Discover Saftec Co Ltd: a promising investment opportunity in Japan's security sector

SAFTEC CO., LTD. is a Japanese company that has been active since 1957 in the sale and rental of safety products for civil engineering works. The company is engaged in the retail, wholesale and rental of billboards, traffic signs, illuminated signs, safety equipment, barricades, protective fences, traffic lights, safety equipment, fire extinguishers, ropes, electrical equipment and paint.

Saftec is very cheap. The price-to-earnings ratio is only 7.9, the price-to-book ratio is 0.6 and the price-to-sales ratio is 0.31. The dividend yield is also particularly attractive, with 2.9% for a payout ratio of only 23%. Saftec therefore still has a lot of room to either increase its dividend or invest in the company's growth.

The company is able to grow its profits, cash, assets and dividend over time, which proves the sustainability of its business model and that it is able to create long-term value for shareholders.

Saftec's liquidity reserves are ideal, i.e. sufficient to meet current financial obligations, without compromising the company's development. Although the current ratio has slightly decreased since the previous year, it remains largely comfortable, at 1.7. The reduced liquidity ratio is 1.4.

The company's gross margin is 44.9%, up from the previous year, while the return on assets, also up, stands at 2.83%. The debt ratio is down, now at 16.48%. As for the number of shares outstanding, it is also down slightly from the previous year.

Saftec is a solid company, which operates in a defensive environment, that is to say protected from economic and financial hazards and from the excitement of traders and institutions. There are also very few big guns who follow this company. Frankly, road signs are not the most glamorous thing... But the long history of the company proves to us that it is not because its products are a bit boring that they are not profitable.

At the current price of JPY 5,500, I believe the stock can easily double in the next few years, and the dividend will do at least as well.

So I just took a position on Saftec.