LOBLAW COMPANIES LTD (L.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:L - CA5394811015 - Common Stock
62.96 CAD
+0.59 (+0.95%)
We assign a fundamental rating of 5 out of 10 to L. L was compared to 17 industry peers in the Consumer Staples Distribution & Retail industry. While L has a great profitability rating, there are some minor concerns on its financial health. L is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year L was profitable.
- L had a positive operating cash flow in the past year.
- Each year in the past 5 years L has been profitable.
- In the past 5 years L always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of L (6.05%) is better than 82.35% of its industry peers.
- The Return On Equity of L (22.30%) is better 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.
- The Average Return On Invested Capital over the past 3 years 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's Profit Margin of 3.92% is amongst the best of the industry. L outperforms 88.24% of its industry peers.
- In the last couple of years the Profit Margin of L has grown nicely.
- L has a Operating Margin (6.92%) which is in line with its industry peers.
- L's Operating Margin has improved in the last couple of years.
- The Gross Margin of L (32.37%) is comparable to the rest of the 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
- L has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for L has been reduced compared to 1 year ago.
- L has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, L has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 3.64 indicates that L is not in any danger for bankruptcy at the moment.
- With a decent Altman-Z score value of 3.64, L is doing good in the industry, outperforming 70.59% of the companies in the same industry.
- The Debt to FCF ratio of L is 5.20, which is a neutral value as it means it would take L, 5.20 years of fcf income to pay off all of its debts.
- L's Debt to FCF ratio of 5.20 is fine compared to the rest of the industry. L outperforms 76.47% of its industry peers.
- A Debt/Equity ratio of 1.52 is on the high side and indicates that L has dependencies on debt financing.
- L's Debt to Equity ratio of 1.52 is in line compared to the rest of the industry. L outperforms 47.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.52 | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.64 |
ROIC/WACC1.54
WACC7.1%
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.
- The Current ratio of L (1.24) is worse than 64.71% of its industry peers.
- A Quick Ratio of 0.70 indicates that L may have some problems paying its short term obligations.
- L has a Quick ratio of 0.70. This is in the lower half of the industry: L underperforms 70.59% of its industry peers.
| 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.
- Measured over the past years, L shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.72% on average per year.
- L shows a small growth in Revenue. In the last year, the Revenue has grown by 4.21%.
- The Revenue has been growing slightly by 4.90% on average over the past years.
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
- The Earnings Per Share is expected to grow by 8.36% on average over the next years. This is quite good.
- 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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- L is valuated quite expensively with a Price/Earnings ratio of 27.26.
- Based on the Price/Earnings ratio, L is valued a bit more expensive than the industry average as 64.71% of the companies are valued more cheaply.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, L is valued at the same level.
- Based on the Price/Forward Earnings ratio of 23.70, the valuation of L can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, L is valued a bit more expensive than the industry average as 64.71% of the companies are valued more cheaply.
- When comparing the Price/Forward Earnings ratio of L to the average of the S&P500 Index (25.98), we can say L is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.26 | ||
| Fwd PE | 23.7 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of L indicates a rather expensive valuation: L more expensive than 82.35% of the companies listed in the same industry.
- L's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.2 | ||
| EV/EBITDA | 12.54 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates L does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of L may justify a higher PE ratio.
PEG (NY)1.82
PEG (5Y)1.73
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.
- With a Dividend Yield of 0.90, L pays less dividend than the S&P500 average, which is at 1.81.
| 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%.