Monday, August 11, 2014

Savaria Corporation

On my other blog I am today writing about Canadian Equities in the Long Term continue...

I do not own this stock of Savaria Corporation (TSX-SIS, OTC- SISXF). I got this stock off the dividend blogger site. I am always interested in dividend growth small cap stock. The first few years of accounting were rather confusing, but I think I figured them out in the end.

This is a dividend growth stock with a good yield and some very good dividend growth. The current yield is 4.31% and the 5 year median dividend yield is 6.91%. The 5 and 8 year dividend growth is at 4.9% and 15.6% per year.

The reason for the recent low growth is that this company has changed from an annual dividend to a quarterly dividend. This has resulted in a decline in annual dividends paid, but the company has paid special dividends in 2013 and 2014. They have also increased the dividend by 75% in 2014.

The 5 year median Dividend Payout Ratio for EPS is at 76% and the 5 year median DPR for CFPS is at 35%. The DPR for EPS for 2013 was at 61% and for CFPS was at 34%. It is expected that the DPR for EPS for 2014 will be around 107% for 2014 and for CFPS around 31%. The DPR for EPS is expected to be lower for 2015.

The shareholders have done well over the past 5 years and 10 years. The 5 and 10 year total return to date is at 39.62% and 10.21% per year over these periods. The portion of this total return attributable to dividends is at 8.85% and 3.46% per year. The portion of this total return attributable to capital gain is at 30.77% and 6.76% per year.

The outstanding shares are down by 3% per year over the past 5 years and up by 4% over the past 10 years. The outstanding shares have increased due to Share Issues, Stock Options and Share Conversions. The outstanding shares have decreased due to Buy Backs. The company has had good growth in Revenue, Earnings and Cash Flow.

The Revenue has grown at 6.7% and 15.7% per year over the past 5 and 10 years. The Revenue per Share has grown at 10% and 11% over the past 5 and 10 years. EPS has grown at 32% and 10.4% per year over the past 5 and 10 years. Cash Flow per Share has grown at 30% and 11% per year over the past 5 and 10 years.

The Return on Equity was lower than 10% 6 times in the last 10 years and 2 times in the past 5 years. The ROE for 2013 was at 26.2% and the 5 year ROE is at 10.9%. The ROE on Comprehensive Income was lower for 2013 at 18.2%. The 5 year ROE for comprehensive income is a little higher at 11.2%. You have to wonder about the quality of the earnings for 2013 when the ROE comprehensive income is so much lower than the ROE on net income.

The balance sheet is quite sound with the Liquidity Ratio for 2013 at 2.04 and the Debt Ratio at 1.70. The Leverage and Debt/Equity Ratios are a little high at 2.42 and 1.42.

The 5 year low, median and high median Price/Earnings per Share Ratios are 7.09, 10.82 and 14.55. These are lower than the 10 year values of 11.24, 16.00 and 20.13. The current P/E Ratio is 14.77 based on a stock price of $3.25 and 2014 EPS $0.22. This stock price test suggests that the stock price is within a relatively reasonable range.

I get a Graham Price of $2.51. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.17 and 1.42. This stock price test suggests that the stock price is within a relatively reasonable range.

The 10 year Price/Book Value per Share Ratio is 1.85 and the current P/B Ratio is 2.56 a value some 38% higher. The current P/B Ratio is based on a BVPS of $1.27 and a stock price of $3.25. This stock price test suggests that the stock price is within a relatively expensive.

Sometimes it all depends on how you view things. The current dividend of 4.31% is lower than the 5 year average of 6.91% by some 38%. This shows that the stock price is relatively expensive. However, if you look at this year's dividend, including the special dividend, the yield is 6.91%. This shows that the stock price is reasonable.

The historical average and the historical median dividend yields are 5.94% and 5.19%. Both these are higher than the current dividend yield but lower than the current dividend and special dividend for 2014.

When I look at analyst’s recommendations, I can only find one analysts following this stock and the recommendation is a Buy. The 12 month stock price is $4.50 and this implies a total return of 42.77% with 38.46% from capital gains and 4.31% from dividends.

Sound bit for Twitter and StockTwits is: Small cap dividend growth stock, reasonable price. I think that the stock price is probably reasonable. See my spreadsheet at sis.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Savaria Corporation is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, installs and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts minivans to be wheelchair accessible. Its web site is here Savaria.

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. 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.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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