Is it a good company at a reasonable price? The company does not seem to be growing much. You need revenue growth for good earnings growth down the road. The analyst that covers this stock seems to think that it will do better this year in growth. It is cheap with a good dividend yield, but a good or high dividend yield and a cheap price does not necessarily mean a stock is a good long term buy.
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. I made a total return of 5.41% with 4.35% from dividends and 0.06% capital gains.
When I was updating my spreadsheet, I noticed profit dropped in 2022 and there were earnings losses in 2023 and 2024. It would just seem that their expenses are just higher than the Revenue. Revenue also went down in 2022 and it has not gone up much since then. Revenue is still not up to what it was in 2021.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the first quarter in 2024 and expected growth over the next year. The chart shows that revenue has not been growth much. Analysts seem to feel that growth in Earnings and stock price will occur this year. Earnings was negative in 2024 and that is why AEPS Growth and Net Income Growth is N/C (non-calculable).
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 1.06% | 0.21% | 0.13% | <-12 mths |
| 5 | AEPS Growth | -109.90% | N/C | 318.69% | <-12 mths |
| 5 | Net Income Growth | -112.99% | N/C | 317.96% | <-12 mths |
| 5 | Cash Flow Growth | -22.28% | -4.92% | ||
| 5 | Dividend Growth | 23.77% | 4.36% | 0.00% | <-12 mths |
| 5 | Stock Price Growth | -66.33% | -19.56% | -11.06% | <-12 mths |
| 10 | Revenue Growth | 29.56% | 2.62% | 0.50% | <-this year |
| 10 | AEPS Growth | -121.63% | N/C | 615.98% | <-this year |
| 10 | Net Income Growth | -120.34% | N/C | 615.98% | <-this year |
| 10 | Cash Flow Growth | 52.35% | 4.30% | <-this year | |
| 10 | Dividend Growth | 89.23% | 6.59% | <-this year | |
| 10 | Stock Price Growth | -0.58% | -0.06% | 116.92% | <-this year |
The current dividend yield is good with dividend growth trending flat. The current dividend yield is good (5% to 6% ranges) at 5.76%. The 5, 10 and historical dividend yields are moderate (2% to 4% ranges) at 2.61%, 2.15% and 3.60%. The dividend growth is currently low (below 8% per year) at 4.4% per year over the past 5 years. The last dividend increase was in 2022 and it was for 9%.
The Dividend Payout Ratios (DPR) are mainly not good except for the DPR for Cash Flow. The DPR for 2023 for Earnings per Share (EPS) not calculable because of earnings loss and with 5 year coverage too high at 88%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is not calculable due to earnings loss with 5 year coverage too high at 91%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 14% with 5 year coverage at 25%. The DPR for 2023 for Free Cash Flow (FCF) is fine at 88% with 5 year coverage too high at 459%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | -373.33% | 88.25% |
| AEPS | -373.33% | 91.14% |
| CFPS | 26.24% | 24.77% |
| FCF | 87.91% | 458.72% |
Debt Ratios are mostly good, but debt is high. The Long Term Debt/Market Cap Ratio for 2023 is too high at 1.21 and currently at 1.13. This should be 1.00 or less. The Liquidity Ratio for 2023 is very good at 3.92 and 3.92 currently. The Debt Ratio for 2023 is good at 1.77 and 1.77 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.29 and 1.29 and currently at 2.29 and 1.29.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.21 | 1.13 |
| Intang/GW | 0.54 | 0.51 |
| Liquidity | 3.92 | 3.92 |
| Liq. + CF | 4.39 | 4.39 |
| Debt Ratio | 1.77 | 1.77 |
| Leverage | 2.29 | 2.29 |
| D/E Ratio | 1.29 | 1.29 |
The Total Return per year is shown below for years of 5 to 39 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 | 4.36% | -16.81% | -19.56% | 2.75% |
| 2013 | 10 | 6.59% | 4.12% | -0.06% | 4.18% |
| 2008 | 15 | 5.51% | 9.34% | 4.40% | 4.94% |
| 2003 | 20 | 6.36% | 7.69% | 3.46% | 4.23% |
| 1998 | 25 | 5.06% | 7.37% | 3.40% | 3.97% |
| 1993 | 30 | 4.46% | 8.72% | 4.22% | 4.50% |
| 1988 | 35 | 3.81% | 8.46% | 3.55% | 4.91% |
| 1984 | 39 | 3.70% | 7.51% | 3.32% | 4.19% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.39, 14.96 and 18.05. The corresponding 10 year ratios are 11.98, 16.96 and 21.21. The corresponding historical ratios are 11.39, 12.12 and 14.71. The current P/E Ratio is 12.06 based on a stock price of $4.10 and EPS estimate for 2025 of $0.34. 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 Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 9.70, 15.40 and 18.59. The corresponding 10 year ratios are 12.72, 16.74 and 21.63. The current P/AEPS Ratio is 12.06 based on a stock price of $4.10 and AEPS estimate for 2025 of $0.34. The current ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $6.52. The 10-year low, median, and high median Price/Graham Price Ratios are 0.99, 1.33 and 1.67. The current ratio is 0.63 based on a stock price of $4.10. 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 reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.71. The current P/BV Ratio is 0.74 based on a stock price of $4.10, Book Value of $241.4M, and Book Value per Share of $5.56. The current ratio is 57% 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 14.51. The current ratio is 4.67 based on Cash Flow for the last 12 months of $38.1M, Cash Flow per Share of $0.88 and a Stock Price of $4.10. The current ratio is 68% 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 3.60%. The current dividend yield is 6.00% based on a stock price of $4.10 and Dividends of $0.246. The current dividend yield is 67% 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 2.15%. The current dividend yield is 6.00% based on a stock price of $4.10 and Dividends of $0.246. The current dividend yield is 179% 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 ratio is 0.46 based on Revenue estimate for 2025 of $388M, Revenue per Share of $8.94 and a stock price of $4.10. The current ratio is 56% 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 dividend yield testing is saying that the stock price is relatively cheap. This is confirmed by the P/S Ratio test. Most of the rest of the testing is saying the same thing.
When I look at analysts’ recommendations, I find a Strong Buy (1). The consensus would be a Strong Buy. The 12 month consensus stock price is $10.00 with a high of $10.00 and low of $10.00. There is only 1 analyst following this stock. The consensus stock price of $10.00 implies a total return of 149.90% with 143.90% from capital gains and 6.00% from dividends based on a current stock price of $4.10.
Mostly, comments on Stock Chase are negative. Analysts wondering if Ontario Government rolling out more retail locations will affect this stock. Stock Chase gives this stock 3 stars out of 5. Daniel Da Costa on Motley Fool thinks this is a defensive stock to buy. Daniel Da Costa on Motley Fool thought in 2022 the stock was down because it was out of favour. The company put out a Press Release about their fourth quarter results of 2024.
Simply Wall Street via Yahoo Finance reviews this stock and its dividend. They wonder about the company continuing to pay the current dividend. A positive to them is the track record the company has for paying dividends. Simply Wall Street has 3 warnings of interest payments are not well covered by earnings; earnings have declined by 47.2% per year over past 5 years; and dividend of 5.82% is not well covered by earnings. Simply Wall Street gives this stock 2 and one half stars out of 5.
Andrew Peller Ltd is a wine-producing company. The company is engaged in the production, bottling, and marketing of wine, spirits, and craft beverage alcohol products in Canada. The Company owns and operates 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 7, 2024 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks August 2024 learn more on Tuesday, August 6, 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.
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