Maple Leaf Foods Inc. (TSX:MFI) is a Mississauga-based producer of food product focused on prepared meats. Maple Leaf stock was up 0.22% as the noon hour winded to a close on March 23. Shares have dropped 13.1% in 2018 thus far. Is it a good time to buy the dip?
Maple Leaf Foods released its 2017 fourth quarter and full-year results on February 21. In the fourth quarter Maple Leaf saw sales grow 5.9% to $876.8 million and adjusted EBITDA rose 8.2% year over year to $93.5 million. The recent acquisition of Lightlife and heightened demand for fresh value-added poultry boosted volumes in the final quarter.
For the full-year Maple Leaf reported sales of $3.52 billion which represented a 5.2% increase from 2016. Adjusted EBITDA climbed 11% from 2016 to $381.1 million. Maple Leaf raised its quarterly dividend by 18% to $0.13 per share representing a 1.4% dividend yield.
Maple Leaf made impressive strides in 2017 in particular with improved U.S. volumes. The acquisition of Lightlife demonstrates that Maple Leaf is committed to plant protein offerings which will be invaluable as consumer trends change. Meat consumption has declined in Canada over the past several decades and companies will be forced to adjust going forward.
Maple Leaf stock has achieved solid growth over a five-year period, shares are up 133% from March 2013. The dip appears enticing but Maple Leaf stock is still fairly pricey. Consider it for a long-term buy-and-hold that also offers a solid dividend.
