Friday, July 3, 2015

Parkland Fuel Corp. 2

Sound bite for Twitter and StockTwits is: Price seems expensive. If they could convert some of the growth in revenue to growth in earnings and cash flow, the price would be relatively reasonable. See my spreadsheet at pki.htm.

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. Roger Conrad currently writes in the Capitalist Times. He is usually a speaker at Money Shows. Here is a bit of blurb on Roger Conrad.

When I look at insider trading over the past year I find no insider selling and no insider buying. In 2014, outstanding share were increased by some 509,000 shares for stock options. This is 0.62% of the outstanding shares and is a little high. These shares have a book value of $6.4M and this number of shares was worth $11.1M at the end of 2014. I think that stock option issued over 0.50% is of outstanding share is high.

In insider ownership, the CEO owns shares worth some $2.5M, a director owns shares worth around $1.1M and the chairman owns shares worth around $5.9M. All this adds up to less than 1% of the outstanding shares, so are relatively small amounts of this company.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 12.55, 14.55 and 17.62. These ratios are higher than the corresponding 10 year values of 9.44, 12.64 and 15.89. However, the historical median P/E Ratio is 14.55, which is at the same level as the 5 year P/E median ratio. The current P/E Ratio is 31.35. This is based on a stock price of $25.39 and 2015 EPS estimate of 0.81. This stock price testing suggests that the stock is relatively expensive.

I get a Graham price of $11.57. The 10 year Price/Graham Price Ratios are 1.03, 1.59 and 1.29. The P/GP Ratio is 2.19 based on a stock price of $25.39. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share of 3.02. The current P/B Ratio is 3.46 based on a stock price of $25.39 and BVPS of $7.34. The current P/B Ratio is only some 14.5% higher than the 10 year value and would suggest that the stock price is relatively reasonable. However, I do think that P/B Ratio of 3.02 is a rather high one. It would seem that the P/B Ratio has always been rather high on this stock and the historical median P/B Ratio is 2.78.

I do not think that testing of the stock price using dividend yield would be of any value. The dividend yields on this stock have in the past been quite high with an historical high of 21.95 and an historical median of 9.03%. It was felt that old income trust stocks would end up with a dividend yield between 4 and 5% and this is where this stock is as its dividend yield is 4.25%.

The 10 year median Price/Cash Value per Share Ratio is 6.98. The current P/CF Ratio is 14.51 based on CFPS estimate for 2015 of $1.75 and a stock price of $25.39. The current P/CF Ratio is some 108% higher than the 10 year median P/CF Ratio. This stock price testing suggests that the stock is expensive. I think that the P/CF Ratio of 6.98 is a good one and perhaps a low ratio, but a ratio is 14.51 is a high one.

The 10 year median P/S Ratio is 0.24 and the current P/S Ratio is 0.27 based on 2015 estimate for Revenue per Share of $94.39 and a stock price of $24.39. The current P/S Ratio is some 13% above the 10 year median and so suggests that the stock price, although above the median is still relatively reasonable. Also a P/S Ratio of 0.27 is absolutely low. I think a P/S Ratio of 1.00 or lower is a low ratio.

The better showing on the P/S Ratio fits with the fact that this company has been able to grow revenue much better than it has been above to growth earnings or cash flow. What the company needs to do now is grow earnings and cash flow.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold and the consensus recommendation is a Hold. (See my blog for information on Analyst Ratings.)

The 12 month target stock price is $24.40. This implies total returns of $4.29% with 4.25% from dividends and 0.04% from capital gains. This stock has done well lately with the stock being up some 16.8% already this year after a 17.7% increase last year.

In a recent press release on Stockhouse this company announced an acquisition, an appointment to their board of directors and Revised 2015 guidance. Recently a couple of analysts raised their 12 month stock price for Parkland Fuel. In September 2014, Cameron Conway of Motley Fool says this company is the best energy stock that you have never heard of.

This is the second of two parts. The first part was posted on Thursday, July 02, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Parkland Fuel Corporation is a marketer and distributor of fuels, managing a nationwide network of sales channels for retail, commercial, wholesale and home heating fuel customers. Its web site is here Parkland Fuel.

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. Follow me on Twitter or StockTwits.

Thursday, July 2, 2015

Parkland Fuel Corp.

On my other blog I am today writing Dividends Covering a Stock's Cost continue...

Sound bite for Twitter and StockTwits is: Dividend Growth Energy Stock. See my spreadsheet at pki.htm.

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.

This is another old income trust company that converted to a corporation in 2010. At that time it decreased its dividend by some 19%. Since then it has been modestly increasing their dividends. Dividends are up by around 1.7% per year. The last increase was in 2015 and it was for 1.9%. Dividend increases were higher prior to 2010 and the 10 years dividend growth is at 6.3% per year. This is even after the dividend cut and the low growth in dividends since 2010.

This stock had quite high dividends in the past and has an historical high dividend yield at around 21%. It was felt that the old income trust stocks would end up, after dividends cuts and/or stock increases, with dividends in the 4 to5% range. This stock current has a dividend at 4.25%.

