Thursday, August 28, 2014

Alimentation Couche-Tard Inc.

I do not own this stock of Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF), but I used to. In 2004 I bought this stock as it has a good reputation and my spreadsheet showed I should do well with it. I bought more of this stock in 2006 as it had started to pay a dividend. I sold the stock in my trading account in 2007 as I was raising mortgage money and this stock had gone down so was cheap, tax wise, to sell. In 2013, I sold the stock in my Pension account as it had the lowest dividend yield and I had to raise money in this account because of yearly withdrawals.

This stock started to pay a dividend 2006. The dividend yield is very low, with current dividend at 0.49% and the 5 year median dividend at 0.80%. The dividend growth is quite good at 21% and 18.6% per year over the past 5 and 7 years.

Because of the low dividend yield it would take quite a while to reach a decent yield on an original investment. With the current dividend yield and dividends increasing at 20% per year, after 10 years the yield on an investment today would only be 3%. After 20 years, the yield on an investment today would be paying a yield of 18.7%. I generally do not buy stock which has a dividend yield below 1%.

The dividend payout ratios are very low. The 5 year median DPR for EPS is at 9.6% and for CFPS is at 5.1%. The DPR for the financial year ending in April 2014 was 7.7% for EPS and 4.7% for CFPS.

Over all this company produced a total return of 15.28% per year for me. The portion of this total return attributable to dividends was 0.52% per year and the portion attributable to capital gain was 14.76% per year. Over the past 5 and 10 years the total return for shareholders has been 37.24% and 19.20% per year. The portion of this total return attributable to dividends was 0.79% and .48% per year over these periods. The portion of this total return attributable to capital gain was 36.45% and 18.72% per year over these periods.

The number of outstanding shares has not changed over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and they have decreased due to Buy Backs. There have also been some conversions of Class A shares into Class B shares. There has been great growth in Revenue, Earnings and Cash Flow. Since 2006, this company has been reporting in US$ and growth has been better in US$ terms than in CDN$ terms.

Revenue per Share is up by 17.3% and 22.3% per year over the past 5 and 10 years in CDN$ terms. Revenue per Share is up by 19.1% and 24.9% per year over the past 5 and 10 years in US$ terms.

Earnings are up by 25.3% and 27.3% per year over the past 5 and 10 years in CDN$ terms. Cash Flow per Share is up by 20.8% and 25.6% per year over the past 5 and 10 years in CDN$ terms.

The Return on Equity has been over 10% each year over the past 10 years. The ROE for the financial year ending in April 2014 was at 20.4% and the 5 year median ROE is at 19.1%. The ROE on comprehensive income for the financial year ending in April 214 was 20.4% and the 5 year median ROE is 21.2%.

The debt ratios are fine. The current Liquidity Ratio is 1.21. However, if you add in cash flow after dividends it is 1.72. The current Debt Ratio is 1.61. The current Leverage and Debt/Equity Ratios are 2.65 and 1.65.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock, Low Yield. Currently I have no plans to buy any of this stock, but I will continue to track it as it is a Dividend Growth Stock and I might be interested in it in the future. See my spreadsheet at atd.htm.

This is the first of two parts. The second part will be posted on Friday, August 29, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Couche-Tard is the largest convenience store operator in North America with over 4,600 company-operated stores. In Europe, with over 1,600 company-operated sites, Couche-Tard is a leader in c-store and road transportation fuel in Scandinavian and the Baltic States, with a growing presence in Poland. Its web site is here Alimentation Couche-Tard.

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, August 27, 2014

Evertz Technologies 2

On my other blog I am today writing about dividend stocks and safety continue...

I own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). I got the idea to investigate this stock from a G&M Article. It looked like something I might want to try out. This stock also came up in a stock screen filter that was looking for reliable dividend payers. That is companies that have reliable profits big enough to comfortably cover their dividend payments. It has high dividends and is probably riskier than average.

When I look at insider trading, I find $0.5M of insider selling and no insider buying. Insider selling is only 0.04% of the stock's market cap and therefore a very small amount. Outstanding shares were increased by 681,200 shares for stock options in the financial year ending April 2014. This is almost 1% of the outstanding shares of the company. It is a little high. About the same thing happened for the financial year ending in April 2013.

