Saputo (TSX:SAP) sells dairy products in Canada, the United States, Argentina, Australia, and internationally. The company offers cheeses, including mozzarella and cheddar; specialty cheeses, including ricotta, provolone, parmesan, goat cheese, feta, and havarti; fine cheeses, including brie and camembert; and other cheeses, including brick, colby, farmer, munster, monterey jack, fresh curd, and processed cheeses. It also provides fluid milk, cream, yogurt, sour cream, cottage cheese, and ice cream mixes, as well as other dairy and non-dairy products, including butter, flavoured cream, dips, and flavoured coffee whitener.
In addition, the company offers dairy ingredients, fine imported cheese, and non-dairy products manufactured by third parties. It serves customers in the retail, food services, and industrial segments. The company sells products under several well-respected brand names. Saputo was founded in 1954 and is headquartered in Montréal, Canada.
Saputo’s primary goal is to create shareholder value through profitability enhancement and long-term growth. The company is focused on cost management and operational efficiency to remain a strong operator with disciplined financial management in a competitive and challenging dairy industry. Saputo is also focused on growth, both organic and through acquisitions, in order to develop new markets and expand existing ones in addition to reinforcing the presence in emerging markets.
The company is proactive in evaluating possible acquisitions and potential growth markets. Saputo benefits from a solid financial position and capital structure, supplemented by a high level of cash generated by operations. Saputo’s financial flexibility allows growth through targeted acquisitions and helps the company to overcome possible economic challenges. In 2019, the company completed several strategic acquisitions, continued to invest in capital projects, and increased the dividend.
Saputo benefits from a solid financial position and capital structure, supplemented by a high level of cash generated by operations, which allows the company to continue to grow through targeted acquisitions and organically through strategic capital investments. Saputo manufactures quality products and is focused on operational efficiencies.
The company reports results under the Canada sector, the USA sector, the International sector, and a new Europe sector. The Canada sector consists of the Dairy Division (Canada), the USA sector consists of the Cheese Division (USA) and the Dairy Foods Division (USA), the International sector consists of the Dairy Division (Australia) and the Dairy Division (Argentina), and the new Europe sector is expected to consist of the Dairy Division (UK).
In 2019, the company’s revenues increased a phenomenal 17.2% on a year-to-year basis due to the contribution of recent acquisitions. However, earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 3.4% due to higher warehousing expenses and lower international selling prices of cheese and dairy ingredients.
Overall, Saputo is one of the best stocks to own if there is a market crash. The stock is hardly correlated to the general market, and this could lead to outsized returns compared to the Toronto Composite Index in the event of a recession. The company’s CEO Lino A. Saputo is one of the best business operators of our generation.
