Friday, February 12, 2016

Manitoba Telecom Services Inc.

Sound bite for Twitter and StockTwits is: Relatively expensive. It is interesting that this stock seems to be going in the opposite direction of the TSX over the past year. See my spreadsheet on Manitoba Telecom Services Inc.

I own this stock of Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF). I still have some of this stock but I do wish I had never bought it. I have not lost money on it, but I have gained very little. I have made a return of 2.55%. I have a capital loss, but I have had some good dividend income.

This is not a dividend growth stock. It appeared to be prior to my purchase in 2006 that they might be a dividend growth stock since they started to pay dividends in 1997. They had raised their dividends each year except for one year between 1998 and 2006. However, since 2006 dividends have been flat or cut in every year.

The most recent change in dividends was in 2015 when dividends were cut by 23.5%. Dividends have declined by 11.4% and 6.7% per year over the past 5 and 10 years. They really cannot even afford current dividends. The Dividend Payout Ratio for EPS for 2015 was 168%. Analysts expect DPR for EPS to be over 100% in 2016 and decline below 100% in 2017.

The dividends are not extraordinarily high currently. The current dividend yield is 4.19% based on dividends $1.30 and a stock price of $31.06. The historical median dividend yield is 5.27% as is the 5 year median dividend yield.

I do not have much good to report. The Revenues, Earnings, Cash Flow and Book Value have all been heading south. Their Liquidity Ratio is very low at 0.87. This means that current assets cannot cover current liabilities. The Liquidity Ratio tends to be low in Telecom stocks, but for this stock if you add in cash flow after dividends you only get to 0.89. Other Telecom stocks I follow with cash flow after dividends added in gets you above 1.00. This gives the company vulnerably in bad times and times are not currently very good.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.19, 12.32 and 13.50. The P/E Ratios have been getting lower. The corresponding 10 year ratios are 14.96, 17.17 and 19.21. This generally means that investors are unwilling to pay the same relative price for this stock against EPS than in the past.

The current P/E Ratio is 25.67 based on a stock price of $31.06 and 2016 EPS estimate of $1.21. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $18.97. The 10 year low, median and high median Price/Graham Price Ratios are 1.09, 1.20 and 1.33. The current P/GP Ratio is 1.64. This stock price testing suggests that the stock price is relatively expensive.

Even the dividend yield tends to show that the stock price is relatively expensive. The historical median dividend yield is 5.27% and this is some 20.6% higher than the current dividend yield of 4.19%.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. The consensus would be a Hold. The 12 month stock price consensus is $30.09. This implies a total return of $1.06% with a capital loss of 3.12% and dividends of 4.19%.

Maddie Sorensen on Financial Market News talks about some recent analysts changes on this stock. Jonathan Ratner at the Financial Post talks about why BCE should buy this company. See what analysts are saying about this company on Stock Chase. Note that this company has sold Allstream.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here

On my other blog I wrote yesterday about Planning for Bear Markets . Since Monday is a holiday, I will not be doing any post. On Tuesday, I write on my other blog about problems of taxing the "rich". The next stock I will write about will be Absolute Software Corporation (TSX-ABT, OTC-ALSWF)... learn more on Wednesday, February 17, 2015.

The company serves its customers through two industry-leading service platforms: FirstService Residential, North America's largest manager of residential communities; and FirstService Brands, one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations. Its web site is here Manitoba Telecom Services Inc.

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, February 10, 2016

Canadian National Railway

Sound bite for Twitter and StockTwits is: Dividend Growth Stock. This stock currently looks like it is selling at a reasonable price. Although the dividend is low the growth is good. I have had this stock for 11 years and I am making a dividend yield of 8.3% on my original stock cost. See my spreadsheet on Canadian National Railway.

I own this stock of Canadian National Railway (TSX-CNR, NYSE-CNI). I am following this stock because I own it. In 2005 I was look for good companies to buy at a reasonable price. This stock met by criteria. This is a dividend growth company with a good record of dividend increases.

The dividend yield is low and the dividend growth is good. The current dividend at 2% is higher than the dividend yield generally is. The 5 year median dividend yield is 1.6% and the historical dividend yield is 1.5%. The dividends have grown at 18.3% and 17.5% per year over the past 5 and 10 years. The last dividend increase was in 2016 and it was for 20%.

This stock is considered to be a dividend growth stock. This means it increases it dividends on a regular basis. See my site for information on Dividend Growth Stocks.

The other thing to mention is that this company has good Dividend Payout Ratios. The DPR for EPS for 2015 was 28.5% and its 5 year median is 26%. The DPR for CFPS for 2015 was 18.6% and its 5 year median is 17%.

