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Canfor Corp CFP

Morningstar Rating
CAD 16.69 +0.09 (0.54%)
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Company Report

Canfor Navigates a Challenging Operating Environment as Lumber Prices and Demand Remain Low

Canfor is one of the largest softwood lumber producers in the world, with over 6 billion board feet of production capacity in western Canada, the Southeastern United States, and Sweden. Homebuilding and remodeling are the main uses of softwood lumber in North America, although Canfor does sell significant volume in Europe and Asia, with both making up roughly 30% of sales in recent years. As price-takers, Canfor and its peers see dramatic profit variations, depending on the health of housing markets and overall economic conditions.

Price vs Fair Value

CFP is trading at a 38% discount.
Price
CAD 16.69
Fair Value
CAD 47.00
Uncertainty
High
1-Star Price
CAD 45.49
5-Star Price
CAD 71.60
Economic Moat
Jnbnc
Capital Allocation
Lbnvhgly

Bulls Say, Bears Say

Bulls

Canfor is less exposed to new residential construction than some of its competitors, which should offer it some protection in the next housing downturn.

Bears

Canfor’s reliance on lumber profitability could put the firm at risk during times of economic weakness.

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Trading Information

Previous Close Price
CAD 16.60
Day Range
CAD 16.4317.01
52-Week Range
CAD 13.4125.08
Bid/Ask
CAD 16.64 / CAD 16.80
Market Cap
CAD 1.99 Bil
Volume/Avg
122,382 / 197,351

Key Statistics

Price/Earnings (Normalized)
9.64
Price/Sales
0.37
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
3.27%

Company Profile

Canfor is a softwood lumber company that also owns around half of Canfor Pulp. It is active throughout North America and Europe, with lumber mills in British Columbia, Alberta, the Southeastern United States, and Sweden. It has two reportable segments: lumber and pulp and paper. The lumber segment includes Canfor's sawmilling and remanufacturing operations and the pulp and paper segment includes the kraft pulp, kraft paper, and bleached chemi-thermomechanical pulp businesses of Canfor Pulp.
Sector
Basic Materials
Industry
Lumber & Wood Production
Stock Style Box
Small Value
Total Number of Employees
7,908

Competitors

Valuation

Metric
CFP
WFG
RYN
Price/Earnings (Normalized)
9.6410.5893.44
Price/Book Value
0.510.932.68
Price/Sales
0.371.044.81
Price/Cash Flow
13.7317.33
Price/Earnings
CFP
WFG
RYN

Financial Strength

Metric
CFP
WFG
RYN
Quick Ratio
1.481.241.77
Current Ratio
2.642.262.26
Interest Coverage
−11.584.37
Quick Ratio
CFP
WFG
RYN

Profitability

Metric
CFP
WFG
RYN
Return on Assets (Normalized)
−5.19%2.08%1.44%
Return on Equity (Normalized)
−8.35%2.71%2.91%
Return on Invested Capital (Normalized)
−7.02%2.07%2.29%
Return on Assets
CFP
WFG
RYN
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Lumber & Wood Production Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
SCABY
Svenska Cellulosa AB ADRGdhd$9.9 Bil
SVCBF
Svenska Cellulosa AB Class BNdfn$9.9 Bil
SSD
Simpson Manufacturing Co IncYdhxny$8.9 Bil
UFPI
UFP Industries IncYknk$7.0 Bil
WFG
West Fraser Timber Co.LtdYztrs$6.6 Bil
STLJF
Stella-Jones IncWxsbvkt$3.5 Bil
CFPZF
Canfor CorpFwz$1.5 Bil
IFSPF
Interfor CorpWpps$778.0 Mil
NWGL
Nature Wood Group Ltd ADRStfhm$262.6 Mil
ACAZF
Acadian Timber CorpXvzpl$215.2 Mil

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