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. The financial year for this company ends March 31 each year. So, the last financial year ended March 31, 2021.
When I was updating my spreadsheet, I noticed that if I had held on to my 1996 shares, I would have made a total return of 11.16% per year with 7.83% from capital gains and 3.33% from dividends. However, this stock did not do much until around 2014, but it did start to increase their dividends in 2008. When I sold in 2000, my total return was 5.41% with 0.06% from capital gains and 5.35% from dividends. As with so many dividend paying stocks, I would not have lost money on it.
The first quarter for 2022 (June 30, 2021) was not a good one for the company. Basically, the Sales were down some $6M, with Gross Profit down some $5M and Admin Cost up some $5M and Net Earnings down some 9M.
The dividend yields are moderate with dividend growth low. The current dividend yield is moderate at (2% to 4% ranges) 2.85%. The 5 year median is low (below 2%) at 1.50%. The 10 and historical dividend yields are moderate at 2.15% and 3.59%. The dividend growth is low (below 8%) at 7.9% per year over the past 5 years. The last dividend increase was for 9% and it was done in 2021.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2021 was 34% with 5 year coverage at 32%. The DPR for CFPS for 2021 was 15% with 5 year coverage at 13%. The DPR for Free Cash Flow for 2021 was 200% with 5 year coverage at 91%. Not all sites agree on Free Cash Flow.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is fine at 0.37. The Liquidity Ratio for 2021 is 4.13. This is very high. They no longer have Bank Debt. The Debt Ratio for 2021 is good at 1.96. The Leverage and Debt/Equity Ratios are fine at 2.04 and 1.04, respectively.
The Total Return per year is shown below for years of 5 to 36 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 | 7.85% | 11.30% | 8.94% | 2.36% |
| 2010 | 10 | 6.94% | 16.68% | 13.58% | 3.10% |
| 2005 | 15 | 7.61% | 11.44% | 8.83% | 2.60% |
| 2000 | 20 | 5.65% | 15.06% | 11.34% | 3.72% |
| 1995 | 25 | 4.81% | 12.21% | 8.88% | 3.33% |
| 1990 | 30 | 4.00% | 13.38% | 8.26% | 5.12% |
| 1985 | 35 | 3.63% | 7.83% | 5.25% | 2.59% |
| 1984 | 36 | 3.63% | 8.92% | 5.99% | 2.93% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.87, 19.44 and 27.13. The corresponding 10 year ratios are 11.75, 15.90 and 19.34. The corresponding historical ratios are 11.45, 13.26 and 14.76. The current P/E Ratio 16.00 based on a stock price of $8.64 and EPS estimate for 2022 of $0.54. The current ratio is between the median and high 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $8.60. The 10 year low, median, and high median Price/Graham Price Ratios are 0.82, 1.13 and 1.42. The current P/GP Ratio is 1.01 based on a stock price of $8.64. The current ratio is between the low and median 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.71. The current P/B Ratio is 1.42 based a Book Value of $265.6M, Book Value per Share of $6.08 and a stock price of $8.64. The current ratio is 16.7% 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 14.04. The current P/CF Ratio is 14.61 based on last 12 months Cash Flow of $25.77M, Cash Flow per Share of $0.59 and a stock price of $8.64. The current ratio is 4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 3.59%. The current dividend yield is 2.85% based on a stock price of $8.64 and dividends of $0.246. The current dividend yield is 21% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 2.15%. the current dividend yield is 2.85% based on a stock price of $8.64 and dividends of $0.246. The current dividend yield is 32% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 1.01. The current ratio is 0.94 based on a stock price of $8.64, Revenue estimate for 2022 of $399M and Revenue per Share of $9.16. The current ratio is 6.3% 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. The dividend yield tests are showing the stock price as either cheap or expensive. The P/S Ratio test is showing the stock price as relatively reasonable and below the median. The P/S Ratio test is probably the best. The rest of the testing is showing the stock price as reasonable and above or below the median.
Is it a good company at a reasonable price? This stock price is probably reasonable. It is a dividend growth stock that has good returns for long term shareholders.
When I look at analysts’ recommendations, I find Strong Buy (2). The consensus is a Strong Buy. The 12 months stock price consensus is $13.50. This implies a total return of 59.10% with 56.25% from capital gains and 2.85% from dividends.
Range of opinions on Stock Chase go from partial sell to top pick. Robin Brown on Motley Fool thinks this stock is a great Canadian value stock. The executive summary on Simply Wall Street gives the stock 3 rewards and 1 risk with 3 stars out of 5. A writer on Simply Wall Street complains that FCF does not cover dividends, but there are wildly different values calculated for FCF for this stock. A writer on Simply Wall Street likes growing earnings and consistent dividend for this stock.
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 many more. Its web site is here Andrew Peller Ltd.
The last stock I wrote about was about was BlackBerry Ltd (TSX-BB, NYSE-BB) ... learn more. The next stock I will write about will be Evertz Technologies (TSX-ET, OTC-EVTZF) ... learn more on Monday, August 9 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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