TSX:LNR

Stock Analysis Report

Executive Summary

Linamar Corporation manufactures and sells precision metallic components, modules, and systems in Canada, the Rest of North America, the Asia Pacific, Mexico, and Europe.


Snowflake Analysis

Undervalued with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Linamar's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LNR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.7%

LNR

-0.6%

CA Auto Components

0.1%

CA Market


1 Year Return

-21.3%

LNR

-8.6%

CA Auto Components

4.5%

CA Market

Return vs Industry: LNR underperformed the Canadian Auto Components industry which returned -8.6% over the past year.

Return vs Market: LNR underperformed the Canadian Market which returned 4.5% over the past year.


Shareholder returns

LNRIndustryMarket
7 Day-3.7%-0.6%0.1%
30 Day-11.2%-3.2%0.9%
90 Day-7.1%-5.7%3.7%
1 Year-20.4%-21.3%-7.0%-8.6%7.8%4.5%
3 Year-29.3%-31.2%-4.5%-13.6%18.2%7.5%
5 Year-45.5%-47.6%1.3%-12.3%33.7%14.2%

Price Volatility Vs. Market

How volatile is Linamar's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Linamar undervalued compared to its fair value and its price relative to the market?

30.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LNR (CA$41.12) is trading below our estimate of fair value (CA$58.71)

Significantly Below Fair Value: LNR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LNR is good value based on its PE Ratio (5.3x) compared to the Auto Components industry average (13.6x).

PE vs Market: LNR is good value based on its PE Ratio (5.3x) compared to the Canadian market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: LNR is poor value based on its PEG Ratio (11.6x)


Price to Book Ratio

PB vs Industry: LNR is good value based on its PB Ratio (0.7x) compared to the XN Auto Components industry average (1.3x).


Next Steps

Future Growth

How is Linamar forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

0.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LNR's forecast earnings growth (0.5% per year) is below the savings rate (1.4%).

Earnings vs Market: LNR's earnings (0.5% per year) are forecast to grow slower than the Canadian market (10.9% per year).

High Growth Earnings: LNR's earnings are forecast to grow, but not significantly.

Revenue vs Market: LNR's revenue (0.5% per year) is forecast to grow slower than the Canadian market (4.7% per year).

High Growth Revenue: LNR's revenue (0.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LNR's Return on Equity is forecast to be low in 3 years time (10.2%).


Next Steps

Past Performance

How has Linamar performed over the past 5 years?

10.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LNR has high quality earnings.

Growing Profit Margin: LNR's current net profit margins (6.7%) are lower than last year (8.1%).


Past Earnings Growth Analysis

Earnings Trend: LNR's earnings have grown by 10% per year over the past 5 years.

Accelerating Growth: LNR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LNR had negative earnings growth (-16.1%) over the past year, making it difficult to compare to the Auto Components industry average (-7%).


Return on Equity

High ROE: LNR's Return on Equity (12.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Linamar's financial position?


Financial Position Analysis

Short Term Liabilities: LNR's short term assets (CA$3.0B) exceed its short term liabilities (CA$1.5B).

Long Term Liabilities: LNR's short term assets (CA$3.0B) exceed its long term liabilities (CA$2.6B).


Debt to Equity History and Analysis

Debt Level: LNR's debt to equity ratio (58.9%) is considered high.

Reducing Debt: LNR's debt to equity ratio has increased from 28.1% to 58.9% over the past 5 years.

Debt Coverage: LNR's debt is well covered by operating cash flow (39.7%).

Interest Coverage: LNR's interest payments on its debt are well covered by EBIT (17.2x coverage).


Balance Sheet

Inventory Level: LNR has a high level of physical assets or inventory.

Debt Coverage by Assets: LNR's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Linamar's current dividend yield, its reliability and sustainability?

1.17%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%2.0%markettop25%5.4%industryaverage2.1%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: LNR's dividend (1.17%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: LNR's dividend (1.17%) is low compared to the top 25% of dividend payers in the Canadian market (5.38%).


Stability and Growth of Payments

Stable Dividend: LNR's dividends per share have been stable in the past 10 years.

