Is it a good company at a reasonable price? If you like to stock, it is probably a good time to buy. It is nice getting stocks cheap, but that is seldom possible. This is a dividend growth stock that has done well for its shareholders in the past. A reasonable price which is below the median is good.
I do not own this stock of Stella-Jones Inc (TSX-SJ, OTC-STLJF). I started a spreadsheet on this stock in mid-2009 because of a favorable report I read on this stock. It was considered to be a dividend growth stock and I am always on the lookout for dividend growth stocks.
When I was updating my spreadsheet, I noticed this company has had great growth over the past 10 years. In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. You can see that Revenue growth has been good for the last 5 and 10 years. In column 5, I am showing what growth has been over the past 12 months and what is expected to the end of this year.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 59.93% | 9.85% | 0.75% | <-12 mths |
| 5 | EPS Growth | 138.82% | 19.02% | 7.95% | <-12 mths |
| 5 | Net Income Growth | 95.61% | 14.36% | 6.27% | <-12 mths |
| 5 | Cash Flow Growth | 353.75% | 35.32% | 25.74% | <-12 mths |
| 5 | Dividend Growth | 100.00% | 14.87% | 10.71% | <-12 mths |
| 5 | Stock Price Growth | 89.74% | 13.67% | 19.22% | <-12 mths |
| 10 | Revenue Growth | 177.63% | 10.75% | 1.70% | <-this year |
| 10 | EPS Growth | 277.33% | 14.20% | 7.40% | <-this year |
| 10 | Net Income Growth | 207.18% | 11.88% | 5.74% | <-this year |
| 10 | Cash Flow Growth | 430.35% | 18.16% | -1.07% | <-this year |
| 10 | Dividend Growth | 300.00% | 14.87% | 9.82% | <-this year |
| 10 | Stock Price Growth | 117.44% | 8.08% | 28.36% | <-this year |
The dividends are low, so if you buy this stock what sort of dividends would you get in the future? This chart is an attempt to show this. If dividends continue to increase by 14.87% as they have in the past 5 years, what you would get in dividends in 5, 10, 15, 20 and 25 years is shown in the Dividends Paid (Div Pd) column. The next column shows what your yield on the current stock price of $84.87 would be. The last column shows the percentage of your stock’s price would be covered by dividends in 5, 10, 15, 20 and 25 years.
| Div Pd | Div Yield | Years | At IRR | Div Cov |
|---|---|---|---|---|
| $2.48 | 2.92% | 5 | 14.87% | 9.83% |
| $4.96 | 5.84% | 10 | 14.87% | 26.55% |
| $9.92 | 11.69% | 15 | 14.87% | 60.01% |
| $19.84 | 23.38% | 20 | 14.87% | 93.47% |
| $39.68 | 46.75% | 25 | 14.87% | 126.93% |
If you had invested in this company in December 2014, for $1,014.94 you would have bought 31 shares at $32.74 per share. In December 2024, after 10 years you would have received $197.16 in dividends. The stock would be worth $2,206.89. Your total return would have been $2,404.05. This would be a total return of 9.36% per year with 8.08% from capital gain and 1.29% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $32.74 | $1,014.94 | 31 | 10 | $197.16 | $2,206.89 | $2,404.05 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.46%. The 5, 10 and historical dividend yields are also low at 1.56%, 1.35% and 1.32%. The dividend growth is moderated (between 8% and 15% per year) at 14.9% per year. (So, it is close to good). The last dividend increase was in 2025 and it was for 10.7%. The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 20% with 5 year coverage at 19%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 10% with 5 year coverage at 9%. The DPR for 2024 for Free Cash Flow (FCF) is good at 20% with 5 year coverage at 19%. FCF varies in 2024 from $276M to $320M. I am using the $276M value.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 19.79% | 19.07% |
| CFPS | 9.82% | 9.38% |
| FCF | 19.69% | 18.81% |
Debt Ratios are currently good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.35 and currently at 0.25. The Liquidity Ratio for 2024 is great at 7.48 and 7.25currently. The Debt Ratio for 2024 is good at 1.90 and 2.04 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.11 and 1.11 and currently good at 1.96 and 0.96.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.35 | 0.25 |
| Intang/GW | 0.14 | 0.12 |
| Liquidity | 7.48 | 7.25 |
| Liq. + CF | 8.69 | 8.41 |
| Debt Ratio | 1.90 | 2.04 |
| Leverage | 2.11 | 1.96 |
| D/E Ratio | 1.11 | 0.96 |
The Total Return per year is shown below for years of 5 to 30 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 14.87% | 15.34% | 13.67% | 1.68% |
| 2014 | 10 | 14.87% | 9.36% | 8.08% | 1.29% |
