TSX:TCL.A

Stock Analysis Report

Executive Summary

Transcontinental Inc. engages in flexible packaging business in Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand.

Snowflake

Fundamentals

Undervalued established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

1.9%

TCL.A

1.6%

CA Commercial Services

0.2%

CA Market


1 Year Return

-23.9%

TCL.A

-10.9%

CA Commercial Services

3.5%

CA Market

Return vs Industry: TCL.A underperformed the Canadian Commercial Services industry which returned -10.9% over the past year.

Return vs Market: TCL.A underperformed the Canadian Market which returned 3.5% over the past year.


Shareholder returns

TCL.AIndustryMarket
7 Day1.9%1.6%0.2%
30 Day-2.7%-4.9%-3.3%
90 Day3.4%-4.5%-1.9%
1 Year-19.8%-23.9%-7.7%-10.9%7.3%3.5%
3 Year-4.3%-14.9%1.3%-6.8%14.7%4.4%
5 Year23.4%1.4%-18.2%-33.0%26.2%7.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TCL.A (CA$15.36) is trading below our estimate of fair value (CA$55.79)

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


Price To Earnings Ratio

PE vs Industry: TCL.A is good value based on its PE Ratio (11.1x) compared to the Commercial Services industry average (12.8x).

PE vs Market: TCL.A is good value based on its PE Ratio (11.1x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TCL.A's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TCL.A is good value based on its PB Ratio (0.8x) compared to the CA Commercial Services industry average (0.8x).


Next Steps

Future Growth

How is Transcontinental forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-0.9%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if TCL.A's forecast earnings growth is above the savings rate (1.9%).

Earnings vs Market: Insufficient data to determine if TCL.A's earnings are forecast to grow faster than the Canadian market

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

Revenue vs Market: TCL.A's revenue is expected to decline over the next 3 years (-0.9% per year).

High Growth Revenue: TCL.A's revenue is forecast to decline over the next 3 years (-0.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TCL.A's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has Transcontinental performed over the past 5 years?

9.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TCL.A's earnings have grown by 9.4% per year over the past 5 years.

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

Earnings vs Industry: TCL.A had negative earnings growth (-45.1%) over the past year, making it difficult to compare to the Commercial Services industry average (-2.1%).


Return on Equity

High ROE: TCL.A's Return on Equity (7.4%) is considered low.


Return on Assets

ROA vs Industry: TCL.A's Return on Assets is below or equal to the Commercial Services industry average last year.


Return on Capital Employed

ROCE Improving: TCL.A's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Transcontinental's financial position?


Financial Position Analysis

Short Term Liabilities: TCL.A's short term assets (CA$922.1M) exceeds its short term liabilities (CA$405.0M)

Long Term Liabilities: TCL.A's short term assets (922.1M) do not cover its long term liabilities (1.6B)


Debt to Equity History and Analysis

Debt Level: TCL.A's debt to equity ratio (85.9%) is considered high

Reducing Debt: TCL.A's debt to equity ratio has increased from 54.3% to 85.9% over the past 5 years.

Debt Coverage: TCL.A's debt is well covered by operating cash flow (26%).

Interest Coverage: TCL.A's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet

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

Debt Coverage by Assets: TCL.A's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

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

5.73%

Current Dividend Yield


Dividend Yield vs Market

company5.7%marketbottom25%2.0%markettop25%5.9%industryaverage1.6%forecastin3Years5.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TCL.A's dividend (5.73%) is higher than the bottom 25% of dividend payers in the Canadian market (1.98%).

High Dividend: TCL.A's dividend (5.73%) is low compared to the top 25% of dividend payers in the Canadian market (5.92%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62.3%), TCL.A's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TCL.A's dividends in 3 years are forecast to be well covered by earnings (35.9% payout ratio).


Next Steps

Management

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

6.1yrs

Average management tenure


CEO

François Olivier (54yo)

11.7yrs

Tenure

CA$7,280,138

Compensation

Mr. François Olivier has been the Chief Executive Officer and President of Transcontinental Inc. since February 20, 2008. Mr. Olivier is heading the diversification strategy of TC Transcontinental, driving ...


CEO Compensation Analysis

Compensation vs. Market: François's total compensation ($USD5.56M) is about average for companies of similar size in the Canadian market ($USD1.63M).

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


Management Age and Tenure

6.1yrs

Average Tenure

Experienced Management: TCL.A's management team is seasoned and experienced (6.1 years average tenure).


