NYSE:UFS

Stock Analysis Report

Executive Summary

Domtar Corporation designs, manufactures, markets, and distributes communication papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally.


Snowflake Analysis

Excellent balance sheet, good value and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.1%

UFS

-6.0%

US Forestry

-4.1%

US Market


1 Year Return

-58.0%

UFS

-42.4%

US Forestry

-14.9%

US Market

Return vs Industry: UFS underperformed the US Forestry industry which returned -42.4% over the past year.

Return vs Market: UFS underperformed the US Market which returned -14.9% over the past year.


Shareholder returns

UFSIndustryMarket
7 Day-3.1%-6.0%-4.1%
30 Day-29.5%-35.2%-19.1%
90 Day-44.2%-41.6%-23.4%
1 Year-55.5%-58.0%-40.5%-42.4%-13.2%-14.9%
3 Year-35.2%-43.3%-36.3%-41.4%10.7%3.5%
5 Year-42.1%-53.5%-41.9%-49.2%28.5%14.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Domtar undervalued compared to its fair value and its price relative to the market?

32.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UFS ($20.88) is trading below our estimate of fair value ($30.94)

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


Price To Earnings Ratio

PE vs Industry: UFS is poor value based on its PE Ratio (15.2x) compared to the Forestry industry average (10.4x).

PE vs Market: UFS is poor value based on its PE Ratio (15.2x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: UFS is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: UFS is good value based on its PB Ratio (0.5x) compared to the US Forestry industry average (0.7x).


Next Steps

Future Growth

How is Domtar forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

17.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UFS's forecast earnings growth (17.3% per year) is above the savings rate (1.7%).

Earnings vs Market: UFS's earnings (17.3% per year) are forecast to grow faster than the US market (12.2% per year).

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

Revenue vs Market: UFS's revenue is expected to decline over the next 3 years (-2.3% per year).

High Growth Revenue: UFS's revenue is forecast to decline over the next 3 years (-2.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Domtar performed over the past 5 years?

-22.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UFS has a large one-off loss of $101.0M impacting its December 31 2019 financial results.

Growing Profit Margin: UFS's current net profit margins (1.6%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: UFS's earnings have declined by -22% per year over the past 5 years.

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

Earnings vs Industry: UFS had negative earnings growth (-70.3%) over the past year, making it difficult to compare to the Forestry industry average (-9.6%).


Return on Equity

High ROE: UFS's Return on Equity (3.5%) is considered low.


Next Steps

Financial Health

How is Domtar's financial position?


Financial Position Analysis

Short Term Liabilities: UFS's short term assets ($1.5B) exceed its short term liabilities ($766.0M).

Long Term Liabilities: UFS's short term assets ($1.5B) do not cover its long term liabilities ($1.8B).


Debt to Equity History and Analysis

Debt Level: UFS's debt to equity ratio (39.5%) is considered satisfactory.

Reducing Debt: UFS's debt to equity ratio has reduced from 47.1% to 39.5% over the past 5 years.

Debt Coverage: UFS's debt is well covered by operating cash flow (47.1%).

Interest Coverage: UFS's interest payments on its debt are well covered by EBIT (4.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: UFS's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

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

8.72%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: UFS's dividend (8.72%) is higher than the bottom 25% of dividend payers in the US market (2.04%).

High Dividend: UFS's dividend (8.72%) is in the top 25% of dividend payers in the US market (5.7%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (132.6%), UFS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UFS's dividends in 3 years are forecast to be covered by earnings (50.9% payout ratio).


Next Steps

Management

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

12.2yrs

Average management tenure


CEO

John Williams (65yo)

11.25s

Tenure

US$7,952,638

Compensation

Mr. John D. Williams, BA, has been the Chief Executive Officer and President of Domtar Corporation since joining in January 1, 2009. Mr. Williams served as the President of the European Packaging Operation ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD7.95M) is above average for companies of similar size in the US market ($USD3.25M).

