Finning International Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Stock price is above the median to expensive. They made up for no dividend increase in 2020 by a bigger than usual one in 2021. See my spreadsheet on Finning International Inc.

I do not own this stock of Finning International Inc (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought.

When I was updating my spreadsheet, I noticed that since they did not give a dividend increase in 2020, they gave a good one in 2021 of 9.8% and more than double recent increases. A lot of companies paused on increases in 2020 because of uncertainty.

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 2.45%. The 5 and 10 year median dividend yields are moderate at 2.82% and 2.70%. The historical median dividend yield is low (below 2%) at 1.97%. In the past this company had low dividend yields, but moderate dividend increases (8% to 14% ranges). The dividend increases are low (below 8%) with 5 year increases at 2.5% per year. The last dividend increase was for 9.8%, and it was paid in 2021. There was no increase in 2020.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 was 57% with 5 year coverage at 65%. This is expected to be lower this year at 40%. The DPR for CFPS for 2020 wat 18% with 5 year coverage at 20%. The DPR for Free Cash Flow for 2020 was 16% with 5 year coverage at 45%. Sites seem to agree on what the FCF is.

Debt Ratios are fine. The Long Term Debt/Market Cap ratio is low and fine at 0.25. The Liquidity Ratio is high and fine at 1.98. The Debt Ratio is high and fine at 1.68. The Leverage and Debt/Equity Ratios are low and fine at 2.47 and 1.47, respectively.

The Total Return per year is shown below for years of 5 to 33 to the end of 2020. 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.
2015	5	2.49%	11.28%	7.67%	3.61%
2010	10	5.72%	2.53%	-0.02%	2.55%
2005	15	9.17%	5.11%	2.53%	2.57%
2000	20	11.09%	10.81%	7.51%	3.30%
1995	25	8.78%	9.92%	7.09%	2.83%
1990	30	6.77%	10.11%	7.45%	2.66%
1987	33	8.25%	10.77%	7.82%	2.95%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 18.22, 20.79 and 24.66. The corresponding 10 year ratios are 12.47, 15.85 and 19.00. The corresponding historical ratios are 12.50, 16.16 and 19.76. The current P/E Ratio is 17.23 based on a stock price of $36.69 and EPS estimate for 2021 of $2.13. The current ratio is between the median and high 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $25.80. The 10 year low, median, and high median Price/Graham Price Ratios are 1.13, 1.41 and 1.62. The current P/GP Ratio is 1.42 based on a stock price of $36.69. The current ratio is around the median P/GP 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and at the median.

I get a 10 year median Price/Book Value per Share Ratio of 2.23. The current P/B Ratio is 2.64 based on a Book Value of $2,252M, Book Value per Share of $13.89 and a stock price of $36.69. The current ratio is 18% 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 9.37. The current P/CF Ratio is 10.05 based on Cash Flow per Share estimate for 2021 of $3.65, Cash Flow of $592M and a stock price of $36.69. The current ratio is 7% above the 10 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 1.97%. The current dividend yield is 2.45% based on a stock price of $36.69 and dividends of $0.90. The current dividend yield is 25% 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 2.70%. The current dividend yield is 2.45% based on a stock price of $36.69 and dividends of $0.90. The current dividend yield is 9% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. Company seems to have changed from a low yield and moderate growth to moderate yield and low growth. This is a reason I like the 10 year median dividend yield test.

The 10 year median Price/Sales (Revenue) Ratio is 0.67. The current P/S Ratio is 0.88 based on Revenue estimate for 2021 of $6,762M, Revenue per Share of $41.71 and a stock price of $36.69. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is expensive.

Results of stock price testing is that the stock price is above the median and probably expensive. The P/S Ratio test shows the stock as expensive. The problem with the historical dividend yield test is that the Dividend Payout Ratio are currently higher than the historical median one, and are still a bit higher than the 10 year median ones. Most of the other tests is showing a current stock price as above the median.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below, the P/S Ratios and the dividend yields do a fairly good job in predicting good total returns.

In the following chart the total return for the 15 years to December 31, 2020 is 5.11% per year. The beginning yield was at 1.18%, and the P/E Ratio and the P/S Ratio were at 20.30 and 0.69. Does this chart change my opinion of the stock price? No.

# Years	Total Ret	Beg P/E	Beg P/S	Beg Yield
5	11.28%	-19.87	0.51	3.88%
10	2.53%	-58.89	1.00	1.73%
15	5.11%	20.30	0.69	1.18%
20	10.81%	13.51	0.39	1.57%
25	9.92%	9.96	0.43	2.05%
30	10.11%	14.56	0.40	3.67%
33	10.77%	12.74
current		17.23	0.88	2.45%

Is it a good company at a reasonable price? The stock price might be relatively high and it is certainly above the median. I still like this company. I did not buy it because I have Toromont and both these companies are in the same business.

When I look at analysts’ recommendations, I find Strong Buy (3), Buy (2) and Hold (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $43.44. This implies a total return of $20.85% with 18.40% from capital gains and 2.45% from dividends.

Last year I said that the results of stock price testing were that the stock price is probably reasonable and around the median and maybe below the median. Last year analyst consensus was a Buy with the 12 month stock price consensus of $25.25. This implied a total return of 5.67% with 2.35% from capital gains and 3.32% from dividends based on a current price of $24.67. What happened is a 12 month total return of 52.04% with 48.72% from capital gains and 3.32% from dividends

David Burrows on Stock Chase says this stock is his top pick with a target price of $41.67. Nikhil Kumar on Motley Fool thinks the company’s resilient business model and financial flexibility position it well to capture attractive growth opportunities, as markets recover following the global pandemic. The Executive Summary on Simply Wall Street gives this company 4 stars out of 5 and lists one risk. A writer on Simply Wall Street likes that the dividend is being increased and the dividend’s sustainability. A writer on Simply Wall Street thinks this stock is one to keep an eye on. He has seen insiders buying shares even though they already own plenty. The company reports its third quarter results on Global Newswire.

