Is it a good company at a reasonable price? This is a small cap stock which has only been on the TSX for 7 years. However, analyst feel that it will do better later this year. This stock is certainly selling at a relatively cheap price.
I do not own this stock of Jamieson Wellness Inc (TSX-JWEL, OTC-JWLLF). This stock was written up in November 26, 2020 by Kay Ng on Motley Fool. She looked at what Warren Buffet was buying and pick some similar stocks, including Jamieson from TSX.
When I was updating my spreadsheet, I noticed they did not have a good first quarter of 2024. Both Revenue and Earnings are down. They had an earnings loss of $0.09. However, the Adjusted EPS was positive at $0.09. Last March they had AEPS of $0.17, so AEPS is down also.
If you had invested in this company in December 2016, for $1,003.40 you would have bought 58 shares at $17.30 per share. In December 2023, after 7 years you would have received $176.32 in dividends. The stock would be worth $1,840.34. Your total return would have been $2,016.66. This would be a total return of 10.83% per year with 9.05% from capital gain and 1.77% from dividends. This calculation takes into consideration stock splits, which means that the original cost would be lowered by these splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.30 | $1,003.40 | 58 | 7 | $176.32 | $1,840.34 | $2,016.66 |
The current dividend yield is moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.56%. This stock has only been around for 7 years and has had a dividend for 5 years, so the 5, 10 and historical median dividend yield is the 5 year one at 1.48%, a low dividend yield (below 2%). The dividend increases are good (above 15%) at 16.2% per year for the past 5 years. The last dividend increase was in 2023 and it was for 11.8%. This stock is on the Money Sense Dividend list.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 67% with 5 year coverage at 50%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 46% with 5 year coverage at 41%. The DPR for 2023 for Cash Flow per Share (CFPS) is fine at 47% with 5 year coverage at 34%. The DPR for 2023 for Free Cash Flow (FCF) is much too high at 135% with 5 year coverage at 98%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 66.67% | 50.09% |
| AEPS | 46.45% | 40.65% |
| CFPS | 46.86% | 33.74% |
| FCF | 135.02% | 97.48% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.27 and currently at 0.25. The Liquidity Ratio for 2023 is good at 2.88 and 2.70 currently. The Debt Ratio for 2023 is good at 1.64 and 1.73 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.57 and 1.57 and currently at 2.38 and 1.38.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.27 | 0.25 |
| Intang/GW | 0.44 | 0.49 |
| Liquidity | 2.28 | 2.70 |
| Liq. + CF | 2.43 | 2.72 |
| Debt Ratio | 1.64 | 1.73 |
| Leverage | 2.57 | 2.38 |
| D/E Ratio | 1.57 | 1.38 |
The Total Return per year is shown below for years of 5 to 7 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 16.19% | 10.37% | 8.27% | 2.10% |
| 2016 | 7 | 10.83% | 9.05% | 1.77% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 23.77, 28.51 and 33.11. The corresponding 7 year ratios are 23.77, 28.51 and 33.11. The current P/E Ratio is 19.12 based on a stock price of $29.64 and EPS estimate for 2024 of $1.53. The current ratio is below the low ratio of the 7 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 20.70, 22.99 and 27.46. The corresponding 7 year ratios are 20.77, 25.08, and 29.41. The current P/AEPS Ratio is 18.53 based on AEPS estimate for 2024 of $1.60 and a stock price of $29.64. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $39.97. The 7-year low, median, and high median Price/Graham Price Ratios are 1.71, 2.05 and 2.36. The current P/GP Ratio is 0.74 based on a stock price of $29.64. The current ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. Even though the 7 year P/GP Ratios are high, a P/GP Ratio of 0.74 is a low one.
I get a 7-year median Price/Book Value per Share Ratio of 3.40. The current P/B Ratio is 0.67 based on a stock price of $29.64, Book Value of $479M and Book Value per Share of $11.54. The current ratio is 24% below the 7 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2024 of $11.80. This implies a ratio of 2.51 with a stock price of $29.64 and Book Value of $490.3M. This ratio is 26% below the 7 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 7-year median Price/Cash Flow per Share Ratio of 33.16. The current P/CF Ratio is 19.25 based on Cash Flow per Share estimate for 2024 of $1.54 and a stock price of $29.64. 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 7 year and historical median dividend yield of 1.48%. The current dividend yield is 2.56% based on a stock price of $29.64 and dividends of $0.76. The current dividend yield is 73% above the 7 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 7-year median Price/Sales (Revenue) Ratio is 2.60. The current P/S Ratio is 1.66 based on Revenue estimate for 2024 of $740M, Revenue per Share of $17.82 and a stock price of $29.64. The current ratio is 36% below the 7 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 dividend yield testing is saying that the stock price is relatively cheap and this is confirmed by the P/S Ratio test. All my testing is pointing to a cheap price.
When I look at analysts’ recommendations, I find Strong Buy (4), and Buy (4). The consensus would be a Strong Buy. The 12 month stock price consensus is $35.69 with a high of $42.00 and a low of $32.00. The consensus price of $35.69 implies a total return of 22.98% with 20.41% from capital gains and 2.56% from dividends.
There are two comments for this stock on Stock Chase. One says Do Not Buy (debt too high) and the other says Buy. Stock Chase gives this stock 3 stars out of 5. Daniel Da Costa on Motley Fool gives his reasons why you should buy this stock. Kay Ng on Motley Fool says why you should buy this consumer staple stock. The company put out a Press Release about their fourth quarter of 2023. The company put out a Press Release on the results of their first quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this undervalued Canadian small cap. Simply Wall Street has 3 warnings of debt is not well covered by operating cash flow; dividend of 2.61% is not well covered by cash flows; and profit margins (5.5%) are lower than last year (8.6%). Simply Wall Street gives this stock 2 and one half stars out of 5.
Jamieson Wellness Inc is engaged in the manufacturing, distributing, and marketing of branded natural health products, including vitamins, minerals, and supplements. The company operates in two segments: The Jamieson brands and The Strategic Partners. The majority of its revenue comes from the Jamieson brand segment. Some of its brands are Jamieson, Progressive, Precision, and Iron Vegan. Its web site is here Jamieson Wellness Inc.
The last stock I wrote about was about was Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF) ... learn more. The next stock I will write about will be Suncor Energy Inc (TSX-SU, NYSE-SU) ... learn more on Monday, July 8, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment