Q: hi, can I get your current thoughts on CSW.A at this time. do you suspect it could start to move up in price with small caps soon? or are people not drinking their "spirits" so much anymore ( large capital depreciation over time ). do you have any other suggestions in the consumer defensive sector (cdn or us) with a good sized dividend and a better growth profile? cheers, chris
5i Research Answer:
We would consider CSW.A OK but certainly not compelling. EPS is lower than it was 10 years ago. The balance sheet is fairly leveraged. The issue really is not the company's fault, perhaps, but there has been a big drop off in demand for alcohol in general. Sales in the sector are declining now for the first time in decades. The dividend has been cut twice now in the past year. We would consider PBH 'better' for growth. The dividend is lower (3.5%) but it is performing better and and EPS has doubled since 2019.