This company has been buying back its own shares recently. Shares on this company have increased due to Stock Options and decreased due to Buy Backs. The outstanding shares have dropped by 3.1% per year over the past 5 and 10 years. The outstanding shares have decreased every year since 2003. This means that things like EPS may not be as good as they appear. EPS has grown at 14.4% and 12.2% per year over the past 5 and 10 years. Net Income has grown at 11% and 8.6% per year over the past 5 and 10 years.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 14.67, 17.28 and 19.90. The corresponding 10 years Ratios are lower at 12.00, 13.55 and 14.91. The current P/E Ratio is 16.54. This is based on a stock price of $76.24 and 2016 EPS estimate of $4.61. This stock price testing suggests that the stock price is reasonable and around the median.

I get a Graham Price of $44.38. The 10 year low, median and high median Price/Graham Price Ratios are 1.15, 1.29 and 1.43. The current P/GP Ratio is 1.75. This stock price testing suggests that the stock price is expensive. The problem is that the stock price has been increasing faster than the book value for this stock.

The current Dividend Yield is 1.97% based on a stock price of $76.24 and dividends of $1.50. This is some 34% higher than the historical median dividend yield and this suggests a reasonable to good stock price. However, the Dividend Payout Ratios have been steadily increasing since this company went public in 1995.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Sell recommendations. Most the recommendations are a Hold and the consensus recommendations is a Hold. The 12 month stock price is $78.08. This implies a total return of 4.38% with 1.97% from dividends and 2.41% from capital gains.

In this news CNR talks about it plans to spend on infrastructure. Joseph Solitro of Motley Fool talks about why you should buy CNR. Analysts' talk about this stock on Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those blog entries here and here.

Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is here Canadian National Railway.

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, February 8, 2016

Exco Technologies Ltd.

Sound bite for Twitter and StockTwits is: Good stock, good price. This small tech stock is doing well and is earning money for its shareholders. It has good growth in dividends. See my spreadsheet on Exco Technologies Ltd.

I do not own this stock of Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). This is a stock given as a recommendation by Keystone at the Toronto Money Show of 2012. I decided to check into it as it is a small tech company that is paying dividends. Also, I decided to review this stock because Keystone has recommended some very good stocks in the past.

Dividends are low to moderate. The dividend growth is moderate to high. The current dividend yield is 1.89% and the 5 year median dividend yield is 2.80%. Dividend growth is at 24.3% and 16.5% per year over the past 5 and 10 years. Dividends just started 12 years ago. The reason that the 5 year growth is better than the 10 years growth is that dividends did not grow at first.

The Dividend Payout Ratios are good. The DPR for EPS for 2015 is 24% and the 5 year DPR for EPS is 26.7%. The DPR for CFPS for 2015 is 16.5% and the 5 year median is 18.2%.

The company had some difficulty in the 2008 to 2010 time frame with lower Revenue, Earnings and Cash Flow. However things picked up and the growth over the past 5 and 10 years to date is good. For example, Revenue has grown by 24.7% and 8.8% per year over the past 5 and 10 years. Revenue per Share has grown at 23.8% and 8.6% per year over the past 5 and 10 years.

The company has a strong balance sheet. The Liquidity Ratio for 2015 was 2.27, the Debt Ratio for 2015 was 3.50 and the Leverage and Debt/Equity Ratios for 2015 was 1.40 and 0.40. These are all very good ratios.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 8.50, 10.40 and 12.31. The corresponding 10 year ratios are close at 8.39, 10.21 and 12.04. The current P/E Ratio is 10.32 based on a stock price of $12.69 and 2016 EPS estimate of $1.23. This stock price testing suggests that the stock price is reasonable and around the median.

I get a Graham Price of $13.00. The 10 year low, median and high median Price/Graham Price Ratios are 0.73, 096 and 1.24. The current P/GP Ratio is 0.98. This stock price testing suggests that the stock price is reasonable and around the median. On an absolute basis an P/GP Ratio lower than 1.00 suggests a stock is selling at a good price.

Looking at the dividend yield the picture is basically the same. The historical median dividend is 1.95% which is some 3% higher than the current dividend yield of 1.89%. You want a current dividend yield that is higher than the median. In this case it is not much higher. So again this stock price testing suggests that the stock price is reasonable and around the median.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. The consensus would be a Buy. The 12 month stock price is $19.10. This implies a total return of 51.69% with 1.89% from dividends and 49.80% from capital gains. (See my blog for information on Analyst Ratings .)