Finning International Inc is a dealer and distributor of heavy-duty machinery and parts of the Caterpillar brand. The company operates in Canada, South America, UK and Ireland, and others. Its web site is here Finning International Inc.

The last stock I wrote about was about was Crescent Point Energy Corp (TSX-CPG, NYSE-CPG) ... learn more. The next stock I will write about will be Quarterhill Inc (TSX-QTRH, OTC-QTRHF) ... learn more on Wednesday, November 17, 2021 around 5 pm. Tomorrow on my other blog I will write about Getting Schooled in Risk .... learn more on Tuesday, November 16, 2021 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.

Crescent Point Energy Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Resource. The stock price is relatively cheap. Dividends have started to grow again with an increase in dividends at the end of 2021. The DPR for EPS for this company are expected to improve. See my spreadsheet on Crescent Point Energy Corp.

I do not own this stock of Crescent Point Energy Corp (TSX-CPG, NYSE-CPG). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.

When I was updating my spreadsheet, I noticed that future EPS from analysts are for 2021, 2022 and 2023 are $4.13, $1.28, and $1.13. The big increase in 2021 is because of impairment reversal. Impairment charges and reversals are a one time thing, so that is why the EPS is given as much higher for 2021. It is probably true as the 12 month EPS to the end of the third quarter is $3.84.

When good shareholders total returns were made in the past it was because of high dividends paid by an income trust. Since this company is now a corporation, this will not occur in the future.

The dividend yields are currently moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 2.05%. The 5 year median dividend yield is also moderate at 2.71%. This 10 year median dividend yield is good (5% to 6% ranges) at 5.54%. The historical median dividend yield is high (7% and above) at 7.31%.

This stock used to be an income trust and income trusts have much higher yields than corporations. Income Trusts can payout more than the EPS, but not corporations. They did not get the DPR for EPS under control since changing to a corporation. They also have not been making much money lately as 6 of the last 6 years had earning losses. They are expected to have positive earnings in 2021. In 2021 they started to raise the dividends again after a number of years of dividend decline.

The Dividend Payout Ratios (DPR) are expected to improve. The DPR for EPS for 2020 is not calculable because of earnings losses. It is the same story with the 5 year coverage. The DPR for EPS for 2021 is expected to be around 1% with the DPR for EPS for 2022 at around 9%. The DPR for CFPS for 2020 is 2% with 5 year coverage at 10%. The DPR for Free Cash Flow for 2020 is 6% with 5 year coverage at 92%. However, how different site calculate the FCF varies greatly.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 1.29 and too high. However, that was due to a dip in the stock price in 2020. The current ratio is fine at 0.62. The Liquidity Ratio for 2020 is 0.42. However, if you add in cash flow after dividends the ratio is good at 1.68. The Debt Ratio is good at 1.74. The Leverage and Debt/Equity Ratios are fine at 2.35 and 1.35.

The Total Return per year is shown below for years of 5 to 19 to the end of 2020. 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.
2015	5	-59.31%	-26.18%	-28.70%	2.53%
2010	10	-37.53%	-15.95%	-23.66%	7.71%
2005	15	-25.60%	6.39%	-12.14%	18.52%
2001	19	-17.66%	37.51%	-0.96%	38.48%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and so unusable. The corresponding 10 year ratios are also all negative and unusable. The corresponding historical ratios are 3.98, 7.16 and 10.34. The current P/E Ratio is 1.42 based on a stock price of $5.85 and 2021 EPS estimate of $4.13. The EPS estimate for 2021 includes an impairment reversal, so is quite low, or really exceedingly low and so points to a very cheap price. This is not a good test as EPS estimate is unusually high.

The P/E Ratio for 2022 is somewhat higher at 4.57 and based on a stock price of $5.85 and 2022 EPS of $1.28. If we can compare this to the historical ratios, this stock price testing suggests that the stock price is relatively reasonable and below the median. But all these ratios are really low. You have to wonder how good the P/E Ratio tests are.

I get a Graham Price of $17.02 for 2022. The Graham Price for 2021 includes the very high EPS expected in 2021 and is probably not valid. The 10 year low, median, and high median Price/Graham Price Ratios are 0.64, 0.77 and 0.95. The current P/GP Ratio is 0.34 based on a stock price of $5.85. This stock price testing suggests that the stock price is relatively cheap. However, you got to wonder how good this test is also.

I get a 10 year median Price/Book Value per Share Ratio of 0.90. The current P/B Ratio is 0.58 based on a Book Value of $5,334M, Book Value per Share of $10.06 and a stock price of $5.85. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. The problem with this testing is that the Book Value per Share has been dropping by 23% per year over the past 5 years and 13% per year over the past 10 years. It is dropping because of the lack of earnings over the past 6 years.

I get a 10 year median Price/Cash Flow per Share Ratio of 5.06. The current P/CF Ratio is 2.28 based on Cash Flow per Share estimate for 2021 of $2.57, Cash Flow of $1,362M and a stock price of $5.85. The current ratio is 55% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This maybe a fine test as the 12 month Cash Flow to the end of the third quarter is $1,237M. The Cash Flow is certainly currently going in the right direction.

