Is it a good company at a reasonable price? The stock price is probably cheap. It is certainly below the median. For most years, shareholders have made a reasonable return. I think a reasonable long term return on a stock is a total return of 8% per year. You probably need to buy this stock at a low to get a good return. The stock is down recently, but so are most stocks.
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. When I held this stock, it was called Andres Wines Ltd. This company has a Financial Year ending March 31 each year. The Financial year I am covering is for March 31, 2022.
When I was updating my spreadsheet, I noticed that the company did not have a good year in 2022. Sales were down, but most costs were up. This ended with EPS down some 55% from last year. There are few analysts following this stock.
If you had invested in this company in December 2011, $1001.30 you would have bought 323 shares at $3.10 per share. In December 2021, after 10 years you would have received $560.63 in dividends. The stock would be worth $2,635.68. Your total return would have been $3,196.31.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $3.10 | $1,001.30 | 323 | 10 | $560.63 | $2,635.68 | $3,196.31 |
The dividend yields are moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 4.00%. The 5, 10 and historical dividend yields are also moderate at 2.05%, 2.15% and 3.58%. The dividend growth is moderate (8% to 14% ranges) at 8.54% per year over the past 5 years. Prior growth is lower.
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2022 is 84% with 5 year coverage at 39%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 203% with 5 year coverage at 66%. The DPR for AEPS for 2023 is expected to drop to 62% and then in 2024 to 46%. The DPR for Cash Flow per Share (CFPS) for 2022 is 26% with 5 year coverage at 23%. The DPR for Free Cash Flow (FCF) for 2022 is 463% with 5 year coverage at 64%. However, sites do not agree on what the FCF is.
Debt Ratios are fine. Long Term Debt/Market Cap is 0.61. It is fine, but is better if at 0.50 or lower. The Liquidity Ratio is very good at 4.34. The Debt Ratio is good at 1.91. The Leverage and Debt/Equity Ratio are fine at 2.10 and 1.10.
The Total Return per year is shown below for years of 5 to 37 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 | 8.54% | -4.87% | -6.95% | 2.08% |
| 2011 | 10 | 7.44% | 13.71% | 10.16% | 3.55% |
| 2006 | 15 | 7.25% | 7.52% | 4.90% | 2.62% |
| 2001 | 20 | 6.25% | 11.34% | 7.92% | 3.42% |
| 1996 | 25 | 5.29% | 9.53% | 6.42% | 3.11% |
| 1991 | 30 | 4.39% | 11.09% | 6.45% | 4.64% |
| 1986 | 35 | 3.86% | 6.02% | 3.51% | 2.51% |
| 1984 | 37 | 8.39% | 5.11% | 3.27% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.32, 21.22 and 27.49. The corresponding 10 year ratios are 11.98, 16.96 and 21.21. The corresponding historical ratios are 9.21, 13.40 and 14.81. The current P/E Ratio is 23.65 based on a stock price of $6.15 and EPS estimate for 2023 of $0.26. This ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earning per Share data. The 5 year low, median, and high median Price/Earnings per Share Ratios are 15.75, 21.81 and 27.88. The corresponding 10 year ratios are 12.79, 16.74 and 21.63. The current ratio is 15.38 based on a stock price of $6.15 and AEPS estimate for 2023 of $0.40. The current ratio is between the low and median ratios of the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $6.01. The 10 year low, median, and high median Price/Graham Price Ratios are 0.84, 1.25 and 1.64. The current ratio is 1.02 based on a stock price of $6.15. The current ratio is between the low and median ratios of the 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 1.00 based on a Book Value of $266M, Book Value per Share of $6.18 and a stock price of $6.15. The current ratio is 42% 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 14.04. The current P/CF ratio is 12.67 based on Cash Flow per Share estimate for 2023 of $0.49, Cash Flow of $20.9M and a stock price $6.15. 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.
I get an historical median dividend yield of 3.58%. The current dividend yield is 4.00% based on a stock price of $6.15 and dividends of $0.246. The current dividend yield is 12% 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 2.15%. The current dividend yield is 4.00% based on a stock price of $6.15 and dividends of $0.246. The current dividend yield is 85% 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 1.05. The current P/S Ratio is 0.68 based on Revenue estimate for 2023 of $389M, Revenue per Share of $9.02 and a stock price of $6.15. The current ratio is 35% 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 is probably cheap. The 10 year dividend yield test and the P/S Ratio test shows this result. Most of the other good tests is showing the stock price as reasonable and below the median.
When I look at analysts’ recommendations, I find Buy (2). The consensus would be a Buy. The 12 month stock price is $8.75. (Reuters). The 12 month stock price points to a total return of 46.28% with 42.28% from capital gains and 4.00% from dividends.
Several analysts on Stock Chase expect the company’s results to improve now that we are past the pandemic. Ambrose O'Callaghan on Motley Fool says that this stock is almost in oversold territory. Christopher Liew on Motley Fool says that this company suffered because of closures of restaurants and hospitality businesses because of the pandemic. The company reports on their fourth quarter via Newswire. The company reports on the first quarter of 2023 via a Press Release.
Simply Wall Street reports on this company via Yahoo Financial. Simply wall Street list 5 warnings on this stock of earnings have declined by 7.9% per year over past 5 years; interest payments are not well covered by earnings; dividend of 4.24% is not well covered by earnings; large one-off items impacting financial results and profit margins (3.3%) are lower than last year (7.1%).
Andrew Peller Ltd is a wine producing company. It is engaged in the production and marketing of wine and spirit products in Canada. The Company owns and operates over 100 well-positioned independent retail locations in Ontario under The Wine Shop, Wine Country Vintners, and Wine Country Merchants store. 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 Ltd (TSX-ET, OTC-EVTZF) ... learn more on Wednesday, August 10, 2022 around 5 pm. Tomorrow on my other blog I will write about Three Dividend All Stars.... learn more on Tuesday, August 9, 2022 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.
No comments:
Post a Comment