There is insider ownership with the CEO owning shares worth around $394M and the chairman owning shares worth around $394M. Insiders own around 70% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.92, 17.70 and 20.48. The 10 year corresponding P/E Ratios are similar. The current P/E Ratio is 17.84 based on a stock price of $17.30 and 2015 earnings estimates of $0.97. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $9.90. The 10 year low, median and high median Price/Graham Price Ratios are 1.35, 1.67 and 1.99. The current P/GP Ratio is 1.75. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 3.58 and the current P/B Ratio is 3.86 a value some 4% higher. This stock price test suggests that the stock price is relatively reasonable.

I get a 5 year median dividend yield of 3.21% and the current dividend yield at 3.70 is some 15% higher. This is a good sign. This stock price test suggests that the stock price is relatively reasonable. (The current one would have to be 20% higher or more for the stock to be cheap.)

The historical average dividend yield is 2.89% and the historical median dividend yield is 2.29% and both these are signaling that the stock price is cheap as they are more than 20% lower than the current dividend yield. (However, do not forget that for this stock there is only 6 years of data to deal with.)

When I look at analysts' recommendations, I get Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 month consensus stock price is $19.50. This implies a total return of 16.42% with 3.70% from dividends and 12.72% from capital gains.

There is an interesting article from Alpha Now about the use of Evertz technologies in the world cup broadcasts. The Street site said that Evertz Technologies is in the top 25 Dividend stocks in an April 2013 item by Jim Cramer.

Sound bit for Twitter and StockTwits is: stock price is reasonable to cheap. Although I have not invested much in this company, I am pleased with this investment. I will probably invest more in this company, but since I am living off my dividends, I generally do not have much money for new investments. See my spreadsheet at et.htm.

This is the second of two parts. The first part was posted on Tuesday, August 26, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz.

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, August 26, 2014

Evertz Technologies

I own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). I got idea to investigate this stock from a G&M Article. It looked like something I might want to try out. This stock came up in a stock screen filter that was looking for reliable dividend payers. That is companies that have reliable profits big enough to comfortably cover their dividend payments. It has high dividends and is probably riskier than average. The company also has a large amount of insider ownership.

First of all, this company declared a special dividend in 2014 which was twice more the normal dividend. You can review the press release here. Basically they had excess cash so they paid a special dividend.

The company was founded in 1996 and went public in 2006 and started to pay dividends in 2008. The dividend is good and the dividend growth is strong. The current dividend is 3.70%, the 5 year median dividend is 3.21% and the dividend has grown at the rate of 17.2% and 21.4% over the past 5 and 6 years.

The most recent increase was for 14.3% in 2013 and so far there has been no increase in 2014. However the financial year end is at the end of April each year. Since dividend started in 2008 they have increased every year. However, analysts do not seem to suggest that dividend will increase this year or next.

Since buying this stock in 2011, I have made a return of 19.60% per year with 11.82% per year from capital gains and 7.78% per year from dividends. The 5 and 8 year total return on this stock is at 10.31% and 6.79% per year. The portion of this return attributable to dividends is at 5.22% and 3.73% per year. The portion of this return attributable to capital gain is at 5.09% and 3.05% per year.

The outstanding shares have not increased over the past 5 year and have increased by 1.53% over the past 9 years. Shares have increased due to Stock Options and have decreased due to Buy Backs. There is growth in revenues, earnings and cash flow but growth has been uneven.

However, Revenue per share has grown at 7.25% and 17.43% per year when looking at 5 year running averages over the past 5 and 8 years. EPS is up by 2.1% and 17.2% per year when using 5 year running averages over the past 5 and 7 years. Cash Flow per Share has grown by 4.9% per year over the past 5 years using 5 year running averages. CFPS share has grown by 40% per year over the past 9 years.

Debt ratios are quite good. The Liquidity Ratio is 5.80, the Debt Ratio is 6.19 and the Leverage and Debt/Equity Ratios are at 1.19 and 0.19.

The Return on Equity has been higher than 10% for all financial years. The ROE for the financial year ending in April 2014 is 19.1% and the 5 year median ROE is at 19.7%. The ROE on comprehensive income is at 20.3% for the financial year ending in April 2014 and the 5 year median ROE is at 19.7%.

Sound bit for Twitter and StockTwits is: Dividend growth tech stock. I am pleased with my investment in this stock. However, it is a tech stock, so I will be keeping my eye on it. See my spreadsheet at et.htm.

This is the first of two parts. The second part will be posted on Wednesday, August 27, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz.

