If you’re serious about investing in the stock market, it is advisable to familiarize yourself with the various sectors and profiles of the publicly-listed companies on the TSX. You will come across popular and household names. But you will also discover companies that have exceptional fundamental characteristics.
Savaria Corporation (TSX:SIS) is one name that could add real value to anyone’s stock portfolio. To begin with, the accessibility company belongs to the diversified industries sector. What is fascinating is that the physically-challenged is their market niche, and Savaria’s mobility products are sought-after in this growing market segment.
Long runway for growth
There are only a few companies that derive revenue from the aging population. It’s incorrect to say these companies exploit the handicapped. On the contrary, Savaria give these customers a big lift. By providing mobility products in all forms, people with mobility issues are endowed with freedom of movement and convenience.
From a demographic standpoint, Savaria is a clear winner. The business of manufacturing elevators, lifts, and vehicles among others for the aging populace and people whose mobility are restricted will endure. The runway for growth could extend as far as the eye can see. Likewise, the income of investors is sure to bloat in the long run.
Strong product portfolio
The primary goal of Savaria is to help people move and gain mobility. The products the company designs, engineers, and manufactures are for commercial and home use. Accessibility lifts and wheelchair accessible vans are the masterpieces suitable for home and commercial use.
Savaria is also entrenched in the medical market. The company has a comprehensive selection of pressure management products. Medical beds are available for the long-term care market. Mattresses and foam pillows are sold in the retail market. Savaria covers a lot a ground including the industrial market.
Savaria is highly profitable due to its extensive reach. About 75% of the total revenue of this Canadian company comes from markets outside the home country. The biggest sales are in the United States. Globally, the company operates about 500 dealers and 28 direct sales offices scattered in Asia, Australia, Europe, and North America.
The accessibility segment contributed 54% of revenue during the first three quarters of 2018. The medical segment and the adapted vehicles segment contributed 35% and 11% respectively. Overall, the bottom line expanded by 45% from last year with the most recent earnings surpassing the average over the last five years.
Savaria’s income-generating potential is improving almost every year. Analysts are now predicting a 32% earnings growth. Internally generated funds are more than adequate to cover debts and liabilities.
Strong business growth
These are the main factors will that sustain Savaria for years: the growing older population and increasing life expectancy; seniors or retirees are becoming well-off and can afford to stay home, and care for seniors can be done at home with the accessibility and mobility solutions. Hence, investors are assured of unfailing dividend payments and solid gains.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.