When a company announces a stock split, investors often ask themselves: Is this a buying opportunity or just noise? In the case of George Weston (TSX:WN), the recent three-for-one stock split, effective August 18, 2025, is grabbing attention. But the more important question is whether the underlying business justifies a buy while the stock trades near, but not at, its all-time high. Let’s look past the split and into what really matters: fundamentals, growth potential, and value.
About George Weston
George Weston stock is a holding company, but not in the boring, passive sense. It owns and controls two publicly traded giants: Loblaw Companies and Choice Properties REIT. Together, these make up the backbone of Canada’s food, pharmacy, and real estate sectors. That’s an attractive combination, especially in uncertain times.
In its latest quarter, George Weston stock reported revenue of $14.8 billion, up 5.2% year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $1.9 billion, also up 6.5%. But net earnings attributable to shareholders fell to $258 million, down from $400 million last year. That decline isn’t as bad as it sounds. The drop was largely due to fair value adjustments tied to the rising unit price of Choice Properties, not core operations. Adjusted net earnings actually rose 1.8% to $401 million.
That makes it pretty clear that operations are solid. Loblaw is expanding with new stores and pharmacy clinics, and the discount grocery segment is gaining share. It’s also benefiting from more efficient distribution and strong customer engagement via the PC Optimum program. Meanwhile, Choice Properties remains steady, with a stable portfolio of necessity-based tenants.
More to come
If that sounds like a snooze, that’s sort of the point. George Weston stock isn’t a flashy investment; it’s a cash machine built on consumer staples and real estate. And it continues to use that cash effectively. In Q2, it repurchased 1.1 million shares for $295 million and still produced $293 million in free cash flow at the corporate level.
George Weston stock closed recently at $264.64, down slightly on the day. It’s off its 52-week high of $280.86, but still up more than 28% year over year. That’s not exactly a bargain-bin find. The forward price-to-earnings (P/E) sits at 20.7, reasonable for a stable compounder, but not screaming cheap.
The dividend yield is modest at 1.3%, although the payout ratio remains conservative at just under 44%. That means there’s room to raise it, and the company has a track record of doing just that. Its recent dividend of $0.89 per share (pre-split) suggests management remains confident in the long-term trajectory. Right now, a $7,000 investment would bring in $93 annually!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| WN | $264.88 | 26 | $3.58 | $93.08 | Quarterly | $6,887.00 |
Foolish takeaway
The real opportunity may lie in how the stock behaves post-split. The three-for-one split will lower the share price into the $88 range, which often invites more retail investors, especially in employee share purchase plans. This could add to momentum, though it’s more a behavioural tailwind than a fundamental one.
There are a few risks worth noting. The valuation is sensitive to the performance of Loblaw and Choice. If either sees slower earnings growth or unexpected costs, George Weston will feel it. Rising interest rates or regulatory changes in healthcare and food pricing could also weigh on results. While the company is strong, it’s not immune to a broader market sell-off.
Should you buy now? If you’re looking for a safe, diversified compounder with stable earnings and a long-term mindset, George Weston is worth serious consideration. But if you’re expecting explosive growth, this isn’t that kind of story.
