NYSE:UFS

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

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

Mediocre balance sheet with moderate growth potential.


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

34.3%

UFS

3.8%

US Forestry

1.9%

US Market


1 Year Return

-18.4%

UFS

10.9%

US Forestry

16.4%

US Market

Return vs Industry: UFS underperformed the US Forestry industry which returned 8.5% over the past year.

Return vs Market: UFS underperformed the US Market which returned 16.3% over the past year.


Shareholder returns

UFSIndustryMarket
7 Day34.3%3.8%1.9%
30 Day36.9%13.9%4.5%
90 Day34.8%32.3%17.6%
1 Year-14.6%-18.4%14.5%10.9%18.9%16.4%
3 Year-16.5%-26.2%7.9%-1.0%44.1%34.8%
5 Year-11.3%-28.2%11.6%-1.9%75.3%56.3%

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?

163.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: UFS ($28.48) is trading above our estimate of fair value ($7.88)

Significantly Below Fair Value: UFS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: UFS is poor value based on its PE Ratio (163.8x) compared to the US Forestry industry average (22.5x).

PE vs Market: UFS is poor value based on its PE Ratio (163.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: UFS is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: UFS is good value based on its PB Ratio (0.7x) compared to the US Forestry industry average (1.1x).


Next Steps

Future Growth

How is Domtar forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

97.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UFS's forecast earnings growth (97.5% per year) is above the savings rate (2.2%).

Earnings vs Market: UFS's earnings (97.5% per year) are forecast to grow faster than the US market (23.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: UFS's revenue (1.5% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: UFS's revenue (1.5% per year) is forecast to grow slower than 20% 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?

-14.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UFS has a large one-off loss of $65.0M impacting its June 30 2020 financial results.

Growing Profit Margin: UFS's current net profit margins (0.2%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: UFS's earnings have declined by 14% 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 (-96.5%) over the past year, making it difficult to compare to the Forestry industry average (6.7%).


Return on Equity

High ROE: UFS's Return on Equity (0.4%) 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 ($639.0M).

Long Term Liabilities: UFS's short term assets ($1.5B) do not cover its long term liabilities ($1.9B).


Debt to Equity History and Analysis

Debt Level: UFS's debt to equity ratio (48%) is considered high.

Reducing Debt: UFS's debt to equity ratio has reduced from 48.8% to 48% over the past 5 years.

Debt Coverage: UFS's debt is well covered by operating cash flow (38.7%).

Interest Coverage: UFS's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet


Next Steps

Dividend

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

0.95%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate UFS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate UFS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if UFS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if UFS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: UFS is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of UFS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

12.5yrs

Average management tenure


CEO

John Williams (66 yo)

11.58yrs

Tenure

US$6,836,746

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 ($USD6.84M) is above average for companies of similar size in the US market ($USD4.53M).

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


Leadership Team

NamePositionTenureCompensationOwnership
John Williams
President11.58yrsUS$6.84m0.088%
$ 1.4m
Daniel Buron
Senior VP & CFO13.42yrsUS$2.97m0.047%
$ 736.6k
Zygmunt Jablonski
Senior VP and Chief Legal & Administrative Officerno dataUS$1.84m0.076%
$ 1.2m
Michael Fagan
President of Personal Care Divisionno dataUS$2.39m0.018%
$ 287.5k
Michael Garcia
President of Pulp & Paper Division6.25yrsUS$2.18m0.051%
$ 800.7k
Nicholas Estrela
Director of Investor Relationsno datano datano data
Patrick Loulou
Senior Vice-President of Corporate Development13.42yrsUS$1.21m0.052%
$ 811.4k
Razvan Theodoru
VP of Corporate Law & Corporate Secretaryno datano datano data
Paola Farnesi
VP & Treasurer12.5yrsno datano data
David Struhs
Vice-President of Corporate Services and Sustainabilityno datano datano data

12.5yrs

Average Tenure

57yo

Average Age

Experienced Management: UFS's management team is seasoned and experienced (12.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Williams
President11.58yrsUS$6.84m0.088%
$ 1.4m
David Maffucci
Independent Non-Executive Director9.58yrsUS$285.11kno data
Pamela Strobel
Independent Non-Executive Director13.58yrsUS$300.15k0.0021%
$ 33.3k
Brian Levitt
Independent Non-Executive Director13.58yrsUS$314.64kno data
Mary Winston
Independent Non-Executive Director4.67yrsUS$242.22kno data
Denis Turcotte
Independent Non-Executive Director13.58yrsUS$306.37k0.0055%
$ 87.1k
David Illingworth
Independent Non-Executive Director6.83yrsUS$260.52kno data
Robert Apple
Independent Chairman of the Board3.25yrsUS$404.71kno data
Giannella Alvarez
Independent Non-Executive Director8.58yrsUS$248.75k0.0018%
$ 28.1k

9.6yrs

Average Tenure

66yo

Average Age

Experienced Board: UFS's board of directors are considered experienced (9.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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$1.572b
  • Shares outstanding: 55.19m
  • 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

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 inter ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/10 00:22
End of Day Share Price2020/08/07 00:00
Earnings2020/06/30
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.