Conservative "Cannabis" Stocks Index Reduced To 5 Constituents -

Conservative “Cannabis” Stocks Index Reduced To 5 Constituents

Nov 11, 2023Jeremy ParkinsonFinance, No picture0

Photo by David Gabrić on UnsplashMolson Coors (TAP) has completed the sale of its 57.5% share of Truss, its JV with Tilray (TLRY), to Tilray, and, as such, has been removed from the munKNEE Conservative “Cannabis” Stocks Index. The 5 stocks that remain in the Index are ranked below in descending order based on the sum total of comparative valuation metrics (the lower the number the better), along with their individual valuation metrics, their performances YTD and any recent news on them. Conservative “Cannabis” Stocks Index

Imperial Brands (IMBBY): Valuation Metrics Total: 21.4

- has a forward price-to-earnings (PE) ratio of 7.7
- has a forward price-to-sales ratio (PSR) of 1.6 (High – sector mean is 1.1)
- has a price-to-earnings-growth (PEG) ratio of 5.9 (High – sector mean is 2.3)
- has a Enterprise Value-to-Earnings Before Interest Taxes, Depreciation and Amortization (EV/EBITDA) ratio of 6.2
has a 19.9% stake in Auxly Cannabis Group (CBWTF)
has a dividend yield of 7.7% (High)
is DOWN 13.0% YTD

Altria Group (MO) Valuation Metrics Total: 21.5

- has a forward price-to-earnings (P/E) ratio of 8.1
- has a forward price-to-sales ratio (PSR) of 3.4 (High -sector mean is 1.1)
- has a price-to-earnings-growth (PEG) ratio of 2.3
- has a Enterprise Value-to-Earnings Before Interest Taxes, Depreciation and Amortization (EV/EBITDA) ratio of 7.7
has a 45% stake in Cronos Group (CRON)
has a dividend yield of 9.8% (High)
is DOWN 12.1% YTD

British American Tobacco (BTI): Valuation Metrics Total: 24.5

- has a forward price-to-earnings (PE) ratio of 6.8
- has a forward price-to-sales ratio (PSR) of 2.0 (High – sector mean is 1.1)
- has a price-to-earnings-growth (PEG) ratio of 8.9 (High – sector mean is 2.3)
- has a Enterprise Value-to-Earnings Before Interest Taxes, Depreciation and Amortization (EV/EBITDA) ratio of 6.9
has a C$346M product development partnership with Organigram Holdings (OGI)
has a dividend yield of 9.3% (High)
is DOWN 24.6% YTD
Read:
- BTI invests another C$124.6M in OGI

Anheuser-Busch InBev (BUD): Valuation Metrics Total: 33.4

- has a forward Price-to-Earnings (PE) ratio of 19.7 (High – sector mean is 17.0)
- has a forward Price-to-Sales Ratio (PSR) of 1.9 (High – sector mean is 1.1)
- has a Price-to-Earnings-Growth (PEG) ratio of 1.8
- has a Enterprise Value-to-Earnings Before Interest Taxes, Depreciation and Amortization (EV/EBITDA) ratio of 10.0
has a $100 million joint venture with Tilray (TLRY)
has a dividend yield of 1.4% (Low)
is UP 0.02% YTD
Read:
- How Bud Light Won UFC Back
- Bud Light boycott weighing on AB InBev but beer giant sees signs of optimism

Constellation Brands (STZ): Valuation Metrics Total: 41.8

- has a forward price-to-earnings (PE) ratio of 20.1 (High – sector mean is 17.0)
- has a forward price-to-sales ratio (PSR) of 4.4 (High – sector mean is 1.1)
- has a price-to-earnings-growth (PEG) ratio of 2.2 (High – sector mean is 2.3)
- has a Enterprise Value-to-Earnings Before Interest Taxes, Depreciation and Amortization (EV/EBITDA) ratio of 15.2 (High – sector mean is 10.7)
has a 38.6% stake in Canopy Growth (CGC)
has a dividend yield of 1.5% (Low)
is UP 5.2% YTD
Read: Constellation Brands Announces Expiration of Canopy Growth Warrants

Definitions

The price-to-earnings (P/E) ratio is the ratio for valuing a company that measures its current share price relative to its earnings per share. An excellent forward P/E ratio is between 10-25 for major stocks since stocks with a forward P/E below 10 can often be a value trap. On the other hand, those above 25 can be too expensive as they are priced with irrationally high growth anticipations. The mean P/E Ratio for Consumer Staples/Tobacco and Distillers and Vintners companies is 17.0.

The price-to-sales ratio (PSR) describes how much someone must pay to buy one share of a company relative to how much that share generates in revenue for the company. and, as such, determines whether its stock is cheap or overpriced in comparison to its peers. While the ideal ratio depends on the company and industry, the ratio is typically good when the value falls between one (1) and two (2) and a ratio of less than one (1`) is even better. The mean forward PSR for Consumer Staples/Tobacco companies is 1.1.

The price earnings-to-growth ratio (PEG ratio) is considered to be an indicator of a stock’s true value. A PEG lower than 1.0 is best, suggesting that a company is relatively undervalued. The mean forward PEG Ratio for Consumer Staples/Tobacco and Distillers and Vintners companies is 2.3.

The Enterprise Value-to-Earnings Before Interest, Taxes, Depreciation, and Amortization ratio (EV/EBITDA) is one of the best metrics used by value investors to evaluate a company because it accounts for the value of all financing the company has received from both equity stakes and debt allowing investors to compare profitability between companies. A high means the company is overvalued, while a low ratio indicates it’s undervalued. The mean forward EV/EBITDA ratio for Consumer Staples/Tobacco and Distillers and Vintners companies is 10.7.

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