Daily Stock Pick: Sabre (SABR)

This week, I'm looking for the fifth technology representative of six for my Ivy portfolio. The technology sector includes nineteen industries ranging from communication equipment, computers, consumer electronics, and contract manufacturing, to health and information technology and services to internet, scientific instruments, software, solar and all such technological enterprises.

Today I'm reviewing a mid-cap information technology services company named Sabre Corp. Their trading ticker symbol is SABR.

• Sabre Corp through its subsidiary, Sabre Holdings Corporation, provides technology solutions to the travel and tourism industry worldwide. 
• The company was founded in 2006 and is headquartered in Southlake, Texas.
• It operates in three segments: Travel Network, Airline Solutions, and Hospitality Solutions.
• It has the number-two share of the global distribution system bookings (mid-30s as of year-end 2018). The global distribution system segment represented 73% of total 2018 revenue.
• The company also has a growing IT solutions division (27% of revenue) that focuses on the airline, hospitality, and travel agent end markets.
• Transaction fees, which are tied to volume and not price, account for the bulk of revenue and profits.

I use three key data points to gauge Sabre Corp:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest. Those first three primary keys, however, best tell whether a  company has made, is making, and will make money.

SABR Price

Sabre's price per share closed at $22.29 yesterday. A year ago its price was $26.46. Price fell $4.17 or over 15.75% in the past year.

Assuming Sabre's stock trades in the range of $20.00 to $26.00 this year, Sabre's recent $22.29 price could rise by $1.71 and go to $24.00 by mid-June, 2020.

SABR Dividends

Sabre's most recent quarterly dividend was $0.14 declared April 23rd and payable June 28th.

That $0.14 Q payout equates to an annul dividend of $0.56 which produces ayield of 2.51% based on yesterday's $22.29 closing price.

Gains For SABR?

Adding the $0.56 annual estimated dividend to my $1.71 estimate of Sabre's price upside shows a $2.27 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little over $1,000.00 today. At the $22.29 recent stock price that would buy us 45 SABR shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.22 per share.

Subtracting that $0.22 brokerage cost from the estimated $2.25 gross annual gain leaves a net gain of $2.05 X 45 shares = $101.25 or a 10.12% net gain on a $1,003.05 investment.

Therefore, SABR now shows a possible net gain of 10.12% including a 2.51% dividend yield.

Ten brokers track Sabre Corp  stock:

• Five say "buy" SABR shares
• One says SABR shares will "outperform" peers
• Four say "hold" your SABR shares.

Therefore, you can look at Sabre Corp (SABR) and see it has made money, is making money, and could net a 10.12% gain including a 2.51% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Sabre Corp  is worth your time and money.