Saputo (TSX:SAP) - Share price, News & Analysis

SAP fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	1/6
Financial Health	2/6
Dividends	3/6

SAP Stock Overview

Saputo Inc. produces, markets, and distributes dairy products in Canada, the United States, Argentina, Australia, and the United Kingdom.

Rewards

Trading at 33.6% below our estimate of its fair value

Earnings are forecast to grow 43.03% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.5% is not well covered by earnings or forecast to be in the next 3 years

Profit margins (1.8%) are lower than last year (4.4%)

Saputo Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Saputo
Historical stock prices
Current Share Price	CA$28.76
52 Week High	CA$37.75
52 Week Low	CA$24.61
Beta	0.59
1 Month Change	14.67%
3 Month Change	-1.88%
1 Year Change	-21.95%
3 Year Change	-26.63%
5 Year Change	-30.28%
Change since IPO	1,047.53%

Recent News & Updates

Jun 14

Saputo's (TSE:SAP) Dividend Will Be CA$0.18

The board of Saputo Inc. ( TSE:SAP ) has announced that it will pay a dividend of CA$0.18 per share on the 28th of...

May 01

Is Saputo (TSE:SAP) A Risky Investment?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...

Shareholder Returns

	SAP	CA Food	CA Market
7D	4.1%	2.0%	0.3%
1Y	-22.0%	-23.2%	-4.1%

Return vs Industry: SAP exceeded the Canadian Food industry which returned -23.2% over the past year.

Return vs Market: SAP underperformed the Canadian Market which returned -4.1% over the past year.

Price Volatility

Is SAP's price volatile compared to industry and market?
SAP volatility
SAP Average Weekly Movement	3.4%
Food Industry Average Movement	10.3%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	17.2%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: SAP is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SAP's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1954	18,600	Lino Saputo	https://www.saputo.com

Saputo Inc. produces, markets, and distributes dairy products in Canada, the United States, Argentina, Australia, and the United Kingdom. The company offers cheeses, including mozzarella and cheddar; specialty cheeses, such as ricotta, provolone, blue, parmesan, goat cheese, feta, romano, and havarti; fine cheeses comprising brie and camembert; and other cheeses that include brick, colby, farmer, munster, monterey jack, fresh curd, and processed cheeses. It also provides fluid milk, yogurt, sour cream, cottage cheese, and ice cream mixes, as well as other dairy and non-dairy products, which comprise butter, cream and creamers, aerosol whipped toppings, whipping cream, dips, spread, oil, flavored coffee whitener, and iced coffee.

Saputo Fundamentals Summary

How do Saputo's earnings and revenue compare to its market cap?
SAP fundamental statistics
Market Cap	CA$11.99b
Earnings (TTM)	CA$274.00m
Revenue (TTM)	CA$15.04b

43.8x

P/E Ratio

0.8x

P/S Ratio

Is SAP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SAP income statement (TTM)
Revenue	CA$15.04b
Cost of Revenue	CA$13.88b
Gross Profit	CA$1.16b
Other Expenses	CA$881.00m
Earnings	CA$274.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 04, 2022

Earnings per share (EPS)	0.66
Gross Margin	7.68%
Net Profit Margin	1.82%
Debt/Equity Ratio	58.3%

How did SAP perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

109%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SAP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SAP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SAP. This is calculated by dividing SAP's market cap by their current preferred multiple.
What is SAP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$11.99b

SAP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.1x
Enterprise Value/EBITDA	15.7x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does SAP's PE Ratio compare to its peers?

SAP PE Ratio vs Peers

The above table shows the PE ratio for SAP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.4x

Forward PE

Price-To-Earnings vs Peers: SAP is expensive based on its Price-To-Earnings Ratio (43.8x) compared to the peer average (25.4x).

Price to Earnings Ratio vs Industry

How does SAP's PE Ratio compare vs other companies in the Food Industry?

Price-To-Earnings vs Industry: SAP is expensive based on its Price-To-Earnings Ratio (43.8x) compared to the Canadian Food industry average (13.2x)

Price to Earnings Ratio vs Fair Ratio

What is SAP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SAP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	43.8x
Fair PE Ratio	42.6x

Price-To-Earnings vs Fair Ratio: SAP is expensive based on its Price-To-Earnings Ratio (43.8x) compared to the estimated Fair Price-To-Earnings Ratio (42.6x).

Share Price vs Fair Value

What is the Fair Price of SAP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SAP (CA$28.76) is trading below our estimate of fair value (CA$43.34)

Significantly Below Fair Value: SAP is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: SAP is poor value based on its PEG Ratio (1x)

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Future Growth

How is Saputo forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

43.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SAP's forecast earnings growth (43% per year) is above the savings rate (1.6%).

Earnings vs Market: SAP's earnings (43% per year) are forecast to grow faster than the Canadian market (8.3% per year).

High Growth Earnings: SAP's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SAP's revenue (6.1% per year) is forecast to grow slower than the Canadian market (7.3% per year).

High Growth Revenue: SAP's revenue (6.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SAP's Return on Equity is forecast to be low in 3 years time (11.1%).

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Past Performance

How has Saputo performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-13.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SAP has high quality earnings.

Growing Profit Margin: SAP's current net profit margins (1.8%) are lower than last year (4.4%).

Past Earnings Growth Analysis

Earnings Trend: SAP's earnings have declined by 13.2% per year over the past 5 years.

Accelerating Growth: SAP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SAP had negative earnings growth (-56.2%) over the past year, making it difficult to compare to the Food industry average (-10.3%).

Return on Equity

High ROE: SAP's Return on Equity (4.2%) is considered low.

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Financial Health

How is Saputo's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SAP's short term assets (CA$4.3B) exceed its short term liabilities (CA$2.8B).

Long Term Liabilities: SAP's short term assets (CA$4.3B) do not cover its long term liabilities (CA$4.4B).

Debt to Equity History and Analysis

Debt Level: SAP's net debt to equity ratio (55.8%) is considered high.

Reducing Debt: SAP's debt to equity ratio has increased from 36.8% to 58.3% over the past 5 years.

Debt Coverage: SAP's debt is not well covered by operating cash flow (18.3%).

Interest Coverage: SAP's interest payments on its debt are well covered by EBIT (6.7x coverage).

Balance Sheet

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Dividend

What is Saputo current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.50%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SAP's dividend (2.5%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: SAP's dividend (2.5%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).

Stability and Growth of Payments

Stable Dividend: SAP's dividends per share have been stable in the past 10 years.

Growing Dividend: SAP's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (108.8%), SAP's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (153.9%), SAP's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

6.4yrs

Average management tenure

CEO

Lino Saputo (54 yo)

18.25yrs

Tenure

CA$1,629,680

Compensation

Mr. Lino Anthony Saputo, Jr., has been Director at Global Dairy Platform. Mr. Saputo has been Chief Executive Officer of Saputo Inc. since March 2004 and has been its Chairman of the Board since August 201...

CEO Compensation Analysis

Compensation vs Market: Lino's total compensation ($USD1.26M) is below average for companies of similar size in the Canadian market ($USD4.78M).

Compensation vs Earnings: Lino's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SAP's management team is seasoned and experienced (6.4 years average tenure).

Board Members

Experienced Board: SAP's board of directors are considered experienced (8.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SAP insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31