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, August 25, 2014

Superior Plus Corp.

On my other blog I am today writing about investigating stocks, mutual funds and ETFs continue...

I do not own this stock of Superior Plus Corp. (TSX-SPB, OTC-SUUIF). I started to follow this stock as it was an income trust company that was talked about in the Money Reporter from MPL Communications. This company changed to a corporation from Unit Trust (TSX-SPF.UN) in 2009. It has started out as an income trust in 1996.

As far as I can see the dividends (or distributions) hit a high in 1999, 2004 and 2008. After each high, dividends were cut. From 2008 to 2011 dividends were level. Dividends were again cut in 2012 and have been level ever since. The 5 and 10 year decline in dividends is at 18% and 12.5% per year.

Although the dividend yield has often been quite high on this stock, this is not the sort of stock I like. Yes, I understand that companies that go from income trusts to corporations have cut dividends and that is fine with me. The problem with this company is that is not the only time it has cut dividends. Current dividend is 4.09%.

The 5 and 10 year total return is at 6.73% for the last 5 years and a loss of 0.73% over the past 10 years. The portion of the total return attributable to dividends is at 6.61% and 6.14% over these periods. The portion of the total return over the past 5 year attributable to capital gains is 0.12% and the portion of the total return over the past 10 year attributable to capital loss is 6.87%.

The outstanding shares have increase by 7.4% and 6.2% per year over the past 5 and 10 years. The shares have increased due to Share Issues, Stock Options and a DRIP plan. Only revenues have increased over the past 5 and 10 years. Earnings and EPS are down. Cash Flow is growth is good over the past 10 years, but non-existent over the past 5 years.

Revenue is up by 8.6% and 11.8% per year over the past 5 and 10 years. Revenue per share is up by 1.1% and 5.3% per year over these periods. Earnings are down by 4.9% and 8% per year over the past 5 and 10 years. EPS is down by 12.3% and 13.7% per year over these periods.

Cash flow is up strongly over the past 10 years and not at all over the past 5 years. Cash Flow is down by 0.2% per year over the past 5 years and up by 29.5% per year over the past 10 years. CFPS is down by 7.1% per year over the past 5 years and up by 21.9% per year over the past 10 years.

Over the past 10 years there has been 3 years of earnings losses. Otherwise Return on Equity has been above 10% except for 2013 where it was at 9.8%. The ROE on Comprehensive Income was good for 2013 at 18.3%.

The debt ratios are adequate. The current Liquidity Ratio is 1.48. The current Debt Ratio is 1.37. The Leverage and Debt/Equity Ratios are 3.68 and 2.68.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 months consensus stock price is $15.20. This implies a total return of 7.19% with 3.12% from capital gains and 4.07% from dividends. The capital gains expected is rather low for a Buy recommendation.

The 5 year low, median and high median Price/Earnings per Share Ratios are 7.18, 9.85 and 12.52. The 10 year corresponding ones are a bit higher at 9.99, 12.44 and 15.35. The current P/E Ratio is 15.52 based on a stock price of $14.74 and 2014 EPS estimate of $0.95. This stock price test suggests that the stock is fully valued. That is the stock is relatively expensive.

I get a Graham Price of $9.62. The P/GP Ratio is 1.53 based on a stock price $14.74. The 10 year low, median and high median P/GP Ratios are 0.87, 1.19 and 1.65. This stock price test suggests that the stock price is relatively reasonable although on the higher end of the reasonableness range.

The 10 year Price/Book Value per Share Ratio is 2.59 and the current P/B Ratio at 3.41 is some 35% higher. This stock price test suggests that the stock price is relatively high.

Sound bit for Twitter and StockTwits is: Variable dividend, expensive stock. See my spreadsheet at spb.htm.

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.

Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior's Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior's Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior's Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior Plus.

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, August 22, 2014

TECSYS Inc. 2

I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

When I look at insider trading I see $0.4M of insider selling and no insider buying. Insider selling is only 0.48% of market cap of this stock and so is low. There is little in the way of outstanding stock options.

