WEST FRASER TIMBER CO LTD (WFG.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:WFG - CA9528451052 - Common Stock
99.08 CAD
+0.27 (+0.27%)
We assign a fundamental rating of 4 out of 10 to WFG. WFG was compared to 12 industry peers in the Paper & Forest Products industry. No worries on liquidiy or solvency for WFG as it has an excellent financial health rating, but there are worries on the profitability. WFG is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year WFG has reported negative net income.
- WFG had a positive operating cash flow in the past year.
- The reported net income has been mixed in the past 5 years: WFG reported negative net income in multiple years.
- WFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of WFG (-2.89%) is comparable to the rest of the industry.
- WFG has a Return On Equity (-3.74%) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.89% | ||
| ROE | -3.74% | ||
| ROIC | N/A |
ROA(3y)5.99%
ROA(5y)12.01%
ROE(3y)7.85%
ROE(5y)17.08%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- In the last couple of years the Operating Margin of WFG has declined.
- Looking at the Gross Margin, with a value of 25.57%, WFG belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
- WFG's Gross Margin has improved in the last couple of years.
- WFG does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 25.57% |
OM growth 3Y-63.89%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-18.87%
GM growth 5Y3.49%
2. Health
2.1 Basic Checks
- WFG does not have a ROIC to compare to the WACC, probably because it is not profitable.
- Compared to 1 year ago, WFG has less shares outstanding
- WFG has more shares outstanding than it did 5 years ago.
- WFG has a better debt/assets ratio than last year.
2.2 Solvency
- WFG has an Altman-Z score of 3.16. This indicates that WFG is financially healthy and has little risk of bankruptcy at the moment.
- WFG has a better Altman-Z score (3.16) than 91.67% of its industry peers.
- The Debt to FCF ratio of WFG is 26.92, which is on the high side as it means it would take WFG, 26.92 years of fcf income to pay off all of its debts.
- WFG has a better Debt to FCF ratio (26.92) than 75.00% of its industry peers.
- A Debt/Equity ratio of 0.05 indicates that WFG is not too dependend on debt financing.
- WFG has a better Debt to Equity ratio (0.05) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 26.92 | ||
| Altman-Z | 3.16 |
ROIC/WACCN/A
WACC7.89%
2.3 Liquidity
- A Current Ratio of 2.39 indicates that WFG has no problem at all paying its short term obligations.
- The Current ratio of WFG (2.39) is better than 75.00% of its industry peers.
- WFG has a Quick Ratio of 1.32. This is a normal value and indicates that WFG is financially healthy and should not expect problems in meeting its short term obligations.
- With a decent Quick ratio value of 1.32, WFG is doing good in the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.39 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
- The earnings per share for WFG have decreased strongly by -167.74% in the last year.
- WFG shows a decrease in Revenue. In the last year, the revenue decreased by -9.23%.
- WFG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.92% yearly.
EPS 1Y (TTM)-167.74%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-155.34%
Revenue 1Y (TTM)-9.23%
Revenue growth 3Y-16.27%
Revenue growth 5Y10.92%
Sales Q2Q%-9.05%
3.2 Future
- WFG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 118.65% yearly.
- Based on estimates for the next years, WFG will show a small growth in Revenue. The Revenue will grow by 2.70% on average per year.
EPS Next Y-2393.2%
EPS Next 2Y-77.79%
EPS Next 3Y213.54%
EPS Next 5Y118.65%
Revenue Next Year-10.68%
Revenue Next 2Y-1.13%
Revenue Next 3Y2.2%
Revenue Next 5Y2.7%
3.3 Evolution
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- WFG reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
- Also next year WFG is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | N/A |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as WFG.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of WFG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 471.77 | ||
| EV/EBITDA | 18.88 |
4.3 Compensation for Growth
- WFG's earnings are expected to grow with 213.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-77.79%
EPS Next 3Y213.54%
5. Dividend
5.1 Amount
- WFG has a Yearly Dividend Yield of 1.88%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.47, WFG pays a bit more dividend than its industry peers.
- WFG's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.88% |
5.2 History
- The dividend of WFG is nicely growing with an annual growth rate of 15.82%!
- WFG has been paying a dividend for at least 10 years, so it has a reliable track record.
- WFG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)15.82%
Div Incr Years4
Div Non Decr Years14
5.3 Sustainability
- The earnings of WFG are negative and hence is the payout ratio. WFG will probably not be able to sustain this dividend level.
- The dividend of WFG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-41.13%
EPS Next 2Y-77.79%
EPS Next 3Y213.54%
WEST FRASER TIMBER CO LTD / WFG.CA FAQ
What is the fundamental rating for WFG stock?
ChartMill assigns a fundamental rating of 4 / 10 to WFG.CA.
Can you provide the valuation status for WEST FRASER TIMBER CO LTD?
ChartMill assigns a valuation rating of 2 / 10 to WEST FRASER TIMBER CO LTD (WFG.CA). This can be considered as Overvalued.
Can you provide the profitability details for WEST FRASER TIMBER CO LTD?
WEST FRASER TIMBER CO LTD (WFG.CA) has a profitability rating of 3 / 10.
Can you provide the expected EPS growth for WFG stock?
The Earnings per Share (EPS) of WEST FRASER TIMBER CO LTD (WFG.CA) is expected to decline by -2393.2% in the next year.
Can you provide the dividend sustainability for WFG stock?
The dividend rating of WEST FRASER TIMBER CO LTD (WFG.CA) is 6 / 10 and the dividend payout ratio is -41.13%.