TSX:HDI

Stock Analysis Report

Hardwoods Distribution

Executive Summary

Hardwoods Distribution Inc. engages in the wholesale distribution of architectural building products to the residential and commercial construction sectors in Canada and the United States.

Snowflake

Flawless balance sheet and fair value.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: HDI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

17.8%

HDI

-0.1%

CA Trade Distributors

0.6%

CA Market


1 Year Return

22.0%

HDI

2.5%

CA Trade Distributors

7.4%

CA Market

Return vs Industry: HDI exceeded the Canadian Trade Distributors industry which returned 2.5% over the past year.

Return vs Market: HDI exceeded the Canadian Market which returned 7.4% over the past year.


Shareholder returns

HDIIndustryMarket
7 Day17.8%-0.1%0.6%
30 Day26.8%9.1%3.3%
90 Day27.4%10.8%3.6%
1 Year25.2%22.0%5.9%2.5%11.0%7.4%
3 Year-9.4%-14.4%20.6%10.9%18.1%7.5%
5 Year46.9%35.1%35.9%14.9%27.1%8.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

11.22x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HDI (CA$15.31) is trading above our estimate of fair value (CA$9.58)

Significantly Below Fair Value: HDI is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HDI is good value based on its PE Ratio (11.2x) compared to the Trade Distributors industry average (13.9x).

PE vs Market: HDI is good value based on its PE Ratio (11.2x) compared to the Canadian market (14.5x).


Price to Earnings Growth Ratio

PEG Ratio: HDI is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: HDI is overvalued based on its PB Ratio (1.1x) compared to the CA Trade Distributors industry average (0.8x).


Next Steps

Future Growth

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

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HDI's forecast earnings growth (13.1% per year) is above the savings rate (1.9%).

Earnings vs Market: HDI's earnings (13.1% per year) are forecast to grow faster than the Canadian market (9.8% per year).

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

Revenue vs Market: HDI's revenue (5.3% per year) is forecast to grow faster than the Canadian market (4.8% per year).

High Growth Revenue: HDI's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if HDI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Hardwoods Distribution performed over the past 5 years?

15.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HDI has high quality earnings.

Growing Profit Margin: HDI's current net profit margins (2.5%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: HDI's earnings have grown by 15.4% per year over the past 5 years.

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

Earnings vs Industry: HDI had negative earnings growth (-5.2%) over the past year, making it difficult to compare to the Trade Distributors industry average (-5.2%).


Return on Equity

High ROE: HDI's Return on Equity (10.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hardwoods Distribution's financial position?


Financial Position Analysis

Short Term Liabilities: HDI's short term assets (CA$337.3M) exceeds its short term liabilities (CA$161.2M)

Long Term Liabilities: HDI's short term assets (CA$337.3M) exceeds its long term liabilities (76.0M)


Debt to Equity History and Analysis

Debt Level: HDI's debt to equity ratio (31.8%) is considered satisfactory.

Reducing Debt: HDI's debt to equity ratio has reduced from 43.4% to 31.8% over the past 5 years.

Debt Coverage: HDI's debt is well covered by operating cash flow (77.4%).

Interest Coverage: HDI's interest payments on its debt are well covered by EBIT (11x coverage).


Balance Sheet

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

Debt Coverage by Assets: HDI's debt is covered by short term assets (assets are 3.7x debt).


Next Steps

Dividend

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

2.22%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Hardwoods Distribution before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.2%marketbottom25%2.0%markettop25%5.7%industryaverage3.0%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: HDI's dividend (2.22%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: HDI's dividend (2.22%) is low compared to the top 25% of dividend payers in the Canadian market (5.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HDI has been paying a dividend for less than 10 years.

Growing Dividend: HDI's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.4%), HDI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Hardwoods Distribution's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Rob Brown 0

3.8yrs

Tenure

CA$1,755,659

Compensation

Mr. Robert J. Brown, also known as Rob, has been the Chief Executive Officer at Hardwoods Distribution Inc. since January 7, 2016 and serves as its President and served as its Chief Operating Officer since ...


CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD1.33M) is above average for companies of similar size in the Canadian market ($USD673.77K).

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


Management Age and Tenure

3.8yrs

Average Tenure

Experienced Management: HDI's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

Experienced Board: HDI's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$151,85815 Nov 19
Arbutus Distributors Ltd.
EntityCompany
Shares10,000
Max PriceCA$15.19
BuyCA$26,26707 Jan 19
Daniel Besen
EntityIndividual
Shares2,200
Max PriceCA$11.94
BuyCA$467,60603 Jan 19
Arbutus Distributors Ltd.
EntityCompany
Shares42,500
Max PriceCA$11.00
BuyCA$216,25218 Dec 18
Arbutus Distributors Ltd.
EntityCompany
Shares20,800
Max PriceCA$10.43

Ownership Breakdown

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


Management Team

  • Rob Brown

    President

    • Tenure: 3.8yrs
    • Compensation: CA$1.76m
  • Lance Blanco

    Senior Vice President of Corporate Development

    • Tenure: 3.8yrs
    • Compensation: CA$652.94k
  • David Hughes

    Senior Vice President of Acquisitions

    • Tenure: 1.3yrs
    • Compensation: CA$895.98k
  • Dave Dickinson

    President of Rugby Architectural Building Products

    • Tenure: 1.3yrs
    • Compensation: CA$741.92k
  • Faiz Karmally

    VP, CFO & Secretary

    • Tenure: 4.7yrs
    • Compensation: CA$507.13k

Board Members

  • Graham Wilson (74yo)

    Independent Director

    • Tenure: 15.8yrs
    • Compensation: CA$100.00k
  • E. Sauder (66yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: CA$140.00k
  • Rob Brown

    President

    • Tenure: 3.8yrs
    • Compensation: CA$1.76m
  • Peter Bull

    Independent Director

    • Tenure: 6.6yrs
    • Compensation: CA$90.00k
  • William Sauder

    Independent Director

    • Tenure: 8.4yrs
    • Compensation: CA$90.00k
  • Michelle Lewis

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: CA$90.00k
  • Jim Macaulay

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: CA$90.00k
  • Rob Taylor

    Director

    • Tenure: 0.3yrs

Company Information

Hardwoods Distribution Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hardwoods Distribution Inc.
  • Ticker: HDI
  • Exchange: TSX
  • Founded:
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: CA$325.859m
  • Shares outstanding: 21.28m
  • Website: https://www.hdidist.com

Number of Employees


Location

  • Hardwoods Distribution Inc.
  • 9440 202nd Street
  • Suite 306
  • Langley
  • British Columbia
  • V1M 4A6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HDITSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 2004
HDIU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMar 2004

Biography

Hardwoods Distribution Inc. engages in the wholesale distribution of architectural building products to the residential and commercial construction sectors in Canada and the United States. The company offe ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/17 23:57
End of Day Share Price2019/11/15 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.