Health and Wellness for your Portfolio
The Canadian IPO market has bounced back from a stagnant year last year to have a flurry of activity this year. However, many of the companies who have gone to public markets recently have been flat or struggled (Aritzia, Freshii, Real Matters, and of course multiple energy names). Bento Sushi even had to cancel their IPO completely and Canada Goose was the only really strong newly listed performer in the first half of the year. However, another interesting Canadian company will soon be available in Jamieson Wellness (JWEL). Most individuals know this company as the largest vitamin provider in Canada which also has a global presence in several areas. To say strong stocks in the Canadian healthcare sector are lacking would be a drastic understatement. After Valeant and Concordia the sector is mostly compiled of small caps struggling to remain relevant. To make matters worse, there have only been a few able to maintain regular dividends: Medical Facilities (who have had their stock price decimated recently), Savaria (an accessibility provider that has done exceptionally well to the point that the yield is fairly minimal) and previously Prims Medical (which was a takeover by Savaria). By comparison the US and European healthcare sectors are filed with large, relatively stable dividend paying companies. For these reasons the addition of Jamieson Wellness to the TSX will likely be welcomed with open arms. The company indicated in their prospectus that they intend to pay a dividend of $12 million per year, which based on expected valuation of $600 million is still meaningful. The company is showing positive growth and global expansion to the point that they were seeking a sale last year for a valuation in the $1 billion range so the valuation seems fairly reasonable even at the high end of the expected price range. The Canadian market was not impressed with the food or housing sector IPO options this year and the apparel market provided one winner and one loser, but adding this healthcare stock to any portfolio should be a healthy choice.