DB:WX5

Stock Analysis Report

Executive Summary

George Weston Limited engages in the food processing and distribution business in Canada and Internationally.

Rewards

Trading at 45.5% below its fair value

Earnings are forecast to grow 57.22% per year

Pays a reliable dividend of 2.16%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.16% is not well covered by earnings

Profit margins (0.4%) are lower than last year (1.1%)

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer with moderate growth potential.


Similar Companies

Share Price & News

How has George Weston's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WX5 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

WX5

3.7%

DE Consumer Retailing

7.3%

DE Market


1 Year Return

-1.6%

WX5

-9.4%

DE Consumer Retailing

-17.7%

DE Market

Return vs Industry: WX5 exceeded the German Consumer Retailing industry which returned -9.4% over the past year.

Return vs Market: WX5 exceeded the German Market which returned -17.5% over the past year.


Shareholder returns

WX5IndustryMarket
7 Day0.8%3.7%7.3%
30 Day-12.0%-2.4%-17.9%
90 Day-12.0%-11.0%-25.8%
1 Year0.4%-1.6%-5.9%-9.4%-15.1%-17.7%
3 Year-18.8%-23.4%-3.3%-12.8%-18.7%-25.6%
5 Year-7.4%-15.3%-4.7%-19.3%-17.7%-29.0%

Price Volatility Vs. Market

How volatile is George Weston's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is George Weston undervalued compared to its fair value and its price relative to the market?

45.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WX5 (€62.5) is trading below our estimate of fair value (€114.74)

Significantly Below Fair Value: WX5 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WX5 is poor value based on its PE Ratio (75.5x) compared to the Consumer Retailing industry average (17.3x).

PE vs Market: WX5 is poor value based on its PE Ratio (75.5x) compared to the German market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: WX5 is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: WX5 is overvalued based on its PB Ratio (2.2x) compared to the XE Consumer Retailing industry average (1.3x).


Next Steps

Future Growth

How is George Weston forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

57.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WX5's forecast earnings growth (57.2% per year) is above the savings rate (-0.4%).

Earnings vs Market: WX5's earnings (57.2% per year) are forecast to grow faster than the German market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WX5's revenue (2.5% per year) is forecast to grow slower than the German market (4.2% per year).

High Growth Revenue: WX5's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WX5's Return on Equity is forecast to be low in 3 years time (18.8%).


Next Steps

Past Performance

How has George Weston performed over the past 5 years?

-5.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WX5 has high quality earnings.

Growing Profit Margin: WX5's current net profit margins (0.4%) are lower than last year (1.1%).


Past Earnings Growth Analysis

Earnings Trend: WX5's earnings have declined by -5.8% per year over the past 5 years.

Accelerating Growth: WX5's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WX5 had negative earnings growth (-62.6%) over the past year, making it difficult to compare to the Consumer Retailing industry average (2.2%).


Return on Equity

High ROE: WX5's Return on Equity (6.2%) is considered low.


Next Steps

Financial Health

How is George Weston's financial position?


Financial Position Analysis

Short Term Liabilities: WX5's short term assets (CA$12.7B) exceed its short term liabilities (CA$10.8B).

Long Term Liabilities: WX5's short term assets (CA$12.7B) do not cover its long term liabilities (CA$23.9B).


Debt to Equity History and Analysis

Debt Level: WX5's debt to equity ratio (121.9%) is considered high.

Reducing Debt: WX5's debt to equity ratio has increased from 96.4% to 121.9% over the past 5 years.

Debt Coverage: WX5's debt is well covered by operating cash flow (28.4%).

Interest Coverage: WX5's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

Inventory Level: WX5 has a high level of physical assets or inventory.

Debt Coverage by Assets: WX5's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is George Weston's current dividend yield, its reliability and sustainability?

2.16%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WX5's dividend (2.16%) is higher than the bottom 25% of dividend payers in the German market (1.71%).

High Dividend: WX5's dividend (2.16%) is low compared to the top 25% of dividend payers in the German market (4.98%).


Stability and Growth of Payments

Stable Dividend: WX5's dividends per share have been stable in the past 10 years.

Growing Dividend: WX5's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (162.1%), WX5's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WX5's dividends in 3 years are forecast to be well covered by earnings (29.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Galen Weston (46yo)

3.17s

Tenure

CA$7,928,555

Compensation

Mr. Galen G. Weston, B.A., M.B.A., has been Chief Executive Officer of George Weston Limited since January 18, 2017 and has been the Chairman since September 2016. He served as a Non-Independent Director o ...


