Banks and Ratios 2

What I want to look at today is the relative stock price using different criterion between last year when I reviewed the banks and this year. What stock price testing is showing is that generally our banks are more expensive then past relative median prices, but there are generally not excessively high. I do not think that the Canadian market is as relatively high historically as the US market currently is.

I will start off with my favourite measure of for determining if the current stock price is relatively good or not. My favourite measure is to compare the current dividend yield with the historical dividend yield. The last column shows difference between the current dividend yield and the historical median dividend yield.

What you want is a current dividend yield equal to or above the historical median dividend yield. For all banks this year, the current dividend yields were below the historical median dividend yield. Last year only the National Bank had a current dividend yield above the historical median dividend yield. The stock prices this year are still reasonable, but they are above the relative median.

Bank 2018	Symbol	Price	Dividend	Yield	Re Med
Bank of Montreal	BMO	$104.44	$3.72	3.56%	-16.97%
Bank of Nova Scotia	BNS	$81.99	$3.16	3.85%	-3.89%
CIBC	CM	$122.53	$5.20	4.24%	-1.08%
Royal Bank	RY	$107.72	$3.64	3.38%	-11.08%
National Bank	NA	$65.08	$2.40	3.69%	-7.34%
TD Bank	TD	$74.08	$2.40	3.24%	-4.71%

Bank 2017	Symbol	Price	Dividend	Yield	Re Med
Bank of Montreal	BMO	$100.66	$3.52	3.50%	-18.49%
Bank of Nova Scotia	BNS	$78.61	$2.96	3.77%	-3.94%
CIBC	CM	$113.16	$4.96	4.38%	3.13%
Royal Bank	RY	$94.47	$3.32	3.51%	-10.35%
National Bank	NA	$56.54	$2.24	3.96%	0.55%
TD Bank	TD	$68.35	$2.20	3.22%	-3.63%

The next checking of the stock price I will look at is using the Price/Book Value per Share Ratio. Here you want the current P/B Ratio to be lower than the 10 year median P/B. Ratio. Here the last column shows how much above or below the current P/B Ratio is compared to the 10 year median P/B Ratio.

In this test for 2018 only BNS and CIBC showed a price that was reasonable and below the median. For BMO and Royal Bank, the price is relatively reasonable but above the median. For National Bank and TD the stock price is showing as relatively expensive. Price is relatively expensive if the difference between the current P/B and 10 year median is 20% or more.

Bank 2018	Symbol	Price	BVPS	Current P/B	Re Med
Bank of Montreal	BMO	104.44	$63.47	1.65	11.95%
Bank of Nova Scotia	BNS	81.99	$46.24	1.77	-5.69%
CIBC	CM	122.53	$66.55	1.84	-6.06%
Royal Bank	RY	107.72	$46.41	2.32	14.90%
National Bank	NA	65.08	$31.51	2.07	24.43%
TD Bank	TD	74.08	$37.89	1.96	21.45%

In 2017 both BNS and CIBC showed a stock price that was relatively reasonable and below the median. All the other banks show a price that was relatively reasonable but above the median.

Bank 2017	Symbol	Price	BVPS	Current P/B	Re Med
Bank of Montreal	BMO	$100.66	$60.49	1.66	8.76%
Bank of Nova Scotia	BNS	$78.61	$43.59	1.80	-7.53%
CIBC	CM	$113.16	$56.59	2.00	-1.50%
Royal Bank	RY	$94.47	$43.32	2.18	5.85%
National Bank	NA	$56.54	$28.52	1.98	13.93%
TD Bank	TD	$68.35	$36.69	1.86	15.57%

In another test I look at the Price/Graham Price Ratio compared to the 10 year median P/GP Ratio. You want the current P/GP Ratio to be lower than the 10 year median P/GP Ratio. Here again the last column says how much the current P/GP Ratio is above or below the 10 year median P/GP Ratio.

In both the 2018 testing and the 2017 testing only CIBC had a current P/GP Ratio lower than the 10 year median P/GP Ratio. In 2018 all the other banks were showing a stock price that was relatively reasonable but above the median. In 2017 only BNS was showing a stock price that was relatively expensive.