Nick Waddell in the CanTech Letter gave a good report on this stock. In this News Release Exco Technologies Ltd talks about its first quarterly results for 2016. There are some analysts' comments at Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

Exco is a global designer, developer and manufacturer of dies, moulds, equipment, components and assemblies to the die-cast, extrusion and automotive industries. The Die Casting and Extrusion Technology groups operations are based in Canada, U.S., Mexico and Colombia and primarily serve automotive and industrial markets throughout the world. The Automotive Solutions Group has facilities are located in Canada, U.S., Mexico and Morocco and supply the North American, European and Asian markets. Its web site is here Exco Technologies Ltd.

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, February 5, 2016

AGF Management Ltd.

Sound bite for Twitter and StockTwits is: Cheap for a reason. I would not believe a turnaround in this company unless it actually happened and seemed sustainable. There is Net Insider Buying of 0.77% of market cap. This is relatively high. See my spreadsheet on AGF Management Ltd.

I do not own this stock of AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF), but I used to. I bought this stock in 2001 and sold half in 2006 and the rest in 2008. It used to be a dividend growth stock, but has not been one for some time now. I sold because I did not see that the stock would improve. It was raising dividends still but at the expense of DPR. In 2008 I was lucky that I sold before it crashed. It has yet to recover.

It is sad to see a once great company do so poorly. For the stock I bought I made a 2.08% total return with 2.09% from dividends and a capital loss of 0.01%. I know I was getting concerned about this stock in 2006 and I made a note that I was, but I did not state what I thought the problem was. The stock certainly hit its high in 2007 and has not recovered. They had certainly raised their dividends at the expense of their Dividend Payout Ratio since 2003.

It was not until they were paying out way more than their earnings in 2012 that they stopped raising their dividends. They were flat for a few years and it was not until 2015 when they finally cut their dividends. In 2006 I was probably concerned about the DPR.

This is no longer a dividend growth stock. For it to be that again, it will need to grow its business again. Analysts seem to expect slight improvements starting in 2017. However, I would want to some sustained improvement if I would ever consider this company a good investment again.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 13.69, 16.32 and 18.96. The 10 year corresponding ratios are similar at 12.42, 15.42 and 19.58. The current P/E Ratio is 9.33 based on a stock price of $4.57 and 2016 EPS estimate of $0.49. This stock price testing suggests that the stock is relatively cheap.

I get a Graham Price of $11.21. The 10 year low, median and high median Price/Graham Price Ratio is 0.73, 0.95 and 1.25. The current P/GP Ratio is 0.41 based on a stock price of $4.57. This stock price testing suggests that the stock is relatively cheap.

When I looked at analysts' recommendations, I saw Hold, Underperform and Sell recommendations. The consensus would be Underperform. The 12 month stock price is $4.86. This implies a total return of 13.35% with 7.00% from dividends and 6.35% from capital gains. It may seem high but most is dividends and you have to wonder if they are assured.

There is an article by Christina Pellegrini in the Financial Post that talks about Assets under Management (AUM) sliding this this company and other Canadian investment firms. This article in EMQ News and Analysis talks about insider buying and recent analysts ratings. See analysts' comments on Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here

AGF Management Limited is an integrated, global wealth management company, whose principal subsidiaries provide investment management for mutual funds, institutions and corporations, as well as high-net-worth clients; and trust products and services. They sell their products in Canada. Its web site is here AGF Management Ltd.

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, February 3, 2016

Shaw Communications Inc.

Sound bite for Twitter and StockTwits is: Cheap to reasonable price. This company is quite reasonable priced and it currently is a dividend growth company. They are making a profit for shareholders, but stock options and insiders selling are rather high. See my spreadsheet on Shaw Communications Inc.

I do not own this stock of Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). I am following this stock because it was a stock on Investment Reporter's list, a MPL Communications Publication.

This is a dividend growth stock with good dividends and low growth. The current dividend is 4.89% based dividends of $1.19 and a stock price of $24.25. The 5 year median dividend yield is 4.22%. I have dividend information going back to 1994. At first dividends were very low and dividend growth very low. Dividends were under 1% and dividend growth low at around 4%.

Dividends were ramped up between 2004 and 2009. This is why the 10 year dividend growth is at 23.4% per year. However, the dividend increases are again low with a 5 year growth of 5.9% per year. The last dividend increase was moderate at 7.7% in 2015. Since around 2009 the dividends have been in the 3 to5% range.

