Tuesday, May 30, 2017

Ensign and Mullen 2

I recently reviewed Mullen Group Ltd (TSX-MTL, OTC-MLLGF and Ensign Energy Services (TSX-ESI, OTC-ESVIF). I had Ensign before 2014 but decided to sell it and replace it with Mullen. Although they do not seem to be direct competitors, they both provide services for the oil and gas industry. The main reasons I liked Mullen better in 2014 was the great Liquidity Ratio. The original blog entry of 2014 is here

Since I have done further reviews of these companies, I thought I would compare them again. I must admit I still like Mullen better. I do like companies that increase their dividends. However, I like companies better than pay dividends they can afford. In the new chart below, I do not give Ensign any credit for increasing their dividends because they cannot afford them.

Even though Mullen has done better in growth (or really not as much a decline) I do not think I can give any points for declining growth. The problem still is that the oil and gas industry is not doing well currently because of the relatively low price of oil.

It has also been my experience that when companies have insider ownership, the debt ratios, especially the Liquidity Ratio, are good. This is not the case with Ensign.

The following chart is now slightly revised.

Item Ensign Pt Mullen Pt
Liquidity Ratio Below 1.00 (0.96) -1 8.28% 1
Other Debt Ratios Good 1 Good 1
Dividend Growth Company Stopped in 2015 To 2017, down 70% -1
Dividend Yield 7.74% 2.35%
5 year Median Dividend Yield 3.42% 4.76%
Dividend Payout Ratios -48.98%, 216.04% 5 year -1 121.15%, 112.55% 5 year -1
DPR for EPS 2017 -65.75% -1 61.02% 1
DPR for CFPS 2016 43.20% (over 40%) -1 33.74% (Better) 1
Dividend Growth 5 years 4.24% -9.89%
Dividend Growth 10 years 5.54% -6.36%
Dividend Increase 2016 0%, 0 in 2017 -47.50%
Could Cut Dividend Yes Further cuts unlikely
Total Return from 2014 -8.3%, L=12.9%, D 4.6% -7.67%, L=11.8%, D=4.2%
Revenue to end of 2015 -40.04% -15.00%
Revenue to end of 2016 -38.71% -24.63%
EPS to end of 2015 -247.83% -85.29%
EPS to end of 2016 44.12% 246.67% 1
CFPS to the end of 2015 -29.96% -9.93%
CFPS to the end of 2016 -42.40% -44.26%
ROE 10 years above 10% 4 years 5 years 1
ROE 5 years above 10% 1 year 3 years 1
ROE 5 year median 3.5% 10.5% 1
Comp Inc. ROE to Net Inc., lower lower
ROE Comp Inc. 5 yr. median 7.8% 10.5% 1
Survive low Liquidity Ratio Probably n/a
Survive Dividend Cut yes Yes
Insider Ownership Yes, Chairman 17.29% 1 Yes, Chairman 3.3% 1
Score -2 8

Below is my chart from my blog entry of 2014:

Item Ensign Pt Mullen Pt
Liquidity Ratio Below 1.00 -1 Very good 1
Other Debt Ratios Good 1 Good 1
Dividend Growth Company Yes 1 Yes 1
Dividend Yield 4.50% 5.64% 1
5 year Median Dividend Y 2.55% 4.44%
Dividend Payout Ratios Better 1
Dividend Growth 5 years Better 1
Dividend Growth 10 years Better 1
Dividend Increase 2014 Yes, 1 No, but scores for smart decision 1
Could Cut Dividend Possible -1
Total Return Better 1
Revenue growth Lately, Mullen Better 1
EPS to end of 2013 Better 1
EPS to end of 2014 Better, especial over past 5 years 1
CFPS to the end of 2013 Better 1
CFPS to the end of 2014 Better 1 But not by much 1
ROE 10 years above 10% Better 1
ROE 5 years above 10% Better 1
ROE 5 year median 8.2% Better 15.8% 1
Comp Inc. ROE to Net Inc., Higher, confirms EPS 1 same 1
ROE Comp Inc. 5 yr. median 8.7% 15.8%
Survive low Liquidity Ratio Possibly not
Survive Dividend Cut Yes
Insider Ownership Yes, Chairman 16.7% 1 Yes, Chairman 3.2% 1
Score 9 14

On my other blog I wrote yesterday about MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF)... learn more. Tomorrow, I will write about Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more on Wednesday, May 31, 2017 date 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, May 25, 2017

Dividend Stocks

Meb Faber writes some interesting articles on investing in dividend stocks. They are Dividend Growth Myth and What You Do Not Want to Hear About Dividend Stocks. For the first article you really have to scroll down to find the subject.

