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 Analysis

Reasonable growth potential and slightly overvalued.


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

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


Market Performance


7 Day Return

-19.8%

OSB

-6.8%

CA Forestry

2.5%

CA Market


1 Year Return

-59.2%

OSB

-55.9%

CA Forestry

-24.8%

CA Market

Return vs Industry: OSB underperformed the Canadian Forestry industry which returned -55.9% over the past year.

Return vs Market: OSB underperformed the Canadian Market which returned -24.8% over the past year.


Shareholder returns

OSBIndustryMarket
7 Day-19.8%-6.8%2.5%
30 Day-57.5%-43.3%-20.8%
90 Day-57.7%-45.6%-24.7%
1 Year-57.7%-59.2%-55.0%-55.9%-22.3%-24.8%
3 Year-55.7%-64.0%-53.4%-56.8%-14.3%-22.2%
5 Year-25.7%-41.6%-51.7%-55.6%-2.4%-17.0%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OSB (CA$14.64) is trading below our estimate of fair value (CA$48.24)

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


Price To Earnings Ratio

PE vs Industry: OSB is unprofitable, so we can't compare its PE Ratio to the Forestry industry average.

PE vs Market: OSB is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: OSB is overvalued based on its PB Ratio (1.2x) compared to the CA Forestry industry average (0.6x).


Next Steps

Future Growth

How is Norbord forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

92.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OSB is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: OSB is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: OSB's is expected to become profitable in the next 3 years.

Revenue vs Market: OSB's revenue (7.1% per year) is forecast to grow faster than the Canadian market (3.4% per year).

High Growth Revenue: OSB's revenue (7.1% 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 (18.3%).


Next Steps

Past Performance

How has Norbord performed over the past 5 years?

32.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OSB is currently unprofitable.

Growing Profit Margin: OSB is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: OSB is unprofitable, but has reduced losses over the past 5 years at a rate of 32.4% per year.

Accelerating Growth: Unable to compare OSB's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: OSB is unprofitable, making it difficult to compare its past year earnings growth to the Forestry industry (4.5%).


Return on Equity

High ROE: OSB has a negative Return on Equity (-5.97%), as it is currently unprofitable.


Next Steps

Financial Health

How is Norbord's financial position?


Financial Position Analysis

Short Term Liabilities: OSB's short term assets ($462.0M) exceed its short term liabilities ($260.0M).

Long Term Liabilities: OSB's short term assets ($462.0M) do not cover its long term liabilities ($957.0M).


Debt to Equity History and Analysis

Debt Level: OSB's debt to equity ratio (103%) is considered high.

Reducing Debt: OSB's debt to equity ratio has reduced from 113.7% to 103% over the past 5 years.


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 0.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: OSB has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: OSB has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

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

5.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OSB's dividend (5.31%) is higher than the bottom 25% of dividend payers in the Canadian market (2.75%).

High Dividend: OSB's dividend (5.31%) is low compared to the top 25% of dividend payers in the Canadian market (8.52%).


Stability and Growth of Payments

Stable Dividend: OSB has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: OSB has only been paying a dividend for 7 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: OSB is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: OSB's dividends in 3 years are forecast to be well covered by earnings (34% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Peter Wijnbergen (57yo)

6.25s

Tenure

US$1,341,637

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 ($USD949.31K) is below average for companies of similar size in the Canadian market ($USD1.69M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Peter Wijnbergen
President6.25yrsUS$1.34m0.062% $737.6k
Robin Lampard
Senior VP & CFO12.17yrsUS$757.60k0.033% $399.6k
Mark Dubois-Phillips
Senior Vice President of Sales1.33yrsUS$549.20k0.0025% $30.2k
Kevin Burke
Senior Vice President of North American Operations2.17yrsUS$698.85k0.021% $254.1k
Alan McMeekin
Senior Vice President of Europe2yrsUS$642.19k0.0086% $102.5k
James Black
Vice President of Technology & Engineering Servicesno datano datano data
Robert Winslow
Vice President of Investor Relations & Corporate Developmentno datano datano data
Tracy McGilley
General Counsel & Corporate Secretaryno datano datano data
Gregory Mackie
Vice President of Human Resources & Environment0.25yrno data0.0011% $13.7k
Elaine Toomey
Assistant Corporate Secretary10.83yrsno datano data

2.2yrs

Average Tenure

Experienced Management: OSB's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Wijnbergen
President6.25yrsUS$1.34m0.062% $737.6k
Paul Houston
Lead Independent Director4.92yrsUS$125.00k0.12% $1.4m
Jack Cockwell
Director33.25yrsUS$115.00k0.030% $353.3k
Paul Gagné
Independent Director5.25yrsUS$110.00k0.00077% $9.2k
J. Gordon
Non-Independent Chairmanno dataUS$175.00kno data
Pierre Dupuis
Independent Director25.25yrsUS$130.00k0.0013% $16.0k
Lori Pearson
Non-Independent Director0.92yrUS$60.00kno data
Denise Nemchev
Independent Director1.92yrsUS$110.00kno data

5.3yrs

Average Tenure

64yo

Average Age

Experienced Board: OSB's board of directors are considered experienced (5.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: OSB 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

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$1.194b
  • Shares outstanding: 81.53m
  • 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 boards for use in sheathing, flooring, and roofing in home construction applications; particleboards that are used in flooring and other construction applications; and medium density fiberboards for use in cabinet doors, moldings, and interior wall paneling applications, as well as related value-added products for use in the construction of new homes, and renovation and repair of existing structures. It markets its products under the Durastrand pointSIX, Pinnacle, Stabledge, TruFlor pointSIX and TruFlor, Rimboard, SteadiTred, QuakeZone, Tallwall, Trubord and Windstorm, SolarBord, TruDeck, StableDec, SterlingOSB, Caberwood MDF, Conti, and Caberboard brand names. The company was formerly known as Nexfor Inc. and changed its name to Norbord Inc. in June 2004. Norbord Inc. was founded in 1987 and is headquartered in Toronto, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/05 04:01
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.