Monday, June 26, 2017

Saputo Inc

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Price is reasonable, but above the median. That means that the price is relatively high but not excessively so. This is a good stock and it is a dividend growth stock in the consumer sector. It is a bit pricy, but that is all. See my spreadsheet on Saputo Inc.

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.

Dividends have generally been low. The current dividend yield is 1.44%. The historical median yield is 1.73% and the 5 and 10 year median dividend yields are 1.56% and 1.75%. The dividend growth used to be good and it has a 10 year growth of 21.8% per year. However, lately it has been moderate with the 5 year dividend growth at 9.9%. The last dividend change was for 11.1% and it occurred in 2016.

They can afford their dividends. The Dividend Payout Ratio for EPS for 2016 is 31.8% and the 5 year coverage is 33.4%. The DPR for CFPS is 17.1% and the 5 year coverage is 17.8%. The dividend growth is down because the growth in EPS is down.

The debt ratios are quite good. The Liquidity Ratio is 1.99 and the Debt Ratio is 2.98 for 2016. Good ratios are 1.50 and above, so these are quite good. The Leverage and Debt/Equity Ratios are also quite good at 1.76 and 0.76.

The other thing to mention is the Return on Equity (ROE). I have about 22 years of data and the ROE has not been lower than 10% in any of these years. The current ROE is 16.9% and the 5 year median is also 16.9%.

I look at my spreadsheet and all I see is green. There is good growth in Revenue, Earnings and Cash Flow.

I get 5 year Price/Earnings per Share of $17.99, 21.17 and 24.35. The 10 year corresponding ratios are 16.97, 19.12 and 22.02. The corresponding historical ratios are 14.79, 18.19 and 21.18. The current P/E Ratio is 19.77 based on a stock price of $41.71 and 2017 EPS estimate of $2.11. This stock price testing suggests that the stock price is relatively reasonable. It is basically around the median.

I get a Graham price of $23.05. The 10 year low, median and high median Price/Graham Price Ratios are 1.55, 1.79 and 2.01. The current P/GP Ratio is 1.81. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a 10 year median Price/Book Value per Share Ratio of 3.51. The current P/B Ratio is 3.73. This is based on a stock price of $41.71 and BVPS of $11.19 (BV $4.323M). The current P/B Ratio is some 6% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The historical dividend yield is 1.73%. The current dividend yield is 1.44% based on a stock price of $41.71 and dividends of $0.60. The current dividend yield is some 16.9% lower than the historical one. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The 10 year P/S Ratio is 1.20. The current P/S Ratio is 1.37 based on a stock price of $41.71, 2017 Revenue estimate of $11,754M and 2017 Revenue per Share estimate of $30.43. The current ratio is some 14.4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price is $47.67. This implies a total return of 15.73% with 14.29% from capital gains and 1.44% from dividends based on a current stock price of $41.71%.

Ryan Goldsman at Motley Fool seems to like this stock. Staff at Union Trade Journal gives some technical scores for this stock. They say that the Piotroski F-Score is 8 which mean the stock is a high value stock. Daniel Jordon on Sports Perspectives talks about what some analysts are recently saying about this stock. See what analysts are saying about this stock on Stock Chase. They mostly like it.

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 Inc.

The last stock I wrote about was about was Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more. The next stock I will write about will be AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Wednesday, June 28, 2017 around 5 pm. Tomorrow on my other blog I will write about T-Bills and Stocks ... learn more on Tuesday, June 27m 2017 around 5 pm.

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. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.


  1. I'd wait on this stock till we see what sort of trade negotiations take place on Dairy in the near future.

  2. Howdy, i read your blog occasionally and i own a similar
    one and i was just wondering if you get a lot of spam feedback?

    If so how do you protect against it, any plugin or anything you can suggest?
    I get so much lately it's driving me crazy so any help is very much appreciated.

    1. Every once in a while a get a bunch of span. However, I delete spam just as soon as it appears. This seems to really cut down on the frequency of the spam.