Thursday, August 17, 2017

Liquidity Ratio

A big thing that would bother me about a dividend stock would be very low Liquidity Ratios. If the Liquidity Ratio is lower than 1.00, it means that current assets cannot cover current liabilities. This can cause trouble in the best of times; however it can be devastating if we suddenly go into a bear market then recession.

The Liquidity Ratio is a very easy figure to ascertain. Look for a company's Balance Sheet and divide the current assets by the current liabilities to get this ratio. It is best if this ratio is 1.50 or higher. I generally do not like mucking about with this ratio to get it to a decent number, but sometimes that may be unavoidable. With the best companies this is usually not a problem.

Unfortunately the Liquidity Ratio can get more complex. Some companies, especially utilities rely on cash flow to cover current liabilities. In order the calculate the effect of using cash flow, add to the assets Cash Flow from Operations, less dividends paid. You can find dividends paid are in the Financing Activities section.

Sometimes the Liquidity Ratio is low because debt has come due and there is a large amount of Long Term Debt due in current year under Current Liabilities. First look into the notes on Financial Statements and ensure that the debt is being handled. If this is true, you can subtract the Long Term Debt due in the current year from the current liabilities before you calculate the Liquidity Ratio.

I remember the problem that Teck Resources Ltd (TSX-TECK.B, NYSE-TECK) had when they bought Fording Coal. Their Liquidity Ratio plummeted to 0.44 just as the 2008 recession hit. The stock also plummeted and they had to cut the dividend.

It is not easy to find articles on their problems. However, Gordon Pitts in the Globe and Mail in June 2010 talks about problems that Teck had from this 2008 purchase. Andy Clark on Reuters talks about the problems Teck was having in 2009. There is a discussion on Liquidity Ratios on Investopedia

On my other blog I wrote yesterday about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY)... learn more. Tomorrow, I will write about ONEX Corp. (TSX-OCX, OTC-ONEXF)... learn more on Friday, August 18, 2017 around 9 am.

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 site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 15, 2017

The West

Western culture seems at this point to be dying. The most important way is that we are not having enough children. This is how cultures and civilizations die. If you stop having children you have no future. In the Western culture we are all about helping the old. We are heavily in debt due to pensions and health care. The most expensive people are old people for both these expenditures.

It was not the baby boomers who started these programs, but the parents of the boomers who did. They got their health care and pensions because there were a lot more boomers. The generations after the boomers are smaller and this is causing a problem.

We are not supporting the youth that we have. Our youth are heavily in debt due to education cost. This is a big problem for our future. Baby boomers protest that we cannot afford to help with higher education costs. Most baby boomers attitude is leave my pension and health care alone at all costs.

And we have some stupid results. I meet at a meetup a young person who had a concession. She was not working because of the effects of this concussion. She was told to get physiotherapy, but she could not afford it. She also could not work because of the concussion. I also know of a 93 year old man who had a brain aneurism and after he did some recovery in the hospital was sent to physiotherapy in a specialized hospital on University. The 93 year old man had everything covered under OHIP.

No, I do not think that OHIP should cover everything. I paid for physiotherapy in the past, but I could also afford to do so. But if you need something like physiotherapy to go back to work, but cannot do that because you cannot afford it we have a system that is dysfunctional.

We also need to do more with funding day care. It may be counter-intuitive, but there is a positive co-relation between the percentage of adult women in the workforce and the birth rate. The higher the proportion of adult women that work the higher the birth rate.

My child is in his thirties. When I was working and he was going to day care, I paid more for day care that I did in rent. It was nothing fancy. It was run by Social Services of Toronto. It did not have to be as expensive as it was. When my child was school age, he was in school most of the day, but the day care had two shifts of full time workers as they covered the children from 8 am to 6 pm. The workers were also covered by a union.

When I asked what the day care workers were doing when children were in school, I was told this was planning time. So from 9 am to 12 am and from 1 pm to 4:30 pm was needed each day for planning? And, the school was complaining that they did not have enough teacher assistant?

The western culture maybe dying, but they are into interesting things. I read Ben Hunt, one of the most interesting writers I have come across. His latest missive is here. In his covering email he talked about a recent post on AI BS Detectors & the Origins of Life by Neville Crawley. This lead me to an article in Quanta Magazine byNatalie Wolchover for an article called "First Support for a Physics Theory of Life".

One problem we have in the West is that a lot of the people having babies do not believe in evolution. So will the best in Western thought die with the Western culture?

On my other blog I wrote yesterday about EnerCare Inc. (TSX-ECI, OTC-CSUWF)... learn more. Tomorrow, I will write about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY)... learn more on Wednesday, August 16, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, August 10, 2017

Volatility

If you are a conservative investor and you are worried about volatility, you may be looking at the wrong information. You should only be in stocks that pay dividends and in little or no resource stock. You should not be looking at the value of your portfolio, but only the income it produces. Your income should, at all times be stable or increasing.

Most of the volatility of stock price has nothing to do with your dividend stock's company value and everything to do with the general feeling towards stocks. Most dividend paying stocks are relatively stable over time if you view them from dividend paying point of view. Most dividend paying stocks produce stable and growing dividends over time.

In every bear market there are stocks that cut or suspend their dividends. There are also ones that keep them stable and others that increase their dividends. If you have a diversified portfolio of dividend paying stocks bear markets should not affect the ability of your portfolio to produce dividends. In bear markets my portfolio has lower dividend increases and that is all.

If a stock cuts or suspense the dividend it is time to take a look at that stock to decide if it is one you want to continue to hold. If you are holding stocks for the very long term as I do, it is not surprising that there will be difficulties every once in a while. The question to ask is: Is the company behaving responsibly? Cutting or suspending a dividend maybe the responsible thing to do for the company for the long term future.

On my other blog I wrote yesterday about Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more. Tomorrow, I will write about Newfoundland Capital Corp. (TSX-NCC, OTC-none)... learn more on Friday, August 11, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 8, 2017

Dividend Changes

Since I started to publish dividend increase and decreased in 2014, The month of August 2017 is the first month to have no activity.

# Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
1 Jan 5 1 4 0 4 0 4.0 0.0
2 Feb 10 0 5 2 8 0 14 0 9.0 0.0
3 Mar 23 0 18 6 19 3 15 1 18.5 2.0
4 Apr 10 2 8 4 9 3 14 0 9.5 2.5
5 May 5 0 3 2 6 1 7 1 5.5 1.0
6 Jun 13 0 18 0 14 1 14 1 14.0 0.5
7 Jul 4 1 3 1 6 1 3 0 3.5 1.0
8 Aug 0 0 4 0 4 2 9 0 4.0 0.0
9 Sep 7 1 7 3 9 0 7.0 1.0
10 Oct 1 1 1 1 1.0 1.0
11 Nov 6 0 4 1 5.0 0.5
12 Dec 12 0 13 2 13 0 13.0 0.0
Tot 70 4 88 16 95 18 99 4 94.0 9.5
154 45% 3% 57% 10% 62% 12% 64% 3% 61% 6%


So far this year, we have more increases and less decreases than at this point last year. In 2016 at this point we have 63 stocks with increases and 15 with decreases. So far this year we have 70 stocks with increases and only 4 with decreases.

# Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
1 Jan 5 1 4 0 4 0 4.0 0.0
2 Feb 10 0 5 2 8 0 14 0 9.0 0.0
3 Mar 23 0 18 6 19 3 15 1 18.5 2.0
4 Apr 10 2 8 4 9 3 14 0 9.5 2.5
5 May 5 0 3 2 6 1 7 1 5.5 1.0
6 Jun 13 0 18 0 14 1 14 1 14.0 0.5
7 Jul 4 1 3 1 6 1 3 0 3.5 1.0
8 Aug 0 0 4 0 4 2 9 0 4.0 0.0
Tot 70 4 63 15 70 11 76 3 68.0 7.0
154 45% 3% 41% 10% 45% 7% 49% 2% 44% 5%


I must admit that in the past when I have updated my spreadsheets on my own stock portfolio there were months with no activity. My updates for my stocks are when dividends are paid. The above tables are based on when dividends are declared.

