ANDREW PELLER LTD. $14 - Toronto symbol ADW.A

ANDREW PELLER LTD. $14 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 11.3 million; Market cap: $158.2 million; Price-to-sales ratio: 0.7; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia.

In its 2014 fiscal year, which ended March 31, 2014, Peller’s sales rose 3.0%, to $297.8 million from $289.1 million in fiscal 2013. That’s mainly because it launched several successful products. Demand for its premium wines also remains strong.

However, strong competition in Western Canada and the Maritimes, as well as higher costs for wine and juice from overseas suppliers, cut Peller’s earnings by 3.4%, to $14.0 million from $14.5 million. Per-share earnings fell 2.9%, to $1.01 from $1.04. Without unusual items, such as losses on hedging contracts, earnings would have risen 4.5%.

The company also raised its dividend for the sixth time in nine years. The new rate of $0.42 a share, up 5.0% from $0.40, yields 3.0%.

Andrew Peller is a buy.

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