With the current dividend of 4.89% and assuming that dividend growth averages 5.9% per year, in 5 years' time you could be earning 6.51% on an investment today or in 10 years' time you could be earning 8.67% on an investment today or in 15 years' time you could be earning 11.55% on an investment made today.

I note that this company gives out a lot of stock options. Over the past 3 years outstanding shares have increased by 0.79%, 0.74% and in 2015 by 1.24% due to stock options. This is high by my standards. For the stocks that I cover the median increase in outstanding shares due to stock options is 0.27% and 70% of the companies increased their outstanding shares by 0.54% or less due to stock options.

Also there is a relatively a lot of insiders' selling. Net insider selling in 2015 was at 0.47% of market cap. The median net insider's selling for the stock I follow is at 0.02% and 70% of the companies I follow, insider selling at 0.11% or lower. Lots of insider selling could be due to the high amount of stock options granted.

I follow BCE, Manitoba Telecom and Telus Corp. also and these stocks are not out of line with stock options or net insider selling from my point of view.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.00, 14.14 and 15.98. The 10 year corresponding values are similar at 13.18, 14.83 and 17.36. The historical median P/E Ratio is 16.02. The current P/E Ratio is 13.62 based on a stock price of $24.25 and 2016 EPS estimate of $1.78. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of 21.02. The 10 year low, median and high median Price/Graham Price Ratios are 1.24, 1.48 and 1.68. The current P/GP Ratio is 1.15 based on a stock price of $24.25. This stock price testing suggests that the stock price is relatively cheap.

The stock looks reasonable to cheap using dividend yields also. I recently put out a report stock prices and dividend yield. See my spreadsheet at dividend growth stocks that I just updated for February 2016.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price is $27.38. This implies a total return of $17.79% with 4.89% from dividends and 12.91% from capital gains. It is a rather high return for a Hold rating.

This article in the Calgary Herald talks about TV mogul JR Shaw being the most generously compensated executive in Calgary in fiscal 2014 at $17.9M. Demetris Afxentiou of Motley Fool likes this company and its long term potential. Christina Pellegrini wrote in the Financial Post how Shaw may become a growth story in the future.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those report here and here.

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Its web site is here Shaw Communications Inc.

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, February 1, 2016

Valener Inc.

Sound bite for Twitter and StockTwits is: Not yet a dividend growth stock. Dividends have started to rise again, but under Gaz Metro dividend when down as well and up. I also worry about the heavy debt load of Gaz Metro which Valener is mostly invested in. See my spreadsheet on Valener Inc.

I do not own this stock of Valener Inc. (TSX-VNR, OTC-VNRCF). I was looking for another utility to invest in, in 2009 and I was looking possibly at another pipeline stock. This company has natural gas pipelines in Quebec. I also recognized the name of this company. In 2010 it reorganized and made a public utility stock out of 29% of what was Gas Metro. This makes the valuation of this stock very complex.

It looks like this stock is trying to be a dividend growth stock again. After the reorganization of Gaz Metro in 2010 this company was formed with a 29% interest in Gaz Metro. Shareholders got their dividend decreased by just over 19%. Then the dividends were flat for 4 years until last year when they were increased by 4% and this year they were again increase and this increase was 3.8%.

It would appear that would again be a stock with a good dividend and a low rate of increase. The current dividend yield is 5.53% and the 5 year median dividend yield 6.27%. There should be some caution with this stock. Under Gaz Metro dividends were decreased as well as increased. It is hard to know at present if this stock will truly by a dividend growth stock.

Most of this company is invested in Gaz Metro. Therefore you have to consider Gaz Metro's annual statements also. The most notable thing is that Gaz Metro debt ratios are a lot worse than Valener's debt Ratios. Gaz Metro's Liquidity Ratio is 1.05 against Valener's of 1.27. Gaz Metro's Debt Ratio is 1.34 against Valener's of 5.60. Gaz Metro's Leverage and Debt/Equity Ratios are of 3.95 and 2.95 against Valener's 1.22 and 10.22. In all cases Valener's ratios are good and Gaz Metro's are mediocre at best.

Both companies seem to have hit a low in 2012 and things have been picking up since then. Although 5 and 10 years growth is from non-existent to low to moderate; revenue, income and earnings have been growing over the last 3 years.

The Dividend Payout Ratio was below 100% in 2015 and is expected to be lower in 2016. The last time this ratio was below 100% was in 2010. The DPR for 2015 for EPS was 91% and is expected to be around 88% in 2016.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.69, 16.16 and 16.63. These are close to the 10 year values of 14.38, 15.67 and 16.60. The current P/E Ratio is 15.87 based on a stock price of $19.20 and 2016 EPS estimate of $1.21. This stock price testing suggests that the stock price is reasonable and around the median.