It would appear that this company is paying out too much in dividends at the current time. The 5 year Payout Ratios for EPS is 142%. The 5 year Payout Ratio for EPS is much better at 62%. However, the EPS Payout Ratio is mitigated by two things. The first is the rapid increase in shares which means that dividend payout increases as the year advances. The other is under DRIP where extra shares are given in place of cash. If you look strictly at cash paid in dividends then in 2014 the company paid out only 49% of their net income in cash dividends.

Shareholders have done quite well in this company over the past 5 and 10 years. The 5 and 10 year Total Return is at 24.07% and 27.24% per year. The portion attributed to capital gain is 17.18% and 14.36% per year. The portion attributed to dividends is 6.89% and 12.88% per year.

The future will not be the same for a couple of reason. This old income trusts shares have already increased due to the change to a corporation. Also, dividend yields are a lot lower. The current dividend yield is 4.25% compared to the past dividend yields for total return over the past 5 and 10 years of 6.89% and 12.88%.

Total return on dividend growth stocks tend to be equal to the growth in dividends plus the dividend yield. The current growth in dividends for 2015 was just 1.9%. The current dividend yield is 4.25%. This would suggest much lower total return over the next while. On the other hand this company expects to grow by acquisitions.

This company has increased their outstanding shares by 10.3% and 8.4% per year over the past 5 and 10 years. If I were a shareholder, I would be most interested in per share values. The growth in Revenue has been good. The growth in EPS is none to good and growth in Cash Flow is none to good.

The growth in Revenue is at 30% and 27% per year over the past 5 and 10 years. The growth in Revenue per Share is at 17.9% and 17.2% per year over the past 5 and 10 years. Analysts expect little growth in Revenue in 2015. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the first quarter, Revenue is down by 8.4%.

EPS is down by 7.4% and up by 20% per year over the past 5 and 10 years. 2014 was not a good year for this company in terms of earnings. Analysts do expect good growth in EPS for 2014. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the first quarter, EPS is down by 9.1%. So EPS is not yet going in the right direction.

Cash Flow is up by 8.1% and 15.8% per year over the past 5 and 10 years. However, CFPS is down by 25 and up by 6.8% per year over these periods. Analysts expect a decline in Cash Flow for 2015. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the first quarter, Cash Flow is up by 59%. Cash flow is going in the right direction.

Return on Equity has been over 10% for each of the past 10 years expect for 2014 where the ROE was just 8.8%. The 5 year median ROE is 15.7%. The ROE from comprehensive income is a bit better for 2014 at 9.1%. The 5 year median ROE is also 15.7%. 2014 was not a good year for earnings for this company.

The debt ratios are fine except that the ones for Leverage and Debt/Equity Ratios are a bit high. The Liquidity Ratio is 1.92. The Debt Ratio is 1.59. I like any ratio of 1.50 and higher. Leverage and Debt/Equity Ratios for 2014 was 2.69 and 1.69. These ratios hit a peak in 2010 and have been falling ever since.

This is the first of two parts. The second part will be posted on Friday, July 3, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Parkland Fuel Corporation is a marketer and distributor of fuels, managing a nationwide network of sales channels for retail, commercial, wholesale and home heating fuel customers. Its web site is here Parkland Fuel.

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. Follow me on Twitter or StockTwits.

Tuesday, June 30, 2015

Algonquin Power & Utilities Corp

I will not be posting tomorrow as it is our July 1 holiday. My post on my other blog called Investing, Economics Mostly will occur on Thursday.

Sound bite for Twitter and StockTwits is: Stock price is relative cheap to reasonable. However, I am not keen on this stock. I do not like the change to paying dividends in US$. They have revenue growth, but not EPS growth. On the other hand there is insider buying. See my spreadsheet at aqn.htm.

I do not own this stock of Algonquin Power & Utilities Corp (TSX-AQN, OTC-AQUNF). This is a dividend paying utility stocks. I got it off a list of dividend paying utility stocks. Also, I own Emera Inc. and this company owns shares in Algonquin Power.

This company used to be an income trust. When it became a corporation in 2009, it reduced its dividend by 73.9%. They then started to increase their dividends again and dividends were up by 41.7% by 2014. In 2014 they switched their dividends to US$. Their most recent dividend increase, in US$, is in 2015 and is for 10.1%. Since earnings are in CDN$ and dividends are in US$, I have looked at Basic and Diluted Earnings and cash paid in Dividends.

They are currently covering their dividends paid in cash. The payout ratio is 84.7%. Two things should be noted. They are issuing shares under a DRIP plan and since their annual statements terminology is "Cash" dividends, I am assuming this excludes dividends owing on DRIP plan shares. Also, they are increasing their shares outstanding each year, so naturally they would be paying dividends on more shares at the end of the year than at the beginning of the year.

As far a dividend increases go, the dividends are down by 9.1% over the past 10 years. However, dividends are up by 8.2% over the past 5 years. They are again a dividend growth company. Of course, there are problems with dividends paid in US$. First it is harder to pin point growth as it depends on the currency exchange rate. Another problem is that each dividend payment will vary with the variance in the currency exchange rate.

