I do buy and hold. I have been investing since the 1970’s and every year lots of people say Buy and Hold is dead. I read articles on how buy and hold is dead. Basically, they say that “Times have changed” and “The Rules are different now”. I do not know how often I have heard this.
I did not believe this in the past and I do not believe it now. Yes, when the bear markets occur, the value of my stock portfolio declines. However, my dividends increase and I live on my dividends. Also, my portfolio does recover. Of course, you should not be in stocks if you cannot stand the volatility of the market.
Bear markets can be scary. In the last two bear markets the value of my portfolio fell 30%. However, I do have good dividend paying companies and waiting out the bear markets was the best thing for me to do. How small investors lose is that they get scared in bear markets and sell stocks at a low price. After the market recover, it takes them awhile to get confidence to buy again. Generally, they buy after the market has increased a lot. This is how they lose money.
On my other blog I wrote yesterday about Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more. Next, I will write about AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more on January 31, 2020 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, January 30, 2020
Tuesday, January 28, 2020
Banks and Other Things
All my charts are using data from the financial year ending in October 2019 for these banks.
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 Nation Bank has the best one, which is the lowest one. However, last year the National Bank also had the lowest payout of EPS at 40.40%. The DPR payout expect is in the 40 to 55% level for banks. On this basis all the banks are fine.
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.
I have started to look at Dividend Payouts compared to Free Cash Flow. The problem I have with checking dividends against Free Cash Flow is that different sites sometimes have different values for FCF. For example, I am currently looking at updating my spreadsheet on AGF Management Inc. The Morningstar report from TD bank gives FCF from 2014 to 2018 as $41,723; $47,698; $49,827; $57.518; and $54.178. The WSJ says $29,879; $37,675; $41,442; $52,060; and $48,006. Maybe next year I will take a second look at this.
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 book value of the stock options at the end of the calendar year.
In 2019 CIBC has the lowest percentage of their shares issued for stock option purposes at 11%. They also had the lowest book value cost at $52M. Last RY had the lowest percentage at 10% with a book value of $92M. The National Bank has the highest percentage of their shares issued for stock options at 0.88%, however, the highest book value is BNS at $253M.
Since I was looking for performance on a long term basis, 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 has the second best. It was the same last year.
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 I am looking for total return of 8% or more. Mostly the banks did that but with a few exceptions like BNS and CIBC in the 5 year total return range and BMO in the 15 year range.
The next thing to cover is how well the banks cover their deposits with assets. In this case, the lower the ratio the better. In this case RY has the lowest and best ratio.
The last thing I want to cover how much an investor would earn if they bought shares with $1,000 on December 31, 1988. On this basis, BNS is the winner with total return of $31,568.31. RY is a close second at $31,242.35. CIBC had the lowest total return at $14,912.80 with National Bank close at $17,756.36.
On my other blog I wrote yesterday about Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more. Next, I will write about Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more on January 29, 2020 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.
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 Nation Bank has the best one, which is the lowest one. However, last year the National Bank also had the lowest payout of EPS at 40.40%. The DPR payout expect is in the 40 to 55% level for banks. On this basis all the banks are fine.
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 | 46.07% | 23.36% |
| Bank of Nova Scotia | BNS | 52.25% | Neg CF |
| CIBC | CM | 50.04% | 42.65% |
| Royal Bank | RY | 45.71% | 40.72% |
| National Bank | NA | 41.01% | 34.68% |
| TD Bank | TD | 46.24% | 35.88% |
I have started to look at Dividend Payouts compared to Free Cash Flow. The problem I have with checking dividends against Free Cash Flow is that different sites sometimes have different values for FCF. For example, I am currently looking at updating my spreadsheet on AGF Management Inc. The Morningstar report from TD bank gives FCF from 2014 to 2018 as $41,723; $47,698; $49,827; $57.518; and $54.178. The WSJ says $29,879; $37,675; $41,442; $52,060; and $48,006. Maybe next year I will take a second look at this.
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 book value of the stock options at the end of the calendar year.
In 2019 CIBC has the lowest percentage of their shares issued for stock option purposes at 11%. They also had the lowest book value cost at $52M. Last RY had the lowest percentage at 10% with a book value of $92M. The National Bank has the highest percentage of their shares issued for stock options at 0.88%, however, the highest book value is BNS at $253M.
| Bank | Symbol | Shares | ‘% of Shares | Value $M |
|---|---|---|---|---|
| Bank of Montreal | BMO | 0.962 | 0.15% | $62 |
| Bank of Nova Scotia | BNS | 4.111 | 0.34% | $253 |
| CIBC | CM | 0.512 | 0.11% | $52 |
| Royal Bank | RY | 1.900 | 0.13% | $136 |
| National Bank | NA | 2.951 | 0.88% | $122 |
| TD Bank | TD | 2.300 | 0.13% | $124 |
Since I was looking for performance on a long term basis, 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 has the second best. It was the same last year.
| Symbol | 5 Yr. | 10 Yr. | 15 Yr. | 20 Yr. | 25 Yr. | 30 Yr. |
|---|---|---|---|---|---|---|
| BMO | 5.59% | 3.61% | 6.33% | 7.58% | 7.95% | 6.96% |
| BNS | 6.39% | 5.94% | 8.00% | 10.97% | 10.46% | 9.65% |
| CM | 7.28% | 4.87% | 6.43% | 8.01% | 8.93% | 7.61% |
| RY | 6.68% | 7.70% | 8.86% | 10.50% | 11.21% | 9.32% |
| NA | 7.65% | 6.91% | 10.59% | 10.60% | 10.45% | 7.06% |
| TD | 9.45% | 9.01% | 10.13% | 10.98% | 11.50% | 9.75% |
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 I am looking for total return of 8% or more. Mostly the banks did that but with a few exceptions like BNS and CIBC in the 5 year total return range and BMO in the 15 year range.