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


Leadership Team

NamePositionTenureCompensationOwnership
John Williams
President11.25yrsUS$7.95m0.087% $1.0m
Daniel Buron
Senior VP & CFO13.08yrsUS$2.96m0.046% $540.0k
Zygmunt Jablonski
Senior VP and Chief Legal & Administrative Officerno dataUS$2.13m0.075% $879.1k
Michael Fagan
President of Personal Care Divisionno dataUS$2.07m0.018% $217.0k
Michael Garcia
President of Pulp & Paper Division5.92yrsUS$2.67m0.050% $587.0k
Nicholas Estrela
Director of Investor Relationsno datano datano data
Patrick Loulou
Senior Vice-President of Corporate Development13.08yrsUS$1.21m0.051% $594.8k
Razvan Theodoru
VP of Corporate Law & Corporate Secretaryno datano datano data
Paola Farnesi
VP & Treasurer12.17yrsno datano data
David Struhs
Vice-President of Corporate Services and Sustainabilityno datano datano data

12.2yrs

Average Tenure

56yo

Average Age

Experienced Management: UFS's management team is seasoned and experienced (12.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Williams
President11.25yrsUS$7.95m0.087% $1.0m
David Maffucci
Independent Non-Executive Director9.25yrsUS$278.14kno data
Pamela Strobel
Independent Non-Executive Director13.25yrsUS$303.51kno data
Brian Levitt
Independent Non-Executive Director13.25yrsUS$309.16kno data
Mary Winston
Independent Non-Executive Director4.33yrsUS$236.83kno data
Denis Turcotte
Independent Non-Executive Director13.25yrsUS$301.46k0.0044% $52.2k
David Illingworth
Independent Non-Executive Director6.5yrsUS$254.39kno data
Robert Apple
Independent Chairman of the Board2.92yrsUS$394.84kno data
Giannella Alvarez
Independent Non-Executive Director8.25yrsUS$247.53k0.00075% $8.8k

9.3yrs

Average Tenure

65yo

Average Age

Experienced Board: UFS's board of directors are considered experienced (9.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: UFS 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

Domtar Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Domtar Corporation
  • Ticker: UFS
  • Exchange: NYSE
  • Founded: 1948
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: US$1.175b
  • Shares outstanding: 56.27m
  • Website: https://www.domtar.com

Number of Employees


Location

  • Domtar Corporation
  • 234 Kingsley Park Drive
  • Fort Mill
  • South Carolina
  • 29715
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
G2K1DB (Deutsche Boerse AG)YesCommon StockDEEURMar 2007
UFSTSX (The Toronto Stock Exchange)YesCommon StockCACADMar 2007
UFSNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2007
G2K1BRSE (Berne Stock Exchange)YesCommon StockCHCHFMar 2007

Biography

Domtar Corporation designs, manufactures, markets, and distributes communication papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally. It operates through two segments, Pulp and Paper, and Personal Care. The company provides business papers, including copy and electronic imaging papers used in inkjet and laser printers, photocopiers, and plain-paper fax machines, as well as computer papers, preprinted forms, and digital papers for office and home use. It also offers commercial printing and publishing papers, such as offset papers and opaques used in sheet and roll fed offset presses; publishing papers, which include tradebook and lightweight uncoated papers for publishing textbooks, dictionaries, catalogs, magazines, hard cover novels, and financial documents; and base papers for envelopes, tablets, business forms, and data processing/computer forms. In addition, the company provides papers for thermal printing, flexible packaging, food packaging, medical packaging, medical gowns and drapes, sandpaper backing, carbonless printing, labels and other coating, and laminating applications; and papers for industrial and specialty applications, such as carrier papers, treated papers, security papers, and specialized printing and converting applications. Further, it designs, manufactures, markets, and distributes absorbent hygiene products, including adult incontinence and infant diaper products under the Attends, IncoPack, Indasec, Reassure, Chelino, and Comfees brand names. Additionally, the company offers branded and private label briefs, bladder control pads, protective underwear, underpads, and washcloths, as well as baby diapers, change mats, youth pants, and training pants for healthcare, retail, and direct-to-consumer channels. It serves merchants, retail outlets, stationers, printers, publishers, converters, and end-users. Domtar Corporation was founded in 1848 and is based in Fort Mill, South Carolina. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 01:54
End of Day Share Price2020/04/02 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.