Is it a good company at a reasonable price? First of all, I personally would not buy any stock that has a negative book value. I could only do two tests of P/S Ratio and P/B Ratio because of negative ratios. However, if you buy you must have faith that the company will recover. Even if it recovers, it might take years. You should only invest in this company with money you can afford to lose. The stock price is probably cheap.
I do not own this stock of Dorel Industries Inc (TSX-DII.B, OTC-DIIBF), but it once did. This was a stock recommended by Investment Reporter as a conservative investment. I sold the stock in 2006 because I had it for 7 years from 1999 and it was going nowhere. I bought this stock before I stopped working and at that time, I did not mind buying stocks with no dividends.
When I was updating my spreadsheet, I noticed they increased their debt in the past year by 803% and now have a negative book value. See recent news on Dorel’s Debt here and here. Shareholders only made money in the past 5 years because of a big dividend payment in 2022.
They would seem to be in an awful state. Revenue down and expected to be down in 2026. However, analysts expect that to change in 2027. They have earnings losses and that is expected to continue. They have taken on a big debt and so the book value is negative. Simply Wall Street is right, insiders are buying stock in the company, they are buying Class B stock, which is the one I am following.
The company current pays no dividends, so there is no dividend yield or Dividend Payout Ratios to look at.
Debt Ratios are not good and it has a negative book value. The Long Term Debt/Market Cap Ratio for 2025 is very high at 8.14 and currently at 7.23. The Intangible Ratios are much too high at 1.93 and currently at 1.69. The Liquidity Ratio for 2025 is low at 1.27 and 1.25 currently. If you added in Cash Flow after dividends, the ratios are even lower at 1.19 and currently better at 1.37. I like these ratios to be at 1.50 or higher. The Debt Ratio for 2025 is below 1.00 and showing that the book value is negative. The ratio for 2025 is at 0.89 and 0.86 currently. The Leverage and Debt/Equity Ratios are meaningless.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 8.14 | 7.23 |
| Intang/GW | 1.93 | 1.69 |
| Liquidity | 1.27 | 1.25 |
| Liq. + CF | 1.19 | 1.37 |
| Debt Ratio | 0.89 | 0.86 |
| Leverage | -7.93 | -6.38 |
| D/E Ratio | -8.93 | -7.38 |
The Total Return per Year is shown below for years of 5 to 33 to the end of 2025 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 0.00% | 8.06% | -36.93% | 44.99% |
| 2015 | 10 | 0.00% | -4.80% | -26.26% | 21.46% |
| 2010 | 15 | 0.00% | -1.81% | -18.90% | 17.09% |
| 2005 | 20 | 0.00% | 0.87% | -13.58% | 14.46% |
| 2000 | 25 | 0.00% | 2.71% | -9.68% | 12.39% |
| 1995 | 30 | 0.00% | 8.59% | -3.79% | 12.38% |
| 1992 | 33 | 0.00% | 6.89% | -3.88% | 10.77% |
The Total Return per Year is shown below for years of 5 to 33 to the end of 2025 in US$. 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 | 0.00% | 4.89% | -38.07% | 42.96% |
| 2015 | 10 | 0.00% | -10.53% | -29.37% | 18.84% |
| 2010 | 15 | 0.00% | -4.63% | -20.76% | 16.12% |
| 2005 | 20 | 0.00% | 0.15% | -14.37% | 14.52% |
| 2000 | 25 | 0.00% | 3.79% | -9.36% | 13.15% |
| 1995 | 30 | 0.00% | 9.13% | -3.85% | 12.98% |
| 1992 | 33 | 0.00% | 8.33% | -3.26% | 11.59% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are also negative and so unusable. The corresponding historical ratios are 6.45, 8.45 and 10.12. The current ratios are negative, so no testing can be done here.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are also negative and so unusable. The corresponding historical ratios are 7.35, 9.16 and 10.74. The current ratios are negative, so no testing can be done here.
I can do not Graham Price testing because the EPS is negative and the book value is negative.
I get a 10-year median Price/Book Value per Share Ratio of 0.78. However, the current ratio is negative because the book value is negative, so I cannot do any stock price testing here.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.65. The current ratio is 0.77 based on Cash Flow per Share estimate for 2026 of $1.42, Cash Flow of $45M and a stock price of $1.10. The current ratio is 70% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I cannot do any dividend yield testing as the company has suspended its dividends.
The 10-year median Price/Sales (Revenue) Ratio is 0.15. The current ratio is 0.03 based on Revenue estimate for 2026 of $1,132M, Revenue per Share of $35.74 and a stock price of $1.10. The current ratio is 79% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
Results of stock price testing is that the stock price is probably cheap. I can only do a P/S Ratio test and a P/B Ratio test. Both are saying that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find one recommendation of Hold (2). The consensus is a Hold. The 12 months stock price consensus is $2.07 CDN$ ($1.46 US$) with a high of $2.07 CDN$ ($1.46 US$) and a Low of $2.07 CDN$ ($1.46 US$). The stock price consensus of $2.07 implies a total return of 32.39% all from capital gains based on a current stock price of $1.56.
The last entry on Stock Chase was dated 2023 and it was a Do Not Buy and saying the company has never done anything. There were Do Not Buys in 2019 and 2018. In August 2018 was a Buy. Amy Legate-Wolfe on Motley Fool in February 2023 talked of this company being incredibly cheap with potential. The company put out a press release about their fourth quarter of 2025 results. The company put out a press release about their first quarter results for 2026.
Simply Wall Street via Yahoo Finance reviews this stock and likes the fact that a number of insiders are buying. They are cautious because the company did not make a profit in the last 12 months before their report of June 2026. Simply Wall Street has 4 warnings out on this stock of negative shareholders’ equity; earnings have declined by 16.7% per year over past 5 years; has less than 1 year of cash runway; and does not have a meaningful market cap (CA$59M).
Dorel Industries Inc is a Canadian company that sells juvenile products and furniture. Its reporting segments include Dorel Home and Dorel Juvenile. Geographically, it derives key revenue from the United States, followed by Europe, Latin America, Canada, Asia, and other regions. Its web site is here Dorel Industries Inc .
The last stock I wrote about was about was TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more. The next stock I will write about will be TECSYS Inc (TSX-TCS, OTC-TCYSF) ... learn more on Wednesday, July 22, 2026 around 5 pm. Tomorrow on my other blog I will write about Hated Bull Market in History.... learn more on Tuesday, July 21, 2026 around 5 pm.
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