Few publicly traded companies can say they were founded 140 years ago. George Weston (TSE:WN) is one of the elite businesses founded in Toronto in the 1800s. The company has fought nationalistic causes, remaining loyal to Canada throughout; it has been a staple of Canadian food culture for decades; and its investors have continuously enjoyed a steady return on their investments for years.
Considering the low 1.75% dividend yield, the stock finds great interest from investors with .6% revenue growth. Meanwhile the stock is up 28.06% year-to-date. (See George Weston stock chart on TipRanks)
The company also garners investment from shareholders interested in the ever-evolving business model George Weston has created. The recent front page news, that the company intends to sell Weston Foods in order to hone in on its retail and real estate businesses, had investors keen on finding the right time to buy.
“Despite its position as a leading North American bakery, Weston Foods remains a small part of GWL’s overall value. In the absence of attractive opportunities to increase its relative scale within the Company, the Board believes that a sale represents the best opportunity to unlock its growth potential,” a recent press release stated.
The Old Company Reinvents Itself
Weston Foods had sales of C$2.1 billion and Adjusted EBITDA of C$200 million in 2020.
In 2021, the company reported a Q1 loss of nearly C$62 million, or C$0.41 per diluted share.
The current PE Ratio is 69.2.
Despite this data, the most interesting, and important part of the past year and Q1 2021 has been the dramatic announcement that Canada’s oldest bakery is reinventing itself to focus on a different industry entirely.
The announcement that the company will focus on real estate and retail caused the stock price to rise. Hovering above C$100 prior to the announcement on March 23, 2021 the company closed at CC$124.58 today. This fast, steady increase in stock price has investors wondering what other major announcements are planned by George Weston.
Analysts’ Take on George Weston Stock
TipRanks’ investors view George Weston stock as a Moderate Buy, with 4 Buys.
The average analyst WN price target is CC$131.75, with a high forecast of CC$141.00 and a low forecast of CC$121.00. The average George Weston price target represents an upside of 5.8%.
With the recent announcement that Second Quarter Earnings Release will take place on July 30th, many analysts are eager to hear additional developments within the company.
Bottom Line
There is very little that a company founded in 1882 hasn’t seen. WN was ahead of its time one hundred years ago and may still be. Considering the stock is up 32.18% over the past six months, there may be even more upside with its recent decision to focus on retail and real estate.
With a meager offering from its dividend program, many shareholders have looked to the company’s steady stock price climb for assurances. WN’s decision to focus on retail and real estate businesses will likely attract more investors. This type of strategic decision making over the years has drawn many investors to buy and hold for the long term.
Disclosure: Lukas Brenowitz held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