| Symbol | 5 Yr. | 10 Yr. | 15 Yr. | 20 Yr. | 25 Yr. | 30 Yr. |
|---|---|---|---|---|---|---|
| BMO | 8.12% | 10.49% | 7.68% | 12.26% | 14.03% | 14.47% |
| BNS | 6.48% | 8.48% | 8.16% | 13.26% | 15.88% | 15.88% |
| CM | 6.42% | 9.80% | 12.42% | 11.01% | 13.57% | 12.44% |
| RY | 8.96% | 9.98% | 12.49% | 14.54% | 16.57% | 13.78% |
| NA | 10.62% | 12.72% | 10.80% | 15.29% | 16.25% | 12.13% |
| TD | 9.43% | 12.20% | 11.08% | 10.07% | 15.83% | 12.89% |
The next thing to cover is how well the banks cover their deposits with assets. In this case, the lower the ratio the better. In this case RY has the lowest and best ratio.
| Bank | Symbol | Deposits Cov. |
|---|---|---|
| Bank of Montreal | BMO | 0.85 |
| Bank of Nova Scotia | BNS | 0.95 |
| CIBC | CM | 0.90 |
| Royal Bank | RY | 0.70 |
| National Bank | NA | 0.80 |
| TD Bank | TD | 0.88 |
The last thing I want to cover how much an investor would earn if they bought shares with $1,000 on December 31, 1988. On this basis, BNS is the winner with total return of $31,568.31. RY is a close second at $31,242.35. CIBC had the lowest total return at $14,912.80 with National Bank close at $17,756.36.
| Symbol | Spent | Shares | Worth | Divs. Pd | Total |
|---|---|---|---|---|---|
| BMO | $1,000.02 | 142.86 | $14,377.43 | $8,294.45 | $22,671.88 |
| BNS | $1,000.02 | 273.23 | $20,041.42 | $11,526.89 | $31,568.31 |
| CM | $1,000.06 | 80.78 | $8,772.71 | $6,140.09 | $14,912.80 |
| RY | $1,000.03 | 211.87 | $21,769.64 | $9,472.71 | $31,242.35 |
| NA | $1,000.04 | 173.92 | $12,536.15 | $5,220.21 | $17,756.36 |
| TD | $1,000.00 | 224.72 | $16,366.36 | $6,734.50 | $23,100.86 |
On my other blog I wrote yesterday about Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more. Next, I will write about Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) ... learn more on January 29, 2020 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, January 23, 2020
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 the banks are relatively the same as last year except for National Bank. Last year National Bank was showing mostly as reasonable, but this year is different. It is showing as above the median or expensive in these tests.
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.
In 2020 BMO and National Bank had dividend yields below the historical median dividend yields. All the rest had dividend yields above the historical median dividend yields and therefore reasonable. Also, both BNS and CIBC are showing the stock price as cheap. Only BNS and CIBC testing is showing the stock price cheaper than last year.
In 2019 banks, except for BMO, the current dividend yields were above the historical median dividend yield. The stock prices in 2019 are reasonable and all but BMO are below the relative median.
The next checking of the stock price I will look at is using the Price/Sales Ratio. Here for a reasonable or cheap stock price you want the current P/S Ratio to be lower than the 10 year median ratio.
In 2020 only BNS and CIBC had ratios lowered than the 10 year ratio. The rest have stock price that are reasonable, but above the median. Also, except for BNS, CIBC, and TD Bank the other banks this year are relatively more expensive. National Bank is a lot more expensive.
In 2019, it was the BNS and National Bank that had current ratios below the 10 year median ratios. All the others had stock prices that were reasonable, but above the median.
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 2020, the banks of BNS, CIBC and RY showed a price that was reasonable and below the median. For BMO, National Bank and TD the price is relatively reasonable but above the median. Except for Royal Bank and National Bank all the other banks are relatively cheaper. National Bank is relative a lot more expensive.
In this test for 2019, the banks of BNS, CIBC and RY showed a price that was reasonable and below the median. For BMO, National Bank and TD the price is relatively reasonable but above the median.
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 2020, BNS, CIBC, Royal Bank and TD Bank are all showing current P/GP Ratios lower than 10 year median P/GP ratios. These banks are showing stock prices that are reasonable and below the median. All the other banks are showing stock prices that are reasonable, but above the median. Only National Bank is showing a stock price relatively higher than last year.
In 2019, all the banks but BMO has a lower price than the median. This mean they are showing as reasonable and below the median. CIBC is almost cheap.
The last test on stock price test to look at is to compare the current Price/Earnings Ratio to the 10 year median P/E Ratio. By this criteria, BNS stock price is relatively the lowest. For all the stocks but National Bank, the stock prices are showing as reasonable and below the median.
In this test for 2019, all the banks are showing a price that is relatively reasonable and below the median. In that year CIBC is relatively cheaper than the other banks.
On my other blog I wrote yesterday about Transcontinental Inc (TSX-TC.A, OTC-TCLAF) ... learn more. Next, I will write about Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more on Friday, January 24, 2020 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.
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.
In 2020 BMO and National Bank had dividend yields below the historical median dividend yields. All the rest had dividend yields above the historical median dividend yields and therefore reasonable. Also, both BNS and CIBC are showing the stock price as cheap. Only BNS and CIBC testing is showing the stock price cheaper than last year.
| Bank 2020 | Symbol | Price | Dividend | Yield | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $4.24 | 4.08% | -2.97% |
| Bank of Nova Scotia | BNS | $72.48 | $3.60 | 4.97% | 20.85% |
| CIBC | CM | $108.77 | $5.76 | 5.30% | 20.90% |
| Royal Bank | RY | $106.55 | $4.20 | 3.94% | 3.73% |
| National Bank | NA | $73.52 | $2.84 | 3.86% | -2.94% |
| TD Bank | TD | $74.12 | $2.68 | 3.62% | 3.90% |
In 2019 banks, except for BMO, the current dividend yields were above the historical median dividend yield. The stock prices in 2019 are reasonable and all but BMO are below the relative median.
| Bank 2019 | Symbol | Price | Dividend | Yield | Re Med |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $97.24 | $4.00 | 4.11% | -4.11% |
| Bank of Nova Scotia | BNS | $73.57 | $3.40 | 4.62% | 12.72% |
| CIBC | CM | $110.24 | $5.44 | 4.93% | 13.70% |
| Royal Bank | RY | $99.06 | $3.92 | 3.96% | 7.24% |
| National Bank | NA | $60.86 | $2.60 | 4.27% | 8.43% |
| TD Bank | TD | $72.83 | $2.68 | 3.68% | 6.05% |
The next checking of the stock price I will look at is using the Price/Sales Ratio. Here for a reasonable or cheap stock price you want the current P/S Ratio to be lower than the 10 year median ratio.
