We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

This TSX leader providing accessibility and mobility solutions should benefit greatly from an aging global population.

| More on:

The global population is greying, and data from the United Nations estimates there will be around 2 billion people over 60 worldwide by 2050. In Canada, Statistics Canada forecasts that those 65 or older will comprise 22.5% of the country’s population in 2030.

One of the pressing needs of people getting older, especially those with physical and cognitive limitations, is mobility. They can still participate in society and contribute to the economy if they can maintain mobility. Meanwhile, a Laval, Quebec-based company is ready to meet the challenge and benefit considerably from an aging population.

Accessibility leader and mobility champion

Savaria Corporation (TSX:SIS) is a leading manufacturer in the accessibility industry. The product portfolio of this $1.1 billion specialty industrial machinery company helps improve the mobility of older, physically challenged, and disabled individuals.  

The extensive product lines include home and commercial elevators, stairlifts, ceiling lifts, wheelchair lifts, and adapted vehicles. Span Division, one of six major divisions, offers medical beds and therapeutic surfaces.

Savaria can easily reach global markets because of its extensive manufacturing network. It has six state-of-the-art plants in Canada, five in Europe, two in the U.S. and China (including pre-assembly operations), plus one in Mexico. The research and development team creates new products and innovations to improve existing products.

Fortunate position

Savaria’s Chairman, President and CEO, Marcel Bourassa, believe the company is in a fortunate position to serve the needs of a more predictable global aging population. For 2022, revenue rose 19.3% to $789 million versus 2021. Notably, net earnings soared 206% year over year to $35.3 million.

Also, cash flows related to operating activities in 2022 jumped 58% to $90.7 million from a year ago. The strong rebound followed weak earnings in 2021 due to the continued impact of the pandemic, and acquisitions and integration costs. Acquisitions, particularly the Handicare Group, contributed significantly to Savaria’s organic growth.

In Q1 2023, revenue and net earnings increased 15% and 13% to $211.6 million and $6 million versus Q1 2022, respectively. Management expects between 8% and 10% revenue growth this year. The contributing factors are high backlog levels, cross-selling initiatives, and strong demand in the Accessibility and Patient Care business segments. 

Monthly dividends

Savaria is among the select few on the TSX paying monthly dividends. If you invest today, the dividend yield is 2.99%. At $17.18 per share, the year-to-date gain and trailing one-year price return are 24.8% and 34.4%, respectively. Market analysts’ 12-month average price target for the growth stock is $21.56, with a return potential of 25%.

Profitable growth story

Slowly but surely, Savaria is on track to achieving its goal of generating approximately $1 billion in revenue in fiscal 2025. Besides the expected revenue synergies with Handicare, the stay-at-home trend among older adults and higher investments by governments in healthcare infrastructure bode well for Savaria.

Even if Savaria warns that the accessibility industry is exposed to various risks and uncertainties, there’s no doubt that the aging population is its most significant tailwind. You can see a profitable growth story developing here. The accessibility equipment manufacturer should be the industry leader for years to come.

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. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

8.7% Dividend Yield: Is KP Tissue Stock a Good Buy?

This top TSX stock is certainly one to consider for that dividend yield, but is that dividend safe given the…

Read more »

grow money, wealth build
Dividend Stocks

TELUS Stock Has a Nice Yield, But This Dividend Stock Looks Safer

TELUS stock certainly has a shiny dividend, but the dividend stock simply doesn't look as stable as this other high-yielding…

Read more »

profit rises over time
Dividend Stocks

A Dividend Giant I’d Buy Over TD Stock Right Now

TD stock has long been one of the top dividend stocks for investors to consider, but that's simply no longer…

Read more »

analyze data
Dividend Stocks

Top Financial Sector Stocks for Canadian Investors in 2025

From undervalued to powerfully bullish, quite a few financial stocks might be promising prospects for the coming year.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

3 TFSA Red Flags Every Canadian Investor Should Know

Day trading in a TFSA is a red flag. Hold index funds like the Vanguard S&P 500 Index Fund (TSX:VFV)…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

1 Magnificent Canadian Stock Down 15% to Buy and Hold Forever

Magna stock has had a rough few years, but with shares down 15% in the last year (though it's recently…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Earn Steady Monthly Income With These 2 Rock-Solid Dividend Stocks

Despite looming economic and geopolitical uncertainties, these two Canadian monthly dividend stocks could help you generate reliable income in 2025…

Read more »

A worker gives a business presentation.
Dividend Stocks

2024’s Top Canadian Dividend Stocks to Hold Into 2025

These top Canadian dividend stocks are worth holding into 2025 to generate steady and growing passive income.

Read more »