Paper & Forest Products

(9 companies included)

INDUSTRY RECOMMENDATION
(provided by Value Sciences Inc.)
This sector is about U.S. housing and lumber now which is uncertain at this moment although early signs are that housing demand is unlikely to suffer greatly unless covid19
has continued impact on the economy for many years.
Revised Oct. 8, 2020 © Copyright Value Sciences Inc., 2020

LATEST QUARTERLY RESULTS

(Updated Dec. 1, 2020)
Quarter Latest P/E Divd Revenue Net Inc Earns Assets Book
Ended Close Ratio Yield $000s $000s Per Sh $000s Value
Domtar Corporation (US$)*........................................Q3: 09/20 39.03 n.m n.a 1,124,000 (92,000) (1.67) 4,903,000 41.771
Cascades Inc.............................................................Q3: 09/20 15.01 14.7 2.10 1,275,000 58,000 0.51 5,180,000 15.799
West Fraser Timber Co. Ltd.......................................Q3: 09/20 75.51 14.1 1.10 1,690,000 350,000 5.09 4,668,000 36.031
Canfor Corporation....................................................Q3: 09/20 19.88 14.6 n.a 1,550,400 216,000 1.74 4,527,000 13.139
Resolute Forest Products Inc. (US$)*........................Q3: 09/20 7.12 n.m 27.30 730,000 57,000 0.66 3,626,000 14.233
Norbord Inc. (US$)*....................................................Q3: 10/20 50.41 13.7 4.80 725,000 203,000 2.51 1,921,000 8.638
Stella-Jones Inc.........................................................Q3: 09/20 44.96 14.9 1.30 742,000 79,000 1.17 2,281,057 19.095
Interfor Corporation....................................................Q3: 09/20 20.11 15.1 n.a 644,884 121,604 1.81 1,341,917 12.355
Western Forest Products Inc......................................Q3: 09/20 0.96 n.m n.a 290,600 11,500 0.03 782,500 1.284
*Latest Close in Cdn$.

INDUSTRY DATA BANK

7 Year
FISCAL YEAR: 2019 2018 2017 2016 2015 2014 2013 Average
SCREENS
Earnings - 1 Yr Growth........................................................ (102.30) 58.02 40.34 211.89 (64.35) (56.64) 246.99 47.71
Dividend Yield %..........................................................................2.08 4.19 1.51 1.42 1.48 2.14 1.68 2.07
Avg Price/Earnings....................................................................21.02 11.98 9.79 12.86 24.93 22.51 21.96 17.87
Avg Price/Book Value..................................................................1.40 1.62 1.61 1.52 1.86 1.99 1.70 1.67
Avg Price/Sales...........................................................................0.66 0.75 0.77 0.68 0.83 0.87 0.92 0.78
Avg Price/Cash Flow.................................................................23.48 7.29 6.08 6.38 16.63 13.98 8.38 11.74
Earnings Yield %..........................................................................5.30 10.51 14.04 8.65 5.03 6.12 7.11 8.11
Estim Payback (yrs)...................................................................14.13 7.76 5.99 8.04 18.56 9.93 12.95 11.05
SAFETY
Cash Flow/Total Debt %............................................................17.40 78.87 72.27 95.34 38.55 58.62 77.22 62.61
Current Ratio...............................................................................2.59 2.63 2.76 2.67 2.43 2.65 2.87 2.66
Acid Test (Quick Ratio)................................................................0.70 1.02 1.13 0.91 0.81 0.90 1.12 0.94
Acct Rec/Acct Pay.......................................................................0.85 0.88 0.97 0.97 1.06 0.96 1.00 0.95
Working Capital/Total Assets %.................................................15.63 19.12 19.57 16.67 16.47 16.75 18.87 17.58
Long Term Debt/Common Equity.................................................0.53 0.40 0.41 0.55 0.68 0.57 0.49 0.52
Total Debt/Common Equity..........................................................0.58 0.43 0.42 0.59 0.73 0.60 0.52 0.55
Cash Flow/Net Bef Disc...............................................................3.52 1.85 1.58 2.33 2.09 1.74 4.12 2.46
Interest Coverage........................................................................4.05 14.79 16.42 10.63 7.25 8.10 8.89 10.02
ROE/ROA....................................................................................1.44 1.74 1.85 1.87 1.58 1.58 1.51 1.65
EARNINGS QUALITY
EBIT Margin %......................................................................... (0.50) 11.18 9.94 8.22 2.89 5.08 8.00 6.40
Asset Turnover.............................................................................1.02 1.19 1.14 1.13 1.07 1.11 1.09 1.10
Interest Burden %........................................................................1.44 1.15 1.14 1.34 1.45 1.38 1.48 1.34
Retention %...............................................................................20.08 73.24 81.48 83.41 106.42 39.91 144.50 78.43
After Tax Items/Assets %..........................................................(0.00) (0.00) nil nil nil nil (0.00) (0.00)
Leverage......................................................................................2.32 2.04 2.01 2.24 2.40 2.29 2.13 2.20
Apparent Tax Rate %.................................................................79.92 26.76 23.79 22.83 22.19 142.72 23.86 48.87
Sales - 1 Yr Growth................................................................ (13.35) 9.58 7.42 7.23 9.33 6.88 13.82 5.84
Cash Flow Growth Y/Y%........................................................ (59.33) 25.81 29.78 53.74 (26.34) (3.55) 100.73 17.26
Book Value/Share - 1 Yr Growth.............................................. (9.53) 7.26 17.45 9.38 3.77 (0.96) 15.10 6.07
Dividends/Share - 1 Yr Growth....................................................1.58 72.95 52.41 (2.51) (7.04) 34.44 13.14 23.57
PROFITABILITY AND EFFICIENCY %
Operating Margin %.....................................................................6.61 16.06 15.36 12.95 9.98 11.49 13.49 12.28
Pre-Tax Margin %.................................................................... (1.90) 10.21 8.88 6.95 1.46 3.77 6.59 5.14
Net Profit Margin %.................................................................. (1.46) 7.56 7.25 5.14 0.96 3.65 4.77 3.98
Return on Equity %.................................................................. (3.14) 17.11 18.38 12.85 0.78 7.80 13.01 9.54
Return on Assets %................................................................. (1.02) 10.23 8.18 7.26 3.37 4.44 8.43 5.84
Return on Invested Capital %......................................................7.22 15.66 8.41 12.65 11.27 6.75 14.15 10.87
OTHER RATIOS
Sales/Receivables.....................................................................12.98 13.89 12.84 12.47 12.80 12.98 12.44 12.91
Sales/Inventory............................................................................6.45 7.89 7.89 7.50 7.39 7.37 7.68 7.45
Sales/Fixed Assets......................................................................2.11 2.55 2.44 2.42 2.45 2.47 2.46 2.41
Sales/Cash & Equiv...................................................................49.19 30.05 92.78 70.22 99.06 81.48 67.79 70.08

Companies Included: Canfor Corporation; Cascades Inc.; Domtar Corporation; Interfor Corporation; Norbord Inc.; Resolute Forest Products Inc.; Stella-Jones Inc.; West
Fraser Timber Co. Ltd.; Western Forest Products Inc.

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