Bank 2018	Symbol	Price	Graham Price	P/GP Ratio	Re Med
Bank of Montreal	BMO	$104.44	$108.87	0.96	11.55%
Bank of Nova Scotia	BNS	$81.99	$81.51	1.01	8.16%
CIBC	CM	$122.53	$128.34	0.95	-1.57%
Royal Bank	RY	$107.72	$91.12	1.18	9.46%
National Bank	NA	$65.08	$63.90	1.02	18.42%
TD Bank	TD	$74.08	$68.66	1.08	11.23%

Bank 2017	Symbol	Price	Graham Price	P/GP Ratio	Re Med
Bank of Montreal	BMO	$100.66	$101.57	0.99	13.91%
Bank of Nova Scotia	BNS	$78.61	$64.37	1.22	31.31%
CIBC	CM	$113.16	$114.52	0.99	-4.99%
Royal Bank	RY	$94.47	$82.55	1.14	0.39%
National Bank	NA	$56.54	$56.93	0.99	12.86%
TD Bank	TD	$68.35	$64.12	1.07	8.77%

The last test on stock price test to look at is to compare the current Price/Earnings Ratio to the 5 year median P/E Ratio. In both 2018 and 2017 the stock price is showing as relatively reasonable, but above the median for all banks. In both years the TD bank's current ratio was the closes to the 5 year median.

Bank 2018	Symbol	Price	2018 EPS Est.	Curr P/E	Re Med
Bank of Montreal	BMO	$104.44	$8.30	12.58	10.19%
Bank of Nova Scotia	BNS	$81.99	$6.39	12.84	13.44%
CIBC	CM	$122.53	$11.00	11.14	12.62%
Royal Bank	RY	$107.72	$7.95	13.55	18.44%
National Bank	NA	$65.08	$5.76	11.30	6.39%
TD Bank	TD	$74.08	$5.53	13.40	6.07%

Bank 2017	Symbol	Price	2017 EPS Est.	Curr P/E	Re Med
Bank of Montreal	BMO	$100.66	$7.58	13.28	17.21%
Bank of Nova Scotia	BNS	$78.61	$6.31	12.46	10.05%
CIBC	CM	$113.16	$10.30	10.99	11.09%
Royal Bank	RY	$94.47	$6.99	13.52	19.29%
National Bank	NA	$56.54	$5.05	11.20	5.42%
TD Bank	TD	$68.35	$5.40	12.66	0.22%

On my other blog I wrote yesterday about Valener Inc. (TSX-VNR, OTC-VNRCF)... learn more. Next, I will write about Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR)... learn more on Wednesday, January 31, 2018 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.

Banks and Other Things

For dividend paying stocks, the Dividend Payout Ratios are important. For the DPRs, lower ratios are better ratios. For Banks the DPR for EPS is the most important one. When looking at these ratios, it would appear that CIBC has the best one, which is the lowest one. The National Bank is above the 40 to 55% level you would expect from a bank.

The problem with cash flow is that for banks they tend to be volatile and often negative. A lot of analysts ignore the Cash Flow of banks.

Bank	Symbol	DPR for EPS	DPR for CFPS
Bank of Montreal	BMO	48.55%	-81.94%
Bank of Nova Scotia	BNS	49.91%	84.87%
CIBC	CM	44.39%	18.47%
Royal Bank	RY	47.20%	17.69%
National Bank	NA	65.35%	13.37%
TD Bank	TD	46.25%	9.09%

When Shares are issued for Stock Options, you want a company that issues around the same relative number of shares for its industry. Of course, the lower the number of shares issued for stock options, the less money comes out of the earnings for shareholders. In the value column, I am putting in the value of the stock options at the end of the calendar year.

In 2017 CIBC has one of the lowest percentages of their shares issued for stock options purposes. However, it was the second lowest when it came to the cost of these stock options. For 2017 BNS has the highest percentage of their shares issued for stock purposes and Royal Bank the highest cost.

