On my other blog I am today writing about an article about What Works in Investing continue...
Sound bite for Twitter and StockTwits is: Dividend growth small cap. There are some good and bad points about this stock. They are certainly in an industry that will boom with an aging population. See my spreadsheet at sis.htm.
I do not own this stock of Savaria Corporation (TSX-SIS, OTC-SISXF). I got this stock off the Dividend Blogger site that no longer exists. 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.
One thing I do not like is that I cannot find out who the Chairman of the Board is and who is on the Board of Directors from Savaria's site. This is very unusual. Under Leadership they mention that Marcel Bourassa is CEO and President but failed to mention he is also the Chairman of the Board. He is stated as Chairman of the Board on their statements. Nowhere on the site or the financial statements do they say who is on the Board of Directors. I had to go to the Bloomberg site to find this out. Why are they not providing such basic information?
A second thing I saw that I did not like was the big difference between Comprehensive Income and Net Income. The Return on Equity for Comprehensive Income was 11.4% and the ROE for Net Income was 17.5%. Generally, the problem here is that the earnings are not of good quality. This is just a cautionary note.
The last thing is positive. The company has a lot of cash on hand at the end of the year and at the end of the second quarter. The percentage of the stock's cost of cash on hand is 12.7% at the end of 2014 and 16.5% at the end of the second quarter. So, currently the company has some $0.98 on hand for each outstanding stock.
This is a small cap stock with dividends. Its dividend is moderate and the dividend growth is good. The Dividend Payout Ratios are currently too high. The current dividend is 2.7%. Dividends have been higher in the past as the 5 year median dividend yield is 6.9%, but a lower historical median at 3.6%. The dividend growth over the past 5 and 9 years is at 34% and 20% per year.
The DPR for EPS for 2014 is at 104%. The 5 year median DPR for EPS is at 104% also. This DPR is expected to drop to around 59% in 2015. The DPR for CFPS is at 63% in 2014. The 5 year median DPR is 49%. This rate will also drop in 2015.
The outstanding shares have increase by 5.9% and 6.6% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options. Shares have decreased due to Buy Backs. There used to be more than one type of shares, but there is only one type now. Revenue growth is low to moderate, Earnings growth is good and Cash Flow growth is moderate to good.
Revenue per Share is up by 2.4% and 7.1% per year over the past 5 and 10 year. EPS growth is up by 20.9% and 9.2% per year over the past 5 and 10 years. Cash Flow per Share is up by 15.2% and 7.4% per year over the past 5 and 10 years.
Return on Equity was above 10% 3 times in the last 5 years. The ROE for 2014 was 17.5% and the 5 year median is 10.9%. The ROE on Comprehensive Income was 11.4% in 2014 and the 5 year median was 11.2%. There has been divergence of the comprehensive income and net income in the past also.
Debt Ratios are good. The Liquidity Ratio for 2014 is 2.49. The Debt Ratio is 2.04 and Leverage and Debt/Equity Ratios are 1.96 and 0.96.
This is the first of two parts. The second part will be posted on Tuesday, August 11, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.
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.
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