Is it a good company at a reasonable price? I think that the analyst on Stock Chase that was worried about this stock as it could not brake out of the $90 range twice, does heighten the risk level for this stock. This stock has generally produced good returns to its shareholders. But I do understand the caution of some analysts because this is the second time the stock has pulled back from a peak. However, it is relatively cheap.
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 that this stock is down by some 22% so far this year. I noticed that the dividend yield was over 2%. The dividends for this stock have seldom been over 2%.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the Third quarter in 2026 and expected growth over this year. I am now including EBITDA in this chart as this item is becoming more important for analyzing stocks.
The last row of the stock price growth is for the next 12 months.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 36.89% | 6.48% | 1.35% | <-12 mths |
| 5 | EPS Growth | 95.19% | 14.31% | -33.17% | <-12 mths |
| 5 | Net Income Growth | 60.48% | 9.92% | -34.12% | <-12 mths |
| 5 | EBITDA Growth | 71.69% | 11.42% | -11.65% | <-12 mths |
| 5 | Cash Flow Growth | 212.92% | 25.63% | -1.62% | <-12 mths |
| 5 | Dividend Growth | 106.67% | 15.63% | 9.68% | <-12 mths |
| 5 | Stock Price Growth | 83.95% | 12.96% | -22.42% | <-12 mths |
| 10 | Revenue Growth | 123.94% | 8.40% | 2.09% | <-this year |
| 10 | EPS Growth | 198.53% | 11.56% | -24.75% | <-this year |
| 10 | Net Income Growth | 138.37% | 9.07% | -34.87% | <-this year |
| 10 | EBITDA Growth | 171.57% | 10.51% | -13.74% | <-this year |
| 10 | Cash Flow Growth | 9849.98% | 58.41% | -35.23% | <-this year |
| 10 | Dividend Growth | 287.50% | 14.51% | 9.92% | <-this year |
| 10 | Stock Price Growth | 62.12% | 4.95% | 15.77% | <-12 mths |
If you had invested in this company in December 2015, for $1,050.20 you would have bought 26 shares at $52.51 per share. In December 2025, after 10 years you would have received $145.60 in dividends. The stock would be worth $1,702.60. Your total return would have been $1,848.20. This would be a total return of 6.01% per year with 4.95% from capital gain and 1.06% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $52.51 | $1,050.20 | 20 | 10 | $145.60 | $1,702.60 | $1,848.20 |
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 15.63% as they have in the past 5 years, what you would get in dividends in 5, 10 and 15 years is shown in the Dividends Paid (Div Pd) column. The next column shows what your yield on the current stock price of $66.51 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 |
|---|---|---|---|---|
| $2.81 | 4.23% | 5 | 15.63% | 13.96% |
| $5.81 | 8.73% | 10 | 15.63% | 38.58% |
| $12.00 | 18.05% | 15 | 15.63% | 89.47% |
| $24.81 | 37.30% | 20 | 15.63% | 140.35% |
| $51.27 | 77.09% | 25 | 15.63% | 357.69% |
The current dividend yield is moderate with dividend growth good. The current dividend yield is moderate (2% to 4% ranges) at 2.04%. The 5, 10 and historical median dividend yields are low (below 2%) at 1.51%, 1.38% and 1.33%. The dividend growth is good (15% and over per year) at 15.6% per year over the past 5 years. The last dividend increase was in 2026 and it was for 9.7%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2025 for Earnings per Share (EPS) is good at 20% with 5 year coverage at 19%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 10% with 5 year coverage at 10%. The DPR for 2025 for Free Cash Flow (FCF) is good at 19% with 5 year coverage at 20%. FCF varies in 2025 from $239.8M to $350.6M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 20.36% | 19.36% |
| CFPS | 10.89% | 9.67% |
| FCF | 19.43% | 19.72% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.28 and currently at 0.31. The Liquidity Ratio for 2025 is good at 7.50 and 4.86 currently. The Debt Ratio for 2025 is good at 1.98 and 2.09 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.02 and 1.02 and currently good at 1.92 and 0.92.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.28 | 0.31 |
| Intang/GW | 0.15 | 0.19 |
| Liquidity | 7.40 | 4.86 |
| Liq. + CF | 9.19 | 5.51 |
| Debt Ratio | 1.98 | 2.09 |
| Leverage | 2.02 | 1.92 |
| D/E Ratio | 1.02 | 0.92 |
The Total Return per Year is shown below for years of 5 to 31 to the end of 2025. 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. |
|---|---|---|---|---|---|
| 2020 | 5 | 15.63% | 14.56% | 12.96% | 1.59% |
| 2015 | 10 | 14.51% | 6.01% | 4.95% | 1.06% |
| 2010 | 15 | 18.68% | 18.62% | 16.77% | 1.86% |
| 2005 | 20 | 21.56% | 19.09% | 17.30% | 1.79% |
| 2000 | 25 | 19.43% | 24.83% | 22.13% | 2.71% |
| 1995 | 30 | 20.28% | 18.78% | 1.50% | |
| 1994 | 31 | 16.36% | 15.32% | 1.04% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.10, 13.21, 15.32. The corresponding 10 year ratios are 11.62, 14.01 and 16.39. The corresponding historical ratios are 9.14, 12.43 and 15.19. The current P/E Ratio is 14.51 based on a stock price of $66.51 and EPS estimate for 2026 of $4.58. The current ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $64.70. The 10-year low, median, and high median Price/Graham Price Ratios are 0.99, 1.19 and 1.42. The current ratio is 1.03 based on a stock price of $66.51. 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 2.24. The current ratio is 1.64 based on a stock price of $66.51, Book Value of $2,216M and Book Value per Share of $40.60. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2026 of $40.98. This implies a ratio of 1.62 based on a stock price of $66.51 and Book Value of $2,237M. This ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 12.17. The current ratio is 10.06 based on Cash Flow per Share estimate for 2026 of $6.61, Cash Flow of $361M and a stock price of $66.51. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.33%. The current dividend yield is 2.04% based on Dividends of $1.36 and a stock price of $66.51. The current dividend yield is 48% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 1.38%. The current dividend yield is 2.04% based on Dividends of $1.36 and a stock price of $66.51. The current dividend yield is 54% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.30. The current ratio is 1.02 based Revenue estimate for 2026 of $3,565M, Revenue per Share of $65.32 and a stock price of $66.51. The current ratio is 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio test. The rest of the testing says that the stock price is relatively cheap to reasonable and above the median.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3), Hold (3), and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $77.00 with a high of $90.00 and low of $64.00. The consensus stock price if $77.00 implies a total return of $17.82 with 15.77% from capital gains and 2.04% from dividends based on a current stock price of $66.51.
Analysts on Stock Chase go from Top Pick to Do Not Buy. It is off its second peak which it does not seem to break through which one analyst of the Do No Buy variety complained about. Kay Ng on Motley Fool says that the pull back gives potential buying opportunities. Christopher Liew on Motley Fool says he would buy before it bounces back. The company put out a press release via Global Newswire about its fourth quarter of 2025. The company put out a press release via Global Newswire about its third quarter of 2026.
Simply Wall Street via Yahoo Finance reviews this stock. It talks about analysts reducing their 12 month stock price target even though they keep their outperforming ratings.
Stella-Jones Inc produces and sells lumber and wood products. The company operates in two segments: Pressure-treated wood and Logs & Lumber. 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 Friday, November 13, 2026 around 5 pm. Tomorrow on my other blog I will write about Mullen Group and Power Corp.... learn more on Thursday, November 12, 2026 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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