Bank	Symbol	Shares	% of Shares	Value 2018
Bank of Montreal	BMO	2.103	0.33%	$179M
Bank of Nova Scotia	BNS	4.228	0.35%	$304M
CIBC	CM	0.816	0.21%	$89M
Royal Bank	RY	4.981	0.34%	$417M
National Bank	NA	1.123	0.33%	$54M
TD Bank	TD	4.900	0.26%	$298M

Since I was looking for performance on a long term basis this year, I want to include the dividend growth and total return for the 6 banks that I cover.

Below is a chart showing the long term growth of dividends for these banks. Certainly in most cases the 15 to 30 years growth is better than the 5 and 10 years growth. The TD Bank has the best ones over each period, but Royal Bank is not far behind. In all durations but one, TD Bank is the highest.

Bank	Symbol	5 Yr	10 Yr	15 Yr	20 Yr	25 Yr	30 Yr
Bank of Montreal	BMO	4.68%	2.65%	7.44%	7.69%	7.87%	6.74%
Bank of Nova Scotia	BNS	6.85%	5.77%	10.05%	11.12%	10.35%	9.89%
CIBC	CM	6.89%	5.03%	8.01%	8.20%	8.51%	7.56%
Royal Bank	RY	8.15%	6.17%	10.10%	11.14%	10.65%	9.20%
National Bank	NA	8.25%	7.42%	11.26%	10.98%	7.11%	7.26%
TD Bank	TD	10.21%	8.34%	10.03%	11.22%	10.58%	10.83%

The other thing I looked at was long term total return. This is calculated from December to December. It will include both capital gains and dividends. It is a compound growth rate per year. Here TD Bank is the highest in 3 durations, Royal Bank in 2 durations and National Bank in 1 duration.

Bank	Symbol	5 Yr	10 Yr	15 Yr	20 Yr	25 Yr	30 Yr
Bank of Montreal	BMO	14.91%	10.13%	10.18%	9.65%	14.48%	15.30%
Bank of Nova Scotia	BNS	11.25%	8.64%	12.08%	12.04%	15.91%	16.60%
CIBC	CM	13.49%	10.03%	12.15%	8.82%	14.64%	12.50%
Royal Bank	RY	15.37%	10.86%	12.71%	12.33%	16.50%	17.03%
National Bank	NA	14.35%	13.28%	13.62%	12.24%	16.17%	12.28%
TD Bank	TD	15.73%	11.05%	14.00%	12.05%	20.62%	14.43%

On my other blog I wrote yesterday about Sylogist Ltd (TSX-SYZ, OTC-SYZLF)... learn more. Next, I will write about Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF)... learn more on January 26, 2018 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.

Banks and Ratios

The reason to look at company ratios is that the stock price for a company tells you very little. The price of a stock certainly does not tell you if the stock is cheap or expensive. For example a stock price of $10 on one stock could be an expensive price, but a stock price of $20 on another stock could be a cheap price. It is like all stocks have their own currency and you will need a common frame of reference in order to tell how cheap or expensive a stock is. My Spreadsheet is here.

In this entry I am only talking about the big 6 Canadian Banks of Bank of Montreal, Bank of Nova Scotia, CIBC, Royal Bank, National Bank, and TD Bank. I try to get the right information, but I cannot guarantee anything. In most of the test the CIBC bank is the one that is relatively cheaper.

The method I like best to check for a good stock price is dividend yield and this against the historical median dividend yield. What you are looking for is a current dividend yield higher than the historical dividend yield. Of the big banks that I follow, the Canadian Imperial Bank of Commerce comes off relatively better in this test. It is the closes to the historical median but currently all are higher.

For CIBC the current dividend yield is 4.24% and this historical one is 4.29% a value 1.08% high. For dividend yields, the higher the dividend yields the better the relative price of a stock is. Here is the 5 year median and historical average and historical median dividend yields based on my spreadsheets for our banks. All this data is going back to 1988.

