Thursday, November 1, 2012

Andrew Peller Ltd

On my other blog I am today writing about the Money Show in Toronto for 2012. I will be putting my notes up as I transcribe them. I have two entries for today and the final one for Friday. I will then go back to posting twice a week, on Mondays and Wednesdays. If Monday is a holiday, I will post on Tuesdays and Thursdays...continue...

I do not own this stock of Andrew Peller Ltd. (TSX-ADW.A). I started to follow it because I read a positive review on this stock, which suggested that it was a good buy. I am always on the lookout for good stocks to buy, so I did a spreadsheet on this stock.

I also held it from October 1996 to August 2000. I sold it because the company was having some difficulties and I did not think there would be a dividend increase anytime soon. I made a return of 5.4% (of which mostly was in dividend income).

As far as dividends go, they do raise them, but the raises are infrequent, but they tend to be good raises when they come. The 5 year median dividend yield is at 3.58%, which is a good dividend. The dividend growth over the past 5 and 10 years is 5.5% and 4.4% per year, respectively.

So dividends are good with a modest growth. If you own this stock for 15 years, you could probably expect yield on your original purchase price to be around 8%. This is not bad, but it is not great either. I did a post about Dividend Yields on Original Investments a while ago.

The Dividend Payout Ratios are good for this company. The 5 year median DPR for earnings is 41% and for cash flow is 35%. They are in a medium range, which would allow the company to pay dividends and also allow cash for growth.

The total return over the past 5 and 10 years was 1.13% and 9.88%. The dividend portion of this return was 3% and 3.67% per year, respectively. There was a capital loss of 1.87% over the past 5 years and a capital gain of 5.72% over the past 10 years. Considering the economy and that this is a retail stock, performance is not bad.

The outstanding shares have declined very slightly over the past 5 and 10 years at the rate of 0.81% and 0.05% per year. This is mainly due to some repurchasing of shares in the last couple of years. Revenues are up 3.9% and 7% per year over the past 5 and 10 years. Revenue per Share is up by 4.8% and 7% per year over the past 5 and 10 years. These are moderate growth rates.

Earnings per Share are up 4.5% and 9.2% per year over the past 5 and 10 years. Cash Flow per Share is up 3.87% and 9.07% per year over the past 5 and 10 years. The Book Value per Share is up at 5.62% and 5.76% per year over the past 5 and 10 years.

The Return on Equity was 10.8% for the financial year ending March 31, 2012. This is within the good 10% to 15% range. The ROE on comprehensive income was a bit, but not much, lower at 9.3%.

The Liquidity Ratio has always been a bit low and the current one is at 1.34. This is the same as it was for the financial year ending in March 2012. The Debt Ratio is much better with a current ratio at 1.73 and the one for the financial year ending in March 2012 at 1.73. The cash flow does not change this ratio.

The current Leverage and Debt/Equity Ratios are fine at 2.33 and 1.37. They are close to the 10 year median ratios of 2.35 and 1.35, respectively.

This is a consumer stock and would be considered to be a defensive stock (that is a stock that would weather rough economic times without losing too much value.) And indeed, this stock has not done badly considering the economic climate. It might be a good long term play, but it is thinly traded and it has a large insider ownership.

Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan and Similkameen Valleys and vineyards around the world. They also market craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company's products are sold predominantly in Canada. Class A shares are non-voting. Its web site is here Andrew Peller. See my spreadsheet at adw.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 or StockTwits.

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