Lower costs should protect your dividends

Article Excerpt

As demand for their traditional products slows due to changing consumer tastes, Saputo and Molson are cutting their costs. Those savings will help them develop new products, and let them keep raising your dividends. SAPUTO INC. $33 is still a hold. The company (Toronto symbol SAP; High-Growth Payer Portfolio, Consumer sector; Shares o/s: 408.0 million; Market cap: $13.5 billion; Dividend yield: 2.1%; Dividend Sustainability Rating: Above Average; www.saputo.com) is a leading dairy producer. Investors tap cheese and dairy brands including Saputo, Neilson, Dairyland, Baxter, and Scotsburn. The company last raised your quarterly dividend in September 2019. Investors receive $0.17 a share, up 3.0% from $0.165. The new annual rate of $0.68 yields 2.1%. Saputo will now close its facilities in Trenton, Ontario, and Saint John, New Brunswick. The company will shift its operations to its other Canadian plants. It’s also expanding into other products, such plant-based milks. If you exclude closure costs and other unusual items, Saputo’s earnings in its fiscal 2020 third quarter, ended December 31, 2019,…

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