In 2020 only BNS and CIBC had ratios lowered than the 10 year ratio. The rest have stock price that are reasonable, but above the median. Also, except for BNS, CIBC, and TD Bank the other banks this year are relatively more expensive. National Bank is a lot more expensive.
| Bank 2020 | Symbol | Price | Rev per Share | P/S Ratio | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $37.15 | 2.79 | 9.28% |
| Bank of Nova Scotia | BNS | $72.48 | $26.67 | 2.72 | -17.44% |
| CIBC | CM | $108.77 | $43.22 | 2.52 | -0.32% |
| Royal Bank | RY | $106.55 | $31.84 | 3.35 | 11.34% |
| National Bank | NA | $73.52 | $23.88 | 3.08 | 10.66% |
| TD Bank | TD | $74.12 | $22.21 | 3.34 | 5.75% |
In 2019, it was the BNS and National Bank that had current ratios below the 10 year median ratios. All the others had stock prices that were reasonable, but above the median.
| Bank 2019 | Symbol | Price | Rev per Share | P/S Ratio | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $97.24 | $36.32 | 2.68 | 4.72% |
| Bank of Nova Scotia | BNS | $73.57 | $25.39 | 2.90 | -11.96% |
| CIBC | CM | $110.24 | $42.34 | 2.60 | 3.12% |
| Royal Bank | RY | $99.06 | $30.41 | 3.26 | 3.74% |
| National Bank | NA | $60.86 | $22.88 | 2.66 | -0.12% |
| TD Bank | TD | $72.83 | $21.57 | 3.38 | 7.75% |
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 2020, the banks of BNS, CIBC and RY showed a price that was reasonable and below the median. For BMO, National Bank and TD the price is relatively reasonable but above the median. Except for Royal Bank and National Bank all the other banks are relatively cheaper. National Bank is relative a lot more expensive.
| Bank 2020 | Symbol | Price | BVPS | Curr P/B | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $71.54 | 1.45 | 0.06% |
| Bank of Nova Scotia | BNS | $72.48 | $53.61 | 1.35 | -24.47% |
| CIBC | CM | $108.77 | $81.19 | 1.34 | -30.22% |
| Royal Bank | RY | $106.55 | $54.39 | 1.96 | -1.06% |
| National Bank | NA | $73.52 | $35.40 | 2.08 | 18.00% |
| TD Bank | TD | $74.12 | $45.19 | 1.64 | 1.87% |
In this test for 2019, the banks of BNS, CIBC and RY showed a price that was reasonable and below the median. For BMO, National Bank and TD the price is relatively reasonable but above the median.
| Bank 2019 | Symbol | Price | BVPS | Current P/B | Re Med |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $97.24 | $64.73 | 1.50 | 3.60% |
| Bank of Nova Scotia | BNS | $73.57 | $49.75 | 1.48 | -20.07% |
| CIBC | CM | $110.24 | $73.83 | 1.49 | -22.23% |
| Royal Bank | RY | $99.06 | $51.11 | 1.94 | -2.11% |
| National Bank | NA | $60.86 | $34.40 | 1.77 | 1.68% |
| TD Bank | TD | $72.83 | $40.45 | 1.80 | 11.83% |
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 2020, BNS, CIBC, Royal Bank and TD Bank are all showing current P/GP Ratios lower than 10 year median P/GP ratios. These banks are showing stock prices that are reasonable and below the median. All the other banks are showing stock prices that are reasonable, but above the median. Only National Bank is showing a stock price relatively higher than last year.
| Bank 2020 | Symbol | Price | Graham Pr | P/GP Ratio | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $124.57 | 0.83 | 0.40% |
| Bank of Nova Scotia | BNS | $72.48 | $94.73 | 0.77 | -14.99% |
| CIBC | CM | $108.77 | $146.82 | 0.74 | -19.47% |
| Royal Bank | RY | $106.55 | $105.82 | 1.01 | -1.28% |
| National Bank | NA | $73.52 | $72.67 | 1.01 | 14.97% |
| TD Bank | TD | $74.12 | $82.53 | 0.90 | -6.45% |
In 2019, all the banks but BMO has a lower price than the median. This mean they are showing as reasonable and below the median. CIBC is almost cheap.
| Bank 2019 | Symbol | Price | Graham Pr | P/GP Ratio | Re Med |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $97.24 | $113.47 | 0.86 | 2.02% |
| Bank of Nova Scotia | BNS | $73.57 | $90.21 | 0.82 | -11.35% |
| CIBC | CM | $110.24 | $144.96 | 0.76 | -19.10% |
| Royal Bank | RY | $99.06 | $101.51 | 0.98 | -5.26% |
| National Bank | NA | $60.86 | $69.77 | 0.87 | -0.88% |
| TD Bank | TD | $72.83 | $78.56 | 0.93 | -4.43% |
The last test on stock price test to look at is to compare the current Price/Earnings Ratio to the 10 year median P/E Ratio. By this criteria, BNS stock price is relatively the lowest. For all the stocks but National Bank, the stock prices are showing as reasonable and below the median.
| Bank 2020 | Symbol | Price | EPS Est. | Curr P/E | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $9.64 | 10.77 | -5.05% |
| Bank of Nova Scotia | BNS | $72.48 | $7.44 | 9.74 | -13.79% |
| CIBC | CM | $108.77 | $11.80 | 9.22 | -7.64% |
| Royal Bank | RY | $106.55 | $9.15 | 11.64 | -0.98% |
| National Bank | NA | $73.52 | $6.63 | 11.09 | 6.73% |
| TD Bank | TD | $74.12 | $6.70 | 11.06 | -10.21% |
In this test for 2019, all the banks are showing a price that is relatively reasonable and below the median. In that year CIBC is relatively cheaper than the other banks.
