TSX:WFT

Stock Analysis Report

West Fraser Timber

Executive Summary

West Fraser Timber Co. Ltd., a diversified wood products company, produces and sells lumber, panels, and pulp and papers in western Canada and the southern United States.


Snowflake Analysis

Reasonable growth potential average dividend payer.


Similar Companies

Share Price & News

How has West Fraser Timber's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

20.7%

WFT

18.5%

CA Forestry

11.7%

CA Market


1 Year Return

-58.6%

WFT

-52.0%

CA Forestry

-26.0%

CA Market

Return vs Industry: WFT underperformed the Canadian Forestry industry which returned -52% over the past year.

Return vs Market: WFT underperformed the Canadian Market which returned -26% over the past year.


Shareholder returns

WFTIndustryMarket
7 Day20.7%18.5%11.7%
30 Day-45.4%-38.6%-21.9%
90 Day-52.2%-43.7%-26.6%
1 Year-57.9%-58.6%-51.0%-52.0%-23.6%-26.0%
3 Year-49.2%-50.8%-47.5%-51.3%-15.8%-23.6%
5 Year-53.8%-55.8%-48.7%-52.8%-3.5%-17.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is West Fraser Timber undervalued compared to its fair value and its price relative to the market?

48.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WFT (CA$27.38) is trading below our estimate of fair value (CA$53.46)

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


Price To Earnings Ratio

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

PE vs Market: WFT 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 WFT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WFT is overvalued based on its PB Ratio (0.8x) compared to the CA Forestry industry average (0.7x).


Next Steps

Future Growth

How is West Fraser Timber forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

127.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

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

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

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

Revenue vs Market: WFT's revenue (5.5% per year) is forecast to grow faster than the Canadian market (3.9% per year).

High Growth Revenue: WFT's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WFT's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has West Fraser Timber performed over the past 5 years?

13.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WFT is currently unprofitable.

Growing Profit Margin: WFT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: WFT is unprofitable, but has reduced losses over the past 5 years at a rate of 13.2% per year.

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

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


Return on Equity

High ROE: WFT has a negative Return on Equity (-6.06%), as it is currently unprofitable.


Next Steps

Financial Health

How is West Fraser Timber's financial position?


Financial Position Analysis

Short Term Liabilities: WFT's short term assets (CA$1.1B) exceed its short term liabilities (CA$837.0M).

Long Term Liabilities: WFT's short term assets (CA$1.1B) do not cover its long term liabilities (CA$1.4B).


Debt to Equity History and Analysis

Debt Level: WFT's debt to equity ratio (41.8%) is considered high.

Reducing Debt: WFT's debt to equity ratio has increased from 22.6% to 41.8% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: WFT's debt is covered by short term assets (assets are 1.1x 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: WFT has been profitable on average in the past, therefore cash runway is not a concern.

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


Next Steps

Dividend

What is West Fraser Timber's current dividend yield, its reliability and sustainability?

2.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WFT's dividend (2.92%) is higher than the bottom 25% of dividend payers in the Canadian market (2.73%).

High Dividend: WFT's dividend (2.92%) is low compared to the top 25% of dividend payers in the Canadian market (8.76%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: WFT's dividends in 3 years are forecast to be well covered by earnings (22.5% payout ratio).


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Ray Ferris (56yo)

0.67

Tenure

CA$3,623,055

Compensation

Mr. Raymond W. Ferris, also known as Ray, has been President since April 19, 2018 and Chief Executive Officer since July 1, 2019 and served as the Chief Operating Officer of West Fraser Timber Co. Ltd. sin ...


CEO Compensation Analysis

Compensation vs Market: Ray's total compensation ($USD2.57M) is about average for companies of similar size in the Canadian market ($USD2.50M).

Compensation vs Earnings: Ray's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Raymond Ferris
CEO, President & Corporate Director0.67yrCA$3.62m0.055% CA$1.0m
Christopher Virostek
CFO & VP of Finance2.92yrsCA$1.17m0.0087% CA$164.1k
Christopher McIver
Vice-President of Sales & Marketing4yrsCA$1.22m0.010% CA$195.9k
Chuck Watkins
Vice-President of Capital & Technologyno datano datano data
D'Arcy Henderson
Vice-Presidentno datano data0.00090% CA$16.9k
Tom Theodorakis
Corporate Secretary2.67yrsno datano data

2.8yrs

Average Tenure

Experienced Management: WFT's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Raymond Ferris
CEO, President & Corporate Director0.67yrCA$3.62m0.055% CA$1.0m
Brian Kenning
Independent Corporate Director2.92yrsCA$176.86k0.0018% CA$32.9k
Henry Ketcham
Chairman3.92yrsCA$465.00k0.46% CA$8.7m
Janice Rennie
Independent Corporate Director15.92yrsCA$170.00k0.0015% CA$27.4k
Robert Phillips
Independent Lead Director12yrsCA$223.14k0.012% CA$219.0k
Gerald Miller
Independent Corporate Director7.92yrsCA$170.00k0.012% CA$223.0k
Reid Carter
Independent Corporate Director3.92yrsCA$180.00kno data
John Floren
Independent Corporate Director3.92yrsCA$180.00kno data
Gillian Winckler
Independent Corporate Director2.92yrsCA$170.00k0.0026% CA$47.9k
John Ketcham
Independent Corporate Director4.92yrsCA$170.00k1.44% CA$27.1m

3.9yrs

Average Tenure

62yo

Average Age

Experienced Board: WFT's board of directors are considered experienced (3.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: WFT 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

West Fraser Timber Co. Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: West Fraser Timber Co. Ltd.
  • Ticker: WFT
  • Exchange: TSX
  • Founded: 1955
  • Industry: Forest Products
  • Sector: Materials
  • Market Cap: CA$1.880b
  • Shares outstanding: 68.67m
  • Website: https://www.westfraser.com

Number of Employees


Location

  • West Fraser Timber Co. Ltd.
  • 858 Beatty Street
  • Suite 501
  • Vancouver
  • British Columbia
  • V6B 1C1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WFTTSX (The Toronto Stock Exchange)YesCommon SharesCACADMay 1986
WFCDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 1986
WFTB.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMay 1986

Biography

West Fraser Timber Co. Ltd., a diversified wood products company, produces and sells lumber, panels, and pulp and papers in western Canada and the southern United States. It offers spruce-pine-fir, Douglas Fir-Larch, Hem-Fir tree, and southern yellow pine lumber; treated wood products; and newsprint, wood chips, and other residuals and energy products. The company also provides medium density fiberboard panels and plywood; laminated veneer lumber wood products; and northern bleached softwood Kraft pulp used to produce various paper products, including printing and writing papers, specialty grades, and various tissue products. In addition, it offers bleached chemical thermo-mechanical pulp that is used to produce coated board grades, printing and writing paper, and paper towel/napkin grades, as well as specialty papers and tissue grades. The company exports lumber to the Far East, Asia, the Caribbean, Europe, the Middle East, and South America. West Fraser Timber Co. Ltd. was founded in 1955 and is based in Vancouver, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 01:38
End of Day Share Price2020/03/27 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.