TSX:NFI

Stock Analysis Report

Executive Summary

NFI Group Inc., together with its subsidiaries, manufactures heavy-duty transit buses, medium-duty buses, low-floor cutaway buses, and motor coaches in the United States and Canada.

Rewards

Trading at 34% below its fair value

Earnings are forecast to grow 43.57% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 6.55% is not well covered by earnings

Profit margins (2.5%) are lower than last year (7.7%)



Snowflake Analysis

Undervalued with reasonable growth potential.


Similar Companies

BYD

SEHK:1211

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.7%

NFI

0.2%

CA Machinery

0.4%

CA Market


1 Year Return

-26.5%

NFI

0.3%

CA Machinery

10.6%

CA Market

Return vs Industry: NFI underperformed the Canadian Machinery industry which returned 0.3% over the past year.

Return vs Market: NFI underperformed the Canadian Market which returned 10.6% over the past year.


Shareholder returns

NFIIndustryMarket
7 Day-0.7%0.2%0.4%
30 Day-13.3%-5.0%0.01%
90 Day-14.2%-2.5%0.7%
1 Year-22.7%-26.5%3.1%0.3%14.3%10.6%
3 Year-28.1%-35.0%3.3%-3.4%15.9%5.4%
5 Year135.8%101.6%28.4%18.0%35.2%15.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NFI (CA$25.7) is trading below our estimate of fair value (CA$38.92)

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


Price To Earnings Ratio

PE vs Industry: NFI is good value based on its PE Ratio (18.1x) compared to the Machinery industry average (20.9x).

PE vs Market: NFI is poor value based on its PE Ratio (18.1x) compared to the Canadian market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: NFI is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: NFI is good value based on its PB Ratio (1.6x) compared to the CA Machinery industry average (2.2x).


Next Steps

Future Growth

How is NFI Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

43.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NFI's forecast earnings growth (43.6% per year) is above the savings rate (1.4%).

Earnings vs Market: NFI's earnings (43.6% per year) are forecast to grow faster than the Canadian market (9.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NFI's revenue (6.8% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: NFI's revenue (6.8% 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 NFI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has NFI Group performed over the past 5 years?

25.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NFI has high quality earnings.

Growing Profit Margin: NFI's current net profit margins (2.5%) are lower than last year (7.7%).


Past Earnings Growth Analysis

Earnings Trend: NFI's earnings have grown significantly by 25.1% per year over the past 5 years.

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

Earnings vs Industry: NFI had negative earnings growth (-65.6%) over the past year, making it difficult to compare to the Machinery industry average (-20.7%).


Return on Equity

High ROE: NFI's Return on Equity (8.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NFI Group's financial position?


Financial Position Analysis

Short Term Liabilities: NFI's short term assets ($1.3B) exceed its short term liabilities ($630.9M).

Long Term Liabilities: NFI's short term assets ($1.3B) do not cover its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: NFI's debt to equity ratio (155.2%) is considered high.

Reducing Debt: NFI's debt to equity ratio has increased from 54.5% to 155.2% over the past 5 years.

Debt Coverage: NFI's debt is not well covered by operating cash flow (0.2%).

Interest Coverage: NFI's interest payments on its debt are not well covered by EBIT (2.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: NFI's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

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

6.55%

Current Dividend Yield


Dividend Yield vs Market

company6.6%marketbottom25%2.0%markettop25%5.6%industryaverage5.3%forecastin3Years6.6%

Current dividend yield vs market & industry

Notable Dividend: NFI's dividend (6.55%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: NFI's dividend (6.55%) is in the top 25% of dividend payers in the Canadian market (5.65%)


Stability and Growth of Payments

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

Growing Dividend: NFI has only been paying a dividend for 8 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (111.3%), NFI's dividend payments are not 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 NFI Group's salary, the management and board of directors tenure and is there insider trading?

9.2yrs

Average management tenure


CEO

Paul Soubry (56yo)

10.9yrs

Tenure

US$3,047,573

Compensation

Mr. Paul Soubry, Jr., ICD.D, has been the Chief Executive Officer and President of New Flyer Industries Inc. and New Flyer Holdings, Inc. since January 19, 2009. He has been the Chief Executive Officer and ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD2.31M) is about average for companies of similar size in the Canadian market ($USD2.21M).

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


Management Age and Tenure

9.2yrs

Average Tenure

Experienced Management: NFI's management team is seasoned and experienced (9.2 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

