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 this stock has done very well. I see all sorts of green ink. This has been a great dividend growth stock for its shareholders.
The dividend yields are moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.38%. The 5, 10 and historical dividend yield is also moderate at 2.49%, 3.43% and 3.62%. The dividend growth is good (15% and over) at 22.28% per year over the past 5 years. However, the last increase was in 2020 and it was for 4.4%. There has been no increase in 2021.
The Dividend Payout Ratios (DPR) need improving. The DPR for EPS for 2020 is 89% with 5 year coverage at 78%. The DPR for EPS is increasing faster than EPS. The DPR for CFPS is 42% with 5 year coverage at 43%. The DPR for Free Cash Flow is 50% with 5 year coverage 75%.
Debt Ratios are very good. The Long Term Debt/Market Cap Ratio or 2020 is 0.07. This is good and low. The Liquidity Ratio for 2020 is 2.67. The Debt Ratio for 2020 is 2.61. The Leverage and Debt/Equity Ratios are 1.62 and 0.62.
The Total Return per year is shown below for years of 5 to 19 to the end of 2020. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 22.28% | 25.50% | 21.28% | 4.21% |
| 2010 | 10 | 18.66% | 30.21% | 24.78% | 5.42% |
| 2005 | 15 | 21.51% | 17.13% | 14.29% | 2.84% |
| 2001 | 19 | 18.21% | 15.74% | 2.47% |
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, 21.05 and 26.14. The corresponding historical ratios are 14.29, 18.19 and 21.64. The current P/E Ratio is 28.84 based on a stock price of $20.19 and EPS estimate for 2021 of $0.70. The current P/E Ratio is above the 10 year high ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $11.82. The 10 year low, median, and high median Price/Graham Price Ratios are 1.17, 1.55 and 1.96. The current ratio is 1.71 based on a stock price of $20.19. The current ratio is between the median and high 10 year median P/GP Ratios. 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 2.28 based on a Book Value of $452.7M, Book Value per Share of $8.87 and a stock price of 20.19. The current ratio is 17% 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 $13.03. The current ratio is 24.62 based on a stock price of $20.19, Cash Flow per Share estimate for 2021 of $0.82 and Cash Flow of $41.9M. The current ratio is 89% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
For the P/CF Ratio testing, analyst seem to expect the Cash Flow per Share to drop by 15% in 2021 and then rise by 78% in 2022. If we use the Cash Flow per Share estimate for 2022 of $1.46, Cash Flow of $74.5M and a stock price of $20.19, the P/CF Ratio becomes 13.83. This ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 3.62%. The current dividend yield is 2.38% based on a stock price of $20.19 and dividends of $0.48. The current dividend yield is 34% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.43%. The current dividend yield is 2.38% based on a stock price of $20.19 and dividends of $0.48. The current dividend yield is 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 1.72. The current P/S Ratio is 1.59 based on Revenue estimate for 2021 of $647M, Revenue per Share of $12.68 and stock price of $20.19. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
For estimate for 2021, analysts expect a big leap in Revenue to $647M or up 86%. This is a big increase and you have to wonder. In the past they have overestimated Revenue. See chart below. For example, in 2019 and 2020, the estimates for 2020 were $430 and $368. The actual revenue came in at $354, which is lower than both estimates.
| Estimates | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| 2018 | $281M | $450M | |||
| 2019 | $395M | $430M | |||
| 2020 | $368M | $396M | |||
| 2021 | $647M | $757M | |||
| Actuals | $286M | $374M | $354M |
Results of stock price testing is that the stock price is could be reasonable, but on the expensive side. The dividend yield tests are showing the stock price as expensive. The P/S Ratio test is not, but I wonder if analysts are right about the big Revenue increase for 2021. Revenues are most likely going up, but by 83%? The results of the other testing are mixed. It is interesting that the P/B Ratio test shows the price as reasonable and below the median.
Is it a good company at a reasonable price? This company has done very well and I expect it will continue to do very well. However, at this point in time I think the stock is on the pricey side
When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (7). The consensus would be a Buy. The 12 month stock price consensus is $23.69. This implies a total return of 19.71%, with 17.34% from capital gains and 2.38% from dividends.
Analysts on Stock Chase think that now is the time to buy this stock. Rajiv Nanjapla on Motley Fool says this is one of his top picks for July 2021. The executive summary on Simply Wall Street gives this stock 4 stars out of 5 and lists 4 risks. A writer on Simply Wall Street talks about ownership of the shares of this company. Richard De Sousa, a blogger on Rich Picks Daily says this is a stock to add to your buy list.
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. 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 Wednesday, July 28, 2021 around 5 pm. Tomorrow on my other blog I will write about Algonquin Power.... learn more on Tuesday, July 27, 2021 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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