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Maple Leaf Foods: Continuing To Perform Under The Radar

Mar. 08, 2021 2:39 PM ETMaple Leaf Foods Inc. (MLFNF), MFI:CABYND3 Comments
Jeffrey Himelson profile picture
Jeffrey Himelson


  • Maple Leaf Foods delivered another great quarter and remains very undervalued.
  • Their plant protein group is quietly growing and becoming a viable competitor in the burgeoning plant-based industry.
  • Management is prudently investing in the future to spark growth while also delivering returns for shareholders in the form of increased dividends.
  • I do much more than just articles at Invest With A Stacked Deck: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

In late February, Maple Leaf Foods (OTCPK:MLFNF) reported another great quarter with revenue of C$1.13B (+10.8% Y/Y) and Q4 GAAP EPS of C$0.20. MLFNF's meat protein group saw sales increase by 11.3% Y/Y and its plant protein group saw sales increase 5.5% Y/Y.

Additionally, MLFNF is in such a good cash flow position that it was able to increase its quarterly dividend to C$0.18 per share (up from C$0.16 per share). It's notable that MLFNF is still heavily investing in growing its brands through marketing spend and building its infrastructure through capital expenditures (projected to range from C$550 million - C$650 million in 2021). MLFNF is a rare dividend paying stock with plenty of upside growth potential.

Source: Q4 Earnings Call Presentation

Despite this continued growth and improvement, the stock has remained pretty stagnant over the past few years.


Operating Segments

As I've previously covered, MLFNF has been diversifying its product base. MLFNF was previously only operating in the meat protein industry, but through acquisition and launches of its own products, MLFNF launched a plant protein group. In December 2019, MLFNF finally began to break out reporting into these separate segments so investors could have more transparency into how well the plant protein group was faring.

Management has been able to quickly grow the plant protein group and revenue in the trailing 12-month period has quickly grown from C$147 million in Q1 of 2019 to C$211 million last quarter or ($167 million USD). To give readers a point of reference, Beyond Meat (BYND) had net revenue of $406.8 million in 2020.

Source: Q4 Earnings Call Presentation

To add further color to the comparison with BYND, BYND's market capitalization stands at roughly $8.7 billion while MLFNF's is only $2.5 billion and MLFNF has a very large and profitable meat protein group. Moreover, BYND reported a net

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This article was written by

Jeffrey Himelson profile picture
Jeffrey Himelson is a corporate lawyer practicing in NYC. He previously worked as a research analyst at a hedge fund and graduated from Columbia Law School in 2017. He is best known on Seeking Alpha for his article "The Trade That Netted Me More Than a 2000% Return."Mr. Himelson is also the author of a book series to teach kids about business: Kimmy and Jimmy's Business Adventures.

Analyst’s Disclosure: I am/we are long MLFNF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (3)

Undervalued yes but underperforms due to it being a family run business. Michael McCain needs to step it up but because it is run like a family business rather than for shareholders, it underperforms. Like most family run businesses, either they to get there act together and create shareholder value or they get bought out at depressed valuations because they are incompetent. So we'll see. I have been long MFI.TO for quite a while but I am getting tired of the underperformance.......
BeaBaggage profile picture
@worldly I started a small buy here on $MLFNF Maple Leaf Foods, this CA foodstuff's co.. decent div growing, mostly family owned and seems well run. Wanted more exposure to staples. I own in my IRA so the div is not taxed by Canada due to treaty. FYI! Bea
bazooooka profile picture
Would be one to add on any dip.
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