Outstanding shares have grown at 20.7% and 13.1% per year over the past 5 and 10 years. As a shareholder, I would be more interested in per share values and growth. Revenue growth is moderate to good. There is no growth in EPS, but there is in Net Income. Cash Flow has grown but CFPS growth is low to moderate.

Revenue has grown at 38.2% and 19.4% per year over the past 5 and 10 years. Revenue per Share has grown at 14.5% and 5.6% per year over the past 5 and 10 years. The real problem is EPS and EPS is down by 4.5% and 0.6% per year over the past 5 and 10 years. CFPS is up by 7.2% and 0.5% per year over the past 5 and 10 years.

Leverage and Debt/Equity Ratios are high and the Liquidity Ratio is low. The company relies on cash flow to cover current liabilities. The Liquidity Ratio is 0.87 in 2014 and if you add in cash flow less dividend it is 1.17. This is still a low ratio. The Leverage and Debt/Equity Ratios are 3.10 and 1.72 in 2014. The Debt Ratio is fine at 1.81.

The 5 year low, median and high median Price/Earnings per Share Ratios are 23.75, 28.18 and 32.60. The corresponding 10 years values are similar at 23.88, 27.63 and 31.44. I think that these are rather high P/E Ratios for a utility. The current P/E Ratio is 21.68 based on a stock price of $9.54 and 2015 EPS of $0.44. This stock price test suggests that the stock is relatively cheap.

I get a Graham Price of $7.74. The 10 year low, median and high median Price/Graham Price Ratios are 1.32, 1.45 and 1.59. I also find these to be high ratios for a utility stock. The current P/GP Ratio is 1.23 based on a stock price of $9.54. This stock price test suggests that the stock is relatively cheap.

The 10 year Price/Book Value per Share is 1.51 and the current P/B Ratio at 1.57 is some 4.3% higher. The current P/B Ratio is based on a stock price of $9.54 and BVPS of $6.05. This stock price test suggests that the stock is relatively reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $10.80. This implies a total return of 18.20% with 13.21% from capital gains and 4.99% from dividends.

This press release on PR Newswire talks about the company coming to terms with CRA about the unit exchange that occurred in 2009. This update on Dakota Financial News talks about recent insider buying.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin Power.

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. Follow me on Twitter or StockTwits.

Monday, June 29, 2015

CI Financial Corp 2

On my other blog I am today writing about Assets under Management continue...

Sound bite for Twitter and StockTwits is: Stock price probably cheap. I worry a bit about what the Graham Price Test and P/B Ratio tests are saying, but the dividend yield tests are based more on facts and in my mind probably the best testing to do. See my spreadsheet at cix.htm.

I do not own this stock of CI Financial Corp (TSX-CIX, OTC-CIFAF). I started to follow this stock originally because it was a Mutual Fund company. People talked about it being easier to make money from buying a Mutual Fund company than buying Mutual Funds. In 2009, it lost its listing on my dividend lists because of a dividend cut. In June 2014, MPL communications called this stock a Buy and advised that they were adding it to their list of Key Stock for the Investment reporter.

When I look at insider trading, I find minimal insider buying and insider selling of $12.9M and net insider selling of $12.8M. Insider selling is 0.13% of the market cap of the stock and is relatively high. However, it is less than options granted in 2014 which runs to $0.18% of outstanding shares. In 2014 outstanding shares were increased by around 493,000 or $0.18% of the outstanding shares.

There is insider ownership with the CEO owning shares worth around $30M, one director owning shares worth around $39M and another director owning shares worth around $147.2M. However, this all adds up to just less than 2% of the outstanding shares. The Chairman owns the most with shares worth around $303.5M and around 3.3% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share ratios are 16.57, 18.32 and 19.91. The 10 year corresponding P/E Ratios are close at 15.84, 17.55 and 19.90. The current P/E Ratio is 15.73 based on a stock price of $33.97 and 2015 EPS estimate of $2.16. This stock price test suggests that the stock price is relatively cheap.

I get a Graham Price of $18.19. The 10 year low, median and high median Price/Graham Price Ratio is 1.49, 1.69 and 1.95. The current P/GP Ratio is 1.87 based on a stock price of $33.97. This stock price test suggests that the stock price is relatively reasonable. However, the ratio is to the top end of reasonableness range and these P/GP Ratios are all rather high.

I get a 10 year Price/Book Value per Share ratio of 3.80. The current P/B Ratio is 4.99 based on a stock price of $33.97 and BVPS of $6.81. The current P/B Ratio is some 31% higher than the 10 year ratio. This stock price testing suggests that the stock is relatively expensive. Also a P/B Ratio of 4.99 is rather high.

The 5 year median dividend yield is 3.72%. The current dividend yield at 3.89% based on a stock price of $33.97 is some 4.4% higher. This stock price test suggests that the stock price is relatively reasonable. It is also good that the current dividend yield is above the 5 year median value.

