Stella-Jones, Inc. (SJ) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Acadian Timber Corp.

Stella-Jones, Inc.

Canfor Corp.

Interfor Corp.

West Fraser Timber Co. Ltd.

G2 Energy Corp.

Western Forest Products, Inc.

Atlas Engineered Products Ltd.

GreenFirst Forest Products, Inc.

Conifex Timber, Inc.

Maple Leaf Green World, Inc.

Why is Stella-Jones, Inc. ?

High Management Efficiency with a high ROCE of 14.92%

High Debt company with Weak Long Term Fundamental Strength

Flat results in Mar 26

DIVIDEND PAYOUT RATIO(Y) Lowest at 0%
ROCE(HY) Lowest at 14.84%
RAW MATERIAL COST(Y) Grown by 11.18% (YoY)

With ROE of 14.48%, it has a fair valuation with a 2.16 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -4.93%, its profits have fallen by -3.1%

Below par performance in long term as well as near term

Along with generating -4.93% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Stella-Jones, Inc. should be less than 10%
Overall Portfolio exposure to Paper, Forest & Jute Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Paper, Forest & Jute Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Stella-Jones, Inc. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Stella-Jones, Inc.

2.9%

-0.49

27.01%

S&P/TSX 60

29.63%

2.33

12.07%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

5.65%

EBIT Growth (5y)

5.88%

EBIT to Interest (avg)

8.67

Debt to EBITDA (avg)

2.34

Net Debt to Equity (avg)

0.73

Sales to Capital Employed (avg)

1.04

Tax Ratio

24.75%

Dividend Payout Ratio

20.85%

Pledged Shares

Institutional Holding

0.13%

ROCE (avg)

14.44%

ROE (avg)

16.83%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.16

EV to EBIT

12.64

EV to EBITDA

9.60

EV to Capital Employed

1.71

EV to Sales

1.68

PEG Ratio

Dividend Yield

ROCE (Latest)

13.49%

ROE (Latest)

14.48%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Mildly Bullish (Daily)

KST

Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 588 MM

DEBT-EQUITY RATIO (HY)

Lowest at 69.08 %

NET SALES(Q)

Highest at CAD 1,042 MM

-6What is not working for the Company

ROCE(HY)

Lowest at 12.44%

DIVIDEND PAYOUT RATIO(Y)

Lowest at 0%

RAW MATERIAL COST(Y)

Grown by 12.67% (YoY

DIVIDEND PER SHARE(HY)

Lowest at CAD 8.33

OPERATING PROFIT MARGIN(Q)

Lowest at 16.22 %

Here's what is working for Stella-Jones, Inc.

Operating Cash Flow

Highest at CAD 588 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Net Sales

Highest at CAD 1,042 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Debt-Equity Ratio

Lowest at 69.08 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Depreciation

Highest at CAD 40 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (CAD MM)

Here's what is not working for Stella-Jones, Inc.

Operating Profit Margin

Lowest at 16.22 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Dividend per share

Lowest at CAD 8.33

in the last five years

MOJO Watch

Company is distributing lower dividend than previous years

DPS (CAD)

Dividend Payout Ratio

Lowest at 0%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Grown by 12.67% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales