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.

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 2021 National Bank had a dividend yield below the historical median dividend yields, but still within a reasonable range. All the rest had dividend yields above the historical median dividend yields and therefore reasonable. Also, both BNS and TD Bank are showing the stock price as cheap. Only TD Bank testing is showing the stock price as relatively cheaper than last year.

Bank 2021	Symbol	Price	Dividend	Yield	M/C
Bank of Montreal	BMO	$97.60	$4.24	4.34%	1.26%
Bank of Nova Scotia	BNS	$69.40	$3.60	5.19%	26.21%
CIBC	CM	$111.06	$5.84	5.26%	18.97%
Royal Bank	RY	$107.36	$4.32	4.02%	2.65%
National Bank	NA	$73.55	$2.84	3.86%	-3.95%
TD Bank	TD	$73.58	$3.16	4.29%	22.70%

In 2020 BMO and National Bank had dividend yields below the historical median dividend yields, but still in the reasonable range. 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.

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%

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 2021 only BNS had ratios lowered than the 10 year ratio. The rest have stock price that are reasonable, but above the median. BMO, BNS, National Bank and TD Bank are all relatively cheaper in 2021 than in 2020.

Bank 2021	Symbol	Price	Rev/Share	P/S Ratio	M/C
Bank of Montreal	BMO	$97.60	$36.58	2.67	6.72%
Bank of Nova Scotia	BNS	$69.40	$24.99	2.78	-13.75%
CIBC	CM	$111.06	$42.35	2.62	3.87%
Royal Bank	RY	$107.36	$32.00	3.36	11.46%
National Bank	NA	$73.55	$24.52	3.00	7.83%
TD Bank	TD	$73.58	$21.62	3.40	7.82%

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.

Bank 2020	Symbol	Price	Rev/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%

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 2021, the banks of BNS, CIBC showed a price that was relatively cheap. For BMO, Royal Bank and TD the price is relatively reasonable and below the median. For National Bank the price is relatively reasonable but above the median. Bank of Montreal, Royal Bank, National Bank and TD Bank are all relatively cheaper this year.

Bank 2021	Symbol	Price	BVPS	Curr P/B	M/C
Bank of Montreal	BMO	$97.60	$79.34	1.23	-12.76%
Bank of Nova Scotia	BNS	$69.40	$51.85	1.34	-21.27%
CIBC	CM	$111.06	$83.67	1.33	-25.01%
Royal Bank	RY	$107.36	$56.86	1.89	-3.67%
National Bank	NA	$73.55	$38.91	1.89	7.40%
TD Bank	TD	$73.58	$49.80	1.48	-8.23%

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.

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 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 2021, BMO, BNS, CIBC, 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. The Royal Bank and National Bank are showing stock prices that are reasonable, but above the median. BMO and National Bank are relatively cheaper this year.

Bank 2021	Symbol	Price	Graham Pr	P/GP Ratio	M/C
Bank of Montreal	BMO	$97.60	$122.53	0.80	-4.03%
Bank of Nova Scotia	BNS	$69.40	$83.88	0.83	-5.98%
CIBC	CM	$111.06	$139.92	0.79	-8.77%
Royal Bank	RY	$107.36	$104.95	1.02	1.28%
National Bank	NA	$73.55	$75.90	0.97	10.12%
TD Bank	TD	$73.58	$80.34	0.92	-2.57%

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. BMO and National Bank are showing stock prices that are reasonable, but above the median.

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%

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. In 2021, by this criterion, BMO stock price is relatively the lowest. For all the stocks but the stock prices are showing as reasonable but above the median.

Bank 2021	Symbol	Price	EPS Est.	Curr P/E	M/C
Bank of Montreal	BMO	$97.60	$8.41	11.61	2.70%
Bank of Nova Scotia	BNS	$69.40	$6.03	11.51	6.86%
CIBC	CM	$111.06	$10.40	10.68	7.00%
Royal Bank	RY	$107.36	$8.61	12.47	8.15%
National Bank	NA	$73.55	$6.58	11.18	9.27%
TD Bank	TD	$73.58	$5.76	12.77	4.97%

In this test for 2020, 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. National Bank is showing as reasonable but above the median.

Bank	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%

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 Friday, January 29, 2021 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.

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. The results may be different from my recent reports as I have updated the stock price to the most recent ones. Also, all the data used in this entry is going back to 1988. When I talked about the individual stocks, data went back for different time periods for each stock.

The method I like best to check for a good stock price is using the current dividend yield and compare this against the historical median dividend yield. What you are looking for is a current dividend yield higher than the historical dividend yield. For dividend yields, the higher the dividend yields the better the relative price of a stock is.

