George Weston Ltd WN

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CAD 180.95 −0.22 (0.12%)

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As of May 1, 2024 1:37pm Delayed Price Open

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Company Report

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We View George Weston's Strategic Investments as Favorable but Not Enough to Warrant a Moat

Dan Su, Grace Na Mar 26, 2024

As the majority shareholder of Canada’s largest retailer Loblaw and leading real estate investment trust Choice Properties, George Weston capitalizes on resilient consumer demand for groceries and pharmacy services, and benefits from synergies between the two operating subsidiaries. We view its financial performance as anchored by steady dividends from the retail and property arms, but we don’t think the firm has a durable competitive edge based on our no-moat rating on Loblaw, which makes up the bulk of revenue and profits for the holding company.

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Price vs Fair Value

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WN is trading at a 9% premium.

Price

CAD 183.94

Apr 29, 2024

Fair Value

CAD 647.00

Oct 3, 2023

Uncertainty

Low

1-Star Price: CAD 659.00
5-Star Price: CAD 246.70
Economic Moat: Jtrx
Capital Allocation: Qwnfrykh

Bulls Say, Bears Say

Bulls

Major subsidiary Loblaw is the largest retailer in Canada, which leverages an extensive retail footprint and strong banners to capture shopper demand across the country.

Bears

George Weston is susceptible to regulatory headwinds, labor disputes, and supply chain disruptions that could hamper the performance of its subsidiaries.

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Trading Information

Previous Close Price: CAD 181.17
Day Range: CAD 179.77–181.03
52-Week Range: CAD 144.41–187.93
Bid/Ask: CAD 180.69 / CAD 181.32
Market Cap: CAD 24.17 Bil
Volume/Avg: 1,214 / 113,595

Key Statistics

Price/Earnings (Normalized): 17.19
Price/Sales: 0.42
Dividend Yield (Trailing): 1.57%
Dividend Yield (Forward): 1.57%
Total Yield: 9.35%

Company Profile

George Weston is a holding company that controls a 53% stake in retailer Loblaw and a 62% stake in Choice Properties, a real estate investment trust. Loblaw boasts the largest retail footprint across Canada with 2,500 food retail and pharmacy stores under banners such as Loblaw, No-Frills, Maxi, and Shoppers Drug Mart. Meanwhile, open-ended Choice Properties REIT owns and manages over 700 commercial and residential properties in Canada, generating roughly 60% of its gross rental revenue from its largest tenant Loblaw. Previously, George Weston sold its wholly owned bakery Weston Foods in 2022. The firm is controlled by the Weston family, which owns a 65% stake.

Sector: Consumer Defensive
Industry: Grocery Stores
Stock Style Box: Large Core
Total Number of Employees: 221,000
Website: https://www.weston.ca

Competitors

Valuation

Metric	WN	KR	L
Price/Earnings (Normalized)	17.19	11.76	20.10
Price/Book Value	4.16	3.43	4.15
Price/Sales	0.42	0.27	0.81
Price/Cash Flow	5.21	6.71	9.60

Price/Earnings

Financial Strength

Metric	WN	KR	L
Quick Ratio	0.70	0.33	0.68
Current Ratio	1.24	0.81	1.25
Interest Coverage	3.79	7.43	4.48

Quick Ratio

Profitability

Metric	WN	KR	L
Return on Assets (Normalized)	5.13%	6.91%	6.49%
Return on Equity (Normalized)	41.38%	32.00%	22.19%
Return on Invested Capital (Normalized)	9.77%	12.44%	10.48%

Return on Assets

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