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.
When I was updating my spreadsheet, I noticed this stock has quite good debt ratios. The Debt Ratio is 2.28. The Leverage and Debt/Equity Ratios are 1.78 and 0.78. Because both the dividend yield and dividend growth are low, it takes a long time to increase significantly the yield on the original stock price. After 5, 10, 15 and 20 years the yield on the original price is 1.73%, 4.75% 7.80% and 19.58% using past data to date.
The dividend yields are low with dividend growth moderate. The current dividend is low (under 2%) at 1.58%. The 5, 10 and historical dividend yields are also low at 1.11%, 1.39% and 1.72%. The dividends growth has varied over time. Last year the dividend was decreased by 26.5%, but it was increased this year by 9.2%. See chart below showing Dividend Growth.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2019 is 25% with 5 year coverage at 23%. The DPR for CFPS is 10% with 5 year coverage also at 10%. The DPR for Free Cash Flow is 18% with 5 year coverage at 11%. The Dividend Coverage Ratio for 2019 is 5.59 and 9.46 for last 5 years.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.23 for 2019 but higher and still good at 0.34 currently due to an increase in debt. Market Cap has increased. The Liquidity Ratio for 2019 is 1.64 with 5 year median at 1.70. The Debt Ratio for 2019 is 2.28 with 5 year median at 2.21. The Leverage and Debt/Equity Ratios for 2019 are 1.78 and 0.78 with 5 year medians at 2.00 and 1.00.
The Total Return per year is shown below for years of 5 to 29 to the end of 2019. 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. |
|---|---|---|---|---|---|
| 2014 | 5 | 10.29% | 5.28% | 3.64% | 1.63% |
| 2009 | 10 | -0.11% | 13.37% | 11.36% | 2.01% |
| 2004 | 15 | 11.60% | 14.02% | 12.02% | 2.00% |
| 1999 | 20 | 11.78% | 14.66% | 12.48% | 2.05% |
| 1994 | 25 | 11.02% | 13.03% | 11.18% | 1.85% |
| 1990 | 29 | 10.46% | 14.81% | 12.48% | 2.33% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.79, 18.10 and 20.37. The corresponding 10 year ratios are 15.26, 17.59 and 19.93. The corresponding historical ratios are 11.64, 13.18 and 15.93. The current P/E Raito is 15.55 based on a stock price of $164.83 and 2020 EPS estimate of $10.60. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $160.09. The 10 year low, median, and high median Price/Graham Price Ratios are 1.07, 1.24 ad 1.40. The current P/GP Ratio is 1.03 based on a stock price of $164.83. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.95. The current P/B Ratio is 1.53 based on a stock price of $164.83, Book Value of $742M, and Book Value per Share of $107.46. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Cash Flow per Share Ratio of 8.89. The current ratio is 7.80 based on the last 12 month Cash Flow $146M, Cash Flow per share of $21.14, and a stock price of $164.83. The current ratio is 12% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.72%. The current dividend yield is 1.58% based on dividends of $2.60 and a stock price of $164.83. The current yield is 8% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 1.39%. The current dividend yield is 1.58% based on dividends of $2.60 and a stock price of $164.83. The current yield is 13% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.71. The current P/S Ratio is 0.59 based on a stock price of $164.83, Revenue estimate for 2020 of $1,921M, and Revenue per Share of 278.05. The current ratio is 16% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable and below the median. Both dividend yield tests show that the stock is reasonable with one above the median and the other below the median. The P/S Ratio test shows that the stock price is reasonable and below the median. The P/B Ratio is showing the stock price is cheap, because there is good growth in the Book Value and this is definitely a positive. There are no problems with any of the tests.
Is it a good company at a reasonable price? I think that the price is reasonable. This is a good company and it has mostly done a good job for its shareholders. You would buy to diversify into a consumer staple. It would be a good stock to build a portfolio with because of the low dividends.
When I look at analysts’ recommendations, I find Buy (1) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $175.00. This implies a total return of 7.755 with 6.17% from capital gains and 1.58% from dividends.
There are no recent comments on this company on Stock Chase but what is there is positive. Brian Pacampara, of Motley Fool likes this small cap. A writer on Simply Wall Street likes the low payout ratio, but not the fact that dividends were cut during the past 10 years. A writer on Simply Wall Street says the latest growth in earnings shows the company is growing faster than in the past. The blogger Dividend Earner wrote about this stock last year and was upset about the dividend cut.
Lassonde Industries Inc is engaged in the development, manufacturing, and marketing of ready-to-drink fruit and vegetable juices and drinks. It also acts as a producer of store brand shelf-stable fruit juices and drinks in the United States and a major producer of cranberry sauces. It earns the majority of the revenue in the United States. Its web site is here Lassonde Industries.
The last stock I wrote about was about was Goeasy Ltd (TSX-GSY, OTC-EHMEF) ... learn more. The next stock I will write about will be Waste Connections Inc (TSX-WCN, NYSE-WCN) ... learn more on Monday, June 15, 2020 around 5 pm.
Also, on my book blog I have put a review of the book A Brief History of Doom by Richard Vague learn more...
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