There is insider ownership by the Brereton family with Peter Brereton, CEO owning shares worth around $2.9M, with David Brereton, Chairman owning shares worth around $20.9M and Kathryn Brereton, 10% holder owning shares worth around $7.1M. This family owns around 44% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.67, 24.56 and 29.44. The current P/E Ratio is 28.38 based on a stock price of $6.81 and April 2015 earnings estimate of $0.24. This stock price test suggests that the stock price is still within a relatively reasonable range, but at the high end of this range. (Note that the 10 year corresponding P/E Ratios are a lot lower than the 5 year ones at 11.24, 13.54 and 16.46.)

I get A Graham Price of $2.79. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 2.44 based on a stock price of $6.81. This stock price test suggests that the stock is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 1.47. The current P/B Ratio is 4.73 a value some 222% higher. The current P/B Ratio is based on a current stock price of $6.81 and current BVPS of $1.44. This stock price test suggests that the stock is relatively expensive.

We have not got much to work with on dividend yield, however, the 5 year median dividend yield is 2.64% and the current dividend yield at 1.32% is 50% lower. The historical average dividend yield is 2.70% and the historical median dividend yield is 2.68%. All this suggests that the stock is relatively expensive.

When I look at analysts' recommendations I see Strong Buy and Buy recommendations. The consensus recommendations would be a Strong Buy. The 12 month consensus stock price is $9.00. This implies a total return of 33.48% with 1.32% from dividends and $31.16% from capital gains.

I could see this as a momentum buy. The stock price has been rising since April 2012. Neither it nor the stock market seems to be slowing down yet. This buying, from my perspective, is for capital gains, not long term investment.

Sound bit for Twitter and StockTwits is: Stock price expensive, momentum buy? I think this is a good stock and I will hold on to what I have. However, I do think that currently it is on the expensive side. A P/E Ratio of 28.38 is not all that high, but the P/B Ratio of 4.73 is high. See my spreadsheet at tcs.htm.

This is the second of two parts. The first part was posted on Thursday, August 21, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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, August 21, 2014

TECSYS Inc.

I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

Dividends were started in 2008 and they have grown at 13.4% and 11% per year over the past 5 and 7 years. The current dividend yield is 1.31% and the 5 year median dividend yield is 2.64%. So the dividends are moderate to low and the increases are moderate. The last dividend increases was in 2014 and it was for 12.5%. At the same time dividends payments were changed from semi-annual to quarterly.

The 5 year median Dividend Payout Ratios for EPS was 47% and for CFPS was at 26.5%. The DPRs for 2014 was at 47% and 22% for EPS and CFPS. (Note that the financial year ends in April each year and the last financial year was for April 2014.)

I bought this stock in 2011 and I have made a total return of 46.65% per year with 43.66% from capital gains and 2.99% from dividends. I have had this stock for under just 3 years. The 5 and 10 year total return for shareholders is at 29.18% and 17.53% per year. The portion of these returns attributed to dividends is at 2.04% and 1.20% per year over these periods. The portion of these returns attributed to capital gains is at 27.14% and 16.33%per year over these periods.

The outstanding shares have decreased by 1.7% and 2% per year over the past 5 and 10 years. Shares have increased for Stock Options and decreased by Buy Backs. There has been growth in revenues, earnings and cash flow and the best growth is over the past 10 years, not the past 5 years.

Revenue growth is at 2.6% and 10.25% per year over the past 5 and 10 years. Revenue per Share is up by 4.3% and 12.5% per year over these periods. Revenue hit a high in 2009 and did not surpass this high until 2013.

Earnings are up by 2.5% and 15.8% per year over the past 5 and 10 years. EPS is up by 5.9% and 18.2% per year over these periods. Earnings hit a high in 2010 and are expected to pass this high in the April 2015 financial year.

Cash Flow up by 10% and 11.6% per year over the past 5 and 10 years. CFPS is up by 11.8% and 12.8% per year over these periods. Cash flows hit a high in 2008 and just pass this high with the financial year of April 2014.

As far as Return on Equity goes, it has been at 10% or above only 3 times in the past 10 years and only twice in the past 5 years. The ROE for the financial year ending April 2014 was 10.8% and the 5 year median is 8.6%. The ROE on comprehensive income is the same as for net income so this suggests that the EPS are of good quality.

There was a lot of earning losses prior to 2008. The company was hit by the last recession and did not return to ROEs above 10% until this year. The ROE is expected to be above 10% also in next year.

