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Deltic Timber

NYSE:DEL
Snowflake Description

No noteworthy features.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
DEL
NYSE
$1B
Market Cap
  1. Home
  2. US
  3. Materials
2018/02/21
Company description

Deltic Timber Corporation, a natural resources company, engages in growing and harvesting timber; and manufacturing and marketing lumber and medium density fiberboards (MDF) in the United States. More info.


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3 Month History
DEL
Industry
5yr Volatility vs Market

Value

 Is Deltic Timber undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Deltic Timber to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Deltic Timber is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Deltic Timber's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Deltic Timber's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Deltic Timber is overvalued based on earnings compared to the US Forestry industry average.
  • Deltic Timber is overvalued based on earnings compared to the US market.
Price based on expected Growth
Does Deltic Timber's expected growth come at a high price?
  • Unable to calculate PEG ratio for Deltic Timber, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Deltic Timber's assets?
  • Deltic Timber is overvalued based on assets compared to the US Forestry industry average.
X
Value checks
We assess Deltic Timber's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Forestry industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Forestry industry average (and greater than 0)? (1 check)
  5. Deltic Timber has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (0%).

    Full details on the Value part of the Simply Wall St company analysis model.
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Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Deltic Timber is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$44

Terminal Value

Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $13 × (1 + 2.47%) ÷ (10.29% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$168

Present value of terminal value:
$103

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$147 = $44 + $103

Value = Total value / Shares Outstanding ($147 / 12)

Discount to Share Price

Value per share:
$12.05

Current discount (share price of $93.28): -673.96%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 10.29% = 2.47% + (1.038 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($1,200,016,205).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.038 = 0.931 (1 + (1- 40%) (19.07%))

Levered Beta used in calculation = 1.038



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Deltic Timber expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

  • Deltic Timber is not covered by any analysts.
The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
10.9%
Expected Forestry industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Deltic Timber expected to grow at an attractive rate?
  • Unable to compare Deltic Timber's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
  • Unable to compare Deltic Timber's earnings growth to the US market average as no estimate data is available.
  • Unable to compare Deltic Timber's revenue growth to the US market average as no estimate data is available.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Unable to determine if Deltic Timber is high growth as no earnings estimate data is available.
  • Unable to determine if Deltic Timber is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Deltic Timber will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess Deltic Timber's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Deltic Timber has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Deltic Timber performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Deltic Timber's growth in the last year to its industry (Forestry).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Deltic Timber's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • Deltic Timber's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Deltic Timber's 1-year earnings growth is negative, it can't be compared to the US Forestry industry average.
Earnings and Revenue History
Deltic Timber's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Deltic Timber has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Deltic Timber used its assets less efficiently than the US Forestry industry average last year based on Return on Assets.
  • Deltic Timber's use of capital has not improved over the past 3 years (Return on Capital Employed).
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Past performance checks
We assess Deltic Timber's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Forestry industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Deltic Timber has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Deltic Timber's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Deltic Timber's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Deltic Timber is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Deltic Timber's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Deltic Timber's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0.2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Deltic Timber's level of debt (90.3%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (27.2% vs 90.3% today).
  • Debt is not well covered by operating cash flow (19.1%, less than 20% of total debt).
  • Interest payments on debt are not well covered by earnings (EBIT is 2x annual interest expense, ideally 3x coverage).
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Financial health checks
We assess Deltic Timber's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Deltic Timber has a total score of 1/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0.43%
Current annual income from Deltic Timber dividends.
If you bought $2,000 of Deltic Timber shares you are expected to receive $9 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Deltic Timber's dividend is below the low risk savings rate (2.25%).
  • Deltic Timber's dividend is below the markets top dividend payers (3.18%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Deltic Timber is not paying a notable dividend, therefore no need to check if the payments are stable.
  • Deltic Timber is not paying a notable dividend, therefore no need to check if the payments are increasing.
Current Payout to shareholders
What portion of Deltic Timber's earnings are paid to the shareholders as a dividend.
  • No need to calculate the sustainability of Deltic Timber's dividends as it is not paying a notable one.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
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Income/ dividend checks
We assess Deltic Timber's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Deltic Timber afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Deltic Timber has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
John Enlow, image provided by Google.
John Enlow
AGE 49
TENURE AS CEO 0.9 years
CEO Bio

