TSX:WFT

Stock Analysis Report

West Fraser Timber

Executive Summary

West Fraser Timber Co. Ltd. produces and sells lumber, panels, and pulp and paper in western Canada and the southern United States.

Snowflake

Fundamentals

Reasonable growth potential and slightly overvalued.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.3%

WFT

-2.5%

CA Forestry

0.4%

CA Market


1 Year Return

-12.6%

WFT

-12.1%

CA Forestry

7.1%

CA Market

Return vs Industry: WFT matched the Canadian Forestry industry which returned -12.1% over the past year.

Return vs Market: WFT underperformed the Canadian Market which returned 7.1% over the past year.


Shareholder returns

WFTIndustryMarket
7 Day-3.3%-2.5%0.4%
30 Day12.3%8.1%2.8%
90 Day18.3%9.6%4.0%
1 Year-11.4%-12.6%-10.1%-12.1%10.7%7.1%
3 Year27.8%24.5%11.3%3.9%18.1%7.4%
5 Year4.9%1.0%-1.0%-8.6%26.1%7.6%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WFT (CA$57.92) is trading below our estimate of fair value (CA$116.18)

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 (1.5x) compared to the CA Forestry industry average (1.1x).


Next Steps

Future Growth

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

202.8%

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 (1.9%).

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 (5.3% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: WFT's revenue (5.3% 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 (9.2%).


Next Steps

Past Performance

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

20.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WFT has large one-off items impacting its financial results.

Growing Profit Margin: WFT's current net profit margins (-1.6%) are lower than last year (15.9%).


Past Earnings Growth Analysis

Earnings Trend: WFT is unprofitable, but has reduced losses over the past 5 years at a rate of 20.8% 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 (-13.7%).


Return on Equity

High ROE: WFT has a negative Return on Equity (-3.06%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


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) exceeds its short term liabilities (CA$750.0M)

Long Term Liabilities: WFT's short term assets (1.1B) do not cover its long term liabilities (1.3B)


Debt to Equity History and Analysis

Debt Level: WFT's debt to equity ratio (38.1%) is considered satisfactory

Reducing Debt: WFT's debt to equity ratio has increased from 19.1% to 38.1% over the past 5 years.

Debt Coverage: WFT's debt is not well covered by operating cash flow (8.8%).

Interest Coverage: Insufficient data to determine if WFT's interest payments on its debt are well covered by EBIT.


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).


Next Steps

Dividend

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

1.38%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.0%markettop25%5.7%industryaverage2.2%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: WFT's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: WFT's dividend (1.38%) is low compared to the top 25% of dividend payers in the Canadian market (5.69%).


Stability and Growth of Payments

Stable Dividend: WFT's dividend payments have been volatile 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 (17.8% payout ratio).


Next Steps

Management

What is the CEO of West Fraser Timber's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Ray Ferris (56yo)

0.3yrs

Tenure

CA$2,972,250

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 ($USD2.24M) is about average for companies of similar size in the Canadian market ($USD2.92M).

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


Management Age and Tenure

2.5yrs

Average Tenure

Experienced Management: WFT's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

3.6yrs

Average Tenure

62yo

Average Age

Experienced Board: WFT's board of directors are considered experienced (3.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$79,01015 May 19
Keith Carter
EntityIndividual
Shares1,320
Max PriceCA$60.13
BuyCA$264,90415 May 19
Raymond Ferris
EntityIndividual
Role
Chief Executive Officer
CEO, President & Corporate Director
Shares4,500
Max PriceCA$59.29
BuyCA$99,77711 Mar 19
Brian Balkwill
EntityIndividual
Shares1,414
Max PriceCA$71.19
BuyCA$61,29711 Mar 19
Keith Carter
EntityIndividual
Shares960
Max PriceCA$63.87
BuyCA$64,91006 Mar 19
Sean McLaren
EntityIndividual
Shares1,000
Max PriceCA$64.91
BuyCA$102,65428 Feb 19
Raymond Ferris
EntityIndividual
Role
Chief Executive Officer
CEO, President & Corporate Director
Shares1,600
Max PriceCA$64.16
BuyCA$65,38928 Feb 19
Charles Watkins
EntityIndividual
Shares1,000
Max PriceCA$65.48
BuyCA$84,35619 Feb 19
Brian Kenning
EntityIndividual
Role
Member of the Board of Directors
Corporate Director
Shares1,200
Max PriceCA$70.30
BuyCA$221,74215 Feb 19
Raymond Ferris
EntityIndividual
Role
Chief Executive Officer
CEO, President & Corporate Director
Shares3,120
Max PriceCA$71.29
BuyCA$67,83828 Dec 18
Sean McLaren
EntityIndividual
Shares1,000
Max PriceCA$67.84
BuyCA$49,12619 Dec 18
Keith Carter
EntityIndividual
Shares750
Max PriceCA$65.52
BuyCA$44,50619 Dec 18
Keith Carter
EntityIndividual
Shares700
Max PriceCA$63.58
BuyCA$153,87819 Dec 18
Christopher Virostek
EntityIndividual
Role
Chief Financial Officer
CFO & VP of Finance
Shares2,350
Max PriceCA$65.48

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Chris Virostek (46yo)

    CFO & VP of Finance

    • Tenure: 2.6yrs
    • Compensation: CA$1.26m
  • Chris McIver

    Vice-President of Sales & Marketing

    • Tenure: 3.8yrs
    • Compensation: CA$1.37m
  • Ray Ferris (56yo)

    CEO, President & Corporate Director

    • Tenure: 0.3yrs
    • Compensation: CA$2.97m
  • Tom Theodorakis

    Corporate Secretary

    • Tenure: 2.3yrs

Board Members

  • Brian Kenning (70yo)

    Corporate Director

    • Tenure: 2.6yrs
    • Compensation: CA$155.00k
  • Hank Ketcham (70yo)

    Chairman

    • Tenure: 3.6yrs
    • Compensation: CA$450.00k
  • Janice Rennie (62yo)

    Corporate Director

    • Tenure: 15.6yrs
    • Compensation: CA$158.03k
  • Bob Phillips (68yo)

    Lead Director

    • Tenure: 11.8yrs
    • Compensation: CA$210.00k
  • Gerry Miller (64yo)

    Corporate Director

    • Tenure: 7.6yrs
    • Compensation: CA$155.00k
  • Reid Carter (62yo)

    Corporate Director

    • Tenure: 3.6yrs
    • Compensation: CA$161.97k
  • John Floren (60yo)

    Corporate Director

    • Tenure: 3.6yrs
    • Compensation: CA$160.00k
  • Ray Ferris (56yo)

    CEO, President & Corporate Director

    • Tenure: 0.3yrs
    • Compensation: CA$2.97m
  • Gill Winckler (56yo)

    Corporate Director

    • Tenure: 2.6yrs
    • Compensation: CA$155.00k
  • John Ketcham (58yo)

    Corporate Director

    • Tenure: 4.6yrs
    • Compensation: CA$155.00k

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$3.943b
  • Shares outstanding: 68.66m
  • 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. produces and sells lumber, panels, and pulp and paper in western Canada and the southern United States. The company offers spruce-pine-fir and southern yellow pine lumber, as we ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 23:47
End of Day Share Price2019/11/14 00:00
Earnings2019/09/30
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.