Diversified Commodities
Commodity-dependent companies face cyclical cash flows. Strong balance sheets are critical for downturn protection.
Stella-Jones Inc. produces and markets pressure-treated wood products, primarily for railway and utility sectors in Canada and the U.S. A notable strength is its strong liquidity, with a current ratio of 5.25, indicating good short-term financial health. However, concerns arise from its low net margin of 5.9% and return on equity of 2.8%, suggesting profitability challenges. While the gross margin is relatively decent at 17.9%, the overall financial health score of 56/100 indicates room for improvement in operational efficiency and profitability.
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Debt of $1.6B is 11.9x the company's cash position of $138.0M.
Operating cash flow of $588.0M exceeds net income by 127%, indicating high-quality earnings with strong cash conversion.
Operating cash flow grew 17.4% YoY, demonstrating improving cash conversion.
Strong cash flow conversion with 16.7% of revenue converting to operating cash.
Excellent liquidity with current ratio of 5.2x ensures operational stability.
Free cash flow grew 17.4% YoY, providing more resources for growth and returns.
Valuation, risk assessment, competitive positioning, and key insights — all in one report.
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Based on 2026-Q2 (June 30, 2026)