The debt ratios are good, but I would like to see the Leverage and Debt/Equity Ratios a bit lower. The Liquidity Ratio is 1.53. The Debt Ratio is 1.95, quite a good value. The Leverage and Debt/Equity Ratios are at 2.06 and 1.06.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock, Tech Small Cap. This stock got hit with hard by the last recessions and revenue, earnings and cash flows fell. The share price also tanked and that is why I have done so well in this stock. I got it at a rather cheap price. See my spreadsheet at tcs.htm.

This is the first of two parts. The second part will be posted on Friday, August 22, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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, August 20, 2014

ONEX Corp.

On my other blog I am today writing about Possible Stocks for Investing continue...

I do not own this stock of ONEX Corp. (TSX-OCX, OTC- ONEXF), but I used to. I thought this was a dividend paying stock, but was mistaken. Sometimes it is a good idea to review the sort of stock that we should not buy. I bought this stock in 2001 because it was on a stock hit list article I read. By April 2008, I knew that this was not the sort of stock I wanted to be invested, so I sold.

I did not make much money in this stock and I wondered if it would ever make much money for shareholders. I held this stock for 7 years and make total returns over this period of 5.87% per year with 5.44% per year from capital gains and 0.43% per year from dividends.

Well, investors over the past 5 and 10 years did better than I did. The 5 and 10 years total return to date is at 22.09% and 12.68% per year. The portion of these total returns attributable to dividends is at 0.36% and 0.37% per year. The portion of these total returns attributable to capital gains is at 21.73% and 12.31% per year.

An interesting note is that dividends have been increasing lately. This started in 2013 with a 36.4% increase. Dividends were increased again in 2014 by some 33.3%. Onex management says that these dividend increases reflects Onex' success and ongoing commitment to its shareholders. However, the prior dividend increase was in 1995 some 19 years ago and it was for 10%.

The outstanding shares have decreased by 1.8% and 2.8% per year over the past 5 and 10 years. Shares have increased due to DRIP and Stock Options and have decreased due to Buy Backs. There has been some growth in revenue, earnings and cash flow over the past 5 and 10 years. Growth is better over the past 10 years. Because shares are declining, the growth in revenue, earnings and cash flow is more important than growth in Revenue per Share, EPS and CFPS.

Revenue has grown at 2% and 5.3% per year over the past 5 and 10 years. Revenue per share has grown at 3.8% and 8.7% per year over the past 5 and 10 years.

Since 2013 is a year of earnings loss, it is hard to measure earnings growth. For EPS, it has declined by 11.7% per year over the past 5 years looking at 5 year running average. It has grown by 5% per year over the past 10 years looking at 5 year running averages. There is nothing I can say about earnings (or net income) because 10 years ago there was also an earnings loss as there was an earnings loss in 2013.

For 4 of the past 5 years, the ROE has been below 10%. The ROE for 2013 is a negative 24.7% and the 5 year median ROE is a negative 3.1%. The ROE on comprehensive income is a negative 16.9% for 2013 and the 5 year median ROE is a positive 0.4%.

I am not especially fond of this company's the debt ratios. The Liquidity Ratio is good at 1.56. However, the Debt Ratio is rather low at 1.13 and the Leverage and Debt/Equity Ratios are rather high at 8.48 and 7.48.

I cannot get a fix on the Price/Earnings per Share Ratio as there has been too many years with earnings losses. However, the current P/E Ratio is 66.39 based on a stock price of $63.07 and 2014 earnings estimate of $0.95 it looks rather excessive.

I get a Graham price of $15.27 and the Price/Graham Price Ratio at 4.13 is also rather excessive. The 10 year median Price/Book Value per Share is 2.28, but the current P/B Ratio at 5.78 is some 153% higher and rather high. I cannot do stock price testing using dividend yield as dividends were level for so many years.

If you look at P/S Ratio, the 10 year median is 0.16 and the current one at 0.25, using 12 month Revenue is some 59% higher. For CFPS using the last 12 months of cash flows, shows a current P/CF Ratio of 5.28 and this stock has a 10 year median P/CF Ratio of 2.48. The current one is some 113% higher. On a relative basis both these tests show a relatively expensive stock price. However, on an absolute basis, a P/S of 0.25 and a P/CFPS Ratio of 5.28 are both good ratios. You have to wonder why shareholders put such low values on P/S Ratios and P/CFPS Ratios for this stock.

