TSX:L

Stock Analysis Report

Executive Summary

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada.


Snowflake Analysis

Solid track record with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.5%

L

-0.3%

CA Consumer Retailing

0.1%

CA Market


1 Year Return

7.0%

L

14.3%

CA Consumer Retailing

4.5%

CA Market

Return vs Industry: L underperformed the Canadian Consumer Retailing industry which returned 14.3% over the past year.

Return vs Market: L exceeded the Canadian Market which returned 4.5% over the past year.


Shareholder returns

LIndustryMarket
7 Day-1.5%-0.3%0.1%
30 Day1.6%1.2%0.9%
90 Day-2.3%-0.6%3.7%
1 Year8.9%7.0%15.8%14.3%7.8%4.5%
3 Year32.4%1.1%37.4%24.9%18.2%7.5%
5 Year52.6%13.0%52.4%35.1%33.7%14.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

23.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: L (CA$70.15) is trading above our estimate of fair value (CA$58.37)

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


Price To Earnings Ratio

PE vs Industry: L is poor value based on its PE Ratio (24x) compared to the Consumer Retailing industry average (19.7x).

PE vs Market: L is poor value based on its PE Ratio (24x) compared to the Canadian market (16.2x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: L is overvalued based on its PB Ratio (2.3x) compared to the CA Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

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

2.5%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if L's forecast earnings growth is above the savings rate (1.4%).

Earnings vs Market: Insufficient data to determine if L'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: L's revenue (2.5% per year) is forecast to grow slower than the Canadian market (4.7% per year).

High Growth Revenue: L's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: L's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has Loblaw Companies performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: L has high quality earnings.

Growing Profit Margin: L's current net profit margins (2.2%) are higher than last year (1.5%).


Past Earnings Growth Analysis

Earnings Trend: L's earnings have grown by 13.8% per year over the past 5 years.

Accelerating Growth: L's earnings growth over the past year (52.3%) exceeds its 5-year average (13.8% per year).

Earnings vs Industry: L earnings growth over the past year (52.3%) exceeded the Consumer Retailing industry 7%.


Return on Equity

High ROE: L's Return on Equity (10%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Loblaw Companies's financial position?


Financial Position Analysis

Short Term Liabilities: L's short term assets (CA$11.3B) exceed its short term liabilities (CA$9.2B).

Long Term Liabilities: L's short term assets (CA$11.3B) do not cover its long term liabilities (CA$15.8B).


Debt to Equity History and Analysis

Debt Level: L's debt to equity ratio (69.3%) is considered high.

Reducing Debt: L's debt to equity ratio has reduced from 97.9% to 69.3% over the past 5 years.

Debt Coverage: L's debt is well covered by operating cash flow (50.5%).

Interest Coverage: L's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet

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

Debt Coverage by Assets: L's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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

1.80%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Loblaw Companies before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.8%marketbottom25%2.0%markettop25%5.4%industryaverage1.3%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: L's dividend (1.8%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: L's dividend (1.8%) is low compared to the top 25% of dividend payers in the Canadian market (5.38%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.4%), L's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: L's dividends in 3 years are forecast to be well covered by earnings (27.9% payout ratio).


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Galen Weston (46yo)

3.1yrs

Tenure

CA$4,086,971

Compensation

Mr. Galen G. Weston, B.A., M.B.A., has been Chief Executive Officer of George Weston Limited since January 18, 2017 and has been the Chairman since September 2016. He served as a Non-Independent Director o ...


CEO Compensation Analysis

Compensation vs Market: Galen's total compensation ($USD3.09M) is below average for companies of similar size in the Canadian market ($USD6.87M).

Compensation vs Earnings: Galen's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Galen Weston
Executive Chairman3.1yrsCA$4.09m0.13% CA$32.3m
Sarah Davis
President & Member of Management Board3.1yrsCA$6.11m0.0029% CA$744.0k
Darren Myers
CFO & Member of Management Board2.1yrsCA$4.52mno data
Garry Senecal
Chief Customer Officer & Member of Management Board0yrsCA$3.54m0.0013% CA$335.4k
Jocyanne Bourdeau
President of Discount Division & Member of Management Board3yrsno data0.00075% CA$189.2k
Gordon Andrew Currie
Executive VP0yrsno datano data
Barry Columb
President of President's Choice Financial & Member of Management Board0yrsno data0.0051% CA$1.3m
Kevin Groh
Senior VP of Corporate Affairs & Communications and Member of Management Board1.1yrsno datano data
Mark Wilson
Executive VP0yrsno datano data
Ian Freedman
President of Joe Fresh & Member of Management Board3.4yrsno datano data

3.0yrs

Average Tenure

51yo

Average Age

Experienced Management: L's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Galen Weston
Executive Chairman3.1yrsCA$4.09m0.13% CA$32.3m
Paul Beeston
Independent Director14.3yrsCA$234.50k0.0022% CA$554.9k
William Downe
Independent Lead Director0.8yrsCA$128.15k0.0044% CA$1.1m
Warren Bryant
Independent Director6.8yrsCA$197.50kno data
Sarah Raiss
Independent Director5.9yrsCA$194.76k0.00025% CA$63.1k
Beth Pritchard
Independent Director5.9yrsCA$187.26kno data
Margaret Harris
Independent Director3.8yrsCA$199.53k0.00065% CA$163.9k
Paviter Binning
Non-Independent Director0.8yrsCA$32.63k0.00046% CA$116.0k
Christie James Clark
Independent Director9.1yrsCA$321.87k0.0050% CA$1.3m
Claudia Kotchka
Independent Director3.8yrsCA$187.26kno data

5.9yrs

Average Tenure

65.5yo

Average Age

Experienced Board: L's board of directors are considered experienced (5.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: L 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

Loblaw Companies Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Loblaw Companies Limited
  • Ticker: L
  • Exchange: TSX
  • Founded: 1919
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: CA$25.221b
  • Shares outstanding: 359.53m
  • Website: https://www.loblaw.ca

Number of Employees


Location

  • Loblaw Companies Limited
  • 1 President's Choice Circle
  • Brampton
  • Ontario
  • L6Y 5S5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1972
L8GDB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972
LBLC.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDDec 1972
L.PRBTSX (The Toronto Stock Exchange)2ND PFD SER BCACADJun 2015

Biography

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada. It operates in two segments, Retail and Financial Services. The Retail segment operates corporate and franchise-owned retail food, and associate-owned drug stores comprising in-store pharmacies, other health and beauty product stores, apparel stores, and other general merchandise stores, as well as supports the PC Optimum reward program. The Financial Services segment provides credit card services, the PC Optimum reward program, insurance brokerage services, deposit taking services, and telecommunication services. Loblaw Companies Limited provides its products and services under the President's Choice, Life Brand, and no name brands. The company was founded in 1919 and is headquartered in Brampton, Canada. Loblaw Companies Limited is a subsidiary of George Weston Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 00:33
End of Day Share Price2020/02/24 00:00
Earnings2019/12/28
Annual Earnings2019/12/28


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.