Thursday, October 30, 2014

TransForce Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by BNN Presents.

I do not own this stock of TransForce Inc. (TSX-TFI, OTC-TFIFF). I read a report called "6 Canadian Dividend Stocks That Fly Under the Radar" by John Heinzl in April of 2013. This is one of the stocks mentioned. There was also a good review of this stock by Advice Hotline by MPL Communications.

Company was an income trust from 2002 to 2008. When it changed to a corporation it dropped monthly distributions for quarterly distributions and dividends dropped almost 75%. Dividends were level in 2010 but since then dividends have been increasing. The median dividend increase from 2011 to 2014 is 9.5%. The last dividend increase was in 2014 and it was for 11.5%.

So for this dividend growth company you have a good dividend and good increases. The current dividend is 2.1% and the 5 year median dividend yield is 3.3%. Last dividend increase was 11.5% as pointed out above. Current dividend increasing at 11.5% a year will give you a yield on an investment today of 6.2% and 10.7% in 10 and 15 years' time.

The 5 year median Dividend Payout Ratios for EPS is 40.6% and the CFPS is $17.4%. The corresponding DPRs for 2013 are 79% for EPS and 25% for CFPS. Earnings were low in 2013. EPS was just $0.66. However, they provide an adjusted EPS figure of $1.26. The adjusted figure is stripped of items that are not in the Company's normal business.

Shareholders have done well lately with the 5 and 10 years total return at 30.64% and 11.74% per year. The dividend portion of this return is at 3.65% and 5.56% per year over these periods. The capital gain portion of this return is at 26.99% and 6.18% per year over these periods.

The outstanding shares have increased by 1.5% and 3.9% per year over the past 5 and 10 years. Revenue growth is from good to very good. Earnings growth has been negative and cash flow growth is negative over the past 5 years but good over the past 10 years.

Revenue is up by 5.5% and 15.3% per year over the past 5 and 10 years. Revenue per Share is up by 5% and 10.9% per year over the past 5 and 10 years. EPS is down by 6.4% and 0.9% per year over the past 5 and 10 years. Cash Flow per Share is down by 3.6% and up by 5.8% per year over the past 5 and 10 years.

If you use the Adjusted EPS, then Earnings have good growth over the past 5 and 10 years. Analysts expect good earnings growth for 2014, but we are half way through the years and EPS over the past 6 months is lower than EPS over the same period last year. This is considered an industrial stock and so you would expect some volatility in earnings because of this.

As far as cash flow goes, analysts also expect good growth in 2014. For the second quarterly report cash flow is indeed up. If you compare the 12 month period to the end of December 2013 to the 12 month period to the end of June 2014, cash flow is up by 15%.

The Return on Equity was below 10% 3 times in the last 10 years and 2 times in the last 5 years. The ROE was just 7.9% for 2013. However, the 5 year median ROE is healthy at 14.9%. The ROE on comprehensive income for 2013 was strong at 12.2%. The 5 year median ROE on comprehensive income was 14.7%.

The debt ratios are ok. The Liquidity Ratio is a bit low at 1.39 but if you add in cash flow after dividends it is 1.94. The Debt Ratio is good at 1.62. The Leverage and Debt/Equity Ratios are a bit high but ok at 2.61 and 1.61.

Sound bit for Twitter and StockTwits is: Industrial dividend growth stock. See my spreadsheet at tfi.htm.

This is the first of two parts. The second part will be posted on Friday, October 31, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce companies service the following segments: Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services; Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services. Its web site is here TransForce.

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, October 29, 2014

Pason Systems Inc. 2

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Pat Bolland.

I do not own this stock of Pason Systems Inc. (TSX-PSI, OTC-PSYTF). I read a report on this stock in the Buy and Sell Advisor in September 2013. I had not heard of this dividend growth company before so I decided to investigate it.