In the past the dividend yield has gotten very high, especially when this stock had an unsustainably high dividend. There is a huge spread between the historical high and low at 17.62% and 0.20%. However the historical median is a viable test, with the historical median dividend yield at 2.93% and some 32.6% below the current dividend yield of $3.89% based on a stock price of $33.97. This final test suggests that the stock price is below the median and is relatively cheap.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month consensus stock price is $39.90. This implies a total return of 21.34% with 17.465 from capital gains and 3.89% from dividends.

A recent press release on Stockhouse talks about this company planning to buy back its shares. Another press release onStockhouse talks about current good growth in Assets under Management. This recent report from Dakota Financial News talks about seven brokerages giving this stock a Buy rating.

This is the second of two parts. The first part was posted on Friday, June 26, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

CI Financial Corp. is a diversified wealth management firm and one of Canada's largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. Its web site is here CI Financial.

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. Follow me on Twitter or StockTwits.

Friday, June 26, 2015

CI Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Company. This company has been doing well lately and has done a good job of increasing its dividends. They have set their dividends to values that probably can maintain. See my spreadsheet at cix.htm.

I do not own this stock of CI Financial Corp (TSX-CIX, OTC-CIFAF). I started to follow this stock originally because it was a Mutual Fund company. People talked about it being easier to make money from buying a Mutual Fund company than buying Mutual Funds. In 2009, it lost its listing on my dividend lists because of a dividend cut. In June 2014, MPL communications called this stock a Buy and advised that they were adding it to their list of Key Stock for the Investment reporter.

When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable, so dividends where decreased in 2010. They changed back to a corporation in 2009 and since that time, they have been increasing their dividends since 2011. This company has been publicly traded on the Toronto Stock Exchange since June 1994.

The company has a very mixed record when it comes to dividend increases. Some years dividends were not increased and some years dividends were decreased. They would seem at present to be a dividend growth company. The dividends have increased by 12% and 21% per year over the past 4 and 10 years. Over the past 5 years, dividends have decreased by 16% per year because of the 74% decrease in dividends in 2010.

If you had held this stock for 5, 10, 15 or 20 years to the end of 2014, 29%, 95%, 374% and 1054% of your original stock cost would have been covered by dividends. Because dividends were quite high, especially from 2007 to 2009, what has happened in the past probably will not happen in the future.

However, current the dividend rate is good and so are the dividend increases. The current dividend yield is 3.89% and the 5 year median dividend yield is 3.72%. The most recent dividend increase was in 2015 and was for 4.8%. However, the total dividends to be paid in 2015 will be 9.75% higher than the total dividends paid in 2014. This is because dividends have been raised more than once during a calendar year.

If you had held this stock for 5, 10, 15 or 20 years to the end of 2014, you would be earning 7.1%, 8.5%, 31.6% and 88.4% on your original stock purchase price. Here again what happened in the past may not happen in the future, but the dividends are good on this stock and so are the current dividend increases.

The Dividend Payout Ratios are fine. The 2014 DPR for EPS is 63% and the DPR for CFPS is 49.1. The 5 year median values are 67.2% and 49.1% for EPS and CFPS, respectively. Both these ratios are expected to be around 60% in 2015.

The outstanding shares have decreased slightly (less than 1% per year) over the past 5 and 10 years. Assets under Management (AUM) growth have been moderate to good. Revenue and earnings growth has been good. Cash Flow growth has been moderate. You will notice that the actual Revenue growth is less than the growth for Revenue per Share. This is because of the slight decline in outstanding shares. In this case the Revenue growth is more important for shareholders than the Revenue per Share growth.

AUM growth over the past 5 and 10 has been at 9.9% and 7.6% per year. Analysts expect similar growth over the next two years. Assets under Administration have growth at 9.1% and 6.7% per year over the past 5 and 10 years.

Revenue has grown at 9% and 8.3% per year over the past 5 and 10 years. Revenue per Share has grown at 9.8% and 8.8% per year over the past 5 and 10 years. Analysts seem to expect Revenue growth of 10.7% for 2015. If you compare the 12 month growth in Revenue to the end of 2014 to the 12 month growth in Revenue to the end of the first quarter, the growth is only 3%.

Net Income has grown at 16.5% and 9% per year over the past 5 and 10 years. EPS has grown at 12.9% and 8.5% per year over the past 5 and 10 years. Net Income is expected to growth at 15% for 2015. If you compare the 12 month growth in Net Income to the end of 2014 to the 12 month growth in Net Income to the end of the first quarter, the growth is only 4.4%.

Cash Flow has grown at 6.3% and 6.3% per year over the past 5 and 10 years. Cash Flow per share has grown at 7% and 6.8% per year over the past 5 and 10 years. Analysts expect Cash Flow to decline in 2015. However, if you compare the 12 month growth in Cash Flow to the end of 2014 to the 12 month growth in Cash Flow to the end of the first quarter, there is some growth at 1.5%.

Return on Equity has always been good and it has been above 10% each year over the past 10 years. The ROE for 2014 is 27.5% and the 5 year median is 23.3%. The ROE on comprehensive income is very close at 27.6% with a 5 year median of 23.1%. This suggests that the earnings are of good quality.

