Jamieson Wellness (TSX:JWEL) stands out as one of my all-time favourite Canadian mid-cap stocks, not just because of its impressive long-term growth narrative, but because it has a strong brand and a front-row seat to the secular health and wellness trend.
Indeed, the $1.55 billion firm has seen more than its fair share of steep swings in both directions. However, I still think the name is worth stashing away, even though its longer-term chart (shares have posted no returns in the last five years despite the choppy ride) isn’t the most compelling in the mid-cap universe.
In a corner of the Canadian market that’s viewed as riskier, more volatile, and perhaps not worth exploring for investment opportunities, Jamieson stands out as one of the names that can not only help pad one’s passive income (a nice 2.5% dividend yield at the time of this writing) but also help smooth the market bumps (0.70 beta).
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JWEL stock looks cheap and timely after its post-earnings rally
Zooming in, shares of JWEL appear much timelier, with shares now up nearly 8% over the past month. Undoubtedly, the second-quarter results didn’t deliver blowout numbers by any stretch of the imagination. That said, there was a glimmer of hope within China, where the Jamieson Wellness brand is really experiencing strength.
Though international growth could be key to the next leg higher for JWEL shares, I wouldn’t discount the company’s ability to drive sales growth here in Canada and the United States. Indeed, pivoting into new product categories (think protein or ashwagandha) is a smart move as it looks to jolt sales. While vitamins, minerals, and supplements are, indeed, commoditized, it’s really tough to vouch for the quality of a certain product, especially those with unrecognizable brand names.
Are you really getting enough calcium in a bottle of multivitamins? When it comes to Jamieson, you can ensure that you’re not only getting high-quality supplements, but also the right dosage, which is absolutely a differentiator in the health food store.
Jamieson’s brand power is over 100 years in the making
Jamieson has been around for a long time. It’s been in the business for more than 100 years! Over that time, it has built a tremendous amount of brand affinity. While legendary consumer packaged good brands have been tested amid inflation, I believe that Jamieson is one of the brands with underrated pricing power.
Given Jamieson’s standing as a premium brand of supplement in Canada, it should come as no surprise that Chinese consumers have been such fans of Jamieson’s time-tested brand and its iconic green bottle caps for some time now.
Perhaps consumers have been conditioned to think that anything without that green cap isn’t the absolute highest quality supplement to ingest. In any case, I think the brand power and unique growth tailwinds (in China and beyond) make the name worth grabbing while it’s hovering for $37 and change.
As the company continues gaining momentum in the Chinese market, I wouldn’t sleep on the stock, which looks quite affordable at just 27.76 times trailing price to earnings (P/E). Add the track record of dividend growth and potential for China to be more of a needle-mover over time, and it’s not hard to see why JWEL is such a great mid-cap to own in any environment.
