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.


Snowflake Analysis

Solid track record with adequate balance sheet.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.3%

SJ

3.8%

CA Forestry

2.1%

CA Market


1 Year Return

-21.7%

SJ

-16.4%

CA Forestry

-10.3%

CA Market

Return vs Industry: SJ underperformed the Canadian Forestry industry which returned -19.8% over the past year.

Return vs Market: SJ underperformed the Canadian Market which returned -11.4% over the past year.


Shareholder returns

SJIndustryMarket
7 Day4.3%3.8%2.1%
30 Day5.7%13.0%5.8%
90 Day5.4%-8.6%-6.4%
1 Year-20.4%-21.7%-14.7%-16.4%-7.3%-10.3%
3 Year-16.4%-19.6%-29.5%-34.5%1.9%-7.6%
5 Year-13.8%-18.4%-32.9%-38.2%18.4%1.0%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SJ (CA$35.44) is trading below our estimate of fair value (CA$83.36)

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


Price To Earnings Ratio

PE vs Industry: SJ is good value based on its PE Ratio (14.9x) compared to the Forestry industry average (15.5x).

PE vs Market: SJ is poor value based on its PE Ratio (14.9x) compared to the Canadian market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: SJ is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: SJ is overvalued based on its PB Ratio (1.7x) compared to the CA Forestry industry average (0.8x).


Next Steps

Future Growth

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

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SJ's forecast earnings growth (8.1% per year) is above the savings rate (1.7%).

Earnings vs Market: SJ's earnings (8.1% per year) are forecast to grow slower than the Canadian market (23.8% per year).

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

Revenue vs Market: SJ's revenue (3.3% per year) is forecast to grow slower than the Canadian market (5.8% per year).

High Growth Revenue: SJ's revenue (3.3% 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?

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 (7.3%) are higher than last year (6.6%).


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 (12.9%) exceeds its 5-year average (3.8% per year).

Earnings vs Industry: SJ earnings growth over the past year (12.9%) exceeded the Forestry industry -14.1%.


Return on Equity

High ROE: SJ's Return on Equity (11.7%) 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$1.5B) exceed its short term liabilities (CA$249.0M).

Long Term Liabilities: SJ's short term assets (CA$1.5B) exceed its long term liabilities (CA$984.0M).


Debt to Equity History and Analysis

Debt Level: SJ's debt to equity ratio (55.6%) is considered high.

Reducing Debt: SJ's debt to equity ratio has reduced from 68% to 55.6% over the past 5 years.

Debt Coverage: SJ's debt is not well covered by operating cash flow (9.5%).

Interest Coverage: SJ's interest payments on its debt are well covered by EBIT (9.9x coverage).


Balance Sheet


Next Steps

Dividend

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

1.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SJ's dividend (1.69%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: SJ's dividend (1.69%) is low compared to the top 25% of dividend payers in the Canadian market (6.35%).


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 (24%), SJ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

4.1yrs

Average management tenure


CEO

Éric Vachon (51yo)

0.67

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 ($USD639.07K) is below average for companies of similar size in the Canadian market ($USD2.09M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Éric Vachon
CEO, President & Director0.67yrCA$863.27k0.0028% CA$67.7k
Ian Jones
Senior Vice-President7.58yrsCA$1.45m0.0036% CA$85.9k
Silvana Travaglini
Senior VP & CFO0.42yrno datano data
Gordon Murray
VP of Environment & Technology and GM of Atlantic Regionno datano datano data
Marla Eichenbaum
VP, General Counsel & Secretary21.83yrsCA$263.53k0.016% CA$378.8k
Sylvain Couture
Vice-Presidentno datano data0.0089% CA$212.1k
Patrick Stark
Vice President Environment Health and Safetyno datano data0.0012% CA$28.7k

4.1yrs

Average Tenure

Experienced Management: SJ's management team is considered experienced (4.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Éric Vachon
CEO, President & Director0.67yrCA$863.27k0.0028% CA$67.7k
James Manzi
Independent Director5.17yrsCA$107.50k0.0074% CA$177.2k
Robert Coallier
Independent Corporate Director0.42yrno data0.012% CA$279.1k
Katherine Lehman
Independent Chairman of the Board1.75yrsCA$150.00k0.0081% CA$194.9k
Douglas Muzyka
Independent Corporate Director0.50yrCA$3.80kno data
Rhodri Harries
Independent Director0.083yrno data0.0074% CA$177.2k
Karen Laflamme
Corporate Independent Director1.5yrsCA$107.50k0.0059% CA$141.8k
Mary Webster
Corporate Independent Director13.08yrsCA$107.50k0.032% CA$771.7k
Simon Pelletier
Independent Lead Directorno dataCA$107.50k0.0074% CA$177.2k

1.1yrs

Average Tenure

56yo

Average Age

Experienced Board: SJ's board of directors are not considered experienced ( 1.1 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$2.391b
  • Shares outstanding: 67.48m
  • 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 utilities and telecommunication companies. The company also provides residential lumber and accessories to retailers for outdoor applications; industrial products, including bridge timbers, foundation and marine pilings; and construction timbers. In addition, it offers wood preservative creosote products that are used in wood treating activities; and coal tar based products. The company was founded in 1992 and is headquartered in Saint-Laurent, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/04 02:23
End of Day Share Price2020/06/03 00:00
Earnings2020/03/31
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.