When I look at insider trading I find $12.9M of net insider selling. This is just 0.58% of market cap and therefore reasonable. The main insider ownership is by James Douglas Hill who is the founder and chairman and he owns shares worth around $287M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 23.89, 28.59 and 33.30. These are higher than the 10 year corresponding values of 15.11, 19.36 and 23.95. The current P/E Ratio is 19.26. This is based on a stock price of $29.96 and 2014 EPS estimate of $1.40. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham price of $12.34. The 10 year low, median and high median Price/Graham Price Ratios are 1.62, 2.05 and 2.51. The current P/GP Ratio is 2.19. This stock price test suggests that the stock price is relatively reasonable. However, on an absolute basis a P/GP Ratio of 2.19 is a rather high one.

The 10 year Price/Book Value per Share Ratio is 3.76. The current P/B Ratio is 5.58 based on a stock price of $26.96 and BVPS of $4.83. The current P/B Ratio is some 48% higher than the 10 year median P/B Ratio. This stock price test suggests that the stock price is relatively expensive. Also the current P/B Ratio of 5.58 is rather high.

The 5 year median Dividend Yield is 2.50% and the current Dividend Yield at 2.52 is 1%. The historical average Dividend Yield and the historical median Dividend yield are at 1.88% and 1.35%, both of which is lower than the current Dividend yield of 2.52%. These stock price tests suggest that the stock price is relatively reasonable to cheap.

As often happens when a stock starts to pay dividends, the dividends are increased a lot at first and the dividend yield rises. This stock started out with a dividend yield around 0.77%. The current dividend yield is 2.52%. Knowing this suggests you should be a bit cautious about dividend yield testing.

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 is a Buy. The 12 month stock price consensus is $36.40. This implies a total return of $37.54% with 35.01% from capital gains and 2.52% from dividends.

There is a recent article on Forbes to say that this stock has gone into oversold territory. (Oversold is a way to say a stock is relatively cheap.) The dividend blogger talks about Pason Systems being a true Canadian Dividend Achiever.

Sound bit for Twitter and StockTwits is: Price is probably reasonable. See my spreadsheet at psi.htm.

This is the second of two parts. The first part was posted on Tuesday, October 27, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Pason is the leading global provider of specialized data management systems for drilling rigs. Their solutions, which include data acquisition, well-site reporting, remote communications, and web-based information management, enable collaboration between the rig and the office. Its web site is here Pason Systems.

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, October 28, 2014

Pason Systems Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Derek Foster.

I do not own this stock of Pason Systems Inc. (TSX-PSI, OTC-PSYTF). I read a report on this stock in the Buy and Sell Advisor in September 2013. I had not heard of this dividend growth company before so I decided to investigate it.

This stock has been around for some time but just started to pay dividends in 2003. The dividend yield is moderate to good and the dividend increases are good. The current dividend yield is 2.48% and the dividends have grown at 27.1% and 31.7% per year over the past 5 and 10 years. The other thing to mention is the dividends used to be paid just semi-annually until this year when they were switched to quarterly.

The last dividend increase was in 2014 and was for 13.3%. However, dividends are up 30.8% year over year. Last year dividends were up 18.2%, year over year. The actual dividends look paid looks different as dividends were switched from semi-annual to quarterly in 2013 and in 2013 shareholders received one semi-annual dividend and 3 quarterly dividends.

The Dividend Payout Ratios seem fine with the 5 year median at 68.2% for EPS and 26.1% for CFPS. The DPR for EPS has been high lately as the EPS has been depressed. The DPR for EPS for 2012 was 87.5% and for 2013 was at 217%. However it is expected to go lower to 43.6% in 2014. Analysts expect EPS to increase by 382% in 2014. If you compare the 12 month period ending in June 2014 to the 12 month period ending in December 2013, EPS are up 203%.

Shareholders have done well recently with the total returns over the past 5 and 10 years at 20.99% and 13.05% per year with 18.27% and 11.29% per year from capital gains and 2.72% and 1.76% per year from dividends.

