Is it a good company at a reasonable price? This company has done well for shareholders until just recently. The Covid Epidemic have caused problems for a lot of companies. The stock price would seem reasonable. I wonder why Money Sense has not had this company in the list of 100 best Canadian dividend Companies (I have the list going back to 2018). I worry about the dividend decrease as this is never a good sign. However, the yield is currently higher than it usually is.
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 company hit a high early in 2018 and has been falling since. The stock price high a high June 2018 at $292.04 and has been falling since. Revenue and Earnings have revived over the past couple of years, but stock price has not.
The dividends were cut in 2019 and they started to increase them again, but they are at $2.80 now and not yet back to those of 2018 of $3.04. Dividends in 2021 was back up at $3.29 but were cut again in 2022. The stock is probably down because of the dividend cut in 2022.
If you had invested in this company in December 2011, $1024.00 you would have bought 16 shares at $64 per share. In December 2021, after 10 years you would have received $346.88 in dividends. The stock would be worth $2,517.44. Your total return would have been $2,864.32.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $64.00 | $1,024.00 | 16 | 10 | $346.88 | $2,517.44 | $2,864.32 |
The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 2.31%. The 5, 10 and historical dividend yields are low (below 2%) at 1.45%, 1.39% and 1.76%. The Dividend Growth is moderate (8% to 14% ranges) at 11% per year over the past 5 years to 2021. However, the 10 year growth is just 0.7%. The dividends have been cut in 3 years over the past 31 years. Also, the dividends were cut again in 2022 by 21%.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 29% with 5 year coverage at 24%. The DPR for Cash Flow per Share for 2022 is 13% with 5 year coverage at 11%. The DPR for Free Cash Flow for 2021 is 32% with 5 year coverage at 17%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is very low and good at 0.08. The Liquidity Ratios is low at 1.32, but if you add in cash flow after dividends it is 1.51 a better ratio. The Debt Ratio is high and good at 2.56. The Leverage and Debt/Equity Ratios are low and good at 1.64 and 0.64.
The Total Return per year is shown below for years of 5 to 31 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 11.14% | -5.30% | -6.74% | 1.44% |
| 2011 | 10 | 0.72% | 11.57% | 9.41% | 2.16% |
| 2006 | 15 | 12.14% | 12.70% | 10.49% | 2.21% |
| 2001 | 20 | 12.36% | 14.32% | 11.94% | 2.39% |
| 1996 | 25 | 10.36% | 11.29% | 9.49% | 1.80% |
| 1991 | 30 | 10.60% | 12.57% | 10.50% | 2.07% |
| 1990 | 31 | 14.19% | 11.68% | 2.52% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.85, 17.31 and 19.77. 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 ratio is 10.83 based on a stock price of $120.98 and EPS estimate for 2022 of $11.17. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $171.59. 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 0.71 based on a stock price of $120.98. The current ratio is below the low of the 10 year median ratios. 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 1.03 based on a stock price of $120.98, Book Value of $212M and Book Value per Share of $117.15. The current ratio is 47% 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 8.98. The current P/CF Ratio is 12.20 based on Cash Flow of last 12 months of $68.8M, Cash Flow per Share of $9.92 and a stock price of $120.98. The current ratio is 37% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 1.76%. The current dividend yield is 2.31% based on a stock price of $120.98 and dividends of $2.80. The current dividend yield is 32% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 1.39%. The current dividend yield is 2.31% based on a stock price of $120.98 and dividends of $2.80. The current dividend yield is 66% above the 10 year 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 0.42 based on Revenue estimate for 2022 of $2,000M, Revenue per Share of $288.47 and a stock price of $120.98. The current ratio is 41% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price could be cheap. The dividend yield tests and P/S Ratio tests says this. Why I hesitate is because dividends were cut in 2022. I know the company does not talk about dividend increases and decreases, but only announces what the dividends will be. However, a dividend decrease is never good news. Also, the P/CF Ratio test is showing a slow down in cash flow and an expensive rating.
Last year, I said that the results of stock price testing are 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.
When I look at analysts’ recommendations, I find Buy (1) and Hold (1). The consensus would be a Buy. The 12 month stock is price is $162.00. This implies a total return of $36.22% with 33.91% from capital gains and 2.31% from dividends.
When I looked at analysts’ recommendations last year, I find Buy (2) recommendations. The consensus is a Buy. 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 based on a stock price of 183.00. What happened was a stock price decline to $120.98 and a total return loss of $31.97% with a capital loss of 33.89% and dividends of 1.92%.
The last analysts’ comments on Stock Chase was in 2021, so analysts not much interested in this stock. Stock Chase gives this stock 3 starts out of 5. It is not included in Money Sense list of 100 best Canadian dividend stocks. Nikhil Kumar on Motley Fool reviewed this stock last year. The company did a News Release on their fourth quarterly results. The company did a News Release on their first quarter of 2022 results. Simply Wall Street via Yahoo Finance talk about dividend payments of this company. Simply Wall Street has one warning sign of unstable dividend track record and they are right.
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. The company operates through a single segment being the development, manufacturing, and marketing of a wide range of ready-to-drink juices and drinks; frozen juice concentrates; and specialty food products; and the importation, packaging, and marketing of selected wines from several countries of origin. 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 Monday, June 20, 2022 around 5 pm.
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