Stella-Jones Inc demonstrates profitable growth
23.03.2016 • About Stella-Jones Inc (
$SJ) • By InTwits
Have you thought about Stella-Jones Inc as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Stella-Jones Inc showed fast growth in the last financial year. The company's revenue surged on 24.8% in FY2015. EBITDA also increased considerably: 38.1% for the same period.
In the longer period Stella-Jones Inc showed fast revenue growth of 29.5% from 2012 to 2015 annually. EBITDA surged on 26.5% from 2012 to 2015 annually.
Stella-Jones Inc ($SJ) financials for the last 5 years
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 640 | 717 | 1,011 | 1,249 | 1,559 |
|---|
| Revenue growth, % | | 12.1% | 40.9% | 23.6% | 24.8% |
|---|
| Gross margin, % | 19.5% | 21.2% | 19.5% | 17.9% | 19.7% |
|---|
| SG&A, % | 5.60% | 5.93% | 5.65% | 5.53% | 5.49% |
|---|
| EBITDA | 97 | 120 | 155 | 176 | 243 |
|---|
| EBITDA growth, % | | 24.4% | 28.9% | 13.7% | 38.1% |
|---|
| EBITDA margin, % | 15.1% | 16.8% | 15.3% | 14.1% | 15.6% |
|---|
| Net Income | 56 | 73 | 93 | 104 | 141 |
|---|
| Net Income margin, % | 8.70% | 10.2% | 9.15% | 8.31% | 9.07% |
|---|
| |
| CAPEX | 8 | 15 | 26 | 24 | 37 |
|---|
| CAPEX/Revenue, % | 1.22% | 2.06% | 2.59% | 1.94% | 2.40% |
|---|
| Debt | 183 | 364 | 373 | 445 | 670 |
|---|
| Cash | 0 | 14 | 3 | 0 | 3 |
|---|
| Net Debt/EBITDA | 1.9x | 2.9x | 2.4x | 2.5x | 2.7x |
|---|
| |
| ROIC, % | 17.1% | 15.3% | 14.9% | 14.3% | 15.4% |
|---|
| ROE, % | 18.2% | 18.3% | 17.8% | 16.4% | 17.6% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. EBITDA margin surged on 1.50 pp from 14.1% to 15.6% in 2015. In the last 3 years the company's EBITDA margin decreased on 1.20 pp from 16.8% in 2012 to 15.6% in 2015.
Stella-Jones Inc shows attractive ROIC at 15.4% for the last 12 months which assumes stable development model. Three years ago it was about the same at 15.3%. It's average level of ROIC for the last three years was 14.9%.
Stella-Jones Inc showed Net Income margin growth of 0.800 pp from 8.30% to 9.10% in 2015. In the longer period Net Income margin dropped on 1.10 pp from 10.2% in 2012 to 9.10% in 2015.
Stella-Jones Inc operates at ROE of 17.6%. Average ROE for the last three years was 17.3%.
Capital expenditures (CAPEX)
Stella-Jones Inc's CAPEX/Revenue was 2.40% in FY2015. The company showed fast CAPEX/Revenue growth of 0.335 pp from 2.06% in 2012 to 2.40% in 2015. It's average CAPEX/Revenue for the last three years was 2.31%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 2.7x Net Debt/EBITDA. If we look for the longer period the company showed decline of 0.16x from 2.91x in 2012 to 2.74x in 2015.
Valuation vs. comparable companies
At the end of trading day today Stella-Jones Inc traded at 15.8x EV/EBITDA which is 44.2% lower than 28.4x Industrial peer group avearge calculated on the basis of 168 companies. At the end of trading day today Stella-Jones Inc traded at 22.5x P/E which is 3.68% higher than 21.7x Industrial peer group avearge calculated on the basis of 40 companies.
Management team
Stella-Jones Inc is run by Brian Mcmanus as a CEO and by Eric Vachon as a CFO.
Peers in Industrial
Below you can find Stella-Jones Inc benchmarking vs. other companies in Industrial industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Electrovaya Inc ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | | 19.7% | 0.9% | 50.5% | 35.3% |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (92 companies) | 3.1% | 10.4% | 4.9% | 9.1% | 9.4% |
|---|
| Stella-Jones Inc ($SJ) | | 12.1% | 40.9% | 23.6% | 24.8% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | 74.0% |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | 75.6% |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.4% | 23.4% | 23.4% | 23.1% | 24.4% |
|---|
| Stella-Jones Inc ($SJ) | 19.5% | 21.2% | 19.5% | 17.9% | 19.7% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | 48.9% |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | 9.8% |
| |
|---|
| Median (85 companies) | 8.1% | 9.2% | 8.3% | 7.2% | 9.5% |
|---|
| Stella-Jones Inc ($SJ) | 15.1% | 16.8% | 15.3% | 14.1% | 15.6% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | 41.3% |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | 42.0% |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | 18.0% |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | 14.7% |
| |
|---|
| Median (92 companies) | 3.0% | 3.1% | 3.7% | 3.2% | 4.0% |
|---|
| Stella-Jones Inc ($SJ) | 1.2% | 2.1% | 2.6% | 1.9% | 2.4% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | 11.4% |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | 19.0% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 8.9% | 9.3% | 8.5% | 8.5% | 9.7% |
|---|
| Stella-Jones Inc ($SJ) | 17.1% | 15.3% | 14.9% | 14.3% | 15.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | 12.9x |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.4x | 1.2x | 1.2x |
|---|
| Stella-Jones Inc ($SJ) | 1.9x | 2.9x | 2.4x | 2.5x | 2.7x |