| Bank 2019 | Symbol | Price | EPS Est. | Curr P/E | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $97.24 | $8.84 | 11.00 | -3.34% |
| Bank of Nova Scotia | BNS | $73.57 | $7.27 | 10.12 | -10.45% |
| CIBC | CM | $110.24 | $12.65 | 8.71 | -15.23% |
| Royal Bank | RY | $99.06 | $8.96 | 11.06 | -8.86% |
| National Bank | NA | $60.86 | $6.29 | 9.68 | -6.88% |
| TD Bank | TD | $72.83 | $6.78 | 10.74 | -14.20% |
On my other blog I wrote yesterday about Transcontinental Inc (TSX-TC.A, OTC-TCLAF) ... learn more. Next, I will write about Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more on Friday, January 24, 2020 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, January 21, 2020
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. Also, the results maybe different from my recent reports as I have updated the stock price to the most recent ones.
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. The Bank of Nova Scotia is a close second. Most of the banks have a current dividend yield above the historical median dividend yield, except for BMO and National Bank were the yield is low than the historical median.
For CIBC the current dividend yield is 5.30% and the historical median one is 4.38% a value 20.9% higher. 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.
Below you can see that Both BNS and CIBC are cheap as their current yield is 20% or more above the historical median dividend yield. Both Royal Bank and TD Bank are showing as reasonable and below the median. BMO is showing as reasonable but above the median.
My next favourite test is the Price/Sales (P/S) Ratio. It sometimes works better than the Dividend Yield test on certain stock, especially old income trust stocks. What you want for a reasonable price is for the current P/S Ratio to be lower than the 10 year median P/S Ratio.
Of the big banks I follow, the Bank of Nova Scotia is relatively lower with the current P/S Ratio some 17.44% below its 10 year median P/S Ratio. Except for CIBC, all the banks have a higher P/S Ratio than the 10 year median P/S Ratio.
In this chart, BNS and CIBC are showing the stock price as reasonable and below the median. All the other banks are showing the stock price as reasonable, but above the median.
A common ratio is the Price/Book Value per Share Ratio. For P/B 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. What you want to see is a current P/B Ratio below the 10 year median P/B Ratio.
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 in the first table. From this it is obvious that historically, investors were willing to pay a relatively higher price for Royal Bank shares than other shares as it has the highest P/B Ratio. It could also say that the Bank of Montreal offers the best deal when it comes to Book Value per Share as it has the lowest ratio.
Of the banks I follow, BMO has the lowest 10 year median P/B Ratio (chart 1) and the CIBC is the lowest relative to its 10 year P/B Ratio as its current P/B Ratio is some 30% lower than the 10 year P/B Ratio (chart 2).
The next chart shows that BNS, and CIBC, are relatively cheap as the current P/B Ratio is 20% or move below the 10 year ratio. The Royal Bank is showing as reasonable and below the median. BMO and TD banks are showing as reasonable but above the median although BMO is very close to the median.
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 19% below its historical median P/GP Ratio. Except for BMO, and National Bank all the banks have a lower Graham Price Ratio than the median Graham Price Ratio
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 as the GP Ratio is the highest ones. It also shows that generally the BMO has a relatively lower stock price as the median P/GP is the lowest of all the banks.
The following chart shows that CIBC has the relatively lowest price. It also shows that BNS, CIBC, Royal Bank, and TD Bank are showing as reasonable and below the median. BMO and National Bank are showing as reasonable, but above the median. BMO again is very close to the median.
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 10 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 as its P/E Ratios are the highest ones.
So, what is the relatively cheapest bank today? Currently CIBC has the lower P/E Ratio. In the last column I am comparing the 10 year Median P/E with the Current P/E. BNS has the lowest relative P/E Ratio. The other banks are showing as reasonable but above the median. This measure shows that the stock price for all but National Bank are below the median as far as P/E goes.
On my other blog I wrote yesterday about Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more. Next, I will write about Transcontinental Inc (TSX-TC.A, OTC-TCLAF) ... learn more on Wednesday, January 22, 2020 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.
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. Also, the results maybe different from my recent reports as I have updated the stock price to the most recent ones.
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. The Bank of Nova Scotia is a close second. Most of the banks have a current dividend yield above the historical median dividend yield, except for BMO and National Bank were the yield is low than the historical median.
For CIBC the current dividend yield is 5.30% and the historical median one is 4.38% a value 20.9% higher. 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 | 4.14% | 5.29% | 4.21% |
| Bank of Nova Scotia | BNS | 4.49% | 4.95% | 4.11% |
| CIBC | CM | 5.00% | 4.66% | 4.38% |
| Royal Bank | RY | 6.32% | 4.29% | 3.80% |
| National Bank | NA | 4.17% | 6.39% | 3.98% |
| TD Bank | TD | 3.75% | 3.32% | 3.48% |
Below you can see that Both BNS and CIBC are cheap as their current yield is 20% or more above the historical median dividend yield. Both Royal Bank and TD Bank are showing as reasonable and below the median. BMO is showing as reasonable but above the median.
| Bank | Symbol | Price | Dividend | Yield | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $4.24 | 4.08% | -2.97% |
| Bank of Nova Scotia | BNS | $72.48 | $3.60 | 4.97% | 20.85% |
| CIBC | CM | $108.77 | $5.76 | 5.30% | 20.90% |
| Royal Bank | RY | $106.55 | $4.20 | 3.94% | 3.73% |
| National Bank | NA | $73.52 | $2.84 | 3.86% | -2.94% |
| TD Bank | TD | $74.12 | $2.68 | 3.62% | 3.90% |
My next favourite test is the Price/Sales (P/S) Ratio. It sometimes works better than the Dividend Yield test on certain stock, especially old income trust stocks. What you want for a reasonable price is for the current P/S Ratio to be lower than the 10 year median P/S Ratio.
