Saputo (TSX:SAP) is a Montreal-based global dairy processor. Shares have dropped 4.3% over the past month as of close on November 4.
Saputo’s significant global footprint and stable position in the Canadian market make it an appealing play for investors on the hunt for defensive stocks right now.
The company is set to release its second quarter fiscal 2020 results on November 7. In the first quarter, Saputo reported revenues of $3.66 billion which were up 12.3% from the prior year.
Adjusted EBITDA jumped 16.4% to $358 million and adjusted net earnings climbed 2.9% to $164.9 million. Saputo achieved higher revenues on the back of its Dairy Crest acquisition, but adjusted EBITDA and net earnings were most heavily impacted by the positive effect of higher international dairy ingredient and cheese market prices.
Poor market conditions in Canada and the United States have continued to weigh on earnings. Saputo still expects its adjusted EBITDA to be higher in fiscal 2020 compared to the prior year. However, it expects that it will continue to wrestle with headwinds in the Canadian and U.S. markets.
Ahead of earnings, Saputo stock possesses a price-to-earnings ratio of 23.3 and a price-to-book value of 2.9. The stock last had an RSI of 38, putting it just outside of technically oversold territory. Saputo last increased its quarterly dividend to $0.17 per share, representing a 1.7% yield. The company has achieved dividend-growth for 19 consecutive years, putting it in elite company on the TSX.