64yo

Average Age

Experienced Board: NFI's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$9,20504 Dec 19
Steven Young
EntityIndividual
Shares350
Max PriceUS$26.30
BuyUS$3,720,14204 Sep 19
Coliseum Capital Management, LLC
EntityCompany
Shares128,700
Max PriceUS$29.13
BuyUS$12,519,14327 Aug 19
Coliseum Capital Management, LLC
EntityCompany
Shares445,500
Max PriceUS$29.03
BuyUS$28,35026 Aug 19
Phyllis Cochran
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$28.35
BuyUS$18,316,95023 Aug 19
Coliseum Capital Management, LLC
EntityCompany
Shares713,444
Max PriceUS$25.77
BuyUS$26,00022 Aug 19
Ian Smart
EntityIndividual
Role
Senior Key Executive
President of Motor Coach Business
Shares1,000
Max PriceUS$26.00
BuyUS$12,69320 Aug 19
Steven Young
EntityIndividual
Shares500
Max PriceUS$25.40
BuyUS$253,13319 Aug 19
Larry Edwards
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$25.31
BuyUS$101,36019 Aug 19
Brian Tobin
EntityIndividual
Role
Chairman of the Board
Independent Chairperson of the Board
Shares4,000
Max PriceUS$25.34
BuyUS$100,60516 Aug 19
Paul Soubry
EntityIndividual
Role
Chief Executive Officer
President
Shares4,000
Max PriceUS$25.15
BuyUS$2,976,91104 Jun 19
Coliseum Capital Management, LLC
EntityCompany
Shares86,800
Max PriceUS$34.43
BuyUS$25,17804 Jun 19
Brian Tobin
EntityIndividual
Role
Chairman of the Board
Independent Chairperson of the Board
Shares750
Max PriceUS$33.57
BuyUS$171,59104 Jun 19
Larry Edwards
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$34.32
SellUS$64,80026 Mar 19
Vincent Sardo
EntityIndividual
Shares2,000
Max PriceUS$32.40
BuyUS$199,32019 Mar 19
Alexander Kirshner
EntityIndividual
Shares6,600
Max PriceUS$30.20
SellUS$49,79518 Mar 19
Brian Tobin
EntityIndividual
Role
Chairman of the Board
Independent Chairperson of the Board
Shares1,650
Max PriceUS$30.18
SellUS$66,28528 Dec 18
Vincent Sardo
EntityIndividual
Shares2,000
Max PriceUS$33.15
BuyUS$1,574,31026 Dec 18
Coliseum Capital Management, LLC
EntityCompany
Shares48,500
Max PriceUS$32.46
BuyUS$67,92018 Dec 18
Janice Harper
EntityIndividual
Role
Head of Human Resources
Executive Vice President of Human Resources
Shares2,000
Max PriceUS$33.96
BuyUS$60,01317 Dec 18
Ian Smart
EntityIndividual
Role
Senior Key Executive
President of Motor Coach Business
Shares1,727
Max PriceUS$34.75

Ownership Breakdown

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


Management Team

  • Paul Soubry (56yo)

    President

    • Tenure: 10.9yrs
    • Compensation: US$3.05m
  • Paul Smith

    Executive Vice President of Sales

    • Tenure: 19.9yrs
    • Compensation: US$649.22k
  • Glenn Asham

    Executive VP of Finance

    • Tenure: 14.9yrs
    • Compensation: US$998.61k
  • Ian Smart

    President of Motor Coach Business

    • Tenure: 8.2yrs
    • Compensation: US$1.02m
  • Colin Pewarchuk

    Executive VP

    • Tenure: 13.8yrs
  • Janice Harper

    Executive Vice President of Human Resources

    • Tenure: 10.2yrs
  • Wayne Joseph

    • Tenure: 0.9yrs
    • Compensation: US$1.57m
  • Brian Dewsnup

    President of Parts Business

    • Tenure: 2.9yrs
    • Compensation: US$1.24m
  • Stephen King

    Group Director of Corporate Development & Investor Relations

    • Tenure: 1.4yrs
  • Colin Robertson

    Chief Executive of ADL & President of NFI International

    • Tenure: 0.9yrs

Board Members

  • Larry Edwards (69yo)

    Independent Director

    • Tenure: 11.3yrs
    • Compensation: US$245.56k
  • Phyllis Cochran (67yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$266.02k
  • Brian Tobin (64yo)

    Independent Chairperson of the Board

    • Tenure: 0yrs
    • Compensation: US$409.26k
  • John Marinucci (62yo)

    Independent Director

    • Tenure: 14.5yrs
    • Compensation: US$245.56k
  • Paul Soubry (56yo)

    President

    • Tenure: 10.9yrs
    • Compensation: US$3.05m
  • Krystyna Hoeg (69yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$245.56k
  • Adam Gray (54yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$245.56k
  • Paulo da Silva Nunes (66yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$245.56k
  • Katherine Winter (56yo)

    Independent Director

    • Tenure: 0.6yrs

Company Information

NFI Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NFI Group Inc.
  • Ticker: NFI
  • Exchange: TSX
  • Founded: 1930
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: CA$1.604b
  • Shares outstanding: 62.42m
  • Website: https://www.nfigroup.com

Number of Employees


Location

  • NFI Group Inc.
  • 711 Kernaghan Avenue
  • Winnipeg
  • Manitoba
  • R2C 3T4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NFITSX (The Toronto Stock Exchange)YesCommon SharesCACADAug 2011
NFYE.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDAug 2011
9NFDB (Deutsche Boerse AG)YesCommon SharesDEEURAug 2011

Biography

NFI Group Inc., together with its subsidiaries, manufactures heavy-duty transit buses, medium-duty buses, low-floor cutaway buses, and motor coaches in the United States and Canada. The company operates th ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 00:29
End of Day Share Price2019/12/11 00:00
Earnings2019/09/29
Annual Earnings2018/12/30


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.