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 that the stock hit a high in 2018 that it has yet to recover to. This company is still 37% off its 2018 high. It high a low in February 2020 and has been recovering since then. However, long term investors have done fine with this stock.
The dividend yields are low with dividend growth moderate. The current yield is low (less than 2%) at 1.92%. The 5, 10 and historical dividend yields are also low at 1.29%, 1.39% and 1.76%. The yield on this stock has always been low and just occasionally venturing into the 2% range. The dividend growth over the past 5 years is moderate (8% to 14% ranges) at 9.3% per year. However, they have raised and lower their dividend rates. There have been 18 increases and 3 decreased over the past 30 years. See chart below.
One of the things I look at, using past data, is dividend yield on original investments after 5 to 25 years. I am also looking at how much of the stock cost is covered by dividends after 5 to 25 years. In the chart below I show the numbers for this stock. For example, if you bought this stock 10 years ago at the median price, you would have a current yield on your original investment of 4.87% and 32% of your original cost would have now been paid by dividends. This is how you build a dividend portfolio to live off of.
| Years | Yield | Cost Cov |
|---|---|---|
| 5 | 1.75% | 7.33% |
| 10 | 4.87% | 32.12% |
| 15 | 8.77% | 70.24% |
| 20 | 22.69% | 197.55% |
| 25 | 21.61% | 197.60% |
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 is 18% with 5 year coverage at 22%. The DPR for CFPS for 2020 is 9% with 5 year coverage at 10%. The DPR for Free Cash Flow 9% with 5 year coverage at 11%
Debt Ratios are all good. The Long Term Debt/Market Cap is good and low at 0.17. The Liquidity Ratio is good at 1.52. The Debt Ratio is good and high at 2.36. The Leverage and Debt/Equity Ratios are low and good at 1.74 and 0.74.
The Total Return per year is shown below for years of 5 to 30 to the end of 2020. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 9.32% | 2.82% | 1.33% | 1.49% |
| 2010 | 10 | -1.20% | 13.48% | 11.50% | 1.97% |
| 2005 | 15 | 11.46% | 12.13% | 10.35% | 1.78% |
| 2000 | 20 | 11.67% | 15.88% | 13.60% | 2.27% |
| 1995 | 25 | 9.55% | 12.22% | 10.54% | 1.68% |
| 1990 | 30 | 10.01% | 14.76% | 12.44% | 2.32% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.66. 17.87 and 20.08. The corresponding 10 year ratios are 15.26, 17.59 and 19.93. The corresponding historical ratios are 14.43, 13.15 and 15.53. The current P/E Ratio is 14.41 based on a stock price of $183.00 and EPS estimate for EPS of $12.70. The current ratio is below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $176.64. The 10 year low, median, and high median Price/Graham Price Ratios are 1.07, 1.24 and 1.40. The current P/GP Ratio is 1.04 based on a stock price of $183.00. The current ratio is 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/Book Value per Share Ratio of 1.95. The current P/B Ratio is 1.68 based on a Book Value of $757M, Book Value per Share of $109.19 and a stock price of $183.00. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 8.89. The current ratio is 6.02 based Cash Flow for the last 12 months of $210.7M, Cash Flow per Share of $30.38 and a stock price of $183.00. The current ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.76%. The current dividend yield is 1.92% based on a stock price of $183.00 and dividends of $3.52. The current dividend yield is 9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 1.39%. The current dividend yield is 1.92% based on a stock price of $183.00 and dividends of $3.52. The current dividend yield is 38% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.71. The current P/S Ratio is 0.64 based on Revenue estimate for 2021 of $1,968M, Revenue per Share of $283.84 and a stock price of $183.00. The current ratio is 9% below the 10 year median 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. Of the dividend yield test, the historical one says stock price is reasonable and the 10 year says cheap. The P/S Ratio test confirms the reasonableness of the stock price. A number of tests suggest a cheap stock price.
Is it a good company at a reasonable price? I think the stock price is reasonable, if not cheap. I also think that this will be a good long term company to buy for capital gains and dividends.
When I look at analysts’ recommendations, I find Buy (2) recommendations. The 12 month stock price consensus is $211.00. This implies a total return of 17.22% with 15.30 from capital gains and 1.92% from dividends.
This stock is not well covered on Stock Chase. Nikhil Kumar on Motley Fool thinks this is a recession-proof stock to buy. The Executive Summary on Simply Wall Street gives this stock 4 stars out of 5 and lists one risk. A writer on Simply Wall Street says they are pleased with this company’s performance. They like the fact the they are only paying out 22% of EPS in Dividends and therefore reinvesting 78% back into the company. The blogger Dividend Earner points out that this stock is no longer on the Dividend Aristocrat list. However, I think you need to look past their dividend inconsistencies and see that it has delivered some good and growing dividends for its shareholders. I like companies that grow their dividends over time and I do not dismiss ones that are not on the Dividend Aristocrat list.
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. Lassonde has its presence in Canada and the United States. It earns the majority of the revenue in the United States. Its web site is here Lassonde Industries Inc.
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 Friday, June 18, 2021 around 5 pm. Tomorrow on my other blog I will write about Dividend Income.... learn more on Thursday, June 17, 2021 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.
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