Q: Parkland was once your favorite stock. With the recent price drop, it now offers a 4.39% dividend yield. Do you think the stock has the potential to rebound and remain a good dividend investment? I appreciate your insights.
5i Research Answer:
Sales growth has weakened over the past couple of years, and recent results were mostly below expectations. It has its merits fundamentally, it trades at a cheap valuation of 11X forward earnings, and its dividend is quite sustainable given its cash flows. Given its low valuation, high free cash flow yield, and decent capital allocation towards dividends and share buybacks, we would be OK holding it as a dividend name, with potential as an acquisition target.