Outstanding shares have not increased over the past 5 years and have increased by 1% per year over the past 10 years. Revenues are up modestly to good over the past 5 and 10 years. Because of the past two years of low EPS, EPS are down over the past 5 and 10 years. CFPS is down over the past 5 years, but up well over the past 10 years.

Revenue per Share is up by 6.5% and 14.7% per year over the past 5 and 10 years. EPS are down by 17.3% and 1.2% per year over the past 5 and 10 years. CFPS is down by 2.3% and up by 9.5% per year over the past 5 and 10 years. If you compare cash flow for the 12 months to the end of June 2014 and to the 12 months to the end of December 2013, it is up by 72%. Analysts expect CF to increase by some 88% in 2014.

Return on Equity was below 10% twice over the past 10 years and twice over the past 5 years. There was an EPS loss in 2009 and the ROE for 2013 was at just6.5%. The 5 year median ROE is 10.8%. The ROE on comprehensive income was better in 2013 at 10.1%. Its 5 year median ROE is 10.1%.

The debt ratios on this stock are very good. The Liquidity Ratio is 2.88 for 2013 and the Debt Ratio is 5.62 for 2013. Leverage and Debt/Equity Ratios for 2013 are at 1.22 and 0.22 respectively.

Sound bit for Twitter and StockTwits is: Oil Service Dividend Growth Stock. See my spreadsheet at psi.htm.

This is the first of two parts. The second part will be posted on Wednesday, October 28, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Pason is the leading global provider of specialized data management systems for drilling rigs. Their solutions, which include data acquisition, well-site reporting, remote communications, and web-based information management, enable collaboration between the rig and the office. Its web site is here Pason Systems.

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, October 27, 2014

Molson Coors Canada

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Jos Schmitt.

I do not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt's was one of the original companies that I purchased and I did very well with it before it was bought out.

The dividends have grown better in US$ terms than in CDN$ terms. For Canadians, the dividends are moderate and the growth is moderate. The current dividend yield is 2% with the 5 and 10 years growth of dividends at 8% and 8.8% per year. For Canadians, the dividends are paid in US$ so they will fluctuate from quarter to quarter depending on the exchange rate.

The total return over the past 5 and 10 years to date is good. Part of the reason is that the stock's price is up some 39% to far this year. The 5 and 10 year total return is at 14.19% and 9.41% per year with 11.95% and 6.30% per year from capital gains and 2.23% and 3.10% from dividends.

Outstanding shares have increased by 1.2% and 7.7% per year over the past 5 and 10 years. The years of 2007 and 2008 were really bad years for this company and especially revenues were hit hard. Even through there had been growth in revenues since then they are still not back to where they were. Also growth is especially low or negative over the past 10 years.

This company reports in US$ and revenues are down by 2% and up by 1% per year over the past 5 and 10 years. Revenue per Share is down by 3.2% and down by 8.3% per year over the past 5 and 10 years. EPS is up by 8% and 2.6% per year over the past 5 and 10 years. CFPS is up by 4.2% and down by 1.2% per year over the past 5 and 10 years.

The Return on Equity has been below 10% 7 of the past 10 years and 4 of the past 5 years. The ROE for 2013 was 6.6%. The ROE for comprehensive income was a bit higher at 8.8%.

The Liquidity Ratios have been low for the last few years. The Liquidity Ratio for 2013 was just 0.72. If you add in cash flow after dividends the ratio becomes 1.15. If the ratio is below 1.00 it means that current assets cannot cover current liabilities.

The Debt Ratio has always been good and the one for 2013 is very good at 2.25. The Leverage and Debt/Equity Ratios have been generally fine and the ones for 2013 are at 1.80 and 0.80, respectively.

There is insider ownership with the CEO having shares worth $12.9M and the CFO having shares worth around $1.2M. There is large ownership by the Coors family and it seems to be around $5.3B. There was some $43.8M of net insider selling over the past year but this is small compared to the market cap of this stock at only 0.28% of the market cap.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold, but the consensus is a Buy. The 12 month consensus stock price in US$ is $80.80. This implies a total return of 13.79% with 2.05% from dividends and 11.74% from capital gains. I can find no consensus stock price in CDN$.

