Dividend Stock Wednesday: Shaw Communications (SJR.B-TSX)

Written by The Dividend Guy on February 20, 2008

This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

Shaw Communications

This week’s dividend stock Wednesday is going to look at Canadian communications company Shaw Communications. Every month I send a nice big check to Shaw for my digital cable, phone service, and high speed internet. I see from previous press releases that the company has started to increase its dividend so I wanted to see how the company stacks up to my personal analysis template. This is the result of that analysis.

Five Points

The Company: Shaw Communications (SJR.B-TSX)

SHAW COMMUNICATIONS INC. is a diversified communications company whose core business is providing broadband cable television, High-Speed Internet, Digital Phone, telecommunications services (through Shaw Business Solutions) and satellite direct-to-home services (through Star Choice).

Dividend Aristocrat (25+ yrs dividend growth)
 No
Dividend Achiever (10+ yrs dividend growth)
 No

THE FUNDAMENTALS

Revenue

Shaw - RevenueClick to Enlarge

Revenue Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with < 2 Down Years 0.5
Choppy with > 2 Down Years 0.0
My Revenue Score 0.0

Earnings Per Share

Shaw - EPSClick to Enlarge

Earnings Per Share Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with < 2 Down Years 0.5
Choppy with > 2 Down Years 0.0
My EPS Score 0.0

TOTAL FUNDAMENTALS SCORE: 0.0

THE RATIOS

Return on Equity

shaw-roe.gifClick to Enlarge

Return on Equity Scoring

Criteria Scoring
Above 15% for Last 5 Years 1.0
At Least One Year Below 15% in Last 5 Years 0.0
My ROE Score 0.0

Other Ratios

Ratio Criteria Value Score (Pass=1 / Fail = 0)
Debt to Equity < 0.50 1.54 0.0
Payout Ratio < 60% 51% 1.0
Credit Rating > BBB+ BB+ 0.0
Total Ratio Score
-
-
1.0

TOTAL RATIOS SCORE: 1.0

DIVIDEND DATA
Annual Dividends

Shaw - DPSClick to Enlarge

Dividend Scoring

Criteria Scoring
25+ Years of Dividend Growth 1.0
10+ Years of Dividend Growth 1.0
< 10 Years of Dividend Growth 0.0
My Dividend Growth Score 0.0

TOTAL DIVIDEND GROWTH SCORE: 0.0

STOCK VALUATION

Valuation Metric Criteria Value Score (Pass=1 / Fail = 0)
Dividend Yield Cur Yld > 10 Yr Avg Yld 0.8% 1.0
Div Yld Compared to SPY Div Yld Cur Yld > SPY Yld 2.3% 1.0
P/E Ratio Cur P/E < 10 Yr Avg P/E 41.2 1.0
Relative P/E Relative P/E < 1.0 0.28 1.0
Price to Sales < 1.5 3.31 0.0
Total Ratio Score
-
-
4.0

Canadian Shareowner’s Association Stock Selection Guide Software Buy Price

Buy Zone
 Maybe Zone
 Sell Zone
 Current Price Rating Scoring (Buy=1.0, Other=0.0)
$16.92 to $18.88
$18.88 to $20.84
$20.84 to $22.80
$21.15
Sell
 0.0

TOTAL STOCK VALUATION SCORE: 4.0

SUMMARY

Points Earned:

5 out of 14

The stock is rated LOW with 5 points earned through my analysis of the stock. This is not a great score as the company has had difficulty delivering consistent results over the past 10 years. In addition, Shaw Communication operates under a dual share structure, meaning that the public can buy one type of shares, and the Shaw family holds the other shares. I am very leery of this as the family has ultimate power to operate the company in any way they wish, including ways that works in their best interests as opposed to those of the public shareholders. As a result, I will not buy shares in Shaw until they remove the dual class structure, which I do not anticipate to be any time soon.

Rating Points Required
High 11+ points
Medium 8-10 points
Low < 8 points

Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

The Dividend Guy does not own shares in Shaw Communications


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2 Comments so far

  1. Dividends4Life February 20, 2008 9:42 am

    It is good to have you back! We missed your daily posts.

    Best Wishes,
    D4L

  2. Dividend growth investor February 21, 2008 8:44 am

    Good to see you back. I am glad you will have more time for the blog now.

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