I get an historical median dividend yield of 7.31%. The current dividend yield is 2.05% based on dividends of $0.12 and a stock price of $5.85. The current dividend yield is 72% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that company used to be an income trust with very high dividend yields and also the dividends have been cut recently.

I get an historical median dividend yield of 5.54%. The current dividend yield is 2.05% based on dividends of $0.12 and a stock price of $5.85. The current dividend yield is 63% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that company used to be an income trust with very high dividend yields and also the dividends have been cut recently.

The 10 year median Price/Sales (Revenue) Ratio is 3.00. The current P/S Ratio is 0.99 based on Revenue estimate for 2021 of $3,128M, Revenue per share of $5.90 and a stock price of $5.85. The current ratio is 67% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. The revenue for the last 12 month to the end of the third quarter is $2,754M. Revenue is certainly going in the direction of the estimate.

Results of stock price testing is that the stock price is probably cheap. The only good tests seem to the P/S Ratio test and the P/CF Ratio test. Both these test show that the stock price is cheap. There are problems with the other tests.

Is it a good company at a reasonable price? The stock price is probably cheap. However, this company is in the oil and gas business. This is a cyclical business and is also a risky business. There is also a lot of uncertainties because of pushes to get rid of oil and gas because of Climate Change policies and rhetoric. There is going to be a lot of problems with getting off oil and gas. We have not yet got of coal, for heaven sake.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (7), Hold (3) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $9.13. this implies a total return of $58.12% with 2.05% from dividends and 56.07% from capital gains.

Some analysts on Stock Chase do not care for the management of this company. Ambrose O'Callaghan on Motley Fool thinks that this company has been performing well. Karen Thomas on Motley Fool says that this company is re-emerging with new management. The Executive Summary on Simply Wall Street gives this stock 4 starts out of 5 and lists 6 risks. A writer on Simply Wall Street says the intrinsic value of this stock is $12.21. A writer on Simply Wall Street says it's free cashflow was significantly lower than its statutory profit, raising questions about how useful that profit figure really is. The company announces its third quarterly results on Newswire.

Crescent Point Energy is an independent exploration and production company. Its web site is here Crescent Point Energy Corp.

The last stock I wrote about was about was Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more. The next stock I will write about will be Finning International Inc (TSX-FTT, OTC-FINGF) ... learn more on Monday, November 15, 2021 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.

Innergex Renewable Energy

Sound bite for Twitter and StockTwits is: Dividend Paying Utility. The stock price would seem to be reasonable. Dividend increases have stopped. They have had positive earnings in only 9 of the past 18 years. Dividend Payout Ratios need to improve. Debt Ratios need to improve. However, the stock price is climbing. See my spreadsheet on Innergex Renewable Energy.

I do not own this stock of Innergex Renewable Energy (TSX-INE, OTC-INGXF). In 2006 I bought Innergex Power on a buy rating and favorable report from TD although it has only been going from 2003. In 2008 I sold Innergex as I did not think that it is a stock I want to hold as dividend increased less than the rate of inflation.

When I was updating my spreadsheet, I noticed a very week Balance Sheet. The Liquidity Ratio is 0.44 and if you add in Cash Flow after dividends you only get to 0.54. If this is below 1.00, it means that current assets cannot cover the current liabilities. The Debt Ratio is just 1.18. Both of these you want to be at 1.50 or higher. The Long Term Debt has been higher than the Market Cap of this stock for some time, and since I have looked at this since 2014. The Debt to Cash Flow (In Years) is 17 and what you want is a number closer to 3. The Assets/Current Liabilities Ratio is good at 6.90.

Last year analysts thought dividends would be raised for 2021 and 2022 to $0.74 and $0.75. This year, analysts do not see any dividend increases in the near future. You need to make a profit in order to pay and raise dividends. However, this company has only made a profit in 4 of the past 10 years. I have 18 years of data and they made a profit in 9 of those 18 years. Currently one of the biggest expenses is financing.

The dividend yields are moderate with dividend growth stopping. The current dividend yield is moderate (2% to 4% ranges) at 3.70%. The 5 year median dividend yields are moderate at 4.60%. The 10 year and historical median dividend yields are good (5% to 6% ranges) at 5.62% and 5.96%. This company used to be an income trust and changed to a corporation in 2010. Income Trust companies paid much higher dividends than corporations. The dividend increases are low (below 8% per year) at 3% per year over the past 5 years. However, there was no dividend increase in 2021 and analysts do not expect any in the near future.

The Dividend Payout Ratios (DPR) need improving. The DPR for EPS for 2020 is non-calculable because of the 2020 earning loss. The 5 year coverage was 1467% and so much too high. The company is not expected to have positive earnings until 2022, and then the DPR for EPS is expected to be 180%. The DPR for Free Cash Flow is negative in 2020 and therefore non-calculable. The 5 year coverage is also non-calculable for the same reason. The DPR for FCF is expected to be 177% in 2021 and then falling to 90% in 2022.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2020 is 0.85. However, it has been above 1.00 in the near past and is currently at 1.29 and much too high. The debt increased in 2021 by over 8%. The Debt Ratio is too low at 1.18. These last two ratios I like to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2020 are too high at 6.68 and 5.68. I prefer them to be under 3.00 and under 2.00.

The Liquidity Ratio for 2020 is 0.44. If you add in cash flow after dividends, it is only 0.54. If you add back in the current portion of the long term debt it is 1.72. That is fine, but you have to carefully check that debt can be rolled over. The problem is that a company can quickly get into debt problems when the economy turns into a recession. It is not a good idea to depend on debt rolling over the have a decent Liquidity Ratio.