The Liquidity Ratio for 2014 was 0.90. This means that the current assets cannot cover the current liabilities. If you had in cash flow after dividends, the ratio is 1.82%. This means that the company depends on cash flow to fund current liabilities. The Debt Ratio has always been quite good and the current one for 2014 is 2.72. The 5 year median 2.29.

Leverage and Debt/Equity Ratios are good ones, especially considering this is a financial service company. The ratios for 2014 are 1.58 and 0.58. The 5 year median values are also 1.58 and 0.58.

This is the first of two parts. The second part will be posted on Monday, June 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

CI Financial Corp. is a diversified wealth management firm and one of Canada's largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. Its web site is here CI Financial.

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. Follow me on Twitter or StockTwits.

Thursday, June 25, 2015

Canexus Corporation

Sound bite for Twitter and StockTwits is: Cheap, but not doing well. I do not like to debt ratios. When debt ratios are not good, a company can be vulnerable. They have an updated business plan and their credits have bought into it. This is a good sign. See my spreadsheet at cus.htm.

I do not own this stock of Canexus Corporation (TSX-CUS, OTC- CXUSF). I started to follow this stock in 2012 after reading that it was part of Sentry Small/Mid Cap Income Fund. It is a small cap that pays good dividends. See stocks in this fund on G&M. Sentry home site is here. This stock was also mentioned by Michael Decter in May of 2012. Michael Decter is president and CEO of LDIC Inc.

This stock started out as an income trust with a very high yield of around 11.3%. They lowered the dividend in 2008 and then kept it flat until 2014 when dividend was decreased by some 93%. The current dividend yield is just 2.61%. They really had no choice about decreasing the dividends as they were not covering the dividend by their earnings. In 2014 EPS was negative and they could not even cover the dividend with cash flow.

In 2015 analysts expect EPS is be again negative, but with positive earnings in 2016. In 2015, analysts do expect dividends to be covered by cash flow. In fact some analysts expect the EPS in 2016 to cover earnings and also expect that the company will raise the dividends in 2016.

With current stock price at $1.53, the total return over the past 5 and 10 years has been a loss of 15.73% and 3.49% per year. The portion attributable to capital loss is at 26.37% and 16.00% per year. The portion attributable to dividends is at 10.64% and 12.52% per year.

Of course you try to make money when you invest. However, another thing that you should also try to do is limit your losses. Dividends help to do this. If you invested in the company at the start at $10.00 you would have recovered some 58% of your purchase price in dividends.

Outstanding shares have grown at 40% and 20% per year over the past 5 and 10 years. Revenues have grown at a moderate rate and cash flows have grown at a good rate. However, there is a decline Revenue per Share and CFPS has some growth. There has been no growth in EPS as they are now negative.

Revenue is up by 4.5% and 4.1% per year over the past 5 and 9 years. Revenue per Share is down by 25.6% and 14.4% per year over the past 5 and 9 years. Analysts do expect very modest growth in Revenues for 2015 of around 1.6%. If you compare the Revenue for the 12 months to the end of 2014 and for the 12 months to the end of the first quarter, Revenue is up by 1.7%.

Cash Flow is up by 37% and 28.5% per year over the past 5 and 9 years. CFPS is down by 2.4% and up by 5.7% per year over the past 5 and 9 years. Analysts do expect growth in Cash Flow for 2015. However, if you compare the 12 months to the end of 2014 and for the 12 months to the end of the first quarter, Cash Flow is down by 35%.

Another thing is that the debt ratios are no good. The Liquidity Ratio is 0.84. This means that the current assets cannot cover the current liabilities. If you subtract current long term debt from current debt, the Ratio becomes 1.35. A good Liquidity Ratios start at 1.50. The Debt Ratio is low at 1.20. Good Debt Ratios start at 1.50. Leverage and Debt/Equity Ratios are high at 6.07 and 5.07. Good Leverage and Debt/Equity Ratios are under 2.00 and 1.00.

There is little to do stock price testing with. With negative EPS expected in 2015, you cannot do price testing with EPS. Using Book Value for testing says that the stock is way overpriced. Dividend yields are a fraction of what they used to be and so imply the stock is way overprice.

I get a Graham Price of $1.11. The 10 year Price/Graham Price Ratios are 1.30, 1.52 and 1.83. The current P/GP Ratio is 1.38. This testing would suggest that the stock price is relatively reasonably. I wonder how good this testing is as it is rather hard to really get a good fix on the Graham Price.

The 10 year Price/Cash Flow per Share Ratio is 9.13. If I use the 12 month to the end of the first quarter CFPS, I get a P/CF Ratio of 5.80, a value some 36.5% lower than the 10 year P/CF Ratio. This stock price testing suggests that the stock price is relatively cheap.

The 10 year P/S Ratio is 0.66 and the current P/S Ratio of 0.49 is some 25.6% lower. The current P/S Ratio is based on 2015 Revenues of $580.00. This stock price testing suggests that the stock price is relatively cheap. On an absolute basis, a P/S Ratio of less than 1.00 suggests the stock is priced cheaply.