Bank	Symbol	5 Year	Hist. Ave	Hist. Med
Bank of Montreal	BMO	4.29%	5.29%	4.29%
Bank of Nova Scotia	BNS	4.12%	5.08%	4.01%
CIBC	CM	4.67%	4.61%	4.29%
Royal Bank	RY	3.92%	4.35%	3.80%
National Bank	NA	4.17%	6.61%	3.98%
TD Bank	TD	3.71%	3.27%	3.40%

Bank	Symbol	Price	Dividend	Yield	M/C
Bank of Montreal	BMO	$104.44	$3.72	3.56%	-16.97%
Bank of Nova Scotia	BNS	$81.99	$3.16	3.85%	-3.89%
CIBC	CM	$122.53	$5.20	4.24%	-1.08%
Royal Bank	RY	$107.72	$3.64	3.38%	-11.08%
National Bank	NA	$65.08	$2.40	3.69%	-7.34%
TD Bank	TD	$74.08	$2.40	3.24%	-4.71%

My next favourite test is using the Graham Price. Of the big banks I follow, the CIBC is relatively lower with the current Price/Graham Price Ratio some 1.6% below its historical median P/GP Ratio. None of the other banks have a lower P/GP Ratios that the 10 year median.

For the 10 year Price/Graham Price Ratios, the lower the ratio the lower the relative price of the underlying shares. This chart shows that investors are willing to pay a relatively higher price for Royal Bank stock than for other bank stocks. It also shows that generally the BMO has a relatively lower stock price.

Bank	Symbol	Low	Median	High
Bank of Montreal	BMO	0.73	0.86	0.97
Bank of Nova Scotia	BNS	0.85	0.93	1.05
CIBC	CM	0.86	0.97	1.08
Royal Bank	RY	0.92	1.08	1.19
National Bank	NA	0.76	0.86	1.02
TD Bank	TD	0.86	0.97	1.07

Bank	Symbol	Price	Graham Price	P/GP Ratio	M/C
Bank of Montreal	BMO	$104.44	$108.87	0.96	11.55%
Bank of Nova Scotia	BNS	$81.99	$81.51	1.01	8.16%
CIBC	CM	$122.53	$128.34	0.95	-1.57%
Royal Bank	RY	$107.72	$91.12	1.18	9.46%
National Bank	NA	$65.08	$63.90	1.02	18.43%
TD Bank	TD	$74.08	$68.66	1.08	11.23%

One of the most common ratios to look at is the P/E Ratio. When dealing with P/E Ratios, the lower the P/E ratio the better the relatively price is. Below is the 5 year low, median and high median P/E Ratios for each bank I follow. What this chart also tells you is that investors are willing to pay relatively more money for TD Bank shares per dollar of earnings than for other banks.

Bank	Symbol	Low P/E	Median P/E	High P/E
Bank of Montreal	BMO	10.07	11.42	12.77
Bank of Nova Scotia	BNS	10.29	11.32	12.52
CIBC	CM	9.00	9.89	10.78
Royal Bank	RY	10.51	11.44	12.68
National Bank	NA	9.04	10.62	12.21
TD Bank	TD	11.40	12.63	13.69

So what is the relatively cheapest bank today? Currently CIBC has the lower P/E. In the last column I am comparing the Historical Median P/E with the Current P/E. This measure shows that all the banks are above the median as far as P/E geos. TD Bank has dropped the least from its median. It is off the median by less than 6.1%

Bank	Symbol	Price	2018 EPS Est.	Curr P/E	M/C
Bank of Montreal	BMO	$104.44	$8.30	12.58	10.19%
Bank of Nova Scotia	BNS	$81.99	$6.39	12.84	13.44%
CIBC	CM	$122.53	$11.00	11.14	12.63%
Royal Bank	RY	$107.72	$7.95	13.55	18.44%
National Bank	NA	$65.08	$5.76	11.30	6.39%
TD Bank	TD	$74.08	$5.53	13.40	6.07%

The next most common ratio is the Price/Book Value per Share Ratio. For Price/Book Value per Share Ratio, the lower the P/B Ratio is, the more book value you get for your money. Theoretically, the book value is the difference between assets and liabilities and therefore is the potential value a company is worth or the breakup value of the stock for the shareholders.