The 5 year low, median and high median Price/Earnings Ratios are 10.99, 12.28 and 13.66. The current P/E Ratio is 16.40 based on a stock price of $82.75 and 2014 EPS estimates of $5.05. This stock price test in CDN$ suggests that the stock price is relatively high. However, a P/E ratio of 16.40 is not particularly high. Using US$, the test comes out the same.

I get a Graham Price of $77.15 CDN$. The 10 year low, median and high Price/Graham Price Ratios are 0.79, 0.87 and 0.98. The current P/GP Ratio is 1.07. This stock price test suggests that the stock price is relatively high.

The 5 year median Dividend Yield is 2.57% and the current dividend yield at 2.05% is some 22% lower. The historical average and median dividend yields are lower at 2.44% and 2.22% which are 18% and 10% higher than the current dividend yield. The first stock price test suggests that the stock price is relatively high. The last two suggest that the stock price is still reasonable, but somewhat in the higher range of reasonable. You get the same results testing in US$ terms.

The 10 years Book Value per Share Ratio is 1.19 and the current P/B Ratio at 1.58 is some 33% higher. This stock price test suggests that the stock price is relatively high. You get the same results in both currencies.

Sound bit for Twitter and StockTwits is: Price rather high. You have to wonder if this is a good stock for Canadians. It is not really a Canadian stock anymore as the Canadian shares are really winding down. We might be better off looking at a small Canadian Brewery than this large American one. See my spreadsheet at tpx.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.

Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through Miller Coors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors.

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, October 24, 2014

The North West Company 2

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Andrew Busch.

I do not own this stock of The North West Company (TSX-NWC, OTC-NWTUF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This stock changed from an income trust to a corporation in 2011.

When I look at insider trading, I find $1.2M of insider selling and $0.5M of insider buying with net insider selling at $0.7M. There is some insider ownership with the CEO owning shares worth around $6.7M and the CFO owning shares worth around $1.6M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.63, 16.12 and 17.60. The 10 year corresponding values are 12.84, 13.67 and 14.05. It would appear that the P/E Ratios are currently increasing. The current P/E Ratio is 20.11 based on a stock price of $23.33 and 2014 EPS estimate of $1.16. This stock price test suggests that the stock is relatively expensive. On the other hand a P/E of 20.11 is not particularly high.

I get a Graham Price of $13.18. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.31 and 1.56. The current P/GP Ratio is 1.77 based on a stock price of $23.33. This stock price test suggests that the stock is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 3.06. The current P/B Ratio at 3.50 is some 15% higher. The P/B Ratio is based on a stock price of $23.33 and BVPS of $6.66. This stock price test suggests that the stock is relatively reasonable, but to the higher end of the reasonableness range.

The 5 year dividend yield is 5.14% and the current dividend yield is only 3% lower at 4.97%. This historical average dividend yield and historical median dividend yields are much higher at 7.73% and 7.38%, but this is expected as this company used to be in income trust. When income trust companies convert to corporations, their dividend yields go down. By the 5 year dividend yield stock price test suggests that the stock is relatively reasonable.

When I look at analysts' recommendations, I find Buy and Hold recommends. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 months stock price consensus is $24.80. This implies a total return of 11.27% with 4.97% from dividends and 6.30% from capital gains.

The Net News Ledger reports on the company's second quarterly results. This article at BNN talks about a recent proxy fight with Montrusco Bolton.

Sound bit for Twitter and StockTwits is: Not cheap, but could be reasonable. This dividend growth consumer staple stock seems to be reasonably priced on some levels. The dividend is good and the company has had decent dividend increases in the past. See my spreadsheet at nwc.htm.

This is the second of two parts. The first part was posted on Thursday, October 23, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.