When I look at analysts' recommendations I find a Buy recommendation and lots of Hold recommendations. The consensus recommendations would be a Hold. The 12 month stock price consensus is $1.94. This implies a total return of 29.41% with 2.61% from dividends and 26.80% from capital gains.

This site of Dakota Financial News talks about recent analysts ratings of which most are Holds. Lou Schizas' technical analysis of Canexus in the Globe and Mail shows this stock in deep decline. In March 2015 Canexus announced a Business Improvement Plan.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Canexus Corporation is engaged in the production of sodium chlorate and chlor-alkali products, and operates a hydrocarbon terminal. They have four plants in Canada and two at one site in Brazil. Its web site is here Canexus.

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. Follow me on Twitter or StockTwits.

Wednesday, June 24, 2015

Power Corp of Canada 2

On my other blog I am today writing Dividend Growth Calculations continue...

Sound bite for Twitter and StockTwits is: Stock is relatively cheap. It is best to buy good companies when they are cheap. See my spreadsheet at pow.htm.

I do not own this stock of Power Corp of Canada (TSX-POW, OTC-PWCDF). I started following this stock because it was on the Dividend Achievers, the Dividend Aristocrats lists and also on Mike Higgs' list. I would not buy it because I have shares in Power Financial, which this company controls.

The outstanding shares were increased by 1.238M shares in 2014 for stock options. The book value for these shares was $40M. This number of shares was worth $39.3M at the end of 2014. This number of shares is 0.16% of the outstanding shares. For most companies, stock options issued in one year is 0.50% or less of outstanding shares. For insider trading, there was $23.9M of insider selling and $23.9M of net insider selling. There was a minimal amount of insider buying. The insider selling is 0.16% of the market cap. This is rather on the high side.

The Desmarais Family Residuary Trust owns some 48.3M shares of this company and 10.56% of the outstanding shares. This company has also issued Participating Preferred Shares Participating which the Desmarais Family Residuary Trust also own 99.5% of. These Participating Preferred Shares have 10 votes each whereas the other shares are subordinate shares with one vote each. This gives the Desmarais Family effective control of this company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.18, 13.79 and 15.28. The 10 year corresponding P/E Ratios are similar at 10.96, 13.79 and 15.16. The current P/E Ratio is 10.50 based on a stock price of $32.43 and 2015 EPS estimate of $3.09. This stock price test suggests that the stock price is relatively cheap.

I get a Graham Price of $40.72. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 0.94 and 1.09. The current P/GP Ratio is 0.80 based on a stock price of $32.43. This stock price test suggests that the stock price is relatively cheap. On an absolute basis a P/GP Ratio of less than 1.00 says a stock is cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.65. The current P/B Ratio is 1.36, a value some 17% lower. The P/B Ratio of 1.36 is based on a stock price of $32.43 and BVPS of $23.85. This stock price test suggests that the stock price is relatively reasonable. For the stock to be considered cheap by this test, the current P/E Ratio would have to be 20% lower than the 10 year median ratio.

The 5 year median dividend yield is 4.14% and the current dividend yield at 3.84% is some 7.3% lower. What you want is to have the current dividend yield higher than the ones of the past, but it is only 7.3% higher, so not that much higher. This stock price test suggests that the stock price is relatively reasonable.

The historical average and historical median dividend yields are lower than the current dividend yields. The historical average and historical median dividend yields are 3.53% and 2.25%. These are 8.9% and 70% lower than the current dividend yield. The historical median dividend yield is probably the right measure. And, by this measure this stock price test suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $37.00. This implies a total return of 17.93% with 17.09% from capital gains and 3.84% from dividends.

Joseph Solitro in March 2015 in a Motley Fool report asks if you should now buy Power Corp. (Note that sometimes you have to exit and go back into a Motley Fool report to get the full report.) Solitro thinks that Power Corp is a long term investment opportunity. There is an interesting December 2014 article in the Globe & Mail talking about should you buy a parent company (like Power Corp) or one of its subsidiaries. This Business Financial Post report talks about the Desmarais Family selling Power Corp stock for estate purposes.

This is the second of two parts. The first part was posted on Tuesday, June 23, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. Some of it subsidiary companies include Power Financial, the Pargesa group and Gesca and Square Victoria Digital Properties. Its web site is here Power Corp.

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. Follow me on Twitter or StockTwits.

Tuesday, June 23, 2015

Power Corp of Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Financial Service stock. It is a good sign that this company has reinstated dividend increases. With the earnings increasing it would seem that they can now afford dividend increases. See my spreadsheet at pow.htm.

I do not own this stock of Power Corp of Canada (TSX-POW, OTC-PWCDF). I started following this stock because it was on the Dividend Achievers, the Dividend Aristocrats lists and also on Mike Higgs' list. I would not buy it because I have shares in Power Financial, which this company controls.