In the first chart is the 10 year median and historical average and historical median dividend yields based on my spreadsheets for our banks. In the second chart is a comparison (M/C field) of current yield and Historical Median Yield.

Of the big banks that I follow, the Bank of Nova Scotia comes off relatively better in this test. For Bank of Nova Scotia, the current dividend yield is 5.19% and the historical median one is 4.11% a difference of 26.21%. The TD Bank is a close second with a current yield of 4.29% compared to the historical median one of 3.50%. The current yield is 22.7% below the historical median yield.

Bank	Symbol	10 Year	Hist. Ave	Hist. Med
Bank of Montreal	BMO	4.29%	5.28%	4.29%
Bank of Nova Scotia	BNS	4.22%	5.10%	4.11%
CIBC	CM	4.81%	4.77%	4.42%
Royal Bank	RY	3.93%	4.27%	3.92%
National Bank	NA	4.12%	6.37%	4.02%
TD Bank	TD	3.73%	3.52%	3.50%

Below you can see that Both BNS and TD Bank are cheap as their current yield is 20% or more above the historical median dividend yield. The Bank of Montreal, CIBC and Royal Bank are showing as reasonable and below the median. National Bank is showing as reasonable but above the median.

Bank	Symbol	Price	Dividend	Yield	M/C
Bank of Montreal	BMO	$97.60	$4.24	4.34%	1.26%
Bank of Nova Scotia	BNS	$69.40	$3.60	5.19%	26.21%
CIBC	CM	$111.06	$5.84	5.26%	18.97%
Royal Bank	RY	$107.36	$4.32	4.02%	2.65%
National Bank	NA	$73.55	$2.84	3.86%	-3.95%
TD Bank	TD	$73.58	$3.16	4.29%	22.70%

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 13.75% below its 10 year median P/S Ratio. All the other banks have a higher P/S Ratio than the 10 year median P/S Ratio.

Bank	Symbol	Ratio
Bank of Montreal	BMO	2.50
Bank of Nova Scotia	BNS	3.22
CIBC	CM	2.52
Royal Bank	RY	3.01
National Bank	NA	2.78
TD Bank	TD	3.16

In this chart, BNS is 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	$97.60	$36.58	2.67	6.72%
Bank of Nova Scotia	BNS	$69.40	$24.99	2.78	-13.75%
CIBC	CM	$111.06	$42.35	2.62	3.87%
Royal Bank	RY	$107.36	$32.00	3.36	11.46%
National Bank	NA	$73.55	$24.52	3.00	7.83%
TD Bank	TD	$73.58	$21.62	3.40	7.82%

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 25% lower than the 10 year P/B Ratio (chart 2).

Bank	Symbol	P/B
Bank of Montreal	BMO	1.41
Bank of Nova Scotia	BNS	1.70
CIBC	CM	1.77
Royal Bank	RY	1.96
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 Bank of Montreal, Royal Bank and TD Bank are showing as reasonable and below the median. National Bank is showing as reasonable but above the median.

Bank	Symbol	Price	BVPS	Cur P/B	M/C
Bank of Montreal	BMO	$97.60	$79.34	1.23	-12.76%
Bank of Nova Scotia	BNS	$69.40	$51.85	1.34	-21.27%
CIBC	CM	$111.06	$83.67	1.33	-25.01%
Royal Bank	RY	$107.36	$56.86	1.89	-3.67%
National Bank	NA	$73.55	$38.91	1.89	7.40%
TD Bank	TD	$73.58	$49.80	1.48	-8.23%

My next favourite test to check reasonableness of the stock price is using the Graham Price. 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 BMO and CIBC have a relatively lower stock price as their median P/GP is the lowest of all the banks at 0.92.

Of the big banks I follow, the CIBC is relatively lower with the current Price/Graham Price Ratio some 8.77% below its historical median P/GP Ratio (see second chart). Except for Royal Bank, and National Bank all the banks have a lower Graham Price Ratio than the median Graham Price Ratio.

Bank	Symbol	Low	Median	High
Bank of Montreal	BMO	0.73	0.83	0.92
Bank of Nova Scotia	BNS	0.80	0.88	0.98
CIBC	CM	0.82	0.87	0.92
Royal Bank	RY	0.91	1.01	1.10
National Bank	NA	0.77	0.88	1.02
TD Bank	TD	0.86	0.94	1.03

The following chart shows that CIBC has the relatively lowest price. It also shows that Bank of Montreal, BNS, CIBC, and TD Bank are showing as reasonable and below the median. Royal Bank and National Bank are showing as reasonable, but above the median. Royal Bank is very close to the median.

