Is it a good company at a reasonable price? In the past this stock has done well for shareholders. It hit a high in 2021 and has fallen since. When a stock is cheap, you are always taking a risk that there are good reasons for the stock to be cheap. Although analyst seem to like to this and seem to think that it will recover. If you are willing to take a risk, you can sometimes do very well buying a good stock when it is cheap. This stock is testing as cheap at present.
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 as one of the top stocks in TD Bank's Canadian Equity Fund in 2016.
When I was updating my spreadsheet, I noticed that Dividend Payout Ratios remain high. This company is finally stopping the raising of the dividends by around 10% per year. There was no dividend raise for 2025. Although analysts expect the dividend to be raised by 9% in 2026.
If you had invested in this company in December 2014, for $1,001.22 you would have bought 41 shares at $24.42 per share. In December 2024, after 10 years you would have received $907.74 in dividends. The stock would be worth $3,242.28. Your total return would have been $4,150.02. This would be a total return of 17.63% per year with 12.47% from capital gain and 5.16% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $24.42 | $1,001.22 | 41 | 10 | $907.74 | $3,242.28 | $4,150.02 |
The current dividend yield is moderate with dividend growth moderate. The dividend yield is moderate (2% to 4% range) at 4.09%. The 5, 10 and historical dividend yields are also moderate at 2.69%, 2.68% and 4.82%. The dividend growth has been moderate (8% to 14%) at 10% per year over the past 5 years. However, there was no dividend increase in 2025 as was usual for this company. Generally, the company increased the dividends each for the July dividend, but this did not occur in 2025. The last dividend increase was in 2024.
Most Dividend Payout Ratios (DPR) need improving. The DPR for 2024 for Earnings per Share (EPS) is far too high at 122% with 5 year coverage at 102%. The DPR for 2024 for Free Cash Flow provided by the company (FCF) is fine at 59% with 5 year coverage good at 48%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is too high at 83% with 5 year coverage at 69%. The DPR for 2024 for Cash Flow per Share (CFPS) is fine at 45% with 5 year coverage good at 39%. The DPR for 2024 for Free Cash Flow (FCF) is non-calculable because of negative FCF with 5 year coverage too high at 176%. But there is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 122.06% | 101.58% |
| FCF Co. | 58.76% | 48.32% |
| AEPS | 83.42% | 68.86% |
| CFPS | 45.14% | 38.89% |
| FCF | -370.25% | 176.38% |
Debt Ratios are show that the company has too much debt. The Long Term Debt/Market Cap Ratio for 2024 is fine at 0.54 and currently at 0.50. The Liquidity Ratio for 2024 is good at 1.61 and low currently 1.04 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.72 and currently too low at 1.19. The Debt Ratio for 2024 is good at 1.55 and low at 1.42 currently. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.28 and 2.11 and currently at 3.38 and 2.38. I prefer these ratios to be less and 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.54 | 0.50 |
| Intang/GW | 0.39 | 0.25 |
| Liquidity | 1.61 | 1.04 |
| Liq. + CF | 1.72 | 1.19 |
| Debt Ratio | 1.55 | 1.42 |
| Leverage | 3.28 | 3.38 |
| D/E Ratio | 2.11 | 2.38 |
The Total Return per year is shown below for years of 5 to 29 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 10.12% | 0.44% | -2.76% | 3.20% |
| 2014 | 10 | 10.26% | 17.63% | 12.47% | 5.16% |
| 2009 | 15 | 7.16% | 18.43% | 12.45% | 5.98% |
| 2004 | 20 | 5.61% | 19.14% | 11.30% | 7.85% |
| 1999 | 25 | 6.69% | 4.28% | 2.41% | |
| 1995 | 29 | 12.67% | 9.30% | 3.37% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 29.60, 38.97 and 44.91. The corresponding 10 year ratios are 28.78, 34.12 and 41.20. The corresponding historical ratios are 19.80, 22.87 and 25.71. The current ratio is 22.49 based on a stock price of $83.20 and EPS estimate for 2025 of $3.70. 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 have Adjusted Earnings per Share (AEPS) data also. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 20.69, 24.34 and 27.99. The corresponding 10 year ratios are 19.19, 24.86 and 29.19. The corresponding historical ratios are 18.30, 21.74, 25.96. The current P/AEPS Ratio is 16.35 based on a stock price of $83.20 and AEPS estimate for 2025 of $5.09. 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 $66.96. The 10-year low, median, and high median Price/Graham Price Ratios are 1.34, 1.76 and 2.11. The current P/GP Ratio is 1.24 based on a stock price of $83.20. 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 10-year median Price/Book Value per Share Ratio of 2.82. The current P/B Ratio is 2.13 based on a Book Value of $1,746M, Book Value per Share of $39.15 and a stock price of $83.20. The current ratio is 25% 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 17.69. The current P/CF Ratio is 9.84 based on Cash Flow per Share estimate for 2025 of $8.45, Cash Flow of $377M and a stock price of $83.20. The current ratio is 44% 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 4.82%. The current dividend yield is 4.09% based on a stock price of $83.20 and dividends of $3.40. The current dividend yield is 15% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This company used to be an income trust and income trusts generally had very high dividends. This test is not a good one then.
I get a 10 year median dividend yield of 2.68%. The current dividend yield is 4.09% based on a stock price of $83.20 and dividends of $3.40. The current dividend yield is 52% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.86. The current P/S Ratio is 0.51 based on a stock price of $83.20, Revenue estimate for 2025 of $7,318M and Revenue per Share of $164.08. 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 is probably relatively cheap. The 10 year median dividend yield test says this. This result is confirmed by the P/S Ratio test. The rest of the testing is saying the same thing, that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (5), Buy (4) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $103.92 with a high of $120.00 and low of $91.00. The consensus stock price implies a total return of 28.99% with 24.90% from capital gains and 4.09% from dividends based on a current stock price of $83.20.
Analyst on Stock Chase like this company, but only one says it is a buy in 2025. One analyst said it was down because of tariff and trade uncertainty. Demetris Afxentiou on Motley Fool especially likes the dividend yield on this stock. Jitendra Parashar on Motley Fool says buy for passive income for Retirement. The company put out a press Release on Newswire about their fourth quarter of 2024. The company put out a press Release on Newswire about their first quarter of 2025.
Simply Wall Street via Yahoo Finance put out a rather negative report about this stock and that it has fallen over the past 3 years. Simply Wall Street has 3 warnings out on this stock of interest payments are not well covered by earnings; dividend of 4.19% is not well covered by earnings or free cash flows; and significant insider selling over the past 3 months. Please note that it looks like insiders are selling when they do not pick up some or all their options. However, of the 7 officers and directors I am following, the CEO and one officer bought sales. The 3 directors I follow all bought. One officer, the CFO sold 6.4% of his shares and one officer did not buy or sell over the past year.
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 9 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2025.... .... learn more on Tuesday, July 8, 2025 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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