Board Age and Tenure

8.6yrs

Average Tenure

55yo

Average Age

Experienced Board: TCL.A's board of directors are considered experienced (8.6 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$100,67415 Jul 19
H. Brues
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,850
Max PriceCA$14.70
BuyCA$34,42205 Apr 19
Donald LeCavalier
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,050
Max PriceCA$16.85
BuyCA$50,66022 Mar 19
Annie Thabet
EntityIndividual
Shares3,000
Max PriceCA$16.90
BuyCA$85,34908 Mar 19
François Roy
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceCA$17.08
BuyCA$52,55006 Mar 19
Yves Leduc
EntityIndividual
Shares3,000
Max PriceCA$17.60
BuyCA$66,72806 Mar 19
Christine Desaulniers
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer & Corporate Secretary
Shares3,800
Max PriceCA$17.56
BuyCA$29,98219 Dec 18
Mario Plourde
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,600
Max PriceCA$18.75
BuyCA$203,22725 Oct 18
J.V. Cyr
EntityIndividual
Shares10,000
Max PriceCA$20.32

Ownership Breakdown


Management Team

  • Rémi Marcoux (79yo)

    Founder & Director

    • Tenure: 43.8yrs
    • Compensation: CA$86.00k
  • Brian Reid

    President of TC Transcontinental Printing

    • Tenure: 5.8yrs
    • Compensation: CA$2.19m
  • François Olivier (54yo)

    President

    • Tenure: 11.7yrs
    • Compensation: CA$7.28m
  • Jacques Grégoire

    President of TC Transcontinental Printing

    • Tenure: 5.4yrs
    • Compensation: CA$729.25k
  • Christine Desaulniers

    Chief Legal Officer & Corporate Secretary

    • Tenure: 13.9yrs
    • Compensation: CA$994.15k
  • Donald LeCavalier

    Chief Financial Officer

    • Tenure: 1.1yrs
    • Compensation: CA$767.04k
  • Benoit Guilbault

    Chief Information Officer

    • Tenure: 6.5yrs
  • Katherine Chartrand

    Senior Director of Corporate Communications

    • Tenure: 0yrs
  • Sam Bendavid

    Vice President of Corporate Development

    • Tenure: 1.8yrs
  • Yan Lapointe

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Mario Plourde (58yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: CA$113.13k
  • François Roy (64yo)

    Independent Director

    • Tenure: 11.4yrs
    • Compensation: CA$112.72k
  • Rémi Marcoux (79yo)

    Founder & Director

    • Tenure: 43.8yrs
    • Compensation: CA$86.00k
  • Isabelle Marcoux (49yo)

    Chair of the Board

    • Tenure: 7.7yrs
    • Compensation: CA$1.01m
  • François Olivier (54yo)

    President

    • Tenure: 11.7yrs
    • Compensation: CA$7.28m
  • Pierre Marcoux (47yo)

    Non-Independent Director

    • Tenure: 14.6yrs
    • Compensation: CA$605.27k
  • Jacynthe Côté (60yo)

    Lead Director

    • Tenure: 0.8yrs
    • Compensation: CA$114.90k
  • Anna Martini (56yo)

    Independent Director

    • Tenure: 8.6yrs
    • Compensation: CA$142.86k
  • Nathalie Marcoux (50yo)

    Non-Independent Director

    • Tenure: 8.6yrs
    • Compensation: CA$107.32k
  • H. Brues (50yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: CA$17.42k

Company Information

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


Key Information

  • Name: Transcontinental Inc.
  • Ticker: TCL.A
  • Exchange: TSX
  • Founded: 1976
  • Industry: Commercial Printing
  • Sector: Commercial Services
  • Market Cap: CA$1.350b
  • Shares outstanding: 87.34m
  • Website: https://www.tctranscontinental.com

Number of Employees


Location

  • Transcontinental Inc.
  • 1 Place Ville Marie
  • Suite 3240
  • Montreal
  • Quebec
  • H3B 0G1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TCL.BTSX (The Toronto Stock Exchange)Class B SharesCACADMar 1985
TCL.ATSX (The Toronto Stock Exchange)YesClass A SharesCACADMay 1992
TCLA.FOTCPK (Pink Sheets LLC)YesClass A SharesUSUSDMay 1992
53LDB (Deutsche Boerse AG)YesClass A SharesDEEURMay 1992

Biography

Transcontinental Inc. engages in flexible packaging business in Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand. It operates through three segments: Packaging, Prin ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 23:36
End of Day Share Price2019/10/23 00:00
Earnings2019/07/28
Annual Earnings2018/10/28


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.