On my other blog I wrote today about Ballard Power Systems Inc. (TSX-BLDP, NASDAQ-BLDP)... learn more. Tomorrow, I will write about Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more on Wednesday, August 9, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, August 4, 2017

Something to Buy August 2017

There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy August 2017 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 22 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Nine (or 41%) are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). There is no change from last month

I follow 12 Consumer Staples stocks. One company is showing as cheap by the historically high dividend yield and that company is Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). Five stocks (or 42%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) is now cheap by historically high dividend yield and Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF) and Metro Inc. (TSX-MRU, OTC-MTRAF) are now cheap by historical median dividend yield.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); Granite Real Estate (TSX-GRT.UN) H & R Real Estate Inv. Trust (TSX-HR.UN, OTC-HRUFF) and Melcor Developments Inc. (TSX-MRD. H & R Real Estate Inv. Trust (TSX-HR.UN, OTC-HRUFF) has been added to the list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 50%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) is back on this list as cheap by historical median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). This is the same as last month.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC), Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF, NYSE-SLF). There is no change from last month.

I follow 31 Industrial stocks. Canam Group Inc. (TSX-CAM, OTC-CNMGA) has gone private and has been removed from the TSX. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are and SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change from last month.

I have 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 42% are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF) and PFB Corp (TSX-PFB, OTC-PFBOF). Canam Group Inc. (TSX-CAM, OTC-CNMGA) has been removed from this list.

I have 15 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 20% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). There is no change from last month.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.

I follow 10 Energy stocks. One Stock or (10%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF). There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). Last month it was Suncor Energy (TSX-SU, NYSE-SU) showing as cheap by the historical high dividend yield.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). There is no change from last month.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF) and Enbridge Inc. (TSX-ENB, NYSE-ENB). This is the same as last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stock (or 25%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). There is no change from last month.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Four stocks (or 100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Quarterhaill Inc. (TSX-QTRH, NASDAQ-QTRH), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.

On my other blog I wrote yesterday about TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more. Tomorrow, I will write about Savaria Corporation (TSX-SIS, OTC-SISXF)... learn more on Friday, August 4, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 1, 2017

Dividend Stocks August 2017

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for August 2017.
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 66 stocks with a dividend yield higher than the historical median dividend yield and
  • 64 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 1 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 64 stocks with a dividend yield higher than the historical median dividend yield and
  • 61 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • I had 9 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 45 stocks with a dividend yield higher than the historical average dividend yield and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
If you had one share of each stock, total dividends last month would be $157.56. This month dividends would be $157.04. However this is being reset because of Canam stock being delisted this month. Of the stock that I follow 0 stocks has raised their dividends since last month. Dividends raises are denoted in green.

Also, of the stocks that I follow, 0 stocks decreased or suspended their dividends.

Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN). This stock started to trade on the NYSE as AQN on November 24, 2016. I have updated my records. It used to have an OTC symbol of AQINF. I should have brought this fact up last month.

Canam Group Inc. (TSX-CAM, OTC-CNMGA) which was an industrial in manufacturing has been taken private and delisted from the TSX. The press release on this is here. There is a new release on Cision. Nicolas Van Praet talks about this in a Globe and Mail article. It is interesting that the company switch from a listing on the TSX to go with a private equity firm American Industrial Partners.

Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF) (that used to be Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about Pulse Seismic Inc. (TSX-PSD, OTC- PLSDF)... learn more. Tomorrow, I will write about TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more on Wednesday, August 2, 2017 around 5 pm

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto.

Thursday, July 27, 2017

Diversification

The question is how much diversification do you need? If you are just starting out and have a few thousand dollars, one stock is enough. When you have at least $10,000 you should have 3 stocks in difference sectors, like Financial, Utility and REIT. When you build your portfolio to another $10,000 you should be looking to diversify into another stock.

It is important to have stocks in different sectors. The TSX divides the TSX stocks into sectors of:

Sector Example 1 Example 2
Consumer Discretionary Dollarama Inc. EnerCare Inc.
Consumer Staples Jean Coutu Group Inc. Loblaw Companies Ltd
Energy ARC Resources Ltd. Imperial Oil Limited
Financial Bank of Montreal Manulife Financial Corp
Health Care Chartwell Retirement Res. Valeant Pharmaceuticals
Industrials Canadian National Railway Finning International Inc.
Information Technology BlackBerry Ltd Computer Modelling Group Ltd.
Materials Barrick Gold Corp Franco-Nevada Corp
Real Estate Brookfield Property Partners L.P. First Capital Realty Inc.
Telecommunications BCE Inc. Rogers Communications Inc.
Utilities Fortis Inc. Superior Plus Corp.