When valuing a stock, the lower the P/B Ratio is, the better the stock price is on a relative basis. The 10 year median P/B Ratios for our banks are below. From this it is obvious that historically, investors were willing to pay a relatively higher price for Royal Bank shares than other shares. It could also say that the Bank of Montreal offers the best deal when it comes to Book Value per Share.

Of the banks I follow, BMO has the lowest P/B Ratio and the CIBC is the lowest relative to its 10 year P/B Ratio as its current P/B Ratio is some 6% lower than the 10 year P/B Ratio.

Bank	Symbol	P/B
Bank of Montreal	BMO	1.47
Bank of Nova Scotia	BNS	1.88
CIBC	CM	1.96
Royal Bank	RY	2.02
National Bank	NA	1.66
TD Bank	TD	1.61

Bank	Symbol	Price	BVPS	Current P/B	M/C
Bank of Montreal	BMO	$104.44	$63.47	1.65	11.95%
Bank of Nova Scotia	BNS	$81.99	$46.24	1.77	-5.69%
CIBC	CM	$122.53	$66.55	1.84	-6.06%
Royal Bank	RY	$107.72	$46.41	2.32	14.90%
National Bank	NA	$65.08	$31.51	2.07	24.43%
TD Bank	TD	$74.08	$37.89	1.96	21.45%

On my other blog I wrote yesterday about Transcontinental Inc. (TSX-TCL, OTC-TCLAF)... learn more. Next, I will write about Sylogist Ltd (TSX-SYZ, OTC-SYZLF)... learn more on Wednesday, January 24, 2018 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. Follow me on Twitter.

Tangerine and Meridian

Note: I would like to say that the transfer of money to my Meridian Account was showing up on Friday, January 19 first thing in the morning and was dated January 18. This is effectively 4 business days before money can actually be used.

I have a reserve fund that I have kept in Tangerine since 2003. I put it into an ING account at that time because the interest rate was good. At the time the interest from banks was pathetic. For the last while the interest rate has been quite low for Tangerine at 1%.

People I know say that you can phone Tangerine every 6 months and get the rate that they give to new customers for 6 months. Apparently they will do this if you threaten to take out your money. Personally I do not want to have to play such games with companies I deal with.

I had met someone who works at Meridian and she suggested that it was a better place to keep such funds. She said the interest rates were better and that they were good to deal with. I looked online and the interest rate was 1.4% compared to Tangerine's 1%. With Tangerine (ING) I had set up my account online and gave them the banking information to do the transfers.

With Meridian you have to print off the form for transfers and either take a sample cheque to them or get the information certified by your bank. Either way, it means a trip to them or your bank. So on Friday, December 29, 2017 I took a sample cheque and the form to the closes Meridian branch. The teller said that I would get an email when the account was ready for transfers.

I had expected an email via my email address as they asked for that. When a week later I had not yet received looked online at my account to see if the ability to transfer funds had been set up. I had no such luck, but I did find that they had a secure messages system. There was a message about me setting up my account.

In the meantime I got a message from Tangerine saying that they were offering 2.4% on new money. So on January 4, 2018 I transferred the balk of the emergency fund top up to Tangerine. I looked everywhere to see how long this 2.4% applied for but could not find that information. Anyone I talked to say that it would probably be for 6 months.

Finally on January 10, 2018 I replied to the secure message on Meridian asking when my account will be set up for transfers. I checked on January 13, 2017 and although I did not get a reply, a message dated January 11, 2018 was there saying that my account was set up for transfers. I guess that they expect to check every day for messages. This is rather silly.

It took them some 10 business days to set up my account and there is no way I would spend my time checking for messages every day online. By the way, when I was in the branch of Meridian I was told the account would be set up soon. They never said or implied in anywhere it would take so long.

