CANADIAN TIRE CORP (CTC.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CTC - CA1366811034 - Common Stock
224.15 CAD
+6.9 (+3.18%)
We assign a fundamental rating of 4 out of 10 to CTC. CTC was compared to 3 industry peers in the Broadline Retail industry. While CTC seems to be doing ok healthwise, there are quite some concerns on its profitability. CTC has a valuation in line with the averages, but on the other hand it scores bad on growth. CTC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- CTC had positive earnings in the past year.
- CTC had a positive operating cash flow in the past year.
- In the past 5 years CTC has always been profitable.
- In the past 5 years CTC always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of CTC (3.33%) is worse than 66.67% of its industry peers.
- CTC has a worse Return On Equity (12.37%) than 66.67% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 5.83%, CTC is doing worse than 66.67% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for CTC 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 has a Profit Margin of 4.49%. This is in the lower half of the industry: CTC underperforms 66.67% of its industry peers.
- In the last couple of years the Profit Margin of CTC has remained more or less at the same level.
- CTC has a worse Operating Margin (8.54%) than 66.67% of its industry peers.
- In the last couple of years the Operating Margin of CTC has grown nicely.
- With a Gross Margin value of 34.22%, CTC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
- CTC'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 is destroying value.
- CTC has about the same amout of shares outstanding than it did 1 year ago.
- CTC has less shares outstanding than it did 5 years ago.
- CTC has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.02 indicates that CTC is not a great score, but indicates only limited risk for bankruptcy at the moment.
- With a decent Altman-Z score value of 2.02, CTC is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- The Debt to FCF ratio of CTC is 17.07, which is on the high side as it means it would take CTC, 17.07 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 17.07, CTC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
- A Debt/Equity ratio of 1.13 is on the high side and indicates that CTC has dependencies on debt financing.
- CTC has a better Debt to Equity ratio (1.13) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 17.07 | ||
| Altman-Z | 2.02 |
ROIC/WACC0.78
WACC7.45%
2.3 Liquidity
- A Current Ratio of 1.80 indicates that CTC should not have too much problems paying its short term obligations.
- CTC's Current ratio of 1.80 is fine compared to the rest of the industry. CTC outperforms 66.67% of its industry peers.
- A Quick Ratio of 1.36 indicates that CTC should not have too much problems paying its short term obligations.
- CTC's Quick ratio of 1.36 is fine compared to the rest of the industry. CTC outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.8 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
- CTC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.68%, which is quite good.
- The Earnings Per Share has been decreasing by -0.74% on average over the past years.
- CTC shows a decrease in Revenue. In the last year, the revenue decreased by -0.13%.
- CTC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.39% yearly.
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
- Based on estimates for the next years, CTC will show a small growth in Earnings Per Share. The EPS will grow by 6.72% on average per year.
- CTC 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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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
- Based on the Price/Earnings ratio of 16.70, the valuation of CTC can be described as correct.
- Based on the Price/Earnings ratio, CTC is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
- CTC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.87.
- Based on the Price/Forward Earnings ratio of 15.85, the valuation of CTC can be described as correct.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CTC indicates a somewhat cheap valuation: CTC is cheaper than 66.67% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.96, CTC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.7 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
- 66.67% of the companies in the same industry are more expensive than CTC, based on the Enterprise Value to EBITDA ratio.
- 66.67% of the companies in the same industry are more expensive than CTC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.98 | ||
| EV/EBITDA | 8.49 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)3.2
PEG (5Y)N/A
EPS Next 2Y5.93%
EPS Next 3Y6.72%
5. Dividend
5.1 Amount
- CTC has a Yearly Dividend Yield of 4.11%, which is a nice return.
- CTC's Dividend Yield is rather good when compared to the industry average which is at 2.81. CTC pays more dividend than 100.00% of the companies in the same industry.
- CTC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
5.2 History
- The dividend of CTC is nicely growing with an annual growth rate of 20.98%!
- CTC has paid a dividend for at least 10 years, which is a reliable track record.
- CTC 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 Years22
5.3 Sustainability
- CTC pays out 49.67% of its income as dividend. This is a bit on the high side, but may be sustainable.
- CTC'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 / CTC.CA FAQ
Can you provide the ChartMill fundamental rating for CANADIAN TIRE CORP?
ChartMill assigns a fundamental rating of 4 / 10 to CTC.CA.
Can you provide the valuation status for CANADIAN TIRE CORP?
ChartMill assigns a valuation rating of 4 / 10 to CANADIAN TIRE CORP (CTC.CA). This can be considered as Fairly Valued.
How profitable is CANADIAN TIRE CORP (CTC.CA) stock?
CANADIAN TIRE CORP (CTC.CA) has a profitability rating of 3 / 10.
How financially healthy is CANADIAN TIRE CORP?
The financial health rating of CANADIAN TIRE CORP (CTC.CA) is 4 / 10.
Is the dividend of CANADIAN TIRE CORP sustainable?
The dividend rating of CANADIAN TIRE CORP (CTC.CA) is 8 / 10 and the dividend payout ratio is 49.67%.