Bank	Symbol	Price	Graham Pr	P/GP	M/C
Bank of Montreal	BMO	$97.60	$122.53	0.80	-4.03%
Bank of Nova Scotia	BNS	$69.40	$83.88	0.83	-5.98%
CIBC	CM	$111.06	$139.92	0.79	-8.77%
Royal Bank	RY	$107.36	$104.95	1.02	1.28%
National Bank	NA	$73.55	$75.90	0.97	10.12%
TD Bank	TD	$73.58	$80.34	0.92	-2.57%

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 at 10.93, 12.17 and 13.30 for Low, Median and High P/E Ratios.

Bank	Symbol	Low P/E	Med P/E	High P/E
Bank of Montreal	BMO	10.07	11.30	12.51
Bank of Nova Scotia	BNS	9.02	10.77	12.52
CIBC	CM	8.86	9.98	10.73
Royal Bank	RY	10.41	11.53	12.80
National Bank	NA	8.85	10.23	11.76
TD Bank	TD	10.93	12.17	13.30

So, what is the relatively cheapest bank today? Currently CIBC has the lower P/E Ratio at 10.73 (see chart above). In the chart below, 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 (at 13.79% below the 10 year Median P/E Ratio). The National Bank is 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 Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more. Next, I will write about Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF) ... learn more on Wednesday, January 27, 2021 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.

Financials to Buy

On the Daily Advice web site there is a current article on 3 Canadian Financials to Buy for growth and income. This article is an edited version of what appear in The Money Letter. I follow all three stocks and own Manulife and Power Corp. Stocks are:

Manulife Financial Corp (TSX-MFC, NYSE-MFC)
National Bank of Canada (TSX-NA, OTC-NTIOF)
Power Corp (TSX-POW, OTC-PWCDF)

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-TCL.A, OTC-TCLAF) ... learn more on Friday, January 22, 2021 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.

Not All Investments Need to be Winners

I generally invest in Dividend Growth Stocks to earn an increasing dividend income. This is what I live on. When I was working, I used my portfolio as a reserve fund, that is for extra expenses that cropped up occasionally or backup funds if I lost my job. Things like that. It was also my Pension Plan. If you change jobs, even if the jobs come with a pension plan, you really need your own because you get little benefit from company pension plans if you change jobs.

I invested slowly over the years. I started in the mid 1970’s but I did not know what I was doing. I ended up being able to retire on my portfolio’s earnings in 1999. I had been let go from my job and I found I had enough money to not have to get another job.

Now, let’s get back to the point of this entry. I made lots of mistakes in investing, especially at first. I invested in some, what I thought were nice dividend stocks, that turned out not to be so nice. The think is when buying shares., you can only lose your investment in those shares. There is therefore a limit to what you can lose. However, the sky is the limit for stock investments that work out. So, basically, you only need to be right most of time, but not all of the time.

If you invest in the stock market, you are going to make mistakes. This cannot be helped. If you do make a mistake in buying into a company, sell it and move on. Hopefully, you will learn something from your mistakes. If you invest in Dividend Paying stocks, your mistakes may not be that costly.

For example:

I bought TransAlta Corp in 1987 and finally sold it in 2019. It had not done well for a few years. I sold below my purchase price. However, my total return was 6.12% per year. I had a positive return because of dividends.

I had Bombardier Inc, which I also in 1987. I also sold this below what I paid for it, but I had a total return of 11.08% per year because they paid dividends at the time that I bought it.

I bought a company called Gennum Corp in 1998 and sold in 2006 for slightly more than what I paid for it. I had a total return of 1.09% per year. It was a tech stock with dividends.

In 2006, I wanted to get into renewable energy. I bought Innergex Power Inc when it was an income fund. I sold in 2008 because it did not seem to be going anywhere. I lost 4.84% per year or a capital loss of 17%. I bought little as I was trying it out.

But over the years, my dividend income grew as did the value of portfolio. Dividend income tends to steadily grow. However, your portfolio value tends to fluctuate a lot.

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 Wednesday, January 20, 2021 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

Telus, Gordon Pape

Gordon Pape in this Money Show article calls Telus a Wealth Builder. Stock symbols are Telus Corp (TSX-T, NYSE-TU) and this is a Canadian Telecom stock.

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 Friday, January 15, 2021 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.

Questions for ESG Investors

The site of Behavioral Investment has an interesting article entitled 10 (More) Questions ESG Investors Must Consider.