I get a Graham Price of $21.58. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.96 and 1.05. The current P/GP Ratio is 0.89. This stock price testing suggests that the stock price is reasonable and below the median.

However, if you look at dividends, the story is different. I am following this stock from Gaz Metro's into Gaz Metro's reorganization in 2010. I have historical date back to 1997 and beyond. The historical median dividend yield is 7.22% a value that is some 22% higher than the current dividend yield of 5.63% based on Dividends of $1.08 and a stock price $19.20. This stock price testing suggests that the stock price is expensive.

The current dividend yield is closer to the 5 year median dividend yield of 6.27% a value some 10% higher. This stock price testing suggests that the stock price is reasonable but above the median.

There are 5 analysts following this stock and all give a recommendation of Hold. The consensus therefore would be a Hold. The 12 month stock price is $18.34. This implies a total return of 1.15%, with a capital loss of 4.48% and dividends at 5.63%. This is based on a current stock price of $19.20.

Tammy Falkenburg on Zolmax talks about recent ratings for this company by National Bank and RBC Capital. A sector perform rating is the same as a Hold rating. There is a press release via Stock House where Valener requested a withdrawal of its Standard & Poor's ("S&P") corporate credit rating following a methodology change that resulted in what it views as an unjustified downgrade by the rating agency. Joseph Solitro of Motley Fool likes this stock.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

Valener owns 29% of Gaz Metro and also owns a stake in the Seigneurie de Beaupré wind power projects located northeast of the city of Québec. Gaz Metro is Quebec's leading natural gas distributor. Its web site is here Valener Inc.

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, January 29, 2016

Rogers Sugar Inc.

Sound bite for Twitter and StockTwits is: Yield is great. If you go by the yield, the stock price looks quite attractive. If you use valuation since the company has become a corporation, it looks rather cheap. Insider buying is relatively high at 0.09% of market cap. See my spreadsheet on Rogers Sugar Inc.

I do not own this stock of Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF). This stock was brought to my attention by Dividend Ninja. This company used to be a Unit Trust (TSX-RSI.UN) but it has recently converted to corporation. On change to a corporation, it lowered its dividend.

This is not a dividend growth stock. When they switched to a corporation they decreased dividends as a lot of other companies that made that switch did. However, I have dividend information going back to 1998 and dividends have both increased and decreased in the past.

They are still paying out more in dividends than they can afford. The Dividend Payout Ratio for EPS rose last year from 116% to 148%. It is not expected to be below 100% for the next 3 years. Another point is that the book value is going down, because they are paying out more in dividends than they can afford.

This stock has a high dividend yield. The current dividend yield is 8.6% and has a 5 year median dividend yield of 6.2%. An 8.6% yield on your money is quite good. With no analyst suggesting that this dividend will be cut, this is currently a very good return on your money.

The 5 and 10 years total return is 4.45% and 12.49% per year. The portion of this total return attributed to dividends is at 8.94% and 11.21% per year. The portion of this total return attributed to capital loss is at 4.49% over the past 5 years and to capital gain is at 1.28% over the past 10 years.

Since a peak in 2012, this stock's price has been moving south. The stock lost 10% in 2013, 11.9% in 2014 and 10.4% in 2015. So far this year the stock is down by 1.4%. If the price drop moderates then you could earn a nice dividend return. This stock is never going to earn much in the way of capital gains.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.49, 16.21 and 18.52. The corresponding 10 year ratios are a lot lower at 9.59, 10.71 and 11.89. The historical median P/E Ratio is 9.84 and much closer to the 10 year values. The current P/E Ratio is 11.94. This P/E Ratio is based on a stock price of $4.18 and 2016 EPS estimate of $0.35.

If you use the last 5 years of valuations, this stock price is relatively cheap. If you use the 10 year valuations, the current P/E Ratio shows that the stock price is relatively expensive. I find this interesting. It probably has to do with the fact that the company changed from an income trust to a corporation. We should probably use the valuations of the last 5 years.

I get a Graham Price of $4.47. The 10 year low, median and high median Price/Graham Price Ratios are 0.76, 0.87 and 0.97. The current P/GP Ratio is 0.93. This is based on a stock price of $4.18. This stock price testing would suggest that the stock price is relatively reasonable but above the median.

If I use dividend yield in checking the stock price, I see that the 5 year median 6.18% against the current dividend yield of 8.61%. There is a 39% difference and this testing would suggest that the stock price is relatively cheap.

