CANADIAN TIRE CORP-CLASS A (CTC-A.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CTC-A - CA1366812024 - Common Stock
172.93 CAD
-1.21 (-0.69%)
Taking everything into account, CTC-A scores 5 out of 10 in our fundamental rating. CTC-A was compared to 3 industry peers in the Broadline Retail industry. CTC-A has only an average score on both its financial health and profitability. CTC-A has a bad growth rate and is valued cheaply. CTC-A also has an excellent dividend rating. With these ratings, CTC-A could be worth investigating further for value and dividend investing!.
1. Profitability
1.1 Basic Checks
- CTC-A had positive earnings in the past year.
- In the past year CTC-A had a positive cash flow from operations.
- CTC-A had positive earnings in each of the past 5 years.
- In the past 5 years CTC-A always reported a positive cash flow from operatings.
1.2 Ratios
- CTC-A has a Return On Assets of 3.33%. This is in the better half of the industry: CTC-A outperforms 66.67% of its industry peers.
- With a decent Return On Equity value of 12.37%, CTC-A is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- With a decent Return On Invested Capital value of 5.83%, CTC-A is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- CTC-A had an Average Return On Invested Capital over the past 3 years of 6.91%. This 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
- Looking at the Profit Margin, with a value of 4.49%, CTC-A is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
- In the last couple of years the Profit Margin of CTC-A has remained more or less at the same level.
- CTC-A has a better Operating Margin (8.54%) than 66.67% of its industry peers.
- CTC-A's Operating Margin has improved in the last couple of years.
- With a decent Gross Margin value of 34.22%, CTC-A is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- CTC-A'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-A is destroying value.
- The number of shares outstanding for CTC-A remains at a similar level compared to 1 year ago.
- CTC-A has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for CTC-A has been reduced compared to a year ago.
2.2 Solvency
- CTC-A has an Altman-Z score of 1.92. This is not the best score and indicates that CTC-A is in the grey zone with still only limited risk for bankruptcy at the moment.
- CTC-A has a worse Altman-Z score (1.92) than 66.67% of its industry peers.
- CTC-A has a debt to FCF ratio of 17.07. This is a negative value and a sign of low solvency as CTC-A would need 17.07 years to pay back of all of its debts.
- CTC-A has a better Debt to FCF ratio (17.07) than 66.67% of its industry peers.
- CTC-A has a Debt/Equity ratio of 1.13. This is a high value indicating a heavy dependency on external financing.
- CTC-A has a Debt to Equity ratio of 1.13. This is amongst the best in the industry. CTC-A outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 17.07 | ||
| Altman-Z | 1.92 |
ROIC/WACC0.79
WACC7.36%
2.3 Liquidity
- A Current Ratio of 1.80 indicates that CTC-A should not have too much problems paying its short term obligations.
- CTC-A has a Current ratio of 1.80. This is amongst the best in the industry. CTC-A outperforms 100.00% of its industry peers.
- A Quick Ratio of 1.36 indicates that CTC-A should not have too much problems paying its short term obligations.
- The Quick ratio of CTC-A (1.36) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.8 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
- CTC-A shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.68%, which is quite good.
- Measured over the past years, CTC-A shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.74% on average per year.
- Looking at the last year, CTC-A shows a decrease in Revenue. The Revenue has decreased by -0.13% in the last year.
- Measured over the past years, CTC-A shows a small growth in Revenue. The Revenue has been growing by 2.39% on average per year.
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
- CTC-A is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.72% yearly.
- The Revenue is expected to grow by 0.54% on average over the next years.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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
- The Price/Earnings ratio is 12.89, which indicates a correct valuation of CTC-A.
- 100.00% of the companies in the same industry are more expensive than CTC-A, based on the Price/Earnings ratio.
- CTC-A is valuated cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 12.23, which indicates a correct valuation of CTC-A.
- CTC-A's Price/Forward Earnings ratio is rather cheap when compared to the industry. CTC-A is cheaper than 100.00% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, CTC-A is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.89 | ||
| Fwd PE | 12.23 |
4.2 Price Multiples
- 100.00% of the companies in the same industry are more expensive than CTC-A, based on the Enterprise Value to EBITDA ratio.
- CTC-A's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CTC-A is cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.04 | ||
| EV/EBITDA | 7.22 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CTC-A does not grow enough to justify the current Price/Earnings ratio.
- CTC-A has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.47
PEG (5Y)N/A
EPS Next 2Y5.93%
EPS Next 3Y6.72%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.11%, CTC-A is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.81, CTC-A pays a bit more dividend than its industry peers.
- CTC-A'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
- On average, the dividend of CTC-A grows each year by 20.98%, which is quite nice.
- CTC-A has been paying a dividend for at least 10 years, so it has a reliable track record.
- CTC-A has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)20.98%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
- 49.67% of the earnings are spent on dividend by CTC-A. This is a bit on the high side, but may be sustainable.
- The dividend of CTC-A is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP49.67%
EPS Next 2Y5.93%
EPS Next 3Y6.72%
CANADIAN TIRE CORP-CLASS A / CTC-A.CA FAQ
Can you provide the ChartMill fundamental rating for CANADIAN TIRE CORP-CLASS A?
ChartMill assigns a fundamental rating of 5 / 10 to CTC-A.CA.
What is the valuation status for CTC-A stock?
ChartMill assigns a valuation rating of 7 / 10 to CANADIAN TIRE CORP-CLASS A (CTC-A.CA). This can be considered as Undervalued.
How profitable is CANADIAN TIRE CORP-CLASS A (CTC-A.CA) stock?
CANADIAN TIRE CORP-CLASS A (CTC-A.CA) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for CTC-A stock?
The Price/Earnings (PE) ratio for CANADIAN TIRE CORP-CLASS A (CTC-A.CA) is 12.89 and the Price/Book (PB) ratio is 1.56.
Can you provide the financial health for CTC-A stock?
The financial health rating of CANADIAN TIRE CORP-CLASS A (CTC-A.CA) is 5 / 10.