On my other blog I wrote yesterday about Calian Group Ltd) ... learn more. Next, I will write about Toronto Dominion Bank (TSX-TD, NYSE-TD) ... learn more on Wednesday, January 13, 2021 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 2021

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 dividend yield test in this note is a quick way of finding possible stock buys. See my Spreadsheet .

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 price 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.

If a stock is showing as a buy using the dividend yield test, I usually like to verify it is a buy by doing a P/S Ratio test. Here you compare the current P/S Ratio to the 10 year median P/S Ratio. If the current P/S Ratio is lower than the 10 year median, then the stock is a buy. I note that Morningstar gives a current P/S Ratio. The 10 year median ratio is shown in my review of a stock. The 10 year median ratio in a review is good for one year from the date of review.

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 2021 Spreadsheet above 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. None of these stocks (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.

Six (26%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), 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), and Stingray Digital Group Inc (TSX-RAY.A). Goeasy Ltd (TSX-GSY, OTC-EHMEF) has been deleted from this list. Goodfellow Inc (TSX-GDL, OTC-GFELF), High Liner Foods (TSX-HLF, OTC-HLNFF) has been 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.

Five stocks (50%) 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), and Saputo Inc. (TSX-SAP, OTC-SAPIF). There is no change from last month.

I follow Five Health Care stocks. None of these stocks (0%) is showing as cheap by the historically high dividend yield. HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) has been removed from this list.

Four stocks (80%) are cheap by the historical median dividend yield. The stocks are HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF), Johnson and Johnson (NYSE-JNJ), Medtronic Inc. (NYSE-MDT), and Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF). Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) has been added to this list.

I follow 10 Energy stocks. One of these stocks (10%) is showing as cheap by the historical high dividend yield. It is Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). There is no change from last month.

There are three stocks (30%) showing as cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ovintiv Inc (TSX-OVV, OTC-OVV), and Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.

I follow 8 Bank stocks. None of these stocks (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.

Four stocks (50%) are showing as cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD). There is no change from last month.

I follow 13 Financial Service stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Seven stocks (62%) are showing as 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 Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF), Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF), CI Financial (TSX-CIX, OTC-CIFAF), Equitable Group Inc (TSX-EQB, OTC-EQGPF), IGM Financial (TSX-IGM, OTC-IGIFF), and Power Corp (TSX-POW, OTC-PWCDF). There is no change from last month.

I follow 6 Insurance stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Five stocks (83%) are showing as cheap by historical median dividend yield. These stocks are Genworth MI Canada Inc (TSX-MIC, OTC-GMICF), Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), IA Financial Corp (TSX-IAG, OTC-IDLLF), Manulife Financial Corp (TSX-MFC, NYSE-MFC), and Sun Life Financial (TSX-SLF, NYSE-SLF). There is no change from last month.

I follow 33 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 7 Construction stocks. One stock (14%) is showing as cheap by the historically high dividend yield. This stock is Aecon Group Inc (TSX-ARE, OTC-AEGXF). There is no change from last month.

Two stocks (29%) are showing as cheap by historical median dividend yield. They are Aecon Group Inc (TSX-ARE, OTC-AEGXF), 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 of these stocks (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.

Two stock (66%) 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 of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stocks (29%) are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), and Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF). There is no change from last month.

I follow 16 Services stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Four stocks (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. One stock (10%) is showing as cheap by the historically high dividend yield. It is Kirkland Lake Gold (TSX-KL, NYSE-KL). There is no change from last month.

Four stock (40%) 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), Kirkland Lake Gold (TSX-KL, NYSE-KL), and Stella-Jones (TSX-SJ, OTC-STLJF). There is no change from last month

I follow 10 Real Estate stocks. No stocks (0%) are showing as cheap by historically high dividend yield. There is no change from last month.

Four stocks (40%) are showing as cheap by historical median dividend yield. They are Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF), First Capital Realty (TSX-FCR.UN, OTC-FCXXF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) has been added to this list.

I follow 3 of the Telecom Service stocks. One stocks (33%) is showing as cheap by historically high dividend yield. It is Shaw Communications Inc (TSX-SJR.B, NYSE-SJR). There is no change from last month.

Three stocks (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). There is no change from last month.

I follow 9 Tech stocks. No stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.

Three stocks (33%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Evertz Technologies (TSX-ET, OTC-EVTZF) has been added to this list.

I follow 8 of the Infrastructure type utility companies. One stock (14%) is showing as cheap by historical high dividend yield. It is Enbridge Inc. (TSX-ENB, NYSE-ENB). This is no change from last month.

