AUS
NZ
UK
CA
USA
IND
Highlights
- Savaria Corporation declares a CA$0.045 per share dividend, yielding 2.3%.
- Dividend sustainability is supported by strong cash flows and projected EPS growth of 34.1% next year.
- Consistent dividend growth over the past decade, with a CAGR of 21%.
Savaria Corporation (TSX:SIS) has announced a dividend of CA$0.045 per share, payable on December 9, 2024. This equates to an annualized yield of 2.3%, consistent with industry averages. With a strong history of reliable payouts, Savaria’s dividend policy remains attractive for income-focused investors.
Sustainability of the Dividend
A key question for shareholders is whether Savaria’s dividend is sustainable. The company’s latest payout represented 80% of its earnings, a relatively high proportion. However, cash flows are robust, providing ample room for reinvestment while supporting dividend payments.
Looking ahead, analysts expect a 34.1% growth in earnings per share (EPS) in 2025. If this projection holds, the payout ratio is forecast to decrease to 68%, improving the long-term sustainability of Savaria’s dividend.
Track Record of Dividend Growth
Savaria has built a solid reputation for maintaining and increasing its dividend. Over the past decade, the annual payout has risen from CA$0.08 in 2014 to CA$0.54 in the most recent fiscal year. This reflects a compound annual growth rate (CAGR) of 21%, underscoring the company’s commitment to delivering shareholder value.
The consistency of this growth, with minimal fluctuations, reinforces confidence in future dividend stability.
Potential for Future Growth
While Savaria’s five-year EPS growth rate of 6.5% per year is commendable, the high payout ratio may constrain the rate of future dividend increases. That said, the anticipated earnings growth in the coming year offers potential for continued dividend expansion, albeit possibly at a more moderate pace.
