GEORGE WESTON LTD. $87.68 - Toronto symbol WN

GEORGE WESTON LTD. $87.68 (Toronto symbol WN; Shares outstanding: 128.1 million; Market cap: $11.2 billion; TSINetwork Rating: Above Average; Dividend yield: 1.9%) makes a number of products through Weston Foods. Its businesses include fresh and frozen bakery and cookie operations in Canada and facilities that make frozen bakery items, biscuits, cookies, cones and wafers in the U.S. Weston also owns 46% of Loblaw (see left).

In the quarter ended June 14, 2014, Weston’s revenue rose 36.0%, to $10.6 billion from $7.8 billion a year earlier. Excluding Shoppers Drug Mart’s contribution to Loblaw’s sales, Weston’s revenue rose 2.5%.

Without one-time items, earnings per share gained 16.7%, to $1.26 from $1.08. A bigger contribution from Loblaw offset weaker results at Weston Foods due to higher commodity prices and plant start-up costs.

Weston holds cash of $2.3 billion, which it could use to increase its Loblaw stake or make other investments to boost growth. The stock trades at 17.2 times this year’s forecast earnings of $5.10 a share and 14.0 times the 2015 estimate of $6.28.

George Weston is a buy.

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