Saturday, 29 June 2013

A Look at Rogers Communications


I recently purchased 135 shares of Rogers Communications (RCI-B.TSX) @ an average price of $43.76 including 2 commissions. My dividend yield is 3.98%.

Below is my analysis.

Average Dividend Yield Analysis*

RCI.B
Year
High Price
Low Price
1Q
div.
2Q
div.
3Q
div.
4Q
div.
Annual Dividend
High Yield
Low Yield
2003
$8.51
$4.18


$0.0250

$0.03
0.60%
0.29%
2004
$13.22
$8.25
$0.0250

$0.0250

$0.05
0.61%
0.38%
2005
$21.25
$12.19
$0.0250

$0.0250

$0.05
0.41%
0.24%
2006
$31.05
$18.31
$0.0375

$0.0375

$0.08
0.41%
0.24%
2007
$54.28
$29.68
$0.0400
$0.0400
$0.1250
$0.1250
$0.33
1.11%
0.61%
2008
$46.40
$22.61
$0.1250
$0.250
$0.250
$0.250
$0.88
3.87%
1.89%
2009
$37.50
$25.40
$0.250
$0.290
$0.290
$0.290
$1.12
4.41%
2.99%
2010
$41.64
$30.64
$0.290
$0.32
$0.32
$0.32
$1.25
4.08%
3.00%
2011
$39.33
$33.29
$0.320
$0.355
$0.355
$0.355
$1.39
4.16%
3.52%
2012
$45.84
$34.75
$0.355
$0.395
$0.395
$0.395
$1.54
4.43%
3.36%
2013


$0.395
$0.435
$0.435
$0.435
$1.70


2014


$0.435
$0.435
$0.435
$0.435
$1.74


Stock prices are per calendar year
5y ave
4.19%
2.95%
Dividends are recorded in the quarter they were paid
3y ave
4.22%
3.29%







5y
$41.53
$58.96







3y
$41.19
$52.82






Super Cheap
$39.26


The table shows the 3 year average dividend yield to be 4.22% ((4.08% + 4.16% + 4.43%)/3). I use the numbers in the “High Yield” column for obvious reasons.

Using the current annual dividend of $1.74, one would have to pay $41.19 for a 4.22% dividend yield.

Buying the stock at its low in 2012 would have earned you an initial yield of 4.43%. Using the current annual dividend, that corresponds to a stock price of $39.26 today (see “super cheap” price in the table above).

Graham Price

RCI.B’s 2010, 2011 and 2012 EPS were $2.65, $2.93 and $3.34. 3Y Ave EPS = $2.97.
RCI.B’s BV is $7.70.
Graham Price = SQRT (3Y Ave EPS * BV * 22.5) = $22.70

Cyclically Adjusted Price to Earnings Ratio

RCI.B’s 7Y Ave EPS = $2.29
CAPE = Stock Price / 7Y Ave EPS = $41.20 / $2.29 = 18
A CAPE below 20 is good.

Conclusion

ADY and CAPE indicate that Rogers Communications is attractively valued. Rogers is down 22% from its high of $52.75. The recent price drop is due to interest rate fears combined with Verizon’s possible entry into Canada.


*My method is not perfect as the stocks low price may have occurred before the annual dividend increase.

Friday, 28 June 2013

Empire Co Increases Dividend


This week, Empire (EMP.A) increased its dividend from $0.96 to $1.04 per year, or 8.3%. My yield on cost is now 2.52%. When I purchased this stock back in 2009, my yield was 1.80%.

On June 12, Empire Co announced it was buying Safeway Canada for $5.8 billion.

As of today, my dividend increases for 2013 are:

Company
2013 Div. Increase
$$$ Increase
CAT
15%
$6.80
CSX
7%
$6.00
Empire Co
8.3%
$13.20
Enbridge
11.5%
$34.19
JP Morgan
26.7%
$64.00
North West Co
7.7%
$32.00
SNC Lavalin
4.5%
$14.00
Target
19%
$14.00
Teva
15%
$59.00
Vodafone
7%
$27.12
Total

$270.31

At the end of 2012, my forward 12-month dividends were $3,598.76. With new purchases and dividend increases, they now stand at $5,033.83, an increase of $1,435.07.