Pacific Trader: Rogers Sugar thrives on our sweet addiction

Rogers stock has mostly been rangebound between $5 and $6 for years. But if it's income you're hungry for, you'll be salivating at that sweet 6-percent dividend yield.

With a wide range of baking and flavouring products, Rogers Sugar leads Canadas sugar market

Starved for income? Take a bite of this food processor’s 6-percent dividend yield

The stock: The visions of sugarplums dancing in your head at this time of year serve as a reminder that Rogers Sugar (TSX:RSI), at 131 years of age one of B.C.’s oldest companies, probably still has many good years ahead of it.

The drivers: Granted, this is no double-your-money growth opportunity. Rogers stock has mostly been rangebound between $5 and $6 for years. (Lately it’s been trading at the top end of that band, hitting $5.98 on Tuesday.) But if it’s income you’re hungry for, you’ll be salivating at that sweet 6-percent dividend yield. And as a consumer-facing company, Rogers is well placed to pass on any inflationary pressures to its customers and maintain its margins.

Founded by Philadelphia-born entrepreneur Benjamin Tingley Rogers in 1890, the company has refined sugar from cane grown around the Pacific Rim at its Dickensian-looking factory on the East Vancouver waterfront ever since. Later augmenting that property with a sugar beet facility in Taber, Alta., Rogers Sugar merged with Montreal-based Lantic Sugar in 2008. Since then the organization has held a leading share of the Canadian sugar market, with a sideline in maple syrup.

And though the medical and dental professions constantly warn us away from sugar, we just can’t seem to quit it. Rogers Sugar’s volume sales increased 2.4 percent, to 779,505 tonnes, for the year ended October 2, despite the fact there was one fewer operational week this fiscal year versus 2020, according to unaudited financial statements released last week. During that period, the company earned $47.5 million on revenue of $894 million.

Word on the street: Following the lead of other analysts, Desjardins Securities‘ Frederic Tremblay raised his target for the company to $6 from $5.75 with a “hold” rating, citing management guidance for improved margins and the dissipation of operational headwinds (a disappointing sugar beet crop in Alberta and pandemic-related supply chain issues) in 2022.

Coming and going: Vancouver-based Ascot Resources (TSX:AOT) has received a B.C. government permit to proceed with construction of its $353-million Premier Gold Project in the Golden Triangle, 25 kilometres from Stewart. The new mine, on the site of the historic Premier Mine, is expected to start production in 2023.