The Total Return per year is shown below for years of 5 to 17 to the end of 2020. 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.
2015	5	3.06%	23.61%	19.29%	4.32%
2010	10	4.51%	14.89%	10.67%	4.22%
2005	15	0.67%	12.35%	7.66%	4.68%
2003	17	0.80%	12.30%	7.29%	5.01%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 36.32, 46.20 and 56.07. The corresponding 10 year ratios are all negative and therefore unusable. The corresponding historical ratios are all negative and therefore unusable. The current P/E Ratio is also negative and so unusable.

The P/E Ratio for 2022 is 48.68 based on a stock price of $19.47 and EPS estimate for 2022 is $0.40. This ratio is between median and high 5 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. The thing with P/E Ratios, if a company is doing badly in EPS, the stock price generally only goes down only so much. A low EPS for a company can result in a high P/E Ratio. This is probably the case here.

I calculate a Graham Price of $5.79, but this is a guess. The 10 year low, median, and high median Price/Graham Price Ratios are 2.27, 2.71 and 3.08. The current P/GP Ratio is 3.36 based on a stock price of $19.47. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. Unusually low EPS does affect the Graham Price also. This is probably also not a good test.

I get a 10 year median Price/Book Value per Share Ratio of 3.54. The current P/B Ratio is 5.23 based on a Book Value of $650M, Book Value per Share of $3.72 and a stock price of $19.47. The current ratio is 48% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The P/B Ratio are quite high. This is because of low EPS and a Book Value that is only slightly growing over the past 5 year and is down over the past 10 years.

I get a 10 year median Price/Cash Flow per Share Ratio of 13.67. The current P/CF Ratio is 14.01 based on Cash Flow per Share estimate for 2021 of $1.39, Cash Flow of $242.7M and a stock price of $16.47. The current ratio is 2.5% above the 10 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 5.96%. The current dividend yield is 3.70% based on a stock price of $19.47 and dividends of $0.72. The current dividend yield is 38% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This company used to be an income trust and so had higher dividend yields than corporations.

I get a 10 year median dividend yield of 5.32%. The current dividend yield is 3.70% based on a stock price of $19.47 and dividends of $0.72. The current dividend yield is 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The dividend yields have only slightly come down from the high income trust yields.

The 10 year median Price/Sales (Revenue) Ratio is 4.63. The current P/S Ratio is 4.60 based on Revenue estimate for 2021 of $739M, Revenue per Share of $4.23 and a stock price of $19.47. The current ratio is 8.8% 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 based on the P/S Ratio test. Most of the test are invalid for various reasons. The only other one that seems valid is the P/CF Ratio test and that also says the stock price is reasonable, but above the median. The problem is lack of EPS and that this company used to be an income trusts and income trusts have high yields.

Is it a good company at a reasonable price? The price is probably reasonable. Personally, I would not buy for two main reasons. One is the high debt level. The second one is that they do not seem to be able to make a profit.

When I look at analysts’ recommendations, I find Buy (6), Hold (4) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $24.66. This implies a total return of $30.35% with 3.70% from dividends and 26.66% from capital gains.

Analysts on Stock Chase say it is a buy and like it because it produces green energy. Adam Othman on Motley Fool believe that this company will start to grow again. The executive summary on Simply Wall Street gives this stock 2 stars out of 5 and lists 2 risks. A writer on Simply Wall Street gives this stock a fair market value of $19.08. A writer on Simply Wall Street says he is uncomfortable with this company’s debt level.

Innergex Renewable Energy Inc is an independent Canadian renewable power producer. It develops, acquires, owns, and operates hydroelectric, wind, and solar facilities in Canada, the United States, France, and Chile. Its web site is here Innergex Renewable Energy.

The last stock I wrote about was about was PFB Corp (TSX-PFB, OTC-PFBOF) ... learn more. The next stock I will write about will be Crescent Point Energy Corp (TSX-CPG, NYSE-CPG) ... learn more on Friday, November 12, 2021 around 5 pm. Tomorrow on my other blog I will write about Couch Potato Investing.... learn more on Thursday, November 11 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.

PFB Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. The stock price seems on the expensive side. Debt Ratios are good. It is expected that the stock will be bought out in December of this year. The company is also promising another $2.00 dividend in November. There would seem little point in buying this company at this time. See my spreadsheet on PFB Corp.

I do not own this stock of PFB Corp (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term only if the company is successful.

When I was updating my spreadsheet for the 2020 financial year, I noticed that EPS was higher because costs went down, especially, the cost of sales (COS). Sales went up 1.17%, but COS went down by 6.42%. The COS/Sales Ratio moved from 0.74 in 2019 to 0.68 in 2020.

However, costs went up this year, especially, the cost of sales, which went up 25.89%. The Sales only went up 16.73%. The COS/Sales Ratio went from 0.69 year to date (YTD) in the first 9 months of 2020 to 0.74 in the first 9 months of 2021. So, it looks like lower costs is not permanent, which is unfortunate. The COS/Sales Ratio is back to 0.74 where it was in 2019. It is the COS/Sales Ratio that gives you the full story. It is the reason you look at ratios.

Sales Annual	$133.232	$134.796
Change		1.17%
COS/Sales R	0.74	0.68
Change		-7.51%
COS Annual	$98.404	$92.087
Change		-6.42%
Sales YTD	$97.737	$114.088
Change		16.73%
COS/Sales R	0.69	0.74
Change		7.85%
COS YTD	$67.052	$84.411
Change		25.89%

The dividend yields are currently low with dividend growth moderate. The current dividend is low (below 2%) at 1.65%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 3.23%, 3.36% and 3.09%. The dividends have gone up moderately (8% to 14% ranges) in the last 5 years at 9.04% per year. The last dividend increase was moderate at 10% and it was for 2021.