Meridian transfers are more restrictive than Tangerine. Tangerine does not have a limit that I know about. Meridian says the maximum for a transfer is $10,000. Tangerine says transfer might take up to 3 business days, but all mine have been done the same or next day. Meridian says transfers take 3 business days.

At the branch they were very good at deflecting questions. They said they had a limited of $10,000 in one transfer in one day. When I questioned this the teller said that it was in case someone made a mistake. I asked if I could get online statements and this change was done to my file. I did not see any way to do this online. I asked about online tax forms and was told that legally that have to send out paper ones. I mentioned that I have been getting online tax forms from TD Bank for years. This was an interesting exchange.

I did a transfer to Meridian first thing Monday morning, January 15, 2018. I will see how long this takes. I will write further about my experience with Meridian. I had never dealt with a credit union before.

So far it is disappointing. They said that transfers would take 3 business days. This is now the afternoon of January 18, 2018 and there is no sign yet that the Meridian has taken the money from the bank account and put it into theirs. This is the third business day by any account.

Their transfers are obvious not an automated process and it is obvious that Tangerine's is. For my latest transfer to Tangerine it was a rather large amount and it went through the same day. The Meridian transfer is quite disappointing, but I knew when I was in the Meridian branch that they were behind in automation compared to our banks.

On my other blog I wrote yesterday about National Bank of Canada (TSX-NA, OTC-NTIOF)... learn more. Next, I will write about Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM)... learn more on Friday, January 19, 2018 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.

Dividend Changes 2017

For the stocks that I follow, I had 86 stocks that raise their dividends. It is common for Canadian Banks to increase dividends more than once in a year.

There were 3 stocks that raised their dividends 3 times. These were:

Enbridge Inc. (TSX-ENB, NYSE-ENB)
Equitable Group Inc. (TSX-EQB, OTC-EQGPF)
National Bank of Canada (TSX-NA, OTC-NTIOF)

There were 8 stocks that raised their dividends twice. These were:

Bank of Montreal (TSX-BMO, NYSE-BMO)
Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
CIBC (TSX-CM, NYSE-CM)
Pembina Pipelines Corp (TSX-PPL, NYSE-PBA)

Royal Bank (TSX-RY, NYSE-RY)
Sun Life Financial (TSX-SLF, NYSE-SLF)
TECSYS Inc. (TSX-TCS, OTC-TCYSF)
Telus Corp. (TSX-T, NYSE-TU)

There were 4 stocks that decreased or suspended their dividends. The first 3 companies decreased their dividends. The last one Manitoba Telecom suspended their dividend before being bought out by BCE.

Barclays PLC (LSE-BARC, NYSE-BCS)
Bird Construction Inc. (TSX-BDT, OTC-BIRDF)
DH Corporation (TSX-DH, OTC-DHIFF)
Manitoba Telecom (TSX-MBT, OTC-MOBAF)

See my spreadsheet at Dividend Stocks 2017

On my other blog I wrote yesterday about Bank of Nova Scotia (TSX-BNS, NYSE-BNS)... learn more. Next, I will write about National Bank of Canada (TSX-NA, OTC-NTIOF)... learn more on Wednesday, January 17, 2018 around 5 pm.

Also, on my book blog I have put a review of the book The Evangelicals by Frances Fitzgerald 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

Update Notes

When I was updating my stock list for January 2018 I noticed a couple outstanding items on Automodular and Canadian Tire which I listed below. I also thought I would publish my chart on increases and decreases in dividends. For 2018 we had 7 stocks increasing their next dividend and no stocks decreasing their dividends. This is a good start for the year.

On stock that I have and follow is Automodular Corp (TSX-AM.H, OTC-AMZKF). I bought this as another entity and but not sell because it is not worth much and I wondered what would happen to it. AMD had now found something to do. They are HLS Therapeutics Inc. and will be listed on the TSX Venture Exchange. However the shares received are described as fully paid and non-assessable? Interesting to see how this works out.

Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) after a third quarterly profit of $2.59 per share raised their dividends by 38.5%. This is discussed Ryan Goldsman on Motley Fool. I have own this stock since 2009 and have made a total return of 14.13% per year on it.