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, October 23, 2014

The North West Company

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Peter Hodson.

I do not own this stock of The North West Company (TSX-NWC, OTC-NWTUF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This stock changed from an income trust to a corporation in 2011.

When this company changed to a corporation, they cut their dividend almost 30%. Since then they have been again raising the dividend. The last dividend increase was in 2014 and the increase was for 3.6%. The 5 and 10 year change in dividends is a decline for 2.6% per year and an increase of 8% per year over these periods.

The dividend yield is good and the dividend increases are moderate. The current dividend yield is 4.97% and the 5 year median dividend yield is 5.14%. The 5 year median Dividend Payout Ratios for EPS is at 85% and for CFPS is at 56%. The DPR for the financial year ending January 2014 for EPS is 85% and for CFPS is 60%.

Shareholders have done well with the total return over the past 5 and 10 years at 9.88% and 14.25% per year. The portion of this attributable to capital gains is 4.19% and 9.23% per year. The portion of this attributable to dividends is 5.69% and 8.02% per year. Note that the dividend yield has gone down from a median of 7.4% to a median of 4.8% since the company changed from an income trust company to a corporation. This means that the dividend portion of total return will be lower in the future than in the past.

Outstanding shares have not changed over the past 5 and 10 years. It would seem that there have been some very minor increases due to Stock Options and this has only been in the last 2 years. There has been moderate growth in revenue over the past 5 and 10 years, but not in EPS or CFPS. There has been no growth in EPS and CFPS over the past 5 years. There has been growth in EPS over the past couple of years, but not in CFPS.

The Revenue per Share has grown by 2% and 7% per year over the past 5 and 10 years. EPS is down by 3.3% per year over the past 5 years and up by 6% per year over the past 10 years. CFPS is down by 3.5% per year over the past 5 years and up by 2% per year over the past 10 years. The Operational Profit Margin (CF/Revenue) Ratio is trending down and this is not good.

The Return on Equity is good with ratio above 10% each year of the past 10 years. The ROE for the January 2014 financial year is 19.9% and the 5 year median is 22%. The ROE on Comprehensive Income for the January 2014 financial year was 24.7% and the 5 year median is 24.7%. You want these ROEs to be close as that suggests that the earnings are of good quality.

The Liquidity Ratio is fine, but a bit low with the one for last year at 1.43. The Debt Ratio is good at 1.93. The Leverage and Debt/Equity Ratios are a little high but also fine at 2.08 and 1.08.

Growth in revenue is good and you need this for growth in EPS and CFPS. It would be nice to have better growth in EPS and CFPS. The second quarterly results should a slight decline in EPS, but strong growth in CFPS. The strong growth in CFPS is a good sign.

Sound bit for Twitter and StockTwits is: Consumer Staple dividend growth stock. It is a good chance that anyone investing in this stock could have a dividend yield of 10% on their original investment in 10 years' time. This is good. See my spreadsheet at nwc.htm.

This is the first of two parts. The second part will be posted on Friday, October 24, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 225 stores under the trading names Northern, NorthMart, Giant Tiger, AC Value Center, and Cost-U-Less. Its web site is here North West Company.

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, October 22, 2014

Equitable Group Inc.

On my other blog I am today writing about the presentations at the World Money Show in Toronto by Peter Schiff and by Camila Sutton .

I do not own this stock of Equitable Group Inc. (TSX-EQB, OTC-EQGPF). I had read a glowing report on investing on this company in 2013, so I decided to check it out. It was interesting as it was loaning money to new immigrants, a class of people who generally have a difficult time getting loans and mortgages from our regular banks.

Let's look at dividends. The dividend is low with moderate growth. The current dividend yield is 1.07%. The 5 year median dividend yield is 1.72%. The growth in dividends over the past 5 and 8 years is at 8.2% and 7.7% per year.

