West Fraser Timber Co., Ltd (NYSE: WFG)

Sector: Basic Materials Industry: Lumber & Wood Production CIK: 0001402388
Market Cap 5.72 Bn
P/B 0.98
P/E -6.10
P/S 1.05
ROIC (Qtr) -14.86
Div Yield % 0.88
Rev 1y % (Qtr) -17.08
Total Debt (Qtr) 300.00 Mn
Debt/Equity (Qtr) 0.05
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About

Investment thesis

Bull case

  • Strong tangible asset base of 5.56B provides 18.53x coverage of total debt 300M, indicating robust asset backing and low credit risk.
  • Retained earnings of 3.63B provide full 12.10x coverage of long-term debt 300M, indicating strong internal capital position.
  • Free cash flow of (315M) provides excellent 3.12x coverage of dividends (101M), indicating sustainable shareholder returns.
  • Robust tangible asset base of 5.56B provides 7.55x coverage of working capital 736M, indicating strong operational backing.
  • Tangible assets of 5.56B provide robust 82.97x coverage of other current liabilities 67M, indicating strong asset backing.

Bear case

  • Operating cash flow of 96M barely covers its investment activities of (380M), with a coverage ratio of -0.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 202M against inventory of 828M, the 0.24 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 96M provides thin coverage of dividend payments of (101M) with a -0.95 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (315M) provides weak coverage of capital expenditures of 411M, with a -0.77 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (1.17B) show weak coverage of depreciation charges of 544M, with a -2.15 ratio indicating high capital intensity and potential reinvestment needs.

Geographical areas [axis] Breakdown of Revenue (2025)

Segments [axis] Breakdown of Revenue (2025)

Peer comparison

Companies in the Lumber & Wood Production
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SSD Simpson Manufacturing Co., Inc. 9.01 Bn 48.59 7.29 445.81 Mn
2 UFPI Ufp Industries Inc 6.70 Bn 110.74 2.45 369.26 Mn
3 WFG West Fraser Timber Co., Ltd 5.72 Bn -6.10 1.05 300.00 Mn
4 BCC BOISE CASCADE Co 3.42 Bn -573.80 0.74 512.44 Mn
5 NWGL CL Workshop Group Ltd 0.02 Bn -2.32 1.10 -
6 JCTC Jewett Cameron Trading Co Ltd 0.01 Bn -0.88 0.16 4.23 Mn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.72 1.42
EV to Cash from Ops. EV/CFO 57.02 40.00
EV to Debt EV to Debt 18.25 11.71
EV to EBIT EV/EBIT -4.68 44.23
EV to EBITDA EV/EBITDA -8.51 14.04
EV to Free Cash Flow [EV/FCF] EV/FCF -17.38 62.95
EV to Market Cap EV to Market Cap 0.96 1.23
EV to Revenue EV/Rev 1.00 2.34
Price to Book Value [P/B] P/B 0.98 3.83
Price to Earnings [P/E] P/E -6.10 -70.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -9.28 1.24
Dividend Payout Ratio % Div Payout % (Qtr) -5.40 8.42
Dividend per Basic Share Div per Share (Qtr) 0.64 0.67
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -15.94 -3.42
Interest Coverage Int. cover (Qtr) 0.00 -63.26
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 15.61 4.39
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -68.49 -40.26
Dividend Growth (1y) % Div 1y % (Qtr) -49.21 -21.79
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -18,640.00 -3,191.72
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -215.65 -97.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -3,178.95 -582.35
EBT Growth (1y) % EBT 1y % (Qtr) -3,178.95 -587.17
EPS Growth (1y) % EPS 1y % (Qtr) -19,683.33 -3,370.25
FCF Growth (1y) % FCF 1y % (Qtr) -281.03 -231.19
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -64.88 -7.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.72 1.25
Cash Payout Ratio Cash Payout (Qtr) 0.20 0.08
Cash Ratio Cash Ratio (Qtr) 0.31 0.67
Current Ratio Curr Ratio (Qtr) 2.13 2.96
Debt to Equity Ratio Debt/Equity (Qtr) 0.05 -0.01
Interest Cover Ratio Int Coverage (Qtr) 0.00 -63.26
Times Interest Earned Times Interest Earned (Qtr) 0.00 -63.26
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -11.50 2.25
EBIT Margin % EBIT Margin % (Qtr) -21.42 -8.33
EBT Margin % EBT Margin % (Qtr) -21.42 -9.24
Gross Margin % Gross Margin % (Qtr) 6.10 19.48
Net Profit Margin % Net Margin % (Qtr) -17.20 -9.98