Of the big banks I follow, the Bank of Nova Scotia is relatively lower with the current P/S Ratio some 17.44% below its 10 year median P/S Ratio. Except for CIBC, all the banks have a higher P/S Ratio than the 10 year median P/S Ratio.
| Bank | Symbol | Ratio |
|---|---|---|
| Bank of Montreal | BMO | 2.56 |
| Bank of Nova Scotia | BNS | 3.29 |
| CIBC | CM | 2.52 |
| Royal Bank | RY | 3.01 |
| National Bank | NA | 2.78 |
| TD Bank | TD | 3.16 |
In this chart, BNS and CIBC are showing the stock price as reasonable and below the median. All the other banks are showing the stock price as reasonable, but above the median.
| Bank | Symbol | Price | Rev per Share | P/S Ratio | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $37.15 | 2.79 | 9.28% |
| Bank of Nova Scotia | BNS | $72.48 | $26.67 | 2.72 | -17.44% |
| CIBC | CM | $108.77 | $43.22 | 2.52 | -0.32% |
| Royal Bank | RY | $106.55 | $31.84 | 3.35 | 11.34% |
| National Bank | NA | $73.52 | $23.88 | 3.08 | 10.66% |
| TD Bank | TD | $74.12 | $22.21 | 3.34 | 5.75% |
A common ratio is the Price/Book Value per Share Ratio. For P/B 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. What you want to see is a current P/B Ratio below the 10 year median P/B Ratio.
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 in the first table. From this it is obvious that historically, investors were willing to pay a relatively higher price for Royal Bank shares than other shares as it has the highest P/B Ratio. It could also say that the Bank of Montreal offers the best deal when it comes to Book Value per Share as it has the lowest ratio.
Of the banks I follow, BMO has the lowest 10 year median P/B Ratio (chart 1) and the CIBC is the lowest relative to its 10 year P/B Ratio as its current P/B Ratio is some 30% lower than the 10 year P/B Ratio (chart 2).
| Bank | Symbol | P/B |
|---|---|---|
| Bank of Montreal | BMO | 1.45 |
| Bank of Nova Scotia | BNS | 1.79 |
| CIBC | CM | 1.92 |
| Royal Bank | RY | 1.98 |
| National Bank | NA | 1.76 |
| TD Bank | TD | 1.61 |
The next chart shows that BNS, and CIBC, are relatively cheap as the current P/B Ratio is 20% or move below the 10 year ratio. The Royal Bank is showing as reasonable and below the median. BMO and TD banks are showing as reasonable but above the median although BMO is very close to the median.
| Bank | Symbol | Price | BVPS | Cur P/B | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $71.54 | 1.45 | 0.06% |
| Bank of Nova Scotia | BNS | $72.48 | $53.61 | 1.35 | -24.47% |
| CIBC | CM | $108.77 | $81.19 | 1.34 | -30.22% |
| Royal Bank | RY | $106.55 | $54.39 | 1.96 | -1.06% |
| National Bank | NA | $73.52 | $35.40 | 2.08 | 18.00% |
| TD Bank | TD | $74.12 | $45.19 | 1.64 | 1.87% |
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 19% below its historical median P/GP Ratio. Except for BMO, and National Bank all the banks have a lower Graham Price Ratio than the median Graham Price Ratio
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 as the GP Ratio is the highest ones. It also shows that generally the BMO has a relatively lower stock price as the median P/GP is the lowest of all the banks.
| Bank | Symbol | Low | Median | High |
|---|---|---|---|---|
| Bank of Montreal | BMO | 0.75 | 0.83 | 0.93 |
| Bank of Nova Scotia | BNS | 0.83 | 0.90 | 0.99 |
| CIBC | CM | 0.84 | 0.92 | 0.99 |
| Royal Bank | RY | 0.92 | 1.02 | 1.12 |
| National Bank | NA | 0.77 | 0.88 | 0.99 |
| TD Bank | TD | 0.87 | 0.96 | 1.05 |
The following chart shows that CIBC has the relatively lowest price. It also shows that BNS, CIBC, Royal Bank, and TD Bank are showing as reasonable and below the median. BMO and National Bank are showing as reasonable, but above the median. BMO again is very close to the median.
| Bank | Symbol | Price | Graham Pr | P/GP Ratio | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $124.57 | 0.83 | 0.40% |
| Bank of Nova Scotia | BNS | $72.48 | $94.73 | 0.77 | -14.99% |
| CIBC | CM | $108.77 | $146.82 | 0.74 | -19.47% |
| Royal Bank | RY | $106.55 | $105.82 | 1.01 | -1.28% |
| National Bank | NA | $73.52 | $72.67 | 1.01 | 14.97% |
| TD Bank | TD | $74.12 | $82.53 | 0.90 | -6.45% |
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 10 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 as its P/E Ratios are the highest ones.
| Bank | Symbol | Low P/E | Median P/E | High P/E |
|---|---|---|---|---|
| Bank of Montreal | BMO | 10.17 | 11.34 | 12.44 |
| Bank of Nova Scotia | BNS | 10.22 | 11.3 | 12.51 |
| CIBC | CM | 9.14 | 9.98 | 10.73 |
| Royal Bank | RY | 10.68 | 11.76 | 12.80 |
| National Bank | NA | 9.15 | 10.39 | 11.47 |
| TD Bank | TD | 11.20 | 12.32 | 13.41 |
So, what is the relatively cheapest bank today? Currently CIBC has the lower P/E Ratio. In the last column I am comparing the 10 year Median P/E with the Current P/E. BNS has the lowest relative P/E Ratio. The other banks are showing as reasonable but above the median. This measure shows that the stock price for all but National Bank are below the median as far as P/E goes.
| Bank | Symbol | Price | 2019 EPS Est. | Curr P/E | M/C |
|---|---|---|---|---|---|
| Bank of Montreal | BMO | $103.80 | $9.64 | 10.77 | -5.05% |
| Bank of Nova Scotia | BNS | $72.48 | $7.44 | 9.74 | -13.79% |
| CIBC | CM | $108.77 | $11.80 | 9.22 | -7.64% |
| Royal Bank | RY | $106.55 | $9.15 | 11.64 | -0.98% |
| National Bank | NA | $73.52 | $6.63 | 11.09 | 6.73% |
| TD Bank | TD | $74.12 | $6.70 | 11.06 | -10.21% |
On my other blog I wrote yesterday about Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM) ... learn more. Next, I will write about Transcontinental Inc (TSX-TC.A, OTC-TCLAF) ... learn more on Wednesday, January 22, 2020 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.
