Is it a good company at a reasonable price? This is the sort of stock I like as it is a dividend growth stock. It has done well for its shareholders and has a moderate dividend yield with moderate growth. The debt ratios and Dividend Payout Ratios are both fine. The stock price appears to be currently reasonable.
I do not own this stock of Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF). I was looking for another stock to follow and I found this is one of the top stocks in TD Bank's Canadian Equity Fund.
When I was updating my spreadsheet, I noticed that this company has had some good growth over the past 5 and 10 years. The total return in most long periods is also good. See chart below on total return.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | 174.29% | 22.36% |
| 5 | FCF Growth | 45.48% | 7.79% |
| 5 | Net Income Growth | 188.20% | 23.58% |
| 5 | Cash Flow Growth | 376.63% | 36.66% |
| 5 | Dividend Growth | 66.77% | 10.77% |
| 5 | Stock Price Growth | -20.24% | -4.42% |
| 10 | Revenue Growth | 522.41% | 20.06% |
| 10 | FCF Growth | 186.79% | 11.11% |
| 10 | Net Income Growth | 1440.71% | 31.45% |
| 10 | Cash Flow Growth | 705.48% | 23.20% |
| 10 | Dividend Growth | 132.57% | 8.81% |
| 10 | Stock Price Growth | 379.77% | 16.98% |
If you had invested in this company in December 2012, for $1,011.85 you would have bought 59 shares at $17.15 per share. In December 2022, after 10 years you would have received $1,078.11 in dividends. The stock would be worth $4,854.52. Your total return would have been $5,932.63. This is a total return of 22.23% per year.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.15 | $1,011.85 | 59 | 10 | $1,078.11 | $4,854.52 | $5,932.63 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 2.95%. The 5 and 10 year dividend yields are also moderate at 2.34% and 2.68%. The Historical median dividend yield is good (5% to 6% ranges) at 5.81%. This company used to be an income trust and income trust had quite high dividend yields. The dividend growth is moderate (8% to 14% ranges) at 10.8% per year over the past 5 years.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2022 for EPS is 77% with 5 year coverage at 81%. The DPR for 2022 for Adjusted Earnings per Share (AEPS) is 57% with 5 year coverage at 59%. The DPR for 2022 for Cash Flow per Share (CFPS) is 34% with 5 year coverage at 36%.
The DPR for Free Cash Flow (FCF) provided by the company is 43% with 5 year coverage at 42%. The DPR for Free Cash Flow, provided by some sites is negative currently with 5 year coverage at 551%. The problem with FCF is that all depends on how you calculate it. Often FCF varies greatly by which site you look at. My TD WebBroker goes with the company provided values, and that is good enough for me.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 76.61% | 80.52% |
| FCF Co. | 42.67% | 41.53% |
| AEPS | 56.74% | 59.49% |
| CFPS | 33.75% | 35.51% |
| FCF | -55.42% | 551.02% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2022 is 0.39 and is good. The Liquidity Ratio for 2022 is high and good at 2.53. The Debt Ratio is good at 1.82. The Leverage and Debt/Equity Ratios are fine at 2.80 and 1.54.
