The Canadian dollar weakened in early January in response to an increasingly gloomy economic outlook. Today, I want to look at a stock that has historically benefited from a weaker Canadian dollar. Is it worth snatching up today? Let’s jump in.
Stella-Jones (TSX:SJ) is a Montreal-based company that produces and markets pressure-treated wood products in Canada and the United States. Shares of Stella-Jones have climbed 19% year-over-year as of close on January 5. The stock is down 1.4% in the opening trading week of the New Year.
This company released its third quarter fiscal 2022 results on November 9. It delivered sales growth of 24% to $842 million. Stella-Jones posted growth in all major product categories. Utility poles represented 39% of third quarter sales, rising to $331 million over $256 million in Q3 2021. These sales were bolstered by currency conversion and higher pricing.
EBITDA rose to $119 million compared to $50 million in the third quarter of fiscal 2021. In the year-to-date period, sales rose to $2.40 billion compared to $2.20 billion in the first nine months of the previous year. EBITDA increased to $361 million in the first three quarters of FY2022 over $348 million for the year-to-date period in FY2021.
Shares of this TSX stock still possess a favourable price-to-earnings ratio of 13. Meanwhile, Stella-Jones offers a quarterly dividend of $0.20 per share. That represents a modest 1.6% yield.