Securitas - Undervalued Global Security Solutions

Summary

• Securitas is one of the world's largest security services company with 370,000 employees in more than 56 countries.
• The company represents 2.5% of my portfolio and yields a respectable and appealing dividend, despite COVID-19 disturbances.
• At current valuations, I view the company as 9-16% undervalued and a "BUY".

The time has come to review Securitas (OTCPK:SCTBF), a company I bought during COVID-19 crash-valuations. During March, I took advantage of my then-large cash position and built up a significant stake over time in Securitas.

In this article, I aim to present Securitas as a business, and what I consider to be appealing in the company for a core dividend growth holding. I also consider Securitas to be an excellent company for non-Swedish investors.

Securitas - What does the company do?

Securitas AB was founded in 1934 in Sweden. Its initial growth was ensured through quick M&A, which made the budding company a larger player in southern Sweden, and the company's tech subsidiary was founded in 1949. It would take until 1972 that the company was renamed as Securitas and the now-famous logo was adopted as the company's trademark.

The company ceased being a family-owned company in 1985 when it was sold to an investment company called Investment AB Latour (though it was later mostly spun off). Latour is one of my largest investment holdings at nearly 2%, and it's for one of the same reasons that I own Securitas - the ownership.

Both Latour and Securitas are owned by Count Gustaf Douglas. While not majority shareholders, they are owners with high ownership and share/vote counts - in the case of Securitas, they have nearly 30% of the company's votes and 10.9% of the shares.

Securitas has, over the course of many years, M&A'ed several famous companies, including the Pinkerton Agency, Burns Security, and several regional security companies in the USA. Through these M&A's, Securitas became one of the largest security companies in the entire world - and in 2013, the company added Pinkerton Government Services to its portfolio, providing cleared securities to agencies and programs that require DoD and DoES clearances.

Analyst’s Disclosure:I am/we are long SCTBF, SCTBY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles.