CANADIAN TIRE CORP-CLASS A (CTC-A.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CTC-A - CA1366812024 - Common Stock
172.93 CAD
-2.99 (-1.7%)
Overall CTC-A gets a fundamental rating of 5 out of 10. We evaluated CTC-A against 3 industry peers in the Broadline Retail industry. Both the profitability and the financial health of CTC-A get a neutral evaluation. Nothing too spectacular is happening here. CTC-A is cheap, but on the other hand it scores bad on growth. Finally CTC-A also has an excellent dividend rating. These ratings would make CTC-A suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- CTC-A had positive earnings in the past year.
- CTC-A had a positive operating cash flow in the past year.
- Each year in the past 5 years CTC-A has been profitable.
- In the past 5 years CTC-A always reported a positive cash flow from operatings.
1.2 Ratios
- CTC-A has a Return On Assets of 3.33%. This is in the better half of the industry: CTC-A outperforms 66.67% of its industry peers.
- CTC-A's Return On Equity of 12.37% is fine compared to the rest of the industry. CTC-A outperforms 66.67% of its industry peers.
- With a decent Return On Invested Capital value of 5.83%, CTC-A is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for CTC-A is below the industry average of 11.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.33% | ||
| ROE | 12.37% | ||
| ROIC | 5.83% |
ROA(3y)3.23%
ROA(5y)3.71%
ROE(3y)12.28%
ROE(5y)15.11%
ROIC(3y)6.91%
ROIC(5y)7.09%
1.3 Margins
- CTC-A has a Profit Margin of 4.49%. This is in the better half of the industry: CTC-A outperforms 66.67% of its industry peers.
- In the last couple of years the Profit Margin of CTC-A has remained more or less at the same level.
- CTC-A has a Operating Margin of 8.54%. This is in the better half of the industry: CTC-A outperforms 66.67% of its industry peers.
- In the last couple of years the Operating Margin of CTC-A has grown nicely.
- CTC-A has a better Gross Margin (34.22%) than 66.67% of its industry peers.
- CTC-A's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.54% | ||
| PM (TTM) | 4.49% | ||
| GM | 34.22% |
OM growth 3Y-1.62%
OM growth 5Y2.41%
PM growth 3Y-7.79%
PM growth 5Y0.27%
GM growth 3Y-1.38%
GM growth 5Y0.48%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CTC-A is destroying value.
- The number of shares outstanding for CTC-A remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, CTC-A has less shares outstanding
- Compared to 1 year ago, CTC-A has an improved debt to assets ratio.
2.2 Solvency
- CTC-A has an Altman-Z score of 1.92. This is not the best score and indicates that CTC-A is in the grey zone with still only limited risk for bankruptcy at the moment.
- The Altman-Z score of CTC-A (1.92) is worse than 66.67% of its industry peers.
- The Debt to FCF ratio of CTC-A is 17.07, which is on the high side as it means it would take CTC-A, 17.07 years of fcf income to pay off all of its debts.
- CTC-A has a Debt to FCF ratio of 17.07. This is in the better half of the industry: CTC-A outperforms 66.67% of its industry peers.
- CTC-A has a Debt/Equity ratio of 1.13. This is a high value indicating a heavy dependency on external financing.
- CTC-A has a Debt to Equity ratio of 1.13. This is amongst the best in the industry. CTC-A outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 17.07 | ||
| Altman-Z | 1.92 |
ROIC/WACC0.79
WACC7.36%
2.3 Liquidity
- A Current Ratio of 1.80 indicates that CTC-A should not have too much problems paying its short term obligations.
- CTC-A's Current ratio of 1.80 is amongst the best of the industry. CTC-A outperforms 100.00% of its industry peers.
- A Quick Ratio of 1.36 indicates that CTC-A should not have too much problems paying its short term obligations.
- CTC-A has a better Quick ratio (1.36) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.8 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.68% over the past year.
- Measured over the past years, CTC-A shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.74% on average per year.
- Looking at the last year, CTC-A shows a decrease in Revenue. The Revenue has decreased by -0.13% in the last year.
- The Revenue has been growing slightly by 2.39% on average over the past years.
EPS 1Y (TTM)12.68%
EPS 3Y-12.66%
EPS 5Y-0.74%
EPS Q2Q%5.29%
Revenue 1Y (TTM)-0.13%
Revenue growth 3Y0.13%
Revenue growth 5Y2.39%
Sales Q2Q%-2.08%
3.2 Future
- The Earnings Per Share is expected to grow by 6.72% on average over the next years.
- CTC-A is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.54% yearly.
EPS Next Y5.23%
EPS Next 2Y5.93%
EPS Next 3Y6.72%
EPS Next 5YN/A
Revenue Next Year-1.34%
Revenue Next 2Y-0.04%
Revenue Next 3Y0.54%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 12.89, which indicates a correct valuation of CTC-A.
- Compared to the rest of the industry, the Price/Earnings ratio of CTC-A indicates a rather cheap valuation: CTC-A is cheaper than 100.00% of the companies listed in the same industry.
- CTC-A is valuated cheaply when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- CTC-A is valuated correctly with a Price/Forward Earnings ratio of 12.23.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CTC-A indicates a rather cheap valuation: CTC-A is cheaper than 100.00% of the companies listed in the same industry.
- CTC-A is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.89 | ||
| Fwd PE | 12.23 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CTC-A is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, CTC-A is valued cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.04 | ||
| EV/EBITDA | 7.25 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of CTC-A may justify a higher PE ratio.
PEG (NY)2.47
PEG (5Y)N/A
EPS Next 2Y5.93%
EPS Next 3Y6.72%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.11%, CTC-A is a good candidate for dividend investing.
- CTC-A's Dividend Yield is a higher than the industry average which is at 2.81.
- Compared to an average S&P500 Dividend Yield of 1.82, CTC-A pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
5.2 History
- On average, the dividend of CTC-A grows each year by 20.98%, which is quite nice.
- CTC-A has paid a dividend for at least 10 years, which is a reliable track record.
- CTC-A has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.98%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
- CTC-A pays out 49.67% of its income as dividend. This is a bit on the high side, but may be sustainable.
- CTC-A's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP49.67%
EPS Next 2Y5.93%
EPS Next 3Y6.72%
CANADIAN TIRE CORP-CLASS A / CTC-A.CA FAQ
Can you provide the ChartMill fundamental rating for CANADIAN TIRE CORP-CLASS A?
ChartMill assigns a fundamental rating of 5 / 10 to CTC-A.CA.
What is the valuation status for CTC-A stock?
ChartMill assigns a valuation rating of 7 / 10 to CANADIAN TIRE CORP-CLASS A (CTC-A.CA). This can be considered as Undervalued.
How profitable is CANADIAN TIRE CORP-CLASS A (CTC-A.CA) stock?
CANADIAN TIRE CORP-CLASS A (CTC-A.CA) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for CTC-A stock?
The Price/Earnings (PE) ratio for CANADIAN TIRE CORP-CLASS A (CTC-A.CA) is 12.89 and the Price/Book (PB) ratio is 1.56.
Can you provide the financial health for CTC-A stock?
The financial health rating of CANADIAN TIRE CORP-CLASS A (CTC-A.CA) is 5 / 10.