The Investment report divides their stocks into the following sectors:

Sector Example 1 Example 2
Manufacturing PPG Industries Magna International Inc
Resources Teck Resources Ltd Imperial Oil Ltd
Consumer Jean Coutu Group Inc Shaw Communications
Financial Bank of Montreal Manulife Financial Corp
Utility TransCanada Corp BCE Inc


There are theories about maximum diversification that you should do. Some hold a portfolio does not need more than 15 stocks and some say 20. But it is important to cover different sorts of companies because in different economic climates, sectors can act differently. You want to limit your exposure to any one type of asset or risk.

The sectors act differently in different parts of the economic cycle. An illustration can be seen on Bay Street. For today, some sectors are going up and some are going down. There is a good article on the Business Cycle or Economic Cycle and Investing at Wall Street Survivor.

When you are starting off and if you are a conservative investor use the Beta Ratio to help in picking stocks. Pick stocks that have a Beta Ratio of around or below 1.00. Basically this measures volatility against the TSX, so if the Beta Ratio is 1.00 it is just a volatile as the TSX. Your first stocks should have a low Beta. Also, I would not buy any in the Resources or Materials sectors as they are higher risk.

On my other blog I wrote yesterday about Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more. Tomorrow, I will write about Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more on Friday, July 28, 2017 around 9 am.

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 site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, July 25, 2017

Home Capital Group

Because I had bought some TD stock in 2009 and have made a lot of money on it, I sold some and bought some Home Capital Group on 6 March 2017 at $25.96 per share. The company had wobbled a bit when the company announced in February 2017 that it received an enforcement notice from staff of the Ontario Securities Commission.

It basically fell off a cliff in mid-March after the company reported several of its current and former executives have been served with enforcement notices from the Ontario Securities Commission over the company’s disclosure of its investigation into fraudulent mortgage documents. It hit a low of $5.85 in May 2017. This notice basically set up a run on this bank. On its way down I bought some more shares at $6.85 each and that would give me an ACB of $22.14.

The stock hit a high of $19 when Warren Buffet rode to its rescue in June 2017. It headed south again after the announcement and now resides at $14.00 plus.

At its lowest point I would have lost some 73.6% of my investment. At $19.00, my loss would have been around 14%. With today’s prices I am down some 36%. Currently analysts’ 12 month stock price ranges from $23.00 (gain of 3.9%) or a low of $12.13 (a loss of 45%) to an average of $17.69 (a loss of 20%).

I need to decide what to do with this. I will take my time and think about it. If I had panicked in May, I would have loss considerable more than I will currently lose. The thing with financials is that you can earn a lot of money investing in them but they are subject to runs. People can panic and pull out money. Banks and Financials are really confidence plays.

On my other blog I wrote yesterday about Lassonde Industries Inc. (TSX-LAS.A, OTC-LSDAF)... learn more. Tomorrow, I will write about Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more on Wednesday, July 26, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, July 20, 2017

Canadian Banks

This is a great article on Canadian Banks by 5iResearch. It gives lots of great reasons why Canadian bank stocks should be part of every Canadian stock portfolio.

The Canadian banks would not make the US dividend achievers list because they have not grown their dividends for the past 10 years because they all stopped increases because of the 2008 crisis. However, they do have a very long history of dividends and dividend growth.

The banks are now on back on the Canadian Dividend Aristocrats because in Canada we have lower standards for our lists. For the Canadian Dividend Aristocrats list a company need only increase the dividends for the past 5 years.

The reason we have lower standards on dividend achievers is that there are far fewer stocks in Canada than in the US. We do have companies that have increased their dividends for the past 10 or even 25 years, but our lists are very short.

On my other blog I wrote yesterday about Atlantic Power Corp (TSX-ATP, NYSE-AT)... learn more. Tomorrow, I will write about Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Friday, July 21, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, July 18, 2017

Do Not Panic

The best advice when investing in stocks is never ever panic. Let the stock market or your individual stock do what it wants, but do not panic no matter what happens. That is how you lose money on the stock market. I was at lunch the other day and a lady said she was worried about the stock market and so she sold all her shares. This is exactly how you lose money on the stock market.

I have been through a number of bear markets and individual stocks that tanked, but overall my portfolio has done well over the years. Maybe I left it late to sell stocks that have tanked, but still over all I did well and my dividend income has only gone up.

More to the point maybe is my son's portfolio which is relatively small. He has investments in some 15 stocks. So far he has two duds in stocks, Reitmans and TransAlta. His portfolio was increasing in value and in dividend income. When problems occurred in Reitmans and TransAlta the increase in dividends and value paused and then continued even though he still kept these stocks.

