TSX:KBL

Stock Analysis Report

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Executive Summary

K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare institutions, hotels, and other commercial organizations in Canada and the United Kingdom. More Details


Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.

Share Price & News

How has K-Bro Linen's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KBL is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: KBL's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

13.0%

KBL

4.9%

CA Commercial Services

2.5%

CA Market


1 Year Return

-7.5%

KBL

22.0%

CA Commercial Services

-0.5%

CA Market

Return vs Industry: KBL underperformed the Canadian Commercial Services industry which returned 23.4% over the past year.

Return vs Market: KBL underperformed the Canadian Market which returned 0.2% over the past year.


Shareholder returns

KBLIndustryMarket
7 Day13.0%4.9%2.5%
30 Day31.5%16.3%9.3%
90 Day14.3%20.9%5.6%
1 Year-3.9%-7.5%23.6%22.0%3.1%-0.5%
3 Year1.7%-7.9%59.7%49.8%12.8%1.9%
5 Year-13.3%-25.9%102.8%82.5%47.5%24.9%

Long-Term Price Volatility Vs. Market

How volatile is K-Bro Linen's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is K-Bro Linen undervalued compared to its fair value and its price relative to the market?

44.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KBL (CA$37.28) is trading below our estimate of fair value (CA$67.03)

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


Price To Earnings Ratio

PE vs Industry: KBL is poor value based on its PE Ratio (102.3x) compared to the CA Commercial Services industry average (23.8x).

PE vs Market: KBL is poor value based on its PE Ratio (102.3x) compared to the Canadian market (15.3x).


Price to Earnings Growth Ratio

PEG Ratio: KBL is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: KBL's PB Ratio (2.1x) is in line with the CA Commercial Services industry average.


Next Steps

Future Growth

How is K-Bro Linen forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

63.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KBL's forecast earnings growth (63.2% per year) is above the savings rate (1.7%).

Earnings vs Market: KBL's earnings (63.2% per year) are forecast to grow faster than the Canadian market (26.8% per year).

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

Revenue vs Market: KBL's revenue (9.7% per year) is forecast to grow faster than the Canadian market (6% per year).

High Growth Revenue: KBL's revenue (9.7% 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 KBL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has K-Bro Linen performed over the past 5 years?

-16.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KBL has a large one-off gain of CA$5.3M impacting its September 30 2020 financial results.

Growing Profit Margin: KBL's current net profit margins (1.8%) are lower than last year (3.9%).


Past Earnings Growth Analysis

Earnings Trend: KBL's earnings have declined by 16.6% per year over the past 5 years.

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

Earnings vs Industry: KBL had negative earnings growth (-60.7%) over the past year, making it difficult to compare to the Commercial Services industry average (15.4%).


Return on Equity

High ROE: KBL's Return on Equity (2%) is considered low.


Next Steps

Financial Health

How is K-Bro Linen's financial position?


Financial Position Analysis

Short Term Liabilities: KBL's short term assets (CA$78.8M) exceed its short term liabilities (CA$35.7M).

Long Term Liabilities: KBL's short term assets (CA$78.8M) do not cover its long term liabilities (CA$113.3M).


Debt to Equity History and Analysis

Debt Level: KBL's debt to equity ratio (31.3%) is considered satisfactory.

Reducing Debt: KBL's debt to equity ratio has increased from 0.05% to 31.3% over the past 5 years.

Debt Coverage: KBL's debt is well covered by operating cash flow (48.8%).

Interest Coverage: KBL's interest payments on its debt are not well covered by EBIT (1.2x coverage).


Balance Sheet


Next Steps

Dividend

What is K-Bro Linen current dividend yield, its reliability and sustainability?

3.22%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KBL's dividend (3.22%) is higher than the bottom 25% of dividend payers in the Canadian market (1.65%).

High Dividend: KBL's dividend (3.22%) is low compared to the top 25% of dividend payers in the Canadian market (5.28%).


Stability and Growth of Payments

Stable Dividend: KBL's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (329.3%), KBL's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KBL's dividends in 3 years are not forecast to be well covered by earnings (96.8% payout ratio).


Next Steps

Management

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

18.3yrs

Average management tenure


CEO

Linda McCurdy (52 yo)

20.83yrs

Tenure

CA$1,971,211

Compensation

Ms. Linda Jane McCurdy, M.B.A., has been the Chief Executive Officer and President at K-Bro Linen Inc., since January 2000. Ms. McCurdy joined K-Bro in May 1998 as Chief Financial Officer. She has been Chi...


CEO Compensation Analysis

Compensation vs Market: Linda's total compensation ($USD1.52M) is above average for companies of similar size in the Canadian market ($USD583.69K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Linda McCurdy
President20.83yrsCA$1.97m1.62%
CA$ 6.1m
Kristie Plaquin
Chief Financial Officer6.25yrsCA$573.17k0.14%
CA$ 518.9k
Sean Curtis
Senior VP21.83yrsCA$959.91k0.92%
CA$ 3.5m
Kevin Stephenson
General Manager of Toronto14.83yrsCA$295.34kno data
Michael Jones
Managing Director of Fishers Services Limitedno dataCA$428.93k0.0037%
CA$ 14.0k
Timothy Bruns
President of Unitrin Specialtyno datano datano data
Ronald Graham
General Manager of Vancouver Plant18.83yrsCA$278.27kno data
Jeffrey Gannon
General Manager of Calgary Plant17.83yrsCA$266.07k0.072%
CA$ 269.6k
Sean Jackson
General Manager of Reginano datano datano data
Jessica Lévesque
Director Général of Quebecno datano datano data
Fabien Poirier
Director of Opérations - Quebecno datano datano data
Sylvain Tremblay
Director Général of Montrealno datano datano data

18.3yrs

Average Tenure

Experienced Management: KBL's management team is seasoned and experienced (18.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Linda McCurdy
President20.83yrsCA$1.97m1.62%
CA$ 6.1m
Matthew Hills
Director15.92yrsCA$219.20k0.15%
CA$ 566.3k
Michael Percy
Independent Director5.42yrsCA$86.05k0.097%
CA$ 364.1k
Steven Matyas
Independent Director15.92yrsCA$92.45k0.36%
CA$ 1.4m
Ross Smith
Independent Chairman of the Boardno dataCA$128.85k0.11%
CA$ 398.4k

15.9yrs

Average Tenure

67yo

Average Age

Experienced Board: KBL's board of directors are seasoned and experienced ( 15.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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

K-Bro Linen Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: K-Bro Linen Inc.
  • Ticker: KBL
  • Exchange: TSX
  • Founded: 1954
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: CA$376.348m
  • Shares outstanding: 10.56m
  • Website: https://www.k-brolinen.com

Number of Employees


Location

  • K-Bro Linen Inc.
  • 14903-137 Avenue NW
  • Edmonton
  • Alberta
  • T5V 1R9
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KBLTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 2005
KBRL.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 2005

Biography

K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare institutions, hotels, and other commercial organizations in Canada and the United Kingdom. Its services i...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 00:17
End of Day Share Price2020/11/25 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.