TSX:LIF

Stock Analysis Report

Labrador Iron Ore Royalty

Executive Summary

Labrador Iron Ore Royalty Corporation, together with its subsidiary, Hollinger-Hanna Limited, owns a 15.10% equity interest in Iron Ore Company of Canada (IOC) that operates an iron mine near Labrador City, Newfoundland and Labrador.


Snowflake Analysis

Outstanding track record with excellent balance sheet and pays a dividend.

Share Price & News

How has Labrador Iron Ore Royalty's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LIF's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.6%

LIF

3.5%

CA Metals and Mining

-1.5%

CA Market


1 Year Return

-34.7%

LIF

6.8%

CA Metals and Mining

2.5%

CA Market

Return vs Industry: LIF underperformed the Canadian Metals and Mining industry which returned 6.8% over the past year.

Return vs Market: LIF underperformed the Canadian Market which returned 2.5% over the past year.


Shareholder returns

LIFIndustryMarket
7 Day-3.6%3.5%-1.5%
30 Day-6.0%5.0%-0.7%
90 Day-16.2%14.3%1.8%
1 Year-24.6%-34.7%7.5%6.8%5.7%2.5%
3 Year56.3%10.1%2.8%1.0%16.8%6.2%
5 Year96.7%19.4%29.1%25.4%32.0%12.8%

Price Volatility Vs. Market

How volatile is Labrador Iron Ore Royalty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Labrador Iron Ore Royalty 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: LIF (CA$20.96) is trading below our estimate of fair value (CA$37.68)

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


Price To Earnings Ratio

PE vs Industry: LIF is good value based on its PE Ratio (6.7x) compared to the Metals and Mining industry average (16.8x).

PE vs Market: LIF is good value based on its PE Ratio (6.7x) compared to the Canadian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: LIF's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: LIF is overvalued based on its PB Ratio (2.4x) compared to the CA Metals and Mining industry average (1.6x).


Next Steps

Future Growth

How is Labrador Iron Ore Royalty forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-10.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LIF's earnings are forecast to decline over the next 3 years (-10.4% per year).

Earnings vs Market: LIF's earnings are forecast to decline over the next 3 years (-10.4% per year).

High Growth Earnings: LIF's earnings are forecast to decline over the next 3 years.

Revenue vs Market: LIF's revenue is expected to decline over the next 3 years (-5.5% per year).

High Growth Revenue: LIF's revenue is forecast to decline over the next 3 years (-5.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LIF's Return on Equity is forecast to be low in 3 years time (15.8%).


Next Steps

Past Performance

How has Labrador Iron Ore Royalty performed over the past 5 years?

18.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LIF has high quality earnings.

Growing Profit Margin: LIF's current net profit margins are higher than last year (99.3%).


Past Earnings Growth Analysis

Earnings Trend: LIF's earnings have grown by 18.5% per year over the past 5 years.

Accelerating Growth: LIF's earnings growth over the past year (63.1%) exceeds its 5-year average (18.5% per year).

Earnings vs Industry: LIF earnings growth over the past year (63.1%) exceeded the Metals and Mining industry 11.9%.


Return on Equity

High ROE: LIF's Return on Equity (36%) is considered high.


Next Steps

Financial Health

How is Labrador Iron Ore Royalty's financial position?


Financial Position Analysis

Short Term Liabilities: LIF's short term assets (CA$112.9M) exceed its short term liabilities (CA$83.8M).

Long Term Liabilities: LIF's short term assets (CA$112.9M) do not cover its long term liabilities (CA$123.7M).


Debt to Equity History and Analysis

Debt Level: LIF is debt free.

Reducing Debt: LIF has not had any debt for past 5 years.

Debt Coverage: LIF has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: LIF has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: LIF has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if LIF's debt is covered by short term assets.


Next Steps

Dividend

What is Labrador Iron Ore Royalty's current dividend yield, its reliability and sustainability?

19.08%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LIF's dividend (19.08%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: LIF's dividend (19.08%) is in the top 25% of dividend payers in the Canadian market (5.6%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.8%), LIF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LIF's dividends in 3 years are not forecast to be well covered by earnings (100.1% payout ratio).


Next Steps

Management

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

1.1yrs

Average management tenure


CEO

John Tuer 0

0.9yrs

Tenure

CA$169,238

Compensation

Mr. John F. Tuer is President and CEO of Labrador Iron Ore Royalty Corporation since March 7, 2019. Mr. Tuer has been a Director of Labrador Iron Ore Royalty Corporation since December 2017 and was its Exe ...


Leadership Team

NamePositionTenureCompensationOwnership
John Tuer
President0.9yrsCA$169.24k0.025% CA$361.2k
Alan Thomas
Chief Financial Officer14.1yrsCA$240.47k0.0031% CA$44.7k
James McCartney
Executive Vice President1.1yrsCA$287.51k0.016% CA$223.1k
Sandra Rosch
Executive VP & Director5.8yrsCA$240.47k0.011% CA$156.1k
Robert Hansen
Secretary1.1yrsno datano data

1.1yrs

Average Tenure

Experienced Management: LIF's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John Tuer
President0.9yrsCA$169.24k0.025% CA$361.2k
Sandra Rosch
Executive VP & Director5.8yrsCA$240.47k0.011% CA$156.1k
Dorothea Mell
Director0.08yrsno datano data
William Corcoran
Independent Director25.1yrsCA$91.40k0.023% CA$334.5k
Mark Fuller
Lead Director0.8yrsCA$116.40k0.0078% CA$111.5k
Douglas McCutcheon
Director0.08yrsno datano data
Patricia Volker
Independent Director5.8yrsCA$72.80k0.0078% CA$111.5k
William McNeil
Chairman0.8yrsCA$444.34k0.0078% CA$111.5k

1.5yrs

Average Tenure

Experienced Board: LIF's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: LIF 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

Labrador Iron Ore Royalty Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Labrador Iron Ore Royalty Corporation
  • Ticker: LIF
  • Exchange: TSX
  • Founded: 1995
  • Industry: Steel
  • Sector: Materials
  • Market Cap: CA$1.427b
  • Shares outstanding: 64.00m
  • Website: https://www.labradorironore.com

Location

  • Labrador Iron Ore Royalty Corporation
  • 26th Floor
  • 40 King Street West
  • Toronto
  • Ontario
  • M5W 2X6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LIFTSX (The Toronto Stock Exchange)YesCommon SharesCACADNov 1996
LIFZ.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDNov 1996
L9ODB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1996

Biography

Labrador Iron Ore Royalty Corporation, together with its subsidiary, Hollinger-Hanna Limited, owns a 15.10% equity interest in Iron Ore Company of Canada (IOC) that operates an iron mine near Labrador City, Newfoundland and Labrador. IOC engages in the production and sale of iron ore pellets and concentrates in North America, Europe, the Middle East, and the Asia-Pacific region. The company was formerly known as Labrador Iron Ore Royalty Income Fund and changed its name to Labrador Iron Ore Royalty Corporation in July 2010. Labrador Iron Ore Royalty Corporation was founded in 1995 and is based in Toronto, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 00:37
End of Day Share Price2020/02/24 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.