On my other blog I wrote yesterday about Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more. Tomorrow, I will write about Atlantic Power Corp (TSX-ATP, NYSE-AT)... learn more on Wednesday, July 19, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, July 13, 2017

Dividend Achievers

You can find a great list of Canadian Dividend Achievers with the blogger Instagram. He gives a list Canadian Stocks with at least 10 years of dividend growth. If you are looking for some Canadian Stocks to buy, this would be a great place to starting looking for a stock.

There is a lot of really good information on quite a number of Canadian Stocks on this site. It is worthwhile downloading his spreadsheets to have a look at them and the information he has on quite a number of Canadian stocks. If you want to follow him on twitter go to @DividendEarner.

In the US, the Dividend Aristocrats have to have 25 years of dividend growth and the Dividend Achievers have to have 10 years of dividend growth. In Canada the Dividend Aristocrats list on the TSX have to only have 5 years of dividend growth. The list that is here is for 10 years of dividend growth.

I personally like dividend growth companies. I do not insist that they increase their dividends every year, but I like to see some nice growth over time.

On my other blog I wrote yesterday about Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF)... learn more. Tomorrow, I will write about TMX Group Ltd (TSX-X, OTC-TMXXF)... learn more on Friday, July 14, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, July 11, 2017

New Flyer Industries Inc.

I started to look at this stock of New Flyer Industries Inc. (TSX-NFI, OTC- NFYEF) but ran into problems in for the year of 2011. Basically what seemed to have happen is that people who held subordinate notes got some 89% of the company while the original shareholders got 11% of the company.

It is difficult to reconstruct what was going on with the company prior to 2011. There is not much information online about dividends or stock prices prior to this and lots of it makes no sense. I do not like stocks that are overly complex and I have already spent too much time on this stock trying to sort out how the changes in 2011 affect the shareholders. Certainly it was not a good outcome for the shareholders.

If I only do a spreadsheet on what happened after 2011, this will not give a full picture of this stock. It certainly seems to be doing well currently, but past history does count and I do not think it I can ignore it. If I do just from after 2011 it would appear to be a far better stock in the past than it actually was. It would give a very false impression of this company.

I am not willing to spend any more time on this stock. They obviously had difficulties in 2011 for the people holding subordinate notes to really take over the company. It is not a company I would want to invest in so this will not be one of the new companies I will be covering in the future.

I have started to investigate Logistec Corp which was also on my list of stock suggestions .

On my other blog I wrote yesterday about Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more. Tomorrow, I will write about Inter Pipeline Ltd (TSX-IPL, OTC-IPPLF)... learn more on Wednesday, July 12, 2017 around 5 pm

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, July 6, 2017

Dividend Stocks July 2017

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for July 2017.
  • I have 1 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 64 stocks with a dividend yield higher than the historical median dividend yield and
  • 61 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 40 stocks with a dividend yield higher than the historical average dividend yield
  • I have 64 stocks with a dividend yield higher than the historical median dividend yield and
  • 54 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • I had 9 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 45 stocks with a dividend yield higher than the historical average dividend yield and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
If you had one share of each stock, total dividends last month would be $161.34. This month dividends would be $157.56. However this is being reset because of splits occurring this month. Of the stock that I follow 4 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF)
Canadian Pacific Railway (TSX-CP, NYSE-CP)
Empire Company Ltd. (TSX-EMP.A, (OTC-EMLAF)
Medtronic PCL (NYSE-MDT)

Of the stocks that I follow no company has decreased their dividends. Of the stocks that I follow one company has suspended their dividends because as I understand it, the HCG has suspended their dividend although site like TD and G&M are still showing a dividend.

Home Capital Group (TSX-HCG, OTC-HMCBF).

For Power Corp (TSX-POW, OTC-PWCDF) I had dividends as $1.34 on the spreadsheet last month and they should be $1.43. CCL Industries (TSX-CCL.B, OTC-CCDBF) has done a 5 to 1 split. Waste Connections Inc. (TSX-WCN, NYSE-WCN) has done a 3 to 2 split. Penn West Petroleum (TSX-PWT, NYSE-PWE) is now Obsidian Energy Ltd. (TSX-OBE, NYSE-OBE)

Canyon Services Group (TSX-FRC, OTC-CYSVF) has a plan of arrangement with Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) for 1.7 shares of Trican for each share of Canyon. So now I am following Trican from Canyon stock. DH Corporation (TSX-DH, OTC-DHIFF) has been acquired by Vista Equity Partners and so deleted from my list.

Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF) (that used to be Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF)... learn more. Tomorrow, I will write about Suncor Energy Inc. (TSX-SU, NYSE-SU)... learn more on Wednesday, July 5, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto

Tuesday, July 4, 2017

Something to Buy July 2017

Since I cannot seem to upload the spreadsheet to my website, I am putting up the second part of my review of my stocks and if they are cheap or not via Dividend Yield testing.

There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy July 2017 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 22 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Nine (or 41%) are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). Goeasy Ltd. (TSX-GSY, OTC-EHMEF), is new to this list.

I follow 12 Consumer Staples stocks. There no companies showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). This is the same as last month.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. This is the same as last month.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Three stocks (or 37%) are showing cheap by the historical median dividend yield. These stocks are CIBC (TSX-CM, NYSE-CM), National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Home Capital Group (TSX-HCG, OTC-HMCBF) is no longer cheap by historically high dividend yield or by historical median dividend yield. Bank of Nova Scotia (TSX-BNS, NYSE-BNS) is no longer cheap by historical median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). DH Corporation (TSX-DH, OTC-DHIFF) has been removed from the TSX.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC), Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF, NYSE-SLF). There is no change from last month.

I follow 32 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are and SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change from last month.

I have 8 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 50% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF) and PFB Corp (TSX-PFB, OTC-PFBOF). Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) has been removed from the list.

I have 15 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 20% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Canyon Services Group (TSX-FRC, OTC-CYSVF) has a plan of arrangement with Trican Well Service Ltd (TSX-TCW, OTC-TOLWF). So now I am following Trican from Canyon stock

I follow 8 Material stocks. I am now following Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF). None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.

I follow 10 Energy stocks. One Stock or (10%) is showing as cheap by the historical high dividend yield. It is Suncor Energy (TSX-SU, NYSE-SU). There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). Last month it was Ensign Energy Services (TSX-ESI, OTC-ESVIF) showing as cheap by the historical high dividend yield.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). There is no change from last month.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF) and Enbridge Inc. (TSX-ENB, NYSE-ENB). This is the same as last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stock (or 25%) is showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN) has been added to this list. Last month only two showed a cheap by historical median dividend yield and they were ATCO and Emera.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Four stocks (or 100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Quarterhaill Inc. (TSX-QTRH, NASDAQ-QTRH), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.

On my other blog I wrote yesterday about Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF)... learn more. Tomorrow, I will write about Suncor Energy Inc. (TSX-SU, NYSE-SU)... learn more on Wednesday, July 5, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, June 30, 2017

Debt and Dividends

Sorry, but I meant to publish this on Thursday and must have gotten off track.

Last week I spoke about debt ratios. What I want to talk about today is company debt and possible implications on dividends. If you do dividend investing like I do, you should be aware of this.

Long term debt usually comes with a Covenant . Here I have referred you to the definition on Investopedia. Perhaps a clearer answer to what is a Debt Covenant is shown here at Simple Studies.

As an investor you should want to know if the companies you invest in have long term debt with covenants and what the covenant might say. If you are investing for dividends in companies that have long term debt you should be aware that debt ratios can affect dividend payments. If certain debt ratios exceed certain levels, a company could be forced to reduce or suspend dividends.

I have read in the past of this happening, but via google I did not get much in the way of examples. Lauren Thomas on CNBC in March 2017 says that Frontier Communications (Nasdaq- FTR) might cut or suspend dividend to address significant debt maturities in 2020-2022, even if it is not required to do so per its bonds' covenants. Precision Drilling Corporation in a Press Release with their fourth quarterly 2015 results says "The dividend suspension, while a result of a debt covenant restriction, further strengthens the balance sheet as we continue to maneuver through uncharted waters".

If you see long term debt jump a lot in one year, it is a good idea to check to see why and what the implications are for you company. The problem with debt ratios being not so good for a company is that they could get into problems, a vulnerability, when bad times come. We still go through economic cycles of expansion and recessions. In every recession there is always companies that cut or suspend dividends.

On my other blog I wrote on Wednesday about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more. Today, I will write about Intact Financial Corp (TSX-IFC, OTC-IFCZF)... learn more on Friday, June 30, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, June 27, 2017

T-Bills and Stocks

Rupert Hargreaves writes an interesting article on Value Walk about how T-Bills over their lifetime can beat stocks. Overall the stock market beats T-Bills.