It is also interesting that analysts' have given recommendations on this stock, but these same analysts, except for some EPS estimates, do not give estimates for this company. The analysts' recommendations are Strong Buy, Hold and Underperform, with the consensus recommendation a Hold because most of the recommendations are a hold. The average 12 month target price is $67.80. This suggests a total return of 7.82% with 7.50% from capital gain and 0.32% from dividends.

A recent Financial Post article says that Onex is fairly valued as cash limits near-term growth. Another recent financial post article says that RBC Capital Markets has downgraded Onex on growth concerns.

Sound bit for Twitter and StockTwits is: Increasing dividends, but expensive. See my spreadsheet at ocx.htm.

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.

Onex is one of North America's oldest investment firm committed to acquiring and building high-quality businesses in partnership with talented management teams. Onex manages investment platforms focused on private equity, real estate and credit securities. Gerald Schwartz is a major owner. Its web site is here Onex.

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, August 19, 2014

Newfoundland Capital Corp.

I do not own this stock of Newfoundland Capital Corp. (TSX-NCC.A). I started to follow this stock as it was suggested as a decent dividend paying stock for investment purposes in the latter part of 2009. It is not on any dividend lists that I follow so I took a look at it.

For this stock, dividends have varied over time. They started to pay dividends in 1997 and then stopped them in 1999. Dividends were restarted in 2004 and for most years since they have paid dividends. The exception is 2009 when no dividends were paid. However, they did pay 3 dividends, rather than the usual 2 in 2008. Over the past 5 and 9 years, dividends are up by 0% and 18.2%. Analysts do not see any dividend increases over the next few years.

The Dividend Payout Ratios are good. The 5 year median DPR for EPS is 17% and for CFPS is 21%. The corresponding ones for 2013 are 17% and 21%. I guess the problem is that for 2014 they are expected to be 28% and 18% respectively.

The total returns over the past 5 and 10 years to date are at 5.30% and 9.09% per year. The portion of this return attributable to dividends is at 1.96% and 2.02% per year over the past 5 and 10 years. The portion of this return attributable to capital gains is at 3.34% and 7.07% per year over the past 5 and 10 years. The return over the past 5 years is not great, but not disastrous either.

The outstanding shares have declined by 4.4% and 2.4% per year over the past 5 and 10 years. This makes growth in revenues, earnings and cash flow more important than revenue per share, EPS and CFPS. Generally growth has been good over the past 5 and 10 years.

Revenues have grown at 3.6% and 8% per year over the past 5 and 10 years. Revenue per Share has grown at 11.3% and 10.6% per year over these periods.

Since exactly 5 year ago, the company had an earnings loss I can only look at 4 year and 10 year growth. Earnings have grown at 15% and 16% per year over the past 4 and 10 years. EPS has grown at 19% and 18% over these periods.

Cash Flow has grown at 9.5% and 7% per year over the past 5 and 10 years. CFPS has grown at 14.5% and 9.6% per year over the past 5 and 10 years.

The Return on Equity has been below 10% 4 times in the last 10 years and only once in the past 5 years. The ROE for 2013 is at 20.2% and the 5 year median ROE is at 14.8%. The ROE on comprehensive income is 21.5% for 2013 and the 5 yea median is at 17.6%. Basically the ROE on comprehensive income suggests that the earnings are of good quality.

The Liquidity Ratios has been lower than what I would like with the one for 2013 at 1.37 and the 5 year median at 0.96. However, for 2013 if you add in cash flow after dividend the Ratio is 2.16. The Debt Ratio is good at 2.31 as is the Leverage and Debt/Equity Ratios at 1.76 and 0.76.

There is lots of insider ownership by the Steele family, with the CEO (Robert George Steele) owning shares worth 7.6M and the chairman (Harry R. Steele) owning shares worth just over $175M.

The 5 year median Price/EPS Ratios are 12.56, 15.81 and 19.07. These are a bit higher than the corresponding 10 year Ratios. The current P/E Ratio is 15.13 based on 2014 earnings estimate of $.55 and a stock price of $8.25. This would suggest that the current stock price is reasonable.

I get a Graham price of $7.76. The 10 year low, median and high Price/Graham Price Ratios are 1.07, 1.24 and 1.41. The current P/GP Ratio is 1.06 based on a stock price of $8.25. This stock price test suggests that the stock price is relatively cheap. However, on this sort of stock I would prefer a P/GP Ratio of 1.00 or lower to point to a cheap price. I think that a P/GP Ratio for this stock at 1.06 shows a reasonable price.

