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Dividend Star: Saputo (SAP)

Once every month I sit down for an hour or two to review my portfolio holdings; to gauge relative value of each stock, recent trends, news, quarterly reports and position in the portfolio.

Last week I did this and took note of one of the longest held position in my portfolio, Saputo (SAP), with some interest.  I rarely hold a stock in more favour than I do with Saputo.  Despite the pricing of the stock over any period of time I enjoy watching this company execute on its strategy, grow its business and reward its shareholders for believing in the process.

I’ve tracked Saputo since around 1997 and have been impressed with the consistency that the company operates at.  Despite pricing pressures on food and food products, changes in consumer activity and the credit crisis of 2008/2009 the company has continued to perform well both in its underlying fundamentals and financial performance.  The stock is up over 100% in the past 24 months but they consistently raise their dividend at a historical rate of over 20% each year (12.3% in the past 5 years) and have integrated acquisitions into their operations with minimal difficulty.

Now I do expect the stock to pull back shortly as its trading at a book value 18% higher than its historical average but for a dividend growth stock that isn’t in the financials, insurance or energy/resources sector Saputo is an excellent addition, at the right price, for a dividend growth investor.
Some interesting stats I’ve collected on the company…
Historical: P/E (20.6), ROE (20.0), Payout Ratio (20.0%), P/B (3.5), Dividend Growth Rate (21.6%) & BV Growth Rate (14.9%)

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{ 3 comments… add one }
  • jack June 6, 2011, 5:15 am

    Nice work..

    Thats a serious growth rate for Saputo..

    Do u think it will suffer much of a downturn when it comes?

  • The Wealthy Canadian July 30, 2011, 6:21 pm

    Great post.

    For years, I have always wanted to own a position in Saputo but I found the dividend yield was fairly low, so I was forced to wait until my dividend investment strategy reached a certain point before I could dive in.

    A couple of weeks ago, I finally bought shares in Saputo and I can tell you that I am pleased with owning part of this company. In my view, it is a recession resistant company and now I make sure my milk and cheese are Saputo products!

    Great job at highlighting the performance of this large cap blue chip. The numbers are impressive.

    TWC

  • dennis the menace September 10, 2011, 12:30 am

    I would like to comment about dividend income. I really think real estate invetment trusts are a great way to earn income along with captial appreciation.

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