| Type | Ratio '22 | Ratio Curr |
|---|---|---|
| Lg Term R | 0.39 | 0.33 |
| Intang/GW | 0.38 | 0.20 |
| Liquidity | 2.53 | 2.49 |
| Liq. + CF | 2.48 | 2.94 |
| Debt Ratio | 1.82 | 1.79 |
| Leverage | 2.80 | 2.88 |
| D/E Ratio | 1.54 | 1.61 |
The Total Return per year is shown below for years of 5 to 26 to the end of 2022. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 10.77% | -2.00% | -4.42% | 2.42% |
| 2012 | 10 | 8.81% | 22.23% | 16.98% | 5.26% |
| 2007 | 15 | 5.79% | 17.90% | 12.59% | 5.31% |
| 2002 | 20 | 5.09% | 16.31% | 11.25% | 5.06% |
| 1997 | 25 | 7.78% | 5.66% | 2.11% | |
| 1995 | 27 | 13.16% | 10.18% | 2.97% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 29.60, 36.05 and 41.86. The corresponding 10 year ratios are 29.17, 34.81 and 41.20. The corresponding historical ratios are 17.22, 22.34 and 25.29. The current P/E Ratio 21.91 based on a stock price of $104.53 and EPS estimate for 2023 of $4.77. 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 also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 20.87, 25.48 and 30.47. The corresponding 10 year ratios are 18.79, 25.05 and 29.19. The current P/AEPS Ratio is 21.91 based on a AEPS estimate for 2023 of $4.77 and a stock price of $104.53. 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 also have Free Cash Flow (FCF) data. The 5-year low, median, and high median Price/Free Cash Flow per Share Ratios are 13.47, 17.40 and 21.73. The corresponding 10 year ratios are 12.61, 16.41 and 19.62. The current P/FCF Ratio is 17.26 based on a FCF estimate for 2023 of $6.06 and a stock price of $104.53. The current ratio is between the median and high ratios of the 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 $74.00. The 10-year low, median, and high median Price/Graham Price Ratios are 1.01, 1.40 and 1.70. The current P/GP Ratio is 1.41 based on a stock price of $104.53. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.82. The current P/B Ratio is 2.60 based on a stock price of $104.53, Book Value of $1,784M, and Book Value per Share of $40.18. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2023 of $41.30. This implies a P/B Ratio of 2.53 with Book Value of $1,834M with a stock price of $104.53. The ratio is 10% 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 20.60. The current P/CF Ratio is 10.35 based on a stock price of $104.53, Cash Flow per Share estimate for 2023 of $10.10 and Cash Flow of $448M. The current ratio is 56% 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 5.81%. The current ratio is 2.95% based on dividends of $3.08 and a stock price of $104.53. The current dividend yield is 49% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. The problem with this test is that this company used to be an income trust and income trust companies can have much higher and do have much higher dividend yields than corporations.
I get a 10 year median dividend yield of 5.68%. The current ratio is 2.95% based on dividends of $3.08 and a stock price of $104.53. The current dividend yield is 10% above the historical median 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 0.86. The current P/S Ratio is 0.71 based on Revenue estimate for 2023 of $6,540M, Revenue per Share of $147.30 and a stock price of $104.53. The current ratio is 18% 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. The 10 year median dividend yield test says that and it is confirmed by the P/S Ratio tests. Most of the rest of the testing is showing the stock as cheap or above and below the median or reasonable.
When I look at analysts’ recommendations, I find Buy (7) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $114.22. This implies a total return of 40.92% with 37.97% from capital gains and 2.95% from dividends.
There are two recommendations for 2023 on Stock Chase and they both are buys. Stock Chase gives this stock 4 stars out of 5. It is ranked 69 on the Money Sense list. Vishesh Raisinghani on Motley Fool says that it has rebounded up over 20% this year. Christopher Liew on Motley Fool says this stock is a top performer among food stocks. The company put out a press release on Newswire about their 2022 results. The company put out a press release on Newswire about their results for the first quarter of 2023.
Simply Wall Street via Yahoo Finance does a review of this stock. Simply Wall Street gives two warnings signs of debt is not well covered by operating cash flow; and dividend of 3.06% is not well covered. Simply Wall Street gives this stock 3 stars out of 5. The Long Term Debt to Cash Flow in 2022 is 14.7 years. Normally a good ratio is 3 years. Currently the Long Term Debt to Cash Flow much better at 3.3 years. The 5 year median is 5.1 years.
Premium Brands Holdings Corp is engaged in specialty food manufacturing, premium food distribution, and wholesale businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada, and Washington State. Its web site is here Premium Brands Holdings Corp .
The last stock I wrote about was about was Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) ... learn more. The next stock I will write about will be Jamieson Wellness Inc (TSX-JWEL, OTC-JWLLF) ... learn more on Wednesday, July 5, 2023 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2023.... learn more on Tuesday, July 4, 2023 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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