Four stocks (50%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF), Pembina Pipeline Corp (TSX-PPL, NYSE-PBA) and TC Energy Corp (TSX-TRP, NYSE-TRP). Capital Power Corp. (TSX-CPX, OTC-CPRHF) has been removed from this list.

I follow 10 of the Power type utility companies. One stock (10%) is showing as cheap by historical high dividend yield. It is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change from last month.

Two stocks (30%) are showing as cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), and Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). There is no change from last month.

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 Friday, January 8, 2021 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 2021

The Blogger Stock Trades Canada has on his site a list of Canadian stocks that have cut their dividends. If you want to stay update on dividend cuts, this seems to a good place to keep an eye on. You might also want to get the free weekly newsletter from Canadian Stock Channel which says what might be the best Canadian Dividend Stocks to buy at the present time.

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. Some use the 10 year average or median yield rather than the historical ones. I use median yields, always. See my spreadsheet at dividend growth stocks that I just updated for January 2021.

On this list,

• I have 7 stocks with a dividend yield higher than the historical high dividend yield,
• I have 43 stocks with a dividend yield higher than the historical average dividend yield
• I have 65 stocks with a dividend yield higher than the historical median dividend yield and
• 71 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list last list in December 2020,

• I have 6 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 62 stocks with a dividend yield higher than the historical median dividend yield and
• 70 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 $166.63. This month dividends would be $$168.78. It can vary as because some stocks are paid in US$ and so this figure is affected by currency exchange. Of the stock that I follow 11 stocks has raised their dividends since last month.

Allied Properties REIT (TSX-AP.UN, OTC-APYRF)
AltaGas Ltd (TSX-ALA, OTC, ATGFF)
Dollarama Inc (TSX-DOL, OTC-DLMAF)
Enbridge Inc (TSX-ENB, NYSE-ENB)
Evertz Technologies (TSX-ET, OTC-EVTZF)

Granite REIT (TSX-GRT.UN, NYSE-GRP.U)
Kirkland Lake Gold (TSX-KL, NYSE-KL)
Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF)
TECSYS Inc (TSX-TCS, OTC-TCYSF)
TFI International (TSX-TFII, OTC-TFIFF)

TransAlta Corp (TSX-TA, NYSE-TAC)

Of the stocks I follow, 0 stock has cut their dividends and sf the stocks I follow, 0* stocks have suspended or terminated their dividend.

Of the stocks I follow, the following declined the most in their stock price.

Name	Exch	Sym	Exch	Sym	Chge
Le Chateau Inc	TSX	CTU	OTC	LCUAF	-33.33%
First Capital REIT	TSX	FCR.UN	OTC	FCXXF	-14.42%
TC Energy Corp	TSX	TRP	NYSE	TRP	-12.75%
Inter Pipeline Ltd	TSX	IPL	OTC	IPPLF	-12.14%
Pembina Pipeline Corp	TSX	PPL	NYSE	PBA	-11.65%
Richelieu Hardware Ltd	TSX	RCH	OTC	RHUHF	-11.35%
SNC-Lavalin	TSX	SNC	OTC	SNCAF	-11.27%
ARC Resources Ltd	TSX	ARX	OTC	AETUF	-10.85%
Computer Modelling	TSX	CMG	OTC	CMDXF	-10.79%
CI Financial	TSX	CIX	OTC	CIFAF	-9.57%

Of the stock that I follow, these stocks gained the most in their stock price.

Name	Exch	Sym	Exch	Sym	Chge
Supremex Inc	TSX	SXP	OTC	SUMXF	17.92%
PFB Corp	TSX	PFB	OTC	PFBOF	18.42%
Calian Group Ltd.	TSX	CGY	OTC	CLNFF	20.07%
Trican Well Service Ltd	TSX	TCW	OTC	TOLWF	20.86%
WSP Global Inc.	TSX	WSP	OTC	WSPOF	26.09%
Maxar Technologies Ltd	TSX	MAXR	NYSE	MAXR	30.70%
TECSYS Inc	TSX	TCS	OTC	TCYSF	31.80%
Obsidian Energy Ltd	TSX	OBE	OTC	OBELF	55.36%
Chesswood Group	TSX	CHW	OTC	CHWWF	62.68%
Cenovus Energy Inc	TSX	CVE	NYSE	CVE	77.75%

Most of my stocks started out as Dividend Payers. Currently 21 stocks are not paying any dividends and this would be some 13.8% of the stocks that I follow. Three of these stocks never had dividends, so 12.7% 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 10 year median dividend yields (P/10Y). 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 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 Wednesday, January 06, 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.