Saputo (TSE:SAP) Hits New 1-Year High - Still a Buy?

Key Points

• Saputo shares hit a 52-week high, reaching C$45.22 and trading near C$45.08, up from the previous close of C$44.46.
• Analyst views are mostly positive: the stock has a “Moderate Buy” consensus and an average price target of C$48.92, with recent targets ranging up to C$53.00; Jefferies is an exception, rating it “Hold.”
• Saputo reported quarterly EPS of C$0.55 on revenue of C$4.26 billion and raised its quarterly dividend to C$0.21 per share, equivalent to an annualized yield of 1.9%.

Shares of Saputo Inc. (TSE:SAP - Get Free Report) reached a new 52-week high during mid-day trading on Thursday. The company traded as high as C$45.22 and last traded at C$45.08, with a volume of 608,328 shares trading hands. The stock had previously closed at C$44.46.

Saputo News Roundup

Investors following SAP have been watching these news items:

• Positive Sentiment: National Bank Financial, Ventum and Scotia analysts were reported to expect Saputo’s stock to appreciate. The reports may support investor sentiment, though the headlines do not provide specific price targets or new earnings estimates. National Bank Financial coverage Ventum coverage Scotia coverage
• Neutral Sentiment: Joey Saputo is putting CF Montréal up for sale after more than 30 years, and reports say the club’s future in Montréal is uncertain; relocation has not been ruled out. This concerns the family’s soccer-club ownership, not a reported change in Saputo Inc.’s dairy operations, so no direct impact on SAP is apparent. CF Montréal sale and future Sale and relocation report
• Neutral Sentiment: A separate report says Philippe Eullaffroy will not return as CF Montréal’s first-team head coach. This is a club personnel development, with no stated connection to the publicly traded dairy company. CF Montréal coaching report

Analyst Upgrades and Downgrades

A number of equities research analysts have recently weighed in on SAP shares. National Bank Financial lifted their price objective on Saputo from C$47.00 to C$48.00 and gave the stock a "sector outperform" rating in a research report on Monday. Desjardins lifted their price target on shares of Saputo from C$47.00 to C$49.00 and gave the company a "buy" rating in a report on Monday. Jefferies Financial Group downgraded shares of Saputo from a "strong-buy" rating to a "hold" rating in a research report on Friday, July 24th. Ventum Financial set a C$49.00 price objective on shares of Saputo and gave the company a "buy" rating in a research report on Monday, August 10th. Finally, TD upped their price objective on shares of Saputo from C$51.00 to C$53.00 and gave the stock a "buy" rating in a report on Monday, August 10th. One investment analyst has rated the stock with a Strong Buy rating, nine have issued a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of C$48.92.

Saputo Trading Up 1.4%

The company has a current ratio of 1.70, a quick ratio of 0.67 and a debt-to-equity ratio of 43.61. The company has a market cap of C$17.71 billion, a PE ratio of 31.31, a PEG ratio of 0.56 and a beta of 0.16. The stock has a 50 day moving average price of C$40.26 and a 200 day moving average price of C$41.27.

Saputo (TSE:SAP - Get Free Report) last issued its quarterly earnings results on Thursday, November 5th. The company reported C$0.55 earnings per share for the quarter. The company had revenue of C$4.26 billion for the quarter. Saputo had a return on equity of 8.44% and a net margin of 3.29%. Sell-side analysts predict that Saputo Inc. will post 1.77 EPS for the current fiscal year.

Saputo Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, September 25th. Investors of record on Friday, September 25th were given a dividend of $0.21 per share. This is an increase from Saputo's previous quarterly dividend of $0.20. The ex-dividend date of this dividend was Tuesday, September 15th. This represents a $0.84 dividend on an annualized basis and a yield of 1.9%. Saputo's dividend payout ratio is 56.25%.

About Saputo

Saputo, one of the top ten dairy processors in the world, produces, markets, and distributes a wide array of dairy products of the utmost quality, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products, and dairy ingredients. Saputo is a leading cheese manufacturer and fluid milk and cream processor in Canada and a leading dairy processor in Australia. In the USA, Saputo ranks among the top three cheese producers and is one of the top producers of extended shelf-life and cultured dairy products.

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