The 10 year median Price/Book Value Per Share Ratio is 2.09 and the current P/B Ratio at 1.68 is some 20% lower. This stock price test suggests that the stock price is cheap.

The 5 year median dividend yield is 1.59% and the current dividend yield at 1.82% is some 14% higher. The historical dividend yield is at 1.11% and the current dividend yield of 1.82% is some 64% higher. This testing suggests that the stock price is reasonable to cheap.

Sound bit for Twitter and StockTwits is: Not Dividend Growth Stock, but price is reasonable. I think that the dividend yield is rather low at 1.82% for a stock with no dividend increases over the past 5 years. Both the 5 year median dividend yield at 1.59% and the 10 year median dividend yield at 1.65% are lower.

Why buy? Not a great dividend, no dividend increases and it is not even cheap. The growth in revenue, earnings and cash flow is quite good as it’s the debt ratios. But, 5 year total return is rather low. See my spreadsheet at ncc.htm.

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.

Newfoundland Capital Corporation Limited also owns and operates Newcap Radio. Newcap Radio is one of Canada's leading radio broadcasters with 79 licenses across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. The Company has 58 FM and 21 AM licenses spanning the country employing over 800 radio professionals in Canada. Newfoundland Capital Corporation Limited also owns and operates the Glynmill Inn, Corner Brook, Newfoundland and Labrador. Its web site is here Newfoundland Capital 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, August 18, 2014

Loblaw Companies Ltd. 2

On my other blog I am today writing about Big Risk and Returns continue...

I do not own this stock of Loblaw Companies Ltd. (TSX-L, OTC- LBLCF), but I used to. I have followed this stock for some time. I got the stock from Mike Higgs' list of dividend growth companies. I owned it from 1996 to 2007. It was originally a great stock. I sold it in 2007 because it was having problems with its tech upgrade to its supply system.

The insider trading report shows insider selling at $54.8M and net insider selling at $54.4M. Net insider selling is at 0.25% of market cap and therefore is relatively small. The George Weston Limited owns around 66% of this company. The company is basically controlled by the Weston family. Also, the Loblaw Employee Benefit Plan Trust owns shares worth around $46.8M.

Outstanding shares were increased by 2.131M shares in 2013 for stock options with a book value of $90M. This number of shares was worth $90.3M at the end of 2013 and is 0.75% of the outstanding shares and generally companies with stock options increase outstanding shares by less than 1% for stock options. In 2012, outstanding shares were increased by 0.719M shares for stock options with a book value of $29M. This number of shares was at 0.25% of outstanding shares and was worth $30.5M at the end of 2012.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.71, 15.99 and 18.27. These are just slightly less than the corresponding 10 year P/E Ratios. The current P/E Ratio is 64.28% based on a stock price $52.71 and 2014 EPS estimate of $0.82.

The problem with this test is that EPS for 2014 is expected to be depressed because of write-offs. The P/E Ratio using 2013 earnings is 23.74 a ratio which suggests that the stock price is expensive. The P/E Ratio using 2015 EPS of $2.99 gets you a P/E Ratio of 17.63. This would suggest a stock price that is reasonable, but at the high end of the reasonableness range.

I get a Graham Price of $23.74. This would be depressed because of the very low EPS expected in 2014 and would result in Price/Graham Price Ratio of 2.22 which shows an expensive stock. If we use 2013's Graham price of $35.24 we would get a P/GP Ratio of 1.50 for a stock price of $52.71. This would suggest also that the stock price is high. (The 10 year low, median and high median P/GP Ratios are 1.05, 1.18 and 1.33.)

I get a 10 year Price/Book Value per Share Ratio of 1.81. The current P/B Ratio is 1.73, a value 4.6% lower and that would suggest that the stock price is reasonable. This P/B Ratio of 1.73 is based on a BVPS of $30.53 and a stock price of $52.71.

Looking at the 5 year median dividend yield of 2.19% and comparing it to the current dividend yield of 1.86%, the current stock price of $52.71 seems reasonable, although at the high end of the reasonableness range. The current dividend yield is some 15% higher than the 5 year median dividend yield.

However, the historical average dividend yield is 1.63% a value that is some 14.4% lower than the current dividend yield of 1.86%. The historical median dividend yield is 1.18% a value some 58% lower than the current dividend yield. This historical testing suggests that the stock price is reasonable to cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The majority of the recommendations are a Buy and the consensus recommendation would be a Buy. The 12 month consensus stock price is $57.80. This implies a total return of $11.52% with 9.66% from capital gains and 1.86% from dividends.

