Latest news with #Stella-Jones'
Associated Press
07-05-2025
- Business
- Associated Press
Stella-Jones Announces First Quarter Results
Published [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year] Sales of $773 million, relatively unchanged from Q1 2024 Operating income of $143 million, including insurance settlement of $38 million Strong EBITDA(1) of $179 million, or 23.2% margin(1), including 5% from insurance settlement Robust available liquidity of $691 million at quarter-end Acquisition post-quarter of a steel transmission structure manufacturer, aligned with strategy to support North American infrastructure MONTREAL, May 07, 2025 (GLOBE NEWSWIRE) -- Stella-Jones Inc. (TSX: SJ) ('Stella-Jones' or the 'Company') today announced financial results for its first quarter ended March 31, 2025. 'We delivered a strong EBITDA margin in the first quarter, reflecting the resilience and strength of our business through softer volumes,' said Eric Vachon, President and Chief Executive Officer of Stella-Jones. 'Though macroeconomic headwinds continue to impact volume growth, at this stage we remain confident in our ability to achieve our financial objectives. We are executing on sound financial and operational foundations, and we remain assured in the long-term growth outlook for our infrastructure businesses.' 'Today, the Company entered into a definitive agreement to acquire Locweld Inc., a leading manufacturer of lattice towers and steel poles for electrical transmission. This transaction marks a step forward in Stella-Jones' long-term vision, allowing us to enhance our infrastructure offering and establish a presence in the growing steel transmission structure industry. It is a significant marker in our growth strategy, which we expect will unlock investment opportunities and position us to create more value for our customers and shareholders,' he concluded. Financial Highlights (in millions of Canadian dollars, except ratios and per share data) Three-month periods ended March 31, 2025 2024 Sales 773 775 Gross profit(1) 168 172 Gross profit margin(1) 21.7% 22.2% Operating income 143 124 Operating income margin(1) 18.5% 16.0% EBITDA(1) 179 156 EBITDA margin(1) 23.2% 20.1% Net income 93 77 Earnings per share ('EPS') - basic and diluted 1.67 1.36 Weighted average shares outstanding (basic, in '000s) 55,720 56,786 Net debt-to-EBITDA(1) 2.6x 2.6x (1) These indicated terms have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the section entitled 'Non-GAAP and Other Financial Measures' of this press release for an explanation of the non-GAAP and other financial measures used and presented by the Company and a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures. FIRST QUARTER RESULTS Sales in the first quarter of 2025 remained relatively unchanged at $773 million, compared to $775 million in the corresponding period last year. Excluding the currency conversion effect of $38 million, pressure-treated wood sales decreased $36 million, or 5%, driven by lower volumes across most product categories, partially offset by favourable pricing for utility poles and residential lumber. The decrease in logs and lumber sales compared to the first quarter last year was largely attributable to less lumber trading activity. Pressure-treated wood products: Utility poles (54% of Q1-25 sales): Utility poles sales increased to $419 million in the first quarter of 2025, compared to sales of $402 million in the corresponding period last year. Excluding the currency conversion effect, utility poles sales decreased by five million dollars, or 1% when compared to the same period last year, as favourable pricing, largely due to product mix, was offset by a decrease in volumes. Sales volumes in the first quarter of 2025 benefited from incremental multi-year commitments secured in 2024 from new customers, but ongoing macroeconomic challenges, as well as unfavourable weather conditions led to lower volumes. Railway ties (27% of Q1-25 sales): Railway ties sales decreased by $19 million to $208 million in the first quarter of 2025, compared to sales of $227 million in the same period last year. Excluding the currency conversion effect, sales of railway ties decreased by $31 million, or 14%, largely attributable to lower sales volumes. The decrease was explained by the transition of a Class 1 railroad toward treating more railway ties internally and timing of non-Class 1 projects. Residential lumber (11% of Q1-25 sales): Sales in residential lumber remained relatively stable at $88 million in the first quarter of 2025, compared to sales of $87 million in the corresponding period last year. Higher pricing attributable to the increase in the market price of lumber when compared to Q1 2024 was offset by lower volumes, mainly due to unfavourable weather conditions which led to a later start of outdoor renovation activities. Industrial products (5% of Q1-25 sales): Industrial product sales increased to $39 million in the first quarter of 2025, compared to $36 million in the corresponding period last year, largely due to more bridge projects. Logs and lumber: Logs and lumber (3% of Q1-25 sales): Sales in the logs and lumber product category were $19 million in the first quarter of 2025, compared to $23 million in the corresponding period last year. The