However, most of the return on the market is created by some 4% of the stocks. So if you do not pick the right stocks you may not be able to beat investing in T-Bills. In the US Hendrik Bessembinder says that 42% of the stocks outperformed T-Bills, but the rest produced negative returns.

Note also that companies disappear off of exchanges for other reasons that Bankruptcy. Companies change their names and symbols, they are bought out or taken private. This is not necessarily bad for investors. You get seemingly new companies with companies split up or spin off sections of their business.

I have done well overtime. I have been investing from the late 1970's. However, I tended to pick big companies that pay dividends. However, not all my investments have worked out and I have lost money on some. Overall I have made good money, especially from dividends.

On my other blog I wrote yesterday about Saputo Inc. (TSX-SAP, OTC-SAPIF)... learn more. Tomorrow, I will write about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Wednesday, June 28, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, June 22, 2017

Debt Ratios

In order to judge is a stock has good debt ratios you have to have a feel for what is common for the sector the stock is in. In the chart below I am look at five different debt ratios. These are categorized by the sectors my stocks are in. There are not so much typical ratios for stocks, but typical ratios for stocks of the different sectors.

If you notice for Banks and Insurance under Financials, the Long Term Debt/Market Cap ratios are quite high. For this ratio, you generally want it at or less than 1.00, but Financials are quite different from other sectors in this regard.

For Liquidity Ratio, generally you want it to be 1.50 and above. Most, but not all sectors achieve this. In some sectors, the companies depend on cash flow to cover current liabilities. See the low ratios for Real Estate and Infrastructure Utilities. Note that most analysts do not consider this ratio at all for Financials.

For Debt Ratios (Assets over Liabilities) you again want the ratios to be 1.50 and above. However, banks are different. For banks the standard used to 1.04 and above. Most banks have now moved higher than 1.04. Insurance companies are similar to banks for this ratio.

Generally for Leverage or Assets/Book Value you look for a ratio that is under 2.00. However, the median for different sectors can be higher. Banks and Insurance companies have very high Leverage Ratios. Utilities can also have relatively high Leverage Ratios. For example, the median Leverage Ratio for my Power Utilities is 3.03.

The Debt/Equity Ratio is similar to the Leverage Ratio, but is lower. Generally here you want a ratio less than 1.00. However, it is generally higher in some sectors like Utilities. The financial also have very high Leverage and Debt/Equity Ratios.

Below is my chart on the median ratios for the different sectors. The column titles are: LTD = Long Term Debt, Debt/Market Cap Ratio; Liq = Liquidity or Current Assets / Current Liabilities; A/DB= Asset/Liability Ratio; Lev = Leverage Asset/Book Value; Dt/Eq = Debt/Equity Ratio. This can help you decide if a stock is out of line with the ratios of its sector.

Sub-Index C LTD Liq A/DB Lev Dt/Eq
Cons Discretionary C 0.23 1.91 1.86 2.10 1.10
Cons Staple C 0.11 1.54 1.87 2.21 1.21
Health Care C 2.73 2.12 1.90 0.90
Real Estate E 0.65 0.85 2.03 1.98 0.98
Bank F 8.23 2.20 1.07 16.37 15.37
Financial Services F 0.44 1.52 1.66 2.51 1.51
Insurance F 6.51 1.65 1.08 12.99 11.99
Construction I 0.15 1.39 2.09 1.96 0.96
Industrial I 0.19 2.78 1.79 2.49 1.49
Manufacturing I 0.21 2.02 2.30 1.66 0.66
Services I 0.23 1.43 2.02 1.93 0.93
Materials M 0.22 1.80 1.81 2.41 1.34
Energy R 0.35 1.28 2.03 1.97 0.97
Tech T 0.00 2.24 2.58 1.53 0.53
Infrastructure U 0.29 0.87 1.69 2.54 1.14
Power U 1.08 1.24 1.42 3.03 2.13
Telecom Services U 0.37 0.52 1.63 2.62 1.62


*C =Index code or type of stock. C=Consumer, E-Real Estate, F=Financial, I=Industrial, M=Materials, R=Resources, T=Tech and U-Utilities.

On my other blog I wrote yesterday about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more. Tomorrow, I will write about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more on Friday, June 23, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.