Thursday, January 16, 2020
Credit Cycles
Edward Altman on Enterprising Investor writes an article called: Where Are We in the Credit Cycle? I found this article interesting.
I have now read a couple of authors who think that the next recession will not be a severe as the 2008 one, but will last longer. He talks about both benign credit cycles and stressed credit cycles.
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 Friday, January 17, 2020 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.
I have now read a couple of authors who think that the next recession will not be a severe as the 2008 one, but will last longer. He talks about both benign credit cycles and stressed credit cycles.
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 Friday, January 17, 2020 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, January 14, 2020
Brookfield Infrastructure Partners
Tom Hutchinson on the Money Show site talks about Brookfield Infrastructure Partners being a good investment for the times.
This is the reason I added to my list and decided to look into it. What I found is that the company’s structure and its accounting is very complex. I am leaving it on my list, but I am not following up with a full spreadsheet and blog report. I do not like investment situation that are complex. It makes it easy to misjudge the investment situation.
On my other blog I wrote yesterday about Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more. Next, I will write about Bank of Nova Scotia (TSX-BNS, NYSE-BNS) ... learn more on Wednesday, January 15, 2020 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.
This is the reason I added to my list and decided to look into it. What I found is that the company’s structure and its accounting is very complex. I am leaving it on my list, but I am not following up with a full spreadsheet and blog report. I do not like investment situation that are complex. It makes it easy to misjudge the investment situation.
On my other blog I wrote yesterday about Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more. Next, I will write about Bank of Nova Scotia (TSX-BNS, NYSE-BNS) ... learn more on Wednesday, January 15, 2020 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, January 9, 2020
Something to Buy January 2020
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. However, this is just a place to start. It is a good idea to check the stock with other tests, especially the P/S Ratio test.
For other testing, like P/E Ratios, P/S Ratios, P/CF Ratios, P/BV Ratios and Price/Graham Price Ratios, you use estimates or data from the last reported financial quarter.
This historical dividend yield test 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 it is not a valid test, I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 10 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 2020 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 23 stocks in the Consumer Discretionary category. Note that DHX Media Inc (TSX-DHX, OTC- DMQHF) changed its name and symbols to WildBrain Ltd (TSX-WILD, OTC-WLDBF).
Four of these stocks (22%) are showing as cheap by the historically high dividend yield and they are Dorel Industries (TSX-DII.B, OTC-DIIBF), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF), and Stingray Digital Group Inc (TSX-RAY.A).
Eleven (or 48%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are BRP Inc (TSX-DOO, NYSE-DOOO), Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Dorel Industries (TSX-DII.B, OTC-DIIBF), Goodfellow Inc (TSX-GDL, OTC-GFELF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF), and Stingray Digital Group Inc (TSX-RAY.A). BRP Inc (TSX-DOO, NYSE-DOOO), and High Liner Foods (TSX-HLF, OTC-HLNFF) has added to this list.
I follow 10 Consumer Staples stocks. No stocks are showing as cheap by the historically high dividend yield. There is no change from last month.
Six stocks (or 60%) 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), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc (TSX-MRU, OTC-MTRAF), North West Company (TSX-NWC, OTC-NWTUF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Metro Inc (TSX-MRU, OTC-MTRAF), North West Company (TSX-NWC, OTC-NWTUF), has been added to this list.
I follow Five Health Care stocks. One stock (or 20%) of these stocks is showing as cheap by the historically high dividend yield. That stock is HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF). There is no change from last month.
Three or 60% are cheap by the historical median dividend yield. The stocks are HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF), Johnson and Johnson (NYSE-JNJ), and Medtronic Inc. (NYSE-MDT). There is no change from last month.
I follow 10 Energy stocks. One stock or 10% are showing as cheap by the historical high dividend yield. It is Suncor Energy (TSX-SU, NYSE-SU). Ensign Energy Services (TSX-ESI, OTC-ESVIF) has been removed from the list.
There are Six stocks (or 60%) 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), Husky Energy (TSX-HSE, OTC-HUSKF), Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.
I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. There is no change from last month.
Six stocks (or 75%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), Barclays PLC (LSE-BARC, NYSE-BCS), CIBC (TSX-CM, NYSE-CM), Toronto Dominion Bank (TSX-TD, NYSE-TD), National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD). National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD) have been added to this list.
I follow 14 Financial Service stocks. No stock is showing as cheap by the historically high dividend yield. There is no change from last month.
Six (or 43%) 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), IGM Financial (TSX-IGM, OTC-IGIFF), Onex Corp (TSX-ONEX, OTC-ONEXF) and Power Corp (TSX-POW, OTC-PWCDF). Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) has been removed from this list.
I follow 6 Insurance stocks. No stock is showing as cheap by the historically high dividend yield. There is no change from last month.
Five stocks (or 83%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), IA Financial Corp (TSX-IAG, OTC-IDLLF), Manulife Financial Corp (TSX-MFC, NYSE-MFC), Power Financial Corp (TSX-PWF, OTC-POFNF), and Sun Life Financial (TSX-SLF, NYSE-SLF). Sun Life Financial (TSX-SLF, NYSE-SLF) has been added to this list.
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 showing as cheap by the historically high dividend yield. There is no change from last month.
One stocks or 17% is showing as cheap by historical median dividend yield. It is Stantec Inc. (TSX-STN, NYSE-STN). There is no change to this list.
I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. There is no change from last month.
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. This has not changed from last month.
Three stocks or 43% 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 Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF). PFB Corp (TSX-PFB, OTC-PFBOF) has been removed from this list.
I follow 16 Services stocks. One stock is showing as cheap by the historically high dividend yield. That stock is Pason Systems Inc. (TSX-PSI, OTC-PSYTF). There is no change from last month.