The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2020 was 58% with 5 year coverage at 64%. It was high because there was a special $1.00 dividend, otherwise the DPR for 2020 would have been 16%. There has been a special $1.00 dividend in 2019, 2020 and 2021. The DPR for CFPS for 2020 is 34% with 5 year coverage at 31%. The DPR for Free Cash Flow is 36% with 5 year coverage at 59%.

Debt Ratios are good. The Long Term Debt/Market Cap for 2020 is 0.05 and this is low and good. The Liquidity Ratio for 2020 is high and good at 2.46. The Debt Ratio is high and good at 2.57. The Leverage and Debt/Equity Ratios are low and good at 1.64 and 0.64.

The Total Return per year is shown below for years of 5 to 27 to the end of 2020. 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.
2015	5	9.04%	20.84%	16.47%	4.38%
2010	10	4.42%	19.77%	14.62%	5.15%
2005	15	2.93%	5.82%	3.36%	2.45%
2000	20	6.76%	17.68%	10.69%	6.99%
1995	25	5.85%	15.32%	8.93%	6.39%
1993	27		14.48%	8.96%	5.52%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.59, 9.59 and 10.60. The corresponding 10 year ratios are 9.41, 11.06 and 14.30. The corresponding historical ratios are 8.39, 10.35 and 14.30. The current P/E Ratio is 12.25 based on a stock price of $26.70 and EPS estimate for 2021 of $2.18. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $22.60. The 10 year low, median, and high median Price/Graham Price Ratios are 0.59, 0.72 and 0.95. The current P/GP Ratio is 1.18 based on a stock price of $26.70. The current ratio is above the 10 year median high ratio. 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 1.03. The current P/B Ratio is 2.56 based on a stock price of $26.70, Book Value of $70.7M and a Book Value per Share of $10.41. The current P/B Ratio is 150% 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 5.99. The current P/CF Ratio is 9.82 based on Cash Flow per Share estimate for 2021 of $2.72, Cash Flow of $18.5M and a stock price of $26.70. The current ratio is 64% 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 3.09%. The current Dividend Yield is 1.65% based on dividends of $0.44 and a stock price of $26.70. The current dividend yield is 47% 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 3.46%. The current Dividend Yield is 1.65% based on dividends of $0.44 and a stock price of $26.70. The current dividend yield is 52% 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 0.50. The current P/S Ratio is 1.18 based on Revenue estimate for 2021 of $154M, Revenue per Share of $22.66 and a stock price of $26.70. The current ratio is 136% above the 10 year median ratio.

Results of stock price testing is that the stock price is probably expensive. The dividend yield tests are pointing to this and it is confirmed by the P/S Ratio test. The other tests are saying the same thing.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the good yields have higher dividend yields than today. The lowest dividend yield had the worst Total Return at the 15 year mark. Year 15 also has the highest P/S Ratio.

In the following chart the total return for the 10 years to December 31, 2020 is 19.77% per year. The beginning yield was at 4.17%, and the P/E Ratio and the P/S Ratio were at 20.54 and 0.58. Does this chart change my opinion of the stock price? No, I think it shows low yields and high P/S Ratio equal lower total return.

# Years	Total Ret	Beg P/E	Beg P/S	Beg Yield
5	20.84%	13.82	0.71	2.29%
10	19.77%	20.54	0.58	4.17%
15	5.82%	14.89	1.15	1.75%
20	17.68%	7.20	0.45	3.39%
25	15.32%	18.93	0.47
27	14.48%	14.80
current		12.25	1.18	1.65%

Is it a good company at a reasonable price? It would see that the stock price is on the expensive side. Since it is to be bought out by the end of this year, this is not surprising. Shareholders who have bought this stock at reasonable prices have done well. It is a small cap stock and so risky. Since it is to be acquired by Riverside Company in December of this year, there may not be much point in buying this stock.

When I look at analysts’ recommendations, I find one Hold recommendations. The 12 month stock price consensus is $24.10. There is also only one 12 month stock price given. This implies a total loss of 8.09% with a capital loss of 9.74% and dividends of 1.65%. Also note that the company has promised an extra $2.00 dividend in November.

It seems that on Stock Chase 5i Research is the only one reporting on this company. They think it is a Buy. The executive summary on Simply Wall Street gives this company 4 stars out of 5 and list no risks. That means they passed all of Simply Wall Street’s risk checks. A writer on Simply Wall Street says that the company’s ROE is higher than its industry and it is growing its EPS. A writer on Simply Wall Street talks about who owns the shares of this company. An article on Newswire says that PFB will be bought out by The Riverside Company effective December 17, 2021 and a second $2 dividend will be paid to PFB shareholders in November 2021. So, it looks like I will lose another company I have been following.

PFB Corp is Canadian based firm which is in the business of delivering products and solutions in the areas of manufacturing insulating building products made from expanded polystyrene materials. Its web site is here PFB Corp.

The last stock I wrote about was about was IBI Group Inc (TSX-IBG, OTC-IBIBF) ... learn more. The next stock I will write about will be Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more on Wednesday, November10, 2021 around 5 pm. Tomorrow on my other blog I will write about What are Dividends.... learn more on Tuesday, November 9, 2021 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.

IBI Group Inc

Sound bite for Twitter and StockTwits is: Industrial Services Stock. The stock price would seem to be expensive. I said the same last year, but stock gained 69%. Debt Ratios need improving. See my spreadsheet on IBI Group Inc.

