Andrew Peller Ltd.

On my other blog I am today writing about possible cheap dividend stocks for September 2014 continue...

I do not own this stock of Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF), but I used to. I started a spreadsheet in April 2009 after I read a favorable report on the stock. Also, this stock was on Mike Higgs' dividend growth stock list. I held this stock when it was called Andres Wines between 1996 and 2000 in my RRSP account.

The dividend is decent currently at 3.1% and the 5 year median is 3.6%. The dividend growth is low over the past 5 years, but decent over the past 10 years. The 5 and 10 year dividend growth was 3.4% and 6.1% per year. The last dividend increase was in 2014 and it was for 5%.

Dividend increases are inconsistent as some years there are no dividend increases. It was the lack of dividend increases is why I sold this stock in 2000. The Dividend Payout Ratios are good with the 5 year median at 37.9% for EPS and at 23.8% for CFPS. The DPR for 2014 was 38.6% for EPS and 23.8% for CFPS.

When I look growth, I see that generally the 5 year running averages growth over the past 5 and 10 years is better than the 5 and 10 year growth. The Revenue per Share is up by 3% and 7% per year over the past 5 and 10 years, but using the 5 year running averages, the 5 and 10 years growth is at 5.3% and 6.9% per year.

EPS is down by 9.3% and up by 4.2% per year over the past 5 and 10 years. Using the 5 year running averages, the 5 and 10 year growth is 16.7% and 7.6% per year.

Cash Flow per Share is up by 5% and 5.6% per year over the past 5 and 10 years. Using the 5 year running averages, the 5 and 10 year growth is 5.6% and 7.5% per year.

The Return on Equity is below 10% for 5 year over the past 10 years, but only once in the past 5 years. The ROE for the financial year ending in March 2014 was at 10.2% and the 5 year median is 10.8%. The corresponding ROE on comprehensive income is 10% and 10%.

The debt ratios are fine with the Liquidity Ratio at 1.44, the Debt Ratio at 1.85 and the Leverage and Debt/Equity Ratios at 2.18 and 1.18 for the financial year ending March 2014.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.48, 10.54 and 11.60. The current P/E is at 15.91 using the last 12 months EPS value of $.95 and a stock price of $14.96. (There are no estimates.) By this stock price test, the stock price is relatively expensive.

I get a Graham Price of $14.41. The 10 year low, median and high median Price/Graham Price Ratios are 0.71, 0.87 and 1.02. The current P/GP Ratio is 0.94 based on a stock price of $14.96. By this stock price test, the stock price is relatively reasonable.

The 10 year Price/Book Value 1.38 and the current P/B Ratio is 1.38 based on a BVPS of $9.81 and a stock price of $14.96. By this stock price test, the stock price is relatively reasonable.

The 5 year median Dividend yield is 3.60% and the current dividend yield of 3.11% is some 13.5% lower. The historical average dividend yield is 4.02% a value some 22% higher than the current dividend yield and the historical median dividend yield is 3.60%. By this stock price test, the stock price is relatively reasonable, but at the higher end of the reasonableness range or getting to be expensive.

The total return on this stock to date over the past 5 and 10 years is at 16.99% and 7.60% per year with 13.91% and 4.81% per year from capital gains and 3.08% and 2.79% per year from dividends.

There is a G&M press release talking about this company having a strong first quarter for 2015. The Financial year for this company is in March. I do not see the first quarter as being strong. When I looked at the financials, the revenue is up slightly, but earnings and cash flow are down.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock, Not Cheap. One problem with this stock is lack of analyst's coverage. It is not a great dividend growth stock, but the stock has returned reasonable total returns over the past 5 and 10 years. From my perspective, this stock price is not cheap enough to make this a good purchase at this time. See my spreadsheet at adw.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

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.

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.

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