Saputo Inc.

On my other blog I am today writing about how my dividend growth calculation spreadsheets match up with what really happened. continue...

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer Staple Stock. I think that if you are putting together a portfolio for future income, you should include stocks with low dividend yield and high dividend growth. See my spreadsheet at sap.htm.

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.

This stock has a low dividend and good dividend increase. However, dividend increases have been slowing down lately. The current dividend yield is 1.79% and the 5 year median is 1.74%. The 5 and 10 year dividend growth is at11.9% and 22.9% per year.

I have had this stock in my RRSP for some 9 years. Currently I am earning 5.62% dividend yield on my stock's original cost. If you had been a shareholder for 5, 10 or 15 years, you could be making 2.9%, 5.6% or 11.7% dividend yield if you paid a median price for this stock. Also after 5, 10 or 15 years, the dividends could have covered 12.6%, 38.4% and 93.4% of the original cost of the stock if you paid a median price.

I have earned a total return of 17.94% per year on this stock. The portion of my total return attributable to dividends is 2.19% and the portion attributable to capital gains is 15.75%. The total return over the past 5 and 10 years is at 9.97% and 15.40% per year with 8.04% and 13.11% per year from capital gains and 1.93% and 2.29% from dividends. When buying stock it is a good idea to buy stock below the relative median price.

The outstanding shares have decreased by 1.1% and 0.6% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and decreased due to Buy Backs. Because shares have decreased it is a good idea to keep an eye on things like Net Income rather than EPS. Revenue, Earnings and Cash Flow have grown at a good rate over the past 5 and 10 years.

Revenue has grown at 12.9% and 10.6% per year over the past 5 and 10 years. Revenue per Share has grown at 14.1% and 11.3% per year over the past 5 and 10 years. Analysts only expect modest growth in Revenue at 2.6% for the next financial year which ends in March 2016.

Net Income has grown at 13.1% and 11.2% per year over the past 5 and 10 years. EPS has grown at 10.8% and 10.8% per year over the past 5 and 10 years. Analysts still expect good growth in EPS for the next financial year ending in March 2016 at around 9.8%. Net Income growth is expected to be a bit better at 10.4%.

Cash Flow has grown at 10.6% and 115 per year over the past 5 and 10 years. CFPS has grown at 11.4% and 11.7% per year over the past 5 and 10 years. Analysts also expect good growth in Cash Flow for the next financial year ending in March 2016 at around 16%.

This stock was first issued in 1997 and since then the Return on Equity has been over 10% each year. The ROE for the financial year ending in March 2015 was 16.7% and the 5 year median is 18.8%. The ROE on Comprehensive Income is even better at 26.3% for the financial year ending in March 2015. The 5 year median is 21.3%.

Debt ratios have generally always be good. The Liquidity Ratio for the financial year of March 2015 is at 1.63. It is better than it has been recently as the 5 year median is just 1.35. The 10 year median ratio is better at 1.53. The Debt Ratio has always been quite good and the ratio for the financial year of March 2015 is 2.14. This ratio has a 5 year median of 2.14.

The Leverage and Debt/Equity Ratios have varied over time, but they are good for the financial year ending in March 2015 at 1.87 and 0.87. The 5 year median ratios are 1.72 and 0.72 respectively.

This is the first of two parts. The second part will be posted on Thursday, July 16, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Saputo produces, markets, and distributes a wide array of products of the utmost quality, including cheese, fluid milk, yogurt, dairy ingredients and snack-cakes. Saputo is the twelfth largest dairy processor in the world, the largest in Canada; the third largest in Argentina and among the top three cheese producers in the United States. Their products are sold in more than 50 countries under well-known brand names. Its web site is here Saputo.

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.

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