Below is a chart showing the number of increases and decreases in dividends for the stocks that I follow.

#	Mths	2018	2018		2017	2017		2016	2016		2015	2015		2014	2014	Med	Med
	Action	Incr	Decr		Incr	Decr		Incr	Decr		Incr	Decr		Incr	Decr	Incr	Decr
1	Jan	7	0		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	5		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				10	0		7	1		7	3		9	0	8.0	0.5
10	Oct				0	0					1	1		1	1	1.0	1.0
11	Nov				5	0		6	0		4	1				5.0	0.0
12	Dec				12	0		12	0		13	2		13	0	12.5	0.0
	Tot	7	0		97	4		88	15		95	18		99	4	94.5	8.5
	%	5%	0%		63%	3%		56%	10%		64%	12%		68%	3%	61%	6%
		154			154			156			148			145		154

On my other blog I wrote yesterday about Calian Group Ltd. (TSX-CGY, OTC- CLNFF)... learn more. Next, I will write about Toronto Dominion Bank (TSX-TD, NYSE-TD)... learn more on Friday, January 12, 2018 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.

Stock Entries 2018

In 2017, I concentrated mostly on talking about the stock price. I believe you should be buying stocks when the price is at least reasonable. I will continue to track this in my entries. However, I believe strongly in investing in stocks for the long term. By long term I am not talking about 5 years. I believe in the very long term. I have had the Bank for Montreal for some 36 years and I have no intention of selling it.

I keep stocks that I buy until they are bought out or get into trouble that they do not seem to be able to resolve. I had Loblaw Companies Ltd for 11 years but sold in 2007 because they did not seem to be able to solve the problems with their new supply chain program. (I do not believe they have even now solved the problems.)

For 2018 I want to consider long term total returns for the stocks that I cover. I have to date only looked at total returns for the past 5 and 10 years. However, for a lot of stocks I have a lot more data. So where I can I will look at total returns over the past 15 plus years.

Often commentaries look at the short term of the last year and some the very short term of only the last quarter. To me that is no basis to buy a stock. Of course the past does not tell you everything. But it can give you a feel for the company and the market it operates in. On the other hand sometimes a new CEO or Chairman changes things a lot, especially if the company has gotten into difficulties and needs new ideas to move forward.

Looking at the past can sometimes help with knowing how a company will react to certain situations. For example, when a company has difficulty in covering their dividends with EPS, the past actions might show you how they will handle the situation now. When a company cannot cover their dividends, they can continue to grow them, they can stop growing them, they can cut them or they can suspend them.

Companies do tend to do what they have done in the past. There are always going to be another recession and some company you own will have problems covering their dividends. When you know what they have done in the past is a good indicator on what they will do now.

I do not find recessions or the suspending or cutting of dividends a problem as I have companies in different sectors and different sectors often react to recessions differently. So in the bad times, I have companies that do stop growing dividends; that do cut them or do suspend them. However, since companies are often affected different, I also have companies that can continue to grow dividends in recessions. Overall I find that in bad times my dividend growth slows down.

I not only look at the past, but I also look at what people are currently saying about a company and what they think will happen in the short term. This short term is from 1 to 3 years.

On my other blog I wrote yesterday about Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF)... learn more. Next, I will write about Calian Group Ltd. (TSX-CGY, OTC- CLNFF)... learn more on Wednesday, January 9, 2018 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.

Something to Buy January 2018

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 January 2018 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. One of these stocks is showing as cheap by the historically high dividend yield and that is Newfoundland Capital Corp (TSX-NCC.A). 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 High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF). Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Dorel Industries (TSX-DII.B) Magna International Inc. (TSX-MG, NYSE-MGA), and Molson Coors Canada (TSX-TPX.B, NYSE-TAP) has been added to this list.