I do not own this stock of IBI Group Inc (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.

When I was updating my spreadsheet, I noticed that there is a problem with Revenue. The increase in Revenue is not bad at 3.75% and 3.08% per year over the past 5 and 10 years. However, the Revenue per Share has been decreasing at 0.81% and 5.64% per year over the past 5 and 10 years. This is because the outstanding shares have been increasing at 4.60% and 9.24% per year over the past 5 and 10 years.

The analysts have been inconsistent in predicting the growth in Revenue. Estimates were during the year when I did my review and actual is what was actually reported when year-end results were published. In the chart below you can see what the estimates were each year from 2018. November 2020, analyst gave an estimate for 2020 of $426M, but the revenue came in lower at $393M. This year, analysts think that the Revenue will be $436 for the 2021 year end. The 12 month Revenue to the end of the second quarter is $422. So, they may be right.

Estimates	2018	2019	2020	2021	2022	2023
2018	$362	$378	$385
2019		$377	$386
2020			$426	$411	$403
2021				$436	$452	$470
Actuals	$368	$377	$393	$422

Currently no dividends are being paid. This company was an Income Fund and changed to a corporation in January 2011. Dividends were paid to 2013 and then suspended. They had not got the Dividend Payout Ratios for EPS under control. They also had a couple of years of EPS losses around 2013.

Recently they have been doing better. Revenues have been growing, but Revenue Per Share has been declining. This is because outstanding shares have been increasing. EPS is growing but are volatile. Shareholders who have had this stock for 15 and 16 years only made money from dividends.

Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2020 is low and good at 0.17. The Liquidity Ratio for 2020 is 1.39. If you add in Cash Flow after dividends, it is good at 1.69. The Debt Ratio is quite low at 1.24. I prefer this to be at 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 5.19 and 4.19. I prefer these to be below 3.00 and below 2.00.

The Total Return per year is shown below for years of 5 to 16 to the end of 2020. 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.
2015	5	0.00%	29.95%	29.95%	0.00%
2010	10	0.00%	-2.91%	-4.88%	1.97%
2005	15	0.00%	7.79%	-1.29%	9.08%
2004	16	0.00%	6.44%	-1.96%	8.41%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.67, 11.79 and 17.64. The corresponding 10 year ratios are 6.43, 11.34 and 14.88. The corresponding historical ratios are 6.93, 10.89 and 14.33. The current P/E Ratio is 17.93 based on a stock price of $12.55 and EPS estimate for 2021 of $0.70. The current P/E Ratio is above the high median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $5.58. The 10 year low, median, and high median Price/Graham Price Ratios are 0.84, 1.29 and 1.83. The current P/GP Ratio is 2.25 based on a stock price of $12.55. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 2.47. The current P/B Ratio is 6.35 based on a stock price of $12.55, Book Value of $61.83M and Book Value per Share of $1.98. The current P/B Ratio is 157% 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 3.14. The current P/CF Ratio is 9.37 based on as stock price of $12.55, Cash Flow per Share estimate for 2021 of $1.34, and Cash Flow of $41.9M. The current ratio is 180% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I cannot do any dividend yield testing as the dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 0.24. The current P/S Ratio is 0.90 based on Revenue estimate for 2021 of $436M, Revenue per Share of $13.95 and a stock price of 12.55. The current ratio is 113% 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 this stock is probably current expensive. The P/S Ratio test says this. Plus, all the other tests say the same thing.

I look at the total return over a number of years. For P/S Ratio and P/E Ratio, the lower the ratio the cheaper the stock. For yield, the higher the yield, the cheaper the stock. In the chart below you can see that the beginning P/E Ratios for good returns are lower than today. This is the same with P/S Ratio. Since dividends are suspended, we can not really judge using dividend yield.

In the following chart the total return for the 10 years to December 31, 2020 is -4.88% per year. The beginning yield was at 11.84%, and the P/E Ratio and the P/S Ratio were at 12.17 and 0.51. Does this chart change my opinion of the stock price? No really. Relatively speaking the P/E Ratio and P/S Ratio are currently high.

# Years	Total Ret	Beg P/E	Beg P/S	Beg Yield
5	29.95%	5.39	0.17	0.00%
10	-4.88%	12.17	0.60	11.84%
15	7.79%	13.21	0.51	11.31%
16	6.44%	-227.73	0.61	10.00%
current		17.93	0.90	0.00%

Is it a good company at a reasonable price? The stock price appears to be on the expensive side. This would be a risky investment. The company had problems in 2012 and 2013 and the recovery has been uneven. A good signal of confidence would be a restart to dividends. The economic recovery from the 2008 bear and been long and slow and it has adversely affected a number of companies.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (6). The Consensus would be a Strong Buy. The 12 month stock price is $14.75. This implies a total return of 17.53% all from Capital Gains based on a current stock price of $12.55.

Last year when I looked at analysts’ recommendations, I found Strong Buy (2) and Buy (5). The consensus would be a Strong Buy. The 12 month stock price was $9.04. That implied a total return of 22.33% all from capital gains based on a stock price of $7.39. What happened was a stock price 1 year later of $12.55 from $7.39 for a total return of 69.82% all from capital gains. I said that the stock price was relatively expensive last year.

There are few entries, but the last two on Stock Chase say the stock is a Buy. Recently Adam Othman on Motley Fool suggested this company as a small cap to buy. The Executive Summary on Simply Wall Street gave this stock 4 stars out of 5 and listed two risks. A writer on Simply Wall Street thinks now may not be the time to buy this stock as it is selling currently at its fair value. A writer on Simply Wall Street talks about who owns shares in this company. The company talks about its third quarterly results on Globe Newswire.

