Savaria Corp: A Dividend Powerhouse in the Growing Accessibility Market

Savaria Corporation (TSX: SIS) has long been a standout in the accessibility sector, not only for its innovative products but also for its unwavering commitment to shareholder returns. The company's consistent monthly dividend of $0.045 per share—paid without interruption for over a decade—has made it a favorite among income-focused investors. But as the global accessibility market expands and Savaria's financial performance strengthens, the question arises: Is this dividend sustainable, and does it offer room for growth?

A Track Record of Dividend Reliability

Savaria's dividend consistency is a cornerstone of its appeal. Over the past 12 months, the company has maintained a flawless payment schedule, with the most recent $0.045 per share dividend declared on July 23, 2025, and paid on August 11, 2025. This reliability is underpinned by a dividend cover of 2.0, meaning earnings are more than sufficient to support the payout. Even during periods of modest earnings growth, Savaria has avoided cutting or reducing dividends, a testament to its disciplined capital allocation.

The company's payout ratio of 70% and cash payout ratio of 35% further reinforce sustainability. While the former suggests a relatively high reliance on earnings, the latter—measured against operating cash flow—indicates robust liquidity. With $254.7 million in available funds as of March 31, 2025, and a net debt-to-EBITDA ratio of 1.49, Savaria's balance sheet is in excellent shape to weather economic headwinds.

Financial Performance and Strategic Growth

Savaria's Q1 2025 results underscore its financial strength. Revenue rose 5.2% year-over-year to $220.2 million, driven by organic growth in North America and a 3.3% foreign exchange tailwind. Adjusted EBITDA surged 17.2% to $40.6 million, with margins expanding to 18.5% from 16.6% in the prior year. This improvement was fueled by the Savaria One transformation program, which streamlined operations and reduced costs.

The company's strategic investments are equally compelling. A $30 million expansion of its Greenville, South Carolina, facility—home to its Eclipse home elevator line—positions Savaria to meet rising demand in North America. Meanwhile, new product launches like the Luma elevator and M Series ceiling lift are expected to drive revenue growth. These initiatives align with the company's long-term vision to dominate the accessibility market while maintaining profitability.

A Market on the Rise

Savaria's growth is inextricably tied to the global accessibility market, which is projected to expand at a compound annual growth rate (CAGR) of 9.1% through 2030. The aging population, rising disability rates, and a shift toward aging-in-place are driving demand for products like stairlifts, home elevators, and patient care equipment.

North America remains Savaria's largest market, but the Asia-Pacific region is emerging as a key growth driver. With its large aging population and improving healthcare infrastructure, countries like Japan, China, and India present significant opportunities. Savaria's ESG initiatives, including sustainable manufacturing and energy-efficient product designs, also position it to capitalize on the growing demand for eco-friendly solutions.

Risks and Considerations

While Savaria's fundamentals are strong, investors should remain cautious. The company's high payout ratio leaves little room for error if earnings growth slows. Additionally, macroeconomic risks—such as supply chain disruptions or geopolitical tensions—could impact margins. However, Savaria's diversified product portfolio and focus on operational efficiency mitigate these concerns.

Investment Thesis

Savaria offers a compelling combination of dividend reliability and growth potential. Its 2.6% yield is supported by a robust balance sheet and expanding market opportunities. For income-focused investors, the company's 21-year streak of consecutive dividend payments and 14% compound annual growth rate since 2015 make it a standout.

Recommendation: Investors seeking a high-quality dividend stock with exposure to the growing accessibility sector should consider Savaria. While the payout ratio is elevated, the company's strong cash flow, strategic investments, and market tailwinds suggest the dividend is sustainable—and potentially growing. As the global demand for accessibility solutions accelerates, Savaria is well-positioned to reward shareholders for years to come.