NYSE:UFS

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Excellent balance sheet, good value and pays a dividend.

Risks

  • Domtar has significant price volatility in the past 3 months.

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


Market Performance


7 Day Return

-4.8%

NYSE:UFS

-1.3%

US Forestry

-1.6%

US Market


1 Year Return

-37.6%

NYSE:UFS

-24.7%

US Forestry

-3.0%

US Market

UFS underperformed the Forestry industry which returned -24.7% over the past year.

UFS underperformed the Market in United States of America which returned -3% over the past year.


Share holder returns

UFSIndustryMarket
7 Day-4.8%-1.3%-1.6%
30 Day-24.7%-11.0%-5.7%
90 Day-25.1%-8.4%0.2%
1 Year-35.1%-37.6%-22.0%-24.7%-0.8%-3.0%
3 Year-3.6%-14.6%7.8%0.2%38.1%29.1%
5 Year4.9%-14.4%2.3%-8.4%50.8%34.1%

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 based on future cash flows and its price relative to the stock market?

36%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Domtar's share price is below the future cash flow value, and at a moderate discount (> 20%).

Domtar's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Domtar is good value based on earnings compared to the US Forestry industry average.

Domtar is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Domtar earnings are not expected to grow next year, we can't assess if its growth is good value.


Price Based on Value of Assets

Domtar is good value based on assets compared to the US Forestry industry average.


Next Steps

Future Growth

How is Domtar expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

-4.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Domtar's revenue is expected to grow by 0.1% yearly, however this is not considered high growth (20% yearly).

Domtar's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.

Domtar's revenue growth is positive but not above the United States of America market average.

Domtar's earnings are expected to decrease over the next 1-3 years, this is below the United States of America market average.

Domtar's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Domtar will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


Next Steps

Past Performance

How has Domtar performed over the past 5 years?

-27.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Domtar's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Domtar has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.

Domtar has become profitable in the last year making it difficult to compare the US Forestry industry average.


Return on Equity

Domtar has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Domtar used its assets less efficiently than the US Forestry industry average last year based on Return on Assets.


Return on Capital Employed

Domtar has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Domtar's financial position?


Financial Position Analysis

Domtar is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Domtar's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Domtar's level of debt (31.2%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (48.3% vs 31.2% today).

Debt is well covered by operating cash flow (56.4%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 8.6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 2x debt.


Next Steps

Dividend

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

5.72%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Domtar before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Domtar's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.52%).

Domtar's dividend is above the markets top 25% of dividend payers in United States of America (3.93%).

Domtar has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).

Dividend payments have increased, but Domtar only paid a dividend in the past 9 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (2.5x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.9x coverage).


Next Steps

Management

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

11.5yrs

Average management tenure


CEO

John Williams (65yo)

10.6yrs

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

John's remuneration is higher than average for companies of similar size in United States of America.

John's compensation has increased in line with Domtar recently becoming profitable.


Management Age and Tenure

11.5yrs

Average Tenure

56yo

Average Age

The average tenure for the Domtar management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

8.6yrs

Average Tenure

65yo

Average Age

The tenure for the Domtar board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$605,07204 Mar 19
Michael Fagan
EntityIndividual
Role
Senior Key Executive
President of Personal Care Division
Shares11,834
Max PriceUS$51.13
SellUS$2,467,30526 Feb 19
John Williams
EntityIndividual
Role
Chief Executive Officer
President
Shares47,176
Max PriceUS$52.30
SellUS$149,41521 Feb 19
Zygmunt Jablonski
EntityIndividual
Role
Chief Administrative Officer
Shares2,864
Max PriceUS$52.17
SellUS$320,22021 Feb 19
Daniel Buron
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares6,000
Max PriceUS$53.37
SellUS$580,73314 Feb 19
Michael Garcia
EntityIndividual
Role
Senior Key Executive
President of Pulp & Paper Division
Shares11,272
Max PriceUS$51.52

Ownership Breakdown


Management Team

  • Razvan Theodoru

    VP of Corporate Law & Corporate Secretary

    • Tenure: 0.0yrs
  • Patrick Loulou (50yo)

    Senior Vice-President of Corporate Development

    • Tenure: 12.4yrs
    • Compensation: US$1.21m
  • David Struhs (58yo)

    Vice-President of Corporate Services and Sustainability

    • Tenure: 0.0yrs
  • Daniel Buron (55yo)

    Senior VP & CFO

    • Tenure: 12.4yrs
    • Compensation: US$2.96m
  • John Williams (65yo)

    President

    • Tenure: 10.6yrs
    • Compensation: US$7.95m
  • Michael Fagan (57yo)

    President of Personal Care Division

    • Tenure: 0.0yrs
    • Compensation: US$2.07m
  • Paola Farnesi (52yo)

    VP & Treasurer

    • Tenure: 11.5yrs
  • Zygmunt Jablonski (65yo)

    • Tenure: 0.0yrs
    • Compensation: US$2.13m
  • Mike Garcia (54yo)

    President of Pulp & Paper Division

    • Tenure: 5.3yrs
    • Compensation: US$2.67m
  • Nicholas Estrela

    Director of Investor Relations

    • Tenure: 0.0yrs

Board Members

  • David Maffucci (68yo)

    Independent Non-Executive Director

    • Tenure: 8.6yrs
    • Compensation: US$278.14k
  • Pamela Strobel (67yo)

    Independent Non-Executive Director

    • Tenure: 12.6yrs
    • Compensation: US$303.51k
  • Brian Levitt (71yo)

    Independent Non-Executive Director

    • Tenure: 12.6yrs
    • Compensation: US$309.16k
  • Mary Winston (57yo)

    Independent Non-Executive Director

    • Tenure: 3.7yrs
    • Compensation: US$236.83k
  • Denis Turcotte (57yo)

    Independent Non-Executive Director

    • Tenure: 12.6yrs
    • Compensation: US$301.46k
  • Dave Illingworth (65yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: US$254.39k
  • John Williams (65yo)

    President

    • Tenure: 10.6yrs
    • Compensation: US$7.95m
  • Robert Apple (69yo)

    Chairman of the Board

    • Tenure: 2.3yrs
    • Compensation: US$394.84k
  • Giannella Alvarez (59yo)

    Independent Non-Executive Director

    • Tenure: 7.6yrs
    • Compensation: US$247.53k

Company Information

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


Key Information

  • Name: Domtar Corporation
  • Ticker: UFS
  • Exchange: NYSE
  • Founded: 1848
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: US$1.998b
  • Shares outstanding: 62.58m
  • 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 various communication papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, a ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/25 00:06
End of Day Share Price2019/08/23 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.