TSX:LNF

Stock Analysis Report

Leon's Furniture

Executive Summary

Leon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada.

Snowflake

Fundamentals

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Leon's Furniture's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.06%

LNF

1.7%

CA Specialty Retail

-0.1%

CA Market


1 Year Return

-9.6%

LNF

-26.5%

CA Specialty Retail

0.9%

CA Market

Return vs Industry: LNF exceeded the Canadian Specialty Retail industry which returned -26.5% over the past year.

Return vs Market: LNF underperformed the Canadian Market which returned 0.9% over the past year.


Shareholder returns

LNFIndustryMarket
7 Day0.06%1.7%-0.1%
30 Day-1.7%-4.3%-2.1%
90 Day1.3%-3.1%-1.6%
1 Year-6.2%-9.6%-24.4%-26.5%4.4%0.9%
3 Year0.8%-8.0%-24.0%-29.5%15.5%5.2%
5 Year26.5%9.6%-29.2%-37.6%25.7%7.5%

Price Volatility Vs. Market

How volatile is Leon's Furniture's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Leon's Furniture undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: LNF (CA$15.45) is trading below our estimate of fair value (CA$32.48)

Significantly Undervalued: LNF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LNF is good value based on its PE Ratio (11.1x) compared to the Specialty Retail industry average (12.5x).

PE vs Market: LNF is good value based on its PE Ratio (11.1x) compared to the Canadian market (13.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate LNF's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LNF is good value based on its PB Ratio (1.4x) compared to the CA Specialty Retail industry average (1.4x).


Next Steps

Future Growth

How is Leon's Furniture forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

7.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LNF's forecast earnings growth (7.7% per year) is above the savings rate (1.9%).

Earnings vs Market: LNF's earnings (7.7% per year) are forecast to grow slower than the Canadian market (13.2% per year).

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

Revenue vs Market: LNF's revenue (2.6% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: LNF's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if LNF's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Leon's Furniture performed over the past 5 years?

10.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: LNF's earnings have grown by 10.4% per year over the past 5 years.

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

Earnings vs Industry: LNF had negative earnings growth (-0.7%) over the past year, making it difficult to compare to the Specialty Retail industry average (-3.1%).


Return on Equity

High ROE: LNF's Return on Equity (12.2%) is considered low.


Return on Assets

ROA vs Industry: LNF's Return on Assets is below or equal to the Specialty Retail industry average last year.


Return on Capital Employed

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


Next Steps

Financial Health

How is Leon's Furniture's financial position?


Financial Position Analysis

Short Term Liabilities: LNF's short term assets (CA$617.7M) exceeds its short term liabilities (CA$496.2M)

Long Term Liabilities: LNF's short term assets (617.7M) do not cover its long term liabilities (689.9M)


Debt to Equity History and Analysis

Debt Level: LNF's debt to equity ratio (20.4%) is considered satisfactory

Reducing Debt: LNF's debt to equity ratio has reduced from 96.1% to 20.4% over the past 5 years.

Debt Coverage: LNF's debt is well covered by operating cash flow (95.1%).

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


Balance Sheet

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

Debt Coverage by Assets: LNF's debt is covered by short term assets (assets are 3.463710x debt).


Next Steps

Dividend

What is Leon's Furniture's current dividend yield, its reliability and sustainability?

3.62%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%2.0%markettop25%6.0%industryaverage3.6%forecastin3Years3.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: LNF's dividend (3.62%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: LNF's dividend (3.62%) is low compared to the top 25% of dividend payers in the Canadian market (5.98%).

Stable Dividend: LNF's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.3%), LNF'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

What is the CEO of Leon's Furniture's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Edward Leon (62yo)

1yrs

Tenure

CA$2,232,752

Compensation

Mr. Edward Florian Leon has been Chief Executive Officer at Leon's Furniture Ltd. since October 1, 2018. Mr. Leon has been President of Leon's Furniture Ltd. since June 17, 2015 and served as its Chief Ope ...


