December 13, 2018

George Weston Ltd (WN)

When you look the Toronto-based food mega-conglomerate George Weston Ltd (WN) today, it is humbling to think that it all began 130 years ago in 1882 when a young man began his career as a bread salesman.  George Weston was a former baker and he started his own small business when he bought a bread route from his former employer.  By 1900 he had expanded throughout Toronto, and soon became Canada’s biggest purveyor of bread and baked goods.  In 1924 Garfield Weston continued in his father’s footsteps and took over the President position at George Weston.  Over the coming turbulent decades he managed to exponentially expand his father’s original business until a multinational food empire with assets around the world.  The third generation of Westons took over in 1970 as Galen Weston took the helm, and integrated the company’s second major wing, Loblaw Companies Limited (L).  George Weston Ltd (WN) has acquired many different organizations in its many of decades in the industry, and is now one of the largest publically traded entities in Canada.

 

George Weston Bakeries IncThe company is essentially divided into two segments.  Weston foods and its subsidiaries carries out the more traditional baking and frozen goods operations that George Weston (WN) has traditionally been known for.  The other major segment – Loblaws – is a large publically traded company in its own right (Weston owns a controlling share at about 63%).  They are the biggest food distributor in Canada in addition to providing numerous other services (general merchandise, financial products, etc) to their clientele.

 

George Weston’s (WN) vision is focused on three main principles: growth, flexibility and innovation.  The company, “Seeks long-term, stable growth in our operating segments, while accepting prudent operating risks through continuous capital investment.  Our goal is to provide sustainable returns to our shareholders over the long term through a combination of common share price appreciation and dividends.”  While this vision is somewhat generic, it is still reassuring to dividend-conscious investors to see the company’s commitment to putting profits back into their pockets.

 

Recently George Weston (WN) stated that its second-quarter profits were up almost 23% from 2010.  The company reported a profit of about a $157 million, or $1.13 per share (up from $128 million last year).  Sales totalled an astounding $7.5 billion for the international foods giant.  With input costs expected to rise along with food prices around the world, Weston reported that Canadians and much of the world would have to deal with price increases of 5-7% in the coming year.

 

Investors looking for an extremely large and well-diversified way to get exposure to the Canadian Foods market should look hard at George Weston Ltd (WN).  The company is recently trading at around $67 per share.  It has been a fairly volatile stock over the past year with a 52-week high of nearly $86 and a 52-week low of about $64.  Weston also has a massive market capitalization of over $8.5 billion.  At it’s currently price, many analysts have the stock rated as a buy, but with a fairly expensive price-to-earnings ratio of 18.5 I’m not quite sold.  The annual dividend is $1.44 which gives George Weston Ltd (WN) a dividend yield of 2.2%.

 

George Weston Ltd (WN) Dividend Stock Graph:

TSE WN

George Weston Ltd (WN) Dividend Stock Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
WNGeorge Weston Ltd71.032.03289.980.570666144.8662538.0214

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  1. […] focuses: Simplify, Innovate, and Grow.  Since Loblaw is a branch of the large foods-conglomerate George Weston (WN), it is committed to the same investor-friendly strategy of returning a generous amount of overall […]

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