Is it a good company at a reasonable price? There are some positives that I see with this company. The first is that the DPR for EPS and AEPS is improving and is expected to continue to improve. Also, analysts expect better growth this year. So, I am hopeful. I plan to hold on to the shares I have. The shares seem to be priced at a reasonable price.
I own this stock of Saputo Inc (TSX-SAP, OTC-SAPIF). This was a stock on Mike Higgs' Canadian Dividend Growth Stock list and on the dividend lists that I followed. I bought this stock first in 2006 for my RRSP account. Because I am now taking money from my RRSP accounts, I have been selling this stock because of the low dividend. I still like this stock so I have been buying it in my TFSA. However, it has not done well lately.
When I was updating my spreadsheet, I noticed that I have made a good return on the stock I bought in 2006 and 2007, but recent buys have not produced a good return. You can see that in the Total Return per Year chart below.
Also, that they have been increasing the dividends without doing much to increased the earnings. When this happens, the Dividend Payout Ratios increases. The DPR has gone from a relatively reasonable one in 2021 in the 40% ranges to the current one in 2024 of 117% and the 5 year running average in 2025 of 93% with the DPR non-calculable due an earning loss. The DPRs are improving and for the March 2026 financial year, they are back into the 40% range.
Note that this company has a financial year ending at March 31 each year. I am reviewing the financial year ending March 31, 2026.
Growth has been low over the past 5 and 10 years. Analysts expect some better growth in 2027. In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4 to then end of the 2026 financial year of March 31, 2026. Column 5 shows growth expected over 12 months to the first quarter in 2027 and expected growth over this financial year to March 31, 2027.
| Yr | Item | Tot. Grth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 22.79% | 4.19% | <-12 mths | -1.44% |
| 5 | AEPS Growth | 4.60% | 0.90% | <-12 mths | 2.20% |
| 5 | Net Income Growth | 7.42% | 1.44% | <-12 mths | 5.36% |
| 5 | Cash Flow Growth | 39.88% | 6.94% | ||
| 5 | Dividend Growth | 13.67% | 2.60% | <-12 mths | 1.27% |
| 5 | Stock Price Growth | 15.00% | 2.84% | <-12 mths | -2.35% |
| 10 | Revenue Growth | 59.68% | 4.79% | <-this year | 2.11% |
| 10 | AEPS Growth | 15.19% | 1.42% | <-this year | 15.93% |
| 10 | Net Income Growth | 11.80% | 1.12% | <-this year | 37.43% |
| 10 | Cash Flow Growth | 77.96% | 5.93% | <-this year | -2.22% |
| 10 | Dividend Growth | 47.66% | 3.97% | <-this year | 13.29% |
| 10 | Stock Price Growth | 4.37% | 0.43% | <-this year | 9.57% |
If you had invested in this company in December 2015, for $1,026.10 you would have bought 31 shares at $33.10 per share. In December 2025, after 10 years you would have received $215.45 in dividends. The stock would be worth $1,280.61. Your total return would have been $1,496.06. This would be a total return of 4.13% per year with 2.24% from capital gain and 1.89% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $33.10 | $1,026.10 | 31 | 10 | $215.45 | $1,280.61 | $1,496.06 |
The current dividend yield is low with dividend growth low. The current dividend yield is low (below 2%) at 1.89%. The 5 and 10 year median dividend yield are moderate (2% to 4% ranges) at 2.40% and 2.08%. The historical median dividend yield is low at 1.68%.
