Small capped Vita Life Science has been paying consistent dividends for years
\nThe company sells vitamins and supplement products including Herbs of Gold
\nStockhead reached out to VLS\u2019s managing director, Andrew O\u2019Keefe<\/p>\n
\u00a0<\/p>\n
Small-capped healthcare stocks may sound like a poor dividend investment when you consider that most have not even reached revenue stage.<\/p>\n
But when digging deeper into this ASX cohort, we found a stock that\u2019s been paying dividends consistently for at least the last 10 years.<\/p>\n
Vita Life Sciences (ASX:VLS)<\/a><\/strong>, a $95m capped distributor of vitamins and supplement products, has been handing out consistent payouts to its shareholders as far back as 2014.<\/p>\n \u00a0<\/p>\n Vita Life Science\u2019s historical dividend payments:<\/strong><\/em><\/p>\n \u00a0<\/p>\n Source: Commsec<\/strong><\/em><\/p>\n \u00a0<\/p>\n The company sell its own brands \u2013 \u00a0Herbs of Gold<\/strong><\/a> and VitaHealth<\/strong> \u2013 to selected pharmacies and specialised health food channels all over the country, and in overseas markets including Malaysia, Singapore, Vietnam, Indonesia, and of course, China.<\/p>\n \u201cWe\u2019re predominantly a vitamins and supplements business,\u201d explained Vita Life Science\u2019s managing director,<\/strong> Andrew O\u2019Keefe.<\/strong><\/p>\n \u201cWe are the brand owners. We utilise third party manufacturers, but for all intents and purposes, we sell and distribute our own vitamins and supplements across Australia and several Southeast Asian markets,\u201d he told Stockhead<\/em>.<\/p>\n O\u2019Keefe says that Herbs of Gold<\/em> is predominantly known within the Australian market, whereas VitaHealth<\/em> is predominantly sold in Southeast Asia.<\/p>\n \u201cWe formulate those products ourselves. We have our own team of internal naturopaths, nutritionists and dietitians that formulate our products in conjunction with our manufacturing partners.\u201d<\/p>\n \u00a0<\/p>\n Sales are expected to hit around $73m-$74m in FY23, up from $66.9m in the previous year, with official numbers to be released soon.<\/p>\n On the back of that revenue, VLS expects bottom line profit to hit the $11.3m-11.8m range, up from $10.7m in FY22.<\/p>\n The company said that it saw sales growth during the year in all its major markets: Australia, Malaysia, as well as its exports into China.<\/p>\n \u201cIt\u2019s proven now and over time that even in the most difficult financial economies, consumers are still looking after their health and wellbeing,\u201d said O\u2019Keefe.<\/p>\n \u201cCovid proved that. People are looking for alternative sources to maintain their health and make sure their dietary requirements are where they need to be \u2013 basically to be fit and healthy.<\/p>\n \u201cSo, it\u2019s really an industry that holds up in any economic situation,\u201d he added.<\/p>\n Each of Vita\u2019s two products has different formulations, but essentially the company has positioned itself as a high-end, natural vitamins and supplements provider.<\/p>\n \u201cOur positioning on both brands is we have high-strength formulations.<\/p>\n \u201cSo we\u2019re very much at the premium end of the product proposition, and that\u2019s why our margins and our pricing reflects that,\u201d said O\u2019Keefe.<\/p>\n \u00a0<\/p>\n In Australia, the products are currently sold in more than 2,000 selected health food and pharmacies like Priceline<\/em>, Blooms<\/em>, and Terry White<\/em>.<\/p>\n O\u2019Keefe admits that when he joined Vita in 2017, he felt the company\u2019s channel strategy was too narrow, as it was just an exclusive brand for the health food channel.<\/p>\n \u201cSo we deployed a deliberate strategy to expand our business into pharmacies.<\/p>\n \u201cNow, we\u2019ve got a very clear channel strategy, and that we\u2019re very selective around how and who we partner with. And that gives us a point of difference with some of our competitors.<\/p>\n \u201cWe\u2019ve also been in the market for a long time, particularly here in Australia for over 30 years now with the Herbs of Gold brand, so there\u2019s been a long association and relationship with consumers that are familiar with our brands.