Market volatility is picking up, but for self-guided investors who crave great deals in markets, that’s not a bad thing! In this piece, we’ll check in on a dividend payer that may very well be worth backing up the truck on, especially if the Bank of Canada is poised to reduce interest rates further through 2026. Of course, it’s tough to time monetary policy, but if rates do continue on the descent, perhaps due to easing inflation or a bit of weakness in the employment picture, I’d look to some of the dividend payers before their dividend yields have a chance to compress further.
Undoubtedly, we’ve already seen some notable yields fall quite a bit from their multi-year highs. And for investors who are shying away from the dividend plays, I do think there’s a risk that hunting down yield gets tougher in two years or so from now, especially if AI technologies produce a disinflationary effect.
In any case, Jamieson Wellness (TSX: JWEL) stock looks like a great mid-cap bargain for newer investors who want a nice (2.7% yield right now) dividend alongside great growth prospects.
Of course, Jamieson Wellness is a very well-known brand (built up over more than a century), but its stock isn’t all too well-known. The $1.45 billion company has seen its shares fluctuate quite wildly in the past five years. Despite the lower correlation (0.88 beta), shares have been quite a roller-coaster ride, with steep spikes and sudden plunges. Right now, the stock is pretty much somewhere in the middle at $34 and change per share.
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Jamieson has room to grow
Shares have not done anything (0% return) in the past five years. And while there has been choppiness and dividends paid, I still think the name is underappreciated, especially as various secular themes look to work out in the health and wellness firm’s favour. While Jamieson is a big name in the world of vitamins and minerals, it’s the supplements category that I think could hold the most long-term growth for the firm.
Whether we’re talking about protein supplements, gummies, probiotics, or cashing in on the obesity drug trend with GLP-1 support products (GLP-1 drugs can come with some very serious side effects), there are many places for the firm to expand.
The company is making some fairly decent strides in the U.S. and Chinese markets. Up ahead, Jamieson could easily break the $1 billion revenue milestone, which, I think, could put Jamieson on the map if it hasn’t already. Either way, China remains key to growth, and with visibility on popular Chinese e-commerce platforms, I think there’s a nice growth pathway set for the firm.
The bottom line
At the time of this writing, shares look quite reasonably priced at 24.2 times trailing price to earnings. If management can execute and continue running strong in China, I think there’s room for a bit of multiple expansion. Either way, Jamieson is a great growth staple to stash away for the long run. What has me most excited is the potential for dividend growth over the next decade as the firm seizes international opportunities.