IBI Group Inc is a Canada-based engineering services provider. The company plans, designs, implements, as well as offers other consulting services and software development for its intelligence, buildings, and infrastructure business segments. Its geographical segments are Canada, the United States, United Kingdom, and other International. Its web site is here IBI Group Inc.

The last stock I wrote about was about was Johnson and Johnson (NYSE-JNJ) ... learn more. The next stock I will write about will be PFB Corp (TSX-PFB, OTC-PFBOF) ... learn more on Monday, November 8, 2021 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.

Johnson and Johnson

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock price still seems in a reasonable range, but towards to top end of the range. The Dividend Payout Ratios are high, but they are expected to improve in the near term. See my spreadsheet on Johnson and Johnson.

I do not own this stock of Johnson and Johnson (NYSE-JNJ). As Canadians, we are told we should be buying US stocks for our portfolio. It is often recommended that we have at least 25% of our portfolio in US stocks. I have never followed this, although I have tried dipping into the US market, but I have never made any money there. I bought some of this stock in June 2005 and realized a year later, in June of 2006 that it was going nowhere for me and sold. I lost almost 17% of my investment. When I bought in 2005, all the analysts were saying that it was a good buy at that time. I bought at the wrong time.

When I was updating my spreadsheet, I noticed that analysts keep thinking that Revenue is going to take off, especially in 2020. See chart below. The years column is year of estimates and the rows are showing the estimates in the first few rows and the actuals in the last row. So, estimates in 2018 are $81,366M, $82,870M and $86,759M for Revenue. Revenue growth has been low with growth only at 3.34% and 2.98% per year over the past 5 and 10 years. Revenue might be taking off in 2021. Estimate in 2021 is Revenue at $94,279. Over the past 9 months to September Quarter, revenue is $91.446.

Years	2018	2019	2020	2021	2022	2023
2018	$81,366	$82,870	$86,759
2019		$82,221	$85,294	$89,527
2020			$81,814	$88,334	$92,567
2021				$94,279	$97,743	$101,520
Actuals	$81,581	$82,059	$82,584	$91,446

When I was updating my spreadsheet, I noticed that this spreadsheet had total return every 5 years starting in 1995. I noticed that between 2005 and 2012 inclusive, the 5 year total return was low. Also, looking at long term total return, the shareholders who bought 20 years ago have the worse total return at 7.87% in US$. See the chart below. This first chart is in US$ and the second one in CDN$.

In US$ total returns from 1999 to 2000 with beginning dividend yield, P/S Ratio and P/E Ratio. So, for the 5 year return to December 31, 2005, the values 5 years earlier was a yield at 1.18%, the P/E was at 5.05 and the P/E was at 32.63. The 5 year Total Return to December 31, 2005 was 4.44%.

Date	Tot. Ret	Beg Yield	Beg P/S	Beg P/E
12/31/99	29.69%	2.06%	2.24	17.55
12/31/00	21.28%	1.50%	2.94	22.98
12/31/05	4.44%	1.18%	5.05	32.63
12/31/06	3.75%	1.17%	5.56	32.53
12/31/07	6.82%	1.50%	4.35	24.59
12/31/08	6.05%	1.83%	3.59	21.09
12/31/09	2.83%	1.73%	3.98	22.33
12/31/10	3.52%	2.12%	3.71	17.37
12/31/11	2.79%	2.20%	3.59	17.71
12/31/12	4.07%	2.43%	3.12	18.37
12/31/13	12.04%	3.00%	2.61	13.10
12/31/14	13.27%	3.00%	2.87	14.64
12/31/15	14.06%	3.41%	2.75	12.96
12/31/16	15.30%	3.43%	2.75	18.79
12/31/17	18.01%	3.42%	2.90	18.16
12/31/18	10.08%	2.83%	3.62	19.04
12/31/19	9.67%	2.64%	3.92	18.35
12/31/20	11.82%	2.87%	4.04	18.74
Current		2.57%	4.61	19.92

In CDN$ total returns from 1999 to 2000 with beginning dividend yield, P/S Ratio and P/E Ratio. The difference between the US$ and CDN$ returns is the exchange rate.

Date	Tot. Ret	Beg Yield	Beg P/S	Beg P/E
12/31/99	31.22%	2.06%	2.24	17.55
12/31/00	23.89%	1.50%	2.94	22.98
12/31/05	-0.97%	1.18%	5.05	32.63
12/31/06	-2.59%	1.17%	5.56	32.53
12/31/07	-2.78%	1.50%	4.35	24.59
12/31/08	4.70%	1.83%	3.59	21.09
12/31/09	0.07%	1.73%	3.98	22.33
12/31/10	0.45%	2.12%	3.71	17.37
12/31/11	0.07%	2.20%	3.59	17.71
12/31/12	4.45%	2.43%	3.12	18.37
01/11/13	8.67%	3.00%	2.61	13.10
12/31/14	15.35%	3.00%	2.87	14.64
12/31/15	21.52%	3.41%	2.75	12.96
12/31/16	21.71%	3.43%	2.75	18.79
12/31/17	23.84%	3.42%	2.90	18.16
12/31/18	15.88%	2.83%	3.62	19.04
12/31/19	12.39%	2.64%	3.92	18.35
12/31/20	10.35%	2.87%	4.04	18.74

The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 2.57%. The 5, 10 and historical dividend yields are also moderate at 2.76%, 2.91% and 2.29%. The dividends have been increasing at the rate of 6.17% per year over the past 5 years. This is below the 8% ranges and so is low. The last dividend increase was 2021 and it was for 5%.

