Lassonde Industries

I do not own any shares in this consumer stock. However, I have started to follow it as it has been recommended for dividend growth and long term capital gain. I just read a report to say this stock (TSX-LAS.A) was undervalued and was currently a good one to buy for long term gains and future dividends.

What I like to see in a consumer stock is good dividend growth and this stock certain has that. The 5 and 10 year growth in dividends is at 15% and 14% per year respectively. This is very good dividend growth. Also, the current dividend at 2% is also quite good for a consumer stock, as a lot of consumer stock dividends are under 2%. If the growth in dividends continue, you are looking at receiving a 4% dividend yield in 5 years time and a 8% dividend yield in 10 years time, based on the current stock price (so on any current investment).

However, this is a consumer stock, and this company acts conservatively. They do not have a record of always increasing their dividends. In 2007, the dividends were decreased by10% when they made a big acquisition. However, by 2008, dividends were higher than they were in 2006. They have increased their dividend by 11% this year, and this is a good increase.

When you look at the growth figures on this stock, they are all good. For example, there has been a very good growth in revenues over the past years. The growth in revenue for the past 5 and 10 years is 15.7% and 10% per year respectively. The growth in cash value for the past 5 and 10 years is 17.5% and 8.5% per year, respectively. And, dear to every investors heart, is the total returns over the past 5 and 10 years, which at average prices, gives returns of 15% and 13% per year, respectively.

I can see why this stock might be recommended as both the Liquidity and the Asset/Liability Ratios are very good indeed at 2.90 and 2.21 respectively. What is good for both these ratios are ones of 1.50 and above. Also, the Return on Equity is very good with a 5 year average of 15% and one of 13% for the first two quarters of 2010.

All in all, this seems like a very good company and tomorrow, I will look at what other analysts say.

Lassonde Industries Inc. is a leading manufacturer of pure fruit juices and fruit drinks in Canada, and the largest manufacturer and distributor of apple juice in Eastern Canada. Through its subsidiaries, Lassonde is active in the processing, packaging and marketing of food products such as pure fruit juices, fruit and citrus drinks, the canning of corn on the cob for foreign markets as well as dipping sauces, fondue bouillon, meat marinades, barbecue sauces and baked beans. The Company also markets its know-how in Canada and abroad. Its web site is here Lassonde. See my spreadsheet at las.htm.

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. See my website for stocks followed and investment notes. Follow me on twitter.