As with other stocks in financial services, they stopped increasing their dividends in 2008. They have a good record of dividend increases since 1994 to 2008. The growth in dividends over the past 5 and 10 years is at 1.1% and 7.7% per year. For the 10 years prior to 2008, dividend growth was at 17.6% per year.

The current dividend yield is good at 3.8%. The 5 year median dividend yield is good at 4.14%. Prior to 2008, when dividends where being increased the dividend yields were lower. The 10 year median dividend yield to 2008 was at 2.1%.

The last dividend increase was 7.3% and the increase occurred in 2015. If they continue with this sort of increases, in 10 years' and 15 years' time your dividend yield could be 7.8% and 11% on today's stock price of $32.43.

If you had bought this stock 5, 10, 15 or 20 years ago at a median price, the dividends paid to date would cover 21%, 35%, 95% and 289% of the cost of your stock at the time of purchase. If you had bought this stock 5, 10, 15 or 20 years ago at a median price your dividend yield would be 4.4%, 4%, 8.7% and 24% on your original cost of your stock.

This stock's price also peaked around 2008 and then fell some 62% in 2009. It is still some 18% off the peak in 2008. The 5 and 10 year total return is 7.21% and 3.64% per year with 3.23% and 0.24% per year attributable to capital gains and 3.99% and 3.40% per year attributable to dividends. Not a great showing, but a lot of stocks are still having problems.

The outstanding shares increased at a very low rate (under 1% per year) over the past 5 and 10 years. Shares have increased due to stock options. Revenues are up moderately. Earnings growth is moderate to good. Cash Flow growth is low to moderate.

Revenue is up by 5.2% and 5.7% per year over the past 5 and 10 years. Revenue per Share is up by 5% and 5.4% per year over the past 5 and 10 years. Analysts expect good growth in revenue in 2015. They expect revenue to grow by almost 20% this year. If you look at the 12 months to the end of 2014 and the 12 months to the end of the first quarter, Revenue has grown at 6.7%.

EPS is up by 14.5% and 3.1% per year over the past 5 and 10 years. Analysts expect good growth in EPS at around 12% this year. If you look at the 12 months to the end of 2014 and the 12 months to the end of the first quarter, EPS has grown at 8.7%.

Cash Flow has grown at 1.8% and 5.5% per year over the past 5 and 10 years. CFPS has grown at 1.6% and 5.1% per year over the past 5 and 10 years. There are no Analysts estimates for cash flow for 2015.

The Return on Equity in 2014 was 11.6% and the 5 year median ROE is 11.6%. The ROE on comprehensive income is somewhat better at 13.7% with a 5 year median ROE at 13.6%. When the ROE on comprehensive income is similar to that of net income it suggests that earnings are of a good quality.

The Liquidity Ratio has generally been good for this stock and the one I calculate for 2015 is 1.55. This is not considered to be an important ratio for financial stocks. The Debt Ratio is good for a financial stock at 1.09. The Leverage and Debt/Equity Ratios at 31.53 and 28.90 are even rather high for a financial stock.

This is the first of two parts. The second part will be posted on Wednesday, June 24, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. Some of it subsidiary companies include Power Financial, the Pargesa group and Gesca and Square Victoria Digital Properties. Its web site is here Power Corp.

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. Follow me on Twitter or StockTwits.

Monday, June 22, 2015

IGM Financial Inc. 2

On my other blog I am today writing investing and Mutual Funds continue...

Sound bite for Twitter and StockTwits is: Stock price is probably relatively cheap. This stock could become a good dividend growth stock again. The time to buy good stocks is when the price is low. See my spreadsheet at igm.htm.

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

When I look at insider trading, I see $3.1M of insider selling and no insider buying. This insider selling is some 0.03% of the stock's market cap and so relatively small. In 2014 some 747,000 shares were issued for stock options. This has a book value of $35.1M and the value of this number of shares at the end of 2014 was $30.9M. This number of shares is 0.30% of outstanding shares and is relatively fine.

As far as insider ownership, the Desmarais Family owns some 62.5% of the company's outstanding stock. The company is part of Power Corp (TSX-POW) and Power Financial (TSX-PWF).

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.30, 14.80 and 16.30. The 10 year corresponding ratios are close at 13.47, 15.72 and 17.53. The current P/E Ratio is 12.34 based on a stock price $41.33 and 2015 estimate EPS of $3.35. This stock price test suggests that the stock price is relatively cheap.

This EPS estimate is some 12.4% higher than the 2014 EPS. If you look at the EPS for the 12 months to the end of 3014 and the 12 months to the end of the first quarter, EPS is up just 1%. For 2014 the EPS was $3.36, but EPS for 2014 was lower at $2.98. The EPS estimate for 2013 was $3.07 and came in at $3.02. This was a better estimate but still low. If you use the last 12 month EPS, P/E Ratio is 13.73. By this measure the stock price is still low, but in the reasonableness range.