However, if you use the historical median dividend yield, which is 10.01%, you again get a test that suggests that the stock price is relatively reasonable but above the median. There is a 14% difference between the current dividend yield of 8.61% and the historical dividend yield.

The thing is that the dividend yield would have been quite high in the past as this stock was an Income Trust since 1997 when it was listed and 2011. The yield at first came down to the 4% to 6% range. However, it has been climbing again in recent years.

There are 4 analysts' following this stock and all the recommendations are a Hold. The 12 month stock price consensus is $4.31. This implies a total return of 11.72% with 8.61% from dividends and 3.11% from capital gains.

Timberwolf Equity Research on Seeking Alpha basically says the same thing I am, good dividend and limited growth. James Dunn on OCTA Finance talks about National Bank rating this stock at Sector Perform in November 2015. Sector Perform is the same as a Hold.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here

Rogers Sugar Inc. was established to hold all of the common shares and notes of Lantic Inc. Lantic Inc. is a refiner, processor, distributor and marketer of sugar products in Canada. Its web site is here Rogers Sugar Inc.

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, January 27, 2016

Enghouse Systems Ltd.

Sound bite for Twitter and StockTwits is: expensive, losing momentum. Since hitting a peak in early January of this year, this stock has been going south. Great stock, but it seems to currently have gotten a little too high. It has also lost its upwards momentum. See my spreadsheet on Enghouse Systems Ltd.

I do not own this stock of Enghouse Systems Ltd. (TSX-ESL, OTC-EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividend.

This company started dividends in 2008, some 8 years ago. Dividends yields are quite low, but the dividend growth is good. The current dividend is 0.80% based on dividends of $0.48 and a stock price of $60.55. The 5 year median dividend yield is 1.36% and the historical median dividend yield is 1.71%. Dividends have grown at 25.7% and 23.6% over the past 5 and 7 years.

The Dividend Payout Ratios are quite moderate. The DPR for EPS for 2015 was 37.6% and it 5 year median is 31.5%. The DPR for CFPS for 2015 was 20.11% with a 5 year median of 17.7%.

Because the current dividend is so low at just 0.8%, in 5 years' time if dividends continue to grow at 23.6%, then the yield on a purchase today would be just 1.22%. In 10 years' time, if dividends continue to grow at 23.6%, then the yield on a purchase today would be 6.70%.

However, if you purchase this stock when the dividend is at its historical median of 1.71%, then the dividend yield on a purchase today would be 2.61% in 5 years' time or 14.23% in 10 years. Starting dividend yield can really make a difference in what yield you earn in the future on your original purchase price.

The growth in revenue, earnings and cash flow has been very good on this stock. For example, Revenues have grown at 24.3% and 19.2% per year over the past 5 and 10 years. Revenue per Share has grown at 22.9% and 18.7% per year over the past 5 and 10 years.

My 5 year low, median and high Price/Earnings per Share Ratios are 15.70, 23.12 and 30.54. The 10 year corresponding ratios are similar at 17.65, 22.80 and 29.53. I get a current P/E Ratio of 36.70 based on a stock price of $60.55 and 2016 EPS estimate of $1.65. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $18.43. The 10 year low, median and high Price/Graham Price Ratios are 1.12, 1.65 and 1.34. The current P/GP Ratio is 3.28. You expect for a fast growing tech stock that the P/GP Ratio would be high, but a ratio of 3.28 is a little too high. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations, I see Buy and Hold recommendations. There is only 2 analysts following this stock and the consensus would therefore be a Buy. The 12 month stock price is $75.00. This implies a total return of 24.66% with 23.86% from capital gains and 0.79% from dividends. This stock hit just over $75.00 in January, but has been south since then. Stocks tend to be overbought or oversold.

Insider selling over the past year is high at 1.39% of market cap. For the stocks I track the median Net Insider selling is 0.02% and 75% of the stock has NIS at a 0.11% or less. The company gives out a lot of stock options, for 2015 stock options were at 1.59% of the outstanding shares. Most of the insider selling has happened since September of 2015 and there was a cluster of selling between $70 and $75.

Technical Analysis on 4 Traders give Bearish in the Short Term and Bullish in the Long Term. This makes sense. The Catalyst Tree on Seeking Alpha gives a glowing report on this stock.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see the reports here and here.

Enghouse Systems Limited is a global provider of enterprise software solutions serving a variety of distinct vertical markets. Its strategy is to build a large diverse enterprise software company through strategic acquisitions and managed growth. Its web site is here Enghouse Systems Ltd.

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, January 25, 2016

Transcontinental Inc.

