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Jean Coutu a stock with the right prescription


An exterior shot of Jean Coutu store in Longueuil, Quebec, May 2, 2012

Christinne Muschi

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Quebec-based pharmacy retailer Jean Coutu Group Inc. operates 405 franchised stores across Québec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté; also owns Pro Doc Ltd., which makes generic drugs. Its U.S. subsidiary merged with U.S. firm Rite Aid in 2007

It grew EPS by 32 per cent in most recent year, and has five-year growth rate of 11 per cent. JCP attracts strong interest from our Peter Lynch-based guru model because it trades for just 6.4 times TTM EPS and has 1.7 per cent dividend yield, which makes for a solid 0.5 yield-adjusted P/E-to-Growth ratio (using five-year growth rate).

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With a very low debt/equity ratio of 2.9 per cent, JCP's return on capital is 59.8 per cent, one reason it gets some interest from the Joel Greenblatt-based model. It also as averaged a return on equity of more than 30 per cent over past 3 years

Click here for the complete breakdown of Validea's investing guru report.

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