LOBLAW COMPANIES LTD (L.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:L - CA5394811015 - Common Stock
61.37 CAD
-0.26 (-0.42%)
L gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 17 industry peers in the Consumer Staples Distribution & Retail industry. While L belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, L is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- L had positive earnings in the past year.
- In the past year L had a positive cash flow from operations.
- L had positive earnings in each of the past 5 years.
- In the past 5 years L always reported a positive cash flow from operatings.
1.2 Ratios
- L has a Return On Assets of 6.05%. This is amongst the best in the industry. L outperforms 82.35% of its industry peers.
- L has a better Return On Equity (22.30%) than 70.59% of its industry peers.
- With an excellent Return On Invested Capital value of 10.91%, L belongs to the best of the industry, outperforming 94.12% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for L is in line with the industry average of 8.51%.
- The last Return On Invested Capital (10.91%) for L is above the 3 year average (9.41%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.05% | ||
| ROE | 22.3% | ||
| ROIC | 10.91% |
ROA(3y)5.21%
ROA(5y)4.76%
ROE(3y)18.18%
ROE(5y)16.12%
ROIC(3y)9.41%
ROIC(5y)8.49%
1.3 Margins
- L has a better Profit Margin (3.92%) than 88.24% of its industry peers.
- L's Profit Margin has improved in the last couple of years.
- L has a Operating Margin of 6.92%. This is comparable to the rest of the industry: L outperforms 58.82% of its industry peers.
- In the last couple of years the Operating Margin of L has grown nicely.
- Looking at the Gross Margin, with a value of 32.37%, L is in line with its industry, outperforming 41.18% of the companies in the same industry.
- L's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.92% | ||
| PM (TTM) | 3.92% | ||
| GM | 32.37% |
OM growth 3Y5.29%
OM growth 5Y6.41%
PM growth 3Y0.27%
PM growth 5Y9.68%
GM growth 3Y0.9%
GM growth 5Y1.03%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), L is creating some value.
- The number of shares outstanding for L has been reduced compared to 1 year ago.
- The number of shares outstanding for L has been reduced compared to 5 years ago.
- The debt/assets ratio for L is higher compared to a year ago.
2.2 Solvency
- L has an Altman-Z score of 3.60. This indicates that L is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of L (3.60) is better than 70.59% of its industry peers.
- L has a debt to FCF ratio of 5.20. This is a neutral value as L would need 5.20 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 5.20, L is doing good in the industry, outperforming 76.47% of the companies in the same industry.
- L has a Debt/Equity ratio of 1.52. This is a high value indicating a heavy dependency on external financing.
- L has a Debt to Equity ratio (1.52) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.52 | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.6 |
ROIC/WACC1.54
WACC7.09%
2.3 Liquidity
- L has a Current Ratio of 1.24. This is a normal value and indicates that L is financially healthy and should not expect problems in meeting its short term obligations.
- L's Current ratio of 1.24 is on the low side compared to the rest of the industry. L is outperformed by 64.71% of its industry peers.
- L has a Quick Ratio of 1.24. This is a bad value and indicates that L is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.70, L is doing worse than 70.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 10.39% over the past year.
- L shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.72% yearly.
- Looking at the last year, L shows a small growth in Revenue. The Revenue has grown by 4.21% in the last year.
- L shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.90% yearly.
EPS 1Y (TTM)10.39%
EPS 3Y15.31%
EPS 5Y15.72%
EPS Q2Q%10.4%
Revenue 1Y (TTM)4.21%
Revenue growth 3Y4.69%
Revenue growth 5Y4.9%
Sales Q2Q%4.62%
3.2 Future
- L is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.36% yearly.
- Based on estimates for the next years, L will show a small growth in Revenue. The Revenue will grow by 3.49% on average per year.
EPS Next Y14.97%
EPS Next 2Y11.35%
EPS Next 3Y10.63%
EPS Next 5Y8.36%
Revenue Next Year6.38%
Revenue Next 2Y4.31%
Revenue Next 3Y4.13%
Revenue Next 5Y3.49%
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 decreasing.
- 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 26.57, the valuation of L can be described as expensive.
- Based on the Price/Earnings ratio, L is valued a bit more expensive than 64.71% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. L is around the same levels.
- The Price/Forward Earnings ratio is 23.10, which indicates a rather expensive current valuation of L.
- L's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. L is more expensive than 64.71% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. L is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.57 | ||
| Fwd PE | 23.1 |
4.2 Price Multiples
- L's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. L is more expensive than 82.35% of the companies in the same industry.
- L's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.69 | ||
| EV/EBITDA | 12.28 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of L may justify a higher PE ratio.
PEG (NY)1.77
PEG (5Y)1.69
EPS Next 2Y11.35%
EPS Next 3Y10.63%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.90%, L is not a good candidate for dividend investing.
- L's Dividend Yield is comparable with the industry average which is at 2.25.
- Compared to an average S&P500 Dividend Yield of 1.82, L's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
5.2 History
- The dividend of L decreases each year by -14.66%.
- L has been paying a dividend for at least 10 years, so it has a reliable track record.
- L has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-14.66%
Div Incr Years13
Div Non Decr Years34
5.3 Sustainability
- L pays out 26.12% of its income as dividend. This is a sustainable payout ratio.
DP26.12%
EPS Next 2Y11.35%
EPS Next 3Y10.63%
LOBLAW COMPANIES LTD / L.CA FAQ
What is the fundamental rating for L stock?
ChartMill assigns a fundamental rating of 5 / 10 to L.CA.
Can you provide the valuation status for LOBLAW COMPANIES LTD?
ChartMill assigns a valuation rating of 2 / 10 to LOBLAW COMPANIES LTD (L.CA). This can be considered as Overvalued.
Can you provide the profitability details for LOBLAW COMPANIES LTD?
LOBLAW COMPANIES LTD (L.CA) has a profitability rating of 8 / 10.
Can you provide the expected EPS growth for L stock?
The Earnings per Share (EPS) of LOBLAW COMPANIES LTD (L.CA) is expected to grow by 14.97% in the next year.
How sustainable is the dividend of LOBLAW COMPANIES LTD (L.CA) stock?
The dividend rating of LOBLAW COMPANIES LTD (L.CA) is 4 / 10 and the dividend payout ratio is 26.12%.