Four stocks or 25% 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), Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). There is no change from last month.
I follow 10 Material stocks. I have added Kirkland Lake Gold (TSX-KL, NYSE-KL) to my list as I might be following it in the future. None are showing as cheap by the historically high dividend yield. This has not changed from last month.
Six stock or 60% are showing as cheap by historical median dividend yield. The stocks are Barrick Gold Corp (TSX-ABX, NYSE-ABX), Chemtrade Logistics Inc. Fund (TSX-CHE.UN, OTC-CGIFF), Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF), Methanex Corp (TSX-MX, NASDAQ-MEOH), Stella-Jones (TSX-SJ, OTC-STLJF), and Supremex Inc (TSX-SXP, OTC-SUMXF). There is no change from last month.
I follow 10 Real Estate stocks. No stock is showing as cheap by historically high dividend yield. There is no change from last month. Three stocks (or 30%) are showing as cheap by historical median dividend yield. They are H & R REIT (TSX-HR.UN, OTC-HRUFF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). H & R REIT (TSX-HR.UN, OTC-HRUFF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) have been added to this list.
I follow 3 of the Telecom Service stocks. No stocks are showing as cheap by historically high dividend yield. This has not changed from last month.
Three stocks (or 100%) 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). This has not changed from last month.
I follow 9 Tech stocks. None are showing as cheap by historical high dividend yield. There is no change from last month.
Four stocks (or 44%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Absolute Software Corporation (TSX-ABT, OTC-ALSWF) has been removed from this list.
I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. This has not changed from last month.
Three stocks (or 43%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF) and TC Energy Corp (TSX-TRP, NYSE-TRP). There is no change from last month.
I follow 10 of the Power type utility companies. One stock is showing as cheap by historical high dividend yield. This is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). ATCO Ltd (TSX-ACO.X, OTC-ACLLF) has been added to this list.
Two stocks (or 20%) are showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), and Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). Fortis Inc (TSX-FTS, OTC-FRTSF) and Just Energy Group Inc. (TSX-JE, NYSE-JE) have been removed from this list.
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 January 10, 2020 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.
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. However, this is just a place to start. It is a good idea to check the stock with other tests, especially the P/S Ratio test.
For other testing, like P/E Ratios, P/S Ratios, P/CF Ratios, P/BV Ratios and Price/Graham Price Ratios, you use estimates or data from the last reported financial quarter.
This historical dividend yield test 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 it is not a valid test, I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 10 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 2020 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 23 stocks in the Consumer Discretionary category. Note that DHX Media Inc (TSX-DHX, OTC- DMQHF) changed its name and symbols to WildBrain Ltd (TSX-WILD, OTC-WLDBF).
Four of these stocks (22%) are showing as cheap by the historically high dividend yield and they are Dorel Industries (TSX-DII.B, OTC-DIIBF), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF), and Stingray Digital Group Inc (TSX-RAY.A).
Eleven (or 48%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are BRP Inc (TSX-DOO, NYSE-DOOO), Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Dorel Industries (TSX-DII.B, OTC-DIIBF), Goodfellow Inc (TSX-GDL, OTC-GFELF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF), and Stingray Digital Group Inc (TSX-RAY.A). BRP Inc (TSX-DOO, NYSE-DOOO), and High Liner Foods (TSX-HLF, OTC-HLNFF) has added to this list.
I follow 10 Consumer Staples stocks. No stocks are showing as cheap by the historically high dividend yield. There is no change from last month.
Six stocks (or 60%) 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), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc (TSX-MRU, OTC-MTRAF), North West Company (TSX-NWC, OTC-NWTUF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Metro Inc (TSX-MRU, OTC-MTRAF), North West Company (TSX-NWC, OTC-NWTUF), has been added to this list.
I follow Five Health Care stocks. One stock (or 20%) of these stocks is showing as cheap by the historically high dividend yield. That stock is HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF). There is no change from last month.
Three or 60% are cheap by the historical median dividend yield. The stocks are HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF), Johnson and Johnson (NYSE-JNJ), and Medtronic Inc. (NYSE-MDT). There is no change from last month.
I follow 10 Energy stocks. One stock or 10% are showing as cheap by the historical high dividend yield. It is Suncor Energy (TSX-SU, NYSE-SU). Ensign Energy Services (TSX-ESI, OTC-ESVIF) has been removed from the list.
There are Six stocks (or 60%) 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), Husky Energy (TSX-HSE, OTC-HUSKF), Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.
I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. There is no change from last month.
Six stocks (or 75%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), Barclays PLC (LSE-BARC, NYSE-BCS), CIBC (TSX-CM, NYSE-CM), Toronto Dominion Bank (TSX-TD, NYSE-TD), National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD). National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD) have been added to this list.
I follow 14 Financial Service stocks. No stock is showing as cheap by the historically high dividend yield. There is no change from last month.
Six (or 43%) 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), IGM Financial (TSX-IGM, OTC-IGIFF), Onex Corp (TSX-ONEX, OTC-ONEXF) and Power Corp (TSX-POW, OTC-PWCDF). Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) has been removed from this list.
I follow 6 Insurance stocks. No stock is showing as cheap by the historically high dividend yield. There is no change from last month.
Five stocks (or 83%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), IA Financial Corp (TSX-IAG, OTC-IDLLF), Manulife Financial Corp (TSX-MFC, NYSE-MFC), Power Financial Corp (TSX-PWF, OTC-POFNF), and Sun Life Financial (TSX-SLF, NYSE-SLF). Sun Life Financial (TSX-SLF, NYSE-SLF) has been added to this list.
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 showing as cheap by the historically high dividend yield. There is no change from last month.
One stocks or 17% is showing as cheap by historical median dividend yield. It is Stantec Inc. (TSX-STN, NYSE-STN). There is no change to this list.
I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. There is no change from last month.
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. This has not changed from last month.
Three stocks or 43% 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 Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF). PFB Corp (TSX-PFB, OTC-PFBOF) has been removed from this list.
I follow 16 Services stocks. One stock is showing as cheap by the historically high dividend yield. That stock is Pason Systems Inc. (TSX-PSI, OTC-PSYTF). There is no change from last month.
