I do not own this stock of Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF). This stock was on Mike Higgs' dividend growth stock list. I owned this stock as Andres Wines Ltd between 1996 and 2000. Yes, it is a dividend growth company, although it does not consistently raise dividends. Shareholders have done fine over time.
When I was updating my spreadsheet, I noticed this company has turned itself into a dividend growth stock and shareholders have done very well since around 2012. Last year analysts started to give estimates for this company which had not been done before. This is a good sign. The financial year for this company ends at the end of March each year so the last date was March 31, 2019.
Talk about dividends yields and growth. Dividends were flat until 2006 when they began to be increased. Since then growth has been uneven but mostly overall low. The last dividend increase was moderate at 13.9% and it occurred this year.
The dividend yield is low (below 2%) to moderate (2% to 4% range). The current dividend yield is low at 1.43%. The 5, 10 and historical yields are low to moderate at 1.50%, 2.89% and 3.72% respectively.
The Dividend Payout Ratios are good. The DPR for EPS for 2019 is 39% with 5 year coverage at 30%. The DPR for CFPS for 2019 is 17% with 5 year coverage at 14%.
Debt Ratios are good. The Long Term Debt/Market Cap for 2019 is 0.18. The Liquidity Ratio for 2019 is 1.98 with 5 year median at 1.96. The Debt Ratio for 2019 is 2.01 with 5 year median also at 2.01. The Leverage and Debt/Equity Ratios for 2019 are 1.99 and 0.99 with 5 year medians at 2.13 and 1.13.
The Total Return per year is shown below for years of 5 to 34 to the end of 2018. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 8.86% | 26.49% | 24.18% | 2.31% |
| 2008 | 10 | 6.09% | 21.74% | 18.94% | 2.80% |
| 2003 | 15 | 7.04% | 14.84% | 12.52% | 2.32% |
| 1998 | 20 | 5.23% | 12.31% | 10.10% | 2.22% |
| 1993 | 25 | 4.48% | 12.45% | 9.76% | 2.69% |
| 1988 | 30 | 3.72% | 12.71% | 8.00% | 4.71% |
| 1984 | 34 | 3.60% | 10.65% | 7.19% | 3.45% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.41, 16.62 and 21.34. The corresponding 10 year ratios are 11.21, 12.89 and 14.30. The corresponding historical ratios are 11.04, 12.95 and 14.42. The current P/E Ratio is 21.34 based on a stock price of $14.30 and 2020 EPS estimate of $0.67. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $9.07. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.99. The current P/GP Ratio is 1.58 based on a stock price of $14.30. 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 1.38. The current P/B Ratio is 2.62 based a Book Value of $243M, Book Value per Share of $5.46 and a stock price of $14.30. The current ratio is 90% higher than the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.72%. The current dividend yield is 1.43% based on dividends of $0.205 and a stock price of $14.30. The current yield is 61% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 064. The current P/S Ratio is 1.60 based on a stock price of $14.30, 2020 Revenue estimate of $394M, and Revenue per Share of 8.92. The current ratio is 149% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is that the stock price is relatively expensive All my testing is showing that the current stock price is relatively expensive without exception. I have nothing to criticize any of these tests.
Is it a good company at a reasonable price? This company has certainly done quite well recently and investors seem to be excited about it. I think it will have a great future. However, at present it does seem to be expensive. The start P/E Ratios that produced good returns over the past 5 and 10 years were at 13.77 and 9.29. It would stand to reason you will not make the same returns starting at the current P/E Ratio of 21.34.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (1). The consensus would be a Strong Buy. The 12 months stock price is $17.17. This implies a total return of 21.50% with 20.07% from capital gains and 1.43% from dividends.
See what analysts are saying on Stock Chase. The company is not well followed, but it is liked. Ryan Vanzo on Motley Fool gave this as one of three Canadian small caps to buy. A writer on Simply Wall Street says that this company can adequately cover their dividends with earnings.. A writer on Simply Wall Street looks at this company’s debt. The assessment is that debt fine now but could possible cause a problem in the future. The company reports a good first quarter on Globe Newswire.
Andrew Peller Ltd is a wine producing company. It is engaged in the production and marketing of wine and spirit products in Canada. Some of the company's brands are Peller Estates, Trius Winery, Thirty Bench, Wayne Gretzky, Sandhill, Red Rooster, Calona Vineyards, and others. 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 Friday, August 23, 2019 around 5 pm. Today on my other blog I will write about Algonquin Power …. learn more on Thursday, August 22, 2019 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.
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