I do not own this stock of Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF), but I used to. This stock was on Mike Higgs' dividend growth stock list. I owned this stock as Andres Wines Ltd between 1996 and 2000. I held it for 4.6 year and made a total return of 5.41% with 5.35% from dividends and 0.06% from capital gain. That is why I sold in 2000.
When I was updating my spreadsheet, I noticed the it has only been a dividend growth stock since 2007 and that earnings are growing faster than sales over the past 5 and 10 years.
Dividends were started in 1988. Dividend yields were good at first (4 to 5% range) but there was only one increase and that was in 1998. Dividend increases started in 2007, but were irregular at first. There have only been regular increases since 2012. Therefore, we are only interested in dividend increases for the past 5 and 10 years which are at 7.94% and 5.80% per year. The last increase was for 13.9% and it was in 2018.
They can afford their dividends. The Dividend Payout Ratio for 2018 financial year (ending in March 2018) was 24.8%with 5 year coverage at 30%. The DPR for CFPS for 2018 is 15% with 5 year coverage at 12%.
The company has good debt ratios no matter which ones you look at. The Long Term Debt/Market Cap Ratio is just 0.15 for 2018 so this is good. The Liquidity Ratio for 2018 is 2.12 with 5 year median at 1.90. The Debt Ratio for 2018 is 1.93 with 5 year median at 1.96. The Leverage and Debt/Equity Ratios are 2.08 and 1.08.
The Total Return per year is show below for years of 5 to 33. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
On a long term basis, shareholders have done well with this consumer stock. They have been paying dividends for 30 years.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 7.94% | 38.43% | 35.89% | 2.54% |
| 10 | 5.80% | 19.58% | 17.42% | 2.15% |
| 15 | 6.16% | 17.64% | 15.25% | 2.40% |
| 20 | 4.59% | 11.01% | 9.32% | 1.70% |
| 25 | 3.97% | 16.60% | 10.03% | 6.57% |
| 30 | 3.30% | 13.89% | 9.02% | 4.87% |
| 33 | 11.11% | 7.85% | 3.26% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.81, 16.30 and 19.83. The corresponding 10 year ratios are 10.81. 12.01 and 13.21. The historical corresponding ratios are 10.92, 12.85 and 14.35. The current P/E Ratio is 22.50 based on a stock price of $17.10 and 2019 EPS estimate of $0.76. The P/E Ratios over time seem quite consistent. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $9.36. The 10 year low, median, and high median Price/Graham Price Ratios are 0.72, 0.87 and 0.99. The current P/GP Ratio is 1.83 based on a stock price of $17.10. 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 1.35. The current P/B Ratio is 3.54 based on Book Value of $226M, Book Value per Share of $5.12 and a stock price of $17.10. The current ratio is some 143% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.84%. The current dividend yield is 1.20% based on dividends of $0.21 and a stock price of $17.10. The current dividend yield is some 69% below the historical dividend yield. Also, the 5 year median dividend yield is 1.97%. The current yield is some 39% below this one also. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 0.56. The current P/S Ratio is 1.93 based on 2019 Revenue estimate of $391M, Revenue per Share of $8.86 and a stock price of $17.10. The current ratio is some 242% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts’ recommendations I find Buy (2) and Hold (1). The consensus recommendation would be a Buy. The 12 month stock price is $19.92. This implies a total return of 17.69% with 16.49% from capital gains and 1.20% from Dividends based on a current stock price of $17.10.
The company announced on CBC that they are buying 3 B. C. wineries. This article by The Canadian Press talks about how this winery feels about and handles bachelorette parties. On Global News Wire the company has reported a good 2018. Ambrose O'Callaghan on Motley Fool thinks that this is a good stock to invest in now. See what analysts are saying about this stock on Stock Chase. They do like this stock.
Andrew Peller Ltd is a wine producing company. It is principally engaged in the production and marketing of wine and spirit products in Canada. Through its subsidiary, the company also produces and markets personal winemaking products. Its web site is here Andrew Peller Ltd.
The last stock I wrote about was about was Superior Plus Corp (TSX-SPB, OTC-SUUIF) ... learn more. The next stock I will write about will be Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF) ... learn more on Monday, August 27, 2018 around 5 pm (maybe).
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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