Coffee Holding JVA Recent Quarter and New Dividend
Sales up, Gross Margin Maintained, Dividend is back
First, I want to touch on some housekeeping on some happenings with a value stock I posted on a couple years ago. The stock is Servotronics SVT. Servotronics is now the second stock I've covered here to get bought out. They got an offer from TransDigm Group Inc. in May, then another company bid, and TransDigm upped their offer. The stock is up +318% from when I covered it.
Coffee Holding Co. JVA is a leading integrated wholesale coffee roaster and dealer They just reported quarterly earnings a couple weeks ago. Coffee Holding Co. owns the popular Hispanic brand Cafe Caribe among other categories and a full range of price points. Here is my old article on it when it was 50% below NTAV.
This is my most recent article on Coffee Holding I sent out to paid subscribers. A month after this article the stock was up 81%.
They just had another profitable quarter with EPS of $.11 vs a loss in the prior year. This is the second consecutive quarter of positive EPS. Revenue was up 22%.
They announced a dividend going forward of 33% of net earnings thanks to improved free cash flow confidence.
The last year they paid a dividend was 2022 with some years of payout before also.
I did some back of the envelope math on the forward dividend, and it looks like there is a 1% to 4.8% dividend yield base case off the current share price. Going off TTM EPS the forward dividend could be $.21 a year or a div yield of 4.8% with the stock currently at $4.33.
Empire Coffee Company was a big recent acquisition for them. The acquisition will actually be accretive to next quarters earnings. This is faster than expected. Empire was a really good purchase for them as it gives them more production capacity.
Even after all this good news the stock is still trading for about net tangible asset value. It's just $1 million over NTAV now at a market cap of $24 million.
The earnings report day brought in volume of 2.1 million which is higher than the early February earnings day that sent the stock higher.
Full Disclosure: I’m long JVA