Tuesday, July 12, 2011

Saputo Inc

I own this stock (TSX-SAP, OTC- SAPIF). I first bought this stock in September 2006 and I bought more in May and June of 2007. To date, I have made a return of 23% per year. Around 2% per year of this total return is attributable to dividends.

This stock is considered to be a dividend paying growth stock. The median dividend increases over the past 10 years is around 19%. This is higher than for the last 5 years where the median increase was around 9%. However, the last increase was better at 10%.

The 5 and 10 year growth in total return on this stock was around 20% per year, with around 2% per year attributable to dividend payments. You would buy this stock to earn capital gain and some increasing dividend income.

Bye all measures, this stock has had positive growth over the past 5 and 10 years. Revenue per share has grown at 9% and 11% per year, respectively. Earnings per Share, over the past 5 and 10 years, have grown at 19% and 15% per year, respectively.

Cash Flow has grown at 19% and 13% per year over the past 5 and 10 years, respectively. And lastly, Book Value per shares has grown over the past 5 and 10 years at 9% and 11% per year, respectively. It is all good.

Some debt ratios are better than others, but they are all fine. The worse is Liquidity at 1.35 (which I would rather see at 1.50. However, the 5 and 10 year median Liquidity Ratio is 1.51 and 1.61, so it is just low this year. They seemed to have taken a bank loan to finance part of an acquisition. This company has been growing both organically and by acquisitions.

The Return on Equity has also been great on this company. The ROE for financial year ending March 2011 was 21.2% and the 5 year median ROE is 17.8%. This company has done very well.

I am, of course, pleased with my investment in this company. This company is in the RRSP part of my portfolio. As I sell off on the RRSP side and move money to my trading account, I will retain this stock. It is a consumer staple stock and is of median risk.

If you are planning to add a consumer stock to your portfolio, you might want to consider this one. (See my site for information on setting up a portfolio.) Generally speaking, consumer stocks do have good yields, but they often have good dividend increases.

This company is a dairy processor and cheese producer in Canada, USA, Argentina, UK and Europe. It is also the largest snack-cake manufacturer in Canada that accounts for about 3% of its business. Its web site is here Saputo. See my spreadsheet at sap.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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