So, you want the easy answer today? While a diversified investment is always ideal, if you’re only looking for one, today I have it. My pick right now would be Savaria (TSX:SIS). This Canadian company has carved out a unique position in the accessibility industry, specializing in stairlifts, home elevators, and wheelchair lifts. As the world’s population ages and mobility solutions become increasingly essential, Savaria stands at the forefront of a growing and resilient market. It’s not just a stock, but a company solving real-world problems while delivering steady financial growth.
An easy choice
In its latest earnings report, Savaria demonstrated why it continues to be a compelling long-term investment. For the third quarter of 2024, the dividend stock reported revenue of $213.6 million, a 1.7% increase from the same quarter the previous year. While this may not seem like explosive growth, what stands out is the 9% increase in gross profit, reaching $79.1 million. This improvement in profitability shows that the company isn’t just growing its top line. It’s becoming more efficient and profitable, a crucial factor for long-term investors. Over the past year, Savaria’s revenue has reached $861.3 million. And with steady cash flow generation, it remains well-positioned to continue expanding.
Looking back over the years, Savaria’s ability to generate consistent growth is impressive. In 2021, revenue soared by 86.5% to $661 million, driven largely by acquisitions and increased demand for its products. While growth has since stabilized, the dividend stock’s long-term trajectory remains intact. Its global presence ensures that it benefits from an increasing need for accessibility solutions, particularly in aging markets like North America and Europe. Demographics are on its side, with a rising senior population requiring mobility assistance, which should drive demand for Savaria’s products well into the future.
Beyond its strong business fundamentals, Savaria is also an attractive option for income investors. The dividend stock pays a monthly dividend, offering a yield of around 3% at writing. While the payout ratio is on the higher side at 80.2%, Savaria has a history of maintaining its dividends and rewarding shareholders. This monthly income stream provides an added incentive for long-term investors, especially those looking for steady cash flow.
Future outlook
From a financial health perspective, Savaria appears well-managed. The company maintains a reasonable net debt-to-adjusted earnings before interest, taxes, depreciation and amortization (EBTIDA) ratio of 1.7 as of its latest report. This level of leverage is manageable and provides the dividend stock with flexibility to invest in future growth while maintaining financial stability. It’s reassuring to see that, despite its expansion efforts, Savaria has not over-leveraged itself, thus reducing the risks that come with high debt levels in a rising interest rate environment.
The stock’s valuation also makes it an appealing long-term buy. With a trailing price/earnings (P/E) ratio of 27.9 and a forward P/E of 14.8, Savaria offers investors a compelling mix of growth and value. Compared to many other dividend stocks in the mid-cap space, SIS is attractively priced for its future potential. Given its steady revenue growth, improving profitability, and strong market position, the current valuation suggests room for upside as earnings continue to grow.
For long-term investors, the biggest draw of Savaria is its combination of stability, growth potential, and reliable dividends. The accessibility market is not one that will disappear. And with an aging population, demand for mobility solutions is only expected to rise. Unlike some high-growth stocks that rely on hype or speculative technologies, Savaria is built on providing essential, real-world solutions. This makes it a safer bet for investors looking for a long-term hold with lower volatility compared to riskier sectors like tech or biotech.
Bottom line
When considering a dividend stock to buy and hold forever, you need a company that can stand the test of time. Savaria checks all the right boxes: a strong business model, a growing market, consistent revenue, improving profitability, and shareholder-friendly policies. While no stock is completely risk-free, Savaria offers the kind of resilience and long-term potential that makes it a compelling choice for anyone looking to invest in a single stock and hold onto it for decades.