decrease in sales compared to the first quarter last year was largely due to less lumber trading activity, influenced by macroeconomic challenges. Gross profit was $168 million in the first quarter of 2025 compared to $172 million in the corresponding period last year, representing a margin of 21.7% and 22.2%, respectively. The decrease in gross profit was largely driven by lower sales volumes across most product categories. Despite lower sales volumes, operating income increased to $143 million in the first quarter of 2025, compared to $124 million in the corresponding period last year, due to the insurance settlement for a 2023 fire incident at one of the Company's facilities that was recorded in Q1 2025. Similarly, EBITDA increased to $179 million in the first quarter of 2025, representing a margin of 23.2%, compared to $156 million, or a margin of 20.1%, in the corresponding period last year. The insurance settlement recorded in the first quarter of 2025 increased EBITDA by $38 million and EBITDA margin by 5%. Net income for the first quarter of 2025 was $93 million, or $1.67 per share, versus net income of $77 million, or $1.36 per share, in the corresponding period of 2024. LIQUIDITY AND CAPITAL RESOURCES During the quarter ended March 31, 2025, Stella-Jones used its liquidity to support the seasonal increase in working capital requirements, maintain its assets, as well as repurchase $15 million of shares. During the quarter, the Company also declared a dividend totaling $17 million. As at March 31, 2025, the Company maintained a healthy financial position. It had available liquidity of $691 million and its net debt-to-EBITDA stood at 2.6x. LEADERSHIP ANNOUNCEMENT On April 14, 2025, Wesley Bourland was appointed as Senior Vice-President and Chief Operating Officer. Having served in several senior operations leadership roles, Mr. Bourland will leverage his expertise in manufacturing, strategic planning and process optimization to drive operational excellence. QUARTERLY DIVIDEND On May 6, 2025, the Board of Directors declared a quarterly dividend of $0.31 per common share payable on June 20, 2025 to shareholders of record at the close of business on June 2, 2025. ACQUISITION OF LOCWELD INC. Today, the Company entered into a definitive agreement to acquire Locweld Inc. ('Locweld'), a leading designer and manufacturer of lattice towers and steel transmission poles, for a purchase price of $58 million on a cash-free debt-free basis and subject to customary working capital adjustments. An additional performance-based consideration of up to seven million dollars may be paid contingent upon achieving specific financial and operational milestones. Stella-Jones will finance the acquisition through its existing revolving credit facilities. Closing of the acquisition is expected to occur today. Based in Candiac, Quebec, Locweld has established a strong reputation for its commitment to quality and service, with over 75 years of operations. Led by a seasoned management team, Locweld employs approximately 220 people and services customers in both Canada and the United States from its 220,000 square foot facility. Sales for Locweld's year ended September 30, 2024 reached approximately $55 million. CONFERENCE CALL Stella-Jones will hold a conference call to discuss these results on May 7, 2025, at 8:00 a.m. Eastern Daylight Time ('EDT'). Interested parties can join the call by dialing 1-800 206-4400. A live audio webcast of the conference call will be available on the Company's website, on the Investor relations section's home page or here: . This recording will be available on Wednesday, May 7, 2025, as of 1:00 p.m. EDT until 11:59 p.m. EST on Wednesday, May 14, 2025. ANNUAL MEETING OF SHAREHOLDERS Stella-Jones will hold its Annual Meeting of Shareholders on May 7, 2025, at 11:00 a.m. EDT. Interested parties may attend in-person at: 1250 René-Lévesque Blvd. West, suite 3610 Montréal, Québec or virtually by webcast at: entering the password: stella2025 (case-sensitive). ABOUT STELLA-JONES Stella-Jones Inc. (TSX: SJ) is a leading North American manufacturer of products focused on supporting infrastructure that are essential to the delivery of electrical distribution and transmission, and the operation and maintenance of railway transportation systems. It supplies the continent's major electrical utilities companies with treated wood utility poles and North America's Class 1, short line and commercial railroad operators with treated wood railway ties and timbers. It also supports infrastructure with industrial products, namely timbers for railway bridges, crossings and construction, marine and foundation pilings, and coal tar-based products. Additionally, the Company manufactures and distributes premium treated residential lumber and accessories to Canadian and American retailers for outdoor applications, with a significant portion of the business devoted to servicing Canadian customers through its national manufacturing and distribution network. CAUTION REGARDING FORWARD-LOOKING INFORMATION Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company and the acquisition described herein. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such items include, among others: general political, economic and business conditions, evolution in customer demand for the Company's products and services, product selling prices, availability and cost of raw materials, operational disruption, climate change, failure to recruit and retain qualified workforce, information security breaches or other cyber-security threats, changes in foreign currency rates, the ability of the Company to raise capital, regulatory and environmental compliance and factors and assumptions referenced herein and in the Company's continuous disclosure filings. As a result, readers are advised that actual results may differ from expected results. Unless required to do so under applicable securities legislation, the Company does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes after the date hereof. Note to readers: Condensed interim unaudited consolidated financial statements for the first quarter ended March 31, 2025 as well as management's discussion and analysis are available on Stella-Jones' website at . Head Office 3100 de la Côte-Vertu Blvd., Suite 300 Saint-Laurent, Québec H4R 2J8 Tel.: (514) 934-8666 Fax: (514) 934-5327 Exchange Listings The Toronto Stock Exchange Stock Symbol: SJ Transfer Agent and Registrar Computershare Investor Services Inc. Investor Relations Silvana Travaglini Senior Vice-President and Chief Financial Officer Tel.: (514) 934-8660 Fax: (514) 934-5327 [email protected] Stella-Jones Inc. Condensed Interim Consolidated Statements of Income (Unaudited) For the three-month periods ended March 31, 2025 and 2024 (in millions of Canadian dollars, except earnings per common share) 2025 2024 Sales 773 775 Expenses Cost of sales (including depreciation and amortization of $32 (2024 - $28)) 605 603 Selling and administrative (including depreciation and amortization of $4 (2024 - $4)) 50 47 Other losses, net 3 1 Gain on insurance settlement (28 ) — 630 651 Operating income 143 124 Financial expenses 20 22 Income before income taxes 123 102 Income tax expense Current 28 24 Deferred 2 1 30 25 Net income 93 77 Basic and diluted earnings per common share 1.67 1.36 Stella-Jones Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited) (in millions of Canadian dollars) As at As at March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents 81 50 Accounts receivable 378 277 Inventories 1,798 1,759 Income taxes receivable 15 11 Other current assets 40 42 2,312 2,139 Non-current assets Property, plant and equipment 1,053 1,048 Right-of-use assets 303 311 Intangible assets 166 170 Goodwill 406 406 Derivative financial instruments 17 21 Other non-current assets 9 8 4,266 4,103 Liabilities and Shareholders' Equity Current liabilities Accounts payable and accrued liabilities 181 180 Income taxes payable 30 — Deferred revenue — 17 Current portion of long-term debt 7 1 Current portion of lease liabilities 64 64 Current portion of provisions and other long-term liabilities 26 24 308 286 Non-current liabilities Long-term debt 1,474 1,379 Lease liabilities 252 259 Deferred income taxes 198 197 Provisions and other long-term liabilities 32 37 Employee future benefits 4 4 2,268 2,162 Shareholders' equity Capital stock 188 188 Retained earnings 1,559 1,498 Accumulated other comprehensive income 251 255 1,998 1,941 4,266 4,103 Stella-Jones Inc. Condensed Interim Consolidated Statements of Cash Flows (Unaudited) For the three-month periods ended March 31, 2025 and 2024 (in millions of Canadian dollars) 2025 2024 Cash flows from (used in) Operating activities Net income 93 77 Adjustments for Depreciation of property, plant and equipment 14 11 Depreciation of right-of-use assets 17 16 Amortization of intangible assets 5 5 Financial expenses 20 22 Income tax expense 30 25 Gain on insurance settlement (28 ) — Other (14 ) 3 137 159 Changes in non-cash working capital components Accounts receivable (77 ) (94 ) Inventories (41 ) (117 ) Other current assets 3 7 Accounts payable and accrued liabilities (11 ) 11 (126 ) (193 ) Interest paid (25 ) (22 ) Income taxes paid (2 ) (6 ) (16 ) (62 ) Financing activities Net change in revolving credit facilities 137 41 Proceeds from long-term debt — 168 Repayment of long-term debt (36 ) (102 ) Repayment of lease liabilities (17 ) (15 ) Repurchase of common shares (15 ) (15 ) 69 77 Investing activities Purchase of property, plant and equipment (20 ) (23 ) Property insurance proceeds — 10 Additions of intangible assets (2 ) (2 ) (22 ) (15 ) Net change in cash and cash equivalents during the period 31 — Cash and cash equivalents – Beginning of period 50 — Cash and cash equivalents – End of period 81 — NON-GAAP AND OTHER FINANCIAL MEASURES This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of 'specified financial measures' (as defined therein). The below-described non-GAAP financial measures, non-GAAP ratios and other financial measures have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. The Company's method of calculating these measures may differ from the methods used by others, and, accordingly, the definition of these measures may not be comparable to similar measures presented by other issuers. In addition, non-GAAP financial measures, non-GAAP ratios and other financial measures should not be viewed as a substitute for the related financial information prepared in accordance with GAAP. Non-GAAP financial measures include: Organic sales growth: Sales