The Dividend Payout Ratio is low with a 5 year median DPR for EPS of 11% and for CFPS at 9.9%. The corresponding DPR for 2013 is at 10% for EPS. Since the cash flow was negative for 2013 there is no DPR for it.

Shareholders have done well recently. The 5 and 10 year total return is at 26.03% and 12.28% per year with 24.48% and 11.05% per year from capital gains and 1.55% and 1.24% per year from Dividends.

Outstanding shares have increased by 0.6% and 4% per year over the past 5 and 10 years. Revenue and earnings has grown well. I cannot measure cash flow as it negative in 2013. Analysts have been looking a net interest income and that has grown at 22% and 21% per year over the past 5 and 10 years.

Revenues have grown at 17.5% and 22.7% per year over the past 5 and 10 years. Revenue per Share has grown at 16.8% and 18% per year over these time periods. EPS has grown at 15.9% and 20.4% per year over the past 5 and 10 years.

Return on Equity has been over 10% each year of the last 10 years. The ROE for 2013 was 15.9% and the 5 year median was 14.6%. The ROE on comprehensive income was 16.2% in 2013 and the 5 year median is also 16.2%.

The company changed from a Trust company to a Schedule 1 bank in 2013. The current Debt Ratio of 1.05 is generally acceptable for a Schedule 1 bank.

When I look at insider trading I find $8.2M of insider selling and $8.0M of net insider selling. There is insider selling by all classes of insider but most is by directors or $7.7M of insider selling. Although the amount in insider selling at $8M sounds like a lot, it is only 0.84% of market cap.

There is some insider ownership with the CEO owing shares worth $4M and a director with shares worth $101.8M and 13% of outstanding shares.

Since 2008, the Price/Earnings Ratios on this stock have been quite low. The 5 year low median and high median P/E Ratios are 5.49, 7.57 and 6.82. The 10 year corresponding P/E Ratios are similar. The current P/E Ratio at 9.71 based on a stock price of $63.50 and 2014 EPS estimate of $6.54. The stock test suggests that the stock might be relatively expensive. However, a P/E of 9.71 is rather low.

The 5 year median dividend yield is 1.72% and the current dividend yield at 1.07 is some 37% lower. The historical average dividend yield is 2.42 and the historical median dividend yield is 1.52%. All these yields are quite a bit higher than the current yield and this suggests that the stock price might be relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is at $73.30. This suggests a total return of 15.50% with 15.43% from capital gains and 1.07% from dividends.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock. The dividend yield is getting a little low for my liking. I do not buy any stock with a dividend yield less than 1%. Compared to what investors were willing to buy over the last few years, this stock looks expensive. However, the P/E Ratio is quite low at 9.71 and the P/B Ratio is not very high at 1.66 although it is some 45% higher than at 10 year median P/B Ratio of just 1.14. See my spreadsheet at eqb.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.

Equitable Group Inc. is a niche mortgage lender. The company's primary business is first charge mortgage financing, which offer through company's wholly owned subsidiary, Equitable Bank (formerly The Equitable Trust Company). Equitable Bank is a Schedule I bank pursuant to the Bank Act; it actively originates mortgages across Canada and serves single family, small & large commercial borrowers. Its web site is here Equitable Group[.

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, October 21, 2014

Gluskin Sheff + Associates Inc. 2

On my other blog I am today writing about the presentations at the World Money Show in Toronto by Kim Githler and by Jim Jubak.

I do not own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited.

When I look at insider trading, I find $4.7M of insider selling with $4.2M of net insider selling. Net insider selling is not a lot as it is only 0.44% of market cap. There is some insider ownership with the CEO owing shares worth $58.4M and a couple of officers owning shares worth $24.9 and $57.7M. Also, the two founders of this company have retired from the board.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.47, 13.73 and 11.60. The 10 year corresponding ratios are 9.47, 14.46 and 17.58. The current P/E Ratio is 12.56 based on a stock price of $29.02 and 2014 EPS estimates of $2.31. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $12.68. The 10 year low, median and high median Price/Graham Price Ratios are 1.41, 2.01 and 2.44. The current P/GP Ratio is 2.29. This stock price test suggests that the stock price is relatively reasonable. However, these P/GP Ratios are rather high for this ratio.