Yes, currently I have mostly dividend stocks and dividend growth stocks. I do believe in them. I am currently living off my dividends. And yes, I do have Canadian Banks which pay good dividends. However, when I was growing my portfolio I did not just go for dividend stocks and certainly not high yield stocks.

When I was growing my portfolio I was working so having high yield dividend stocks was fine in my RRSP account, but not in my trading account. In my trading account I had a mixture of median yield, low yield and no yield stocks. Today the vast majority of my stocks are dividend stocks. When building a portfolio your needs in stocks and dividends are different from when you are living off your portfolio.

On my other blog I wrote yesterday about Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF)... learn more. Tomorrow, I will write about Ensign Energy Services (TSX-ESI, OTC-ESVIF)... learn more on Friday, May 26, 2017 around 5 pm.

Also, on my book blog I have put a review of the book The Story of the Jews by Simon Schama learn more...

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, May 23, 2017

The Elmer Approach

Recently Ryan Goldsman sent me an email about a new site he was setting up called The Elmer Approach . I had cited him in some of my blogs when he had written articles for The Motley Fool.

On his site he talks about his approach to investing. He has a free book and a sample portfolio. You might find this of interest.

On my other blog I wrote today about Mullen Group (TSX-MTL, OTC-MLLGF)... learn more. Tomorrow, I will write about Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF)... learn more on Wednesday, May 24 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, May 18, 2017

Beta Ratings

I have recently looked at the Beta Ratings for my stocks and for the stocks that I follow. Basically, if a stock has a beta rating of 1 it means that it moves with the market. If the beta is less than 1 then stocks price is theoretically less volatility than the market. If the Beta is higher than 1 that indicates that the stock price is theoretically more volatile than the market. See my spreadsheet here .

If a stock has a Beta of 1 it means that is an average risk. A Beta of 0 means the stock has zero risk. In the stocks I cover some have a negative Beta. With a negative risk you could expect less than a risk free return. A stock with a negative Beta would act like a hedge. They move in the opposite way of the market.

When I look at the Beta Ratings for the stocks I own the median Beta is 0.79, the highest is 2.14 which is Barrick Gold Corp. (TSX-ABX, NYSE-ABX) and the lowest is 0.01, which is Metro Inc. (TSX-MRU, OTC-MTRAF).

Category Beta
Median 0.80
Highest 2.14
Lowest 0.01


The stocks that I follow, including mine, the median is 0.74, the highest is 4.18, which is Penn West Petroleum (TSX-PWT, NYSE-PWE) and the lowest is -0.65 which is Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF).

Category Beta
Median 0.74
Highest 4.18
Lowest -0.65


A good place for information about stock betas is Investopedia. On his blog Aswath Damodaran talks about the implications of negative Beta Ratings. Dan Caplinger on Motley Fool talks about negative Beta Rating stocks. There is also a good discussion about this subject by Pat McKeough On TSI Wealth Daily Advice.

On my other blog I wrote yesterday about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more. Tomorrow, I will write about be Canadian Utilities Ltd (TSX-CU, OTC-CDUAF)... learn more on Friday, May 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.

Tuesday, May 16, 2017

Portfolio for the Long Term

My portfolio tends to underperform in bull markets and outperform in bear markets. That means my portfolio never gets the great returns in the bull markets, but never gets the lows in the bear markets. It is less volatile. I think that over all I get a better return.

My portfolio does not mirror the TSX. The TSX is mostly banks and resources. I have the banks but I have less than 1% of my portfolio in resources. I never buy a resource stock for the long term.

Ben Graham I think certainly got it right for the individual investor. He said that the individual investor should act consistently as an investor and not as a speculator. I think that it is acting like a speculator that causes individual investors to lose money. It is not that I have not lost money on a stock; it is just that over all I have made money.

I make compounding work for me. For example, I bought Emera in 2005. On my original stock purchase after some 12 years I am making a dividend yield of 11% whereas the current yield is around 4.45%. Take the stock Fortis Inc. I bought stock some 21 years ago. On this stock I have a dividend yield on my original purchase of 23%. The current yield is 3.59%. I also bought Royal Bank some 21 years ago and I am making a dividend yield of 48% on my original purchase. Its current yield is 3.76%.