The Dividend Payout Ratios (DPR) should be improving. The DPR for EPS for 2020 is 72% with 5 year coverage at 77%. Analysts expect it to go lower in the future at 51% next year and then 48% in 2022. The DPR for CFPS is 50% in 2020 with 5 year coverage at 51%. This is also a bit high. The DPR for Free Cash Flow is 52% with 5 year coverage also at 52%.

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.08 and is good. The Liquidity Ratio for 2020 is quite low at 1.21, but if you add in cash flow after dividends, it is better at 1.51. The Debt Ratio is good at 1.57. The Leverage and Debt/Equity Ratios are fine at 2.76 and 1.76.

The Total Return per year is shown below for years of 5 to 32 to the end of 2020 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2015	5	4.82%	10.34%	7.52%	2.82%
2010	10	9.41%	16.20%	12.72%	3.49%
2005	15	8.68%	9.96%	7.42%	2.55%
2000	20	8.87%	6.72%	4.80%	1.92%
1995	25	10.38%	10.58%	8.09%	2.49%
1990	30	11.61%	13.74%	10.49%	3.25%
1988	32	11.96%	15.33%	11.57%	3.76%

The Total Return per year is shown below for years of 5 to 32 to the end of 2020 in US$. 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.
2015	5	6.17%	11.82%	8.91%	2.91%
2010	10	6.55%	13.01%	9.77%	2.68%
2005	15	7.88%	9.30%	6.63%	2.23%
2000	20	9.74%	7.87%	5.64%	2.65%
1995	25	10.61%	10.96%	8.31%	3.07%
1990	30	11.19%	13.14%	10.07%	3.53%
1988	32	11.56%	14.70%	11.17%	3.53%

The 5 year low, median, and high median Price/Earnings per Share Ratios are 21.28, 24.17 and 26.35. The corresponding 10 year Ratios are 16.54, 18.32 and 20.47. The corresponding historical ratios are 16.55, 18.72 and 21.32. The current P/E Ratio is 19.92 based on a stock price of $165.12, EPS estimate for 2021 of $8.29. the current ratio is between the median and high ratios for the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $65.59. The 10 year low, median, and high median Price/Graham Price Ratios are 1.62, 1.81 and 2.03. The current P/GP Ratio is 2.44 based on a stock price of $165.12. The current ratio is above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The P/GP Ratios are quite high in absolute terms. A cheap price is a P/GP of 1.00 and a reasonable ratio would be 1.50.

I get a 10 year median Price/Book Value per Share Ratio of 4.08. The current P/B Ratio is 6.74 based on a Book Value of $64,473M, Book Value per Share of $24.49, and a stock price of $165.12. The current ratio is 65% above the 10 year median ratio. These ratios are also quite high, when a reasonable one is considered to be 1.50.

I get a 10 year median Price/Cash Flow per Share Ratio of 6.31. The current P/CF Ratio is 18.03 based on Cash Flow per Share estimate for 2021 of $9.16, Cash Flow of $24,114M and a stock price of $165.12. The current ratio is above the 10 year median ratio by 186%. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.30%. The current dividend yield is 2.57% based on dividends of $4.24 and a stock price of $165.12. The current dividend yield is 12% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get n 10 year median dividend yield of 2.91%. The current dividend yield is 2.57% based on dividends of $4.24 and a stock price of $165.12. The current dividend yield is 12% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Sales (Revenue) Ratio is 4.02. The current P/S Ratio is 4.61 based on a stock price of $165.12, Revenue estimate for 2021 of $94,279 and Revenue per Share of $35.81. 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.

Results of stock price testing is that the stock price is? The stock price seems to be in the reasonable category. The dividend testing puts it above and below the median, with the P/S Ratio testing, but the stock price above the median. The DPRs for this stock is on the high side. If you compare the current values of Dividend Yield, P/S Ratio and P/E Ratio to 5 year returns, it probably shows a low positive total return.

Is it a good company at a reasonable price? The stock price still seems reasonable, but a bit on the high side of the reasonable range. Also, the P/GP Ratio and P/B Ratio have high values. However, this company has been profitable for shareholders for a long time. It would be a good way for Canadians to diversify into the Health Care sector.

When I look at analysts’ recommendations, I find Strong Buy (8), Buy (2) and Hold (8). The consensus would be a Buy. The 12 month stock price consensus is $186.06. This implies a total return of 15.25% with 12.68% from capital gains and 2.57% from dividends based on a current stock price of $165.12.

Most analysts on Stock Chase think this stock is a buy. Rachel Warren And Brian Withers talk on Motley Fool about this stock. Rachel Warrant thinks it is good stock to buy and hold. The Executive Summary on Simply Wall Street gives this stock 4 stars out of 5 and list 2 risks. A writer on Simply Wall Street says JNJ is cheap and its intrinsic value is $251.94. A writer on Simply Wall Street says the combination of rising EPS and insider ownership appeals to him. Insider Monkey on Yahoo Finance says 88 hedge funds hold JNJ.

Johnson & Johnson is engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The Company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Its web site is here Johnson and Johnson.

The last stock I wrote about was about was Cenovus Energy Inc (TSX-CVE, NYSE-CVE) ... learn more. The next stock I will write about will be IBI Group Inc (TSX-IBG, OTC-IBIBF) ... learn more on Friday, November 05, 2021 around 5 pm. Tomorrow on my other blog I will write about Something to Buy November 2021.... learn more on Thursday, November 4, 2021 around 5 pm.

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