Mr. John D. Enlow, Sr., has been the Chief Executive Officer, President and Director at Deltic Timber Corporation since March 8, 2017. Mr. Enlow has more than 25 years of experience in the forest resources industry. He served as Vice President of Real Estate and Southern Timberlands at Weyerhaeuser Co. from February 24, 2014 to 2016, where he was responsible for setting business strategy, developing talent and overseeing forest operations as well as real estate sales, development and strategic acquisitions. He joined Weyerhaeuser from Rayonier, where he served as Director of that Atlantic and Northern timberlands regions. He served as Region Director of Atlantic at Rayonier since 2007, with responsibilities in the Northern region added in 2012. Prior to that, he served as Manager of Business Development from 2005 to 2007, Procurement Operations Manager from 2001 to 2005, Chip Procurement Manager from 1999 to 2001, Manager of Operations Analysis from 1997 to 1999 and Manager of East Area. Before joining Rayonier, he held roles in sales, finance and forestry at Union Camp Corporation. He holds a Bachelor of Science degree from Mississippi State University and an MBA from Brenau University in Kings Bay, Ga. Mr. Enlow also is a graduate of Wharton's Executive Strategy program.

CEO Compensation
  • Deltic Timber has a new CEO, we can't show their compensation history.
Management Team Tenure

Average tenure and age of the Deltic Timber management team in years:

4.3
Average Tenure
56.2
Average Age
  • The tenure for the Deltic Timber management team is about average.
Management Team

Jim Andrews

TITLE
VP, General Counsel & Secretary
COMPENSATION
$787K
AGE
53
TENURE
7.3 yrs

David Meghreblian

TITLE
Vice President of Real Estate
COMPENSATION
$884K
AGE
58
TENURE
14.3 yrs

Kent Streeter

TITLE
Vice President of Wood Products
COMPENSATION
$734K
AGE
56
TENURE
0.8 yrs

John Enlow

TITLE
President
AGE
49
TENURE
0.9 yrs

Byrom Walker

TITLE
CFO, VP
COMPENSATION
$326K
AGE
56
TENURE
0.9 yrs

Deborah Cannon

TITLE
Director & Advisor to the Board
AGE
65
TENURE
1.7 yrs
Board of Directors Tenure

Average tenure and age of the Deltic Timber board of directors in years:

10.2
Average Tenure
61.9
Average Age
  • The average tenure for the Deltic Timber board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Robert Nolan

TITLE
Chairman of the Board
COMPENSATION
$277K
AGE
75
TENURE
21.2 yrs

John Enlow

TITLE
President
AGE
49
TENURE
0.9 yrs

Robert Murphy

TITLE
Independent Director
COMPENSATION
$206K
AGE
59
TENURE
21.2 yrs

Christoph Keller

TITLE
Independent Director
COMPENSATION
$178K
AGE
62
TENURE
21.2 yrs

R. Pierson

TITLE
Independent Director
COMPENSATION
$175K
AGE
65
TENURE
18.2 yrs

Randy Coley

TITLE
Independent Director
COMPENSATION
$180K
AGE
70
TENURE
11 yrs

Bobby Tudor

TITLE
Independent Director
COMPENSATION
$168K
AGE
57
TENURE
11 yrs

Bert Jones

TITLE
Independent Director
COMPENSATION
$141K
AGE
65
TENURE
2.7 yrs

Lennie Sullivan

TITLE
Independent Director
COMPENSATION
$147K
AGE
59
TENURE
2.7 yrs

D. Leland

TITLE
Independent Director
COMPENSATION
$712K
AGE
55
TENURE
1.7 yrs

Deborah Cannon

TITLE
Director & Advisor to the Board
AGE
65
TENURE
0.8 yrs
Recent Insider Trading
  • No 3 month insider trading information.
Who owns this company?
X
Management checks
We assess Deltic Timber's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Deltic Timber has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

External News
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Simply Wall St News

How Does Investing In Deltic Timber Corporation (NYSE:DEL) Impact Your Portfolio?

View our latest analysis for Deltic Timber An interpretation of DEL's beta Deltic Timber's beta of 0.91 indicates that the stock value will be less variable compared to the whole stock market. … DEL’s beta indicates it is a stock that investors may find valuable if they want to reduce the overall market risk exposure of their stock portfolio. … An asset-heavy company tends to have a higher beta because the risk associated with running fixed assets during a downturn is highly expensive.