Banks are particularly good in having good dividends that grow well. But you also have to diversify. You cannot diversity in the Canadian market as much as you can in the US market, but we do have a variety of utilities, consumer and industrial stocks.

On my other blog I wrote yesterday about Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF)... learn more. Tomorrow, I will write about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more on Wednesday, May 17, 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.

Thursday, May 11, 2017

If I Knew Then 5

Here I am going to talk about my adventures in stocks, or my early stock investments. I did relative well. Doing relatively well on my stock purchases gave me confidence to invest in stock and get rid of my mutual fund investments.

The first stock I bought was BCE (TSX-BCE, NYSE-BCE) on October 15, 1982. From the time I bought this stock until September 1987 I reinvested the dividends for more stock and make extra cash deposits. To be more consistent with the Mutual Fund investments, I looked at this stock's value in October 1998. This is a holding period of some 16 years. My total return on this was 13.31% per year with 8.79% per year from capital gains and 4.52% per year from dividends. Over the same time period the TSX index showed an increase of 8.1%% per year.

Because I started to track this stock in Quicken only in December 1987, I only have Quicken calculations from there to the present. Using Quicken from December 31, 1987 to April 30, 2017 I have a total return of 9.52% per year with 4.12% from capital gains and 5.40% from dividends. The thing with Quicken is that it takes care of the split off and my selling of Nortel and Bell Aliant. This is the total return over a 29 year period. Over the same time period the TSX Index return is 5.59% per year.

Another early stock purchase was Bank of Montreal (TSX-BMO, NYSE-BMO) which I bought on October 4, 1983. From the time I bought this stock until July 1987 I reinvested the dividends for more stock and make extra cash deposits. I looked at my return for November 30, 1998. This is a holding period of 13.6 years. My total return was 14.98% with 11.84% per year from capital gains and 3.14% per year from dividends. Over the same time period the TSX index showed an increase of 6.72%% per year.

I have only tracked this stock from December 1987 also in Quicken. So from December 31, 1987 to April 30, 2017 I have a total return of 15.845 per year with 9.64% from capital Gains and 6.20% from dividends. This is the total return over a 29 year period. Over the same time period the TSX Index return is 5.59% per year.

The third stock purchase I made was Labatt which I bought on October 4, 1983. I reinvested the dividends for more share in 1985. I had to sell this stock on July 28, 1995 as the company was bought out. My total return was 11.81% with 6.68% from capital gains and 5.13% from dividends. Over the same time period the TSX index showed an increase of 8.30%% per year.

This is the last of a series of blogs called "If I knew now". In February of 2017 I started this series saying that If I Knew Then when I started investing what I know now, I would have only invested in Canadian Dividend Growth stocks. My first entry was about investing in US stocks in the blog If I Knew Then 2. In the next entry I talk about investing in international stocks under If I Knew Then 3. In the fourth entry I talked about investing in Mutual fund under If I Knew Then 4.

On my other blog I wrote yesterday about TFI International (TSX -TFII, OTC-TFIFF)... learn more. Tomorrow, I will write about Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF)... learn more on Friday May 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.

Tuesday, May 9, 2017

If I Knew Then 4

My adventures in Mutual Funds have been mixed. I tried investing in Mutual Funds. With all the hype about Mutual Funds, I thought I should invest in them. After all they were managed by investment experts. They should do better than me that was just leaning. Turn out not to be true. The stocks I invested in did mostly better than the mutual funds.

On May 4, 1982 I invested in the Royal Bank's Equity Fund. I held it until 29 April 1997 which is 15 years. My total return was 12.59% per year. Over the same time period the TSX index showed an increase of 9.2% per year. So it would appear I did well with this.

I invested in Mackenzie Financial Corp's Industrial Growth Fund January 9, 1985. I held it until December 31, 1987, which is almost 3 years. My total return was 5.18% per year. Over the same time period the TSX index showed an increase of 10.2% per year. Here I got a positive return but it was lower than the market.

On January 30, 1992 I invested in Altamira's Equity Fund. I sold this on October 16, 1998. This is just over 6 years. My total return was 5.7% per year. Over the same time period the TSX index showed an increase of 7.5% per year. This was a positive return and only a few percentage points below the TSX.

On February 9, 1993 I invested in Altamira's Special Growth Fund. I did $100 investment every month until February 1997 when I reduced my monthly purchases is $75 per month. I stopped my monthly investments in December 1997. I sold this on October 7, 1998. So I held this fund for almost 6 years. My total return is a negative 0.2% per year. Over the same time period the TSX index showed an increase of 8.7% per year. This investment did quite poorly.

