Fact based stock research
Stella-Jones (TSX:SJ)

CA85853F1053

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Stella-Jones stock research in summary

stella-jones.com

ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Stella-Jones (Forest Products, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Stella-Jones are a good value (attractively priced) with a consolidated Value Rank of 70 (better than 70% of alternatives), are safely financed (Safety Rank of 61, which means low debt burdens), but show below-average growth (Growth Rank of 28). ...read more

RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Stella-Jones's financial characteristics. As the company Stella-Jones's key financial metrics exhibit good value (Obermatt Value Rank of 70) but low growth (Obermatt Growth Rank of 28) while being safely financed (Obermatt Safety Rank of 61), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 70% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	70
Growth Rank	28
Safety Rank	61
Combined Rank	59

Country	Canada
Industry	Forest Products
Index	Timber Industry, TSX Composite
Size class	Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Stella-Jones

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	81	49	70
GROWTH
GROWTH	15	7	91	28
SAFETY
SAFETY	74	88	57	61
SENTIMENT
SENTIMENT	n/a	99	90	^new
360° VIEW
360° VIEW	n/a	91	98	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Stella-Jones is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	81	49	70
GROWTH
GROWTH	15	7	91	28
SAFETY
SAFETY	74	88	57	61
COMBINED
COMBINED	49	62	88	59

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Stella-Jones the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 70 (better than 70% compared with alternatives), Stella-Jones shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Stella-Jones. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value concerning Stella-Jones's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 78% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 67 (dividends are expected to be higher than 67% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 53% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Stella-Jones to 47. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 70, is a buy recommendation based on Stella-Jones's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	51	55	52	57
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	58	64	67	78
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	43	80	40	47
DIVIDEND YIELD
DIVIDEND YIELD	61	73	56	67
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	57	81	49	70

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Stella-Jones; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 28 (better than 28% compared with alternatives), Stella-Jones shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Stella-Jones. While Sales Growth ranks at 55, professionals currently expect the company to grow more than 55% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 37, which means that, currently, professionals expect the company to grow its profits less than 63% of its competitors, and Capital Growth has a low rank of 14. Historic stock returns were also below average with a current Stock Returns rank of 48 which means that the stock returns have recently been below 52% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 28, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	33	29	85	55
PROFIT GROWTH
PROFIT GROWTH	86	22	87	37
CAPITAL GROWTH
CAPITAL GROWTH	n/a	51	21	14
STOCK RETURNS
STOCK RETURNS	12	13	83	48
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	15	7	91	28

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Stella-Jones.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Stella-Jones has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Stella-Jones is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Stella-Jones. Refinancing is at 82, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 82% of its competitors. Liquidity is also good at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 25, which means the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Stella-Jones has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Stella-Jones could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Stella-Jones and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	53	60	44	25
REFINANCING
REFINANCING	84	77	63	82
LIQUIDITY
LIQUIDITY	58	74	50	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	74	88	57	61

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Stella-Jones and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	76	62	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	75	^new
MARKET PULSE
MARKET PULSE	n/a	90	100	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	99	90	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Stella-Jones.
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