I follow 12 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Four stocks (or 33%) 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), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). This is the same as for 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 10 Real Estate stocks as I have deleted Colliers International Group Inc. (TSX-CIGI, NASDAQ-CIGI) as I will no longer follow this stock. None of these stocks are showing as cheap by the historically high dividend yield. Three stocks (or 30%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN, OTC- ARESF); Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U) and Melcor Developments Inc. (TSX-MRD, OTC-MODVF). H & R REIT (TSX-HR.UN, OTC-HRUFF) and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) have been deleted from cheap by historically median dividend yield list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. No stock is showing cheap by the historical median dividend yield. Last month CIBC (TSX-CM, NYSE-CM) was on this list.

I follow 13 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Seven (or 54%) 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, OTC-AGFMF), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX, OTC-CIFAF), Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF), IGM Financial (TSX-IGM, OTC-IGIFF) and Power Corp (TSX-POW, OTC-PWCDF). Last month Equitable Group Inc. (TSX-EQB, OTC-EQGPF) was on this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF); Manulife Financial Corp (TSX-MFC, NYSE-MFC), Power Financial Corp (TSX-PWF, OTC-POFNF). Sun Life Financial (TSX-SLF, NYSE-SLF has been deleted to cheap by historically median dividend yield list.

I follow 33 Industrial stocks. I have started to follow Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) and will blog about it when the 2017 annual report is in. 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 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. Four stocks or 57% 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), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). There is no change from last month.

I have 17 Services stocks because of the addition of Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA). None are showing as cheap by the historically high dividend yield. Four stocks or 24% 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) Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) has been added to cheap by historically median dividend yield list. .

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. None are showing as cheap by historical median dividend yield. This is the same as for last month.

I follow 10 Energy stocks. Ensign Energy Services (TSX-ESI, OTC-ESVIF) is showing as cheap by the historical high dividend yield. 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). There is no change from last month.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Four stocks (or 50%) 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), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). There is no change from last month.

I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 43%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB) and Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF). Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF) has been added back to this from cheap by historically median dividend yield list.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Six stock (or 50%) 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), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Emera Inc. (TSX-EMA, OTC-EMRAF), Fortis Inc. (TSX-FTS, OTC-FRTSF) and Just Energy Group Inc. (TSX-JE, NYSE-JE). Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN) and Fortis Inc. (TSX-FTS, OTC-FRTSF) have been added to cheap by historically median dividend yield 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). There is no change from last month.

On my other blog I wrote yesterday about Bank of Montreal (TSX-BMO, NYSE-BMO)... learn more. Next, I will write about Royal Bank of Canada (TSX-RY, NYSE-RY)... learn more on Friday, January 5, 2018 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.

Dividend Stocks January 2018

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 January 2018. On this list,

• I have 2 stocks with a dividend yield higher than the historical high dividend yield,
• I have 32 stocks with a dividend yield higher than the historical average dividend yield
• I have 61 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 last list in December 2017,

• I have 2 stocks with a dividend yield higher than the historical high dividend yield,
• I have 30 stocks with a dividend yield higher than the historical average dividend yield
• I have 57 stocks with a dividend yield higher than the historical median dividend yield and
• 57 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 $158.12. This month dividends would be $161.28. Of the stock that I follow 7 stocks has raised their dividends since last month.

Allied Properties REIT (TSX-AP.UN, OTC-APYRF)
Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF)
DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF)
Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)

Granite REIT (TSX-GRT.UN, NYSE-GRP.U)
TFI International (TSX-TFII, OTC-TFIFF)

The TD Bank says that SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) have increased their dividend from $1.75 to $1.85. However, I cannot find a press-release or another site that confirms this. I know that the dividend to be paid in January 2018 is still at the old rate of $0.14583 per unit. I have not updated my spreadsheet to show any increase in dividends for this company.

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

Most of my stocks started out as Dividend Payers. Currently 16 stocks are not paying any dividends and this would be some 10.4% of the stocks that I follow. Three of these stocks never had dividends, so 8.44% 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).

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 today about Metro Inc. (TSX-MRU, OTC-MTRAF)... learn more. Next, I will write about Bank of Montreal (TSX-BMO, NYSE-BMO)... learn more on Wednesday, January 03, 2018 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.