Monday, July 24, 2017

Lassonde Industries Inc.

I just bought 200 shares of Alaris Royalty Corp (TSX-AD, OTC-ALARF) for my TFSA. It is a higher risk stock, but for my TFSA I am going to higher risk stock. Also, with a dividend yield of over 7%, there is a good chance that the company will cut the dividends.

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. This is a great company, but it is currently rather expensive. A good price on this stock would be closer to $140.00 rather than the current $240.00. See my spreadsheet on Lassonde Industries Inc.

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.

It is rather typical of food companies to have low dividend yields and this company is no different. The current dividend yield is 1 % based on dividends of $2.44 and a stock price of $240.50. The 5 year median, 10 year median and historical median are higher at 1.34%, 1.67% and 1.76% respectively.

The dividend growth is better over the past 5 years than in the past. This dividend growth is good at 15.1% per year. For other time periods the dividend growth was low to moderate with the lowest growth over the past 20 years. Growth over the past 10, 15 and 20 years were at 14% (moderate), 9.2% (moderate) and 6.8% (low). In keeping with increasing dividend growth, the latest dividend increase which occurred in 2017 was for 19.6%.

When I look at my spreadsheet all I see is green. I colour code growth values and green means growth of 8% or more. I look generally at the last 5 and 10 years, and at Revenue, EPS, Stock Price, Cash Flow, Book Value and Net Income are all coming up green.

Debt ratios are all good. For example, the Liquidity Ratio for 2016 was 1.70 and has a 5 year median of 1.79. Leverage Debt/Equity Ratios for 2016 is at 1.88 and 0.88 with 5 year medians at 2.06 and 1.06. Return on Equity (ROE) has not been below 10% during the last 10 years. However, Comprehensive Income Return on Equity has as it was 9.3% in 2016 when the ROE was 11.6%.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.79, 18.10 and 20.37. The 10 year corresponding values are 10.80, 12.38 and 12.12. The historical values are 10.80, 13.06 and 14.87. Unfortunately, the increase in the P/E Ratio can account for some of the run up in the stock price. The current P/E Ratio is 20.80 based on a stock price of $240.50 and 2017 EPS estimate of 11.56. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham price of $142.61. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.99 and 1.13. The current P/GP Ratio is 1.69 based on a stock price of $240.50. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.80. The current P/B Ratio is 3.08 a value some 71% higher. The current P/B Ratio is based on a stock price of $240.50, Book Value of $546.37 and BVPS of $78.19. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 1.76%. The current dividend yield is 1.01% based on dividends of $2.44 and a stock price of $240.50. The current yield is 42% below the historical median. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Sales (or Price/Revenue) Ratio of 0.63. The current P/S Ratio is 1.09 based on 2017 Revenue estimate of $1546M, Revenue per Share estimate of $221.24 and a stock price of $240.50. The current ratio is some 73% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look for analysts' recommendation, I found only one that that analyst is giving a Buy Recommendations. The 12 month stock price is set at $250. This implies a total return of 4.96% with 1.01% from dividends and 3.95% from capital gains.

Ryan Goldsman on Motley Fool gives this stock as his top pick for July. Staff at Financial Newsweek Staff say some interesting things about this stock. Kurt Siggers on San Times says that the next quarterly EPS estimate is $2.90.

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 Industries Inc.

The last stock I wrote about was about was Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more. The next stock I will write about will be Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more on Wednesday, July 26, 2017 around 5 pm. Tomorrow on my other blog I will write about Home Capital Group... learn more on Tuesday, July 25, 2017around 5 pm.

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.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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