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.
No comments:
Post a Comment