When this decade kicked off, many analysts were rightly bullish on the technology and healthcare sectors. These had been high performers over the course of the 2010s. The COVID-19 pandemic has highlighted the health-care sector, and investors should take notice.
Today, I want to take a snapshot of one of my favourite health-care stocks on the TSX.
Savaria Corporation (TSX:SIS) designs, engineers, and manufactures products for personal mobility in Canada, the United States, and around the world. Its shares have dropped 2.9% in 2020 as of close on May 22. However, the stock is up 19% month over month.
Demographics is perhaps the key driver in the personal mobility market. In 2019, Grand View Research estimated that the global personal mobility devices market size was valued at $10.8 billion U.S.. It projects that the market will deliver a CAGR of 6.5% and reach a valuation of $17.9 billion by 2027.
The company released its first-quarter 2020 results on May 12. Revenue rose 1.1% year-over-year to $88.4 million and gross profit jumped 11.4% to $30.1 million. Adjusted net earnings surged 96.1% from the prior year to $7.2 million and adjusted net earnings per share increased 75% to $0.14.
Moreover, adjusted EBITDA climbed 17.3% to $12.4 million. The COVID-19 pandemic has proven a challenge, but Savaria has reiterated its faith in its 2020 outlook.
Shares of Savaria last had a price-to-earnings ratio of 24, which puts it in favourable value territory relative to its industry peers. Better yet, Savaria offers a monthly dividend of $0.0383 per share. This represents a solid 3.4% yield.
