TSX:OSB

Stock Analysis Report

Executive Summary

Norbord Inc. manufactures and sells wood-based panels for retail chains, contractor supply yards, and industrial manufacturers primarily in North America and Europe.

Snowflake

Fundamentals

Reasonable growth potential with acceptable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

15.4%

OSB

4.9%

CA Forestry

-0.2%

CA Market


1 Year Return

2.5%

OSB

-19.3%

CA Forestry

1.5%

CA Market

Return vs Industry: OSB exceeded the Canadian Forestry industry which returned -19.3% over the past year.

Return vs Market: OSB exceeded the Canadian Market which returned 1.5% over the past year.


Shareholder returns

OSBIndustryMarket
7 Day15.4%4.9%-0.2%
30 Day10.7%0.4%-3.5%
90 Day13.1%6.3%-1.8%
1 Year8.4%2.5%-16.9%-19.3%5.1%1.5%
3 Year26.6%3.4%7.3%-0.4%13.3%3.2%
5 Year81.3%39.1%0.5%-7.4%25.2%7.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

6.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OSB (CA$35.02) is trading below our estimate of fair value (CA$37.35)

Significantly Below Fair Value: OSB is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: OSB is poor value based on its PE Ratio (25.3x) compared to the Forestry industry average (18x).

PE vs Market: OSB is poor value based on its PE Ratio (25.3x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: OSB is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: OSB is overvalued based on its PB Ratio (2.9x) compared to the CA Forestry industry average (1x).


Next Steps

  • Explore potentially undervalued companies in the Materials industry.

Future Growth

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

78.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OSB's forecast earnings growth (78.5% per year) is above the savings rate (1.9%).

Earnings vs Market: OSB's earnings (78.5% per year) are forecast to grow faster than the Canadian market (13.6% per year).

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

Revenue vs Market: OSB's revenue (6% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: OSB's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OSB's Return on Equity is forecast to be low in 3 years time (18.6%).


Next Steps

Past Performance

How has Norbord performed over the past 5 years?

51.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: OSB's earnings have grown significantly by 51.9% per year over the past 5 years.

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

Earnings vs Industry: OSB had negative earnings growth (-84.1%) over the past year, making it difficult to compare to the Forestry industry average (-57.6%).


Return on Equity

High ROE: OSB's Return on Equity (11.9%) is considered low.


Return on Assets

ROA vs Industry: OSB has a higher Return on Assets than the Forestry industry average last year.


Return on Capital Employed

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


Next Steps

Financial Health

How is Norbord's financial position?


Financial Position Analysis

Short Term Liabilities: OSB's short term assets ($768.0M) exceeds its short term liabilities ($469.0M)

Long Term Liabilities: OSB's short term assets (768.0M) do not cover its long term liabilities (989.0M)


Debt to Equity History and Analysis

Debt Level: OSB's debt to equity ratio (130.6%) is considered high

Reducing Debt: OSB's debt to equity ratio has increased from 100% to 130.6% over the past 5 years.

Debt Coverage: OSB's debt is well covered by operating cash flow (30%).

Interest Coverage: OSB's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet

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

Debt Coverage by Assets: OSB's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

4.49%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%2.0%markettop25%6.0%industryaverage2.8%forecastin3Years4.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: OSB's dividend (4.49%) is higher than the bottom 25% of dividend payers in the Canadian market (2.04%).

High Dividend: OSB's dividend (4.49%) is low compared to the top 25% of dividend payers in the Canadian market (6.03%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (96.2%), OSB's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OSB's dividends in 3 years are forecast to be well covered by earnings (46.5% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Peter Wijnbergen (57yo)

5.8yrs

Tenure

US$4,697,709

Compensation

Mr. Peter C. Wijnbergen has been the Chief Executive Officer and President of Norbord, Inc. since January 1, 2014. Mr. Wijnbergen served as Chief Operating Officer and Senior Vice President of Norbord, Inc ...