CEO Compensation Analysis

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

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


Management Age and Tenure

2.9yrs

Average Tenure

Experienced Management: LNF's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

15.1yrs

Average Tenure

67.5yo

Average Age

Experienced Board: LNF's board of directors are seasoned and experienced ( 15.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyCA$82,14530 Sep 19
Constantine Pefanis
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares5,000
Max PriceCA$16.47
SellCA$19,52430 Sep 19
John Cooney
EntityIndividual
Role
Chief Legal Officer
VP of Legal & Corporate Secretary
Shares1,200
Max PriceCA$16.36
BuyCA$5,53716 Sep 19
Timmyal Limited
EntityCompany
Shares350
Max PriceCA$15.82
SellCA$36,21316 Sep 19
John Cooney
EntityIndividual
Role
Chief Legal Officer
VP of Legal & Corporate Secretary
Shares2,300
Max PriceCA$15.78
BuyCA$75,90012 Sep 19
Antomel Limited
EntityCompany
Shares4,400
Max PriceCA$17.25
SellCA$75,90012 Sep 19
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares4,400
Max PriceCA$17.25
SellCA$89,58012 Sep 19
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares5,700
Max PriceCA$15.72
SellCA$25,08530 Aug 19
John Cooney
EntityIndividual
Role
Chief Legal Officer
VP of Legal & Corporate Secretary
Shares1,600
Max PriceCA$15.70
BuyCA$152,50028 Aug 19
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares10,000
Max PriceCA$15.25
SellCA$23,415,94921 Aug 19
Antomel Limited
EntityCompany
Shares1,535,472
Max PriceCA$15.25
SellCA$15,15012 Jun 19
Graeme Leon
EntityIndividual
Shares1,000
Max PriceCA$15.15
SellCA$15,68731 May 19
Graeme Leon
EntityIndividual
Shares1,000
Max PriceCA$15.70
SellCA$15,80021 May 19
Graeme Leon
EntityIndividual
Shares1,000
Max PriceCA$15.80
SellCA$99,38715 Mar 19
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares6,900
Max PriceCA$14.40
BuyCA$148,07007 Mar 19
Mark Leon
EntityIndividual
Role
Chairman of the Board
Chairman
Shares10,000
Max PriceCA$14.81
BuyCA$14,76006 Mar 19
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares1,000
Max PriceCA$14.76
BuyCA$75,47423 Nov 18
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares5,000
Max PriceCA$15.33
BuyCA$22,65023 Nov 18
Edward Leon
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares1,500
Max PriceCA$15.10
BuyCA$42,48821 Nov 18
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares2,700
Max PriceCA$15.74
BuyCA$142,41519 Nov 18
Terrence Leon
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares9,200
Max PriceCA$15.54
BuyCA$31,10019 Nov 18
Edward Leon
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares2,000
Max PriceCA$15.55

Ownership Breakdown


Management Team

  • Edward Leon (62yo)

    CEO, President & Director

    • Tenure: 1yrs
    • Compensation: CA$2.23m
  • Dave Freeman

    President of the Brick Division

    • Tenure: 2.9yrs
    • Compensation: CA$934.18k
  • John Cooney

    VP of Legal & Corporate Secretary

    • Tenure: 4.2yrs
  • Mike Walsh

    President of the Leon's Division

    • Tenure: 4.2yrs
    • Compensation: CA$854.15k
  • Constantine Pefanis

    Chief Financial Officer

    • Tenure: 1.8yrs
    • Compensation: CA$720.76k

Board Members

  • Peter B. Eby (80yo)

    Director

    • Tenure: 42.8yrs
    • Compensation: CA$90.00k
  • Edward Leon (62yo)

    CEO, President & Director

    • Tenure: 1yrs
    • Compensation: CA$2.23m
  • Alan Lenczner (76yo)

    Director

    • Tenure: 27.8yrs
    • Compensation: CA$84.50k
  • Mark Leon (67yo)

    Chairman

    • Tenure: 14.4yrs
    • Compensation: CA$80.00k
  • Terry Leon (68yo)

    Vice Chairman

    • Tenure: 1yrs
    • Compensation: CA$2.01m
  • Frank Gagliano (70yo)

    Director

    • Tenure: 11.8yrs
    • Compensation: CA$90.00k
  • Mary Leon (64yo)

    Director

    • Tenure: 15.8yrs
    • Compensation: CA$90.00k
  • Joseph Leon (59yo)

    Director

    • Tenure: 5.8yrs
    • Compensation: CA$80.00k

Company Information

Leon's Furniture Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Leon's Furniture Limited
  • Ticker: LNF
  • Exchange: TSX
  • Founded: 1909
  • Industry: Homefurnishing Retail
  • Sector: Retail
  • Market Cap: CA$1.201b
  • Shares outstanding: 77.72m
  • Website: https://www.leons.ca

Number of Employees


Location

  • Leon's Furniture Limited
  • 45 Gordon Mackay Road
  • Toronto
  • Ontario
  • M9N 3X3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LNFTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1975
LEFU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1975

Biography

Leon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada. The company also operates as a commercial retailer o ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 23:38
End of Day Share Price2019/10/11 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.