Friday, August 4, 2017

Savaria Corporation

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. From what I see, the stock price on this company is very high. The price is relatively very high for this type of stock. I guess people see companies supplying things for the old as very profitable. See my spreadsheet on Savaria Corporation .

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.

What I noticed doing the spreadsheet update is the lack of consistency, especially in dividends. Overall growth is good through. They have just gone up and down a lot. Also there have been a couple of special dividends. Overall the dividends have increase by 12.4% and 25.6% per year over the past 5 and 10 years.

Dividends are currently low, but they have been moderate to good in the past. The current dividend is just 1.74%. The 5, 10 and historical median dividend yields are 3.54%, 4.64% and 3.89%. The historical high is very high at over 12% and this was because the stock took a dive in 2008.

Currently they can afford their dividends. The Dividend Payout Ratio for EPS for 2016 is 63% with 5 year coverage of 74.7%. The DPR for EPS is expected to go lower in the future. They did have DPR for EPS over 100% in 2011 which caused them to cut the dividends some 33%.

The 2011 dividend cut is the third time they cut or suspended dividends and dividends have just been paid since 2001. They have had big dividend increases and big dividend cuts in the past. So, I would not count on them doing anything different in the future.

Debt ratios have also varied, but are generally quite good. The 2016 Liquidity Ratio is 3.39 with a 5 year median of 2.49. The 2016 Debt Ratio is 2.92 with a 5 year median of 2.04. There are good as what is normally thought of as decent ratios is those 1.50 and above. The 2016 Leverage and Debt/Equity Ratios are 1.52 and 0.52 respectively with 5 year medians of 2.03 and 1.03. They have little long term debt with Long Term Debt/Market Cap at 0.03.

The Return on Equity has varied a lot, but it has only been below 10% once in the past 5 years, but 4 times in the past 10 years. The 2016 ROE is 14.8% with a 5 year median of 17.5%. The Comprehensive Income ROE for 2016 is 20.2% with a 5 year ROE of 11.4%. The difference between the ROE on Net Income and Comprehensive Income has also varied a lot.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.26, 18.41 and 22.18. Corresponding 10 year values are 10.91, 15.40 and 19.40. The historical ones are 13.37, 17.29 and 20.63. The current P/E Ratio is 29.37 based on a stock price of $14.98 and 2017 EPS estimate of $0.51. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $5.27. The 10 year low, median and high Price/Graham Price Ratios are 0.93, 1.17 and 1.42. The current P/GP Ratio is 2.84 based on a stock price of $14.98. This is a very high Price/GP Ratio for this sort of a company. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 6.18 based on Book Value of $91.6M, BV of $2.42 and a stock price of $14.98. The current P/B Ratio is some 234% above the 10 year median ratio. A P/B Ratio of 6.18 is very high for this sort of a company. This stock price testing suggests that the stock price is relatively expensive.

The historical dividend yield is 3.89%. The current dividend yield is 1.74% based on dividends of $0.26 and a stock price of $14.98. The current dividend yield is some 55% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 0.61. The current P/S Ratio is 3.01 based on 2017 Revenue estimate of $188M, Revenue per Share of 4.98 and a stock price of $14.98. The current P/S Ratio is some 397% above the 10 year median P/S Ratio. This stock price testing suggests that the stock price is relatively expensive.

There is a lot of insider selling with the percentage of insider selling to market cap at 0.32%. Normally this ratio is around 0.02%. INK shows selling mostly by directors, but since I review this stock last year both the CEO and CFO are holding fewer shares. The problem of with selling is that you never know why and it could be unconnected with how the company is doing.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. There are only 5 analysts following this stock. The consensus recommendation would be a Buy. The 12 month target price is $16.80. This implies a total return of 13.89% with 1.74% from dividends and 12.15% from capital gains.

From the Investment Reporter there is a good report via Daily Buy Sell Advisor. The Investment Reporter also thinks that the stock is costly but might be suitable for aggressive investors. Marguerite Chambers on Finance News Daily talks about this company getting Buy ratings. Staff of Financial News Week give some technical analysis on this stock. See what analysts are saying about this stock on Stock Chase. They mostly like this company.

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 Corporation .

The last stock I wrote about was about was TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more. The next stock I will write about will be Ballard Power Systems Inc. (TSX-BLDP, NASDAQ-BLDP)... learn more on Tuesday, August 8, 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.

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