Sound bite for Twitter and StockTwits is: Recovering and cheap. I think that this company is finding its feet again. It has made good efforts to recover and I still think it is relatively cheap. See my spreadsheet on Transcontinental Inc.

I own this stock of Transcontinental Inc. (TSX-TCL, OTC-TCLAF). This is a dividend growth stock. It was on a number of dividend lists. However, it fell on hard times after 2008, but currently seems to be recovering. It is still on the Canadian Dividend Aristocrats Index.

The question I think you have to ask yourself about this stock is, is it making any progress?

They have not made much progress in regards to Revenue. It was down by some 3% in 2015 and is only expected to rise by 1.4% in 2016. Over the past 5 and 10 years Revenue is down by around 1% per year.

EPS is up by 10.2% and 8.1% per year over the past 5 and 10 years. This is only because 2015 was a great year. The 5 year running averages over the past 5 and 10 years for EPS is down by 4.9% and 6.6% per year. They could not cover their dividends in 2012 and 2013. The Dividend Payout Ratio for 2015 was 20% for EPS and 13.8% for CFPS. So DPR are currently good.

However, this company did but out an adjusted EPS value since 2005. Companies do that when they feel that the EPS calculated in the approved normal way does not properly reflect how well they are really doing. Here the growth over the past 5 and 10 years is 4.1% and 4.4% per year. The 5 year running average growth over the past 5 and 10 years is similar at 4.7% and 5.2% per year.

What would support having an adjusted EPS this is that the Return on Equity on comprehensive income has been higher over the past 3 years than for the ROE on net income. The ROE on comprehensive income was 27% in 2015 and it has a 5 year value of 9.6%. The ROE on net income was 25.8% in 2015 and its 5 year median value was 5.9%.

Growth in cash flow has been moderate. Cash Flow has grown at 3.7% and 3.4% per year over the past 5 and 10 years. CFPS has grown at 4.3% and 5.1% per year over the past 5 and 10 years. (There is no discrepancy over the 5 year running average growth in CFPS which runs at 4.6% and 4.5% per year over the past 5 and 10 years.)

I just bought this stock in January of 2015. My total return to date is 15.9% per year with 12.1% from capital gains and 3.8% from dividends. The 5 and 10 year total return on this stock is 12.88% and 1.36% per year with 5.89 and 2.98% per year from dividends and 6.99% and a capital loss of 1.63% per year

The debt ratios are a mixed bag. The Liquidity Ratio has never been high. The one for 2015 was 1.26 and it has a 5 year median of 1.00. I would rather this be 1.50 or more. If you add in cash flow after dividends the ratio becomes 1.78 for 2015 with a 5 year median of 1.62. So the company depends on cash flow to meet current liabilities would be the implication of this.

The Debt Ratio has always been good. The current one is 1.93 and its 5 year median is 1.78. I like this ratio to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2015 are 2.08 and 1.08 and their 5 year ratios are 2.09 and 1.13. These ratios have been declining since 2012. I prefer these to be less than 2.00 and less than 1.00 respectively. However, these ratios are not really out of line for this sort of company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 4.33, 5.24 and 6.14. The corresponding 10 year ratios are a little higher at 7.85, 8.98 and 10.11. The current P/E Ratio is 7.28 based on a stock price $17.68 and 2016 EPS estimate of $2.43. Analysts think that the EPS will drop by some 14% in 2016. Analyst's estimates for EPS and Adjusted EPS are quite close for the future. It would seem to me that the P/E Ratio is relatively reasonable and below the median.

(The same test using Adjusted EPS would get you a relatively reasonable price above the median. In this case the P/E Ratio would currently be 7.34)

I get a Graham Price of $26.66. The 10 year Price/Graham Price Ratios are 0.71, 0.89 and 0.97. The current P/GP Ratio is 0.66. This stock price testing suggests that the stock price is relatively cheap.

The historical median dividend is 1.29% and the current dividend yield is 3.85%. The current dividend yield is based on $0.68 and a stock price of $17.68. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus would be a Hold. The 12 month stock price is $20.44. This implies a total return of 19.46% with 3.85% from dividends and 15.61% from capital gains. Recommendations and total return does not match up as a 19% return is high for a Hold recommendation. Also, analysts still expect the dividends to grow.

In this article in the Financial Post from by Christina Pellegrini talks about how this company is a winner with Rogers and Toronto Star cutting back on their printing and giving it to Transcontinental. When TV came into wide spread use, everyone was saying that Radio was dead. However, people are still making a living off of radio. It is not that new technology does not change things; they just do not change things in ways people expect.

