TSX:NWC

Stock Analysis Report

Executive Summary

The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in Canada, Alaska, the South Pacific, and the Caribbean.


Snowflake Analysis

Fair value with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.8%

NWC

-1.4%

CA Consumer Retailing

0.3%

CA Market


1 Year Return

-14.5%

NWC

13.5%

CA Consumer Retailing

5.5%

CA Market

Return vs Industry: NWC underperformed the Canadian Consumer Retailing industry which returned 13.6% over the past year.

Return vs Market: NWC underperformed the Canadian Market which returned 5.8% over the past year.


Shareholder returns

NWCIndustryMarket
7 Day0.8%-1.4%0.3%
30 Day-0.7%1.5%0.5%
90 Day0.2%2.5%3.5%
1 Year-10.5%-14.5%15.1%13.5%8.8%5.5%
3 Year5.7%-7.3%37.4%25.2%14.8%4.5%
5 Year38.3%11.0%52.6%35.1%34.1%14.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is North West 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: NWC (CA$27.86) is trading below our estimate of fair value (CA$84.19)

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


Price To Earnings Ratio

PE vs Industry: NWC is good value based on its PE Ratio (17.1x) compared to the Consumer Retailing industry average (19.7x).

PE vs Market: NWC is poor value based on its PE Ratio (17.1x) compared to the Canadian market (15.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: NWC is overvalued based on its PB Ratio (3.3x) compared to the CA Consumer Retailing industry average (1.7x).


Next Steps

Future Growth

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

3.2%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

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

Earnings vs Market: Insufficient data to determine if NWC'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: NWC's revenue (3.2% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: NWC's revenue (3.2% 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 NWC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has North West performed over the past 5 years?

6.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NWC has high quality earnings.

Growing Profit Margin: NWC's current net profit margins (3.8%) are lower than last year (4.5%).


Past Earnings Growth Analysis

Earnings Trend: NWC's earnings have grown by 6.3% per year over the past 5 years.

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

Earnings vs Industry: NWC had negative earnings growth (-10.8%) over the past year, making it difficult to compare to the Consumer Retailing industry average (7%).


Return on Equity

High ROE: NWC's Return on Equity (19.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is North West's financial position?


Financial Position Analysis

Short Term Liabilities: NWC's short term assets (CA$440.4M) exceed its short term liabilities (CA$206.2M).

Long Term Liabilities: NWC's short term assets (CA$440.4M) do not cover its long term liabilities (CA$611.8M).


Debt to Equity History and Analysis

Debt Level: NWC's debt to equity ratio (100.8%) is considered high.

Reducing Debt: NWC's debt to equity ratio has increased from 64.9% to 100.8% over the past 5 years.

Debt Coverage: NWC's debt is well covered by operating cash flow (32.2%).

Interest Coverage: NWC's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: NWC's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

4.74%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%1.9%markettop25%5.3%industryaverage1.3%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: NWC's dividend (4.74%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: NWC's dividend (4.74%) is low compared to the top 25% of dividend payers in the Canadian market (5.32%).


Stability and Growth of Payments

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

Growing Dividend: NWC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (80.4%), NWC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NWC's dividends in 3 years are forecast to be covered by earnings (69.6% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Edward Kennedy (59yo)

23.1yrs

Tenure

CA$3,315,367

Compensation

Mr. Edward S. Kennedy has been the Chief Executive Officer and President of The North West Company Inc., since 1997 and its Executive since 1989 and serves as its Director since 1996. Mr. Kennedy has been  ...


