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

Fundamentals

Adequate balance sheet with moderate growth potential.


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


Market Performance


7 Day Return

-2.6%

L

-2.0%

CA Consumer Retailing

0.1%

CA Market


1 Year Return

10.8%

L

24.8%

CA Consumer Retailing

1.6%

CA Market

Return vs Industry: L underperformed the Canadian Consumer Retailing industry which returned 24.8% over the past year.

Return vs Market: L exceeded the Canadian Market which returned 1.6% over the past year.


Shareholder returns

LIndustryMarket
7 Day-2.6%-2.0%0.1%
30 Day-1.0%-2.1%-2.9%
90 Day6.9%4.1%-1.4%
1 Year40.5%10.8%33.3%24.8%5.2%1.6%
3 Year39.4%6.5%27.0%16.1%13.8%3.7%
5 Year76.9%31.1%83.7%62.0%25.3%7.2%

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?

23.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: L (CA$71.5) is trading below our estimate of fair value (CA$93.09)

Significantly Undervalued: L is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: L is poor value based on its PE Ratio (38.7x) compared to the Consumer Retailing industry average (20.8x).

PE vs Market: L is poor value based on its PE Ratio (38.7x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: L is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: L is overvalued based on its PB Ratio (2.4x) compared to the CA Consumer Retailing industry average (2.1x).


Next Steps

Future Growth

How is Loblaw Companies forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

20.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: L's forecast earnings growth (20.8% per year) is above the savings rate (1.9%).

Earnings vs Market: L's earnings (20.8% per year) are forecast to grow faster than the Canadian market (13.2% per year).

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

Revenue vs Market: L's revenue (2.7% per year) is forecast to grow slower than the Canadian market (5.8% per year).

High Growth Revenue: L's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Loblaw Companies performed over the past 5 years?

24.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: L has become profitable over the past 5 years, growing earnings by 24.4% per year.

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

Earnings vs Industry: L had negative earnings growth (-42.3%) over the past year, making it difficult to compare to the Consumer Retailing industry average (8.9%).


Return on Equity

High ROE: L's Return on Equity (6.6%) is considered low.


Return on Assets

ROA vs Industry: L's Return on Assets is below or equal to the Consumer Retailing industry average last year.


Return on Capital Employed

ROCE Improving: L has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Loblaw Companies's financial position?


Financial Position Analysis

Short Term Liabilities: L's short term assets (CA$10.3B) exceeds its short term liabilities (CA$7.7B)

Long Term Liabilities: L's short term assets (10.3B) do not cover its long term liabilities (16.4B)


Debt to Equity History and Analysis

Debt Level: L's debt to equity ratio (67.4%) is considered high

Reducing Debt: L's debt to equity ratio has reduced from 103.5% to 67.4% over the past 5 years.

Debt Coverage: L's debt is well covered by operating cash flow (44.2%).

Interest Coverage: L's interest payments on its debt are well covered by EBIT (3.9x 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 1.346040x debt).


Next Steps

Dividend

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

1.76%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%2.0%markettop25%6.0%industryaverage1.3%forecastin3Years1.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: L's dividend (1.76%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: L's dividend (1.76%) is low compared to the top 25% of dividend payers in the Canadian market (6.01%).

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 reasonable payout ratio (64.9%), L's dividend payments are 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 Loblaw Companies's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Galen Weston (46yo)

2.8yrs

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 ($USD3.11M) is about average for companies of similar size in the Canadian market ($USD6.91M).

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


Management Age and Tenure

2.7yrs

Average Tenure

51yo

Average Age

Experienced Management: L's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

65.5yo

Average Age

Experienced Board: L's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyCA$369,555,40510 Sep 19
Willard Weston
EntityIndividual
Shares4,979,189
Max PriceCA$74.22
SellCA$172,379,43710 Sep 19
Willard Weston
EntityIndividual
Shares2,322,547
Max PriceCA$74.22
SellCA$197,175,96810 Sep 19
Wittington Investments Limited
EntityCompany
Shares2,656,642
Max PriceCA$74.22
SellCA$128,52023 Aug 19
Garry Senecal
EntityIndividual
Role
Member of Management Board
Chief Customer Officer & Member of Management Board
Shares1,785
Max PriceCA$72.00
SellCA$918,68008 Mar 19
Willard Weston
EntityIndividual
Shares14,102
Max PriceCA$65.15
BuyCA$365,10030 Nov 18
William Downe
EntityIndividual
Role
Lead Director
Independent Lead Director
Shares6,000
Max PriceCA$60.85

Ownership Breakdown


Management Team

  • Galen Weston (46yo)

    Executive Chairman

    • Tenure: 2.8yrs
    • Compensation: CA$4.09m
  • Jocyanne Bourdeau (51yo)

    President of Discount Division & Member of Management Board

    • Tenure: 2.7yrs
  • Gordon Andrew Currie (60yo)

    Executive VP

    • Tenure: 0yrs
  • Mark Wilson (48yo)

    Executive VP

    • Tenure: 0yrs
  • Barry Columb (54yo)

    President of President's Choice Financial & Member of Management Board

    • Tenure: 0yrs
  • Darren Myers (45yo)

    CFO & Member of Management Board

    • Tenure: 1.8yrs
    • Compensation: CA$4.52m
  • Sarah Davis (51yo)

    President & Member of Management Board

    • Tenure: 2.8yrs
    • Compensation: CA$6.11m
  • Garry Senecal

    Chief Customer Officer & Member of Management Board

    • Tenure: 0yrs
    • Compensation: CA$3.54m
  • Ian Freedman

    President of Joe Fresh & Member of Management Board

    • Tenure: 3.1yrs
  • Jeff Leger

    President of Shoppers Drug Mart & Member of Management Board

    • Tenure: 1.8yrs

Board Members

  • Paul Beeston (73yo)

    Independent Director

    • Tenure: 14yrs
    • Compensation: CA$234.50k
  • Bill Downe (66yo)

    Independent Lead Director

    • Tenure: 0.4yrs
    • Compensation: CA$128.15k
  • Warren Bryant (73yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: CA$197.50k
  • Sarah Raiss (62yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: CA$194.76k
  • Beth Pritchard (72yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: CA$187.26k
  • Marianne Harris (61yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: CA$199.53k
  • Pavi Binning (58yo)

    Non-Independent Director

    • Tenure: 0.4yrs
    • Compensation: CA$32.63k
  • Chris Clark (65yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: CA$321.87k
  • Galen Weston (46yo)

    Executive Chairman

    • Tenure: 2.8yrs
    • Compensation: CA$4.09m
  • Claudia Kotchka (68yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: CA$187.26k

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$25.935b
  • Shares outstanding: 362.72m
  • 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 busin ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 23:39
End of Day Share Price2019/10/17 00:00
Earnings2019/06/15
Annual Earnings2018/12/29


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.