Jean Coutu Group

I am reviewing this stock today as its annual statement for 2008 has been published (on March 2008) and I already have a spreadsheet on this stock (TSX-PJC.A). I was sorting through by spreadsheet list for Annual Statements expected so far in 2008 and I realized that I had missed this stock. Also, the reporting date for this stock has been changed from the end of May each year to March 1 each year. This stock is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm. It is not on the great dividend stock lists, but it has been recommended in the past by the Investment Reporter.

I had some of this stock previously. I bought it in 2000 and some more in 2004. I sold in 2007, partly to raise some cash and partly to invest in Saputo, which I liked better. I made a return on this stock of 7.4%, including dividends. It is not a bad return. This stock has been beaten down recently, but so has everything else. There are some Strong Buys and Buys on this stock, but the majority seems to be Hold rating. Some people think that the dividend is in jeopardy.

The 5 and 10 growth in dividends at 5.9% and 23% per year respectively is good, some of the 10 year indicators are good, the accrual Ratio is negative, which is good, and the 5 and 10 year growth in cash Flow at 5.9% and 10.9% per year respectively is good. However, by and large, this stock seems to be in trouble. It seems to have stalled in 2004 and it has not made much progress since. Since the economy is in trouble, I would like to see this stock revive somewhat before I would again consider it for purchase.

The Jean Coutu Group operates a network of 343 franchised drugstores in Canada located in the provinces of Québec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Santé Beauté). The Company also holds a significant interest in Rite Aid Corporation (‘‘Rite Aid’’), one of the United States’ leading drugstore chains with approximately 5,000 drugstores in 31 states and the District of Columbia. Its web site is www.jeancoutu.com. See my spreadsheet at www.spbrunner.com/stocks/pjc.htm. I have included the August 2008 second quarterly report.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.