Teck Resources Ltd (NYSE: TECK)

Sector: Basic Materials Industry: Other Industrial Metals & Mining CIK: 0000886986
Market Cap 28.53 Bn
P/B 1.58
P/E 31.70
P/S 3.75
ROIC (Qtr) 4.86
Div Yield % 0.67
Rev 1y % (Qtr) 16.72
Total Debt (Qtr) 3.67 Bn
Debt/Equity (Qtr) 0.20
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About

Investment thesis

Bull case

  • Healthy cash reserves of 3.45B provide 8.63x coverage of short-term debt 399.28M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 31.84B provides 8.68x coverage of total debt 3.67B, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 1.09B provides 5.56x coverage of SG&A expenses 196.38M, showing efficient operational cost management.
  • Tangible assets of 31.84B provide robust 122.75x coverage of other current liabilities 259.42M, indicating strong asset backing.
  • Cash position of 3.45B provides exceptional 12.01x coverage of minority interest expenses 286.96M, indicating strong liquidity.

Bear case

  • Operating cash flow of 1.09B barely covers its investment activities of (1.30B), with a coverage ratio of -0.84, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.09B provides thin coverage of dividend payments of (179.71M) with a -6.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (1.30B) provide weak support for R&D spending of 92.03M, which is -14.17x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of (96.38M) provides weak coverage of capital expenditures of 1.19B, with a -0.08 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of (96.38M) represents just 0.10x of debt issuance (983.33M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical areas [axis] Breakdown of Revenue (2024)

Products and services [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Other Industrial Metals & Mining
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BHP BHP Group Ltd 188.54 Bn 18.41 3.49 29.90 Bn
2 TECK Teck Resources Ltd 28.53 Bn 31.70 3.75 3.67 Bn
3 MP MP Materials Corp. / DE 9.57 Bn -81.36 41.12 1.00 Bn
4 SKE Skeena Resources Ltd 3.70 Bn -44.17 0.00 0.04 Bn
5 MTRN MATERION Corp 3.18 Bn 42.47 1.78 0.53 Bn
6 ALM Almonty Industries Inc. 2.45 Bn -216.48 122.35 0.14 Bn
7 USAS Americas Gold & Silver Corp 1.71 Bn -27.92 15.69 0.06 Bn
8 USAR USA Rare Earth, Inc. 1.68 Bn -6.60 0.00 0.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.70 2.89
EV to Cash from Ops. EV/CFO 20.80 -38.49
EV to Debt EV to Debt 6.20 537.19
EV to EBIT EV/EBIT 12.59 -24.27
EV to EBITDA EV/EBITDA 8.96 458.80
EV to Free Cash Flow [EV/FCF] EV/FCF -235.84 -18.50
EV to Market Cap EV to Market Cap 0.80 0.42
EV to Revenue EV/Rev 2.99 34.60
Price to Book Value [P/B] P/B 1.58 10.18
Price to Earnings [P/E] P/E 31.70 -32.46
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.63 -16.19
Dividend Payout Ratio % Div Payout % (Qtr) 21.60 1.36
Dividend per Basic Share Div per Share (Qtr) 0.39 0.05
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -144.85 -4.32
Interest Coverage Int. cover (Qtr) 2.71 412.60
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 39.70 -7,554.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -35.17 2,335.82
Dividend Growth (1y) % Div 1y % (Qtr) -59.26 -2.77
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,628.97 -76.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 237.08 -2.67
EBIT Growth (1y) % EBIT 1y % (Qtr) 2,373.05 -36.91
EBT Growth (1y) % EBT 1y % (Qtr) 278.57 -100.70
EPS Growth (1y) % EPS 1y % (Qtr) 164.20 -24.28
FCF Growth (1y) % FCF 1y % (Qtr) -142.73 -5,480.62
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 78.88 9.93
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.17 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.01
Cash Ratio Cash Ratio (Qtr) 1.26 3.63
Current Ratio Curr Ratio (Qtr) 2.78 5.14
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 0.74
Interest Cover Ratio Int Coverage (Qtr) 2.71 412.60
Times Interest Earned Times Interest Earned (Qtr) 2.71 412.60
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.60 -684.08
EBIT Margin % EBIT Margin % (Qtr) 32.79 -696.03
EBT Margin % EBT Margin % (Qtr) 14.98 -788.18
Gross Margin % Gross Margin % (Qtr) 21.10 11.20
Net Profit Margin % Net Margin % (Qtr) 11.80 -790.68