Monday, July 3, 2017

Premium Brands Holdings Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. The stock has recently had a great run but it seems currently to have lost it momentum. It would seem to be expensive. All my tests show that the current stock price is relatively expensive. See my spreadsheet on Premium Brands Holdings Corp.

I do not own this stock of Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF). I was looking for another stock to follow and I found this is one of the top stocks in TD Bank's Canadian Equity Fund.

This company used to be an income trust. It did not really reduce it dividends when it became a corporation, but changed the frequency from monthly to quarterly. Dividends were rather flat and then lately it has increased the dividends. The last dividend increase was in 2017 and the increase was for 10.5%. The growth over the past 5 and 10 years is at 4.8% and 2.4% per year.

The company was not covering their dividends with EPS until 2016. In that year the Dividend Payout Ratio was 62%. In the previous year the cover ages at 274%. It is expected that the DPR will be good going forward from 2017.

The current dividend yield is low at just 1.81%. In the past it was very high with an historical high of over 17% and with an historical median of 8.05%. It might settle into a stock with a moderate dividend with moderate growth. That would be a dividend in the 2% range and increases around 10 to 12%.

The company has good debt ratios currently. The Liquidity Ratio for 2016 is 2.00. The Debt Ratio for 2016 is 2.55 and the Leverage and Debt/Equity Ratios for 2016 are 2.63 and 1.63. It did not always have good debt ratios. From 2009 to 2013, the Liquidity Ratio was below 1.50 and sometimes below 1.50. In the same time period the Debt Ratio was below 1.50.

The Return on Equity for 2016 was good at 16.2%, but the 5 year median is 6.1%. This is because the ROE has been low over the past 5 year. The ROE was slightly better on comprehensive income with a 2016 ROE of 15.1% and a 5 year median of 8.6%. During the past 5 years the Revenue has been going up, the problem was that the EPS was not.

The 5 year low, median and high median Price/Earnings per Share Ratios are 28.73, 33.58 and 38.42. The corresponding 10 year ratios are 17.88, 22.87 and 25.71. The historical ratios are 11.21, 13.91 and 15.42. It would appear that a big component of the rise in stock price has been a rise in P/E Ratio. The current P/E Ratio is 30.21 based on a stock price of $93.04 and 2017 EPS estimate of $3.08. This is a rather high P/E Ratio and it would suggest that the stock price is relatively expensive.

I get a Graham price of 31.56. The 10 year low, median and high median Price/Graham Price Ratios are 1.21, 1.33 and 1.44. The current P/GP Ratio is 2.95 based on a stock price of $93.04. This stock price testing would suggest that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.79. The current ratio is 6.47 based on Book Value of $426.8M, $14.37 per share and a stock price of $93.04. The current P/B Ratio is some 262% higher than the 10 year median. This stock price testing would suggest that the stock price is relatively expensive.

The current dividend yield is 1.81% based on dividends of $1.68 and a stock price of $93.04. I cannot use the historical median as this stock was an income trust and reached rates it will probably never get to again. However, the 5 year median is 5.50%. This is some 67% above the current dividend yield. This stock price testing would suggest that the stock price is relatively expensive.

The 10 year median P/S Ratio is 0.41. The current P/S Ratio is 1.25 based on a stock price of $93.04 and 2017 Revenue estimate of $2,215M and Revenue per share of $74.58. This stock price testing would suggest that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Hold, but Buy is the consensus recommendations. The 12 month stock price is $93.09. This implies a total return of 1.86% with 1.81% from dividends and 0.05% from capital gain based on a current Price of $93.04.

Harper Lund on Chaffey Breeze talks about BMO giving this stock a market perform (Hold) and a target price of $97.00. In the meantime RY lifted their target to $100.00 and gave it a recommendation of Outperform (Buy). Ryan Vanzo of Motley Fools wrote about this stock last year. See what analysts are saying about this stock on Stock Chase. They mostly like it.

Premium Brands Holdings Corporation, through its subsidiaries, owns a range of specialty food manufacturing and premium food distribution and wholesale businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada, Ohio and Washington State.. Its web site is here Premium Brands Holdings Corp.

The last stock I wrote about was about was Intact Financial Corp (TSX-IFC, OTC-IFCZF)... learn more. The next stock I will write about will be Suncor Energy Inc. (TSX-SU, NYSE-SU)... learn more on Wednesday, July 5, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy July 2017... learn more on Tuesday, July 4, 2017 around 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.

1 comment:

  1. A meeting of Board of Directors of the Company is scheduled to be held on 19th July, 2017, Wednesday, to consider and approve, inter alia, the Un-audited Standalone Financial Results of the Company for the first quarter ended 30th June, 2017.
    Value Pick