This is the fourth of a series of blogs called "If I knew now". In February of 2017 I started this series saying that If I Knew Then when I started investing what I know now, I would have only invested in Canadian Dividend Growth stocks. My first entry was about investing in US stocks in the blog If I Knew Then 2. In the next entry I talk about investing in international stocks under If I Knew Then 3.

On my other blog I wrote yesterday about McCoy Global Inc. (TSX-MCB, OTC-MCCRF)... learn more. Tomorrow, I will write about TFI International (TSX -TFII, OTC-TFIFF)... learn more on Wednesday, May 10, 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.

Thursday, May 4, 2017

Something to Buy May 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 May 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 21 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Seven (or 33%) are showing cheap by historical median dividend yield. They are DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), 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) Both Goodfellow Inc. (TSX-GDL, OTC-GFELF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI) have been removed from this list

I follow 12 Consumer Staples stocks. There no companies showing as cheap by the historically high dividend yield. Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) has been removed from this list. 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). Metro Inc. (TSX-MRU, OTC-MTRAF) has been removed from this list.

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. There is one company showing as cheap by the historically high dividend yield and that is Home Capital Group (TSX-HCG, OTC-HMCBF). Five stocks (or 62.5%) 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), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) and Toronto Dominion Bank (TSX-TD, NYSE-TD) have been added to this list.

I follow 13 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 62%) 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). Equitable Group Inc. (TSX-EQB, OTC-EQGPF) has been added to this list.

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); Intact Financial Corp. ( TSX-IFC, OTC-IFCZF), Manulife Financial Corp (TSX-MFC) and Power Financial Corp (TSX-PWF). Intact Financial Corp. ( TSX-IFC, OTC-IFCZF) has been added to this group.

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 Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) Canexus Corporation (TSX-CUS, OTC-CXUSF) has been removed from this list next month as it has been removed from the TSX. Also PFB Corp (TSX-PFB, OTC-PFBOF) has been removed from the list as being cheap by historical median dividend yield.

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 7 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 three stocks (or 30%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.

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. Four stock (or 33%) is showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF) have been removed from this list.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 75%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). Manitoba Telecom (TSX-MBT, OTC-MOBAF) has been removed from this list as it has been bought out and delisted from the TSX. There is no change from last month.

On my other blog I wrote yesterday about Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more. Tomorrow, I will write about Automodular Corp. (TSX-AM.H, OTC-AMZKF)... learn more on Friday, May 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.

Tuesday, May 2, 2017

Dividend Stocks May 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 May 2017.
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 37 stocks with a dividend yield higher than the historical average dividend yield
  • I have 60 stocks with a dividend yield higher than the historical median dividend yield and
  • 55 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in April 2017,
  • I have 3 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 37 stocks with a dividend yield higher than the historical average dividend yield
  • I have 60 stocks with a dividend yield higher than the historical median dividend yield and
  • 60 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 $158.78. This month dividends would be $159.14. Of the stock that I follow 5 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

EnerCare Inc. (TSX-ECI, OTC-CSUWF)
Johnson and Johnson (NYSE-JNJ)
Methanex Corp. (TSX-MX, NASDAQ-MEOH)
Pembina Pipelines Corp (TSX-PPL, NYSE-PBA)
Teck Resources Ltd (TSX-TECK.B, NYSE-TECK)

Of the stocks that I follow no company has decreased their dividends.

However, Barclays PLC (LSE-BARC, NYSE-BCS) did decreased its dividends in 2016. Changes in Dividends for this stock are not that easy to tell. Because they do not give out equal dividends sites that give out dividend information often get changes to dividends wrong. This belongs to March 2016.

Of the stocks that I follow no company has suspended their dividends.

Canam Group Inc. (TSX-CAM, OTC-CNMGA) stock price has doubled because the Dutil family is taking this company private and is offering twice the stock price to do so. So this is another stock I should replace.

Of the stocks I own and follow, Home Capital Group (TSX-HCG, OTC-HMCBF) stock has taken a dive because of loss of confidence. Equitable Group Inc. (TSX-EQB, OTC-EQGPF) is down also because it is the same sort of mortgage lender.

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 9.74% of the stocks that I follow. Three of these stocks never had dividends, so 7.79% 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 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 Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more. Tomorrow, I will write about Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more on Wednesday, May 3, 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.