Savaria is one of the world’s leading providers of accessibility. The company manufactures products that help people maintain their personal mobility. The large product portfolio includes home elevators, commercial elevators, stairlifts, ceiling lifts and customized vehicles. Savaria also offers medical beds and therapeutic surfaces. The company has manufacturing facilities in North America, Europe and China. It operates a sales network of dealers worldwide.

The company operates through the Savaria Concord Lifts Inc., Savaria Huizhou, Span America / Span Medical Products and Garaventa Lift divisions. The company manages its operations in three reportable segments, Accessibility (which represents 72% of last quarter’s revenue), Patient Handling (~ 23%), and Customized Vehicles (~ 5%). With the acquisition of Handicare, Savaria’s geographic presence has become more balanced, with North America now accounting for ~ 56% of total sales, followed by Europe (40%) and RoW (4%).

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Plant data

Sales growth & market presence

With three decades of extensive experience and innovative technology, Savaria is well positioned to understand the needs of its customers and develop tailor-made products for them. The company has one of the most comprehensive product lines on the market. It helps clients stay mobile and independent both at home and at work.

The company deals with both home and commercial accessibility products, including straight and curved air lifts, vertical / inclined platform lifts, floor guided lifts, and home lifts. The company is known for groundbreaking new products from the ground up, including its range of patient lifts, innovative ceiling lifts and a new lift for bariatric needs.

Savaria’s revenues are diversified and include revenues from the medical market. The company sells print management products for the medical market as well as an extensive range of medical devices and solutions for the safe handling of patients. In addition, Savaria converts vehicles to make them wheelchair accessible.

The company acquired Handicare (estimated market share of 20% -25%) which is focused on increasing the independence of the disabled / elderly. Savaria’s 2019 acquisition of Florida Lifts opened an attractive market for an aging population, luxury real estate, and commercial accessibility for seniors.

Savaria’s sales in the last quarter rose more than 26% year-over-year due to the acquisition of Hancdicare, offsetting slow organic sales growth resulting from the pandemic. The company’s margins also improved due to a better product mix. Savaria has a solid track record of successful acquisitions and integrations. Sales have increased 35% CAGR over the past five years.

Dividends

Savaria Corporation is a Canadian dividend aristocrat with an annual dividend yield of 2.2% and a current payout ratio of ~ 90%. The company’s dividends have seen an impressive growth rate of 19% + CAGR over the past decade, and have maintained double-digit CAGR growth rates over the past several years. The dividends paid last quarter were ~ $ 6 million.

The company has a strong balance sheet with low debt. The company’s revenue is well diversified between mobility products and medical devices. Savaria is well positioned to benefit from a number of positive market dynamics across a variety of market segments including the pursuit of safe patient care, the increasing global aging of the population and the growing market for residential elevators.

The company offers a variety of barrier-free solutions for physically disabled people to increase their comfort, mobility and independence. The company is focused on expanding the geographic reach of its products, adding new products to its existing portfolio and developing new sales channels for future growth. Rising bariatric surgeries and rising obesity rates in Europe and North America will be strong growth drivers for the company. Savaria expects an AEBITDA of over 100 million US dollars for the 2021 financial year.

Savaria (SIS) Historical return
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competition

The company operates in a highly competitive industry. The company competes with other elevator and elevator companies such as Nationwide Lifts, Acorn Stairlifts, Access Elevator & LIfts, Orona, BraunAbility, etc. In the therapeutic and pressure management products business, Savaria Joerns Healthcare, Medline Industries, Drive DeVilbiss Healthcare, Invacare Corporation are key competitors , GF Health Products etc. For the chip segment, larger and established competitors dominate the market. Providing innovative and effective products at a lower cost remains its primary USP.

Bottom line

The demand for Savaria products is likely to continue to rise following the demographic change in the country and a growing housing market. According to the US Census Bureau, Stats Canada, it is estimated that over 20% of the population in North America will be 65+ by 2030. The global patient lifting device market is projected to reach US $ 6.06 billion in 2025 and will grow at an annual rate of. grow 11%.

Savaria’s acquisition of Handicare will also play an important role in balancing its geographic footprint and expanding its product offering and efficiency. Given its extensive product portfolio, strong consumer focus and large geographic footprint, Savaria should continue its dividend payment streak well into the future.

Savaria (SIS) Historical PE
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