Four stocks or 25% 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), Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). There is no change from last month.
I follow 10 Material stocks. I have added Kirkland Lake Gold (TSX-KL, NYSE-KL) to my list as I might be following it in the future. None are showing as cheap by the historically high dividend yield. This has not changed from last month.
Six stock or 60% are showing as cheap by historical median dividend yield. The stocks are Barrick Gold Corp (TSX-ABX, NYSE-ABX), Chemtrade Logistics Inc. Fund (TSX-CHE.UN, OTC-CGIFF), Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF), Methanex Corp (TSX-MX, NASDAQ-MEOH), Stella-Jones (TSX-SJ, OTC-STLJF), and Supremex Inc (TSX-SXP, OTC-SUMXF). There is no change from last month.
I follow 10 Real Estate stocks. No stock is showing as cheap by historically high dividend yield. There is no change from last month. Three stocks (or 30%) are showing as cheap by historical median dividend yield. They are H & R REIT (TSX-HR.UN, OTC-HRUFF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). H & R REIT (TSX-HR.UN, OTC-HRUFF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) have been added to this list.
I follow 3 of the Telecom Service stocks. No stocks are showing as cheap by historically high dividend yield. This has not changed from last month.
Three stocks (or 100%) 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). This has not changed from last month.
I follow 9 Tech stocks. None are showing as cheap by historical high dividend yield. There is no change from last month.
Four stocks (or 44%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Absolute Software Corporation (TSX-ABT, OTC-ALSWF) has been removed from this list.
I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. This has not changed from last month.
Three stocks (or 43%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF) and TC Energy Corp (TSX-TRP, NYSE-TRP). There is no change from last month.
I follow 10 of the Power type utility companies. One stock is showing as cheap by historical high dividend yield. This is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). ATCO Ltd (TSX-ACO.X, OTC-ACLLF) has been added to this list.
Two stocks (or 20%) are showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), and Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). Fortis Inc (TSX-FTS, OTC-FRTSF) and Just Energy Group Inc. (TSX-JE, NYSE-JE) have been removed from this list.
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 January 10, 2020 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, January 7, 2020
Dividend Stocks January 2020
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 2019. On this list,
Bank of Montreal (TSX-BMO, NYSE-BMO)
Enbridge Inc (TSX-ENB, NYSE-ENB)
Granite REIT (TSX-GRT.UN, NYSE-GRP.U)
National Bank of Canada (TSX-NA, OTC-NTIOF)
TECSYS Inc (TSX-TCS, OTC-TCYSF)
TFI International (TSX-TFII, OTC-TFIFF)
Of the stocks I follow, none have cut their dividends. Of the stocks I follow, I stock has suspended or terminated their dividends. That stock is shown below. There is a tension between needing money for investing in growth and paying dividends.
Just Energy Group Inc (TSX-JE, NYSE-JE)
DHX Media Inc (TSX-DHX, OTC- DMQHF) changed its name and symbols to WildBrain Ltd (TSX-WILD, OTC-WLDBF).
I might start to follow Kirkland Lake Gold (TSX-KL, NYSE-KL). It was recommended as a much better stock than Barrick Gold Corp (TSX-ABX, NYSE-ABX) stock that I now hold by Sue O'Reilly of my meetup investment club. The link is the here. However, please note that the link will not work if you are not signed on to Meetup. Meetup is free to join and it has groups on everything all over the world. She is also on StockTwits as @SueO.
Most of my stocks started out as Dividend Payers. Currently 14 stocks are not paying any dividends and this would be some 9.03% of the stocks that I follow. Four of these stocks never had dividends, so 5.81% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), 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 it is 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 Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more. Next, I will write about Rogers Sugar Inc (TSX-RSI, OTC-RSGUF) ... learn more on January 8, 2020 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.
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 2019. On this list,
- I have 08 stocks with a dividend yield higher than the historical high dividend yield,
- I have 45 stocks with a dividend yield higher than the historical average dividend yield
- I have 74 stocks with a dividend yield higher than the historical median dividend yield and
- 86 stocks with a dividend yield higher than the 5 year average dividend yield.
- I have 09 stocks with a dividend yield higher than the historical high dividend yield,
- I have 45 stocks with a dividend yield higher than the historical average dividend yield
- I have 69 stocks with a dividend yield higher than the historical median dividend yield and
- 89 stocks with a dividend yield higher than the 5 year average dividend yield.
- 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.
Bank of Montreal (TSX-BMO, NYSE-BMO)
Enbridge Inc (TSX-ENB, NYSE-ENB)
Granite REIT (TSX-GRT.UN, NYSE-GRP.U)
National Bank of Canada (TSX-NA, OTC-NTIOF)
TECSYS Inc (TSX-TCS, OTC-TCYSF)
TFI International (TSX-TFII, OTC-TFIFF)
Of the stocks I follow, none have cut their dividends. Of the stocks I follow, I stock has suspended or terminated their dividends. That stock is shown below. There is a tension between needing money for investing in growth and paying dividends.
Just Energy Group Inc (TSX-JE, NYSE-JE)
DHX Media Inc (TSX-DHX, OTC- DMQHF) changed its name and symbols to WildBrain Ltd (TSX-WILD, OTC-WLDBF).
I might start to follow Kirkland Lake Gold (TSX-KL, NYSE-KL). It was recommended as a much better stock than Barrick Gold Corp (TSX-ABX, NYSE-ABX) stock that I now hold by Sue O'Reilly of my meetup investment club. The link is the here. However, please note that the link will not work if you are not signed on to Meetup. Meetup is free to join and it has groups on everything all over the world. She is also on StockTwits as @SueO.
Most of my stocks started out as Dividend Payers. Currently 14 stocks are not paying any dividends and this would be some 9.03% of the stocks that I follow. Four of these stocks never had dividends, so 5.81% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), 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 it is 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 Royal Bank of Canada (TSX-RY, NYSE-RY) ... learn more. Next, I will write about Rogers Sugar Inc (TSX-RSI, OTC-RSGUF) ... learn more on January 8, 2020 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.
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