TSX:SJ

Stock Analysis Report

Executive Summary

Stella-Jones Inc. produces, markets, and sells pressure treated wood products in Canada and the United States.

Snowflake

Fundamentals

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Stella-Jones's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.4%

SJ

6.3%

CA Forestry

0.2%

CA Market


1 Year Return

-9.6%

SJ

-18.0%

CA Forestry

3.5%

CA Market

Return vs Industry: SJ exceeded the Canadian Forestry industry which returned -18% over the past year.

Return vs Market: SJ underperformed the Canadian Market which returned 3.5% over the past year.


Shareholder returns

SJIndustryMarket
7 Day-0.4%6.3%0.2%
30 Day-3.1%2.3%-3.3%
90 Day-9.4%5.1%-1.9%
1 Year-8.4%-9.6%-15.5%-18.0%7.3%3.5%
3 Year-13.9%-16.7%6.7%-0.6%14.7%4.4%
5 Year18.4%12.9%0.7%-7.1%26.2%7.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Stella-Jones undervalued compared to its fair value and its price relative to the market?

32.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SJ (CA$38.31) is trading below our estimate of fair value (CA$56.72)

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


Price To Earnings Ratio

PE vs Industry: SJ is good value based on its PE Ratio (17.9x) compared to the Forestry industry average (16.6x).

PE vs Market: SJ is poor value based on its PE Ratio (17.9x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: SJ is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: SJ is overvalued based on its PB Ratio (2x) compared to the CA Forestry industry average (1x).


Next Steps

Future Growth

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

12.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SJ's forecast earnings growth (12.1% per year) is above the savings rate (1.9%).

Earnings vs Market: SJ's earnings (12.1% per year) are forecast to grow slower than the Canadian market (13% per year).

High Growth Earnings: SJ's earnings are forecast to grow, but not significantly.

Revenue vs Market: SJ's revenue (4.1% per year) is forecast to grow slower than the Canadian market (5.5% per year).

High Growth Revenue: SJ's revenue (4.1% 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 SJ's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Stella-Jones performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SJ's earnings have grown by 7.3% per year over the past 5 years.

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

Earnings vs Industry: SJ had negative earnings growth (-9.8%) over the past year, making it difficult to compare to the Forestry industry average (-33.7%).


Return on Equity

High ROE: SJ's Return on Equity (11.4%) is considered low.


Return on Assets

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


Return on Capital Employed

ROCE Improving: SJ's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Stella-Jones's financial position?


Financial Position Analysis

Short Term Liabilities: SJ's short term assets (CA$1.2B) exceeds its short term liabilities (CA$198.4M)

Long Term Liabilities: SJ's short term assets (1.2B) exceeds its long term liabilities (823.0M)


Debt to Equity History and Analysis

Debt Level: SJ's debt to equity ratio (47.8%) is considered high

Reducing Debt: SJ's debt to equity ratio has reduced from 74.6% to 47.8% over the past 5 years.

Debt Coverage: SJ's debt is not well covered by operating cash flow (12.9%).

Interest Coverage: SJ's interest payments on its debt are well covered by EBIT (10.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: SJ's debt is covered by short term assets (assets are 1.988450x debt).


Next Steps

Dividend

What is Stella-Jones's current dividend yield, its reliability and sustainability?

1.46%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%2.0%markettop25%5.9%industryaverage2.8%forecastin3Years1.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SJ's dividend (1.46%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.98%).

High Dividend: SJ's dividend (1.46%) is low compared to the top 25% of dividend payers in the Canadian market (5.92%).

Stable Dividend: SJ's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.3%), SJ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SJ's dividends in 3 years are forecast to be well covered by earnings (23.3% payout ratio).


Next Steps

Management

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

4.5yrs

Average board tenure


CEO

Éric Vachon 0

0yrs

Tenure

CA$636,380

Compensation

Mr. Éric Vachon, CPA, CA, has been President, Chief Executive Officer and Director at Stella-Jones Inc., since October 11, 2019 and its Interim Chief Financial Officer. He had been the Chief Financial Offi ...


CEO Compensation Analysis

Compensation vs. Market: Éric has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Canadian market.

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


Board Age and Tenure

4.5yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SJ's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyCA$194,66702 Oct 19
Gestion de patrimoine Intégralis, Inc.
EntityCompany
Shares5,000
Max PriceCA$38.93
BuyCA$60,00018 Sep 19
Katherine Lehman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares1,500
Max PriceCA$40.00
SellCA$113,32508 May 19
George Bunze
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceCA$45.33
BuyCA$3,57825 Mar 19
George Caric
EntityIndividual
Shares94
Max PriceCA$38.06
BuyCA$41,90028 Jan 19
Karen Laflamme
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceCA$41.90
BuyCA$164,03815 Jan 19
Katherine Lehman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares4,000
Max PriceCA$41.04
BuyCA$42,00010 Jan 19
Simon Pelletier
EntityIndividual
Role
Lead Director
Lead Director
Shares1,000
Max PriceCA$42.00
BuyCA$40,13707 Jan 19
Karen Laflamme
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceCA$40.14
BuyCA$23,10022 Dec 18
Ian Jones
EntityIndividual
Role
Senior Key Executive
Senior Vice-President
Shares600
Max PriceCA$38.50

Ownership Breakdown


Management Team

  • Marla Eichenbaum

    VP, General Counsel & Secretary

    • Tenure: 21.2yrs
    • Compensation: CA$263.53k
  • Gordon Murray

    VP of Environment & Technology and GM of Atlantic Region

    • Tenure: 0yrs
  • Ian Jones

    Senior Vice-President

    • Tenure: 6.9yrs
    • Compensation: CA$781.15k
  • Éric Vachon

    CEO, President

    • Tenure: 0yrs
    • Compensation: CA$636.38k
  • Patrick Stark

    Vice President Environment Health and Safety

    • Tenure: 0yrs

Board Members

  • James Manzi (69yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: CA$92.50k
  • Kate Lehman (44yo)

    Independent Chairman of the Board

    • Tenure: 1.1yrs
    • Compensation: CA$101.98k
  • George Bunze (75yo)

    Independent Director

    • Tenure: 18.4yrs
    • Compensation: CA$112.50k
  • Karen Laflamme (56yo)

    Independent Director

    • Tenure: 0.8yrs
    • Compensation: CA$7.71k
  • Mary Webster (65yo)

    Independent Director

    • Tenure: 12.4yrs
    • Compensation: CA$92.50k
  • Éric Vachon

    CEO, President

    • Tenure: 0yrs
    • Compensation: CA$636.38k
  • Simon Pelletier (52yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: CA$92.50k

Company Information

Stella-Jones Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Stella-Jones Inc.
  • Ticker: SJ
  • Exchange: TSX
  • Founded: 1992
  • Industry: Forest Products
  • Sector: Materials
  • Market Cap: CA$2.634b
  • Shares outstanding: 68.76m
  • Website: https://www.stella-jones.com

Number of Employees


Location

  • Stella-Jones Inc.
  • 3100 de la Côte-Vertu Boulevard
  • Suite 300
  • Saint-Laurent
  • Quebec
  • H4R 2J8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SJTSX (The Toronto Stock Exchange)YesCommon SharesCACADJun 1994
STLJ.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 1994
97SDB (Deutsche Boerse AG)YesCommon SharesDEEURJun 1994

Biography

Stella-Jones Inc. produces, markets, and sells pressure treated wood products in Canada and the United States. It offers railway ties and timbers for railroad operators; and utility poles for electrical ut ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 23:43
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
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.