increases are low, but the company is saying money for acquisitions and has done well with this. A writer on Simply Wall Street says that the dividends are well covered but the debt is starting to be of some concern. A writer on Simply Wall Street says the stock is fairly value to slightly undervalued at $45.74 in January of this year. .

Parkland Corp distributes and markets fuels and lubricants. Refined fuels and other petroleum products are among the variety of offerings the company delivers to motorists, businesses, consumers, and wholesalers in the United States and Canada. Its web site is here Parkland Fuel Corp.

The last stock I wrote about was about was Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF) ... learn more. The next stock I will write about will be Saputo Inc (TSX-SAP, OTC-SAPIF) ... learn more on Monday, June 29, 2020 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.

Computer Modelling Group Ltd

Sound bite for Twitter and StockTwits is: Dividend Growth Tech. Stock Price is relatively reasonable and below the median and it may even be cheap. Dividends are not growing at present, but I suspect this will again in the future. This tech stock is connected to the Oil and Gas industries, so it has some current problems. See my spreadsheet on Computer Modelling Group Ltd.

I own this stock of Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF). I first bought this stock when I was looking for something to buy after selling SNC in July 2008. This company is a dividend paying growth stock that would also be considered to be a small cap with a capitalization at that time of around $115 million. At that time Insiders were buying this stock. It has great growth and it is information technology a favourite sector of mine.

When I was updating my spreadsheet, I noticed insiders started to buy in the bear market when the stock price went below $7 and stop around $4.50. There have been no further buys since April. This company hit a peak in 2015 and it has not done much since. However, it is connected to the Oil and Gas industry and I think that this accounts for it.

The dividend yields are moderate with dividend growth currently non-existent. When this company was doing well, it gave out special dividends as it could afford them. The current dividend is moderate (2% to 4% ranges) at 3.93%. The 5, 10 and historical dividend yields are also moderate at 4.52%, 3.65% and 3.65% respectively.

The Dividend Payout Ratios (DPR) were unsustainable and dividends have been cut to a level that appears to be sustainable. The DPR for EPS for 2020 is 138% with 5 year coverage at 137%. The DPR for CFPS for 2020 is $112% with 5 year coverage at 88%. The DPR for Free Cash Flow for 2020 is 164% with 5 year coverage at 139%. The dividend was unsustainable and they have just cut it by 50%. The new dividend should be fine as the DPR for EPS for 2021 is expected to be 83%, the DPR for CFPS for 2021 is expected to 60% and the DPR for FCF for 2021 is expected to be 58%.

Debt Ratios are fine, but needs some adjustment for the future. The Long Term Debt/Market Cap Ratio is 0.15. The Liquidity Ratio for 2020 is 1.65 with a 5 year median of 1.96. The Debt Ratio for 2020 is 1.47 with a 5 year ratio of 2.22. The Leverage and Debt/Equity Ratios are 3.15 and 2.15 with 5 year medians at 1.69 and 0.69. These ratios have changed mainly because of new account rules (for lease liabilities and right-of-use Assets).

The Total Return per year is shown below for years of 5 to 23 to the end of 2019. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2014	5	0.00%	-3.31%	-7.19%	3.98%
2009	10	8.31%	15.07%	8.14%	6.94%
2004	15	21.90%	32.84%	19.47%	13.37%
1999	20		49.81%	30.51%	19.30%
1991	23		19.40%	14.37%	5.03%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.98, 30.26 and 33.81. The corresponding 10 year ratios are 21.01, 28.93 and 33.96. The corresponding historical ratios are 10.22, 16.72 and 20.34. The current P/E Ratio is 19.96 based on a stock price of $4.79 and 2021 EPS estimate of $0.24. This stock price testing suggests that the stock price is relatively cheap.

I get a Graham Price of $1.61. The 10 year low, median, and high median Price/Graham Price Ratios are 3.15, 4.04 and 4.86. The current P/GP Ratio is 2.98 based on a stock price of $4.79. 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 12.69. The current P/B Ratio is 10.02 based on a stock price of $4.79, Book Value of $38.4M, and Book Value per Share of $0.48. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Cash Flow per Share Ratio of 24.13. The current P/CF Ratio is 14.52 based on 2021 Cash Flow per Share estimate of $0.33, Cash Flow of $26.5M and a stock price of $4.79. The current ratio is 40% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

I get an historical median dividend yield of 3.65%. The current dividend yield is 4.18% based on a stock price of $4.79 and dividends of $0.20. The current dividend yield is 14% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year median dividend yield of also of 3.65%. The current dividend yield is 4.18% based on a stock price of $4.79 and dividends of $0.20. The current dividend yield is 14% above the historical dividend 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 10.39. The current P/S Ratio is 5.62 based on a stock price of $4.97, 2021 Revenue estimate of $68.4M and Revenue per Share of $0.85. The current ratio is 56% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably reasonable and below the median. The dividend yield tests are showing that the stock price is reasonable and below the median. The P/S Ratio test confirms this and suggests it might be cheap. The dividend yield tests are just showing the price as reasonable because the company has cut the dividends by 50%. Dividend cuts signal that management do not expect things to get better in the short term.

Bye the way, there is nothing particularly wrong with the other tests which signal that the stock price is relatively cheap. Ratios are, of course, rather high, but that is because this stock was a fast growing tech stock. The problem for this tech stock is that it services the Oil and Gas industry and this industry is currently in trouble.

Is it a good company at a reasonable price? I still like this company and I am going to hold on to the shares that I have. I am not buying any stock because basically I do not have spare money. The price is reasonable at this time.

When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2) and Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $5.46. This implies a total return of 18.16% with 13.99% from capital gains and $4.18% from dividends.

Analysts were never very interested in this small company and they stopped being interested in 2017 as shown by the entries on Stock Chase. Stephanie Bedard-Chateauneuf likes this stock on Motley Fool back in February. A writer on Simply Wall Street talks about this company’s beta and what it means. There are risks to this stock as shown on Simply Wall Street Executive Summary. Nick Waddell on CanTech talks about this stock.

Computer Modelling Group Ltd is a Canada-based provider of reservoir simulation software for the oil and gas industry. Its capabilities include integrated analysis and optimization, black oil and unconventional simulation, reservoir and production system modelling, post-processor visualization, compositional simulation, thermal processes simulation, and fluid property characterization. The firm has operations in over 50 countries in the Americas, Europe, Middle East, Africa, and Asia-Pacific regions. Its web site is here Computer Modelling Group Ltd.

The last stock I wrote about was about was CI Financial Corp (TSX-CIX, OTC-CIFAF) ... learn more. The next stock I will write about will be Parkland Fuel Corp (TSX-PKI, OTC-PKIUF) ... learn more on Friday, June 26, 2020 around 5 pm. Tomorrow on my other blog I will write about Predictable Interest.... learn more on Thursday, June 25, 2020 around 5 pm.

Also, on my book blog I have put a review of the book Future of Capitalism by Paul Collier learn more...

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.