CEO Compensation Analysis

Compensation vs Market: Galen's total compensation ($USD5.63M) is about average for companies of similar size in the German market ($USD5.11M).

Compensation vs Earnings: Galen's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Galen Weston
Chairman & CEO3.17yrsCA$7.93m0.075% CA$7.2m
Richard Dufresne
President & CFO2.17yrsCA$4.81m0.0039% CA$369.7k
Sarah Davis
President of Loblaw3.17yrsCA$6.11m0.00092% CA$88.1k
Tara Speers
Senior Director of Investor Relationsno datano datano data
Gordon Andrew Currie
Executive VP & Chief Legal Officerno datano data0.017% CA$1.7m
Rashid Wasti
Executive VP & Chief Talent Officerno datano data0.0072% CA$685.7k
Khush Dadyburjor
Chief Strategy Officer3.83yrsno datano data
Peter Effer
Group Head of Tax3.83yrsno datano data
Wendy Mizuno
Group Head of Pensions & Benefits1.17yrsno datano data
Anemona Turcu
VP & Chief Risk Officer0.58yrno datano data

3.2yrs

Average Tenure

51yo

Average Age

Experienced Management: WX5's management team is considered experienced (3.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Galen Weston
Chairman & CEO3.17yrsCA$7.93m0.075% CA$7.2m
Gordon Nixon
Independent Director5.33yrsCA$199.50k0.0033% CA$312.2k
Christianne Strauss
Independent Director3.83yrsCA$190.00k0.00065% CA$62.3k
J. Robert Prichard
Lead Independent Director7.83yrsCA$257.50k0.0013% CA$124.5k
Willard Weston
Chairman Emeritusno dataCA$3.15m2.74% CA$262.1m
Sarabjit Marwah
Independent Director6.83yrsCA$189.85k0.0023% CA$218.4k
Robert Sawyer
Independent Director3.5yrsCA$190.00k0.0028% CA$266.2k
Paviter Binning
Non-Independent Director0.83yrCA$140.31k0.055% CA$5.2m
Barbara Stymiest
Independent Director9.17yrsCA$273.88k0.0013% CA$124.5k
Alannah Weston
Non-Independent Director3.83yrsCA$182.50k0.056% CA$5.3m

3.8yrs

Average Tenure

62yo

Average Age

Experienced Board: WX5's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WX5 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 16.5%.


Top Shareholders

Company Information

George Weston Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: George Weston Limited
  • Ticker: WX5
  • Exchange: DB
  • Founded: 1882
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: CA$14.945b
  • Listing Market Cap: CA$9.577b
  • Shares outstanding: 153.58m
  • Website: https://www.weston.ca

Number of Employees


Location

  • George Weston Limited
  • 22 St. Clair Avenue East
  • Toronto
  • Ontario
  • M4T 2S7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WNTSX (The Toronto Stock Exchange)YesCommon SharesCACADNov 1972
WX5DB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1972
WNGR.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDNov 1972
WN.PRATSX (The Toronto Stock Exchange)PFD 1 5.8%CACADDec 2001
WN.PRCTSX (The Toronto Stock Exchange)PFD SHS IIICACADApr 2005
WN.PRDTSX (The Toronto Stock Exchange)PFD IV 5.20%CACADAug 2005
WN.PRETSX (The Toronto Stock Exchange)PFD 4.75% VCACADApr 2006

Biography

George Weston Limited engages in the food processing and distribution business in Canada and Internationally. The company operates through three segments: Weston Foods, Loblaw, and Choice Properties. The Weston Foods segment offers foodservice and retail, making bread, rolls, cupcakes, donuts, biscuits, cakes, pies, cones and wafers, artisan baked goods, and more. The Loblaw segment provides grocery, pharmacy, health and beauty, apparel, general merchandise, and financial services. It operates retail drug stores under the Shoppers Drug Mart, and President's Choice Bank. This segment also provides merchandisers, warehouse clubs, online retailers, mail order prescription drug distributors, limited assortment stores, discount stores, convenience stores, and specialty stores. The Choice Properties segment owns, develops, and manages retail and commercial real estate consisting of 700 properties portfolio is comprising of retail properties, leased, tenants, industrial, office, residential assets. The company was founded in 1882 and is based in Toronto, Canada. George Weston Limited is a subsidiary of Wittington Investments, Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 22:06
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.