CEO Compensation Analysis

Compensation vs. Market: Peter's total compensation ($USD3.59M) is about average for companies of similar size in the Canadian market ($USD2.24M).

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


Management Age and Tenure

5.8yrs

Average Tenure

Experienced Management: OSB's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

64yo

Average Age

Experienced Board: OSB's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$9,96520 Sep 19
Paul Houston
EntityIndividual
Role
Lead Director
Lead Director
Shares325
Max PriceUS$30.66
BuyUS$197,61611 Sep 19
Paul Houston
EntityIndividual
Role
Lead Director
Lead Director
Shares6,800
Max PriceUS$30.31
SellUS$10,38211 Sep 19
Paul Houston
EntityIndividual
Role
Lead Director
Lead Director
Shares335
Max PriceUS$30.99
SellUS$10,33106 Sep 19
Paul Houston
EntityIndividual
Role
Lead Director
Lead Director
Shares335
Max PriceUS$30.84
BuyUS$176,08709 Aug 19
Paul Houston
EntityIndividual
Role
Lead Director
Lead Director
Shares6,190
Max PriceUS$28.63

Ownership Breakdown


Management Team

  • Robin Lampard

    Senior VP & CFO

    • Tenure: 11.7yrs
    • Compensation: US$2.95m
  • Peter Wijnbergen (57yo)

    President

    • Tenure: 5.8yrs
    • Compensation: US$4.70m
  • Elaine Toomey

    Assistant Corporate Secretary

    • Tenure: 10.3yrs
  • James Black

    Vice President of Technology & Engineering Services

    • Tenure: 0yrs
  • Nigel Banks

    Senior Vice President of Corporate Services

    • Tenure: 8.9yrs
    • Compensation: US$1.11m
  • Kevin Burke

    Senior Vice President of North American Operations

    • Tenure: 1.7yrs
    • Compensation: US$1.31m
  • Alan McMeekin

    Senior Vice President of Europe

    • Tenure: 1.5yrs
    • Compensation: US$1.43m
  • Mark Dubois-Phillips

    Senior Vice President of Sales

    • Tenure: 0.8yrs

Board Members

  • Paul Houston (70yo)

    Lead Director

    • Tenure: 4.4yrs
    • Compensation: US$123.75k
  • Jack Cockwell (78yo)

    Director

    • Tenure: 32.8yrs
    • Compensation: US$118.75k
  • Paul Gagné (72yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$108.75k
  • J. Gordon (58yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: US$170.00k
  • Pierre Dupuis (74yo)

    Independent Director

    • Tenure: 24.8yrs
    • Compensation: US$128.75k
  • Lori Pearson (57yo)

    Director

    • Tenure: 0.4yrs
  • Peter Wijnbergen (57yo)

    President

    • Tenure: 5.8yrs
    • Compensation: US$4.70m
  • Denise Nemchev (49yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$82.50k

Company Information

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


Key Information

  • Name: Norbord Inc.
  • Ticker: OSB
  • Exchange: TSX
  • Founded: 1987
  • Industry: Forest Products
  • Sector: Materials
  • Market Cap: CA$2.860b
  • Shares outstanding: 81.67m
  • Website: https://www.norbord.com

Number of Employees


Location

  • Norbord Inc.
  • 1 Toronto Street
  • Suite 600
  • Toronto
  • Ontario
  • M5C 2W4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OSBTSX (The Toronto Stock Exchange)YesCommon SharesCACADJul 1987
QXP1DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 1987
OSBNYSE (New York Stock Exchange)YesCommon SharesUSUSDJul 1987

Biography

Norbord Inc. manufactures and sells wood-based panels for retail chains, contractor supply yards, and industrial manufacturers primarily in North America and Europe. The company offers oriented strand boar ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 23:50
End of Day Share Price2019/10/21 00:00
Earnings2019/07/06
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.