The 10 year Price/Book Value per Share ratio is 6.29. The current P/B Ratio is 9.39 a value some 49% higher. This stock price test suggests that the stock price is relatively expensive.

The 5 year median Dividend Yield is 2.93 and the current Dividend yield of 3.10 is some 5.7% higher. The historical average Dividend yield is 3.51%, but the historical median dividend yield is lower at 2.84. This stock price test suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The most recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $35.50. This implies a total return of $25.43% with 3.10% from dividends and 22.33% from capital gains.

There is an article about this company on newswire which announces the first fiscal quarter of 2014 and the fact that the two founders are retiring from the board of this company.

Sound bit for Twitter and StockTwits is: Price reasonable, but founders have left. See my spreadsheet at gs.htm.

This is the second of two parts. The first part was posted on Monday, October 20, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff.

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, October 20, 2014

Gluskin Sheff + Associates Inc.

On my other blog I am today writing about going to World Money Show Toronto. continue...

I do not own this stock of Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I started to review some of the stock recommended by Jennifer Dowty from a column she wrote and I reviewed in February 2010 on Dividends and Special Dividends. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited.

I did a spreadsheet on this stock in February 2010 and was not impressed with the stock. I chose this stock because I recognized the names of Gluskin and Sheff. I reviewed problems with list in February 2010. This stock peaked in 2006 and had not recovered by August 2011. This includes Revenues, Earnings and Book Value. The Stock Price and Cash Flow peaked in 2007.

It has taken a while, but this stock has now fully recovered from problems it was having in 2006 and 2007. In the meantime shareholders have not only gotten a good dividend yield but special dividends were paid in all of the past 6 years.

I had been a bit negative on this stock since I started to review it. However, perhaps that was uncalled for. The gains that this company has made in the last couple of years have been impressive. On the other hand, analysts seem to think that revenue, earnings and cash flow are going to drop significantly for the financial year ending in June 2015. They expect revenue to drop 24%, earnings to drop 36% and cash flow to drop 65%.

So let's first talk about dividends. Dividends are moderate with a moderate increase. The current dividend yield is 3.1% and the 5 year median dividend yield is 2.84%. The dividends have increased over the past 5 and 7 years at 10.5% and 14% per year. The last dividend increase was for 12.5% and occurred in 2014.

Another thing with dividends to discuss is special dividends. Each year over the past 6 years there has been median special dividend of $0.80 a share. This has delivered a median extra yield of 4.3% for these 6 years.

The last thing to discuss is Dividend Payout Ratios. The 5 year median DPR for EPS is 79% and the CFPS is 72%. The DPR for the financial year ending in June 2014 are 99.3% and 85.8%. These figures include special dividends. For financial year of 2012 the company paid out more in dividends than their EPS and CFPS.

The total returns over the past 5 and 9 years are at 14.61% and 10.83% per year. The portion of this return attributable to capital gains is at 7.15% and 5.13% per year. The portion of this return attributable to dividends is at 7.46% and 5.70% per year.

The outstanding shares have not increased over the past 5 years, but have increased by 16.4% per year over the past 9 years. There has been good to excellent growth in revenue, earnings and cash flow over the past 5 and 9 years. The last 5 years growth is generally better than the 9 year growth.

Revenue is up by 29% and 17.9% per year over the past 5 and 9 years. Revenue per Share is up by 28.6% and 2.9% over the past 5 and 9 years. In connection with this, because it is an investment management company, we should also look at Assets under Management (AUM). AUM has growth at 10.9% and 9.2% per year over the past 5 and 8 years.

EPS has grown at 37.6% and 56.5% per year over the past 5 and 9 years. Cash Flow has grown at 34.9% and 23.5% per year over the past 5 and 9 years. CFPS has grown at 34.4% and 34.9% over the past 5 and 9 years.