| 2009 | 15 | 18.30% | 19.33% | 17.38% | 1.95% |
| 2004 | 20 | 22.30% | 23.70% | 21.19% | 2.52% |
| 1999 | 25 | 19.82% | 23.07% | 20.85% | 2.22% |
| 1994 | 30 | 16.22% | 15.18% | 1.04% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.35, 11.71, 15.06. The corresponding 10 year ratios are 13.68, 11.71 and 15.06. The corresponding historical ratios are 13.44, 12.00 and 15.06. The current ratio is 13.96 based on a stock price of $84.87 and EPS estimate for 2025 of $6.08. This ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Operating Income (AOE) data. The 5-year low, median, and high median Price/Adjusted Operating Income Ratios are 5.45, 767, 10.18. The corresponding 10 year ratios are 8.92, 10.60 and 12.22. The corresponding historical ratios are 7.68, 9.20 and 11.33. The current ratio is 9.67 based on a stock price of $84.87 and AOE for the last 12 months of $8.78. This ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $71.18. The 10-year low, median, and high median Price/Graham Price Ratios are 1.08, 1.28 and 1.48. The current P/GP Ratio is 1.19 based on a stock price of $84.87. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.31. The current P/B Ratio is 2.29 based on a stock price of $84.87, Book Value of $2,068M and Book Value per Share of $37.04. The current ratio is 1% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Book Value per Share estimate for 2025 of $37.95. This implies a Book Value of $2,119M and a ratio of 2.24 with a stock price of $84.87. This ratio is 3.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 15.11. The current P/CF Ratio is 11.74 based on Cash Flow per Share estimate for 2025 of $7.23, Cash Flow of $404M and a stock price of $84.87. The current ratio is 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.32%. The current dividend yield is 1.46% based on dividends of $1.24 and a stock price of $84.87. The current dividend yield is 11% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 1.35%. The current dividend yield is 1.46% based on dividends of $1.24 and a stock price of $84.87. The current dividend yield is 7% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.32. The current ratio is 1.34 based on the Revenue estimate for 2025 of $3,528M, Revenue per Share of $63.20 and a stock price of $84.87. The current ratio is 2% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable and below the median. The dividend yield tests say that the stock price is reasonable and below the median. The P/S Ratio test says that the stock price is reasonable but above the median, but it is close at 2%. The rest of the testing is saying that the stock price is reasonable and below the median, except for the P/CF Ratio test that says that the stock price is cheap.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), Hold (3), Underperform (1). The consensus is a Buy. The 12 month stock price consensus is $91.38 with a high of $97.00 and low of $83.00. The 12 month stock price consensus implies a total return of 9.13% with 7.67% from capital gain and 1.46% from dividends based on a current stock price of $84.87.
There are three entries on Stock Chase for 2025. They are buys, but one says to buy on weakness. They do like this stock. Amy Legate-Wolfe on Motley Fool says this stock is a long term play. This stock has resilience she says. Demetris Afxentiou on Motley Fool says this stock will be harmed by Trump tariffs. The company put out a press release via Globe Newswire about their fourth quarter of 2024. The company put out a Press Release via Globe Newswire about their third quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and says that it is worth watching. Simply Wall Street has two warnings of earnings are forecast to decline by an average of 1.2% per year for the next 3 years; and has a high level of debt.
Stella-Jones Inc produces and sells lumber and wood products. The company operates in two segments: Pressure-treated wood and the Logs & Lumber segment. The vast majority of its revenue comes from the Pressure-treated wood segment. Its geographical segments are the United States and Canada, and the majority of its revenue is derived from the United States. Its web site is here Stella-Jones Inc.
The last stock I wrote about was about was First Capital REIT (TSX-FCR.UN, OTC-FCXXF) ... learn more. The next stock I will write about will be Wild Brain Ltd (TSX-WILD, OTC-WLDBF) ... learn more on Monday, November 24, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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