\u201d<\/p>\n In terms of expansion, O\u2019Keefe believes there\u2019s an opportunity to grow in some of the countries it\u2019s already selling in, such as China and Vietnam.<\/p>\n In China, the company partners with a distributor which handles sales across all the major e-commerce platforms in the country.<\/p>\n But while China is an obvious big target, it\u2019s Vietnam that O\u2019Keefe says he will focus his attention on outside of Australia.<\/p>\n \u201cVietnam is an interesting market, and we feel that that it has some good growth prospects for us. A lot of companies are looking at Vietnam as the next new emerging market.<\/p>\n \u201cThe economy is doing reasonably well, with reasonably high level of middle class.\u201d<\/p>\n \u00a0<\/p>\n Given all this growth potential that lays ahead, O\u2019Keefe believes the market may have overlooked the stock.<\/p>\n The company has a healthy balance sheet, with a solid cash position; it carries no debt, and has not raised any funds since listing in 2007.<\/p>\n \u201cWe\u2019ve got a business that has really good strong growth prospects.<\/p>\n \u201cWe\u2019ve got a consumer that has an appetite to continue to look after themselves in a healthy and meaningful way.<\/p>\n \u201cAnd we\u2019ve got a company here that has proven itself to have good strong financial disciplines and deliver returns over the long term,\u201d said O\u2019Keefe.<\/p>\n The VLS share price has climbed 20% in the past six months.<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span>\u00a0<\/p>\n Wellnex Life (ASX:WNX)<\/a><\/strong><\/p>\n Wellnex is a developer of some of Australia\u2019s leading health brands, including Wakey Wakey<\/em>, Nighty Night<\/em>, The Iron Company<\/em>, and recently acquired Pain Away<\/em>.<\/p>\n The company has two joint ventures in place with Chemist Warehouse<\/em> for Wagner Health Liquigesic<\/em>, as well as medicinal cannabis.<\/p>\n Wellnex also owns the TGA registration of assorted liquid soft gel analgesics, which is licensed and\/or supplied to major pharmaceutical brands in Australia and offshore.<\/p>\n Looking ahead, Wellnex said the recently launched brands during 2H FY23 are expected to accelerate during FY24, and will lead to improved gross margins and profitability.<\/p>\n \u00a0<\/p>\n Vitura Health (ASX:VIT)<\/a><\/strong><\/p>\n Vitura Health is a cannabis focused company that owns CanView<\/em>, an online platform that delivers prescribing, dispensing and medication management solutions for plant medicine.<\/p>\n The company\u2019s subsidiaries include Melbourne-based Cortexa<\/em>, one of the only companies in the world able to supply validated psychedelics ready for patient use.<\/p>\n It also owns CDA Clinics, <\/em>a company that provides medicinal cannabis consultations and prescription services in Australia since 2018.<\/p>\n In addition, Vitura recently acquired Doctors on Demand<\/em>, a nationwide 24\/7\u00d7365 telehealth platform business with a current annual run rate of ~300k consults.<\/p>\n The company has also recently partnered with WholeLife Pharmacy<\/em>, a specialised health foods & wellness network.<\/p>\n \u00a0<\/p>\n Anagenics (ASX:AN1)<\/a><\/strong><\/p>\n Anagenics is a beauty, health, and wellness company with owned brands that include \u00e9volis<\/em> and USPA<\/em>.<\/p>\n Over the last few years, the company has been growing its revenue to $9.9m in FY23, and narrowed its bottom line loss to -$1m.<\/p>\n The company says it will be looking to grow by entering into earnings accretive M&A opportunities.<\/p>\n Anagenics has also recently brought in a new CEO, Scott Greasley, who brings 15 years of experience building market-leading profitable businesses.<\/p>\n \u00a0<\/p>\n The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.<\/em><\/p>\n Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.\u00a0<\/em><\/p>\n <\/span><\/p>\n The post Healthy balance sheet with no debt, this overlooked ASX health stock has been paying dividends for years<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Premium end of market<\/h2>\n
Overseas expansion<\/h2>\n
A healthy balance sheet<\/h2>\n
Vita Life Science share price today:<\/h2>\n\n
Other ASX stocks in this space<\/h2>\n