Bega Shares ASX

In 2019 we released an article and brought Big into Bega Shares. Today I have the honor of updating that article and quoting ourselves as saying;

“PROPHET INVEST IS A SPECULATIVE BUY AT THE CURRENT PRICE OF $3.57”

In February we sold our holdings in Bega shares ASX at a price of $6.13, making us an impressive 71.70% profit. So let’s answer the question: Is Bega going Bigger?

Bega Share Price

Bega shares currently has a share price of $5.87, giving it a market cap of $1.78 Billion. BGA is up 14.34% over a one-year period. Over the course of 10-years it has averaged a decent 21.4% per year (not including it’s dividends). Really not bad for a cheese company.

Bega Shares, Bega Shares ASX, Bega Share price
Share Price

Bega Shares: Dividend History

We can see that Bega shares have an excellent dividend history, with a steadily growing rate since 2015, excluding the COVID downturn. At it’s current prices BGA has a net yield of 1.70% and a grossed-up yield of 2.43%. BGA currently has a dividend payout ratio of 63.85%.

Bega Shares, Bega Shares ASX, Bega Share price, bega Dividends
Dividend History

Bega Shares: FY2021 Outlook in Tightening Market Conditions

Bega Cheese is committed to diversifying its reach in the Australian dairy industry, growing its portfolio of high-quality food products and investing in and protecting its famous Australian brands. However, unprecedented competitive milk supply conditions and easing demand from the third party-branded businesses has changed the profit outlook for this year

In February BGA released its 1H2021 Financial results. The result demonstrates the successful execution of a number of key strategic initiatives, improvement in product mix and the ongoing transformation of the company.

1H2021 Highlights

  • Strong financial performance, balance sheet strengthening
  • Continuing to manage the impact of COVID-19
  • Volatile international dairy commodity market
  • New lactoferrin capacity completed and commissioned
  • Operational Performance Review outcomes implemented
  • National dairy production stable
  • Good performance in Australian retail market
  • Completion of Lion Dairy and Drinks acquisition on 25 January 2021

Key Financial Metrics

 1HFY20211HFY2020Change
 $ Million$ Million$ Million%
Revenue708741-33-5
EBITDA65.839.326.568
EBIT40.817.723.1131
PAT21.78.513.2154
EPS (cents per share)9.64.05.6141
Bega Shares: Financials

Here we see excellent growth in the companies profits, and a massive jump in EPS.

Bega Shares: Prophet’s Take

It’s safe to say Bega has a strong economic moat, being an Aussie Icon. Aussies will continue to buy Bega’s milk, cheese, peanut butter, and vegemite. They have a strong balance sheet and are well positioned financially. At it’s current PE ratio of 37.87x BGA seems expensive. However given the markets currently overinflated PE ratios this is in-line with the ASX 200. We see BGA as a solid company, but are currently more excited for plays by Appen.

Please Remember all Articles Published on Prophet Invest are Opinion only

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