Here’s a 6.3% yield from Andrew Peller

Lower costs should restore earnings and support a high payout that’s been in effect since 1979.

The stock trades at just 10.9 times the company’s forward earnings forecast.

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ANDREW PELLER LTD. (Toronto symbols ADW.A and ADW.B; www.andrewpeller.com) is Canada’s second-largest wine producer after Arterra Wines. It also has long-term licencing deal with hockey star Wayne Gretzky to make both wine and whisky under the Gretzky brand.

Peller continues to pay quarterly dividends of $0.0615 per class A share; the annual rate of $0.246 yields a high 6.3%.

In its fiscal 2025 first quarter, ended June 30, 2024, Peller’s sales fell 1.0%, to $99.5 million from $100.5 million a year earlier. A drop in tourist traffic to its wineries offset higher sales through provincial liquor stores, restaurants and hotels.

Dividend Stocks: Restored profitability should be coming in 2025

Thanks to a cost-savings plan, the company’s losses improved to $375,000, or $0.01 a share, in the quarter, compared to the year-earlier loss of $931,000, or $0.02 a share.

Lower costs should lift Peller’s projected earnings from $0.12 a share in fiscal 2025 to $0.45 in 2026. The class A shares trade at a reasonable 8.8 times that 2026 estimate.

The company has paid dividends since 1979. It has also increased the annual rate by an average 2.7% each year for the past five years. Andrew Peller has an Above Average TSI Dividend Sustainability Rating.

Recommendation in The Successful Investor: Andrew Peller Ltd. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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