TSX:SJ

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Flawless balance sheet with proven track record and pays a dividend.


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

Stable Share Price: SJ is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SJ's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-3.3%

SJ

-4.2%

CA Forestry

-0.5%

CA Market


1 Year Return

20.8%

SJ

28.0%

CA Forestry

1.6%

CA Market

Return vs Industry: SJ underperformed the Canadian Forestry industry which returned 28% over the past year.

Return vs Market: SJ exceeded the Canadian Market which returned 1.6% over the past year.


Shareholder returns

SJIndustryMarket
7 Day-3.3%-4.2%-0.5%
30 Day-1.4%-4.3%3.4%
90 Day2.7%24.1%13.2%
1 Year22.7%20.8%30.1%28.0%5.3%1.6%
3 Year-3.6%-7.4%-5.5%-11.6%13.1%2.3%
5 Year11.3%5.0%57.0%43.1%66.0%40.5%

Long-Term 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?

15.29x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SJ (CA$46.19) is trading above our estimate of fair value (CA$42.65)

Significantly Below Fair Value: SJ is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SJ is poor value based on its PE Ratio (15.3x) compared to the CA Forestry industry average (14.7x).

PE vs Market: SJ is good value based on its PE Ratio (15.3x) compared to the Canadian market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: SJ is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: SJ is overvalued based on its PB Ratio (2.2x) compared to the CA Forestry industry average (1.5x).


Next Steps

Future Growth

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

3.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SJ's forecast earnings growth (3.2% per year) is above the savings rate (1.5%).

Earnings vs Market: SJ's earnings (3.2% per year) are forecast to grow slower than the Canadian market (25.6% per year).

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

Revenue vs Market: SJ's revenue (2.5% per year) is forecast to grow slower than the Canadian market (7.9% per year).

High Growth Revenue: SJ's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SJ's Return on Equity is forecast to be low in 3 years time (12.2%).


Next Steps

Past Performance

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

3.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SJ has high quality earnings.

Growing Profit Margin: SJ's current net profit margins (8.4%) are higher than last year (7.2%).


Past Earnings Growth Analysis

Earnings Trend: SJ's earnings have grown by 3.8% per year over the past 5 years.

Accelerating Growth: SJ's earnings growth over the past year (31.1%) exceeds its 5-year average (3.8% per year).

Earnings vs Industry: SJ earnings growth over the past year (31.1%) underperformed the Forestry industry 31.1%.


Return on Equity

High ROE: SJ's Return on Equity (14.2%) is considered low.


Next Steps

Financial Health

How is Stella-Jones's financial position?


Financial Position Analysis

Short Term Liabilities: SJ's short term assets (CA$1.4B) exceed its short term liabilities (CA$308.0M).

Long Term Liabilities: SJ's short term assets (CA$1.4B) exceed its long term liabilities (CA$738.0M).


Debt to Equity History and Analysis

Debt Level: SJ's debt to equity ratio (36.4%) is considered satisfactory.

Reducing Debt: SJ's debt to equity ratio has reduced from 62.8% to 36.4% over the past 5 years.

Debt Coverage: SJ's debt is well covered by operating cash flow (41.7%).

Interest Coverage: SJ's interest payments on its debt are well covered by EBIT (11.8x coverage).


Balance Sheet


Next Steps

Dividend

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

1.30%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SJ's dividend (1.3%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.54%).

High Dividend: SJ's dividend (1.3%) is low compared to the top 25% of dividend payers in the Canadian market (5.03%).


Stability and Growth of Payments

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 (19.5%), 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 (21.4% payout ratio).


Next Steps

Management

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

4.7yrs

Average management tenure


CEO

Éric Vachon (52 yo)

1.25yrs

Tenure

CA$863,273

Compensation

Mr. Éric Vachon, CPA, CA, has been President, Chief Executive Officer and Director at Stella-Jones Inc., since October 11, 2019 and served as Interim Chief Financial Officer until January 13, 2020. He had ...


CEO Compensation Analysis

Compensation vs Market: Éric's total compensation ($USD677.85K) is below average for companies of similar size in the Canadian market ($USD3.00M).

Compensation vs Earnings: Éric's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Éric Vachon
CEO, President & Director1.25yrsCA$863.27k0.0029%
CA$ 88.3k
Ian Jones
Senior Vice-President8.17yrsCA$1.45m0.0036%
CA$ 112.1k
Silvana Travaglini
Senior VP & CFO1yrno datano data
Gordon Murray
VP of Environment & Technology and GM of Atlantic Regionno datano datano data
Marla Eichenbaum
VP, General Counsel & Secretary22.42yrsCA$263.53k0.016%
CA$ 493.7k
Sylvain Couture
Vice-Presidentno datano data0.0090%
CA$ 276.7k
Patrick Stark
Vice President Environment Health and Safetyno datano data0.0012%
CA$ 37.4k

4.7yrs

Average Tenure

Experienced Management: SJ's management team is considered experienced (4.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Éric Vachon
CEO, President & Director1.25yrsCA$863.27k0.0029%
CA$ 88.3k
James Manzi
Independent Director5.75yrsCA$107.50k0.0075%
CA$ 231.0k
Robert Coallier
Independent Corporate Director1yrno data0.012%
CA$ 363.7k
Katherine Lehman
Independent Chairperson of the Board2.33yrsCA$150.00k0.0097%
CA$ 300.1k
Douglas Muzyka
Independent Corporate Director1.08yrsCA$3.80kno data
Rhodri Harries
Independent Director0.67yrno data0.015%
CA$ 461.9k
Anne Giardini
Directorno datano datano data
Karen Laflamme
Corporate Independent Director2.08yrsCA$107.50k0.0075%
CA$ 231.0k
Mary Webster
Corporate Independent Director13.67yrsCA$107.50k0.032%
CA$ 993.0k
Simon Pelletier
Independent Lead Directorno dataCA$107.50k0.0090%
CA$ 277.3k

1.7yrs

Average Tenure

58yo

Average Age

Experienced Board: SJ's board of directors are not considered experienced ( 1.7 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: SJ 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

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$3.088b
  • Shares outstanding: 66.85m
  • 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 Analysis2021/01/18 00:05
End of Day Share Price2021/01/15 00:00
Earnings2020/09/30
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.