The Dividend Payout Ratios (DPR) are decreasing and that is good. The DPR for 2025 for Earnings per Share (EPS) is good at 48% with 5 year coverage too high at 93%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 43% with 5 year coverage at 47%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 18% with 5 year coverage at 20%. The DPR for 2025 for Free Cash Flow (FCF) is good at 31% with 5 year coverage at 36%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 48.47% | 92.98% |
| AEPS | 43.41% | 47.63% |
| CFPS | 18.11% | 20.32% |
| FCF | 31.46% | 35.93% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.13 and currently at 0.13. The Liquidity Ratio for 2025 is good at 1.71 and 1.71 currently. The Debt Ratio for 2025 is good at 2.00 and 2.00 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.00 and 1.00 and currently at 2.00 and 1.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.13 | 0.13 |
| Intang/GW | 0.20 | 0.20 |
| Liquidity | 1.71 | 1.71 |
| Liq. + CF | 2.10 | 2.09 |
| Debt Ratio | 2.00 | 2.00 |
| Leverage | 2.00 | 2.00 |
| D/E Ratio | 1.00 | 1.00 |
The Total Return per Year is shown below for years of 5 to 29 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 2.60% | 4.96% | 3.00% | 1.96% |
| 2013 | 10 | 3.97% | 4.13% | 2.24% | 1.89% |
| 2008 | 15 | 6.38% | 7.18% | 5.03% | 2.15% |
| 2003 | 20 | 7.68% | 10.95% | 8.23% | 2.73% |
| 1998 | 25 | 12.14% | 12.06% | 9.24% | 2.81% |
| 1996 | 29 | 10.31% | 8.16% | 2.16% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 16.69, 21.21, and 25.11. The corresponding 10 year ratios are 19.48, 22.42 and 25.93. The corresponding historical ratios are 11.14, 20.72 and 21.26. The current ratio is 18.60 based on a stock price of $40.91 and EPS estimate for 2027 of $2.20. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earning per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.66, 19.00 and 23.79. The corresponding 10 year ratios are 18.75, 22.38 and 24.74. The corresponding historical ratios are 16.65, 21.12 and 23.79. The current ratio is 19.39 based on a stock price of $40.91 and AEPS estimate for 2027 of $2.11. The current ratio is between the low ratio and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $28.27. The 10-year low, median, and high median Price/Graham Price Ratios are 1.27, 1.50 and 1.78. The current ratio is 1.45 based on a stock price of $40.91. The current ratio is between the low ratio and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.18. The current ratio is 2.44 based on a Book Value of $6,805M, Book Value per Share of $16.80 and a stock price of $40.91. The current ratio is 12% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 14.52. The current ratio is 11.24 based on CFPS estimate for 2027 of $3.64, Cash Flow of $1,475M and a stock price of $40.91. The current ratio is 23% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.68%. The current dividend yield is 1.96% based on a stock price of $40.91 and Dividends of $0.80. The current dividend yield is 16% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 2.08%. The current dividend yield is 1.96% based on a stock price of $40.91 and Dividends of $0.80. The current dividend yield is 6% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.96. The current P/S Ratio is 0.87. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably still reasonable. The 10 year dividend yield test says it is reasonable but above the median. The P/S Ratio test says it is reasonable and below the median. The rest of the testing runs from cheap to reasonable.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (3), Hold (3) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $47.62 with a high of $51.00 and low of $42.00. The consensus stock price of $47.62 implies a total return of 18.36% with 16.40% from capital gains and 1.96% from dividends based on a current stock price of $40.91.
There are two entries for this stock on Stock Chase for 2026. One is a Buy and the other a Partial Sell. The Partial Sell thinks that the P/E is too high. Stock Chase gives this stock 4 and one half stars out of 5. Christopher Liew on Motley Fool says to buy as it appears to be a turnaround story. Amy Legate-Wolfe on Motley Fool thinks this stock is good for your RRSP with slower growth but a reliable dividend. The company put out a Press Release for their fourth quarter ending in March 2026.
This Globe Newswire article via Yahoo Finance talk about Saputo selling 80% interest in its Dairy Division (Argentina). Simply Wall Street via Yahoo Financial reviews this stock and talks about the bull and bear view of this company. Simply Wall Street has one warning of significant insider selling over the past 3 months. Actually, it is company insiders not taking up options. Simply Wall Street gives this stock 4 and one half stars out of 5 stars.
Saputo Inc produces, markets, and distributes dairy products, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products, and dairy ingredients. The Company is a cheese manufacturer and fluid milk and cream processor in Canada, a dairy processor in Australia, a cheese producer and extended shelf-life and cultured dairy products manufacturer in the USA, and a manufacturer of branded cheese and dairy spreads in the UK. Its web site is here Saputo Inc.
The last stock I wrote about was about was Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF) ... learn more. The next stock I will write about will be Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) ... learn more on Wednesday, July 8, 2026 around 5 pm. Tomorrow on my other blog I will write about Canada’s Economy.... learn more on Tuesday, July 7, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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