Higher prices lift Saputo’s profits

Article Excerpt

SAPUTO INC. $33 is still a hold. The dairy producer (Toronto symbol SAP; High-Growth Payer Portfolio, Consumer sector; Shares outstanding: 418.1 million; Market cap: $13.8 billion; Dividend yield: 2.2%; Dividend Sustainability Rating: Above Average; www.saputo.com) last raised its quarterly dividend by 2.9% with the September 2021 payment. The new annual rate of $0.72 yields 2.2%. In its fiscal 2023 second quarter, ended September 30, 2022, Saputo’s sales jumped 20.9%, to $4.46 billion from $3.69 billion a year earlier. That increase is largely because the company raised its selling prices to offset higher input and labour costs. Recent acquisitions also contributed $20 million to the latest quarterly sales. The higher sales lifted Saputo’s earnings before unusual items in the quarter by 52.6%, to $177 million from $116 million. Per-share earnings improved 50.0%, to $0.42 from $0.28 on fewer shares outstanding. The company now aims to improve its efficiency with equipment upgrades and by closing some plants. The plan should increase its adjusted gross profits from $1.155 in fiscal…