Is it a good company at a reasonable price? The stock price is reasonable. Shareholders have done quite well with this dividend growth stock. However, the recent Simply Wall Street report does make some good points of declining ROE and Profit Margins. So, this probably makes this stock riskier. Certainly, I think the company realizes that dividends are too high and the last two increases have been around 4%.
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 is that Long Term Debt has increased over the past year by 661%. Long Term Debt/Market Cap is fine at 0.31. They made some Business Acquisitions. Also, Intangibles and Goodwill has increased by 250% over the past year. The Intangible Goodwill/Market Cap Ratio is ok at 0.54. The reason that Earnings went down even though Revenue was up was because of Financing Costs.
If you had invested in this company in December 2011, $1001.10 you would have bought 705 shares at $1.42 per share. In December 2021, after 20 years you would have received $2,043.58 in dividends. The stock would be worth $13,507.80. Your total return would have been $15,551.38.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $1.42 | $1,001.10 | 705 | 10 | $2,043.58 | $13,507.80 | $15,551.38 |
The dividend yields are moderate with dividend growth good. The current dividend yields are moderate (2% to 4% ranges) at 3.79%. The 5, 10 and historical dividend yields are also moderate at 2.62%, 3.31% and 3.54%. The dividend growth is good (15% and above) at 17.7% per year over the past 5 years. For this stock, the dividend growth has been good for the past 16 years. See chart below. However, the last two dividend increases have been low at around 4%.
The Dividend Payout Ratios (DPR) are fine or going to be fine. The DPR for EPS for 2021 is 255% and with 5 year coverage at 97%. This is the highest these numbers have been. Analysts expect these numbers to moderate this year, with DPR for EPS to be around 77% in 2022 and 59% in 2023. There is Adjusted Earnings per Share (AEPS) data. The DPR for AEPS for 2021 is 131% with 5 year coverage at 88%. These are also expected to moderate this year to 70% and moderate to 56% in 2023. The DPR for Cash Flow per Share for 2021 is 36% with 5 year coverage at 41%. The DPR for Free Cash Flow (FCF) 71% with 5 year coverage at 77%. (However, this is quite a bit of disagreement on what the FCF is.)
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2021 is low and good at 0.31. The Liquidity Ratio is good at 1.93. The Debt Ratio is good at 1.65. The Leverage and Debt/Equity Ratios are fine at 2.55 and 1.55.
The Total Return per year is shown below for years of 5 to 20 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 17.67% | 14.95% | 12.00% | 2.94% |
| 2011 | 10 | 14.99% | 35.74% | 29.72% | 6.02% |
| 2006 | 15 | 22.90% | 19.23% | 16.26% | 2.97% |
| 2001 | 20 | 20.36% | 18.85% | 16.52% | 2.33% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 21.85, 30.31 and 38.77. The corresponding 10 year ratios are 14.96, 23.56 and 29.88. The corresponding historical ratios are 14.31, 18.41 and 22.18. The current P/E Ratio is 20.29 based on a stock price of $13.19 and EPS estimate for 2022 of $0.65. This ratio is between the 10 year low and median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $9.80. The 10 year low, median, and high median Price/Graham Price Ratios are 1.26, 1.65 and 2.01. The current P/GP Ratio is 1.35 based on a stock price of $13.19. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 2.86. The current P/B Ratio is 2.01 based on a stock price of $13.19, Book Value of $421.8M and Book Value per Share of $5.67. The current P/B Ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Cash Flow per Share Ratio of 15.36. The current P/CF Ratio is 10.07 based on Cash Flow per Share estimate for 2022 of $1.31, Cash Flow of $84M and a stock price of $13.19. The current ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is cheap.
I get an historical median dividend yield of 3.54%. The current dividend yield is $3.79% based on dividends of $0.5004 and a stock price of $13.19. The current dividend yield is 7% above the historical median 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 3.31%. The current dividend yield is $3.79% based on dividends of $0.5004 and a stock price of $13.19. The current dividend yield is 14.7% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.76. The current P/S Ratio is 1.09 based on Revenue estimate for 2022 of $779M, Revenue per Share of $12.13 and a stock price of $13.19. The current ratio is 38% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is reasonable and maybe cheap. The Dividend yield tests are saying that the stock price is reasonable, but the P/S Ratio test is saying the stock price is cheap.
When I look at analysts’ recommendations, I find Strong Buy (1) and Buy (7). The consensus would be a Buy. The 12 months stock price consensus is $22.31. This implies a total return of 72.94% with 69.14% from capital gains and 3.79% from dividends based on a stock price of $13.19.
Analysts on Stock Chase have various views on the company, but mostly like it. Stock Chase gives this company 4 stars out of 5. It is not on Money Sense’s list. Jitendra Parashar on Motley Fool thinks this is a good stock for passive income. Motley Fool believes this stock will return solid returns over the long term. He says it is selling 40% below its 52 weeks high. The company has a Press Release on its fourth quarter 2021 results. The has put out a Press Release on First Quarter of 2022 results.
Simply Wall Street report on Yahoo Finance talks about the company’s week ROE. Simply Wall Street gives four warnings on this company of debt is not well covered by operating cash flow; dividend of 3.83% is not well covered by earnings or forecast to be in the next 3 years; large one-off items impacting financial results and profit margins (1.8%) are lower than last year (6.5%).
Savaria Corp designs, engineers, and manufactures products for personal mobility. Its products include home elevators, wheelchair lifts, commercial elevators, ceiling lifts, stairlifts, 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-BLDP0 ... learn more on Friday, July 29, 2022 around 5 pm. Tomorrow on my other blog I will write about Building Your Pension Plan.... learn more on Tuesday, July 28, 2022 around 5 pm.
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