There is an interesting article about Loblaw selling13 stores and pharmacies to Metro, Jean Coutu Group and Remedy's. There is an interesting article about supply chains at Loblaws and Shoppers in the Canadian Grocer. There is an article dated 2012 where Loblaws says that it has fixed it supply chain problems in the Materials Management and Distribution magazine. You could have fooled me. I still shop at Loblaws because my store has great fresh produce, but if the ginger marmalade I like goes missing from the store, it is not there for months. I go to Metro for this product. If Metro is out of it, it will be back in the store in a couple of days.

Sound bit for Twitter and StockTwits is: Price could be reasonable. By the P/B Ratio test and the dividend yield tests the stock seems reasonable. These tests are sometimes preferable because they are not based on estimates. See my spreadsheet at lob.htm.

This is the second of two parts. The first part was posted on Friday, August 15, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. Its web site is here Loblaw.

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, August 15, 2014

Loblaw Companies Ltd.

I do not own this stock of Loblaw Companies Ltd. (TSX-L, OTC- LBLCF), but I used to. I have followed this stock for some time. I got the stock from Mike Higgs' list of dividend growth companies. I owned it from 1996 to 2007. It was originally a great stock. I sold it in 2007 because it was having problems with its tech upgrade to its supply system.

After a very long time of no dividend increases, from 2006 to 2011 inclusive, this company has again become a dividend growth company. In 2012 the dividend increase was 4.8%, in 2013 the increase was 9.1%, but for 2014 the increase has been only at 2.1%.

The low rise in 2014 probably has to do with the low expected EPS for 2014. However, the low EPS for 2014 has mostly to do with right-offs than with actual earnings. EPS for 2014 is expected to be only at $0.82. EPS for 2013 was $2.22 and for 2015 is expected to be $2.99.

The recent change to the dividend policy is probably why investors have made money over the past 5 years, but not the past 10 years. The total returns to date over the past 5 and 10 years is 11.45% gain per year and 1.69% loss per year. The portion of this total return attributable to dividends is at 2.20% and 1.38% per year over the past 5 and 10 years. The portion of this total return attributable to capital gains and losses is at 9.24% per year gain over the past 5 years and 3.07% per year loss over the past 10 years.

There has been no growth in outstanding shares over the past 5 and 10 years. Shares have increased due to Shares Issues, Stock Options and DRIP. Shares have decreased due to Buy Backs. However, note that for 2014 has have increased by 46% due to the takeover of Shoppers.

The growth in last 5 and 10 years has not been great for revenue, earnings or cash flow however, analysts expect better this year and next year. For example revenue per share is up by 0.4% and 2.3% per year over the past 5 and 10 years. Analysts do not expect much in 2014, but expect a growth of over 7% in 2015.

The growth in EPS over the past 5 and 10 years is at 2.2% per year and a negative 3.1%per year. EPS is expected to be low in 2014 mainly because of write-offs and integration of Shoppers. However, in 2014 EPS is expected to be up by 35% over 2012.

The growth in Cash Flow per Share over the past 5 and 10 years is at 2.6% and 2.8% per year. Not much growth is expected in 2014, but CFPS is expected to grow by 26% in 2015.

The Return on Equity has been below 10% 5 of the last 10 years and twice over the past 5 years. The ROE for 2013 is at 9% and the 5 year median ROE is at 10%. The ROE on comprehensive income for 2013 was at 12.2%, but the 5 year median ROE was at 9.8%

Debt ratios are ok. The Liquidity Ratio is a bit low at 1.43, but if you add in cash flow after dividends the ratio is 1.65. The Debt Ratio is good at 1.51 and Leverage and Debt/Equity Ratios are acceptable at 2.96 and 1.96.

I made money on this stock at 10% per year when I held it between 1996 and 2007. Perhaps it is again in a position to make money for its shareholders. The Weston family has a lot invested in this company and so they are probably motivated to have it earn a decent return for shareholders including themselves.

Sound bit for Twitter and StockTwits is: Probably dividend growth company again. See my spreadsheet at lob.htm.

This is the first of two parts. The second part will be posted on Monday, August 18, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. Its web site is here Loblaw.

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.