Lassonde Industries Inc.

Sound bite for Twitter and StockTwits is: Dividend growth Consumer Staple stock. Even though the original owner has kept control through two classes of shares, shareholders have well when investing in this company. See my spreadsheet at las.htm.

I do not own this stock of Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF). Although this stock is not on the Investment Reporter list, MPL communications does write about this stock. It has been covered several times in their Advice Hotline emails in 2010. Reports have been favorable and they suggest buying it for dividends and long term capital gains.

This company started to give dividends in 1991. Although they do not consistently raise their dividends each year the dividends has risen quite well. The dividend growth over the past 5 and 10 years is at 15.1% and 14% per year.

The dividend yield is quite low, but the growth is good. The current dividend is 1.19% based on a stock price of $137.46. The 5 year median dividend yield is better at 1.69%. If you have had this stock for 5, 10, 15 or 20 years, you would be currently earning a dividend yield of 3%, 5%, 12.5% or 13.5% on your original stock price is you made a median price for your stock.

If you purchased this stock today with the dividend yield of 1.19% and they continued to increase the dividends at 15%, in 10 or 15 years’ time you could be earning 4.8% or 9.7% yield on today’s stock costing $137.46.

The Dividend Payout Ratios are good. The DPR for EPS for 2014 was 24.6% and for CFPS was 19.2%. The 5 year median DPR for EPS is 23.2% and for CFPS is 14.1%.

Shareholders have done well over the past 5 and 10 years. The total return for the past 5 and 10 years is 20.47% and 14.8% per year. The portion of this total return attributable to dividends is 1.74% and 1.52% per year. The portion of this total return attributable to capital gains is 18.73% and 13.28% per year.

Outstanding shares have increased by 1.2% and 0.2% per year over the past 5 and 10 years. Shares have increased due to stock issues and decreased due to Buy Backs. There are also two levels of shares. Class A shares have one vote each and these are on the TSX. Class B shares have 10 votes each and are owned by insider Pierre-Paul Lassonde, who is the Chairman and CEO.

Revenue growth has been good over the past 5 and 10 years. Earnings growth is moderate to good. Cash Flow growth is low to good. Revenue has grown at 17.6% and 16.3% per year over the past 5 and 10 years. Revenue per Share has grown at 16.3% and 16% per year over the past 5 and 10 years. EPS has grown at 7% and 13.9% per year over the past 5 and 10 years.

Cash flow has grown at 2.2% and 9.2% per year over the past 5 and 10 years. CFPS is up by 1% and 8.9% per year over the past 5 and 10 years. Cash Flow can fluctuate so it is interesting to look at 5 year running averages. The for CFPS, the 5 year running averages show growth at 12.9% and 13.1% per year over the past 5 and 10 years. So growth in cash flow maybe better than it first appears just looking at growth over exactly 5 and 10 years.

The Return on Equity has been over 10% each year over the past 10 years. The ROE for 2014 was 10.5% and the 5 year median ROE is 12.4%. The comprehensive income is better with ROE for 2014 at 15.6% and the 5 year median ROE at 15.6%. This suggests that earnings are of good quality.

Debt Ratios are good. The Liquidity Ratio is 1.79 for 2014. The Debt Ratio is 1.74 for 2014. The Leverage and Debt/Equity Ratios are 2.36 and 1.36 for 2014.

This is the first of two parts. The second part will be posted on Wednesday, July 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of fruit and vegetable juices and drinks marketed under recognized brands such as Apple & Eve, Everfresh, Fairlee, Flavür, Fruité, Graves, Northland, Oasis, Rougemont, Seneca and The Switch. Lassonde is the second-largest producer of store brand ready-to-drink fruit juices and drinks in the United States and a major producer of cranberry juices, drinks and sauces. Its web site is here Lassonde.

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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