of a given period compared to sales of the comparative period, excluding the effect of acquisitions and foreign currency changes Gross profit: Sales less cost of sales EBITDA: Operating income before depreciation of property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets (also referred to as earnings before interest, taxes, depreciation and amortization) Net debt: Sum of long-term debt and lease liabilities (including the current portion) less cash and cash equivalents Non-GAAP ratios include: Organic sales growth percentage: Organic sales growth divided by sales for the corresponding period Gross profit margin: Gross profit divided by sales for the corresponding period EBITDA margin: EBITDA divided by sales for the corresponding period Net debt-to-EBITDA: Net debt divided by trailing 12-month ('TTM') EBITDA Other financial measures include: Operating income margin: Operating income divided by sales for the corresponding period Management considers these non-GAAP and specified financial measures to be useful information to assist knowledgeable investors to understand the Company's financial position, operating results and cash flows as they provide a supplemental measure of its performance. Management uses non-GAAP and other financial measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets, to assess the Company's ability to meet future debt service, capital expenditure and working capital requirements, and to evaluate senior management's performance. More specifically: Organic sales growth and organic sales growth percentage: The Company uses these measures to analyze the level of activity excluding the effect of acquisitions and the impact of foreign exchange fluctuations, in order to facilitate period-to-period comparisons. Management believes these measures are used by investors and analysts to evaluate the Company's performance. Gross profit and gross profit margin: The Company uses these financial measures to evaluate its ongoing operational performance. EBITDA and EBITDA margin: The Company believes these measures provide investors with useful information because they are common industry measures used by investors and analysts to measure a company's ability to service debt and to meet other payment obligations, or as a common valuation measurement. These measures are also key metrics of the Company's operational and financial performance and are used to evaluate senior management's performance. Net debt and net debt-to-EBITDA: The Company believes these measures are indicators of the financial leverage of the Company. The following tables present the reconciliations of non-GAAP financial measures to their most comparable GAAP measures. Reconciliation of Operating Income to EBITDA (in millions of dollars) Three-month periods ended March 31, 2025 2024 Operating income 143 124 Depreciation and amortization 36 32 EBITDA 179 156 Reconciliation of Long-Term Debt to Net Debt (in millions of dollars) As at March 31, 2025 As at December 31, 2024 Long-term debt, including current portion 1,481 1,380 Add: Lease liabilities, including current portion 316 323 Less: Cash and cash equivalents 81 50 Net Debt 1,716 1,653 EBITDA (TTM) 656 633 Net Debt-to-EBITDA 2.6x 2.6x Source: Stella-Jones Inc. Stella-Jones Inc. Contacts: Silvana Travaglini, CPA Stephanie Corrente Senior Vice-President and Chief Financial Officer Stella-Jones Director, Corporate Communications Stella-Jones Tel.: (514) 934-8660 [email protected] [email protected]
Hamilton Spectator
06-05-2025
- Business
- Hamilton Spectator
Reminder - Stella-Jones' First Quarter Results Conference Call and Annual Meeting of Shareholders
MONTRÉAL, May 06, 2025 (GLOBE NEWSWIRE) — Stella-Jones Inc. (TSX: SJ), ('Stella-Jones' or 'the Company') will hold a conference call to discuss its first quarter results: THE PRESS RELEASE WILL BE PUBLISHED BEFORE MARKET OPENS THE DAY OF THE CONFERENCE CALL THROUGH GLOBE NEWSWIRE. Please log on or dial in 15 minutes before the conference call begins. If you are unable to attend at this time, you may access a web recording of the meeting at the following link: . This recording will be available online on Wednesday, May 7, 2025, as of 1:00 PM until 11:59 PM on Wednesday, May 14, 2025. MEDIA WISHING TO QUOTE AN ANALYST SHOULD CONTACT THE ANALYST PERSONALLY FOR PERMISSION. THE ANNUAL MEETING OF SHAREHOLDERS OF STELLA-JONES INC. ('MEETING') WILL BE HELD AS A HYBRID MEETING: On Wednesday, May 7, 2025, at 11:00 AM Eastern Daylight Time In-person at: 1250 René-Lévesque Blvd. West, suite 3610 Montréal, Québec Or virtually by webcast at: Password: stella2025 (case-sensitive) Management will be available to speak with the media immediately following the meeting. Registered shareholders and duly appointed proxyholders, including non-registered shareholders who have duly appointed themselves as proxyholder, will be able to participate at the Meeting, in person or virtually, ask questions and vote, provided they comply with all of the requirements set out in the Company's management proxy circular dated March 14, 2025 (available on our website). Non-registered shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting, in person or virtually, as guests, but in both cases, guests will not be able to vote nor ask questions at the Meeting. Stella-Jones' 