Return on Equity has been very high with the 5 year median ROE for 2014 at 50.7% and the ROE for the financial year ending June 2014 at 116.2%. The ROE on comprehensive income is about the same with the 5 year median at 50.7% and the ROE for the current financial year at 114.5%.

There is a problem here with ROE. The desirable ROE is between 12% and 15%. Anything higher than 15% and analysts begin to worry about leverage. However, the leverage on this stock is not than high at 2.11. A very high ROE does not necessarily mean better financial performance of a company. There is some discussion of ROE at Ready Ratios and Investopedia.

Debt Ratios are fine with the current Liquidity Ratio at 1.81, the Debt Ratio at 1.90 and the Leverage and Debt/Equity Ratios at 2.11 and 1.11.

Sound bit for Twitter and StockTwits is: Dividend growth stock, special dividends. See my spreadsheet at gs.htm.

This is the first of two parts. The second part will be posted on Tuesday, October 21, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Its web site is here Gluskin Sheff.

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, October 17, 2014

Canadian Pacific Railway 2

I do not own this stock of Canadian Pacific Railway (TSX-CP, NYSE-CP), but I used to. It is a stock I held from 1987 to 1999. I also held it 2006 to 2011. I decided in 2011 to have only one railway stock and choice CN as my railway stock. I am following this stock because it is a dividend growth stock.

When I look at insider trading, I find some $0.8M of insider buying and $532.3M of insider selling. The net insider selling is some 1.5% of the outstanding stocks. I notice that William Ackerman seems to be selling off shares. Last year when I looked he held 13.5% of outstanding shares and now he holds some 8% of the outstanding shares.

The increase in outstanding share due to stock options was 1.5M for 2013 and this is some 0.86% of the outstanding shares as is fine. However, last year shares were increased by 3.9M shares and 2.2% of the outstanding shares and this is a lot. (Anything over 1% is a lot for an increase in outstanding shares for stock options.)

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.84, 17.25 and 20.66. These are moving up as the corresponding P/E Ratios for the past 10 years is at 16.67, 13.79 and 16.67. The current P/E Ratio is 25.03 based on a stock price of $210.49 and 2014 earnings estimates of $8.41. This stock price test suggests that the stock is relatively expensive.

The current Dividend Yield is 0.67% and the 5 year median dividend yield at 1.77% is some 62% higher. The historical average and median Dividend Yield are 1.83% and 1.53%. These are both a lot higher than the current dividend yield. This stock price test suggests that the stock is relatively expensive. Even the historical high at 1.08% is higher than the current yield.

I get a Graham Price of $87.74. The 10 year low, median and high median Price/Graham Price Ratios are 0.85, 1.03 and 1.27. The current P/GP Ratio is 2.40 based on a stock price of $210.49. This stock price test suggests that the stock is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.88 and the current P/B Ratio at 5.17 is some 175% higher. This is based on a stock price of $210.49 and BVPS of $40.68. This stock price test suggests that the stock is relatively expensive.

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 is a Buy. The 12 month stock price consensus is $230.00. This implies a total return of 9.93% with 9.27% from capital gains and 0.67% from dividends.

This article in the Financial Post talks about the implications of a CP takeover of CSX Corp. The Motley Fool looks at both CP and CN (TSX-CNR).

Sound bit for Twitter and StockTwits is: Stock is relatively expensive. I would not buy this stock at this price because of the low dividend yield. When the dividend yield is below 1% it takes a very long time to earn a descent dividend yield on your original purchase of a stock.

Of course the stock market is still falling and we are at least in a market correction period. Who knows, the stock price might just become a reasonable or even a cheap one if this market correction continues. See my spreadsheet at cp.htm.

This is the second of two parts. The first part was posted on Thursday, October 16, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. Northeast and Midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is here Canadian Pacific.

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.