Growing Dividend: LNR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (10.9%), LNR's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LNR's dividends in 3 years are forecast to be thoroughly covered by earnings (6.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

15.5yrs

Average management tenure


CEO

Linda Hasenfratz (53yo)

17.5yrs

Tenure

CA$15,437,064

Compensation

Ms. Linda S. Hasenfratz, C.M., has been the Chief Executive Officer of Linamar Corporation, an affiliate of Skyjack Inc., since August 12, 2002. Ms. Hasenfratz served as an Acting Chief Financial Officer a ...


CEO Compensation Analysis

Compensation vs Market: Linda's total compensation ($USD11.68M) is above average for companies of similar size in the Canadian market ($USD2.12M).

Compensation vs Earnings: Linda's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Frank Hasenfratz
Founder & Chairman of the Board54.1yrsCA$12.90m23.78% CA$638.0m
Linda Hasenfratz
CEO & Non-Independent Director17.5yrsCA$15.44m6.72% CA$180.4m
Jim Jarrell
President & COO15.5yrsCA$11.08m0.032% CA$857.4k
Dale Schneider
Chief Financial Officer8.3yrsCA$1.16m0.030% CA$798.6k
Kenneth McDougall
Group President of Linamar Canada - Mexico Group0yrsCA$2.04m0.0091% CA$244.1k
Mark Stoddart
CTO, Executive VP of Sales & Marketing and Non-Independent Director21.1yrsno data1.26% CA$33.7m
Roger Fulton
Executive VP of Human Resources16.4yrsno data0.012% CA$326.2k
Brian Ahlborn
Group President of Linamar Machining & Assembly - Europe & Linamar Montupet Casting0yrsno datano data
Brad Boehler
Group President of Skyjack Inc8.1yrsno datano data

15.5yrs

Average Tenure

55yo

Average Age

Experienced Management: LNR's management team is seasoned and experienced (15.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Frank Hasenfratz
Founder & Chairman of the Board54.1yrsCA$12.90m23.78% CA$638.0m
Linda Hasenfratz
CEO & Non-Independent Director17.5yrsCA$15.44m6.72% CA$180.4m
Mark Stoddart
CTO, Executive VP of Sales & Marketing and Non-Independent Director21.1yrsno data1.26% CA$33.7m
William Harrison
Independent Director30.1yrsCA$66.04k0.013% CA$335.3k
Terry Reidel
Independent Director17.1yrsCA$73.49k0.0061% CA$164.4k
Dennis Grimm
Independent Director5.8yrsCA$64.99k0.0043% CA$114.3k

21.6yrs

Average Tenure

71.5yo

Average Age

Experienced Board: LNR's board of directors are seasoned and experienced ( 21.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LNR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Linamar Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Linamar Corporation
  • Ticker: LNR
  • Exchange: TSX
  • Founded: 1966
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: CA$2.683b
  • Shares outstanding: 65.24m
  • Website: https://www.linamar.com

Number of Employees


Location

  • Linamar Corporation
  • 287 Speedvale Avenue West
  • Guelph
  • Ontario
  • N1H 1C5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LNRTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1986
LNRDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1986
LIMA.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1986

Biography

Linamar Corporation manufactures and sells precision metallic components, modules, and systems in Canada, the Rest of North America, the Asia Pacific, Mexico, and Europe. It operates through two segments, Industrial and Transportation. The company offers hybrid power units, power transfer units, rear drive units/modules, and engineered gears; and shaft and shell assemblies, differential assemblies, transmission gears, clutch modules, center housings, transmission/driveline shafts, transfer case pump housings, and other transmission components. It also provides cylinder blocks, cylinder heads, connecting rods, camshafts, flywheels, fuel rails, pumps and bodies, balance shaft modules, fuel injector bodies, fuel pump housings, and turbo charger housings; and wheel hubs and bearings, axle shafts, and steering knuckles. In addition, the company offers precision machined castings and metallic assemblies; planetary carriers, gearbox housings, bearing housings, and torque arms; aluminum castings; and freight solutions. Further, it provides mobile industrial and harvesting equipment, aerial work platforms, telehandlers, draper headers, and self-propelled windrowers; markets corn and sunflower heads under the Harvestec and OROS brands; and produces assemblies for hay rake equipment, track modules for tracked construction equipment and tractors, combine head trailers, and other agricultural related fabrications and systems. It serves automotive, commercial vehicle, off highway, marine and recreational, industrial, aerial work platforms, energy, and agricultural industries. Linamar Corporation was founded in 1966 and is headquartered in Guelph, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 01:40
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.