Valued at a market cap of $1.5 billion, Andlauer Healthcare (TSX:AND) is a provide chain administration firm. It gives a platform of personalized third-party logistics (3PL) and specialised transportation options for the healthcare sector in Canada and the U.S.
At present, the TSX inventory is down 30% from all-time highs. Regardless of the continued pullback, the Canadian tech inventory has returned round 100% to shareholders since its preliminary public providing in December 2019. Let’s see why you could possibly purchase the dip in AND inventory and profit from outsized beneficial properties in 2025 and past.
Is the TSX inventory an excellent purchase proper now?
Andlauer Healthcare is Canada’s unique nationwide temperature-controlled healthcare provide chain companies supplier. It serves the highest 25 international pharmaceutical producers and manages roughly $7 billion in pharmaceutical product distribution throughout Canada.
Andlauer has established itself as a most popular associate for healthcare distributors. As an illustration, its shopper retention charge is spectacular, with common relationships exceeding 15 years for its prime 20 shoppers.
Its in depth infrastructure spans 39 amenities, totalling over 2.2 million sq. toes throughout Canada. This contains 32 temperature-controlled amenities and 7 third-party cross-dock places. Andlauer’s specialised fleet options validated temperature monitoring programs, complemented by proprietary Crēdo thermal packaging for versatile temperature administration starting from ultra-cold (-70°C) to ambient (25°C).
Since 2021, Andlauer has expanded into the U.S. market by means of strategic acquisitions of Skelton USA and Boyle Transportation, offering specialised healthcare logistics throughout all 48 contiguous states. Boyle Transportation notably diversifies income, with 25-30% coming from authorities and defence sectors.
Is the TSX dividend inventory undervalued?
Andlauer reported report annual income of $650.5 million within the fourth quarter (This fall) whereas sustaining a strong EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) margin of 25.9%, close to the higher finish of its 24-26% goal vary. Canadian floor transportation income, excluding gasoline, elevated 6.3% 12 months over 12 months, pushed by greater volumes from pharmaceutical and biologics shoppers, which offset weak spot in client well being merchandise.
Healthcare Logistics noticed 10.4% progress, pushed by a 25.2% surge in packaging options income. In the meantime, U.S. operations confronted headwinds in what administration described as “the Nice Freight Recession,” with floor transportation income declining 17% 12 months over 12 months in This fall.
Regardless of these challenges, Andlauer maintained its shareholder-friendly capital-allocation technique, elevating its quarterly dividend to $0.12 per share whereas actively repurchasing shares. In 2024, the corporate purchased again over 266,000 shares for $10.4 million below its buyback program.
Andlauer Healthcare is forecast to report a free money movement of $102.7 million in 2025. Given its excellent share depend, the corporate’s annual dividend expense is round $17 million, indicating a payout ratio of 17%. The healthcare enabler has greater than doubled its dividend payout within the final three years and at the moment presents a yield of 1.1%.
With $40.5 million in money, a conservative web leverage ratio of 0.86, and a working capital of $62.7 million, Andlauer stays well-positioned for strategic acquisitions. Additionally it is investing in further cooler house capability, together with a brand new facility in Boucherville, to capitalize on rising biologics and vaccine distribution alternatives.
Priced at 21.6 occasions ahead earnings, the TSX dividend inventory in all fairness valued and trades at a reduction of 28% to consensus worth targets.
