Clarification - NOT a Comparitive P/EDear hamstra,
Thank you for the post regarding Lassonde - it is an interesting, but ultimately not directly comparable company, and the financial differences between Lassonde and Sun-Rype more than make up for the 2 point difference in the P/E ratios, as there are compelling reasons to value Lassonde less "richly" than Sun-Rype.
While it looks like Lassonde has similar "net margins" to those of Sun-Rype (both companies have net margins of approx. 5.2%), Lassonde has over $33 million in debt, while Sun-Rype has none. That is relevant, because if someone were to buy either Lassonde or Sun-Rype (ie: buy the whole company), the price paid (a multiple of profitability) would then be discounted by the amount needed to pay off the debt. Clearly having $33 million in debt is a factor that counts against Lassonde, and being debt free is a plus for Sun-Rype.
Another item contributing to Lassonde's lower P/E ratio is that the shares with which that P/E ratio is associated do not carry any "control" of the company with them. This is because the only shares of Lassonde that trade publicly are the SUBORDINATED voting shares, which carry 1 vote each. Lassonde also has an equal number (about 3.7 million) of MULTIPLE voting shares, which carry 10 votes apiece. This means that there will never be any "control premium" paid for the Lassonde Subordinated Voting shares. That is very different from the share structure at Sun-Rype, where there is only one class of common shares, and hence a "control premium" would apply to the shares in the event of a takeover.
As for the dividends, since Sun-Rype started paying a quarterly dividend, they have not missed one payment, and they are generating lots of free cash flow - the recent "special dividend" is proof of that. You can get away with a special dividend if you don't have things like big debt payments to make.
Overall, it's not hard to see why - and in my view correctly - the market is valuing Sun-Rype shares higher than those of Lassonde (and it's really only a slight premium anyways).
Appreciate you bringing Lassonde to our attention, but I'm sticking with Sun-Rype!
Best regards,
VentureGuy.