CEO Compensation Analysis

Compensation vs Market: Edward's total compensation ($USD2.51M) is above average for companies of similar size in the Canadian market ($USD1.58M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Edward Kennedy
President23.1yrsCA$3.32m0.84% CA$11.5m
John King
Executive VP & CFO9.7yrsCA$1.18m0.18% CA$2.5m
Daniel McConnell
President of International Retail0yrsCA$1.53m0.055% CA$750.9k
Craig Gilpin
Executive VP & Chief Corporate Officer9.9yrsCA$1.29m0.048% CA$663.1k
Gary Merasty
Executive VP & Chief Development Officer2.1yrsCA$936.02kno data
Amanda Sutton
VP of Legal & Corporate Secretary2.4yrsno datano data
Beth Millard-Hales
Vice President of Human Resources1.8yrsno datano data
Toby Noiles
Executive Vice President of Canadian Food Procurement & Marketing2.1yrsno data0.0014% CA$19.4k
Alex Yeo
President of Canadian Retail2.1yrsno data0.0018% CA$25.1k
Frank Kelner
President of North Star Air Ltd.3.1yrsno datano data

2.4yrs

Average Tenure

Experienced Management: NWC's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Edward Kennedy
President23.1yrsCA$3.32m0.84% CA$11.5m
H. Riley
Independent Chairman11.7yrsCA$240.00k0.020% CA$278.6k
Eric Stefanson
Independent Director8.1yrsCA$135.50k0.0081% CA$110.8k
Frank Coleman
Independent Director21.1yrsCA$125.00k0.015% CA$208.9k
Robert Kennedy
Independent Director17.1yrsCA$137.00k0.0061% CA$83.5k
Violet A. Konkle
Independent Director5.9yrsCA$122.00k0.0074% CA$101.7k
Annalisa King
Independent Director5.2yrsCA$119.00k0.010% CA$137.7k
Stewart Glendinning
Independent Director5.3yrsCA$123.50kno data
Wendy Evans
Independent Director15.1yrsCA$131.50k0.011% CA$147.6k
Victor Tootoo
Independent Director4.6yrsCA$119.00kno data

9.9yrs

Average Tenure

65yo

Average Age

Experienced Board: NWC's board of directors are considered experienced (9.9 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.


Ownership Breakdown

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


Top Shareholders

Company Information

The North West Company Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The North West Company Inc.
  • Ticker: NWC
  • Exchange: TSX
  • Founded: 1668
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: CA$1.369b
  • Shares outstanding: 49.15m
  • Website: https://www.northwest.ca

Number of Employees


Location

  • The North West Company Inc.
  • Gibraltar House
  • 77 Main Street
  • Winnipeg
  • Manitoba
  • R3C 2R1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NNWW.FOTCPK (Pink Sheets LLC)YesCommon Voting SharesUSUSDSep 1990
NWCTSX (The Toronto Stock Exchange)YesCommon Voting SharesCACADSep 1990

Biography

The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in Canada, Alaska, the South Pacific, and the Caribbean. The company’s Canadian operations comprise 117 Northern stores, which offers food, financial services, and general merchandise; 5 NorthMart stores that provides fresh foods, apparel, and health products and services; 44 Giant Tiger junior discount stores, which offers family fashion, household products, and food; 22 Quickstop convenience stores that provides ready-to-eat foods, and fuel and related services; 1 Solo Market store for rural market; 1 Valu Lots discount center and direct-to-customer food distribution outlet; 2 Pharmacy and Convenience stores; and 1 North West Company Fur Marketing outlet that offers wild furs, handicrafts, and authentic Canadian heritage products. The Canadian operations also provides contract tele-pharmacist services to rural hospitals and health centers; water and air-based transportation services; and produce and fresh meats to independent grocery stores. Its International operations include 27 Alaska Commercial Company stores that provides food and general merchandise to remote and rural regions; 11 Cost-U-Less mid-size warehouse stores, which offers discount food and general merchandise; 1 Cost-U-Less Express store that provides fresh and prepared foods; 5 Quickstop convenience stores; 7 Riteway food markets; and 1 Cash and Carry store. In addition, the company offers physician services; healthcare solutions; and airline cargo and passenger services. The North West Company Inc. was founded in 1668 and is headquartered in Winnipeg, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 01:33
End of Day Share Price2020/02/14 00:00
Earnings2019/10/31
Annual Earnings2019/01/31


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.