2024 Annual Report is now available on the Company's website . ABOUT STELLA-JONES Stella-Jones Inc. (TSX: SJ) is a leading North American manufacturer of products focused on supporting infrastructure that are essential to the delivery of electrical distribution and transmission, and the operation and maintenance of railway transportation systems. It supplies the continent's major electrical utilities companies with treated wood utility poles and North America's Class 1, short line and commercial railroad operators with treated wood railway ties and timbers. It also supports infrastructure with industrial products, namely timbers for railway bridges, crossings and construction, marine and foundation pilings, and coal tar-based products. Additionally, the Company manufactures and distributes premium treated residential lumber and accessories to Canadian and American retailers for outdoor applications, with a significant portion of the business devoted to servicing Canadian customers through its national manufacturing and distribution network. For more information, visit: INQUIRIES Stephanie Corrente Director, Corporate Communications Stella-Jones Inc. communications@
Yahoo
29-03-2025
- Business
- Yahoo
Stella-Jones' (TSE:SJ) Upcoming Dividend Will Be Larger Than Last Year's
The board of Stella-Jones Inc. (TSE:SJ) has announced that it will be paying its dividend of CA$0.31 on the 18th of April, an increased payment from last year's comparable dividend. Despite this raise, the dividend yield of 1.8% is only a modest boost to shareholder returns. Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Stella-Jones' dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business. The next year is set to see EPS grow by 12.4%. If the dividend continues on this path, the payout ratio could be 20% by next year, which we think can be pretty sustainable going forward. See our latest analysis for Stella-Jones The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of CA$0.28 in 2015 to the most recent total annual payment of CA$1.24. This means that it has been growing its distributions at 16% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period. Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Stella-Jones has been growing its earnings per share at 19% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting. Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Stella-Jones that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
22-03-2025
- Business
- Yahoo
The Returns At Stella-Jones (TSE:SJ) Aren't Growing
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So, when we ran our eye over Stella-Jones' (TSE:SJ) trend of ROCE, we liked what we saw. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Stella-Jones, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = CA$518m ÷ (CA$4.1b - CA$286m) (Based on the trailing twelve months to December 2024). Therefore, Stella-Jones has an ROCE of 14%. That's a pretty standard return and it's in line with the industry average of 14%. View our latest analysis for Stella-Jones Above you can see how the current ROCE for Stella-Jones compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Stella-Jones for free. The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has consistently earned 14% for the last five years, and the capital employed within the business has risen 82% in that time. Since 14% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders. The main thing to remember is that Stella-Jones has proven its ability to continually reinvest at respectable rates of return. And the stock has done incredibly well with a 146% return over the last five years, so long term investors are no doubt ecstatic with that result. So while the positive underlying trends may be accounted for by investors, we still think this stock is worth looking into further. One more thing to note, we've identified 1 warning sign with Stella-Jones and understanding this should be part of your investment process. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
02-03-2025
- Business
- Yahoo
Stella-Jones (TSE:SJ) Is Increasing Its Dividend To CA$0.31
The board of Stella-Jones Inc. (TSE:SJ) has announced that it will be paying its dividend of CA$0.31 on the 18th of April, an increased payment from last year's comparable dividend. Despite this raise, the dividend yield of 1.8% is only a modest boost to shareholder returns. See our latest analysis for Stella-Jones While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, Stella-Jones' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business. Looking forward, earnings per share is forecast to rise by 12.4% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 20% by next year, which is in a pretty sustainable range. Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was CA$0.28 in 2015, and the most recent fiscal year payment was CA$1.24. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable. Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Stella-Jones has seen EPS rising for the last five years, at 19% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time. In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Stella-Jones that you should be aware of before investing. Is Stella-Jones not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
