Canadian Tire Corporation, Limited Fundamental Analysis (TSX: CTC.TO)
Canadian Tire Corporation, Limited Fundamental Analysis (TSX: CTC.TO)
Canadian Tire Corporation, Limited (TSX: CTC.TO) shows weak financial fundamentals with a PE ratio of 15.60, profit margin of 4.11%, and ROE of 11.53%. The company generates $12.2B in annual revenue with weak year-over-year growth of -0.26%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CTC.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakCTC.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentCTC.TO trades at attractive valuation levels.
Growth Score
WeakCTC.TO faces weak or negative growth trends.
Financial Health Score
ExcellentCTC.TO maintains a strong and stable balance sheet.
Profitability Score
WeakCTC.TO struggles to sustain strong margins.
Key Financial Metrics
Is CTC.TO Expensive or Cheap?
P/E Ratio
CTC.TO trades at 15.60 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, CTC.TO's PEG of -2.35 indicates potential undervaluation.
Price to Book
The market values Canadian Tire Corporation, Limited at 1.76 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.78 times EBITDA. This is generally considered low.
How Well Does CTC.TO Make Money?
Net Profit Margin
For every $100 in sales, Canadian Tire Corporation, Limited keeps $4.11 as profit after all expenses.
Operating Margin
Core operations generate 9.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.53 in profit for every $100 of shareholder equity.
ROA
Canadian Tire Corporation, Limited generates $3.00 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Canadian Tire Corporation, Limited generates limited operating cash flow of $885.91M, signaling weaker underlying cash strength.
Free Cash Flow
Canadian Tire Corporation, Limited produces free cash flow of $444.84M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $11.45 in free cash annually.
FCF Yield
CTC.TO converts 5.70% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.60
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.35
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.76
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.64
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.91
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.88
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How CTC.TO Stacks Against Its Sector Peers
| Metric | CTC.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.60 | 25.81 | Better (Cheaper) |
| ROE | 11.53% | 973.00% | Weak |
| Net Margin | 4.11% | -4892.00% (disorted) | Weak |
| Debt/Equity | 0.91 | 0.60 | Weak (High Leverage) |
| Current Ratio | 1.88 | 2.32 | Neutral |
| ROA | 3.00% | 299.00% | Weak |
CTC.TO outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Canadian Tire Corporation, Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
23.11%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-13.66%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
-56.27%
Industry Style: Cyclical, Growth, Discretionary
Declining