Nelson Smith of Motley Fool talks about three dividend stocks I like that aren't on many investors' radars. One of these companies is Transcontinental. This report in Zolmax talks about recent analysts' rating on Transcontinental. By the way a "sector perform" rating is a Hold rating.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see these reports here and here.

Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the third-largest in North America. Its web site is here Transcontinental Inc.

Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the third-largest in North America. Its web site is here Transcontinental Inc.

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, January 22, 2016

National Bank of Canada

Sound bite for Twitter and StockTwits is: Buy at 5.7% yield. Who knows where the markets will go from here. They may head lower and they may not. However, the stock is still relatively cheap. See my spreadsheet on National Bank of Canada.

I do not own this stock of National Bank of Canada (TSX-NA, OTC-NTIOF). I thought I should follow one of the smaller Canadian Banks. This seems like a good choice.

This is one of the smaller banks of Canada. It has a moderate to good yield and the growth of dividends is moderate. The current dividend yield is 5.7% and the 5 year median dividend yield is 4.08%. These are good yields, as I believe any yield over 4% is. The historical median yield is moderate and somewhat lower at 3.89%. The dividend growth is 10% and 9.2% per year over the past 5 and 10 years.

This bank did quite well in the last financial crisis as it only held its dividends flat for two years of 2009 and 2010. The last dividend increase was this year and it was for 3.9%. This bank also tends to increase dividends more than once in a year and the total dividend increase in 2015 was 9%.

If this bank continues to raise dividends at 10% a year, in 5 and 10 years' time you could be earning 14.8% and 23.8% on a purchase today if at $37.90. The 10 year median dividend yields on original stock price if price was median price over the last 5, 10 and 15 years are dividend yields of 6.7%, 10.1% and 21.2%. For example, after 5 years this stock purchased over the past 10 years at a median price had a median dividend yield of 6.7%.

This stock's price fell by 18.5% in 2015 and 6% so far this year. This means that total return to date is rather low. The 5 and 10 year total return to date is 7.11% and 5.65% per year. The portion of this total return attributable to dividends is 5.07% and 4.23% per year. The portion of this total return attributable to capital gains is 2.04% and 1.42% per year. The beauty of dividend growth stocks is that even though the stock price is falling, dividends have grown at 9% last year and 7% so far this year.

Dividend Payout Ratios for EPS for 2015 was 44.4% and the 5 year median is 38.7%. The DPR for CFPS for 2015 was 10.6% and the 5 year median is 14.6%. This bank would appear to be able to afford its dividends and its dividend growth.

The Debt Ratio at 1.06 is fine for a bank. The Leverage and Debt/Equity Ratios are a little high for a Canadian Bank at 19.03 and 18.03. (The other banks are in the 16.00 and 15.00 range.)

The Return on Equity on Comprehensive Income has a tendency to be lower than the ROE on Net Income. In 2015 the ROE on Net Income was 18.9% and its 5 year median was 18.9%. The ROE on Comprehensive Income was 12.9% and its 5 year median was 14.9%. When this happens it suggests that the EPS may not be of the best quality. This is a cautionary note.

The CEO owns shares worth around $6.5M and the Chairman owns shares worth around $0.9M. One of the officers of this bank owns shares worth $1.9M. This is a good sign and a positive note.

This Newswire article is about this bank issuing preferred shares recently. This article on EMQ News Analysis talks about recent analysts ratings on this bank. See recent analysts' comments on Stock Chase. (Note that according to my records it was 1992 and 1993 when dividends were cut. They were back up to precut dividends by 2001. They ran into earnings problems at that time.)

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.04, 10.62 and 11.89. The corresponding 10 year ratios are a bit higher at 9.15, 10.47 and 12.05. The current P/E Ratio is 7.93 based on a stock price of $37.90 and 2016 EPS estimate of $4.78. This stock price testing suggests that the stock price is cheap.

I get a Graham Price of $50.32. The 10 years low, median and high median Price/Graham Price Ratios are 0.80, 0.89 and 1.05. The current P/GP Ratio is 0.75. This stock price testing suggests that the stock price is cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform Recommendations. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 months stock price consensus is $48.63. This implies a total return of 33.98% with 28.28% from capital gains and 5.70% from dividends. The recommendations and the implied total return do not match up.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here

National Bank of Canada provides financial services to consumers, small and medium-sized enterprises, and large corporations & has branches in every province in Canada. It is also represented in the U.S. and Europe through its subsidiaries and alliances. Its web site is here National Bank of Canada.

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.