LEON'S FURNITURE LTD (LNF.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:LNF - CA5266821092 - Common Stock
28.2 CAD
-0.07 (-0.25%)
We assign a fundamental rating of 6 out of 10 to LNF. LNF was compared to 19 industry peers in the Specialty Retail industry. Both the profitability and the financial health of LNF get a neutral evaluation. Nothing too spectacular is happening here. LNF has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year LNF was profitable.
- LNF had a positive operating cash flow in the past year.
- Each year in the past 5 years LNF has been profitable.
- Each year in the past 5 years LNF had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of LNF (7.15%) is better than 68.42% of its industry peers.
- With a decent Return On Equity value of 14.25%, LNF is doing good in the industry, outperforming 68.42% of the companies in the same industry.
- The Return On Invested Capital of LNF (9.15%) is better than 73.68% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for LNF is in line with the industry average of 11.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.15% | ||
| ROE | 14.25% | ||
| ROIC | 9.15% |
ROA(3y)7%
ROA(5y)7.24%
ROE(3y)15.43%
ROE(5y)17.71%
ROIC(3y)9.82%
ROIC(5y)11.29%
1.3 Margins
- LNF has a Profit Margin (6.77%) which is comparable to the rest of the industry.
- LNF's Profit Margin has improved in the last couple of years.
- LNF's Operating Margin of 8.58% is in line compared to the rest of the industry. LNF outperforms 57.89% of its industry peers.
- In the last couple of years the Operating Margin of LNF has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 45.03%, LNF is in the better half of the industry, outperforming 68.42% of the companies in the same industry.
- LNF's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.58% | ||
| PM (TTM) | 6.77% | ||
| GM | 45.03% |
OM growth 3Y-12.63%
OM growth 5Y1.03%
PM growth 3Y-9.31%
PM growth 5Y5.61%
GM growth 3Y0.22%
GM growth 5Y0.33%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so LNF is still creating some value.
- The number of shares outstanding for LNF has been increased compared to 1 year ago.
- Compared to 5 years ago, LNF has less shares outstanding
- Compared to 1 year ago, LNF has an improved debt to assets ratio.
2.2 Solvency
- LNF has an Altman-Z score of 3.07. This indicates that LNF is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 3.07, LNF is doing good in the industry, outperforming 68.42% of the companies in the same industry.
- LNF has a debt to FCF ratio of 1.88. This is a very positive value and a sign of high solvency as it would only need 1.88 years to pay back of all of its debts.
- LNF has a better Debt to FCF ratio (1.88) than 78.95% of its industry peers.
- LNF has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
- LNF's Debt to Equity ratio of 0.32 is fine compared to the rest of the industry. LNF outperforms 78.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.88 | ||
| Altman-Z | 3.07 |
ROIC/WACC1.05
WACC8.7%
2.3 Liquidity
- LNF has a Current Ratio of 1.57. This is a normal value and indicates that LNF is financially healthy and should not expect problems in meeting its short term obligations.
- With a decent Current ratio value of 1.57, LNF is doing good in the industry, outperforming 78.95% of the companies in the same industry.
- LNF has a Quick Ratio of 1.57. This is a bad value and indicates that LNF is not financially healthy enough and could expect problems in meeting its short term obligations.
- LNF has a better Quick ratio (0.90) than 73.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
- LNF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.50%, which is quite impressive.
- LNF shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.92% yearly.
- The Revenue has been growing slightly by 1.99% in the past year.
- Measured over the past years, LNF shows a small growth in Revenue. The Revenue has been growing by 1.82% on average per year.
EPS 1Y (TTM)33.5%
EPS 3Y-4.99%
EPS 5Y9.92%
EPS Q2Q%35.19%
Revenue 1Y (TTM)1.99%
Revenue growth 3Y-0.19%
Revenue growth 5Y1.82%
Sales Q2Q%4.1%
3.2 Future
- The Earnings Per Share is expected to grow by 4.99% on average over the next years.
- Based on estimates for the next years, LNF will show a small growth in Revenue. The Revenue will grow by 2.50% on average per year.
EPS Next Y4.77%
EPS Next 2Y4.15%
EPS Next 3Y4.99%
EPS Next 5YN/A
Revenue Next Year3.15%
Revenue Next 2Y2.63%
Revenue Next 3Y2.5%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- LNF is valuated reasonably with a Price/Earnings ratio of 10.72.
- Based on the Price/Earnings ratio, LNF is valued cheaper than 84.21% of the companies in the same industry.
- LNF is valuated cheaply when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 11.66, the valuation of LNF can be described as very reasonable.
- LNF's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LNF is cheaper than 78.95% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.96, LNF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.72 | ||
| Fwd PE | 11.66 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, LNF is valued a bit cheaper than 63.16% of the companies in the same industry.
- 63.16% of the companies in the same industry are more expensive than LNF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.53 | ||
| EV/EBITDA | 5.74 |
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 LNF may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)1.08
EPS Next 2Y4.15%
EPS Next 3Y4.99%
5. Dividend
5.1 Amount
- LNF has a Yearly Dividend Yield of 3.40%. Purely for dividend investing, there may be better candidates out there.
- LNF's Dividend Yield is rather good when compared to the industry average which is at 2.62. LNF pays more dividend than 84.21% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, LNF pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
5.2 History
- The dividend of LNF has a limited annual growth rate of 5.74%.
- LNF has been paying a dividend for at least 10 years, so it has a reliable track record.
- The dividend of LNF decreased in the last 3 years.
Dividend Growth(5Y)5.74%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- LNF pays out 31.00% of its income as dividend. This is a sustainable payout ratio.
- The dividend of LNF is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31%
EPS Next 2Y4.15%
EPS Next 3Y4.99%
LEON'S FURNITURE LTD / LNF.CA FAQ
What is the ChartMill fundamental rating of LEON'S FURNITURE LTD (LNF.CA) stock?
ChartMill assigns a fundamental rating of 6 / 10 to LNF.CA.
Can you provide the valuation status for LEON'S FURNITURE LTD?
ChartMill assigns a valuation rating of 6 / 10 to LEON'S FURNITURE LTD (LNF.CA). This can be considered as Fairly Valued.
How profitable is LEON'S FURNITURE LTD (LNF.CA) stock?
LEON'S FURNITURE LTD (LNF.CA) has a profitability rating of 6 / 10.
What is the valuation of LEON'S FURNITURE LTD based on its PE and PB ratios?
The Price/Earnings (PE) ratio for LEON'S FURNITURE LTD (LNF.CA) is 10.72 and the Price/Book (PB) ratio is 1.58.
Can you provide the dividend sustainability for LNF stock?
The dividend rating of LEON'S FURNITURE LTD (LNF.CA) is 6 / 10 and the dividend payout ratio is 31%.