I get a Graham Price of $37.48. The 10 year low, median and high median Price/Graham Price Ratios are 1.17, 1.33 and 1.60. The current P/GP Ratio is 1.10 based on a stock price of $41.33. This stock price testing suggests that the stock price is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 2.68. The current P/B Ratio is 2.22, a value some 17.4% lower. The current P/B Ratio is based on BVPS of $18.64 and a stock price of $41.33. This stock price testing suggests that the stock price is relatively reasonable. For the stock to be considered cheap, the current P/B Ratio would have to be 20% lower than the 10 year ratio. It is getting close.

The current Dividend Yield is 5.44% based on dividends at $2.25 and a stock price of $41.33. The 5 year median, historical average and historical median Dividend Yields are 4.55%, 3.95% and 3.33%. The current Dividend Yield is some 19.6%, 387.8% and 63.5% lower than these yields. All this suggests that the current stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock price is $49.00. This price implies a total return of 24% with 5.44% from dividends and 18.56% from capital gains. It is rather a high return considering the recommendations.

The Stock House site is announcing growth in Assets under Management for IGM Financial for May 2015. Nelson Smith of the Motley Fool thinks that people will turn away from Mutual Funds. I must admit, I wonder about this. Recent changes to analysts' rating is discussed at Sleek Money.

This is the second of two parts. The first part was posted on Friday, June 19, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

This is a mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial.

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. Follow me on Twitter or StockTwits.

Friday, June 19, 2015

IGM Financial Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Financial Service Stock. It has not raised their dividends much over the last little while, but I would expect that dividend increases will be in the future for this company. See my spreadsheet at igm.htm.

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

This is a dividend growth stock, but it has not always raised its dividends every year. A lot of financial companies have had problems with the last recession. Recently dividends were not raised in 2010, 2013 and 2014. The last dividend increase was in 2015 for 4.65%. The dividend growth over the past 5 and 10 years is at 1% and 6.5% per year. The dividend increases were much higher in the past. For the 10 years to 2008, the dividend growth was 15.1% per year.

On the other side of the coin, the Dividend Payout Ratios for EPS have been much higher recently. The 5 year median DPRs for ESP to 2014 was 71.9%, but the 5 year median DPRs for EPS prior to 2008 was 52.9%. The DPRs for EPS hit a peak in 2009 at 96.7%. The DPRs for EPS for 2014 was 72.1% and is expected to be around 67% for 2015. As earnings grow they will be able to increase dividends.

Currently the dividend is quite good, but the growth is low. The dividend yield used to be lower with a higher growth. The current dividend yield is 5.4% with 5 and 10 years growth at 1% and 6.5%. The 5 year median dividend yield is 4.6%. The historical median dividend is 3.3%. I would expect in the future that dividend yield will go lower and the dividend growth will go higher.

The total return over the past 5 and 10 years was at 4.06% and 3.69% per year. The portion of this total return attributable to dividends was 5.06% and 4.60% per year. The portion of this total return attributable to capital loss was at 1.005 and 0.90% per year. This stock used to do much better at total returns, and I expect it to do better in the future, but it has been a long slow recovery for financial stocks.

The outstanding shares have not changed much over the past 5 and 10 years. The change in outstanding shares is less than 1% per year. The shares increased due to Stock Options and have decreased due to Buy Backs. The growth in Assets under Management (AUM), Revenue and Cash Flow has been moderate. The Growth in EPS has been moderate to low.

AUM has grown at 3.3% and 5.1% per year over the past 5 and 10 years. Revenue has grown at 4.8% and 3.3% per year over the past 5 and 10 years. Revenue per Share has grown at 5.7% and 3.8% per year over the past 5 and 10 years. Analysts expect moderate growth at 6.2% for 2015. If you compare the 12 months to the end of 2014 and the 12 months to the end of the first quarter, Revenue has grown at 1.57% and AUM has grown at 7.8%.

EPS has grown at 7.1% and 2.9% per year over the past 5 and 10 years. Analysts expect good growth in EPS for 2015 at 12.4%. If you compare the 12 months to the end of 2014 and the 12 months to the end of the first quarter, EPS has grown at only 1 %. With such a low growth in the first quarter, you have to wonder about the 2015 estimates.

The Cash Flow has grown at 4.5% and 3.1% per year over the past 5 and 10 years. CFPS has grown at 5.4% and 3.6% per year over the past 5 and 10 years. Analysts expect growth in CFPS at around 25% in 2015. If you compare the 12 months to the end of 2014 and the 12 months to the end of the first quarter, Cash Flow has grown at 0.3%. Here again, with such low growth in the first quarter, you have to wonder about the 2015 estimates.

Return on Equity has always been good, that is above 10%. The ROE for 2014 is 16.1% and it has a 5 year median of 16.7%. The ROE on comprehensive income is slightly lower for 2014 is 15.7% and it 5 year median is 16.8%. I see no problems here.

Liquidity Ratios are not very important in financial companies. The Debt Ratio has been good with the one for 2014 at 1.51 and the 5 year median at 1.59. The Leverage and Debt/Equity Ratios are fine at 2.98 and 1.98. I see no problem with debt ratios.

This is the first of two parts. The second part will be posted on Monday, June 22, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This is a mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM Financial.

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. Follow me on Twitter or StockTwits.