Investment opportunities abound in the current market, as many stocks are trading at valuations far below fair value. Some of those companies even remain undervalued despite years of consistent performance. And one of those companies is Jamieson Wellness (TSX:JWEL).
Jamieson stock has been an excellent choice for Canadian investors when seeking out long-term income and steady growth. With attractive valuations, and more growth ahead, let’s look at why investors may want to consider adding it to their porfolio.
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Strong financial performance
During Jamieson stock’s most recent first quarter earnings report, investors were pleased to see a quarter that beat out earnings estimates. Consolidated revenue increased 31.9% for the company, with Jamieson Brands increasing 30%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $24.5 million, with diluted earnings per share to $0.21.
Revenue grew faster than adjusted EBITDA for the quarter, registering a 17% increase. Management stated this was from strategic investments to build out their brand, expanding operations in both the United States and China. The natural health product maker is now confident its outlook for the year will continue to climb. In fact, the company already overdelivered on revenue expectations in the U.S. with stronger than expected consumption.
“Jamieson Wellness entered 2023 in a position of strength, having laid a solid foundation for continued growth across our business in 2022. Our Jamieson Brands segment delivered another exceptional quarter with a 30% revenue increase, reflecting organic growth, the impact of our U.S. acquisition, and the continued demand for our brands, globally.”
Mike Pilato, President and CEO of Jamieson Wellness
History repeating itself?
This latest growth comes as merely the latest in the company’s years of impressive financial growth. Between 2010 and 2020 alone, revenue increased from $206 million to $363 million, bringing in a remarkable compound annual growth rate (CAGR) of 6.5%. As you can see, Jamieson stock has already outpaced this growth in 2023 alone, as it continues to capture a larger market share.
As the company continues to expand around the world, it has enjoyed a significant amount of growth in the last decade, both organically and through strategic acquisitions. This includes acquisitions such as Body Plus in 2014, and the expansion into China, growing even faster since lockdowns lifted.
Yet shares of Jamieson stock are still down about 20% in the last year, and 13% in the last three months. So what should investors do now?
Consider the long run
Jamieson stock is actually quite new in terms of its time on the market. Since its initial public offering (IPO) in 2017, shares of the stock are up 54% as of writing. There was a surge as investors looked for growth stocks, but the stock has come down in recent years.
Now, the stock is an undervalued gem that investors shouldn’t miss out on. Being in the healthcare sector offers protection should the market drop once again. It also offers growth as its healthcare and beauty options bring in more consumers than ever before.
Jamieson stock offers a 2.36% dividend yield at the time of writing, trading at 23.7 times earnings. This is lower than the average five years, when the price-to-earnings (P/E) ratio sat around 25.6. So investors can lock in a deal, growth, and income from this undervalued stock. But only while it lasts.