Simply Wall St -

Does Deltic Timber Corporation's (NYSE:DEL) PE Ratio Signal A Selling Opportunity?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for DEL Price per share = $88.01 Earnings per share = $0.775 ∴ Price-Earnings Ratio = $88.01 ÷ $0.775 = 113.5x On its own, the P/E ratio doesn’t tell you much; however, it becomes extremely useful when you compare it with other similar companies. … For example, if you accidentally compared lower growth firms with DEL, then DEL’s P/E would naturally be higher since investors would reward DEL’s higher growth with a higher price. … Alternatively, if you inadvertently compared riskier firms with DEL, DEL’s P/E would again be higher since investors would reward DEL’s lower risk with a higher price as well.

Simply Wall St -

Are Deltic Timber Corporation's (NYSE:DEL) Interest Costs Too High?

How does DEL’s operating cash flow stack up against its debt? … Additionally, DEL has generated cash from operations of $43.6M in the last twelve months, resulting in an operating cash to total debt ratio of 0.18x, indicating that DEL’s operating cash is not sufficient to cover its debt. … DEL’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise.

Simply Wall St -

Does Deltic Timber Corporation's (DEL) 58.8% Earnings Growth Make It An Outperformer?

Below, I will assess Deltic Timber Corporation's (NYSE:DEL) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. … Though Deltic Timber's past data is helpful, it is only one aspect of my investment thesis. … There may be factors that are influencing the industry as a whole, thus the high industry growth rate over the same time period.

Simply Wall St -

Why Deltic Timber Corporation's (DEL) ROE Of 3.78% Does Not Tell The Whole Story

See our latest analysis for DEL Peeling the layers of ROE – trisecting a company’s profitability Return on Equity (ROE) weighs DEL’s profit against the level of its shareholders’ equity. … ROE can be broken down into three different ratios: net profit margin, asset turnover, and financial leverage. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NYSE:DEL Last Perf Nov 21st 17 Essentially, profit margin shows how much money the company makes after paying for all its expenses.

Simply Wall St -

Company Info

Map
Description

Deltic Timber Corporation, a natural resources company, engages in growing and harvesting timber; and manufacturing and marketing lumber and medium density fiberboards (MDF) in the United States. The company’s Woodlands segment harvests pine and hardwood pulpwood for sale to third parties for use in the manufacture of paper products; and provides timberland management services, such as harvesting and thinning operations, reforestation, cull timber removal programs, and introducing genetically improved seedlings. This segment also leases oil and gas, hunting land, and other rights on its timberlands; and provides harvest planning, silvicultural improvement, and maintenance works for timberlands. This segment owns approximately 530,000 acres of timberland primarily in Arkansas and north Louisiana. Its Manufacturing segment owns and operates two sawmills that manufacture and sell various softwood lumber products, such as dimension lumber, boards, and timbers primarily to wholesale distributors, large retailers, lumber treaters, industrial accounts, and truss manufacturers for use in residential construction, roof trusses, remanufactured products, and laminated beams. This segment also produces wood chips, shavings, sawdust, and bark as by-products. In addition, the Manufacturing segment manufactures and markets MDF under the Solidium trade name for use in furniture, kitchen cabinets, laminate flooring, store fixtures, door parts, and moldings. This segment sells MDF to industrial distributors, wholesalers, retailers, and manufacturers. The company’s Real Estate segment develops and markets residential lots for homebuilders and individuals; and commercial sites for developers and businesses, as well as sells undeveloped acreage. It also leases retail and office space to third parties; resells existing homes; and operates a country club. Deltic Timber Corporation was founded in 1996 and is headquartered in El Dorado, Arkansas.

Details
Name: Deltic Timber Corporation
DEL
Exchange: NYSE
Founded: 1996
$1,200,016,205
12,189,093
Website: http://www.deltic.com
Address: Deltic Timber Corporation
210 East Elm Street,
PO Box 7200,
El Dorado,
Arkansas, 71731,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE DEL Common Stock New York Stock Exchange US USD 12. Dec 1996
DB DTC Common Stock Deutsche Boerse AG DE EUR 12. Dec 1996
Number of employees
Current staff
Staff numbers
547
Deltic Timber employees.
Industry
Forest Products
Materials
Company Analysis and Financial Data Status
Area Date
Company Analysis updated: 2018/02/21
Last earnings update: 2017/12/31
Last annual earnings update: 2017/12/31


All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.