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.
When I was updating my spreadsheet, I noticed that the company has been doing well with rising Revenue, Earnings and Cash Flow. For example, EPS has gone up by 18% and 19% per year over the past 5 and 10 years. However, for some reason analysts think that EPS will decrease this year, but the first quarter points to a slight increase in EPS for 2020.
Their web site does not show top management. I have not seen any other side not to show this information. A negative is the increasing number of outstanding shares. Outstanding shares have been increasing by 11.4% and 8.6% per year over the past 5 and 10 years.
The dividend yields are moderate with dividend growth good. The current dividend is moderate (2% to 4% ranges) at 3.47%. The 5, 10 and historical dividend yields are also moderate at 2.49%, 3.43% and 3.54%. The dividend growth has been over all good (15% per year and over) with dividend growing at 27% per year over the past 5 years. See chart below. The last dividend increase was in 2019 and it was for 16.7%. They have also paid out special dividends. But they have cut dividends in the past when the DPRs got too high.
The Dividend Payout Ratios (DPR) are too high and need improving. The DPR for EPS for 2019 is 81% with 5 year coverage at 73%. The DPR for CFPS for 2019 is 44% with 5 year coverage also at 44%. The DPR for Free Cash Flow for 2019 is 102% with 5 year coverage at 96%. Dividend Coverage Ratio for 2019 is 0.98 and the 5 year ratio is 1.04. The increase for 2019 was lower than it has been and this is a good step forward.
Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2019 is 0.07 and this is very good. The Liquidity Ratio for 2019 is 2.45 and this is also very good. The Debt Ratio is 2.54 and very good. The Leverage and Debt/Equity Ratios for 2019 are 1.63 and 0.63 and are very good.
The Total Return per year is shown below for years of 5 to 18 to the end of 2019. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 27.02% | 30.27% | 26.25% | 4.02% |
| 2009 | 10 | 30.50% | 39.22% | 32.29% | 6.93% |
| 2004 | 15 | 22.53% | 17.69% | 15.11% | 2.58% |
| 2001 | 18 | 18.73% | 16.45% | 2.28% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 20.19, 25.40 and 36.53. The corresponding 10 year ratios are 14.54, 18.92 and 22.88. The corresponding historical ratios are 14.26, 17.97 and 21.11. The current P/E Ratio is 29.47 based on a stock price of $13.26, EPS estimate for 2020 o $0.45. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $7.44. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.54 and 1.81. The current P/GP Ratio is 1.78 based on a stock price of $13.26. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 2.74. The current P/B Ratio is 2.42 based on a stock price of $13.26, Book Value of 277M, and Book Value per Share of $5.47. The current P/B Ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 12.82. The current P/CF Ratio is 20.09 based on Cash Flow per Share estimate of $0.66, Cash Flow of $33.4M and a stock price of $13.26. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.54%. The current dividend yield is 3.47% based on dividends of $0.46 and a stock price of $13.26. The current yield is 2% below the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 3.43%. The current dividend yield is 3.47% based on dividends of $0.46 and a stock price of $13.26. The current yield is 1% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.53. The current P/S Ratio is 1.82 based on Revenue estimate for 2020 of $368M, Revenue per Share of $7.27 and a stock price of $13.26. The current ratio is 19% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests show that the stock price is around the median. The P/S Ratio test show that it is above the median. The P/B Ratio test show the stock price below the median.
Is it a good company at a reasonable price? They have increasing Revenue, Earnings and Cash Flow, but are also increases outstanding shares. I think that the company is good, but growth maybe uneven. Dividend increases may decline. However, I suspect that they will do well long term.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (4). The consensus would be a Buy. The 12 month stock price consensus is $15.39. This implies a total return of 19.53% with 16.06% from capital gains and 3.47% from dividends.
Analysts on Stock Chase think the company has growth potential. Ambrose O'Callaghan on Motley Fool thinks this company is a great small cap for your TFSA. A writer on Simply Wall Street says that increases in outstanding shares is likely hurt its dividend prospects. A writer on Simply Wall Street says the stock is selling below its intrinsic value of $17.55 but there is high uncertainty for this company in the near term. The company announces two new contracts on Globe Newswire.
Savaria Corp designs, engineers, and manufactures products for personal mobility. Its products include home elevators, wheelchair lifts, commercial elevators, ceiling lifts, stair lifts, and van conversions. The company's operating segments are the Accessibility, the Adapted Vehicles, and the Patient Handling divisions. 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 Friday, July 31, 2020 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks for 2020.... learn more on Thursday, July 30, 2020 around 5 pm.
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